 Total Number of PPP Loans Total Number of PPP Loans PPP Funding Distribution PPP Funding Distribution Current Deferrals Compared to March 31, 2020 Total Loans Current Deferrals Compared to March 31, 2020 Total Loans Current Deferrals Compared to June 30, 2020 Total Loans Current Deferrals Compared to June 30, 2020 Total Loans Total Loan Deferrals by Ending Date Total Loan Deferrals by Ending Date Total Loan Deferrals by Deferral Type Total Loan Deferrals by Deferral Type Total Loan Deferrals by Industry Total Loan Deferrals by IndustryQuarter Two 2020 Highlights: Net income totaled 3.7 million for the quarter ended June 30, 2020, or 0.30 per diluted common share, an increase of 12.2 from 3.3 million, or 0.27 per diluted common share, for the quarter ended June 30, 2019. A 1.9 million provision for loan losses was recorded during the quarter ended June 30, 2020, due to economic uncertainties from the COVID-19 pandemic, up from 1.6 million during the quarter ended March 31, 2020. Asset growth of 494.9 million, or 41.8, to 1.68 billion for the quarter ended June 30, 2020, compared to 1.18 billion at March 31, 2020. Total loans receivable, net of deferred loan fees, grew 44.0 during the quarter ended June 30, 2020 to 1.45 billion compared to 1.01 billion at March 31, 2020. Includes 427.4 million in Paycheck Protection Program PPP loans originated in the second quarter of 2020. Loans receivable, net of PPP loans, grew at an annualized rate of 5.8, or 14.5 million, during the quarter ended June 30, 2020. Total deposits increased 30.0 during the quarter ended June 30, 2020 to 1.31 billion, compared to 1.01 billion at March 31, 2020. Utilized the Paycheck Protection Program Liquidity Facility PPPLF to fund PPP loans. 190.2 million loans pledged and borrowed at June 30, 2020. Opened 15th branch in Arlington, Washington.EVERETT, Wash., July 27, 2020 GLOBE NEWSWIRE -- Coastal Financial Corporation Nasdaq: CCB the Company, the holding company for Coastal Community Bank the Bank, today reported unaudited financial results for the quarter ended June 30, 2020. Net income for the second quarter of 2020 was 3.7 million, or 0.30 per diluted common share, compared with net income of 2.7 million, or 0.22 per diluted common share, for the first quarter of 2020, and 3.3 million, or 0.27 per diluted common share, for the quarter ended June 30, 2019. During a period in which businesses and individuals had to contend with the impact of a global COVID-19 pandemic on the economy and on their personal lives, I am proud of the accomplishments and achievements of our team who have remained positive, flexible, and relentlessly focused on serving our communities and continued growth of our Company. Despite the pandemic related disruptions that continued through the quarter, we finished the second quarter of 2020 with net income of 3.7 million, which includes 1.9 million in loan loss provision expense primarily in response to the economic uncertainties of the pandemic. As a preferred Small Business Administration SBA lender, we have funded 438.1 million gross funds in financial assistance to existing and new small business customers via the PPP as provided in the Coronavirus Aid, Relief and Economic Security Act CARES Act, which represents 2,526 loans, impacting nearly 40,000 employees in our communities as of June 30, 2020. We placed special emphasis on small companies, with 98 of the loans funded going to companies with fewer than 100 employees. In addition, we continue to develop our CCBX division and added three new customers for the quarter, which provides Banking as a Service BaaS enabling broker dealers and digital financial service providers to offer their clients banking services, while providing additional sources of fee income for the Bank, stated Eric Sprink, the President and CEO of the Company and the Bank.During this uncertain time, we remain committed to our customers and, pursuant to federal guidance, have deferred or modified payments for 207.2 million in loans for our customers, representing 215 loans, remaining as of June 30, 2020. This proactive approach to restructuring payments helped provide financial relief within our communities.We remain committed to following the guidelines set forth by our federal, state and local government and public health officials to keep us all healthy and safe while remaining open and serving our communities through our drive throughs, call center, mobile banking, online banking and ATMs. As new guidance emerges, the Company is enhancing measures already in place to protect the health and safety of its employees and continues to successfully employ remote work arrangements to the fullest extent possible. We remain focused on closely analyzing higher risk