EVERETT, Wash., April 29, 2026 (GLOBE NEWSWIRE) -- Coastal Financial Corporation (NASDAQ:CCB) (the "Company", "Coastal", "we", "our", or "us"), the holding company for Coastal Community Bank (the "Bank"), through which it operates a community-focused bank segment ("community bank") with an industry leading banking as a service ("BaaS") segment ("CCBX"), today reported unaudited financial results for the quarter ended March 31, 2026, including net income of $12.0 million, or $0.78 per diluted common share, compared to $12.6 million, or $0.82 per diluted common share, for the three months ended December 31, 2025 and $9.7 million, or $0.63 per diluted common share, for the three months ended March 31, 2025.

Management Discussion of the First Quarter Results

"During the first quarter of 2026, total assets increased $922.4 million, or 19.5%, to $5.66 billion at March 31, 2026 compared to $4.74 billion at December 31, 2025, deposits grew by $897.0 million, or 21.6% and loans receivable increased by $109.8 million, representing a 2.9% rise, marking another period of solid growth. Our CCBX segment continued to expand product offerings with existing partners during the quarter, while advancing new partners through onboarding toward launch and active status in alignment with our long-term strategy. We expect growth to continue as current programs scale, new products are introduced, and we leverage our experience in the BaaS space to support disciplined, sustainable expansion," stated CEO Eric Sprink.

Key Points for First Quarter and Our Go-Forward Strategy

CCBX Partner and Product Expansion. As of March 31, 2026 we had two partners in testing, three in implementation/onboarding, and two signed letters of intent (LOIs). Our active pipeline positions us for continued growth, with new partnership opportunities and product launches expected for 2026. Total BaaS program fee income was $10.9 million for the three months ended March 31, 2026, an increase of $2.0 million, or 22.3%, from the three months ended December 31, 2025. We continue to have contracts with our partners that fully indemnify us against fraud and 98.8% against credit risk on CCBX loan partner balances as of March 31, 2026.
Deepening CCBX Partner Relationships. During the quarter ended March 31, 2026, we advanced multiple partner products through key development and launch stages. We managed progression across key development stages, from internal testing through limited release to full market launch, across credit, deposit and credit card programs, steadily advancing products toward successful launch and deepening strategic partner relationships.
Positive On- and Off-Balance Sheet Trends Continue. Average deposits were $4.38 billion, an increase of $349.9 million, or 8.7%, over the quarter ended December 31, 2025, driven primarily by growth in deposits associated with CCBX partner programs. At March 31, 2026 we swept off $2.81 billion in deposits for FDIC insurance and liquidity purposes, and generated $710,000 in noninterest income during the quarter ended March 31, 2026, an increase of $170,000, or 31.5%, from $540,000 for the quarter ended December 31, 2025.

During the first quarter of 2026, we sold $3.28 billion of loans, including $2.63 billion of additional credit card receivables originated through ongoing cardholder spend and revolving activity and sold under existing forward flow arrangements, compared to $2.98 billion of sold loans in the quarter ended December 31, 2025, including $2.26 billion sold under the same forward flow arrangements. We retain a portion of the fee income on sold credit card loans. As of March 31, 2026 there were 667,023 off-balance sheet credit cards with fee earning potential, an increase of 116,046 compared to the quarter ended December 31, 2025 and an increase of 429,999 from March 31, 2025.

First Quarter 2026 Financial Highlights

The tables below outline some of our key operating metrics.

	Three Months Ended
(Dollars in thousands, except share and per share data; unaudited)	March 31, 2026			December 31, 2025			September 30, 2025			June 30, 2025			March 31, 2025
Income Statement Data:
Interest and dividend income	$	111,681		$	107,886		$	109,027		$	107,797		$	104,907
Interest expense		28,324			28,521			31,126			31,060			28,845
Net interest income		83,357			79,365			77,901			76,737			76,062
Provision for credit losses		51,398			48,041			56,598			32,211			55,781
Net interest income after provision for credit losses		31,959			31,324			21,303			44,526			20,281
Noninterest income		66,077			58,661			66,777			42,693			63,477
Noninterest expense		83,452			72,804			70,172			72,832			71,989
Provision for income tax		2,565			4,538			4,316			3,359			2,039
Net income	$	12,019		$	12,643		$	13,592		$	11,028		$	9,730

	As of and for the Three Month Period
	March 31, 2026			December 31, 2025			September 30, 2025			June 30, 2025			March 31, 2025
Balance Sheet Data:
Cash and cash equivalents	$	1,495,467		$	736,970		$	642,258		$	719,759		$	624,302
Investment securities		46,169			48,247			43,942			45,577			46,991
Loans held for sale		124,039			71,216			42,894			60,474			42,132
Loans receivable		3,859,379			3,749,531			3,703,848			3,540,330			3,517,359
Allowance for credit losses		(172,427	)		(169,530	)		(173,813	)		(164,794	)		(183,178	)
Total assets		5,663,829			4,741,437			4,553,076			4,480,559			4,339,282
Interest bearing deposits		4,462,003			3,564,583			3,408,160			3,358,216			3,251,599
Noninterest bearing deposits		579,161			579,616			564,403			555,355			539,630
Core deposits⁽¹⁾		5,028,967			4,131,911			3,959,360			3,441,624			3,321,772
Total deposits		5,041,164			4,144,199			3,972,563			3,913,571			3,791,229
Total borrowings		48,074			48,036			47,999			47,960			47,923
Total shareholders' equity	$	503,762		$	490,959		$	475,277		$	461,709		$	449,917

Share and Per Share Data⁽²⁾:
Earnings per share – basic	$	0.79		$	0.84		$	0.90		$	0.73		$	0.65
Earnings per share – diluted	$	0.78		$	0.82		$	0.88		$	0.71		$	0.63
Dividends per share		—			—			—			—			—
Book value per share⁽³⁾	$	33.05		$	32.43		$	31.45		$	30.59		$	29.98
Tangible book value per share⁽⁴⁾	$	32.76		$	32.13		$	31.45		$	30.59		$	29.98
Weighted avg outstanding shares – basic		15,179,447			15,116,005			15,093,274			15,033,296			14,962,507
Weighted avg outstanding shares – diluted		15,422,822			15,455,856			15,443,987			15,447,923			15,462,041
Shares outstanding at end of period		15,241,491			15,140,192			15,112,000			15,093,036			15,009,225
Stock options outstanding at end of period		68,585			118,881			122,206			126,654			163,932

See footnotes that follow the tables below

	As of and for the Three Month Period
	March 31, 2026			December 31, 2025			September 30, 2025			June 30, 2025			March 31, 2025
Credit Quality Data:
Nonperforming assets⁽⁵⁾to total assets		1.19	%		1.35	%		1.31	%		1.36	%		1.30	%
Nonperforming assets⁽⁵⁾to loans receivable and OREO		1.75	%		1.71	%		1.61	%		1.72	%		1.60	%
Nonperforming loans⁽⁵⁾to total loans receivable		1.75	%		1.71	%		1.61	%		1.72	%		1.60	%
Allowance for credit losses to nonperforming loans		253.0	%		264.4	%		290.8	%		270.7	%		325.0	%
Allowance for credit losses to total loans receivable		4.47	%		4.52	%		4.69	%		4.65	%		5.21	%
Gross charge-offs	$	54,523		$	55,189		$	54,534		$	53,780		$	53,686
Gross recoveries	$	4,936		$	5,114		$	5,289		$	4,467		$	5,486
Net charge-offs to average loans⁽⁶⁾		5.18	%		5.31	%		5.37	%		5.54	%		5.57	%

