Coastal Financial Corporation (NASDAQ:CCB) shares dropped 4.3% on Tuesday after the company reported second-quarter results that came in below analyst forecasts on both revenue and earnings.
For the quarter ending June 30, 2025, Coastal reported net income of $11.0 million, or $0.71 per diluted share—falling short of the $0.84 per share expected by analysts. Revenue totaled $119 million, significantly under the consensus estimate of $151.37 million. Earnings per share also declined from $0.84 in the same quarter a year earlier.
Despite the miss, the company highlighted positive momentum in its Banking as a Service (CCBX) segment. Fee income from BaaS programs reached $6.8 million (excluding $504,000 in nonrecurring revenue), reflecting an 8.2% increase over Q1. Lower provisions for credit losses also contributed to improved results in the segment.
“Second quarter of 2025 saw a lower provision for credit losses as a result of an improvement in the performance of the CCBX portfolio and our focus on originating higher quality CCBX loans resulting in lower historical loss factors,” stated CEO Eric Sprink.
Deposits continued to trend upward, with total deposits increasing by $122.3 million to $3.91 billion during the quarter. Average deposits rose 6.0% from the previous quarter to $3.93 billion.
Operating expenses remained stable at $72.8 million, inching up just 1.2% from Q1. The increase was mainly driven by higher data processing and software costs, partially offset by reduced legal and professional fees.
Looking ahead, Sprink commented, “We expect expense growth should moderate considerably in the second half of 2025, with new programs or products starting to produce revenue to offset the initial up-front expenses.”
Coastal also continues to grow its BaaS platform, with two partners currently in testing, two in the implementation phase, and five signed letters of intent as of the end of the second quarter.
Coastal Financial Corporation stock price
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.