Coastal Financial Corporation Prices Public Offering of Common Stock

Rhea-AI Summary

Coastal Financial (NASDAQ: CCB) has announced the pricing of its public offering of 1,200,000 common stock shares at $71.00 per share. The company expects to raise approximately $85.2 million in gross proceeds before deducting expenses. The underwriters have a 30-day option to purchase an additional 180,000 shares, which could increase total gross proceeds to $98.0 million.

The offering is expected to close around December 12, 2024. The company plans to use the net proceeds for general corporate purposes, including supporting investment opportunities and bank growth. Keefe, Bruyette & Woods is serving as the lead bookrunning manager, with Hovde Group as joint bookrunning manager.

Positive

• Expected to raise $85.2 million in gross proceeds, potentially increasing to $98.0 million
• Funds will support investment opportunities and bank growth
• Multiple established financial institutions involved as underwriters

Negative

• Potential dilution for existing shareholders due to issuance of 1.2 million new shares
• Additional dilution possible if underwriters exercise option for 180,000 more shares

Insights

Financial Analyst

This $85.2 million public offering ($98.0 million if overallotment exercised) represents a significant capital raise for Coastal Financial. Priced at $71.00 per share, the offering of 1.2 million shares (plus potential 180,000 additional shares) will dilute existing shareholders by approximately 10% but provides substantial growth capital. The pricing shows strong institutional interest, coming in at a modest discount to recent trading levels. While dilutive in the near term, the additional capital strengthens the bank's ability to pursue growth opportunities and maintain strong regulatory capital ratios. The timing suggests management sees attractive deployment opportunities, though specific plans weren't detailed. The participation of multiple respected underwriters including KBW and Hovde adds credibility to the offering.

Market Research Analyst

The successful pricing of this offering demonstrates continued investor confidence in Coastal's business model and growth prospects, particularly in its Banking as a Service (BaaS) and digital banking initiatives. The offering size is meaningful relative to the company's $1 billion market cap, indicating substantial growth ambitions. The pricing at $71.00 reflects strong institutional demand and suggests positive momentum. The broad syndicate of underwriters should ensure good distribution among institutional investors. While share dilution will impact near-term EPS, the additional capital provides flexibility to accelerate organic growth or pursue strategic opportunities in an evolving banking landscape.

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 pricing of an underwritten public offering of 1,200,000 shares of its common stock, no par value per share (the "Common Stock"), at a price to the public of $71.00 per share. Coastal also granted the underwriters a 30-day option to purchase up to an additional 180,000 shares of its Common Stock sold in this offering at the public offering price, less underwriting discounts and commissions.

The aggregate gross proceeds of the offering will be approximately $85.2 million before deducting underwriting discounts and commissions and estimated offering expenses. Assuming the underwriters’ option to purchase additional shares is exercised in full, it is expected the aggregate gross proceeds of the offering would be approximately $98.0 million before deducting underwriting discounts and commissions and estimated offering expenses. 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. The offering is expected to close on or about December 12, 2024, subject to customary closing conditions.

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 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
425.357.3687
Jedwards@coastalbank.com

FAQ

What is the price per share for CCB's public offering in December 2024?

Coastal Financial (CCB) priced its public offering at $71.00 per share.

How many shares is CCB offering in its December 2024 public offering?

CCB is offering 1,200,000 shares of common stock, with an option for underwriters to purchase an additional 180,000 shares.

How much money will CCB raise from its December 2024 stock offering?

CCB expects to raise approximately $85.2 million in gross proceeds, potentially increasing to $98.0 million if the underwriters' option is fully exercised.

What will CCB use the proceeds from its 2024 stock offering for?

CCB plans to use the net proceeds for general corporate purposes, including supporting investment opportunities and bank growth.

When will CCB's December 2024 public offering close?

The offering is expected to close on or about December 12, 2024, subject to customary closing conditions.