segments within the loan portfolio, monitoring economic conditions, and are working diligently to proactively manage the risks and uncertainties associated with these unprecedented times. The Coastal team is dedicated to our customers and to working within our communities to provide assistance through traditional banking services and are also committed to growing and developing our CCBX division, which provides an alternative means of income for the Company.Results of Operations During the quarter ended June 30, 2020, significant focus was placed on helping the small businesses in our communities through the PPP. These loans have had a significant impact on our financial statements for the quarter ended June 30, 2020 and will continue to impact our results in the future. Throughout this earnings release, we will address the impact of these loans including borrowings received through PPPLF to help fund these loans and to aid in liquidity, increased customer deposit accounts from unused disbursements, and earnings and expenses related to these activities. Any estimated adjusted ratios that exclude the impact of this activity are non-GAAP measures. For more information about non-GAAP financial measures, see the end of this earnings release.The table below summarizes key information regarding the PPP loans as of the period indicated: Loan Size As of June 30, 2020 0.00 - 150,000.00 150,000.01 - 350,000.00 350,000.01 - 2,000,000.00 2,000,000.01 Totals Dollars in thousands; unaudited Principal outstanding: Existing customer 37,674 29,561 86,232 52,299 205,766 New customer 48,914 42,205 82,940 58,252 232,311 Total principal outstanding 86,588 71,766 169,172 110,551 438,077 Deferred fees outstanding 3,729 3,057 4,247 940 11,973 Deferred costs outstanding 940 215 161 18 1,334 Net deferred fees 2,7892,8424,08692210,639 Total principal, net of deferred fees 83,799 68,924 165,086 109,629 427,438 Weighted average maturity years 1.91 1.83 1.83 1.81 1.83 Number of loans: Existing customer 768 128 108 13 1,017 New customer 1,185 190 116 18 1,509 Total loan count 1,953 318 224 31 2,526 Percent of total 77.3 12.6 8.9 1.2 100.0 Net interest income was 14.0 million for the quarter ended June 30, 2020, an increase of 23.1 from 11.4 million for the quarter ended March 31, 2020, and an increase of 37.4 from 10.2 million for the quarter ended June 30, 2019. The increase compared to the prior quarter and prior years second quarter is largely related to increased interest income resulting from our loan growth. This loan growth includes 438.1 million in PPP loans and 2.8 million in related interest income for the quarter ended June 30, 2020, combined with lower interest expense resulting from a decrease in interest rates paid on interest bearing deposits and an increase in noninterest bearing deposits from cash advanced on PPP loans being placed in noninterest bearing demand accounts. Interest expense was 1.4 million as of June 30, 2020, a 323,000 decrease from the period ended March 31, 2020 and a 185,000 decrease from the period ended June 30, 2019. Partially offsetting this decrease is a 228,000 decrease in interest earned on deposits with other banks compared to March 31, 2020, and a 522,000 decrease compared to June 30, 2019, largely as a result of lower rates. Deposits held with other banks increased 32.6 million as of June 30, 2020, compared to March 31, 2020, as a result of the PPPLF borrowings, which were obtained to provide liquidity as PPP funds in deposit accounts are withdrawn. Net deferred fees on PPP loans will be earned over the life of the loan, as a yield adjustment. Forgiveness of principal, early paydowns and payoffs on PPP loans will increase interest income earned in those periods. Net interest margin for the quarter ended June 30, 2020 was 3.78, a 37 basis point decrease from 4.15 for the quarter ended March 31, 2020 and a 46 basis point decrease from 4.24 for the quarter ended June 30, 2019. The decrease over the prior quarter and second quarter in the previous year was largely due to the originating and holding of PPP loans and lower interest rates on all other loans. Contributing to the decrease in net interest margin were PPP loans, which account for an average of 335.2 million in gross loans for the quarter ended June 30, 2020, and bear a contractual interest rate of 1.0, and yield 3.31 after considering the amortization of loan fees, for the quarter ended June 30, 2020. Cost of funds decreased 29 basis points in the quarter ended June 30, 2020 compared to the quarter ended March 31, 2020 and decreased 33 basis points from the quarter ended June 30, 2019. Proceeds from the PPP loans were largely deposited into noninterest bearing accounts, which helped reduce our cost of funds. 