Coastal Financial Corporation · NASDAQ:CCB
Coastal Financial — Q2 2021 Earnings Presentation
31 slides from Coastal Financial's earnings presentation, Jul 27, 2021
Slide 1: Investor Presentation
July 27, 2021 INVESTOR PRESENTATION Exhibit 99.1
Slide 2: Legal Information and Disclaimer
LEGAL INFORMATION AND DISCLAIMER This presentation and oral statements made regarding the subject of this presentation contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Coastal Financial Corporation
Slide 3: Three Prong Long-Term Strategy
THREE PRONG LONG-TERM STRATEGY Driving Long-Term Value for Shareholders 3-Prong Strategy “CFC” The Community Bank “CCB” Provide Banking as a Service (BaaS) “CCBX” Coastal’s Digital Bank “CCDB” Compliance Operational Integrity No matter how we talk to our customers or what type of customer, Complianc
Slide 4: CFC Financial Highlights
Core Deposits (3) CFC FINANCIAL HIGHLIGHTS Total Assets Note: Annual data as of or for the year ended December 31 of each respective year (3) Consists of total deposits less all time and brokered deposits (4) 2017 net income is adjusted to exclude the impact of a deferred tax asset revaluation due t
Slide 5: Coastal Community Bank overview
Coastal Community Bank was established in 1997 with a focus on serving small to medium-sized businesses within the Puget Sound region. Headquarters Everett, Washington – the largest city in and county seat of Snohomish County Branches 14 full-service banking locations 12 in Snohomish County 1 in Isl
Slide 6: COVID-19 Response – PPP Loans
COVID-19 RESPONSE – PPP LOANS PPP loans: We have funded a total of $763.9 million in assistance to existing and new small business customers in 2020 and 2021 As of June 30, 2021, we have $398.0 million in PPP loans outstanding Net Deferred Fees on PPP loans: Total of $26.3 million on all PPP loans,
Slide 7: COVID-19 Response – PPP Loans
COVID-19 RESPONSE – PPP LOANS
Slide 8: COVID-19 Response – Loan Modifications
COVID-19 RESPONSE – LOAN MODIFICATIONS Status of All Deferred Loans(1) Deferral balances reflect deferrals still remaining as of June 30, 2021 All loans that have resumed payments are current. Two loans totaling $11.7 million remain on deferred or modified status as of June 30, 2021 and are expected
Slide 9: CCB Core Markets – Snohomish County
CCB CORE MARKETS – SNOHOMISH COUNTY Largest Locally HQ’d Bank in Snohomish County Notable Employers Source: S&P Global Market Intelligence; FDIC’s Summary of Deposits as of June 30, 2020 Total Deposits in Market for Coastal Financial Corporation are $1.6 billion at June 30, 2021 (2) Puget Sound Regi
Slide 10: CFC Loan Composition
CFC LOAN COMPOSITION Loan Composition Loan Concentrations by County 63.8% of loans (measured by dollar amount outstanding) were secured by real estate, and 88.2% were made to borrowers who live or conduct business, in the Puget Sound region $36.3 million legal lending limit as of June 30, 2021 Overa
Slide 11: CFC Deposit Composition
CFC DEPOSIT COMPOSITION Deposit Composition Core Deposit Driven Funding Emphasis on core deposits has helped generate an attractive funding mix Core Deposit Franchise Core deposits are all deposits excluding time deposits and brokered deposits Core deposits were 104.0% of total loans as of June 30,
Slide 12: Strong Asset Quality
STRONG ASSET QUALITY Asset Quality Trends NPAs / Assets (%), NPLs / Loans (%) and NCOs / Avg. Loans (%) Allowance for Loan Losses (“ALLL”) / NPLs (%) Note: Data as of and for the year ended December 31 of each respective year unless noted otherwise
Slide 13: Historic Profitability and Efficiency
HISTORIC PROFITABILITY AND EFFICIENCY Net Income and Return on Average Assets (assets for QE June 30, 2021 includes $398.0 million in PPP loans) Net Income ($mm) Efficiency Ratio (%) and Noninterest Expense (“NIE”) to Average Assets (%) (assets for QE June 30, 2021 includes $398.0 million in PPP loa
Slide 14: CFC Recent Developments
CFC RECENT DEVELOPMENTS 2021 Q2 Financial Results: Includes $398.0 million in PPP loans at June 30, 2021 and $365.8 million in PPP loans at December 31, 2020. Pre-Tax, Pre-Provision return on average assets is a non-GAAP measure that excludes the impact of the provision for income taxes and loan los
Slide 15: CCBX Recent Developments
CCBX Partner Growth: CCBX Financial Highlights: As of June 30, 2021, loan growth of $412,000, or 0.4%, compared to March 31, 2021, and $37.4 million or 57.0%, compared to December 31, 2020 Capital call line commitments increased $112.0 million, or 64.1%, to $286.8 million as of June 30, 2021, compar
Slide 16: Robust Sourcing Capabilities and Partnering
Since Inception of the Wholesale Banking Group in 2016 ROBUST SOURCING CAPABILITIES AND PARTNERING Thesis-Driven Sourcing Focused points of view and research with experts Proactive market mapping and product identification Diversity and inclusion Intensive Filtering Visionary management teams Strong
