Coastal Financial Corporation · NASDAQ:CCB
Coastal Financial — Q4 2024 Earnings Presentation
31 slides from Coastal Financial's earnings presentation, Jan 28, 2025
Slide 1: Investor Presentation
January 28, 2025 INVESTOR PRESENTATION Exhibit 99.1 COASTAL FINANCIAL CORPORATION
Slide 2: Legal Information and Disclaimer
2 LEGAL INFORMATION AND DISCLAIMER Important note regarding forward-looking statements: Statements made in this presentation (or conveyed orally) which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any stat
Slide 3: Fourth Quarter 2024 Highlights
3 FOURTH QUARTER 2024 HIGHLIGHTS Note: Data as of the three months ended December 31, 2024 unless otherwise indicated (1)Core net revenue is a non-GAAP measure which includes net interest income and noninterest income, adjusted for BaaS credit enhancement, BaaS fraud enhancement, reimbursement of ex
Slide 4: Fourth Quarter 2024 Financial Summary
4 FOURTH QUARTER 2024 FINANCIAL SUMMARY • Diluted EPS of $0.94, compared to $0.97 over LQ • Higher diluted EPS 42.2% compared to PYQ; driven by higher noninterest and net interest income • ROA of 1.30% in quarter ended December 31, 2024, compared to 1.34% LQ, and 0.97% in PYQ Note: Data as of the th
Slide 5: Fourth Quarter 2024 GAAP Results
5 FOURTH QUARTER 2024 GAAP RESULTS (1) Share and per share-diluted amounts are based on total actual or average common shares outstanding, as applicable. (2) Core net revenue includes net interest income and noninterest income, adjusted for indemnification income, reimbursement of expenses (BaaS) an
Slide 6: Solid Balance Sheet Capital and Liquidity Ratios
6 SOLID BALANCE SHEET CAPITAL AND LIQUIDITY RATIOS Note: Data as of three months ended December 31, 2024 unless otherwise indicated (in millions) CASH & BORROWINGS • Combined $1.14 billion cash and immediate borrowing capacity • Represents 30.5% of total deposits at December 31, 2024 • Exceeds $543.
Slide 7: Balance Sheet Positioning
7 BALANCE SHEET POSITIONING Bank is well positioned for rate changes • Modestly liability sensitive balance sheet • 42% of our assets reprice within 3 months as of December 31, 2024 • 68% of our liabilities reprice within 3 months as of December 31, 2024 Community Bank: • 23% of community bank loans
Slide 8: Long-Term Strategic Verticals
8 LONG-TERM STRATEGIC VERTICALS The Community Bank “CCB” Provide Banking as a Service (BaaS) “CCBX” • Best-in-class community bank that offers lending and deposit products to commercial customers • Community bank loan portfolio consists primarily of CRE loans, Construction loans, Land and Land Devel
Slide 9: Compliance and Risk Investments Designed to Support Future Growth
9 COMPLIANCE AND RISK INVESTMENTS DESIGNED TO SUPPORT FUTURE GROWTH 4 4 5 5 9 11 12 14 19 43 64 69 80 92 110 116 150 176 210 228 211 211 258 218 216 Risk Management Compliance BSA Internal Audit CCBX Risk Co-sourced BSA Resources (1) Q4 - 2018 Q1 - 2019 Q2 - 2019 Q3 - 2019 Q4 - 2019 Q1 - 2020 Q2 - 2
Slide 10: Segment Updates: CCBX & Community Bank
10 SEGMENT UPDATES: CCBX & COMMUNITY BANK
Slide 11: CCBX Banking as a Service Partners Overview
11 21 22 24 19 19 19 1 1 1 1 1 1— 1 3— — Wind down - active but preparing to exit relationship Signed letters of intent Implementation / onboarding Friends and family / testing Active December 31, 2023 September 30, 2024 December 31, 2024 CCBX provides banking as a service (BaaS) that enables broker
Slide 12: Banking as a Service Partners
Banking as a Service – “BaaS” Partners 12 (1) The acquisition of Brigit by Upbound Group is expected to close in Q1 2025, subject to receipt of requisite regulatory approvals and satisfaction of other customary closing conditions. (1)
Slide 13: CCBX Revenue Growth
13 CCBX REVENUE GROWTH As of and for the three month period indicated (Dollars in thousands) $4,369 $4,825 $6,096 $6,436 $8,210 December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 BaaS Program Fee Income Note: Data as of and for the quarter ended December 31, 2024, un
Slide 14: Growth in CCBX Activity Based Income
14 GROWTH IN CCBX ACTIVITY BASED INCOME CCBX TRANSACTION AND INTERCHANGE INCOME (Dollars in thousands) 62.4% growth over prior year quarter $2,278 $2,661 $2,934 $3,549 $3,699 $1,006 $1,122 $1,309 $1,696 $1,783 $1,272 $1,539 $1,625 $1,853 $1,916 Transaction income Interchange income 4Q2023 1Q2024 2Q2
Slide 15: CCBX Loans and Deposits
15 CCBX LOANS AND DEPOSITS (Dollars in billions) $1.86 $2.10 $2.06 Other deposits Demand, noninterest bearing Interest bearing December 31, 2023 September 30, 2024 December 31, 2024 (Dollars in billions) $1.20 $1.52 $1.60 Other consumer loans Residential RE secured credit cards Commercial and indust
