Every deck about banking as a service shows a bank earning fees on somebody else's customers. None of them show the split.
So I went looking for a bank that publishes it. Coastal Financial Corporation reports its BaaS business as a separate segment called CCBX, and its annual report for 2025, filed on 27 February 2026, breaks out the economics line by line. The segment "provides banking as a service ('BaaS') that allows our digital financial service partners to offer their customers banking services."
The table is what I came for. For 2025 it reads "BaaS loan interest income $274,608", then "Less: BaaS loan expense 129,086", giving "Net BaaS loan income (1) $145,522". The figures are in thousands of dollars.
That is $274.6m of interest income on partner loans. Of it, $129.1m was paid out and $145.5m kept.
The partner takes 47% of the interest income. Do that division once and the business model stops being abstract.
The same table gives the yield: "Yield on loans 15.87%", against "Net BaaS loan income divided by average BaaS loans (1) 8.41%" on average BaaS loans of "$1,730,016".
So the gross yield is nearly 16%, and the net is under 9%.
That gap is the price of not owning the customer. A community bank earning 8.41% on consumer credit would be delighted, so this is not a bad business. It is simply a different one from what the gross yield implies, and the gross yield is the number that ends up in presentations.
The segment reporting repeats the pattern one level up: "Net interest income (GAAP) 211,172", "Less: BaaS loan expense (129,086)", "Net interest income, net of BaaS loan expense $82,086", on "CCBX earning assets 2,347,560".
So $211.2m of net interest income becomes $82.1m. The deduction is 61% of reported net interest income for that segment.
I find that figure hard to read past. More than three fifths of the visible income flows out to partners under contract.
The trend is the part I had not expected, and it cuts against the story I would have told.
BaaS loan interest income ran "$274,608 15.87%", "$248,286 17.39%", "$197,306 16.30%" across 2025, 2024 and 2023. BaaS loan expense ran "129,086 7.46%", "118,536 8.30%", "79,748 6.59%". Net BaaS loan income: "$145,522 8.41%", "$129,750 9.09%", "$117,558 9.71%".
Income went up while the net margin went down, three years in a row.
It slid from 9.71% to 9.09% to 8.41%. The book grew from $1.21bn to $1.73bn of average loans while the net take per dollar fell. Scale arrived at Coastal, but pricing power did not.
This is the clause that makes the whole structure work, and it is easy to miss. Loans come with " credit enhancement provided by the partner which protects the Bank by indemnifying or reimbursing incurred losses", recorded as an asset "due from CCBX partners related to losses in the loan portfolio".
The bank books it as revenue at the same moment it books the loss. The enhancement asset is created "through the recognition of BaaS credit enhancement revenue at the same time we establish an allowance for those loans though a provision for credit losses - loans."
That clause shifts the whole question. Credit risk becomes counterparty risk , and the bank says so: it is exposed "to additional credit losses as a result of this counterparty risk" if a partner "failed to fulfill its obligations."
A fintech promising to cover consumer losses is only as good as its own balance sheet. That is the exposure this model carries, and it does not show up in a loan loss ratio.
This has nothing to do with the arithmetic, so feel free to skip it.
The segment "had a total of 28 relationships as indicated in the chart below, at varying stages, including one signed letter of intent as of December 31, 2025." Twenty-eight, and one of those is a letter of intent that the total counts as a relationship.
I have thought about that inclusion more than is reasonable. It is disclosed openly, and it still tells you something about how partner counts get presented across this industry.
Right, back to the money itself.
I had assumed the fee income was the point of BaaS and the lending was incidental. For this bank that is backwards.
The revenue description is "CCBX revenue from BaaS fee income and interest on loans", and the numbers above are lending numbers, not fee numbers. The interest book is the engine. The fee income rides alongside it.
I cannot give you the partner-level split. The 47% is an aggregate across 28 relationships, and contracts almost certainly differ, so no individual partner economics can be read out of this.
I also cannot tell you whether the declining net margin is competition, mix, or the repricing described in the filing, where offering rates "are modeled using partner contractual net yields which mostly adjust immediately with market shifts." My suspicion is mix, and it is only a suspicion.
And one bank is still only one bank. This is the clearest disclosure I have found, not a benchmark for the sector.
Gross 15.87%, net 8.41%, and 47% of interest income going to the partner.
If you are evaluating a BaaS proposition, on either side of the table, ask for those three numbers before anything else. The thing that still bothers me is how rarely the middle one appears in the pitch.