Coastal Financial (NASDAQ:CCB) Issues Quarterly Earnings Results

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

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 Down 41.7%

Coastal Financial stock traded down $29.50 during midday trading on Thursday, reaching $41.16. The stock had a trading volume of 1,125,790 shares, compared to its average volume of 157,493. Coastal Financial has a 12 month low of $36.61 and a 12 month high of $120.05. The company has a market capitalization of $627.77 million, a P/E ratio of 12.90 and a beta of 0.72. The company has a fifty day moving average price of $74.10 and a two-hundred day moving average price of $80.77. The company has a current ratio of 1.06, a quick ratio of 1.03 and a debt-to-equity ratio of 0.10.

Analyst Ratings Changes

Several equities analysts recently issued reports on the stock. Keefe, Bruyette & Woods dropped their target price on shares of Coastal Financial from $115.00 to $95.00 and set an “outperform” rating on the stock in a report on Friday, May 1st. Wall Street Zen raised Coastal Financial from a “sell” rating to a “hold” rating in a research report on Saturday, May 16th. Zacks Research raised Coastal Financial from a “strong sell” rating to a “hold” rating in a research report on Tuesday, June 30th. 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. Finally, TD Cowen cut their target price on Coastal Financial from $145.00 to $120.00 and set a “buy” rating on the stock in a research report on Thursday, April 30th. Four research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company. Based on data from MarketBeat.com, the company has an average rating of “Moderate Buy” and a consensus price target of $122.60.

Institutional Investors Weigh In On Coastal Financial

A number of hedge funds have recently added to or reduced their stakes in the company. Smartleaf Asset Management LLC raised its position in shares of Coastal Financial by 20,700.0% during the fourth quarter. Smartleaf Asset Management LLC now owns 624 shares of the company’s stock worth $72,000 after purchasing an additional 621 shares during the period. Russell Investments Group Ltd. grew its position in Coastal Financial by 229.5% in the 2nd quarter. Russell Investments Group Ltd. now owns 827 shares of the company’s stock valued at $80,000 after purchasing an additional 576 shares during the period. Tower Research Capital LLC TRC increased its stake in Coastal Financial by 521.7% during the 2nd quarter. Tower Research Capital LLC TRC now owns 1,262 shares of the company’s stock valued at $122,000 after purchasing an additional 1,059 shares in the last quarter. DRW Securities LLC acquired a new position in Coastal Financial during the fourth quarter worth $214,000. Finally, Brooklyn Investment Group raised its holdings in Coastal Financial by 28.0% during the third quarter. Brooklyn Investment Group now owns 2,063 shares of the company’s stock worth $223,000 after buying an additional 451 shares during the last quarter. Institutional investors and hedge funds own 59.24% of the company’s stock.

About Coastal Financial

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.