• Capital Bancorp, Inc. Posts Broad Based Growth Leading to a Sharp Profitability Increase

    ソース: Nasdaq GlobeNewswire / 28 10 2024 15:03:01   America/Chicago

    Third Quarter 2024 Results

    • Net Income of $8.7 million, or $0.62 per share
      • Net Income, as adjusted to exclude the impact of merger-related expenses (non-GAAP)(1), of $9.2 million, or $0.66 per share
    • Tangible Book Value Per Share(1) of $20.13, increased 4.5%, or $0.87 as compared to $19.26 (2Q 2024).
    • Net Interest Income increased $1.3 million, or 3.5% (not annualized), from 2Q 2024
    • Net Interest Margin ("NIM") decreased to 6.41% as compared to 6.46% (2Q 2024)
      • Core NIM, as adjusted to exclude the impact of credit card loans (non-GAAP)(1) increased to 4.08% as compared to 4.00% (2Q 2024)
    • Loan Growth of $85.9 million, or 16.9% annualized for 3Q 2024
    • Deposit Growth of $85.8 million, or 16.2% annualized for 3Q 2024; Noninterest bearing deposits increased $33.5 million, or 19.5% annualized from 2Q 2024
    • Cash dividend of $0.10 per share declared

    ROCKVILLE, Md., Oct. 28, 2024 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $8.7 million, or $0.62 per diluted share, for the third quarter 2024, compared to net income of $8.2 million, or $0.59 per diluted share, for the second quarter 2024, and $9.8 million, or $0.70 per diluted share, for the third quarter 2023. Net income, as adjusted to exclude the impact of merger-related expenses (non-GAAP)(1), was $9.2 million, or $0.66 per diluted share, for the third quarter 2024, compared to $8.3 million, or $0.59 per diluted share, for the second quarter 2024.

    The Company also declared a cash dividend on its common stock of $0.10 per share. The dividend is payable on November 20, 2024 to shareholders of record on November 4, 2024.

    “We continue to benefit from our diversified business which is driving growth across our platforms," said Ed Barry, Chief Executive Officer of the Company and the Bank. "With the changing interest rate environment, our core margin has inflected. The acquisition of Integrated Financial Holdings, Inc. is now complete and we are now focused on integration and unlocking opportunity out of their complementary lines of business."

    "The Bank continues to execute on its smart growth strategy as reflected by the impressive year-to-date and third quarter growth in commercial bank loan balances and deposits, both interest bearing and non-interest bearing. Our diversified profit centers complement one another and our recent acquisition of IFH adds an additional high potential opportunity for growth,” said Steven J Schwartz, Chairman of the Company. “In addition, our quarter-over-quarter 4.5% increase in tangible book value (with all investment securities fully marked), together with stable asset quality, ROA and ROE metrics, offer clear evidence of our franchise durability.”

    (1) Reconciliations of the non–U.S. generally accepted accounting principles ("GAAP") measures are set forth in the Appendix at the end of this press release.

    Acquisition of Integrated Financial Holdings, Inc.
    On October 1, 2024, the Company completed its previously announced merger with Integrated Financial Holdings, Inc. ("IFHI"). Pursuant to the terms of the Merger Agreement, each share of IFHI’s common stock, par value $1.00 per share (“IFHI Common Stock”) was converted into the right to receive (a) 1.115 shares of common stock of the Company, par value $0.01 per share (“Capital Common Stock”); and (b) $5.36 in cash per share of IFHI Common Stock held immediately prior to the Effective Time, in addition to cash in lieu of fractional shares. In addition, each stock option granted by IFHI to purchase shares of IFHI Common Stock, whether vested or unvested, outstanding immediately prior to the Effective Time, was assumed by the Company and converted into an equivalent option to purchase Capital Common Stock, with the same terms and conditions as applied to the IFHI stock option.

    In the first nine months of 2024, the Company incurred pre-tax merger-related expenses of $1.3 million, including expenses totaling $0.5 million for the third quarter 2024, consistent with modeled expectations.

    The following table provides a reconciliation of the Company's net income under GAAP to non-GAAP results excluding merger-related expenses.

