COASTAL FINANCIAL CORPCCB
COASTAL FINANCIAL CORP Commitments Disclosure
Commitments and Contingencies
In the normal course of business, there are various outstanding commitments and contingent liabilities, such as commitments to extend credit and standby letters of credit, which are not reflected in the consolidated financial statements. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making such commitments as it does for instruments that are included in the consolidated balance sheets.
At December 31, 2025 and 2024, the Company had a reserve for unfunded commitments of $5.2 million and $2.5 million, respectively, included in other liabilities on the consolidated balance sheet.
The following table presents commitments associated with outstanding commitments to extend credit, standby and commercial letters of credit and equity investment commitments as of the periods indicated:
| (dollars in thousands) | 2025 | 2024 | |||||||||
| Commitments to extend credit: | |||||||||||
| Commercial and industrial loans | $ | 90,281 | $ | 94,589 | |||||||
| Commercial and industrial loans – capital call lines | 519,135 | 550,948 | |||||||||
| Construction – commercial real estate loans | 58,562 | 36,873 | |||||||||
| Construction – residential real estate loans | 39,676 | 10,929 | |||||||||
| Residential real estate loans | 684,485 | 499,516 | |||||||||
| Commercial real estate loans | 28,108 | 34,222 | |||||||||
| Credit cards | $ | 819,495 | $ | 717,198 | |||||||
| Consumer and other loans | 68,302 | 18,553 | |||||||||
| Total commitments to extend credit | $ | 2,308,044 | $ | 1,962,828 | |||||||
| Standby letters of credit | $ | 1,042 | $ | 1,042 | |||||||
| Equity investment commitment | $ | 1,125 | $ | 480 | |||||||
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commercial and industrial loan commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if considered necessary by us, upon extension of credit, is based on management’s credit evaluation of the customer. The type of collateral held varies but may include accounts receivable, inventory, property and equipment, and income-producing commercial properties. As of December 31, 2025, $1.42 billion of the $2.31 billion in total commitments to extend credit were unconditionally cancelable.
Standby and commercial letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party. In the event of nonperformance by the customer, we have rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and/or marketable securities. Our credit risk associated with issuing letters of credit is essentially the same as the risk involved in extending loan facilities to our customers. No losses were incurred in 2025 or 2024 under these commitments.
Commitments to extend credit on CCBX loans are included in the table above and are summarized below:
| (dollars in thousands) | December 31 2025 | December 31 2024 | |||||||||
| Commitments to extend credit: | |||||||||||
| Commercial and industrial loans | $ | 23,859 | $ | 19,104 | |||||||
| Commercial and industrial loans - capital call lines | 519,135 | 550,948 | |||||||||
| Residential real estate loans | 631,973 | 453,369 | |||||||||
| Credit cards, consumer and other loans | 874,245 | 733,005 | |||||||||
| Total commitments to extend credit | $ | 2,049,212 | $ | 1,756,426 | |||||||
As of December 31, 2025, $1.42 billion in CCBX commitments to extend credit were unconditionally cancelable, compared to $1.30 billion at December 31, 2024. Commitments that are unconditionally cancelable allow us to manage loan growth, credit concentrations and liquidity. We also limit CCBX partners to a maximum aggregate customer loan balance originated and held on our balance sheet, as shown in the table below.
| (dollars in thousands) | Type of Lending | Maximum Portfolio Size | |||||||||
| Commercial and industrial loans: | |||||||||||
| Capital call lines | Business - Venture Capital | $ | 350,000 | ||||||||
All other commercial & industrial loans | Business - Small Business | 515,589 | |||||||||
| Real estate loans: | |||||||||||
| Home equity lines of credit | Home Equity - Secured Credit Cards | 400,000 | |||||||||
| Consumer and other loans: | |||||||||||
| Credit cards | Credit Cards - Primarily Consumer | 900,000 | |||||||||
| Installment loans | Consumer | 1,740,813 | |||||||||
| Other consumer and other loans | Consumer - Secured Credit Builder & Unsecured consumer | 478,598 | |||||||||
| 4,385,000 | |||||||||||
The Company also has agreements with certain key officers that provide for potential payments upon retirement, disability, termination, change in control and death.
The Company is subject to claims and lawsuits which arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the financial position of the Company.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Mar 17, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 14, 2022 | |
| 2020 | Mar 12, 2021 | |
| 2019 | Mar 12, 2020 | |
| 2018 | Mar 28, 2019 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.