Coastal Financial in Everett, Wash., disclosed that three of its Banking-as-a-Service clients are preparing to exit the relationship.
The $3.1 billion-asset company disclosed in a slidedeck that the number of active partners fell to 19 in the third quarter from 23 a quarter earlier. Looking at the pipeline, five companies have signed letters of intent, while two others are in the middle of testing.
Coastal also said that the programs being wound down “were not material in terms of income and sources of funds.”
BaaS fee income increased by 84% in the third quarter from a year earlier, to $3.6 million. The quarter included $357,000 in transaction income and $250,000 in interchange income.
Deposit balances in the business nearly doubled from a year earlier, to $1.2 billion. Coastal said it transferred another $267 million of deposits off its balance sheet.
Total loans increased by 381%, to $915.6 million, including $521 million of consumer loans. Coastal also had $43.3 million of loans held for sale on Sept. 30.
While net chargeoffs to average loans was 3.59%, they were completely covered by credit enhancements provided by the partner.