Coastal Financial Corporation reported first‑quarter 2026 results on April 29, 2026, showing net interest income of $83.36 million and a net income of $12.0 million, a 23.5% year‑over‑year increase from $9.7 million in Q1 2025. Basic earnings per share rose to $0.78 and diluted earnings per share matched that figure, both falling short of the consensus estimate of $1.03–$1.05 per share. Total revenue reached $149.4 million, up 8.3% from the prior quarter, but missed the consensus range of $138.63–$153.07 million.
The earnings miss was driven primarily by margin compression. Net interest margin (NIM) slipped to 7.00% from 7.03% in Q4 2025 and 7.48% a year earlier, while NIM excluding BaaS loan expense fell to 3.90% from 4.26% in the preceding quarter. The decline reflects higher BaaS loan expenses that eroded the bank’s core interest‑earning profitability.
Segment performance highlights the continued expansion of the CCBX Banking‑as‑a‑Service unit. BaaS program fee income surged 73.4% year‑over‑year, contributing to the overall revenue growth, but the associated loan‑expense costs increased sharply, offsetting the margin gains. Meanwhile, total assets grew $922.4 million to $5.66 billion and deposits rose $897.0 million to $5.56 billion, underscoring the bank’s balance‑sheet strength even as cost pressures mount.
CEO Eric Sprink noted the balance‑sheet gains and the CCBX momentum: "During the first quarter of 2026, total assets increased $922.4 million, or 19.5%, to $5.66 billion at March 31, 2026, compared to $4.74 billion at December 31, 2025. Deposits grew by $897.0 million, or 21.6%, and loans receivable increased by $109.8 million, a 2.9% rise, marking another period of solid growth." He added that elevated deposit balances should normalize in Q2 2026 as sweep and reciprocal networks are more fully utilized.
Market reaction was negative, with the stock trading down 14.0% on April 29, 2026, to $74.51. Investors focused on the EPS miss, the compression of net interest margins—particularly the 3.90% NIM excluding BaaS loan expense—and the rising BaaS‑related costs that threaten profitability, despite the strong growth in assets, deposits, and the CCBX segment.
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