Capital Ratios:
Company
Tier 1 leverage capital		10.09	%		10.62	%		10.54	%		10.39	%		10.67	%
Common equity Tier 1 risk-based capital		12.08	%		12.43	%		12.33	%		12.32	%		12.13	%
Tier 1 risk-based capital		12.17	%		12.52	%		12.42	%		12.41	%		12.22	%
Total risk-based capital		14.54	%		14.95	%		14.88	%		14.90	%		14.73	%
Bank
Tier 1 leverage capital		10.10	%		10.60	%		10.49	%		10.33	%		10.57	%
Common equity Tier 1 risk-based capital		12.19	%		12.50	%		12.37	%		12.36	%		12.12	%
Tier 1 risk-based capital		12.19	%		12.50	%		12.37	%		12.36	%		12.12	%
Total risk-based capital		13.48	%		13.79	%		13.66	%		13.65	%		13.42	%

⁽¹⁾Core deposits are defined as all deposits excluding brokered and time deposits.

⁽²⁾Share and per share amounts are based on total actual or average common shares outstanding, as applicable.

⁽³⁾We calculate book value per share as total shareholders' equity at the end of the relevant period divided by the outstanding number of our common shares at the end of each period.

⁽⁴⁾Tangible book value per share is a non-GAAP financial measure. We calculate tangible book value per share as total shareholders' equity at the end of the relevant period, less goodwill and other intangible assets, divided by the outstanding number of our common shares at the end of each period. The most directly comparable GAAP financial measure is book value per share. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of intangible assets on book value.

⁽⁵⁾Nonperforming assets and nonperforming loans include loans 90+ days past due and accruing interest.

⁽⁶⁾Annualized calculations.

Key Performance Ratios

Return on average assets ("ROA") was 0.98% for the quarter ended March 31, 2026 compared to 1.09% and 0.93% for the quarters ended December 31, 2025 and March 31, 2025, respectively. ROA for the quarter ended March 31, 2026 decreased 0.11%, compared to December 31, 2025 primarily due to an increase in noninterest expense and increased 0.05% compared to March 31, 2025. Noninterest expenses were higher for the quarter ended March 31, 2026 compared to the quarter ended December 31, 2025 driven primarily by a $2.6 million increase in legal and professional expenses and higher BaaS loan expense. The quarter over quarter variance in BaaS loan expense is driven in part by higher yields on certain partner loans, the income of which is passed through to partners, resulting in an increase in loan yield that partially offsets the higher BaaS loan expense, and also by, to a lesser extent, the timing of loan sales. Additionally, recent changes to partner agreements and pricing have contributed to higher BaaS loan expense and a corresponding decrease in loan yield, net of BaaS loan expense, on a quarter-over-quarter basis. Overall, these actions align with a strategic focus on enhanced partner economics and more sustainable, risk-adjusted returns over time. Noninterest expenses were higher than the quarter ended March 31, 2025 due primarily to an increase in data processing and software licenses, salaries and employee benefits, and legal and professional expenses, all of which are related to the growth of the Company and investments in technology and risk management. These increases were partially mitigated by continued discipline in staffing levels over the last year, with full-time equivalent employees decreasing to 496 compared to 517 for the quarter ended March 31, 2025.

Compared to the quarter ended December 31, 2025, yield on earning assets declined 0.17% while yield on loans receivable increased by 0.13%. Average loans receivable as of March 31, 2026 increased $138.6 million compared to December 31, 2025 as net CCBX loans continue to grow, despite selling $3.28 billion in CCBX loans during the quarter ended March 31, 2026. Compared to the quarter ended March 31, 2025, yield on earning assets declined 0.94% and yield on loans receivable declined by 0.57%. Average loans receivable as of March 31, 2026 increased $366.9 million compared to March 31, 2025.

The quarter over quarter volatility in the efficiency ratio and noninterest income to average asset performance metrics were driven by changes in the credit enhancement on CCBX loans, which is included within noninterest income, due to changes in CCBX provision expense. These items have a neutral impact on net income, but they impact the abovementioned metrics quarter over quarter due to changes in reported noninterest income.

The following table shows the Company's key performance ratios for the periods indicated.

	Three Months Ended
(unaudited)	March 31, 2026		December 31, 2025		September 30, 2025		June 30, 2025		March 31, 2025

Return on average assets⁽¹⁾	0.98	%	1.09	%	1.19	%	0.99	%	0.93	%
Return on average equity⁽¹⁾	9.80	%	10.41	%	11.52	%	9.72	%	8.91	%
Yield on earnings assets⁽¹⁾	9.38	%	9.55	%	9.80	%	9.92	%	10.32	%
Yield on loans receivable⁽¹⁾	10.76	%	10.63	%	10.95	%	11.11	%	11.33	%
Cost of funds⁽¹⁾	2.59	%	2.77	%	3.07	%	3.13	%	3.11	%
Cost of deposits⁽¹⁾	2.56	%	2.74	%	3.04	%	3.10	%	3.08	%
Net interest margin⁽¹⁾	7.00	%	7.03	%	7.00	%	7.06	%	7.48	%
Noninterest expense to average assets⁽¹⁾	6.78	%	6.25	%	6.13	%	6.52	%	6.87	%
Noninterest income to average assets⁽¹⁾	5.37	%	5.04	%	5.83	%	3.82	%	6.06	%
Efficiency ratio	55.85	%	52.75	%	48.50	%	60.98	%	51.59	%
Loans receivable to deposits⁽²⁾	79.02	%	92.20	%	94.32	%	92.01	%	93.89	%

⁽¹⁾Annualized calculations shown for quarterly periods presented.

⁽²⁾Includes loans held for sale.

Management Outlook; CEO Eric Sprink

"We continued to see strength in our CCBX segment in the first quarter, driven by the performance of our existing partners, new products and the addition of new relationships. We've been intentional about how we grow, and that includes focusing on credit quality as portfolios mature and ensuring we're operating in a safe and sound manner as expectations around bank–fintech partnerships continue to evolve. As the rate environment evolves, we expect some pressure on margins, but we believe our diversified business model and funding base continue to position us well. Our focus remains on consistent execution and building long-term value through disciplined growth." said CEO Eric Sprink.

Coastal Financial Corporation Overview

The Company has one main subsidiary, the Bank, which consists of three segments: CCBX, the community bank and treasury & administration. The CCBX segment includes all of our BaaS activities, the community bank segment includes all community banking activities and the treasury & administration segment includes treasury management, overall administration and all other aspects of the Company.

