Coastal Financial (NASDAQ:CCB) Posts Earnings Results, Misses Expectations By $3.77 EPS

Coastal Financial (NASDAQ:CCB) announced its quarterly earnings results on Thursday. The company reported ($2.76) earnings per share for the quarter, missing the consensus estimate of $1.01 by ($3.77), FiscalAI reports. The business had revenue of $60.37 million during the quarter, compared to the consensus estimate of $148.50 million. Coastal Financial had a net margin of 7.35% and a return on equity of 10.20%.

Here are the key takeaways from Coastal Financial’s conference call:

• Negative Sentiment: Coastal reported a $42.1 million GAAP net loss, driven primarily by $68.8 million of pre-tax adjustments tied to a specific CCBX partner’s approximately $500 million consumer-loan portfolio, including a $46 million credit-enhancement valuation adjustment and $22.8 million provision.
• Neutral Sentiment: Management said the affected portfolio has been isolated and that reviews found no comparable issue in the remaining approximately $1.7 billion CCBX portfolio, but the resolution could take one to two quarters or as long as 12–18 months and final recoveries may differ from current estimates.
• Positive Sentiment: Underlying operating trends were strong, with record net interest income of $89.4 million, a 7.27% net interest margin, 9% quarterly loan growth, and 10.3% sequential growth in BaaS program fee income.
• Positive Sentiment: Coastal remained well-capitalized and liquid, ending the quarter with a 10.86% CET1 ratio, approximately $1.01 billion of cash, more than $1.1 billion in contingent borrowing capacity, and no short-term borrowings outstanding.
• Negative Sentiment: Management acknowledged that expense growth and operating leverage need improvement, launching a review of vendors, contractors, organizational duplication, technology spending, and partner-level profitability; CFO Brandon Soto is also departing, with former CFO Joel Edwards returning as interim CFO.

Coastal Financial Stock Performance

Shares of CCB stock traded down $29.50 during trading on Thursday, hitting $41.16. The company’s stock had a trading volume of 1,125,790 shares, compared to its average volume of 157,493. The business has a fifty day moving average of $74.10 and a 200-day moving average of $80.77. The company has a market cap of $627.77 million, a PE ratio of 12.90 and a beta of 0.72. Coastal Financial has a 52 week low of $36.61 and a 52 week high of $120.05. The company has a current ratio of 1.06, a quick ratio of 1.03 and a debt-to-equity ratio of 0.10.

Wall Street Analyst Weigh In

Several brokerages have recently commented on CCB. Stephens reissued an “overweight” rating and issued a $110.00 price objective on shares of Coastal Financial in a research note on Friday, May 1st. Zacks Research raised Coastal Financial from a “strong sell” rating to a “hold” rating in a research report on Tuesday, June 30th. Keefe, Bruyette & Woods decreased their price target on Coastal Financial from $115.00 to $95.00 and set an “outperform” rating for the company in a report on Friday, May 1st. TD Cowen decreased their price target on Coastal Financial from $145.00 to $120.00 and set a “buy” rating for the company in a report on Thursday, April 30th. Finally, Weiss Ratings reissued a “hold (c)” rating on shares of Coastal Financial in a research report on Monday, June 29th. Four analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company’s stock. According to data from MarketBeat, Coastal Financial has an average rating of “Moderate Buy” and an average price target of $122.60.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in CCB. Wellington Management Group LLP raised its holdings in shares of Coastal Financial by 9.0% in the 3rd quarter. Wellington Management Group LLP now owns 486,197 shares of the company’s stock worth $52,592,000 after purchasing an additional 39,984 shares during the period. Loomis Sayles & Co. L P grew its position in shares of Coastal Financial by 43.8% in the fourth quarter. Loomis Sayles & Co. L P now owns 330,230 shares of the company’s stock valued at $37,841,000 after purchasing an additional 100,661 shares in the last quarter. Geode Capital Management LLC increased its position in shares of Coastal Financial by 3.0% during the fourth quarter. Geode Capital Management LLC now owns 325,897 shares of the company’s stock valued at $37,351,000 after buying an additional 9,357 shares during the period. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its holdings in Coastal Financial by 364.1% during the 3rd quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 168,764 shares of the company’s stock worth $18,255,000 after acquiring an additional 132,403 shares during the period. Finally, UBS Group AG increased its holdings in shares of Coastal Financial by 158.7% in the third quarter. UBS Group AG now owns 166,185 shares of the company’s stock worth $17,976,000 after purchasing an additional 101,935 shares during the period. 59.24% of the stock is currently owned by hedge funds and other institutional investors.

Coastal Financial Company Profile

Coastal Financial Corporation is a bank holding company whose principal subsidiary, Coastal Community Bank, provides a full range of community banking services to clients along North Carolina’s central and eastern coastline. The company focuses on delivering personalized relationship banking to individuals, small businesses, and local professionals in seaside and inland communities.

Through Coastal Community Bank, Coastal Financial offers deposit products including checking, savings, money market accounts and certificates of deposit.