Coastal Financial posts Q2 loss on $68.8 mln credit charge

Overview

• U.S. community and BaaS bank posted Q2 net loss after $68.8 mln credit expense tied to one partner

• Company saw 9% loan growth and higher BaaS program income despite credit expense impact

• Management says credit expense is isolated, with capital ratios remaining above well-capitalized levels

Outlook

• Company expects continued growth in BaaS partner relationships and product launches for 2026

• Coastal Financial plans to invest in technology and risk management to support platform scalability

• Company expects expansion initiatives to drive higher partner revenue in upcoming periods

Result Drivers

• SINGLE PARTNER CREDIT EXPENSE - Co said Q2 net loss was primarily due to $68.8 mln credit expense tied to one BaaS partner

• LOAN AND BaaS PROGRAM GROWTH - Co reported 9% loan growth and higher BaaS program income, citing expansion of partner relationships and product offerings

• TECHNOLOGY MODERNIZATION - Co said technology upgrades improved operational efficiency and partner experience

Company press release: ID:nGNX74CdCx

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 4 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for Coastal Financial Corp (EVERETT) is $105.00, about 48.6% above its July 29 closing price of $70.66

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 13 three months ago

Reuters Recommended Reads

• July 29 - FinWise Bancorp Q2 net income falls on higher loan loss provisions

• July 28 - Summit State Bank posts Q2 loss on higher credit provisions

• July 29 - SoFi's unchanged profit forecast tempers record quarter, revenue outlook lift

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)