CCBX Performance Update

Our CCBX segment continues to evolve, and we have 30 relationships, at varying stages, including two partners in testing, three in implementation/onboarding, two signed LOIs and three winding down as of March 31, 2026. This includes a new CCBX correspondent bank partner relationship. We continue to refine our partnership criteria, prioritizing larger, established partners with strong management teams, customer bases, and financial profiles, while selectively pursuing emerging partners aligned with our model, and will proactively manage and exit select relationships in line with our ongoing portfolio optimization efforts, reflecting our focus on enhancing partner quality and long-term value creation.

We are also actively exploring opportunities to expand the CCBX partner base and broaden related product offerings to support continued growth. This dual approach of onboarding new partners while deepening relationships with existing ones supports growth that aligns with our long-term strategic objectives, while leveraging our established relationships to help mitigate incremental risk.

Increased partner activity and transaction volumes are driving growth in noninterest income, a trend we expect to continue as existing products scale and new offerings are introduced. As part of our strategy to manage partner and lending limits, as well as overall portfolio composition and credit quality, we plan to continue selling loans. We also retain a portion of the fee income associated with processing transactions on sold credit card loans. This revenue stream continues to grow and is expected to provide ongoing income without adding balance sheet risk or capital requirements.

As our deposit base grows, we expect to continue moving deposits on and off the balance sheet, subject to applicable agreements, to manage liquidity, FDIC insurance coverage, and deposit program operations. This deposit sweep capability allows us to better manage liquidity and deposit programs. At March 31, 2026 we swept off $2.81 billion in deposits for FDIC insurance and liquidity purposes, and generated $710,000 in noninterest income during the quarter ended March 31, 2026, compared to $540,000 for the quarter ended December 31, 2025. During the quarter ended March 31, 2026, eight partner programs were in various stages of expansion to include additional products, such as lines of credit, deposit programs, credit cards, and other lending products. The expansion of these and other partner initiatives is expected to drive higher partner revenue in upcoming periods.

The following table illustrates the activity and evolution in CCBX relationships for the periods presented.

	As of
(unaudited)	March 31, 2026	December 31, 2025	March 31, 2025
Active	20	19	19
Friends and family / testing	2	2	2
Implementation / onboarding	3	5	3
Signed letters of intent	2	1	1
Wind down - active but preparing to exit relationship	3	1	0
Total CCBX relationships	30	28	25

Total exited relationships life to date	9	9	8

CCBX loans increased $76.6 million, or 4.2%, to $1.88 billion despite selling $3.28 billion in loans during the three months ended March 31, 2026, $2.63 billion of which was new activity on previously sold credit card loans.

The following table details the CCBX loan portfolio:

CCBX	As of
	March 31, 2026					December 31, 2025					March 31, 2025
(dollars in thousands; unaudited)	Balance			% to Total		Balance			% to Total		Balance			% to Total
Commercial and industrial loans:
Capital call lines	$	176,384		9.4	%	$	210,480		11.6	%	$	133,466		8.1	%
All other commercial & industrial loans		21,792		1.2			19,166		1.1			29,702		1.8
Real estate loans:
Residential real estate loans		266,037		14.1			264,059		14.6			285,355		17.3
Consumer and other loans:
Credit cards		693,485		36.8			622,681		34.4			532,775		32.2
Other consumer and other loans		726,943		38.5			691,708		38.3			670,026		40.6
Gross CCBX loans receivable		1,884,641		100.0	%		1,808,094		100.0	%		1,651,324		100.0	%
Net deferred origination fees		(517	)				(542	)				(498	)
Loans receivable	$	1,884,124				$	1,807,552				$	1,650,826
Loan Yield - CCBX⁽¹⁾⁽²⁾		15.01	%				14.89	%				16.88	%

⁽¹⁾CCBX yield does not include the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements and originating & servicing CCBX loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield.

⁽²⁾Loan yield is annualized for the three months ended for each period presented and includes loans held for sale and nonaccrual loans.

The increase in CCBX loans in the quarter ended March 31, 2026, includes an increase of $106.0 million, or 8.1%, in consumer and other loans and an increase of $2.0 million, or 0.7%, in residential real estate loans partially offset by a decrease of $34.1 million, or 16.2%, in capital call lines as a result of normal balance fluctuations and business activities. We sold $3.28 billion in CCBX loans during the quarter ended March 31, 2026 compared to sales of $2.98 billion in the quarter ended December 31, 2025. We continue to manage CCBX credit and concentration levels in an effort to optimize our loan portfolio earnings and generate off-balance sheet fee income. CCBX loan yield increased 0.12% for the quarter ended March 31, 2026 compared to the quarter ended December 31, 2025 due to a change in overall mix of loans compared to the quarter ended December 31, 2025.

The following charts show the growth and quarter over quarter changes in credit card accounts that generate fee income. This includes accounts with balances, which are included in our loan totals, and accounts that have been sold and have no corresponding balance in our loan totals, both of which generate fee income.

CCBX Credit Cards

Quarter over Quarter Change in CCBX Credit Cards

The following chart shows the growth in active CCBX debit cards, which are sources of interchange income.

CCBX Debit Cards

The following table details the CCBX deposit portfolio:

CCBX	As of
	March 31, 2026					December 31, 2025					March 31, 2025
(dollars in thousands; unaudited)	Balance			% to Total		Balance			% to Total		Balance			% to Total
Demand, noninterest bearing	$	77,890		2.3	%	$	86,648		3.4	%	$	58,416		2.6	%
Interest bearing demand and money market		3,121,888		90.0			2,425,881		94.8			2,145,608		94.6
Savings		268,444		7.7			45,311		1.8			16,625		0.7
Total core deposits		3,468,222		100.0			2,557,840		100.0			2,220,649		97.9
Other deposits		—		0.0			—		0.0			46,359		2.1
Total CCBX deposits	$	3,468,222		100.0	%	$	2,557,840		100.0	%	$	2,267,008		100.0	%
Cost of deposits⁽¹⁾		3.17	%				3.52	%				4.01	%

⁽¹⁾Cost of deposits is annualized for the three months ended for each period presented.

CCBX deposits increased $910.4 million, or 35.6%, in the three months ended March 31, 2026 to $3.47 billion, driven largely by new CCBX partner relationships. Management expects the newly added deposits to moderate during the second quarter of 2026 and then normalize. The increase excludes the $2.81 billion in CCBX deposits that were swept off-balance sheet for increased Federal Deposit Insurance Corporation ("FDIC") insurance coverage and liquidity purposes, compared to $843.6 million for the quarter ended December 31, 2025. Using a third-party facilitator/vendor sweep product, amounts in excess of FDIC insurance coverage are swept off-balance sheet to participating financial institutions.

Community Bank Performance Update

In the quarter ended March 31, 2026, the community bank saw net loans increase $33.3 million, or 1.7%, to $1.98 billion, as a result of loan growth and normal balance fluctuations.

