Coastal Financial Corp (CCB) Announces Q3 2023 Earnings
Coastal Financial Corp (NASDAQ:CCB) reported a net income of $10.3 million for Q3 2023, a decrease from $12.9 million in Q2 2023.
Total assets increased by $145.0 million, or 4.1%, to $3.68 billion in Q3 2023.
Total loans, net of deferred fees, decreased by $40.5 million, or 1.3%, to $2.97 billion in Q3 2023.
Deposits increased by $127.1 million, or 4.0%, to $3.29 billion in Q3 2023.
Coastal Financial Corp (NASDAQ:CCB) released its Q3 2023 earnings report on October 27, 2023. The company reported a net income of $10.3 million, or $0.75 per diluted common share, for the three months ended September 30, 2023. This is a decrease from the net income of $12.9 million, or $0.95 per diluted common share, reported for the three months ended June 30, 2023. The Return on Average Assets (ROA) and Return on Average Equity (ROE) for the quarter were 1.13% and 14.60% respectively.
Financial Performance
CCB's total assets increased by $145.0 million, or 4.1%, to $3.68 billion for the quarter ended September 30, 2023, compared to $3.54 billion at the end of June 2023. Total loans, net of deferred fees, decreased by $40.5 million, or 1.3%, to $2.97 billion for the quarter ended September 30, 2023. This decrease was part of the company's strategy to reduce risk, optimize the CCBX loan portfolio, and strengthen the balance sheet through enhanced credit standards.
Deposits and Liquidity
Deposits increased by $127.1 million, or 4.0%, to $3.29 billion for the quarter ended September 30, 2023. The company reported a capacity to borrow up to $577.9 million from the Federal Home Loan Bank and the Federal Reserve Bank discount window, with no borrowings taken under these facilities since the first quarter of 2022.
Investment Portfolio
The company's investment portfolio as of September 30, 2023, included available for sale (AFS) investments of $98.9 million, compared to $98.2 million as of June 30, 2023, of which 99.7% are U.S. Treasuries. The company also held to maturity (HTM) investments of $42.6 million, of which 100% are U.S. Agency mortgage-backed securities held for CRA purposes.
Company's Outlook
Eric Sprink, the CEO of the Company and the Bank, stated,
At Coastal we pride ourselves on being proactive in how we serve our customers, manage risk and position the Bank for shareholders. We continue to focus on our BaaS business by concentrating on working with larger partners and optimizing our CCBX loan portfolio so we can grow and advance our presence in the BaaS space."
Despite the decrease in net income, the company's overall financial position remains strong with a significant increase in total assets and deposits. The company's strategy to reduce risk and optimize the loan portfolio appears to be effective, as evidenced by the decrease in total loans and the increase in total assets and deposits.
Explore the complete 8-K earnings release (here) from Coastal Financial Corp for further details.
This article first appeared on GuruFocus.
