Disclosure Under Scrutiny: The lawsuit alleges Coastal Financial’s disclosures paired precise credit-protection figures with no meaningful warning about a deteriorating partner portfolio, ahead of a $68.8 million charge and a 43.5% one-day decline.

NEW YORK, Oct. 21, 2026 /PRNewswire/ — Levi & Korsinsky, LLP examines the adequacy of Coastal Financial Corporation’s (NASDAQ: CCB) SEC disclosures. A securities class action has been filed in the U.S. District Court for the Western District of Washington on behalf of investors who purchased Coastal common stock between October 28, 2024 and July 29, 2026. Find out if you could qualify to recover your losses, or contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com or (212) 363-7500.

On July 30, 2026, shareholders lost $30.75 per share, a 43.5% decline to $39.91, after Coastal recorded a $68.8 million credit expense tied to a single banking-as-a-service partner. The complaint calculates that charge at nearly 14% of that partner’s loan portfolio. LEAD PLAINTIFF DEADLINE: December 1, 2026.

Coastal Financial SEC Disclosure Adequacy: What Investors Were Told

Coastal’s first quarter 2026 results announcement stated that the Company had “contracts with our partners that fully indemnify us against fraud and 98.8% against credit risk on CCBX loan partner balances as of March 31, 2026.” Disclosure language also indicated that CCBX grew from 45.9% to 48.1% of total loans receivable between year-end 2024 and year-end 2025.

The complaint challenges what those disclosures left out. Plaintiffs allege Coastal did not disclose that a roughly $500 million partner portfolio had materially deteriorated, which exposed the Company to losses despite the indemnification.

Disclosure Gaps Alleged

The action identifies several areas where Coastal’s disclosures allegedly fell short:

• Concentration: One partner’s portfolio represented nearly 23% of CCBX loans. Deterioration in that portfolio allegedly went undisclosed while Coastal reported aggregate CCBX growth.
• Indemnification limits: The 98.8% figure allegedly omitted that the protection depended on that partner’s ability to pay. The eventual charge included a $22.8 million provision tied to the partner’s indemnification obligations.
• Asset valuation: Coastal reduced the value of the related credit enhancement asset by $46 million. The complaint says investors were not warned of this exposure.
• Credit assurances: An October 29, 2025 statement expressed confidence in the ability to “maintain credit quality, even in a changing economic and interest rate environment.” According to the complaint, that statement did not disclose the alleged portfolio deterioration.
• Monitoring: Plaintiffs contend Coastal’s risk management and credit monitoring practices were inadequate to identify and mitigate the deterioration.

Why Generic Warnings May Not Protect

The complaint asserts that many of the challenged statements were not identified as forward-looking when made. It further asserts that, where they were, “there were no meaningful cautionary statements identifying important factors that could cause actual results to differ materially.” In practical terms, plaintiffs contend that boilerplate caveats cannot shield statements about credit conditions that were allegedly already deteriorating.

“Generic risk factor language cannot substitute for disclosing specific, known problems that are already affecting a company’s operations. The complaint alleges Coastal investors received a precise indemnification percentage while a large partner portfolio was deteriorating, and shareholders are entitled to ask whether those disclosures told the whole story.” — Joseph E. Levi, Esq.

Submit your information here or call (212) 363-7500.

Levi & Korsinsky, LLP — Top 50 securities litigation firm (ISS, seven consecutive years). Over 70 professionals. Hundreds of millions recovered.

Frequently Asked Questions About the CCB Lawsuit

Q: How much did CCB stock drop? A: Shares fell approximately 43.5%, a decline of $30.75 per share, after the Company disclosed a $68.8 million credit expense associated with a single CCBX partner relationship and a second quarter 2026 GAAP net loss of $42.1 million. Investors who purchased shares during the Class Period at allegedly artificially inflated prices and suffered losses may be eligible to seek compensation.

Q: What specific misstatements does the CCB lawsuit allege? A: The complaint alleges Coastal Financial Corporation made materially false or misleading statements during the Class Period. The alleged misstatements concern the growth and credit quality of its CCBX business, the adequacy of its risk management and credit monitoring practices, and the credit protections afforded by its CCBX partner indemnification agreements. When the $68.8 million credit expense tied to a single CCBX partner relationship was disclosed, the stock price declined sharply.

Q: When did Coastal Financial Corporation allegedly mislead investors? A: The Class Period runs from October 28, 2024 to July 29, 2026. The complaint alleges that corrective disclosures revealed information that caused a significant stock decline.

Q: What do CCB investors need to do right now? A: Investors may gather brokerage records showing purchase dates, share quantities, and prices paid. Submit your information for a no-cost, no-obligation evaluation of your potential recovery. No immediate action is required to remain eligible as an absent class member.

Q: What happens after I contact Levi & Korsinsky? A: An attorney will review your trading history at no cost and provide an initial assessment of your potential eligibility.

Q: What if I already sold my CCB shares — can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold the shares. Investors who bought during the Class Period and sold at a loss may still be eligible to participate.

Q: Do I need to go to court or give testimony? A: No. The overwhelming majority of class members never appear in court or give depositions. If there is a settlement or recovery, eligible class members generally submit a claim form to seek their portion.

Q: What if I live outside the United States? A: U.S. securities class actions generally cover purchases on U.S. exchanges regardless of the investor’s country of residence.

CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
jlevi@levikorsinsky.com
Tel: (212) 363-7500
Fax: (212) 363-7171

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