     Third Quarter 2024 Second Quarter 2024
    (in thousands, except per share data)Income Before Income Taxes Income Tax Expense (Benefit) Net Income Diluted Earnings per Share Income Before Income Taxes Income Tax Expense Net Income Diluted Earnings per Share
    GAAP Earnings$11,499  $2,827  $8,672  $0.62  $10,933  $2,728  $8,205  $0.59 
    Add: Merger-Related Expenses 520   (37)  557     83   21   62   
    Non-GAAP Earnings$12,019  $2,790  $9,229  $0.66  $11,016  $2,749  $8,267  $0.59 


     Nine Months Ended September 30, 2024
    (in thousands, except per share data)Income Before Income Taxes Income Tax Expense Net Income Diluted Earnings per Share
    GAAP Earnings$31,056  $7,617  $23,439  $1.69 
    Add: Merger-Related Expenses 1,315   158   1,157   
    Non-GAAP Earnings$32,371  $7,775  $24,596  $1.77 
                    

    Note: The tax benefit associated with merger-related expenses has been adjusted to reflect the estimated nondeductible portion of the expenses.

    Third Quarter 2024 Highlights

    Earnings Summary

    Net income of $8.7 million, or $0.62 per diluted share, increased $0.5 million compared to $8.2 million, or $0.59 per diluted share, for the second quarter 2024. Net income, as adjusted to exclude the impact of merger-related expenses (non-GAAP)(1), increased $0.9 million to $9.2 million, or $0.66 per diluted share, for the third quarter 2024 compared to $8.3 million, or $0.59 per diluted share, for the second quarter 2024.

    • Net interest income of $38.4 million increased $1.3 million, or 3.5%, compared to the second quarter 2024.
      • Interest income of $52.6 million increased $2.0 million, or 3.9%, over the second quarter 2024 primarily from $1.7 million in portfolio loan interest income, as growth in average balances increased $61.0 million. Interest income from interest-bearing deposits held at other financial institutions increased $0.2 million, as average balances increased $14.0 million to $91.1 million.
      • Interest expense of $14.3 million increased $0.7 million, or 5.1% over the second quarter 2024 due to increases in customer money market deposits and time deposits of $0.4 million and $0.3 million, respectively. Average balances increased $27.0 million and $14.0 million, respectively.
    • The provision for credit losses was $3.7 million, an increase of $0.3 million from the second quarter 2024 primarily driven by unsecured credit card loan growth in the quarter. Net charge-offs totaled $2.7 million in the third quarter including $1.7 million from credit card related loans, $0.6 million from commercial real estate, and $0.4 million from commercial and industrial loans. The $0.8 million net charge-offs increase quarter over quarter includes $0.6 million from a commercial loan charge-off that was fully reserved for, and $0.2 million from higher credit card loans. At September 30, 2024, the allowance for credit losses to total loans ratio was 1.51%, down 2 basis points from the ratio at June 30, 2024.
    • Noninterest income of $6.6 million decreased $0.3 million as compared to the second quarter 2024 primarily due to decreased credit card fees of $0.3 million.
    • Noninterest expense of $29.7 million increased $0.2 million as compared to the second quarter 2024. Noninterest expense of $29.2 million, excluding merger-related expenses of $0.5 million, decreased $0.2 million as compared to the second quarter 2024. Variances include:
      • Advertising expense of $1.2 million decreased $0.8 million off of seasonally high second quarter levels.
      • Professional fees of $2.0 million increased $0.2 million primarily related to increased non-merger-related legal fees.
      • Other expense categories increased $0.4 million including slight increases from data and loan processing expense and operational losses.
    • Income tax expense of $2.8 million, or 24.6% of pre-tax income for the third quarter 2024, increased $0.1 million from $2.7 million, or 25.0% of pre-tax income for the second quarter 2024.

    Balance Sheet

    Total assets of $2.6 billion at September 30, 2024 increased $122.2 million, or 5.0% (not annualized), from June 30, 2024.

