NASDAQ$CCB

Coastal Financial Corporation · Q3 2021 earnings

Q3 2021 earnings · · Investor relations

Briefing

Coastal Financial's performance was marked by significant asset and deposit growth, driven by the expansion of its CCBX division, while net income saw a slight decrease compared to the previous quarter.

Coastal Financial Corporation reported a strong third quarter with significant growth in total assets and deposits. Total assets increased by $444.4 million to $2.45 billion, and total deposits increased by $421.9 million to $2.22 billion. Net income for the quarter was $6.7 million, or $0.54 per diluted common share.

  • Total assets increased by $444.4 million, reaching $2.45 billion.
  • Total deposits grew by $421.9 million, totaling $2.22 billion.
  • Loan growth reached $47.5 million, despite $130.8 million in PPP loan forgiveness.
  • Net income amounted to $6.7 million, or $0.54 per diluted common share.

Headline financials

Total Revenue

$24.9M

Previous: $17M+46.4%
EPS (adj)

$0.54

Previous: $0.34+58.8%
Return on Avg. Assets

1.2%

Previous: 0.9%+27.4%
Return on Avg. Equity

16.8%

No prior period
Yield on Loans Receivable

4.6%

No prior period
Cost of Funds

0.2%

No prior period
Cost of Deposits

0.1%

No prior period
Efficiency Ratio

64.7%

No prior period
Loans to Deposits

76.7%

No prior period
Capital Expenditures

-$2.19M

Previous: -$4.75M+53.9%
Free Cash Flow

$4.5M

Previous: -$660K+781.2%
Net Income

$6.68M

Previous: $4.09M+63.4%
Operating Income

$21.8M

Previous: $12.8M+69.9%
Gross Profit

$24.5M

Previous: $16.7M+46.5%
Cash & Equivalents

$670M

Previous: $182M+267.6%
Total Assets

$2.45B

Previous: $1.75B+40.1%
Stock-Based Comp

$268K

Previous: $144K+86.1%

Revenue & EPS history

Coastal Financial · Revenue · Quarterly

$24.9M

Q3 2021+46.4%vs Q3 2020
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Revenue by segment

Coastal Financial · $60.3M total across 2 segments · Q3 2023

  • CCBX
    $41M+30.3%
  • Community Bank
    $19.3M-15.1%

Forward guidance

Management expects net interest margin to fluctuate as PPP loans are forgiven and paid off. They also anticipate an increase in software license, maintenance, and subscription expenses due to investments in automated processing and product line growth for CCBX and CCDB.

Tailwinds

  • Continued forgiveness payments from the SBA.
  • Ongoing vaccination efforts and increased re-opening of economic activities.
  • Successful customer migration from deferral to active status.
  • Access to $331.1 million in CCBX customer deposits that are swept off the balance sheet.
  • Strong pipeline of potential new CCBX relationships.

Headwinds

  • Net interest margin will likely fluctuate over the near term as PPP loans continue to be forgiven and paid off.
  • Increased demand deposits and cash on the balance sheet resulting in a lower loan to deposit ratio.
  • Market conditions for deposits continued to be competitive.
  • The long-term economic impact of the COVID-19 pandemic, political gridlock, and trade issues is unknown.
  • Legal and professional fees increased due to CCBX division expenses and higher costs associated with financial reporting.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2021

Historical avgQ3 2021

+1.8%

Avg return

Earnings day

+1.0%

Avg return

5 days after

+3.7%

Avg return

30 days after

69%

24 / 35 earnings

Positive

+10.4%

Q1 2023

Best reaction

-9.0%

Q3 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+4.0%-15.2%-18.0%
Q4 2025+0.1%-11.3%-26.5%
Q3 2025-3.4%-1.3%+2.8%
Q1 2025+0.3%+3.7%+3.8%
Q4 2024+6.8%+0.4%-2.6%
Q3 2024+10.4%+8.2%+32.1%
Q2 2024+0.1%-7.0%-0.5%
Q1 2024-4.7%+3.2%+6.0%
Q4 2023-6.6%-8.8%-10.2%
Q3 2023-9.0%-9.7%-1.9%
Q2 2023-3.0%-6.2%-8.3%
Q1 2023+10.4%+2.8%+8.2%
Q4 2022+3.9%+8.4%+5.2%
Q3 2022+9.9%+15.6%+18.4%
Q2 2022+4.6%+3.8%+2.9%
Q1 2022+1.1%-0.0%-4.0%
Q4 2021-3.9%+1.8%-2.9%
Q3 2021+3.7%+11.3%+27.0%
Q2 2021+3.1%+1.5%+3.7%
Q1 2021+5.7%+7.2%+11.9%
Q4 2020-1.7%-3.7%+31.8%
Q3 2020+7.0%+15.7%+32.1%
Q2 2020-2.8%-2.1%+0.7%
Q1 2020+8.6%-3.3%+17.8%
Q4 2019+1.6%+2.3%-4.2%
Q3 2019+0.3%-0.1%+12.0%
Q2 2019+4.2%+3.5%-3.4%
Q1 2018-0.1%-2.4%-2.5%
Q1 2019+1.5%-0.8%-1.6%
Q2 2018+6.8%+7.1%+2.3%
Q4 2017+6.8%+7.1%+2.3%
Q4 2018+0.9%-2.5%+10.1%
Q3 2017-1.1%+1.0%-13.3%
Q3 2018-4.6%-0.9%-4.4%
Q2 2017+2.3%+5.3%+3.8%
Q1 2017

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