NEW YORK, Oct. 12, 2026 (GLOBE NEWSWIRE) -- Levi & Korsinsky, LLP alerts investors in Coastal Financial Corporation (NASDAQ: CCB) that a securities class action has been filed concerning investors who purchased Coastal securities between October 28, 2024 through July 29, 2026. Check if you might be eligible to recover your investment losses or contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com or (212) 363-7500.
Management told shareholders that Coastal was 98.8% indemnified against credit risk with its CCBX banking-as-a-service partners. The Company then reported a $68.8 million credit expense tied to one partner, a $42.1 million quarterly net loss, and a 43.5% share decline that erased approximately $470 million in market value. The Court has set December 1, 2026 as the deadline to apply for lead plaintiff appointment.
"Investors deserve transparency about material risks that could affect their investments, including how far a bank's partner agreements actually shield it from credit losses. The complaint alleges that Coastal's indemnification assurances left out deterioration in a single partner portfolio representing nearly a quarter of CCBX loans. Whether those assurances were accurate is a central question in this case," said Joseph E. Levi, Esq.
The Alleged Single-Partner Indemnification Concentration
With its first quarter 2025 results, the Company reported that it "remain[ed] fully indemnified against fraud and 98.8% indemnified against credit risk with our CCBX partners as of March 31, 2025." Management repeated the 98.8% figure a year later for balances as of March 31, 2026.
The lawsuit asserts that these statements omitted a key fact: one partner's loan portfolio, approximately $500 million and nearly 23% of all CCBX loans, had materially deteriorated. As alleged, Coastal overstated the extent to which its CCBX credit protections shielded the Bank from losses, leaving Coastal exposed to significant losses notwithstanding the partner’s indemnification agreement.
Partner Credit Protection Trends in Banking-as-a-Service Lending
The action claims that the CCBX structure carried more risk than those figures conveyed:
- Protection can lose value: The $68.8 million expense included a $46 million valuation adjustment to the related credit enhancement asset.
- Losses can still reach the bank: A $22.8 million provision for credit losses was tied to the partner's indemnification obligations.
- Concentration magnifies exposure: The partner was one of 22 active CCBX relationships as of June 30, 2026.
- Severity relative to the book: The charge equaled nearly 14% of that partner's entire loan portfolio.
Why Banking-as-a-Service Indemnification Adequacy Allegedly Matters to Securities Investors
A near-total indemnification figure signaled that partner loan losses would largely fall on someone else. Class Period purchasers allegedly paid prices that did not reflect the exposure tied to that single relationship.
Learn more about the case or call (212) 363-7500.
ABOUT LEVI & KORSINSKY, LLP — Over the past 20 years, Levi & Korsinsky has secured hundreds of millions of dollars for aggrieved shareholders. The firm has extensive expertise in complex securities litigation and a team of over 70 employees. For seven consecutive years, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report. Investors who suffered losses have until December 1, 2026 to seek appointment as lead plaintiff.
Frequently Asked Questions About the CCB Lawsuit
Q: Who is eligible to join the CCB investor lawsuit? A: Investors who purchased CCB stock or securities between October 28, 2024 and July 29, 2026 and suffered financial losses may be eligible. Eligibility is based on purchase date and documented losses -- not on whether you still hold the shares.
Q: What specific misstatements does the CCB lawsuit allege? A: The complaint alleges that Coastal Financial Corporation made materially false or misleading statements during the Class Period regarding the growth and credit quality of its CCBX banking-as-a-service business, the adequacy of its risk management and credit monitoring practices, and the credit protections afforded by its CCBX partner indemnification agreements. When a $68.8 million credit expense tied to a single CCBX partner relationship was disclosed, the stock price declined sharply.
Q: Who are the defendants named in the CCB lawsuit? A: The complaint names Coastal Financial Corporation and individual defendants including senior executives who signed SEC filings, made public statements, or certified financial disclosures under Sarbanes-Oxley.
Q: What is a lead plaintiff and why does it matter? A: A lead plaintiff is the investor appointed by the court to represent the entire class. Lead plaintiffs are typically investors with the largest documented losses. Being appointed does not increase individual recovery but gives direct oversight of how the case is run.
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: What does it cost me to participate? A: There is no upfront cost to submit your information and review whether you may be eligible to recover. Should you choose to participate in the securities class action, they are generally handled on a contingency basis, with any attorneys' fees and expenses subject to court approval.
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
Tel: (212) 363-7500
Fax: (212) 363-7171
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