The following table details the community bank loan portfolio:

Community Bank	As of
	March 31, 2026					December 31, 2025					March 31, 2025
(dollars in thousands; unaudited)	Balance			% to Total		Balance			% to Total		Balance			% to Total
Commercial and industrial loans	$	235,603		11.9	%	$	224,439		11.5	%	$	149,104		8.0	%
Real estate loans:
Construction, land and land development loans		234,911		11.8			222,075		11.4			166,551		8.9
Residential real estate loans		199,185		10.1			202,293		10.4			202,920		10.8
Commercial real estate loans		1,300,547		65.6			1,285,856		66.0			1,340,647		71.6
Consumer and other loans:
Other consumer and other loans		11,587		0.6			14,072		0.7			13,326		0.7
Gross community bank loans receivable		1,981,833		100.0	%		1,948,735		100.0	%		1,872,548		100.0	%
Net deferred origination fees		(6,578	)				(6,756	)				(6,015	)
Loans receivable	$	1,975,255				$	1,941,979				$	1,866,533
Loan Yield⁽¹⁾		6.58	%				6.52	%				6.53	%

⁽¹⁾Loan yield is annualized for the three months ended for each period presented and includes loans held for sale and nonaccrual loans.

The increase in community bank loans consisted of an increase of $14.7 million in commercial real estate loans, an increase of $12.8 million in construction, land and land development loans, and an increase of $11.2 million in commercial and industrial loans, partially offset by a decrease of $3.1 million in residential real estate loans and $2.5 million in consumer and other loans during the quarter ended March 31, 2026.

The following table details the community bank deposit portfolio:

Community Bank	As of
	March 31, 2026					December 31, 2025					March 31, 2025
(dollars in thousands; unaudited)	Balance			% to Total		Balance			% to Total		Balance			% to Total
Demand, noninterest bearing	$	501,271		31.9	%	$	492,968		31.1	%	$	481,214		31.5	%
Interest bearing demand and money market		1,006,623		64.0			1,024,798		64.6			560,416		36.8
Savings		52,851		3.3			56,305		3.5			59,493		3.9
Total core deposits		1,560,745		99.2			1,574,071		99.2			1,101,123		72.2
Other deposits		1		0.0			1		0.0			407,391		26.7
Time deposits less than $100,000		4,174		0.3			4,415		0.3			5,585		0.4
Time deposits $100,000 and over		8,022		0.5			7,872		0.5			10,122		0.7
Total community bank deposits	$	1,572,942		100.0	%	$	1,586,359		100.0	%	$	1,524,221		100.0	%
Cost of deposits⁽¹⁾		1.46	%				1.56	%				1.76	%

⁽¹⁾Cost of deposits is annualized for the three months ended for each period presented.

Community bank deposits decreased $13.4 million, or 0.8%, during the three months ended March 31, 2026 to $1.57 billion as a result of normal balance fluctuations. The community bank segment includes noninterest bearing deposits of $501.3 million, or 31.9%, of total community bank deposits, resulting in a cost of deposits of 1.46%, compared to 1.56% for the quarter ended December 31, 2025 as a result of lower interest rates.

Net Interest Income and Margin Discussion

Net interest income was $83.4 million for the quarter ended March 31, 2026, an increase of $4.0 million, or 5.0%, from $79.4 million for the quarter ended December 31, 2025, and an increase of $7.3 million, or 9.6%, from $76.1 million for the quarter ended March 31, 2025. Net interest income compared to December 31, 2025 and March 31, 2025 was higher due to an increase in interest on loans and interest earning deposits with other banks primarily due to an increase in average loans receivable and average interest earning deposits with other banks as well as a reduced cost of funds due to lower interest rates.

Net interest margin was 7.00% for the three months ended March 31, 2026, compared to 7.03% for the three months ended December 31, 2025. Net interest margin was 7.48% for the three months ended March 31, 2025. The modest decrease in net interest margin for the three months ended March 31, 2026 compared to the three months ended December 31, 2025 was primarily due to lower yields on interest earning deposits with other banks, partially offset by lower cost of funds and higher loan yields. Net interest margin, net of BaaS loan expense, (a reconciliation of the non-GAAP measures are set forth in the Non-GAAP Financial Measures section of this earnings release) was 3.90% for the three months ended March 31, 2026, compared to 4.26% for the three months ended December 31, 2025, and 4.28% for the three months ended March 31, 2025. The quarter-over-quarter decline in net interest margin, net of BaaS loan expense, was primarily driven by an increase in BaaS loan expense. This increase reflects higher yields on certain partner loans, the income of which is passed through to partners, as well as, to a lesser extent, the timing of loan sales. While these higher yields contributed to overall loan yield and partially offset the impact of the higher BaaS loan expense, recent changes to partner agreements and pricing contributed to both higher BaaS loan expense and a corresponding decrease in loan yield, net of BaaS loan expense. These actions align with our strategic focus on enhanced partner economics and more sustainable, risk-adjusted returns over time.

Interest and fees on loans receivable increased $2.7 million, or 2.7%, to $102.9 million for the three months ended March 31, 2026, compared to $100.2 million for the three months ended December 31, 2025, as a result of an increase in loans receivable. Interest and fees on loans receivable increased $4.7 million, or 4.8%, compared to $98.1 million for the three months ended March 31, 2025, due to loan growth.

The following table illustrates how net interest margin and loan yield is affected by BaaS loan expense:

Consolidated	As of and for the Three Months Ended
(dollars in thousands; unaudited)	March 31 2026			December 31 2025			March 31 2025
Net interest margin, net of BaaS loan expense:
Net interest margin⁽¹⁾		7.00	%		7.03	%		7.48	%
Earning assets		4,830,601			4,482,007			4,124,065
Net interest income (GAAP)		83,357			79,365			76,062
Less: BaaS loan expense		(36,940	)		(31,256	)		(32,507	)
Net interest income, net of BaaS loan expense⁽²⁾	$	46,417		$	48,109		$	43,555
Net interest margin, net of BaaS loan expense⁽¹⁾⁽²⁾		3.90	%		4.26	%		4.28	%
Loan income net of BaaS loan expense divided by average loans:
Loan yield (GAAP)⁽¹⁾		10.76	%		10.63	%		11.33	%
Total average loans receivable	$	3,878,626		$	3,740,073		$	3,511,724
Interest and earned fee income on loans (GAAP)		102,887			100,206			98,147
BaaS loan expense		(36,940	)		(31,256	)		(32,507	)
Net loan income⁽²⁾	$	65,947		$	68,950		$	65,640
Loan income, net of BaaS loan expense, divided by average loans⁽¹⁾⁽²⁾		6.90	%		7.31	%		7.58	%

⁽¹⁾Annualized calculations shown for periods presented.

⁽²⁾A reconciliation of the non-GAAP measures are set forth at the end of this earnings release.

Average investment securities increased $988,000 to $47.5 million compared to the three months ended December 31, 2025 as a result of held-to-maturity mortgage backed securities purchased for CRA purposes, and increased $259,000 compared to the three months ended March 31, 2025 as a result of securities purchased for CRA purposes, net of principal paydowns.

Cost of funds was 2.59% for the quarter ended March 31, 2026, a decrease of 18 basis points from the quarter ended December 31, 2025 and a decrease of 52 basis points from the quarter ended March 31, 2025. Cost of deposits for the quarter ended March 31, 2026 was 2.56%, compared to 2.74% for the quarter ended December 31, 2025, and 3.08% for the quarter ended March 31, 2025. The decreased cost of funds and deposits compared to December 31, 2025 and March 31, 2025 were largely due to the reductions in the Fed funds rate in 2025.

