Coastal Financial Corp Files 2023 Annual Report on Form 10-K

TL;DR

<b>Coastal Financial Corp has submitted its 2023 annual report (10-K) detailing its financial performance and operations.</b>

AI Summary

COASTAL FINANCIAL CORP (CCB) filed a Annual Report (10-K) with the SEC on March 15, 2024. Coastal Financial Corp filed its 2023 Form 10-K on March 15, 2024. The filing covers the fiscal year ending December 31, 2023. The company is classified under SIC code 6022 for State Commercial Banks. Coastal Financial Corp is incorporated in Washington (WA). The company's principal business address is in Everett, WA.

Why It Matters

For investors and stakeholders tracking COASTAL FINANCIAL CORP, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Coastal Financial Corp's financial health and strategic direction for the fiscal year 2023, crucial for investors and stakeholders to assess performance. As a commercial bank, the detailed financial disclosures in this report are essential for understanding its regulatory compliance, risk exposure, and market position within the banking sector.

Risk Assessment

Risk Level: medium — COASTAL FINANCIAL CORP shows moderate risk based on this filing. The company operates in the highly regulated commercial banking sector, which inherently carries significant market and operational risks that are detailed in the filing.

Analyst Insight

Review the detailed financial statements and risk factors in the 10-K to understand Coastal Financial Corp's performance and outlook for the upcoming fiscal year.

Key Numbers

• 20231231 — Fiscal Year End (CONFORMED PERIOD OF REPORT)
• 20240315 — Filing Date (FILED AS OF DATE)
• 142 — Public Document Count (PUBLIC DOCUMENT COUNT)
• 0001437958-24-000052 — Accession Number (ACCESSION NUMBER)

Key Players & Entities

• COASTAL FINANCIAL CORP (company) — COMPANY CONFORMED NAME
• 6022 (dollar_amount) — STANDARD INDUSTRIAL CLASSIFICATION
• WA (company) — STATE OF INCORPORATION
• 5415 EVERGREEN WAY (company) — BUSINESS ADDRESS STREET 1
• EVERETT (company) — BUSINESS ADDRESS CITY
• WA (company) — BUSINESS ADDRESS STATE
• 98203 (company) — BUSINESS ADDRESS ZIP
• 425-257-1652 (company) — BUSINESS PHONE

FAQ

Industry Context

Coastal Financial Corp operates within the commercial banking industry, a sector characterized by stringent regulations and sensitivity to economic conditions.

Regulatory Implications

As a commercial bank, Coastal Financial Corp is subject to oversight from various regulatory bodies, including those governing banking and financial institutions.

What Investors Should Do

1. Analyze the company's financial statements for revenue trends, profitability, and asset quality.
2. Review the risk factors section to understand potential challenges and mitigation strategies.
3. Assess the company's BaaS (Banking as a Service) program performance and associated fees/expenses.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.
• 2024-03-15: Filing Date — Date the 10-K was officially filed with the SEC.

Year-Over-Year Comparison

This filing represents the annual 10-K for the fiscal year 2023, providing updated financial and operational information compared to previous filings.

Key Financial Figures

• $3.75 b — cember 31, 2023, we had total assets of $3.75 billion, total loans receivable of $3.03
• $3.03 b — 3.75 billion, total loans receivable of $3.03 billion, total deposits of $3.36 billion
• $3.36 billion — ble of $3.03 billion, total deposits of $3.36 billion and total shareholders' equity of $295.
• $295.0 million — llion and total shareholders' equity of $295.0 million. Throughout this Report on Form 10-K,
• $159.5 billion — .0 million, over 174,000 businesses and $159.5 billion of deposits with us and other banking i
• $291.3 million — Loans . As of December 31, 2023, we had $291.3 million of commercial and industrial loans, rep
• $149.5 million — mmercial and industrial loan balance is $149.5 million in community bank loans and $141.8 mill
• $141.8 million — 9.5 million in community bank loans and $141.8 million in CCBX commercial loans. We make comme
• $87.5 million — iles. As of December 31, 2023, we held $87.5 million in capital call lines provided to ventu
• $2.7 m — SBA portfolio, excluding PPP loans, was $2.7 million, net of $3.5 million in loans sol
• $3.5 million — ing PPP loans, was $2.7 million, net of $3.5 million in loans sold, with $1.3 million guaran
• $1.3 million — net of $3.5 million in loans sold, with $1.3 million guaranteed by the SBA. We participate i
• $150,000 — greater than 4 Table of Content s $150,000. For loans $150,000 or less, the progra
• $5 million — aranty. The maximum 7(a) loan amount is $5 million. The guaranty is conditional and covers
• $3.0 million — ommercial and industrial loans included $3.0 million in PPP loans. These are SBA loans that

