Coastal Financial (NASDAQ:CCB) Returns to Profitability in Q3 2026 as BaaS Fee Income Surges 80% Year Over Year

Sonal Goyal

30 October 2026 09:16 PM AEDT

Coastal Financial (NASDAQ:CCB) Returns to Profitability in Q3 2026 as BaaS Fee Income Surges 80% Year Over Year

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Key Highlights

Net income of $13.8 million, or $0.89 diluted EPS, recovering from a Q2 2026 net loss of $42.1 million.
BaaS program fee income grew 79.6% year over year to $14.1 million, up 17.6% sequentially from Q2.
Off-balance-sheet Credit card accounts reached 1.3 million, up 236% year over year.
Community bank deposits grew $63.2 million, or 4.0%, to $1.64 billion during the quarter at a cost of 1.54%.

Recovery After a Challenging Q2

Coastal Financial Corporation (NASDAQ:CCB) returned to profitability in the third quarter of 2026, reporting Net Income of $13.8 million, or $0.89 per diluted common share, compared to a net loss of $42.1 million, or $2.76 per diluted share, in Q2 2026. The second quarter had been burdened by $22.8 million in credit provisions and a $46.0 million credit enhancement asset valuation adjustment related to a single BaaS partner. The company's Return on Assets was 1.01% for the third quarter.

During Q3, management conducted an updated review of the affected partner relationship—including portfolio performance, expected credit losses, and collectability of indemnification obligations—and found that conditions broadly supported the estimates established at June 30. Management recorded an additional $3.1 million of provision expense that was not offset by credit enhancement income, while the $22.8 million specific allowance established in Q2 remained unchanged. Total noninterest expense declined $56.3 million sequentially to $84.8 million, primarily due to the absence of Q2's $46.0 million valuation adjustment and lower data processing costs.

BaaS Segment Delivering Accelerating Growth

Coastal's BaaS segment, known as CCBX, continued to demonstrate operating momentum during the quarter. Total BaaS program fee income reached $14.1 million in Q3 2026, up $2.1 million or 17.6% from Q2 2026 and up $6.3 million or 79.6% from Q3 2025. This growth reflects what the company describes as the strength and stability of its broader partner portfolio beyond the single impaired relationship.

At September 30, 2026, Coastal had one partner in testing, two in implementation or onboarding, and three with signed letters of intent. Off-balance-sheet credit card accounts reached 1.3 million, up 51.4% sequentially from Q2 and 236% year over year. During the third quarter, the company sold approximately $5.99 billion of loans, including $4.69 billion of credit card receivables originated through ongoing cardholder spend and revolving activity under forward flow arrangements. Off-balance-sheet FDIC sweep deposits stood at $6.29 billion at quarter end.

Community Bank Performance and Funding

The community bank segment contributed meaningfully to Q3 performance. Deposits grew $63.2 million, or 4.0%, to $1.64 billion during the quarter at a cost of deposits of 1.54%. This reflects the company's ongoing effort to build a lower-cost, relationship-driven deposit base alongside the BaaS platform.

Regarding the pending Acquisition of CCBX partner Bluevine by Valley National Bancorp, Coastal noted that at September 30, 2026, the Bank held $452.4 million in Bluevine deposits on its Balance Sheet with an additional $1.85 billion swept off-balance sheet to other banks. The company stated that it expects to replace related on-balance-sheet funding through its existing sweep capabilities and other funding sources and does not anticipate a material adverse effect on Liquidity if the Bluevine relationship terminates following that acquisition.

Asset Quality and Capital Position

Nonperforming assets decreased $14.7 million quarter over quarter, driven by improvements across both the community bank and CCBX portfolios. The decline in CCBX nonperforming assets was consistent with stabilization in partner credit performance and a trend toward lower net charge-offs during the quarter. Management indicated it continues to monitor the affected partner closely.

CEO Eric Sprink cited momentum across both segments and pointed to a strong pipeline as the company moves into the final quarter of 2026. The company exited the quarter well capitalized with strong cash reserves, and eight active partner programs are in various stages of expanding into additional products.

Coastal Financial's third quarter results marked a decisive return to profitability following a challenging Q2, with BaaS fee income growing 80% year over year and off-balance-sheet credit card accounts expanding 236%. The stabilization of the impaired partner relationship combined with a growing pipeline positions the company to build on this recovery as BaaS adoption continues to scale.

What was Coastal Financial's net income in Q3 2026?

Coastal Financial reported net income of $13.8 million, or $0.89 per diluted share, in Q3 2026, recovering from a net loss of $42.1 million in Q2 2026.

How did BaaS fee income perform in Q3 2026?

BaaS program fee income grew 79.6% year over year to $14.1 million in Q3 2026, and increased 17.6% from Q2 2026.

What is the status of the Bluevine relationship?

Valley National Bancorp has announced plans to acquire Bluevine, which may lead to termination of Bluevine's relationship with Coastal. At September 30, 2026, Coastal held $452.4 million in Bluevine deposits on-balance sheet, but expects to manage any runoff through existing sweep and funding capabilities.

How many off-balance-sheet credit card accounts does Coastal have?

Coastal had 1.3 million off-balance-sheet credit card accounts at September 30, 2026, up 236% from Q3 2025 and up 51.4% from Q2 2026.

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