The following table summarizes the average yield on loans receivable and cost of deposits:

	For the Three Months Ended
	March 31, 2026				December 31, 2025				March 31, 2025
	Yield on Loans⁽²⁾		Cost of Deposits⁽²⁾		Yield on Loans⁽²⁾		Cost of Deposits⁽²⁾		Yield on Loans⁽²⁾		Cost of Deposits⁽²⁾
Community Bank	6.58	%	1.46	%	6.52	%	1.56	%	6.53	%	1.76	%
CCBX⁽¹⁾	15.01	%	3.17	%	14.89	%	3.52	%	16.88	%	4.01	%
Consolidated	10.76	%	2.56	%	10.63	%	2.74	%	11.33	%	3.08	%

⁽¹⁾CCBX yield on loans does not include the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit and fraud enhancements and originating & servicing CCBX loans. To determine Net BaaS loan income earned from CCBX loan relationships, the Company takes BaaS loan interest income and deducts BaaS loan expense to arrive at Net BaaS loan income, which can be compared to interest income on the Company's community bank loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield.

⁽²⁾Annualized calculations for periods presented.

The following table illustrates how BaaS loan interest income is affected by BaaS loan expense resulting in net BaaS loan income and the associated yield:

	For the Three Months Ended
	March 31, 2026				December 31, 2025				March 31, 2025
(dollars in thousands, unaudited)	Income / Expense		Income / expense divided by average CCBX loans⁽²⁾		Income / Expense		Income / expense divided by average CCBX loans⁽²⁾		Income / Expense		Income / expense divided by average CCBX loans⁽²⁾
BaaS loan interest income	$	71,153	15.01	%	$	68,846	14.89	%	$	67,855	16.88	%
Less: BaaS loan expense		36,940	7.79	%		31,256	6.76	%		32,507	8.09	%
Net BaaS loan income⁽¹⁾	$	34,213	7.22	%	$	37,590	8.13	%	$	35,348	8.79	%
Average BaaS Loans⁽³⁾	$	1,922,586			$	1,833,904			$	1,630,088

⁽¹⁾A reconciliation of the non-GAAP measures are set forth at the end of this earnings release.

⁽²⁾ Annualized calculations shown for the periods presented.

⁽³⁾Includes loans held for sale.

Noninterest Income Discussion

Noninterest income was $66.1 million for the three months ended March 31, 2026, an increase of $7.4 million from $58.7 million for the three months ended December 31, 2025, and an increase of $2.6 million from $63.5 million for the three months ended March 31, 2025. The increase in noninterest income for the quarter ended March 31, 2026 as compared to the quarter ended December 31, 2025 was primarily due to a $3.4 million increase in BaaS credit enhancements related to the increase in provision for credit losses based upon an analysis of the CCBX loan portfolio and a $2.0 million increase in BaaS fraud enhancements, and an increase of $2.0 million in BaaS program income (see "Appendix B" for more information on the accounting for BaaS allowance for credit losses and credit and fraud enhancements).

The $2.6 million increase in noninterest income over the quarter ended March 31, 2025 was primarily due to an increase of $4.6 million in BaaS program income partially offset by a $1.8 million decrease in BaaS credit and fraud enhancements due to mix of loans and improvement in the performance of the CCBX loan portfolio.

Noninterest Expense Discussion

Total noninterest expense increased $10.6 million to $83.5 million for the three months ended March 31, 2026, compared to $72.8 million for the three months ended December 31, 2025, and increased $11.5 million from $72.0 million for the three months ended March 31, 2025. The $10.6 million increase in noninterest expense for the quarter ended March 31, 2026, as compared to the quarter ended December 31, 2025, was primarily due to a $2.6 million increase in legal and professional fees, a $665,000 increase in data processing and software licenses, and a $377,000 increase in salaries and employee benefits, partially offset by a $456,000 decrease in other expenses. Also contributing to the variance is a $5.7 million increase in BaaS loan expense, and a $2.0 million increase in BaaS fraud expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements and originating & servicing CCBX loans. BaaS fraud expense represents non-credit fraud losses on partner's customer loan and deposit accounts. A portion of this expense is realized during the quarter in which the loss occurs, and a portion is estimated based on historical or other information from our partners. The $2.6 million increase in legal and professional fees was primarily driven by a CCBX partner's professional fees resulting from our asset acquisition in the prior quarter. Data processing and software license costs increased due to continued investments in growth, technology, and risk management.

The $11.5 million increase in noninterest expenses for the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025 was largely due to a $3.4 million increase in data processing and software licenses due to enhancements and investments in technology and a $1.6 million increase in salary and employee benefits. Also contributing to the variance is a $4.4 million increase in BaaS loan expense, and a $1.1 million increase in BaaS fraud expense.

Certain operating expenses associated with CCBX programs are reimbursed by our CCBX partners. In accordance with GAAP we recognize all expenses in noninterest expense and the reimbursement of expenses from our CCBX partner in noninterest income. The following table reflects the portion of noninterest expenses that are reimbursed by partners to assist in understanding how the increases in noninterest expense are related to expenses incurred and reimbursed by CCBX partners:

	Three Months Ended
	March 31,		December 31,		March 31,
(dollars in thousands; unaudited)		2026		2025		2025
Total noninterest expense (GAAP)	$	83,452	$	72,804	$	71,989
Less: BaaS loan expense		36,940		31,256		32,507
Less: BaaS fraud expense		3,059		1,090		1,993
Less: Reimbursement of expenses (BaaS)		2,392		1,868		1,026
Noninterest expense, net of BaaS loan expense, BaaS fraud expense and reimbursement of expenses (BaaS)⁽¹⁾	$	41,061	$	38,590	$	36,463

⁽¹⁾A reconciliation of the non-GAAP measures are set forth at the end of this earnings release.

Provision for Income Taxes

The provision for income taxes was $2.6 million for the three months ended March 31, 2026, $4.5 million for the three months ended December 31, 2025 and $2.0 million for the first quarter of 2025. The income tax provision was lower for the three months ended March 31, 2026 compared to the quarter ended December 31, 2025 and higher when compared to the quarter ended March 31, 2025 as a result of differences in net income and the taxability of certain equity awards during each period.

As CCBX activities and employee presence expand into additional states, the Company becomes subject to additional state tax jurisdictions, which has increased the overall tax rate used in calculating the provision for income taxes. The Company uses a federal statutory tax rate of 21.0% as a basis for calculating provision for federal income taxes and 5.14% for calculating the provision for state income taxes. The state rate increased in the quarter ended June 30, 2025 primarily as a result of a change in California's tax laws.

Financial Condition Overview

Total assets increased $922.4 million, or 19.5%, to $5.66 billion at March 31, 2026 compared to $4.74 billion at December 31, 2025. The increase is primarily comprised of a $740.0 million increase in interest earning deposits with other banks, a $109.8 million increase in loans receivable, and a $52.8 million increase in loans held for sale.