Filing Documents

• ck1437958-20231231.htm (10-K) — 5614KB
• a10-kccbx20231231xexx231.htm (EX-23.1) — 3KB
• a10-kccbx20231231xexx311.htm (EX-31.1) — 10KB
• a10-kccbx20231231xexx312.htm (EX-31.2) — 10KB
• a10-kccbx20231231xexx321.htm (EX-32.1) — 5KB
• a10-kccbx20231231xexx322.htm (EX-32.2) — 5KB
• a122023executivecompensati.htm (EX-97.1) — 33KB
• ck1437958-20231231_g1.jpg (GRAPHIC) — 88KB
• 0001437958-24-000052.txt (&nbsp;) — 24409KB
• ck1437958-20231231.xsd (EX-101.SCH) — 127KB
• ck1437958-20231231_cal.xml (EX-101.CAL) — 191KB
• ck1437958-20231231_def.xml (EX-101.DEF) — 857KB
• ck1437958-20231231_lab.xml (EX-101.LAB) — 1376KB
• ck1437958-20231231_pre.xml (EX-101.PRE) — 1146KB
• ck1437958-20231231_htm.xml (XML) — 4831KB

Forward Looking Statements

Forward Looking Statements i Part I Item 1

Business

Business 3 Information About our Executive Officers 26 Item 1A

Risk Factors

Risk Factors 27 Item 1B Unresolved Staff Comments 47 Item 1 C Cybersecurity 47 Item 2

Properties

Properties 48 Item 3

Legal Proceedings

Legal Proceedings 49 Item 4 Mine Safety Disclosures 49 Part II Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases 50 Item 6 [Reserved] 52 Item 7

Management's Discussion and Analysis of Financial Condition and Operations

Management's Discussion and Analysis of Financial Condition and Operations 52 Item 7A

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 111 Item 8

Financial Statements and Supplementary Data (Moss Adams LLP, Everett, WA, PCAOB ID: 659 )

Financial Statements and Supplementary Data (Moss Adams LLP, Everett, WA, PCAOB ID: 659 ) 111 Consolidated Balance Sheets 115 Consolidated Statements of Income 116 Consolidated Statements of Comprehensive Income 118 Consolidated Statements of Changes in Shareholders' Equity 119 Consolidated Statements of Cash Flows 120

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 122 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 173 Item 9A

Controls and Procedures

Controls and Procedures 173 Item 9B Other Information 174 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 174 Part III Item 10 Directors, Executive Officers and Corporate Governance 175 Item 11

Executive Compensation

Executive Compensation 175 Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 175 Item 13 Certain Relationships and Related Transactions, and Director Independence 176 Item 14 Principal Accountant Fees and Services 176 Part IV Item 15 Exhibits and Financial Statement Schedules 177 Item 16 Form 10-K Summary 181

Signatures

Signatures 181 Table of Content s CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (this Report on Form 10-K) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management's expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "intends" and similar words or phrases. Any or all of the forward-looking statements in this Report on Form 10-K may turn out to be inaccurate. The inclusion of or reference to forward-looking information in this Report on Form 10-K should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors more fully described under the caption "Item 1A. Risk Factors" and elsewhere in this Report on Form 10-K; changes in business and economic conditions generally and in the financial services industry, nationally and within our market area, particularly in the markets in which we operate and in which our loans are concent

Business

Item 1. Business Our Company Coastal Financial Corporation ("Company") is a registered bank holding company, whose wholly owned subsidiaries are Coastal Community Bank ("Bank") and Arlington Olympic LLC ("LLC"). The Company is a Washington state corporation that was organized in 2003. The Bank was incorporated and commenced operations in 1997 and is a Washington state-chartered commercial bank and Federal Reserve System ("Federal Reserve") member bank. The LLC was formed in 2019 and owns the Company's Arlington branch, which the Bank leases from the LLC. Our executive offices are located at 5415 Evergreen Way, Everett, Washington 98203 and our telephone number is (425) 257-9000. Our website address is www.coastalbank.com. Information on our website should not be considered a part of this Report on Form 10-K. We are headquartered in Everett, Washington, which by population is the largest city in, and the county seat of, Snohomish County. Our business is conducted through three reportable segments: The community bank, CCBX and treasury & administration. The primary focus of the community bank is on providing a wide range of banking products and services to consumers and small to medium sized businesses in the broader Puget Sound region in the state of Washington and through the Internet and our mobile banking application. We currently operate 14 full-service banking locations, 12 of which are located in Snohomish County, where we are the largest community bank by deposit market share, and two of which are located in neighboring counties (one in King County and one in Island County). The CCBX segment provides banking as a service ("BaaS") that allows our broker-dealer and digital financial service partners to offer their customers banking services. The CCBX segment has a total of 21 partners, 19 that are active with two more currently in the testing or implementation stage as of December 31, 2023. The treasury & administration segment includes investments, debt and

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View this 10-K filing on SEC EDGAR