COASTAL FINANCIAL CORPCCB
COASTAL FINANCIAL CORP Stock Compensation Disclosure
Stock-Based Compensation
Stock Options and Restricted Stock
The 2018 Coastal Financial Corporation Omnibus Plan (“2018 Plan”) authorizes the Company to grant awards, including but not limited to, stock options, restricted stock units, and restricted stock awards, to eligible employees, directors or individuals that provide service to the Company, up to an aggregate of 500,000 shares of common stock. On May 24, 2021, the Company’s shareholders approved the First Amendment to the 2018 Plan, which increased the authorized plan shares by 600,000. On May 28, 2025, the Company's shareholders approved the Second Amendment to the 2018 Plan which increased the authorized plan shares by 600,000. The 2018 Plan replaced both the 2006 Plan and the Directors’ Stock Bonus Plan. Existing awards will vest under the terms granted and no further awards will be granted under these prior plans. Shares available to be granted under the 2018 plan were 700,458 at December 31, 2025.
Stock Option Awards
The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. Expected volatilities are based on historical volatility of the Company’s stock and other factors. The Company uses the vesting term and contractual life to determine the expected life. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Compensation expense related to unvested stock option awards is reversed at date of forfeiture.
There were no new options granted in the year ended December 31, 2025.
A summary of stock option activity under the Company’s Plan during the year ended December 31, 2025:
| Options | Number of Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||||
| (dollars in thousands, except per share amounts) | ||||||||||||||||||||||||||
| Outstanding at December 31, 2024 | 186,354 | $ | 9.80 | 2.8 | $ | 13,996 | ||||||||||||||||||||
| Granted | — | $ | — | |||||||||||||||||||||||
| Exercised | (65,933) | $ | 9.25 | |||||||||||||||||||||||
| Expired | — | $ | — | |||||||||||||||||||||||
| Forfeited | (1,540) | $ | 11.01 | |||||||||||||||||||||||
| Outstanding at December 31, 2025 | 118,881 | $ | 10.10 | 2.1 | $ | 12,422 | ||||||||||||||||||||
| Vested or expected to vest at December 31, 2025 | 51,745 | $ | 9.89 | 2.0 | $ | 5,418 | ||||||||||||||||||||
| Exercisable at December 31, 2025 | 51,745 | $ | 9.89 | 2.0 | $ | 5,418 | ||||||||||||||||||||
The total intrinsic value (which is the amount by which the stock price exceeds the exercise price) of options exercised during the year ended December 31, 2025 was $5.2 million. The intrinsic value of options exercised during the year ended December 31, 2024 was $6.7 million.
As of December 31, 2025, there was $284,000 of total unrecognized compensation cost related to unvested stock options granted under the Plan. Total unrecognized compensation cost is adjusted for unvested forfeitures. The Company expects to recognize that cost over a weighted-average period of approximately 2.1 years. Compensation expense recorded related to stock options was $602,000, $274,000 and $319,000 for the years ended December 31, 2025, 2024 and 2023, respectively.
Included in stock option compensation expense for the year ended December 31, 2025 is $449,000 related to the acceleration of certain equity awards in connection with retirements and employment separations. This total amount includes both the immediate recognition of previously unrecognized compensation cost and $375,000 of incremental compensation expense resulting from award modifications.
Restricted Stock Units
During the year ended December 31, 2025, the Company granted 108,710 restricted stock units under the 2018 Plan to employees, which vest ratably over various terms ranging from four years to five years. Additionally, the Company granted 64,435 performance-based restricted stock units ("PSUs") under the 2018 Plan that are eligible to vest over various terms ranging from 5.0 years to 1 year, 6 months.
