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COASTAL FINANCIAL
CORPORATION

5415 Evergreen
Way

Everett, WA 98203

January
24, 2025

VIA EDGAR

U. S. Securities
and Exchange Commission

Division of
Corporation Finance

100 F Street,
N.E.

Washington D.C.
20549

Attention: Shannon
Davis and Michael Volley

    Re:
    Coastal Financial Corporation

    Form 10-K for Fiscal Year Ended December
    31, 2023

    File No. 001-38589

Dear Ms. Davis
and Mr. Volley:

Set
forth below is the response of Coastal Financial Corporation (the “Company” or “we”), to the comment
received from the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”)
by letter dated December 20, 2024, with respect to the Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2023 (the “Annual Report”). For your convenience, we have reproduced the text of the Staff’s comments in
bold text followed by the Company’s response.

Form 10-K
for Fiscal Year Ended December 31, 2023 Item 1. Business, page 3

 1. Staff’s
                                         Comment:

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.

Response:

The
Company respectfully acknowledges the Staff’s comment and will include the requested information in future filings, beginning with our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Consumer
and Other Loans, page 6

 2. Staff’s
                                         Comment:

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.

Response:

The
Company respectfully acknowledges the Staff’s comment and will provide in future filings additional disclosure about the
consumer loans, including with respect to the term, the approximate percentages of our consumer loans that are secured and unsecured,
and further information about any such consumer loans that are cash secured. We also note the table on page 84, which provides
information regarding our consumer loans by type, including balances, commitments, and number of each type of loan.

Concentrations
of Credit Risk, page 7

 3. Staff’s
                                         Comment:

Please
revise future filings, in the Business section and/or other sections as appropriate, to include additional information related
to the operation of and risk 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.

Response:

The
Company respectfully acknowledges the Staff’s comment. Based on our discussions with the Staff regarding this comment, we
will provide in future filings a discussion of how the cash reserve accounts protect the bank and investors from potential losses related to our partner
relationships. We will discuss the process and timing of steps to be taken if a partner relationship were to deteriorate. We will indicate
that the balances are included in deposit liabilities and disclose the period end balance of the cash reserve. An overview of the mechanics
of the credit enhancement arrangements will also be included in future filings. We note that the difference between average and period
end balances are not material.

 4. Staff’s
                                         Comment:

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.

Response:

The
Company respectfully acknowledges the Staff’s comment. However, we believe that we have adequately disclosed on page 8 of
the Annual Report that the allowance for credit losses is an accounting estimate quantifying the risk related to the loans, credit
enhancement and related asset.

Deposit Products,
page 8

 5. Staff’s
                                         Comment:

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.

Response:

The
Company respectfully acknowledges the Staff’s comment and will include in future filings whether it is CCBX’s fintech
partners, customers or workforce that receive FDIC insurance protection coverage on the deposit products.

Regulation
and Supervision, page 13

 6. Staff’s
                                         Comment:

Please
consider revising future filings to present a separately captioned section related to regulations specific to the operations of
CCBX.

Response:

The
Company respectfully acknowledges the Staff’s comment. However, we note that our CCBX division operates as part of the Coastal
Community Bank, and there are no specific regulations that would apply to the operations of CCBX only. Broker-dealers and FinTech
companies are regulated by the banking regulations that we discuss beginning on page 13 of the Annual Report.

Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations, page 52

 7. Staff’s
                                         Comment:

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 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.

Response:

The
Company respectfully acknowledges the Staff’s comment. We believe that the disclosure regarding deposit concentrations is
comprehensive but will include, to the extent applicable at the time of a filing of a periodic report, the requested information
in future filings regarding known trends, demands, commitments, events and uncertainties related to BaaS partners that are reasonably
likely to have a material impact on the Company’s financial results and/or business.

 8. Staff’s
                                         Comment:

In
future filings, please ensure you disclose all information related to risks and uncertainties required by ASC 275-10-50.

Response:

The
Company respectfully acknowledges the Staff’s comment. However, we believe that we have provided the required disclosures
under ASC 275-10-50 under “Risk Factors” with respect to risks arising from concentrations.

Noninterest
Income, page 66

 9. Staff’s
                                         Comment:

Please
revise future filings to provide information related to the nature of and potential variability of the revenue streams presented
as BaaS program income.

Response:

The
Company respectfully acknowledges the Staff’s comment and will include in future filings the requested information to provide
expanded disclosure around the Company’s BaaS program and the revenue streams presented as BaaS program income.

 10. Staff’s
                                         Comment:

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.

Response:

The
Company respectfully acknowledges the Staff’s comment. However, we note that no specific internal performance measures related
to BaaS program income are used by management.

 11. Staff’s
                                         Comment:

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.

Response:

The
Company respectfully acknowledges the Staff’s comment and will update the title to “Service Charges and Fees.”

Loan Portfolio,
page 79

 12. Staff’s
                                         Comment:

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.

Response:

The
Company respectfully acknowledges the Staff’s comment. However, we believe that junior lien positions are not material to
the Company’s business and do not believe adding a discussion of the different risks related to junior lien loans will be
meaningful to investors.

Please
do not hesitate to call me at (425) 357-3687 with any additional questions regarding the Annual
Report.

    Sincerely,

    /s/ Joel Edwards

    Joel Edwards

    Executive Vice President and Chief Financial
    Officer

cc:
 Michael Reed, Covington & Burling LLP

       (212) 841-1204

       MReed@cov.com