The market will heavily discount CCB's BaaS model following this credit event. Monitor the Q3 2026 earnings call for details on the specific partner's remediation plan, any changes to underwriting or partner concentration limits, and whether the credit enhancement asset valuation adjustment expands to other partners. The stock is likely to trade down significantly as the market reassesses the risk profile of the BaaS segment.
Price Chart
Executive Summary
Coastal Financial Corp (CCB) reported a Q2 2026 net loss of $42.1M, or $(2.76) per diluted share, a massive miss vs. the $1.01 consensus estimate, driven by a $68.8M credit expense tied to a single CCBX partner relationship. While core net interest income grew 7.2% QoQ to a record $89.4M and BaaS program income rose 10.3%, the unexpected credit charge and $46.0M valuation adjustment on the credit enhancement asset overwhelmed operating results, causing a GAAP net loss and a ~1 percentage point reduction in capital ratios. The stock is likely to react sharply negatively as the market prices in elevated counterparty risk within the BaaS model, despite management's assertion that the issue is isolated.
Key Financial Metrics
Key Facts
- Net loss of $42.1M vs. net income of $12.0M in Q1 2026 and $11.0M in Q2 2025.
- GAAP diluted EPS of $(2.76) vs. consensus estimate of $1.01 (a 373.9% miss).
- Record net interest income of $89.4M, up 7.2% QoQ and 16.4% YoY.
- BaaS program income grew 10.3% QoQ to $12.0M.
- Credit expenses of $68.8M related to a single CCBX partner, including a $22.8M specific provision and a $46.0M valuation adjustment on the credit enhancement asset.
- Company CET1 ratio fell ~120 bps to 10.86%, but remains well above well-capitalized minimums.
- Off-balance sheet credit cards with fee earning potential grew 32.2% QoQ to 881,659.
Financial Impact
Net loss of $42.1M, or $(2.76) per share, driven by $68.8M in credit expenses from one partner. Book value per share fell from $33.05 to $30.33 QoQ.
Risk Factors
- Further credit deterioration at the identified CCBX partner or other partners in the portfolio.
- Regulatory scrutiny or increased capital requirements for BaaS activities.
- Loss of partner confidence leading to reduced deposit inflows or program wind-downs.
- Potential for additional valuation adjustments on the credit enhancement asset if other partners face collectability issues.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001437958-26-000052 |
| Document: ck1437958-20260730.htm | 0001437958-26-000052 |
| Document: 0001437958-26-000052-index-headers.html | 0001437958-26-000052 |
| Document: 0001437958-26-000052-index.html | 0001437958-26-000052 |
| Document: 0001437958-26-000052.txt | 0001437958-26-000052 |
| 8-K Data (Synthetic) | 0001437958-26-000052 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 22, 2026 4d ago | Press Release | $44.90 | awaiting T+20 | — | $46.51 (+3.57%) |
Sep 28, 2026 29d ago | 8-K | $37.55 $45.08 | ▲ +20.07% | ▲ +20.10% | $46.51 (+23.86%) |
Aug 26, 2026 8w ago | 3 | $46.74 $43.62 | ▼ −6.68% | ▼ −6.17% | $46.51 (−0.50%) |
Aug 7, 2026 11w ago | Insider Cluster | $48.61 $49.47 | ▲ +1.77% | ▲ +2.68% | $46.51 (−4.33%) |
Jul 30, 2026 12w ago | 8-K | $39.91 $46.74 | ▼ −17.11% | ▼ −13.15% | $46.51 (−16.52%) |
Jul 30, 2026 12w ago | 8-K | $39.91 $46.74 | ▼ −17.11% | ▼ −13.15% | $46.51 (−16.52%) |
Jul 23, 2026 13w ago | Press Release | $72.19 | awaiting T+20 | — | $46.51 (−35.58%) |
Jul 22, 2026 13w ago | Press Release | $71.41 $46.06 | ▼ −35.51% | ▼ −38.81% | $46.51 (−34.88%) |
Jun 11, 2026 19w ago | Institutional Cluster | $73.53 $78.47 | ▲ +6.72% | ▲ +4.94% | $46.51 (−36.75%) |
May 1, 2026 25w ago | Insider Cluster | $76.39 $71.34 | ▼ −6.61% | ▼ −11.90% | $46.51 (−39.12%) |
US Market Status
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