Coastal Financial Corporation (CCB) will report third-quarter results Oct. 29 as investors await an update after a proposed lawsuit challenged disclosures about credit risks in its CCBX banking-as-a-service business.
Allegheny County Employees’ Retirement System filed the proposed securities class action Oct. 2 in the U.S. District Court for the Western District of Washington. The complaint names Coastal, Chief Executive Officer Eric M. Sprink, interim CFO Joel Edwards and former CFO Brandon Soto as defendants. It seeks to represent investors who acquired Coastal shares from Oct. 28, 2024, through July 29, 2026. EconoTimes previously covered the lawsuit’s allegations about CCBX credit risks.
CCBX lets partner companies offer banking and other financial services to their customers. The complaint says loans tied to one partner totaled about $500 million, or nearly 23% of CCBX loans. It alleges Coastal’s oversight failed to catch the portfolio’s deterioration or address it. Those claims have not been established in court.
Coastal’s July 30 earnings release reported a $42.1 million net loss, or $2.76 per diluted share, for the quarter ended June 30, 2026. The company attributed the loss mainly to a $68.8 million credit expense tied to one CCBX partner. That total included a $46 million reduction in the value of a credit-enhancement asset and a $22.8 million provision for credit losses. Coastal said it did not expect to recover either amount in full under the partner’s indemnification arrangement. Sprink called the matter an “isolated issue” involving one partner.
Nasdaq historical data show CCB shares closed at $39.91 on July 30, down 43.5% from the previous day’s $70.66 close.
Coastal announced Oct. 22 that it will release third-quarter results before the market opens Thursday, Oct. 29, and hold a conference call at 8 a.m. ET (12:00 UTC). Hagens Berman’s case notice lists Dec. 1 as the deadline for investors seeking appointment as lead plaintiff.