As of March 31, 2026, in addition to the $1.50 billion in cash on hand, the Company had the capacity to borrow up to a total of $636.6 million from the Federal Reserve Bank discount window and Federal Home Loan Bank, plus an additional $50.0 million from a correspondent bank. There were no borrowings outstanding on these lines as of March 31, 2026.

The Company, on a stand alone basis, had a cash balance of $40.2 million as of March 31, 2026, a portion of which is retained for general operating purposes, including debt repayment, for funding $1.0 million in commitments to bank technology investment funds, with the remaining cash available to be contributed to the Bank as capital.

Uninsured deposits were $1.77 billion as of March 31, 2026, compared to $641.3 million as of December 31, 2025. Uninsured deposits are elevated due to the timing of new partner deposits participating in sweep and reciprocal deposit networks, but are expected to normalize during the second quarter.

Total shareholders' equity as of March 31, 2026 increased $12.8 million since December 31, 2025. The increase in shareholders' equity was primarily comprised of $12.0 million in net earnings combined with an increase of $784,000 in common stock outstanding as a result of equity awards vested and exercised during the three months ended March 31, 2026.

The Company and the Bank remained well capitalized at March 31, 2026, as summarized in the following table.

(unaudited)	Coastal Community Bank		Coastal Financial Corporation		Minimum Well Capitalized Ratios under Prompt Corrective Action⁽¹⁾
Tier 1 Leverage Capital (to average assets)	10.10	%	10.09	%	5.00	%
Common Equity Tier 1 Capital (to risk-weighted assets)	12.19	%	12.08	%	6.50	%
Tier 1 Capital (to risk-weighted assets)	12.19	%	12.17	%	8.00	%
Total Capital (to risk-weighted assets)	13.48	%	14.54	%	10.00	%

⁽¹⁾Presents the minimum capital ratios for an insured depository institution, such as the Bank, to be considered well capitalized under the Prompt Corrective Action framework. The minimum requirements for the Company to be considered well capitalized under Regulation Y include to maintain, on a consolidated basis, a total risk-based capital ratio of 10.0 percent or greater and a tier 1 risk-based capital ratio of 6.0 percent or greater.

Asset Quality

The allowance for credit losses was $172.4 million and 4.47% of loans receivable at March 31, 2026 compared to $169.5 million and 4.52% at December 31, 2025 and $183.2 million and 5.21% at March 31, 2025. The allowance for credit loss allocated to the CCBX portfolio was $154.3 million and 8.19% of CCBX loans receivable at March 31, 2026, with $18.2 million of allowance for credit loss allocated to the community bank, or 0.92% of total community bank loans receivable.

The following table details the allocation of the allowance for credit loss as of the period indicated:

	As of March 31, 2026									As of December 31, 2025									As of March 31, 2025
(dollars in thousands; unaudited)	Community Bank			CCBX			Total			Community Bank			CCBX			Total			Community Bank			CCBX			Total
Loans receivable	$	1,975,255		$	1,884,124		$	3,859,379		$	1,941,979		$	1,807,552		$	3,749,531		$	1,866,533		$	1,650,826		$	3,517,359
Allowance for credit losses		(18,153	)		(154,274	)		(172,427	)		(18,231	)		(151,299	)		(169,530	)		(18,992	)		(164,186	)		(183,178	)
Allowance for credit losses to total loans receivable		0.92	%		8.19	%		4.47	%		0.94	%		8.37	%		4.52	%		1.02	%		9.95	%		5.21	%

Net charge-offs totaled $49.6 million for the quarter ended March 31, 2026, compared to $50.1 million for the quarter ended December 31, 2025 and $48.2 million for the quarter ended March 31, 2025. Net charge-offs as a percent of average loans decreased to 5.18% for the quarter ended March 31, 2026 compared to 5.31% for the quarter ended December 31, 2025, and 5.57% for the quarter ended March 31, 2025. CCBX partner agreements provide for a credit enhancement that covers the net charge-offs on CCBX loans and negative deposit accounts by indemnifying or reimbursing incurred losses, except in accordance with the program agreement for one partner where the Company was responsible for credit losses on approximately 5% of a $324.0 million loan portfolio. At March 31, 2026, our portion of this portfolio represented $22.0 million in loans. Net charge-offs for this $22.0 million in loans were $1.0 million for the three months ended March 31, 2026, $1.2 million for the three months ended December 31, 2025 and $1.1 million for the three months ended March 31, 2025.

The following table details net charge-offs for the community bank and CCBX for the period indicated:

	Three Months Ended
	March 31, 2026									December 31, 2025									March 31, 2025
(dollars in thousands; unaudited)	Community Bank			CCBX			Total			Community Bank			CCBX			Total			Community Bank			CCBX			Total
Gross charge-offs	$	2		$	54,521		$	54,523		$	24		$	55,165		$	55,189		$	4		$	53,682		$	53,686
Gross recoveries		(3	)		(4,933	)		(4,936	)		(2	)		(5,112	)		(5,114	)		(7	)		(5,479	)		(5,486	)
Net charge-offs (recoveries)	$	(1	)	$	49,588		$	49,587		$	22		$	50,053		$	50,075		$	(3	)	$	48,203		$	48,200
Net charge-offs to average loans⁽¹⁾		0.00	%		10.46	%		5.18	%		0.00	%		10.83	%		5.31	%		0.00	%		11.99	%		5.57	%

⁽¹⁾Annualized calculations shown for periods presented.

During the quarter ended March 31, 2026, a $52.6 million provision for credit losses was recorded for CCBX partner loans, compared to $45.9 million for the quarter ended December 31, 2025. The increase in the provision was largely due to an increase in loans receivable and a change in the mix of loans, bringing the CCBX allowance for credit losses to $154.3 million at March 31, 2026 compared to $151.3 million at December 31, 2025. In general, CCBX loans have a higher level of expected losses than our community bank loans, which is reflected in the factors for the allowance for credit losses. Agreements with our CCBX partners provide for a credit enhancement, which protects the Bank by indemnifying or reimbursing incurred losses.

In accordance with accounting guidance, we estimate and record a provision for expected losses for these CCBX loans and reclassified negative deposit accounts. When the provision for CCBX credit losses and provision for unfunded commitments is recorded, a credit enhancement asset is also recorded on the balance sheet through noninterest income (BaaS credit enhancements). Expected losses are recorded in the allowance for credit losses. The credit enhancement asset is relieved when credit enhancement recoveries are received from the CCBX partner. If our partner is unable to fulfill their contracted obligations then the Bank could be exposed to additional credit losses. Management regularly evaluates and manages this counterparty risk with our CCBX partners.

The factors used in management's analysis for community bank credit losses indicated that a provision recapture of $1.4 million was needed for the quarter ended March 31, 2026 compared to a provision recapture of $101,000 and a provision of $65,000 for the quarters ended December 31, 2025 and March 31, 2025, respectively. The provision recapture in the current period was due to an improvement in the overall economic outlook, partially offset by a marginal increase in the overall portfolio historical loss rates.

