The complaint, Allegheny County Employees' Retirement System v. Coastal Financial Corporation, alleges that the bank holding company failed to disclose that a significant portion of its CCBX partner loan portfolio—totaling roughly $500 million—had materially deteriorated. According to the suit, Coastal Financial’s risk management practices were insufficient to identify or mitigate the fallout from these assets, which represented nearly 23% of its CCBX loan volume.

Market confidence fractured on July 30, 2026, when the company reported a $42.1 million GAAP net loss, citing a $68.8 million credit expense tied to a single partner relationship. Following the disclosure, the company's stock price plummeted by more than 43%. Robbins Geller Rudman & Dowd LLP, the firm representing the plaintiffs, contends that executives provided false assurances about the credit protections embedded in their "banking as a service" agreements throughout the class period.