Coastal Financial Corporation Announces Proposed Public Offering of Common Stock

Rhea-AI Summary

Coastal Financial (NASDAQ: CCB) has announced a proposed underwritten public offering of common stock shares. The company plans to grant underwriters a 30-day option to purchase up to an additional 15% of shares at the public offering price, less underwriting discounts and commissions.

The net proceeds will be used for general corporate purposes, including supporting investment opportunities and bank growth. Keefe, Bruyette & Woods is serving as lead bookrunning manager, with Hovde Group as joint bookrunning manager, and Raymond James & Associates and Stephens Inc. as co-managers.

The shares will be issued under an effective shelf registration statement on Form S-3, with a preliminary prospectus supplement already filed with the SEC.

Positive

• Potential capital raise to support investment opportunities and growth
• Multiple established financial institutions involved as underwriters

Negative

• Potential dilution of existing shareholders' equity
• Stock offering may put downward pressure on share price

Insights

Financial Analyst

This public offering announcement signals a significant capital raising initiative by Coastal Financial. The shelf registration format provides flexibility in timing and amount, while the 15% overallotment option could increase the total raise substantially. The involvement of major underwriters like KBW and Hovde Group adds credibility to the offering. While the exact offering size isn't specified, this move typically indicates a company's need for growth capital or strategic expansion. For a bank with a $1.02 billion market cap, this equity raise could meaningfully impact their capital structure. The stated use of proceeds for "general corporate purposes" and supporting growth suggests potential expansion plans, though the broad terms maintain strategic flexibility. Without specific pricing details, investors should monitor the final terms closely as dilution impact will depend on offering size and price.

Legal Expert

The offering's structure demonstrates careful regulatory compliance, utilizing an effective S-3 shelf registration (File No. 333-279879) that was declared effective in June 2024. The multi-underwriter syndicate and formal SEC filing process reflect a well-orchestrated capital markets transaction. The inclusion of a preliminary prospectus supplement and pending final prospectus ensures full disclosure compliance. Notable is the standard 30-day overallotment option for underwriters, a common feature providing price stability post-offering. The carefully worded disclaimers and availability of documentation through multiple channels align with SEC requirements. This methodical approach to securities issuance helps minimize regulatory risks and ensures investor protection through proper disclosure channels.

EVERETT, Wash., Dec. 10, 2024 (GLOBE NEWSWIRE) -- Coastal Financial Corporation (NASDAQ: CCB) (“Coastal” or the “Company”), the holding company for Coastal Community Bank (the “Bank”), today announced the launch of a proposed underwritten public offering of shares of its common stock, no par value. Coastal expects to grant the underwriters a 30-day option to purchase up to an additional 15% of the number of shares of its Common Stock sold in this offering at the public offering price, less underwriting discounts and commissions.

The Company intends to use the net proceeds from this offering for general corporate purposes, including, without limitation, supporting investment opportunities and the Bank’s growth.

Keefe, Bruyette & Woods, a Stifel company, is serving as the lead bookrunning manager, Hovde Group, LLC is serving as a joint bookrunning manager and Raymond James & Associates, Inc. and Stephens Inc. are serving as co-managers for the proposed offering.

The shares of common stock will be issued pursuant to an effective shelf registration statement on Form S-3 (File No. 333-279879) filed by Coastal with the U.S. Securities and Exchange Commission (the “SEC”), which was declared effective by the SEC on June 13, 2024. A preliminary prospectus supplement related to the offering has been filed with the SEC and a final prospectus supplement relating to this offering will be filed with the SEC. Prospective investors should read the preliminary prospectus supplement, the final prospectus supplement, when available, and other documents Coastal has filed with the SEC for more complete information about Coastal and the offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Copies of the preliminary prospectus supplement, the final prospectus supplement, when available, and the accompanying prospectus relating to this offering may be obtained by contacting Keefe, Bruyette & Woods, Inc., 787 Seventh Avenue, Fourth Floor, New York, NY 10019, attention: Equity Capital Markets, or by calling toll free at (800) 966-1559 or emailing USCapitalMarkets@kbw.com.

This press release is for informational purposes only and shall not constitute an offer to sell, or the solicitation of an offer to buy, the securities, nor shall there be any offer, solicitation, or sale in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

About Coastal Financial Corporation
Coastal Financial Corporation (Nasdaq: CCB) (the “Company”), is an Everett, Washington based bank holding company whose wholly owned subsidiaries are Coastal Community Bank (“Bank”) and Arlington Olympic LLC.  The $4.07 billion Bank provides service through 14 branches in Snohomish, Island, and King Counties, the Internet and its mobile banking application.  The Bank provides banking as a service to broker-dealers, digital financial service providers, companies and brands that want to provide financial services to their customers through the Bank's CCBX segment.  Member FDIC.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance and statements regarding the proposed offering. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Any or all of the forward-looking statements in this press release may turn out to be inaccurate. The inclusion of or reference to forward-looking information in this press release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward- looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, the risks and uncertainties discussed under “Risk Factors” in our Annual Report on Form 10-K for the most recent period filed, our Quarterly Report on Form 10-Q for the most recent quarter, and in any of our other filings with the SEC.

If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. You are cautioned not to place undue reliance on forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by law.

Contact:
Joel Edwards
CFO
425.357.6987
Jedwards@coastalbank.com

FAQ

What is the purpose of Coastal Financial 's (CCB) stock offering?

The stock offering's proceeds will be used for general corporate purposes, including supporting investment opportunities and bank growth.

Who are the underwriters for CCB's public stock offering?

Keefe, Bruyette & Woods is the lead bookrunning manager, Hovde Group is joint bookrunning manager, and Raymond James & Associates and Stephens Inc. are co-managers.

What is the additional purchase option in CCB's stock offering?

Underwriters will have a 30-day option to purchase up to an additional 15% of shares at the public offering price, less underwriting discounts and commissions.

When was CCB's shelf registration statement declared effective?

The shelf registration statement on Form S-3 was declared effective by the SEC on June 13, 2024.