Earnings call transcript: Coastal Financial returns to profit in Q3 2026 despite miss

Coastal Financial Corp. delivered a profit in Q3 2026, posting $13.8 million in net income or $0.89 per diluted share, after a sharp loss in the previous quarter. Revenue stood at $149.33 million, below Wall Street's $158.86 million forecast, and EPS missed expectations of $0.9619. The stock rose 1.46% in premarket trading to $47.82.

Coastal Financial regained profitability after a $42.1 million loss in Q2, driven by lower credit costs and stronger capital levels. Program fee income from Banking-as-a-Service (BaaS) grew significantly, up 17.6% year-over-year and 79.6% year-over-year. Net interest income was $88.3 million, down 1.2% sequentially but up 13.4% year-over-year.

The company's common equity Tier 1 ratio rose to 11.47%, indicating improved capital levels. Coastal Financial identified over $20 million in annualized expense savings and expects further savings in the coming quarters. The earnings miss was not large in absolute terms, but investors viewed it positively given the overall recovery in the company's financial health.