CCB

Analyst Note: Coastal Financial Corporation (CCB)

Date: June 13, 2026 Current Price: $71.65

1. Structural Readiness

Aggressive/Pre-Breakout Entry: Current price ($71.65) represents a partial entry signal for a forming coil, provided the price holds above the structural support line. Current Price Extension: N/A (Price is currently in the consolidation/pullback phase of the forming coil, not in an extension). ATR Context: Current ATR is 3.3% (Productive). This sits within the historical "productive" range, suggesting sufficient volatility to support a move but not yet in the "extreme" (>8%) or "weak" (<2.5%) zones.

2. Thesis Layer

Thesis Classification: Tactical / Setup-Led Macro Thesis Status: None. Analysis: As of June 13, 2026, there is no named secular macro thesis driving this name. The investment case is strictly tactical, derived from the quality of the technical setup (the forming coil) and the specific fundamental inflection points observed in the recent filings. We are judging this name on its structural readiness and business fundamentals, not on a broader thematic rotation.

3. Business Overview

Company Profile: Coastal Financial Corporation (CCB) operates as the parent company for Coastal Community Bank, headquartered in Everett, Washington. The company serves the Puget Sound region (Snohomish, King, and Island Counties) with 14 full-service banking locations. Business Model: The company operates a dual-engine model:

• Traditional Community Banking: Providing consumer and commercial lending, deposits, and cash management services to the local Puget Sound market.
• Banking as a Service (CCBX): A high-growth segment enabling digital financial service providers to offer banking services to their customers.

Key Fundamentals (as of Q1 2026 filings):

• CCBX Growth: The CCBX segment is a primary growth driver. Average loans receivable in this segment reached $1.92 billion for the quarter ended March 31, 2026, up 17.9% year-over-year from $1.63 billion.
• Partner Expansion: The CCBX segment expanded its partner base to 30 partners as of March 31, 2026, up from 28 as of December 31, 2025.
• Total Loan Portfolio: Total loans receivable grew to $3.86 billion at March 31, 2026, from $3.52 billion a year prior.
• Credit Quality: The provision for credit losses decreased to $51.4 million in Q1 2026 from $55.8 million in Q1 2025, indicating improving asset quality or lower risk provisioning needs.
• Net Interest Income (NII): NII increased 9.6% to $83.4 million for the quarter ended March 31, 2026, compared to $76.1 million in the prior year period.
• Credit Enhancement: As of December 31, 2025, 98.8% of CCBX loans were covered by credit enhancement, mitigating risk in the digital lending channel.
• Strategic M&A: Subsequent to March 31, 2026, the Bank entered a non-binding term sheet with Evolve Bank & Trust to explore the acquisition of certain BaaS programs, signaling management's intent to expand the CCBX footprint organically and inorganically.

4. Archetype and Conviction

Archetype: Growth Leader Fit Analysis: CCB fits the "Growth Leader" archetype due to the double-digit growth in its CCBX segment (17.9% loan growth) and the expansion of its partner ecosystem. The company is successfully leveraging its balance sheet to capture the "Banking as a Service" trend while maintaining a dominant local market share (largest community bank in Snohomish County by deposit share).

Valuation Context:

• Forward Consensus: The financial spine indicates a Forward Consensus EPS of $4.465 for FY1 and $7.005 for FY2.
• Implied Growth: The jump from FY1 to FY2 consensus suggests the market expects significant earnings acceleration, likely driven by the scaling of the CCBX segment and the potential integration of the Evolve Bank & Trust programs.
• Conviction Stack:
• *Thesis Strength:* Moderate (Tactical, no macro tailwinds).
• *Evidence Quality:* High (Recent filings show clear growth metrics and strategic M&A activity).
• *Setup Readiness:* Partial (Forming coil requires breakout confirmation).
• *Rerating Potential:* High (If the breakout occurs, the combination of earnings growth and the M&A narrative could drive a multiple expansion).

5. Invalidations, Strengths, and Gaps

What Would Strengthen the Case:

• Fundamental: Confirmation of the Evolve Bank & Trust acquisition or a significant increase in CCBX partner count beyond 30.
• Operational: Continued reduction in provision for credit losses alongside NII growth.

What Would Invalidate the Case:

• Fundamental: A reversal in the CCBX loan growth trend or a significant increase in credit losses that erodes the 98.8% credit enhancement coverage.

Evidence Gaps:

• M&A Terms: The term sheet with Evolve is non-binding; specific deal terms, valuation, and timing are unknown.
• Full Year Guidance: While FY1 and FY2 consensus exist, specific management guidance for the full year 2026 regarding the integration of new partners is not detailed in the provided snippets.

PRIVATE ANALYST CALL

Judgment: Speculative Confidence: medium Key evidence: CCBX loans grew 17.9% YoY to $1.92B; 30 partners as of March 2026; 98.8% of CCBX loans covered by credit enhancement; Forward EPS consensus jumps from $4.47 to $7.01. Key risks: Technical setup is "Forming" and not yet confirmed; M&A with Evolve is non-binding and unconfirmed; Regional concentration in Puget Sound; Potential for credit loss spikes if digital lending partners underperform. Sizing hint: Position size should be conservative relative to a confirmed breakout, reflecting the "Forming" state and the binary nature of the M&A news. Expected path: Management expects CCBX to continue scaling via the Evolve acquisition and organic partner additions; price likely consolidates near current levels until a technical breakout or fundamental confirmation occurs. Expected horizon: 3 to 6 months for the setup to resolve (breakout or invalidation).