Form 4: Coastal Financial Corp. Executive Brian Hamilton Reports Routine Share Withholding for Tax Obligations

Brian T. Hamilton, President of CCBX and a Director of Coastal Financial Corp., reported the withholding of 14,292 shares of common stock valued at $87.89 per share to cover tax obligations related to the vesting of restricted and performance stock units.

Summary

• Brian T. Hamilton, President of CCBX and a Director of Coastal Financial Corp. (CCB), reported a transaction on May 30, 2025.
• The transaction involved the disposition of 14,292 shares of Coastal Financial Corp. common stock.
• These shares were withheld for the payment of withholding taxes upon the partial vesting of Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) that were granted on September 30, 2024.
• The price per share for the withheld shares was $87.89.
• Following this transaction, Brian T. Hamilton beneficially owns 87,094 shares of Coastal Financial Corp. common stock directly.
• This beneficial ownership includes 20,349 RSUs with remaining shares vesting monthly in approximately equal amounts through April 30, 2028.
• It also includes 23,226 performance-based RSUs which are eligible to vest on the first day of each month beginning October 1, 2024, until April 30, 2028, contingent on continuous employment and specific stock price conditions.
• Additionally, 15,000 performance-based RSUs are included, eligible to vest on April 30, 2028, subject to continuous employment and achieving a return on equity that is at least 80% of the company's comparator peer group.
• Finally, 669 RSUs are included, vesting in four approximately equal remaining installments.

Sentiment

Score: 6

Explanation: The sentiment is slightly positive as it indicates the vesting of equity awards, which aligns executive interests with shareholders. The transaction itself is routine and expected for tax purposes, not indicating any negative sentiment from the insider.

Positives

• The transaction represents the vesting of previously granted equity awards (RSUs and PSUs), indicating that performance or time-based conditions for these awards have been met.
• The continued beneficial ownership of a significant number of shares and unvested equity awards (87,094 shares in total, including various RSU/PSU tranches) by a key executive like Brian T. Hamilton aligns management's interests with those of shareholders.

Negatives

• The disposition of 14,292 shares, while for tax purposes, reduces the direct share count held by the executive.

Risks

• The value of the unvested performance-based RSUs is subject to the achievement of specific stock price conditions and return on equity targets relative to a peer group, introducing variability in the ultimate number of shares received.
• The value of all beneficially owned shares and RSUs/PSUs is subject to the market price fluctuations of Coastal Financial Corp. common stock.

Future Outlook

The document outlines future vesting schedules for various RSU and PSU awards held by Brian T. Hamilton, with vesting periods extending through April 30, 2028, subject to continuous employment and specific performance conditions (stock price and return on equity targets).

Industry Context

This Form 4 filing is a routine disclosure of an insider transaction related to executive compensation. It reflects the common practice of using equity awards (RSUs, PSUs) as a significant component of executive pay in the financial services industry, aligning executive incentives with long-term shareholder value creation.

Comparison to Industry Standards

• The use of Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) is a standard practice in executive compensation across the financial services industry, including regional banks and financial holding companies like Coastal Financial Corp.
• The withholding of shares to cover tax obligations upon vesting is a common and expected mechanism for settling tax liabilities associated with equity compensation, consistent with practices observed at comparable institutions such as Umpqua Holdings Corporation (UMPQ) or Columbia Banking System, Inc. (COLB).
• The inclusion of performance-based vesting conditions tied to stock price and return on equity (relative to a peer group) aligns with best practices in corporate governance, aiming to incentivize performance that directly benefits shareholders, similar to compensation structures seen at other publicly traded banks.

Stakeholder Impact

• Shareholders: The vesting and subsequent tax withholding of equity awards are part of the company's approved compensation plans, which can lead to minor dilution over time but are intended to align executive incentives with shareholder value. The continued significant beneficial ownership by a key executive is generally positive for shareholder alignment.
• Employees: The report pertains to executive compensation and does not directly impact the broader employee base, though it reflects the company's overall compensation philosophy.

Next Steps

• Continued vesting of 20,349 RSUs monthly through April 30, 2028.
• Continued vesting of 23,226 performance-based RSUs monthly from October 1, 2024, until April 30, 2028, subject to stock price conditions.
• Vesting of 15,000 performance-based RSUs on April 30, 2028, subject to return on equity targets.
• Continued vesting of 669 RSUs in four approximately equal remaining installments.

Key Dates

Keywords

SEC Form 4, insider transaction, equity compensation, restricted stock units, performance stock units, RSU, PSU, stock withholding, executive compensation, Coastal Financial Corp, CCB, beneficial ownership