Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
At December 31, 2025, the end of the period covered by this Annual Report on Form 10-K, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. Based on that evaluation, both the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025.
Management’s Report on Internal Control Over Financial Reporting
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Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act). Our internal control over financial reporting is designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements in accordance with GAAP. Internal control over financial reporting includes self-monitoring mechanisms, and actions are taken to correct deficiencies as they are identified.
An effective internal control system can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of an internal control system may vary over time. There are inherent limitations in any internal control over financial reporting, no matter how well designed, misstatements due to error or fraud may occur and not be detected, including the possibility of circumvention or overriding of controls.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has concluded that our internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f), was effective as of December 31, 2025.
Existence of Material Weaknesses
A material weakness exists when there is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement in the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, management identified material weaknesses in internal control over financial reporting related to the control environment and the risk assessment and control activities components of the COSO framework associated with accounting and financial reporting for information provided by Banking-as-a-Service (“BaaS”) partners. These material weaknesses resulted in the restatement of the Company’s financial statements for the year ended December 31, 2023 and interim quarterly periods in 2024 and 2023.
Remediation of Previously Identified Material Weaknesses
During 2025, management, under the oversight of the Audit Committee, designed and implemented a comprehensive remediation plan to address the previously identified material weaknesses. Remediation actions included enhancements to the Company’s risk assessment procedures over third-party reports, implementation of new and enhanced controls over partner accounting policies, funds flow documentation, partner journal entries, partner data and information produced by the entity, financial statement impact assessments and the establishment of a formal Partner ICFR Program.
All remediation actions were fully implemented as of December 31, 2025 and operated for a sufficient period to allow management to evaluate their design and operating effectiveness. Management tested the effectiveness of the remediated controls, and Internal Audit independently evaluated the design and operating effectiveness of the Partner ICFR Program and related controls. The controls were determined to be operating effectively during the period tested.
Based on these evaluations, management concluded that the previously identified material weaknesses have been remediated as of December 31, 2025.
Changes in Internal Control over Financial Reporting
In connection with the remediation of the previously identified material weaknesses described above, management implemented enhancements to our internal control over financial reporting during 2025. Except for the remediation activities described above, there were no changes in our internal control over financial reporting during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Auditor Attestation
Baker Tilly, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2025, and their report is included in Item 8. Financial Statements and Supplementary Data.
Item 9B. Other Information
During the fiscal quarter ended December 31, 2025, no director or officer of the Company adopted , modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
Board of Directors
For information relating to the directors of the Company, the section captioned “Items to be Voted on by Shareholders—Item 1—Election of Directors” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders is incorporated herein by reference.
Executive Officers
For information relating to officers of the Company, the section captioned “Other Information Relating to Directors and Executive Officers—Information About Our Executive Officers” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders is incorporated herein by reference.
Delinquent Section 16(a) Reports
For information regarding compliance with Delinquent Section 16(a) Reports, the section captioned “Stock Information—Delinquent Section 16(a) Reports” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders is incorporated herein by reference.
Disclosure of Code of Ethics
For information concerning the Company’s Code of Ethics, the information contained under the section captioned “Corporate Governance—Code of Ethics and Business Conduct” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders is incorporated by reference. A copy of the Code of Ethics and Business Conduct is available to shareholders on the Company’s website at www.coastalbank.com.
Audit Committee
For information regarding the Audit Committee and its composition and the audit committee financial expert, the section captioned “Corporate Governance—Meetings and Committees of the Board of Directors—Audit Committee” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders is incorporated herein by reference.
Item 11. Executive Compensation
Executive Compensation
For information regarding executive compensation, the sections captioned “Executive Compensation” and “Director Compensation” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders are incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
(a) Security Ownership of Certain Beneficial Owners
Information required by this item is incorporated herein by reference to the section captioned “Stock Information” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders.
(b) Security Ownership of Management
Information required by this item is incorporated herein by reference to the section captioned “Stock Information” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders.
