COASTAL FINANCIAL CORPCCB
COASTAL FINANCIAL CORP Revenue Disclosure
Revenue from Contracts with Customers
All of the Company’s revenue from contracts with customers in the scope of Topic 606 is recognized within noninterest income. The following table presents the Company’s noninterest income by revenue stream for the years ended December 31:
| 2025 | 2024 | 2023 | |||||||||||||||
| (dollars in thousands) | |||||||||||||||||
| Service charges and fees | |||||||||||||||||
| Interchange income | $ | 1,808 | $ | 2,002 | $ | 2,176 | |||||||||||
| Merchant service fees | 495 | 487 | 498 | ||||||||||||||
| Overdraft fees | 207 | 198 | 213 | ||||||||||||||
| Other | 1,048 | 1,051 | 967 | ||||||||||||||
| Loan referral fees | — | 168 | 683 | ||||||||||||||
BaaS program income (1) | 29,491 | 20,075 | 13,240 | ||||||||||||||
Other income (2) | 1,286 | 692 | 323 | ||||||||||||||
| Total noninterest income subject to Topic 606 | 34,335 | 24,673 | 18,100 | ||||||||||||||
BaaS enhancements / guarantees (1) | 195,667 | 282,673 | 184,929 | ||||||||||||||
| Gain (loss) on equity investment | (414) | 27 | 279 | ||||||||||||||
| Gain on sale of loans, net | — | — | 253 | ||||||||||||||
| Loan servicing fees | 117 | 142 | 171 | ||||||||||||||
| Sweep fee income | 1,208 | — | — | ||||||||||||||
| Earnings on life insurance | 515 | 486 | 185 | ||||||||||||||
| Lease and sublease income | 180 | 204 | 205 | ||||||||||||||
| Total noninterest income not subject to Topic 606 | 197,273 | 283,532 | 186,022 | ||||||||||||||
| Total noninterest income | $ | 231,608 | $ | 308,205 | $ | 204,122 | |||||||||||
(1)See description below for detailed components of BaaS fees and related Topic 606 applicability.
(2)Includes the following immaterial income streams that are within the scope of Topic 606: wire transfer fees, annuity fees, mortgage broker fees and brokerage fees.
A description of the Company’s revenue streams accounted for under Topic 606 is as follows:
Service Charges on Accounts: The Company earns fees from deposit customers for transaction-based fees, account maintenance and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed. This point in time is when the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs.
Interchange Income: The Company earns interchange fees from debit card holder transactions conducted through various payment networks. Interchange fees from cardholder transactions represent a percentage of the underlying transactions’ value and are recognized daily, concurrently with the transaction processing services provided by the cardholder. Interchange income is included in Service Charges and Fees in the consolidated statements of income.
Merchant Service Fees: The Company earns a percentage of fees from cardholder transactions conducted through a third-party payment network provider. The Company is obligated to provide sales, customer support, marketing, deployment and installation of equipment, and savings analysis to merchant service customers. An exclusivity agreement is in place between the Company and the third-party payment network provider. Fees are recognized on a monthly basis, as earned. Merchant service fees are included in Services Charges on Deposit Accounts in the consolidated statements of income.
Loan Referral Fees: The Company earns loan referral fees when the Company originates a variable rate loan and the borrower enters into an interest rate swap agreement with a third party to fix the interest rate for an extended period, usually 20 or 25 years. The Company recognizes the loan referral fee for arranging the interest rate swap.
BaaS Fees: The Company earns fees and is reimbursed for certain expenses, as specified in the program agreement, for providing banking services to digital financial service providers. Earned program fees and reimbursement of expenses are recorded gross and recognized on a monthly basis, as earned. Credit enhancements for fraud and credit losses are not within the scope of Topic 606.
The following table presents the BaaS fees that are within and not within the scope of Topic 606:
| Year Ended December 31, | 2025 compared to 2024 | 2024 compared to 2023 | ||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2023 | Increase (Decrease) | Increase (Decrease) | |||||||||||||||||||||||||||
| Program income - within the scope of Topic 606 | ||||||||||||||||||||||||||||||||
| Servicing and other BaaS fees | $ | 5,795 | $ | 4,743 | $ | 3,855 | $ | 1,052 | $ | 888 | ||||||||||||||||||||||
| Transaction and interchange fees | 18,744 | 12,843 | 8,263 | 5,901 | 4,580 | |||||||||||||||||||||||||||
| Reimbursement of expenses | 4,952 | 2,489 | 1,122 | 2,463 | 1,367 | |||||||||||||||||||||||||||
| Total BaaS program income | 29,491 | 20,075 | 13,240 | 9,416 | 6,835 | |||||||||||||||||||||||||||
| Guarantees - not within the scope of Topic 606: | ||||||||||||||||||||||||||||||||
| BaaS credit enhancement | 187,653 | 272,839 | 177,764 | (85,186) | 95,075 | |||||||||||||||||||||||||||
| BaaS fraud enhancement | 8,014 | 9,834 | 7,165 | (1,820) | 2,669 | |||||||||||||||||||||||||||
| Total BaaS enhancements / indemnifications | 195,667 | 282,673 | 184,929 | (87,006) | 97,744 | |||||||||||||||||||||||||||
| Total BaaS fees | $ | 225,158 | $ | 302,748 | $ | 198,169 | $ | (77,590) | $ | 104,579 | ||||||||||||||||||||||
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 Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.