SecProbe.io

December 20, 2024
Joel G. Edwards
Executive Vice President and Chief Financial Officer
Coastal Financial Corporation
5415 Evergreen Way
Everett, WA 98203
Re:Coastal Financial Corporation
Form 10-K for Fiscal Year Ended December 31, 2023
File No. 001-38589
Dear Joel G. Edwards:
            We have limited our review of your filing to the financial statements and related
disclosures and have the following comments.
            Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this letter, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2023
Item 1. Business, page 3
1.Please revise future filings to include the information related to your BaaS partners in
slide 12 in your October 28, 2024 Investor Presentation included in Form 8-K filed on
October 28, 2024. Additionally, please clarify which BaaS partners are regulated
broker dealers.
Consumer and Other Loans, page 6
2.We note your disclosure that the terms of consumer loans vary considerably based
upon the loan type, nature of collateral and size of the loan. Please revise future filings
to provide some context to the noted variability, including disclosing typical terms of
and collateral provided for installment loans and credit cards.
Concentrations of Credit Risk, page 7
Please revise future filings, in the Business section and/or other sections as
appropriate, to include additional information related to the operation of and risks 3.

December 20, 2024
Page 2
related to the cash reserve account including, but not limited to, the following:

•the balance at the most recent period end and the average amount outstanding
during each period presented if materially different,
•where the amount is presented on your balance sheet,
•a discussion of the typical contractual terms describing when a BaaS partner is
required to replenish the account, and the number of times, if any, a BaaS partner
has been unable to replenish the account,
•how credit loss recoveries impact the cash reserve account, and
•whether your payments related to BaaS loan and fraud expenses are paid into the
cash reserve account or go directly to the BaaS partner.
4.Please revise future filings, in the Business section and/or other sections as
appropriate, to include additional information related to the operation of and risks
related to the credit enhancement and related asset including, but not limited to, the
following:

•a roll forward of the asset for each period presented, which includes increases
related to expected losses recognized in the allowance for credit losses, reductions
due to payments received, reductions due to credit loss recoveries, and any other
adjustments with appropriate discussion if material,
•a discussion of the typical contractual terms that define when a credit loss has
been incurred (e.g., certain number of days delinquent, etc.) and the BaaS partner
is required to pay you and any material timing considerations related to the
payment,
•a discussion of the typical payment mechanism, (e.g., partner pays you directly or
you are paid through a reduction in the cash reserve account), and
•a discussion of the typical contractual terms related to amount of interest income,
if any, covered by the credit enhancement.
Deposit Products, page 8
5.Please revise future filings to clarify which deposit products provided through your
CCBX partners provide FDIC insurance protection to the CCBX partners’ customer,
partner or workforce. If the FDIC insurance protection does not cover the CCBX
partners’ customer, partner or workforce, please discuss the risks related to this.
Regulation and Supervision, page 13
6.Please consider revising future filings to present a separately captioned section related
to regulations specific to the operations of CCBX.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations, page 52
We note disclosure of deposit concentrations on page 101 and your discussion of how
you manage loan and credit concentrations on page 55. In future filings, please ensure
you identify, quantify and analyze all known trends, demands, commitments, events 7.

December 20, 2024
Page 3
and uncertainties related to BaaS partners that are reasonably likely to have a material
impact on your financial results or business. Refer to Item 303 of Regulation S-K for
guidance.
8.In future filings, please ensure you disclose all information related to risks and
uncertainties required by ASC 275-10-50.
Noninterest Income, page 66
9.Please revise future filings to provide information related to the nature of and
potential variability of the revenue streams presented as BaaS program income.
10.Please revise future filings to disclose and discuss any performance or operating
measures or metrics used by management related to BaaS program, including any
measures or metrics related to BaaS program income.
11.Please tell us how you considered whether your “Deposit service charges and fees”
line-item title was appropriate considering that it appears that the material amount of
income included in this line-item does not relate to deposit service charges.
Alternatively, please revise future filings to use a more appropriate line-item title.
Loan Portfolio, page 79
12.Please revise future filings to separately disclose real estate secured loans that are in a
first lien and junior lien position, if material, and provide a discussion of the different
risks related to junior lien loans.
            In closing, we remind you that the company and its management are responsible for
the accuracy and adequacy of their disclosures, notwithstanding any review, comments,
action or absence of action by the staff.
            Please contact Shannon Davis at 202-551-6687 or Michael Volley at 202-551-3437
with any questions.
Sincerely,
Division of Corporation Finance
Office of Finance