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(c) Changes in Control
Management of the Company knows of no arrangements, including any pledge by any person or securities of the Company the operation of which may at a subsequent date result in a change in control of the registrant.
(d) Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth information about the Company common stock that may be issued upon the exercise of stock options, warrants and rights under all of the Company’s equity compensation plans as of December 31, 2025.
Number of
securities to be
issued upon
exercise of
outstanding
options
Weighted-
average
exercise price
of outstanding
options
Number of
securities
remaining
available
for issuance
under
equity
compensation
plans (1)
Equity compensation plan approved by stockholders 118,881 $ 10.10 700,458
Equity compensation plan not approved by shareholders - - -
Total 118,881 $ 10.10 700,458
(1) This number has been reduced by the number of securities to be issued upon the exercise of outstanding options, also reported in this table.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Certain Relationships and Related Transactions
For information regarding certain relationships and related transactions, the section captioned “ Other Information Relating to Directors and Executive Officers—Transactions with Related Persons” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders is incorporated herein by reference.
Director Independence
For information regarding director independence, the section captioned “Corporate Governance—Director Independence” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
For information regarding the principal accountant fees and expenses, the section captioned “Item 2—Ratification of Selection of Independent Registered Public Accounting Firm” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders is incorporated herein by reference.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(1) The financial statements required in response to this item are incorporated herein by reference from Item 8 of this Annual Report on Form 10-K.
(2) All financial statement schedules are omitted because they are not required or applicable, or the required information is shown in the consolidated financial statements or the notes thereto.
(3) Exhibits
No. Description Location
3.1 Second Amended and Restated Certificate of Incorporation of Coastal Financial Corporation
Incorporated herein by reference to
Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
3.2 Articles of Amendment to the Second Amended and Restated Articles of Incorporation of Coastal Financial Corporation
Incorporated herein by reference to
Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
3.3 Third Amended and Restated Bylaws of Coastal Financial Corporation, effective May 28, 2025
Incorporated herein by reference to
Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-38589), filed with the Securities and Exchange Commission on June 03, 2025
4.1 Form of Common Stock Certificate of Coastal Financial Corporation
Incorporated herein by reference to
Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
4.2 Description of Securities
Incorporated herein by reference to
Exhibit 4.2 to the Company’s Annual Report on Form 10-K (File No. 001-38589), filed with the Securities and Exchange Commission on March 12, 2020
4.3 Form of 3.375% Fixed-to-Floating Rate Subordinated Note due September 1, 2031
Incorporated herein by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. 001-38589), filed with the Securities and Exchange Commission on August 18, 2021
4.4 Form of 7.00% Fixed-to-Floating Rate Subordinated Note due November 1, 2032
Incorporated herein by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. 001-38589), filed with the Securities and Exchange Commission on November 1, 2022
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10.1+ 2006 Stock Option and Equity Compensation Plan
Incorporated herein by reference to
Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
10.2+ First Amendment to the 2006 Stock Option and Equity Compensation Plan
Incorporated herein by reference to
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-38589), filed with the Securities and Exchange Commission on August 7, 2020
10.3+ 2018 Omnibus Incentive Plan
Incorporated herein by reference to
Exhibit 10.3 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
10.4+ The First Amendment to the Coastal Financial Corporation 2018 Omnibus Incentive Plan
Incorporated herein by reference to Appendix A of the Company's Proxy Statement on Form DEF 14A, filed with the Securities and Exchange Commission on April 9, 2021
10.5+ The Second Amendment to the Coastal Financial Corporation 2018 Omnibus Incentive Plan
Incorporated herein by reference to Appendix A of the Company's Proxy Statement on Form DEF 14A, filed with the Securities and Exchange Commission on April 17, 2025
10.6+ Coastal Financial Corporation Annual Incentive Plan
Incorporated herein by reference to
Exhibit 10.4 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
10.7+ Second Amended and Restated Employment Agreement by and among Coastal Financial Corporation, Coastal Community Bank and Eric M. Sprink dated October 4, 2021.
Incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-38589), filed with the Securities and Exchange Commission on October 7, 2021
10.8+ Amended and Restated Change in Control Severance Agreement by and among Coastal Financial Corporation, Coastal Community Bank, and Joel Edwards
Incorporated herein by reference to
Exhibit 10.6 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
10.9+ Employee Retirement and Retention Agreement by and among Coastal Financial Corporation, Coastal Community Bank, and Joel Edwards dated May 7, 2025
Incorporated herein by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (File No. 001-38589), filed with the Securities and Exchange Commission on August 8, 2025
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10.10 Lease dated October 21, 1996, between certain persons and Coastal Community Bank
Incorporated herein by reference to
Exhibit 10.9 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
10.11 Lease Amendment 1.0 dated as of August 15, 2006, between certain persons and Coastal Community Bank
Incorporated herein by reference to
Exhibit 10.10 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
10.12 Lease Amendment 2.0 dated as of March 31, 2008, between certain persons and Coastal Community Bank
Incorporated herein by reference to
Exhibit 10.11 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
10.13 Lease Amendment 3.0 dated as of June 29, 2009, between certain persons and Coastal Community Bank
Incorporated herein by reference to
Exhibit 10.12 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
10.14 Lease Amendment 4.0 dated as of January 31, 2023, between certain persons and Coastal Community Bank
Incorporated herein by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K (File No. 001-38589), filed with the Securities and Exchange Commission on March 16, 2023
10.15 Investment Agreement dated as of March 30, 2011, between Coastal Financial Corporation and Steven D. Hovde
Incorporated herein by reference to
Exhibit 10.13 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
10.16 First Amendment to Investment Agreement dated as of May 9, 2019, between Coastal Financial Corporation and Steven D. Hovde
Incorporated herein by reference to
Exhibit 10.20 to the Company’s Registration Statement on Form S-1 (File No. 333-225715), filed with the Securities and Exchange Commission on June 19, 2018
10.17# Program Agreement dated as of September 26, 2019 by and between Coastal Community Bank and Aspiration Financial, LLC
Incorporated herein by reference to Exhibit 10.1 to Amendment No. 1 to the Company’s Current Report on Form 8-K/A (File No. 001-38589) filed with the Securities and Exchange Commission on March 21, 2019
10.18+ Form of Change in Control Severance Agreement
Incorporated herein by reference to
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-38589), filed with the Securities and Exchange Commission on May 8, 2020
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10.19+ Amended Non-Employee Director Compensation Policy
Incorporated herein by reference to
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 001-38589), filed with the Commission on November 6, 2020
10.20 Form of Subordinated Note Purchase Agreement, dated as of August 18, 2021
Incorporated herein by reference to
Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-38589), filed with the Securities and Exchange Commission on August 18, 2021
10.21 Form of Subordinated Note Purchase Agreement, dated as of November 1, 2022
Incorporated herein by reference to
Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-38589), filed with the Securities and Exchange Commission on November 1, 2022
10.22 Employment Agreement by and among Coastal Financial Corporation, Coastal Community Bank and Brian Hamilton, dated September 30, 2024.
