Coastal Financial Corporation Prices Public Offering of Common Stock

Coastal Financial Corporation (CCB), the holding company for Coastal Community Bank, has priced a public offering of 1,200,000 shares of its common stock at $71.00 per share. The offering, which is expected to close on December 12, 2024, subject to customary closing conditions, will raise 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, the aggregate gross proceeds of the offering could reach approximately $98.0 million.

The company plans to use the net proceeds from this offering for general corporate purposes, including supporting investment opportunities and the Bank's growth. Coastal Financial Corporation has engaged Keefe, Bruyette & Woods, a Stifel company, as the lead bookrunning manager, with Hovde Group, LLC, Raymond James & Associates, Inc., and Stephens Inc. serving as co-managers for the offering.

The pricing of this public offering comes at a time when Coastal Financial Corporation is looking to expand its CCBX segment, which provides banking as a service to broker-dealers, digital financial service providers, companies, and brands. The raised capital will enable the company to invest in technology and digital capabilities, explore strategic acquisitions, and enhance its competitive position in the banking sector.



Investors should note that the issuance of new shares may result in dilution of existing shareholders' equity. Assuming the offering is fully subscribed, the additional 1,200,000 shares could increase the outstanding share count by approximately 17.1%. This dilution would reduce earnings per share (EPS) by a similar percentage, assuming earnings remain constant. However, if the company uses the raised capital effectively to drive growth, EPS could potentially increase at a faster rate than the dilution, benefiting shareholders in the long run.

In conclusion, Coastal Financial Corporation's public offering of common stock is a strategic move to bolster its capital base and support its growth initiatives. While the offering may result in temporary dilution for existing shareholders, the company's plans to invest in its CCBX segment and expand its banking services could lead to long-term benefits for investors. As always, investors should carefully monitor the company's progress and assess the potential impact of the offering on their portfolios.