Coastal Financial Reports Q2 GAAP Net Loss Due to BaaS Partner Issues
Coastal Financial Corporation (NASDAQ:CCB) reported a $42.1 million second-quarter net loss, driven by pre-tax adjustments of $68.8 million tied to an unnamed Banking-as-a-Service partner and its consumer loan portfolio. The losses included a $46 million valuation adjustment on credit enhancement assets and a $22.8 million provision for credit losses under the indemnification agreement with the partner. Despite these charges, Coastal's core operations showed growth: net interest income increased 7.2% to a record $89.4 million, loans rose by 9%, and BaaS program revenue climbed 10.3%. The affected portfolio includes about $500 million in consumer loans, with resolution expected over one or two quarters up to 12–18 months. The company stated the issue is isolated to this single partner and found no evidence of impropriety. Coastal remains well-capitalized but announced leadership changes including CFO Brandon Soto's departure and Joel Edwards' return as interim CFO.
Tickers: $CCB
Topics: BaaS partner issue leadership change loss