Incorporated herein by reference to Exhibit 10.19 of the Company’s Form 10-K (File No. 001-38589), filed with the Securities and Exchange Commission on March 17, 2025
10.23+ Employee Agreement by and among Coastal Financial Corporation, Coastal Community Bank, and Brandon Soto dated October 1, 2025
Incorporated herein by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 001-38589), filed with the Securities and Exchange Commission on November 7, 2025
10.24+ Offer Letter by and among Coastal Financial Corporation, Coastal Community Bank, and Brandon Soto dated September 22, 2025
Incorporated herein by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (File No. 001-38589), filed with the Securities and Exchange Commission on November 7, 2025
10.25+ RSU Award Agreement by and among Coastal Financial Corporation, Coastal Community Bank, and Brandon Soto dated September 22, 2025
Incorporated herein by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q (File No. 001-38589), filed with the Securities and Exchange Commission on November 7, 2025
10.26+ PSU Award Agreement by and among Coastal Financial Corporation, Coastal Community Bank, and Brandon Soto dated October 1, 2025
Incorporated herein by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q (File No. 001-38589), filed with the Securities and Exchange Commission on November 7, 2025
10.27+ Separation Agreement by and among Coastal Financial Corporation, Coastal Community Bank, and Curt Queyrouze dated September 9, 2025
Incorporated herein by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q (File No. 001-38589), filed with the Securities and Exchange Commission on November 7, 2025
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10.28+ Separation Agreement by and among Coastal Financial Corporation, Coastal Community Bank, and Andy Stines dated September 29, 2025
Incorporated herein by reference to Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q (File No. 001-38589), filed with the Securities and Exchange Commission on November 7, 2025
10.29+
Employee Agreement by and among Coastal Financial Corporation, Coastal Community Bank, and Freddy Rivas dated July 31, 2025
Filed herewith
16.1 Changes in Registrant’s Certifying Accountant
Incorporated herein by reference to Exhibit 16.1 of the Company’s Current Report on Form 8-K (File No. 001-38589), filed with the Securities and Exchange Commission on June 4, 2025
19.1 Insider Trading Policy
Incorporated herein by reference to Exhibit 19.1 of the Company’s Form 10-K (File No. 001-38589), filed with the Securities and Exchange Commission on March 17, 2025
21.1 Subsidiaries
Incorporated herein by reference to
Exhibit 21.1 of the Company’s Form 10-K (File No. 001-38589), filed with the Securities and Exchange Commission on March 14, 2022
23.1 Consent of Baker Tilly LLP
Filed herewith
31.1 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith
31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith
32.1 Certifications of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Filed herewith
32.2 Certifications of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Filed herewith
97.1 Executive Compensation Clawback Policy
Incorporated herein by reference to Exhibit 97.1 of the Company’s Form 10-K (File No. 001-38589), filed with the Securities and Exchange Commission on March 15, 2024
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101 The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheet, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statement of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to the Consolidated Financial Statements Filed herewith
104 Cover Page Interactive Data (formatted as Inline XBRL and contained in Exhibit 101 filed herewith)
_______________________________________
+ Management contract or compensatory plan, contract or arrangement.
# Portions of this exhibit have been omitted pursuant to a request for confidential treatment and the non-public information has been filed separately with the SEC.
Item 16. Form 10-K Summary
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
COASTAL FINANCIAL CORPORATION
Dated: February 27, 2026 /s/ Eric M. Sprink
Eric M. Sprink
Chief Executive Officer
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name Title Date
/s/ Eric M. Sprink Chief Executive Officer and Director
(Principal Executive Officer) February 27, 2026
Eric M. Sprink
/s/ Brian T. Hamilton CCBX President and Director February 27, 2026
Brian T. Hamilton
/s/ Brandon J. Soto Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer) February 27, 2026
Brandon J. Soto
/s/ Christopher D. Adams Chair of the Board February 27, 2026
Christopher D. Adams
/s/ Steven D. Hovde Vice Chair of the Board February 27, 2026
Steven D. Hovde
/s/ Pamela R. Unger Director February 27, 2026
Pamela R. Unger
/s/ Rilla R. Delorier Director February 27, 2026
Rilla R. Delorier
/s/ Stephan Klee Director February 27, 2026
Stephan Klee
/s/ Thomas D. Lane Director February 27, 2026
Thomas D. Lane
/s/ Sadhana Akella-Mishra Director February 27, 2026
Sadhana Akella-Mishra
/s/ Michael R. Patterson Director February 27, 2026
Michael R. Patterson
/s/ Gregory A. Tisdel Director February 27, 2026
Gregory A. Tisdel
198