Slide 16: Community Bank Loans and Deposits
16 COMMUNITY BANK LOANS AND DEPOSITS (Dollars in billions) $1.50 $1.52 $1.52 Time deposits Demand, noninterest bearing Interest bearing December 31, 2023 September 30, 2024 December 31, 2024 Community Bank Loans Community Bank Deposits Note: Data as of and for the quarter ended December 31, 2024, un
Slide 17: Segment Overview - Community Bank and CCBX
17 SEGMENT OVERVIEW - Community Bank and CCBX (for the three months ended) 1.57% 1.92% 1.86% 4.90% 4.82% 4.19% 3.36% 3.59% 3.21% Community Bank CCBX Consolidated December 31, 2023 September 30, 2024 December 31, 2024 —% 2.50% 5.00% 7.50% Average Cost of Deposits (annualized) 6.32% 6.64% 6.53% 17.36%
Slide 18: Segment Overview - Credit Quality
18 SEGMENT OVERVIEW - Credit Quality 1.18% 1.06% 1.00% 7.97% 9.87% 9.86% 3.86% 4.98% 5.08% Community Bank CCBX Consolidated December 31, 2023 September 30, 2024 December 31, 2024 —% 1.25% 2.50% 3.75% 5.00% 6.25% 7.50% 8.75% 10.00% Allowance for Loan Losses to Total Loans CCBX partner agreements prov
Slide 19: Coastal World
19 Coastal World is an immersive 3D web platform that promotes, educates, and informs visitors about digital banking solutions that best fit their lifestyle, values, or specific financial situations through a fun and engaging online experience. Opportunity and Potential www.coastalworld.com Engageme
Slide 20: Appendix
20 APPENDIX
Slide 21: Coastal Community Bank Overview
21 • Established in 1997 with a focus on serving small to medium- sized businesses within the Puget Sound region • Offers traditional lending and deposit products to commercial and retail customers as well as treasury management, remote deposit capture and credit processing • Largest bank by deposit
Slide 22: Loan Composition
22 CRE - Non- Owner Occupied 16.2% CRE - Owner Occupied 11.4% C&I 8.4% Installment loans 18.9% Credit cards 15.1% Other consumer .6% 1-4 Family 13.4% Construction and Land Development 4.2% Multifamily 11.8% LOAN COMPOSITION Consolidated Loan Composition Community Bank Loan Concentrations by County C
Slide 23: CCBX Loan Portfolio Statistics & Lending Approach
23 CCBX LOAN PORTFOLIO STATISTICS & LENDING APPROACH CCBX Loan Portfolio Information December 31, 2024 (dollars in thousands; unaudited) Type of Lending Balance Percent of CCBX loans receivable Available Commitments (1) Maximum Portfolio Size Number of Accounts (2) Average Loans Size Cash Reserve/ P
Slide 24: Deposit Composition
24 Demand, noninterest bearing 14.7% Interest bearing demand and money market 70.5% Savings 1.9% Time deposits < $100K .2% Time deposits > $100K .3% Other deposits 12.4% DEPOSIT COMPOSITION Deposit CompositionEmphasis on core deposits has helped generate an attractive funding mix • Core deposits are
Slide 25: Deposit Costs
25 DEPOSIT COSTS • Cost of total deposits was 3.21% for the quarter ended December 31, 2024 compared to 3.59% for the quarter ended September 30, 2024, and 3.36% for the quarter ended December 31, 2023 ◦ Cost of deposits for the community bank and CCBX were 1.86% and 4.19%, respectively, for the qua
Slide 26: Loan and Deposit Growth
26 LOAN AND DEPOSIT GROWTH $3.03 $3.42 $1.83 $1.90 $1.88 $1.20 $1.52 $1.60 Community Bank CCBX December 31, 2023 September 30, 2024 December 31, 2024 Loans increased $67.7 million or 2.0% from September 30, 2024 and growth of 15.2% since December 31, 2023 Additional $273.2 million in CCBX deposits w
Slide 27: Asset Quality
27 ASSET QUALITY (1) These ratios are impacted by the increase in CCBX loans over 90 days delinquent that are covered by CCBX partner credit enhancements, see note below for more information. CCBX loans represent 1.52% and 1.79% for NPAs/Total Assets and NPLs/Loans Receivable, respectively as of Dec
Slide 28: Non-GAAP Reconciliation - CCBX Net BaaS Loan Income
28 NON-GAAP RECONCILIATION –CCBX Net BaaS Loan Income Interest Margin The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. How
Slide 29: Non-GAAP Reconciliation - Net Interest Margin, net of BaaS Loan Expense
29 NON-GAAP RECONCILIATION –Net Interest Margin, net of BaaS Loan Expense The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance.
Slide 30: Non-GAAP Reconciliation - PPNR & Core Expense
30 NON-GAAP RECONCILIATION – PPNR & Core Expense The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. However, these non-GAAP
Slide 31: Non-GAAP Reconciliation - Core Net Revenue
31 NON-GAAP RECONCILIATION – Core Net Revenue The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. However, these non-GAAP fin