Slide 17: Fintech Company Stage
FINTECH COMPANY STAGE Seed Early Mid/Expansion Late/Mezzanine Exit Venture Investors Early–Stage: Between Seed and Series A: Partner with companies early and obtain long term loyal relationships Growth Company Stage Fintech’s Time Horizon 3 – 5 years in business Years 5 - 15 Debt Financing Later–Sta
Slide 18: CCBX Division
CCBX Division introduced January 2020 and was previously referred to as Wholesale Banking Group. Provides Banking as a Service (“BaaS”) enabling broker dealers and digital financial service providers to offer banking services to their communities. The “X” in CCBX is indicative of the technology serv
Slide 19: Banking as a Service and Financial Inclusion
BANKING AS A SERVICE AND FINANCIAL INCLUSION Coastal began offering Banking as a Service (“BaaS”) with the belief that being flexible while holding our partners to strong compliance and regulatory standards would benefit both the fintech and their customers. We also believed that the partnerships wo
Slide 20: Strong Commitment to Diversity & Inclusion
STRONG COMMITMENT TO DIVERSITY & INCLUSION 73% of our CCBX partners have a diverse* CEO 88% of our partners have a diverse* co-founder Diversity and inclusion has been incorporated throughout our partnering process including: Financial literacy for at-risk communities Underserved and under-represent
Slide 21: Audiences Served by CCBX Fintech Partners
AUDIENCES SERVED BY CCBX FINTECH PARTNERS Coastal Young Adults ESG Immigrants Underserved Small Business Black Women Latinx
Slide 22: CCDB - Coastal's Digital Bank Through Collaboration with Google
CCDB - COASTAL’S DIGITAL BANK THROUGH COLLABORATION WITH GOOGLE Coastal’s collaboration with Google is anticipated to be a great avenue for us to reach existing customers, our communities, and expand to new communities in the coming years. We expect that the new platform will provide customers with
Slide 23: Appendix
Appendix
Slide 24: CFC Selected Year-End Financials
CFC SELECTED YEAR-END FINANCIALS Refer to “Non-GAAP Reconciliation” in this Appendix for additional details. Share and per share amounts are based on total common shares outstanding, which includes common stock and nonvoting common stock. Tangible book value per share is a non-GAAP measure. Since th
Slide 25: CFC Selected Quarterly Financials
CFC SELECTED QUARTERLY FINANCIALS Core deposits are defined as all deposits excluding time and brokered deposits. Share and per share amounts are based on total common shares outstanding, which includes common stock and nonvoting common stock. Tangible book value per share is a non-GAAP measure. Sin
Slide 26: CFC Diverse Loan Portfolio
CFC DIVERSE LOAN PORTFOLIO CRE Loan and Available Commitment Breakdown as % of Total Outstanding Balances and Available Commitments (Excludes PPP Loans) Represents $825.9 and 45.4% of Total Outstanding Balances and Available Commitments (Excludes PPP Loans) C&I Loan Breakdown and Available Commitmen
Slide 27: CFC Loan Portfolio Statistics
CFC LOAN PORTFOLIO STATISTICS (1) (1) (2) (2) (3) Based on best available data. If a loan has multiple guarantors, FICO score represented is highest of the guarantors. FICO scores are based off origination unless updated through annual term loan review or other credit action. Loan to Value (“LTV”) d
Slide 28: COVID-19 Update – Company and Washington State Re-opening
COVID-19 UPDATE – COMPANY and WASHINGTON STATE RE-OPENING As of June 30, 2021, Washington state re-opened under the Washington Ready plan. All industry sectors previously covered by the Roadmap to Recovery or the Safe Start plan, with limited exceptions, returned to usual capacity and operations. Ef
Slide 29: Non-GAAP Reconciliation – PPP Loan Impact
NON-GAAP RECONCILIATION –PPP LOAN IMPACT The following non-GAAP financial measures are presented to illustrate and identify the impact of PPP loans on Tier 1 Capital, we are providing investors with this information to better compare results with periods that did not have these significant impacts.
Slide 30: Non-GAAP Reconciliation – Pre-Tax, Pre-Provision
NON-GAAP RECONCILIATION – PRE-TAX, PRE-PROVISION Some of the financial measures included in this presentation are not measures of financial performance recognized by GAAP. The following non-GAAP measures are presented to illustrate the impact of provision for loan losses and provision for income tax
Slide 31: Non-GAAP Reconciliation – 2017 Adjusted Measures
NON-GAAP RECONCILIATION – 2017 ADJUSTED MEASURES Some of the financial measures included in this presentation are not measures of financial performance recognized by GAAP. Our management uses the non-GAAP financial measures set forth below in its analysis of our performance for 2017 to exclude the i