The following table details the provision expense/(recapture) for the community bank and CCBX for the period indicated:

	Three Months Ended
(dollars in thousands; unaudited)	March 31, 2026			December 31, 2025			March 31, 2025
Community bank	$	(1,428	)	$	(101	)	$	65
CCBX		52,563			45,893			54,319
Total provision expense	$	51,135		$	45,792		$	54,384

Included in provision expense was a $252,000 provision for unfunded commitments, recorded primarily due to an increase in available commitments for CCBX loans, partially offset by a decline in the remaining weighted-average life of the unfunded construction and land portfolio.

At March 31, 2026, our nonperforming assets were $67.6 million, or 1.19%, of total assets, compared to $64.1 million, or 1.35%, of total assets, at December 31, 2025, and $56.4 million, or 1.30%, of total assets, at March 31, 2025. These ratios are impacted by nonperforming CCBX loans that are covered by CCBX partner credit enhancements. As of March 31, 2026, $60.9 million of the $62.8 million in nonperforming CCBX loans were covered by CCBX partner credit enhancements described above. Additionally, certain CCBX partners employ collection practices that place specific loans on nonaccrual status to enhance collectability. As of March 31, 2026, $22.3 million of these loans are less than 90 days past due.

Nonperforming assets increased $3.5 million during the quarter ended March 31, 2026, compared to the quarter ended December 31, 2025. Community bank nonperforming loans decreased $1.7 million from December 31, 2025 to $4.8 million as of March 31, 2026 with the payoff of a nonaccrual loan. CCBX nonperforming loans increased $5.2 million to $62.8 million from December 31, 2025. The increase in CCBX nonperforming loans is due to an increase of $3.2 million in nonaccrual loans from December 31, 2025 to $27.6 million, combined with a $2.1 million increase in CCBX loans that are past due 90 days or more and still accruing interest. As a result of the type of loans (primarily consumer loans) originated through our CCBX partners, we would typically anticipate that balances 90 days past due or more and still accruing will generally increase as those loan portfolios grow. Consumer loans originated through CCBX lending partners may continue to accrue interest beyond 90 days past due. Installment (closed-end) loans generally continue to accrue until 120 past due while revolving (open-end) loans generally continue to accrue until 180 days past due. There were no repossessed assets or other real estate owned at March 31, 2026. Our nonperforming loans to loans receivable ratio was 1.75% at March 31, 2026, compared to 1.71% at December 31, 2025 and 1.60% at March 31, 2025.

For the quarter ended March 31, 2026, there were $1,000 in community bank net charge-offs and $49.6 million in CCBX net charge-offs. These CCBX loans have a higher level of expected losses than our community bank loans, which is reflected in the factors used in the allowance for credit losses.

The following table details the Company's nonperforming assets for the periods indicated.

Consolidated	As of
(dollars in thousands; unaudited)	March 31, 2026			December 31, 2025			March 31, 2025
Nonaccrual loans:
Commercial and industrial loans	$	251		$	2,278		$	381
Real estate loans:
Construction, land and land development		—			—			—
Residential real estate		314			38			—
Commercial real estate		4,344			4,344			—
Consumer and other loans:
Credit cards		24,497			21,433			13,602
Other consumer and other loans		3,015			2,875			6,376
Total nonaccrual loans		32,421			30,968			20,359
Accruing loans past due 90 days or more:
Commercial & industrial loans		604			654			782
Real estate loans:
Residential real estate loans		2,241			1,961			2,407
Consumer and other loans:
Credit cards		24,149			22,536			27,187
Other consumer and other loans		8,205			7,993			5,632
Total accruing loans past due 90 days or more		35,199			33,144			36,008
Total nonperforming loans		67,620			64,112			56,367
Real estate owned		—			—			—
Repossessed assets		—			—			—
Total nonperforming assets	$	67,620		$	64,112		$	56,367
Total nonaccrual loans to loans receivable		0.84	%		0.83	%		0.58	%
Total nonperforming loans to loans receivable		1.75	%		1.71	%		1.60	%
Total nonperforming assets to total assets		1.19	%		1.35	%		1.30	%

The following tables detail the CCBX and community bank nonperforming assets, which are included in the total nonperforming assets table above.

CCBX	As of
(dollars in thousands; unaudited)	March 31, 2026			December 31, 2025			March 31, 2025
Nonaccrual loans:
Commercial and industrial loans:
All other commercial & industrial loans	$	81		$	127		$	192
Consumer and other loans:
Credit cards		24,497			21,433			13,602
Other consumer and other loans		3,015			2,875			6,376
Total nonaccrual loans		27,593			24,435			20,170
Accruing loans past due 90 days or more:
Commercial & industrial loans		604			654			782
Real estate loans:
Residential real estate loans		2,241			1,961			2,407
Consumer and other loans:
Credit cards		24,149			22,536			27,187
Other consumer and other loans		8,205			7,993			5,632
Total accruing loans past due 90 days or more		35,199			33,144			36,008
Total nonperforming loans		62,792			57,579			56,178
Other real estate owned		—			—			—
Repossessed assets		—			—			—
Total nonperforming assets	$	62,792		$	57,579		$	56,178
Total CCBX nonperforming assets to total consolidated assets		1.11	%		1.21	%		1.29	%

Community Bank	As of
(dollars in thousands; unaudited)	March 31, 2026			December 31, 2025			March 31, 2025
Nonaccrual loans:
Commercial and industrial loans	$	170		$	2,151		$	189
Real estate:
Residential real estate		314			38			—
Commercial real estate		4,344			4,344			—
Total nonaccrual loans		4,828			6,533			189
Accruing loans past due 90 days or more:
Total accruing loans past due 90 days or more		—			—			—
Total nonperforming loans		4,828			6,533			189
Other real estate owned		—			—			—
Repossessed assets		—			—			—
Total nonperforming assets	$	4,828		$	6,533		$	189
Total community bank nonperforming assets to total consolidated assets		0.09	%		0.14	%		—	%

About Coastal Financial

Coastal Financial Corporation (NASDAQ:CCB) (the "Company"), is an Everett, Washington based bank holding company whose wholly owned subsidiaries are Coastal Community Bank ("Bank") and Arlington Olympic LLC. The $5.66 billion Bank provides service through 14 full-service branches in Snohomish, Island and King Counties, one loan production office in King County, the Internet and its mobile banking application. The Bank provides banking as a service to digital financial service providers, companies and brands that want to provide financial services to their customers through the Bank's CCBX segment. To learn more about the Company visit www.coastalbank.com.

CCB-ER

Contact

Eric Sprink, Chief Executive Officer, esprink@coastalbank.com

Brandon J. Soto, Executive Vice President & Chief Financial Officer, bsoto@coastalbank.com

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management's expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "intends" and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of or reference to forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, the risk that the conflicts in the Middle East and/or changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations and those other risks and uncertainties discussed under "Risk Factors" in our Annual Report on Form 10-K for the most recent period filed and in any of our subsequent filings with the Securities and Exchange Commission.

If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. You are cautioned not to place undue reliance on forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by law.