RSUs provide for an interest in Company common stock to the recipient, the underlying stock is not issued until certain conditions are met. Vesting requirements include time-based, performance-based, or market-based conditions. Recipients of RSUs do not pay any cash consideration to the Company for the units and the holders of the restricted units do not have voting rights. The fair value of time-based and performance-based units is equal to the fair market value of the Company’s common stock on the grant date. The fair value of market-based units is estimated on the grant date using the Monte Carlo simulation model. Compensation expense is recognized over the vesting period that the awards are based. RSUs are nonparticipating securities.
As of December 31, 2025, there was $18.0 million of total unrecognized compensation cost related to unvested restricted stock units. The Company expects to recognize that cost over the remaining weighted-average vesting period of approximately 3.2 years. Compensation expense recorded related to restricted stock units was $7.0 million, $3.9 million and $2.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Included in restricted stock unit compensation expense for the year ended December 31, 2025 is $1.9 million related to the acceleration of certain equity awards in connection with retirements and employment separations. This total amount includes both the immediate recognition of previously unrecognized compensation cost and $959,000 of incremental compensation expense resulting from award modifications.
A summary of the Company’s unvested restricted stock units at December 31, 2025 and changes during the year is presented below:
| Unvested shares - RSUs | Number of Shares | Weighted- Average Grant Date Fair Value | ||||||||||||
| Unvested shares at December 31, 2024 | 563,384 | $ | 36.20 | |||||||||||
| Granted | 173,145 | $ | 79.77 | |||||||||||
| Forfeited or expired | (86,395) | $ | 39.55 | |||||||||||
| Vested | (173,832) | $ | 42.59 | |||||||||||
| Unvested shares at December 31, 2025 | 476,302 | $ | 51.93 | |||||||||||
Restricted Stock Awards
Employees
There were no restricted stock awards granted to employees in the year ended December 31, 2025.
The fair value of restricted stock awards is equal to the fair value of the Company’s stock at the date of grant. Compensation expense is recognized over the vesting period that the awards are based. Restricted stock awards are participating securities.
As of December 31, 2025, there was no unrecognized compensation cost related to unvested restricted stock awards. Compensation expense recorded related to restricted stock awards was $167,000 for the year ended December 31, 2025, and $9,000 for the years ended December 31, 2024 and 2023.
Included in restricted stock award compensation expense for the year ended December 31, 2025 is $160,000 related to the acceleration of certain equity awards in connection with retirements and employment separations. This total amount includes both the immediate recognition of previously unrecognized compensation cost and $139,000 of incremental compensation expense resulting from award modifications.
Director’s Stock Bonus
Under the 2018 Plan, eligible directors are granted stock with a total market value of approximately $85,000, and the Board Chair is granted stock with a total market value of approximately $125,000. Committee chairs receive additional stock in an amount that varies depending upon the nature and frequency of the committee meetings. The audit committee chair receives additional stock with a market value of approximately $15,000, non-financial risk and compensation committee chairs receive additional stock with a market value of approximately $12,500, and the asset liability & investment, credit, technology, and nominating & governance chairs receive additional stock with a market value of approximately $10,000. Stock is granted as of each annual meeting date and vest one day prior to the next annual meeting date. During the vesting period, the grants are considered participating securities.
As of December 31, 2025, there was $350,000 of total unrecognized compensation expense related to director restricted stock awards which the Company expects to recognize over the remaining average vesting period of approximately five months. Director compensation expense recorded related to the 2018 Plan totaled $823,000, $625,000 and $432,000 for the for the years ended December 31, 2025, 2024 and 2023, respectively.
A summary of the Company’s unvested shares at December 31, 2025 and changes during the year is presented below:
| Unvested shares - RSAs | Number of Shares | Weighted- Average Grant Date Fair Value | ||||||||||||
| Unvested shares at December 31, 2024 | 18,698 | $ | 40.90 | |||||||||||
| Granted | 10,039 | $ | 87.19 | |||||||||||
| Forfeited | — | $ | — | |||||||||||
| Vested | (18,698) | $ | 50.81 | |||||||||||
| Unvested shares at December 31, 2025 | 10,039 | $ | 87.19 | |||||||||||
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 Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.