COASTAL FINANCIAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands; unaudited)
ASSETS
	March 31, 2026			December 31, 2025			September 30, 2025			June 30, 2025			March 31, 2025
Cash and due from banks	$	52,695		$	34,241		$	34,928		$	29,546		$	43,467
Interest earning deposits with other banks		1,442,772			702,729			607,330			690,213			580,835
Investment securities, available-for-sale, at fair value		28			29			31			33			34
Investment securities, held-to-maturity, at amortized cost		46,141			48,218			43,911			45,544			46,957
Other investments		14,023			12,837			12,778			12,521			12,589
Loans held for sale		124,039			71,216			42,894			60,474			42,132
Loans receivable		3,859,379			3,749,531			3,703,848			3,540,330			3,517,359
Allowance for credit losses		(172,427	)		(169,530	)		(173,813	)		(164,794	)		(183,178	)
Total loans receivable, net		3,686,952			3,580,001			3,530,035			3,375,536			3,334,181
CCBX credit enhancement asset		180,587			177,657			177,741			167,779			183,377
CCBX receivable		24,926			23,047			16,260			13,009			12,685
Premises and equipment, net		29,710			29,325			29,114			29,052			28,639
Lease right-of-use assets		4,641			4,821			4,788			4,891			5,117
Accrued interest receivable		20,139			18,613			20,493			20,849			21,109
Bank-owned life insurance, net		14,044			13,910			13,777			13,648			13,501
Deferred tax asset, net		—			—			—			3,829			3,912
Intangible assets, net		4,434			4,536			—			—			—
Other assets		18,698			20,257			18,996			13,635			10,747
Total assets	$	5,663,829		$	4,741,437		$	4,553,076		$	4,480,559		$	4,339,282

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits	$	5,041,164		$	4,144,199		$	3,972,563		$	3,913,571		$	3,791,229
Subordinated debt, net		44,480			44,443			44,406			44,368			44,331
Junior subordinated debentures, net		3,594			3,593			3,593			3,592			3,592
Deferred compensation		251			267			281			295			310
Accrued interest payable		2,665			1,435			1,106			954			1,107
Lease liabilities		4,799			4,984			4,956			5,063			5,293
CCBX payable		28,410			27,492			31,221			32,939			29,391
Deferred tax liability, net		1,656			853			799			—			—
Other liabilities		33,048			23,212			18,874			18,068			14,112
Total liabilities		5,160,067			4,250,478			4,077,799			4,018,850			3,889,365
SHAREHOLDERS' EQUITY
Common Stock		234,222			233,438			230,399			230,423			229,659
Retained earnings		269,541			257,522			244,879			231,287			220,259
Accumulated other comprehensive loss, net of tax		(1	)		(1	)		(1	)		(1	)		(1	)
Total shareholders' equity		503,762			490,959			475,277			461,709			449,917
Total liabilities and shareholders' equity	$	5,663,829		$	4,741,437		$	4,553,076		$	4,480,559		$	4,339,282

COASTAL FINANCIAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts; unaudited)
	Three Months Ended
	March 31, 2026		December 31, 2025		September 30, 2025		June 30, 2025			March 31, 2025
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	102,887	$	100,206	$	100,367	$	98,867		$	98,147
Interest on interest earning deposits with other banks		8,128		6,810		8,007		8,085			6,070
Interest on investment securities		622		635		616		626			650
Dividends on other investments		44		235		37		219			40
Total interest income		111,681		107,886		109,027		107,797			104,907
INTEREST EXPENSE
Interest on deposits		27,670		27,863		30,466		30,400			28,185
Interest on borrowed funds		654		658		660		660			660
Total interest expense		28,324		28,521		31,126		31,060			28,845
Net interest income		83,357		79,365		77,901		76,737			76,062
PROVISION FOR CREDIT LOSSES		51,398		48,041		56,598		32,211			55,781
Net interest income after provision for credit losses		31,959		31,324		21,303		44,526			20,281
NONINTEREST INCOME
Service charges and fees		850		882		903		913			860
Unrealized gain (loss) on equity securities, net		126		—		9		(439	)		16
Other income		410		459		461		496			682
Noninterest income, excluding BaaS program income and BaaS indemnification income		1,386		1,341		1,373		970			1,558
Servicing and other BaaS fees		2,623		2,113		1,575		1,896			1,419
Transaction and interchange fees		5,873		4,924		4,878		5,109			3,833
Reimbursement of expenses		2,392		1,868		1,412		646			1,026
BaaS program income		10,888		8,905		7,865		7,651			6,278
BaaS credit enhancements		50,744		47,325		55,412		31,268			53,648
BaaS fraud enhancements		3,059		1,090		2,127		2,804			1,993
BaaS indemnification income		53,803		48,415		57,539		34,072			55,641
Total noninterest income		66,077		58,661		66,777		42,693			63,477
NONINTEREST EXPENSE
Salaries and employee benefits		23,122		22,745		20,146		21,401			21,532
Occupancy		859		1,091		952		915			1,034
Data processing and software licenses		7,643		6,978		6,114		5,541			4,232
Legal and professional expenses		7,002		4,447		3,957		5,962			6,488
Point of sale expense		445		105		69		69			107
Excise taxes		1,169		756		696		681			722
Federal Deposit Insurance Corporation ("FDIC") assessments		573		817		815		790			755
Director and staff expenses		668		870		544		612			631
Marketing		38		259		272		50			50
Other expense		1,934		2,390		1,640		1,524			1,938
Noninterest expense, excluding BaaS loan and BaaS fraud expense		43,453		40,458		35,205		37,545			37,489
BaaS loan expense		36,940		31,256		32,840		32,483			32,507
BaaS fraud expense		3,059		1,090		2,127		2,804			1,993
BaaS loan and fraud expense		39,999		32,346		34,967		35,287			34,500
Total noninterest expense		83,452		72,804		70,172		72,832			71,989
Income before provision for income taxes		14,584		17,181		17,908		14,387			11,769
PROVISION FOR INCOME TAXES		2,565		4,538		4,316		3,359			2,039
NET INCOME	$	12,019	$	12,643	$	13,592	$	11,028		$	9,730
Basic earnings per common share	$	0.79	$	0.84	$	0.90	$	0.73		$	0.65
Diluted earnings per common share	$	0.78	$	0.82	$	0.88	$	0.71		$	0.63
Weighted average number of common shares outstanding:
Basic		15,179,447		15,116,005		15,093,274		15,033,296			14,962,507
Diluted		15,422,822		15,455,856		15,443,987		15,447,923			15,462,041

COASTAL FINANCIAL CORPORATION AVERAGE BALANCES, YIELDS, AND RATES – QUARTERLY (Dollars in thousands; unaudited)
	For the Three Months Ended
	March 31, 2026						December 31, 2025						March 31, 2025
	Average Balance		Interest & Dividends		Yield / Cost⁽¹⁾		Average Balance		Interest & Dividends		Yield / Cost⁽¹⁾		Average Balance		Interest & Dividends		Yield / Cost⁽¹⁾
Assets
Interest earning assets:
Interest earning deposits with other banks	$	891,511	$	8,128	3.70	%	$	682,663	$	6,810	3.96	%	$	553,393	$	6,070	4.45	%
Investment securities, available-for-sale⁽²⁾

Coastal Financial Corporation Announces First Quarter 2026 Results