    • Cash and cash equivalents of $156.7 million at September 30, 2024 increased $20.2 million from June 30, 2024, as total deposits increased $85.8 million, and Federal Home Loan Bank advances increased $20.0 million, partially offset by an increase in total portfolio loans of $85.9 million.
    • Total portfolio loans of $2.1 billion at September 30, 2024 increased $85.9 million, or 4.3% (not annualized) from June 30, 2024. Total average loans increased $61.0 million quarter over quarter.
      • Owner-occupied commercial real estate loans increased $32.1 million, or 10.0% (not annualized) from June 30, 2024.
      • The average portfolio loans-to-deposit ratio of 98.20% for the three months ended September 30, 2024 remained stable.
    • Total deposits of $2.2 billion at September 30, 2024 increased $85.8 million, or 4.1% (not annualized), from June 30, 2024, The increase includes $40.4 million of customer time deposits, $33.5 million of noninterest-bearing deposits primarily related to growth in title company deposit balances and $14.1 million of growth in customer money market deposits.
      • Uninsured and unprotected deposits were approximately $645.6 million as of September 30, 2024, representing 29.5% of the Company's deposit portfolio.
      • Low and no interest bearing deposits of $988.4 million increased $33.5 million, or 3.5% (not annualized) from June 30, 2024. Average noninterest-bearing deposits of $680.7 million increased $27.7 million, or 4.2% (not annualized), and represented 32.6% of total average deposits at September 30, 2024.
    • The investment securities portfolio continues to be classified as available-for-sale and had a fair market value of $208.7 million, or 8.1% of total assets, an effective duration of 3.0 years, with U.S. Treasury Securities representing 61.8% of the overall investment portfolio at September 30, 2024. The AOCI on the investment securities portfolio decreased $4.5 million during the quarter to a negative $8.6 million as of September 30, 2024, which represents 3.1% of total stockholders' equity. The Company does not have a held-to-maturity investment securities portfolio.
    • Liquidity - The Company maintains stable and reliable sources of available borrowings consistent with prior quarter. Sources of available borrowings at September 30, 2024 totaled $691.8 million, including available collateralized lines of credit of $500.4 million, unsecured lines of credit with other banks of $76.0 million and unpledged investment securities available as collateral for potential additional borrowings of $115.4 million.
    • Capital Positions - As of September 30, 2024, the Company reported a robust common equity tier 1 capital ratio of 14.78%, compared to 15.08% at June 30, 2024. At September 30, 2024, the Company and the Bank maintain regulatory capital ratios that exceed all capital adequacy requirements.

    Financial Metrics

    Net Interest Margin - Net interest margin decreased 5 basis points to 6.41% for the three months ended September 30, 2024, compared to prior quarter. Core Net Interest Margin, as adjusted to exclude the impact of OpenSky™ credit card loans (non-GAAP)(1), increased 8 basis points to 4.08% as compared to prior quarter.

    • The average yield on interest earning assets of 8.79% decreased 3 basis points compared to the prior quarter. The yield on portfolio loans, as adjusted to exclude the impact of OpenSky™ credit card loans (non-GAAP)(1), of 7.15% for the third quarter 2024, increased 11 basis points primarily from portfolio turnover.
    • The total cost of deposits increased 3 basis points to 2.64% for the third quarter 2024 as compared to the prior quarter.
    • The total cost of interest-bearing deposits increased 5 basis points to 3.92% for the third quarter 2024 as compared to the prior quarter.

    Efficiency Ratios – The efficiency ratio was 66.1% for the three months ended September 30, 2024, compared to 67.1% for the three months ended June 30, 2024. The efficiency ratio, as adjusted to exclude the impact of merger-related expenses (non-GAAP)(1), was 64.9% for the three months ended September 30, 2024 compared to 66.9% for the three months ended June 30, 2024.

    Credit Metrics and Asset Quality - Overall credit performance remains stable with the allowance for credit losses to total loans ratio decreasing 2 basis points to 1.51% at September 30, 2024 as compared to June 30, 2024. Nonperforming assets increased 2 basis point to 0.60% of total assets at September 30, 2024 as compared to June 30, 2024. Total nonaccrual loans at September 30, 2024 increased $1.4 million to $15.5 million compared to June 30, 2024. At September 30, 2024, special mention loans totaled $20.3 million, or 1.0% of total portfolio loans, as compared to $23.3 million, or 1.2% of total portfolio loans, at June 30, 2024. At September 30, 2024, substandard loans totaled $23.8 million, or 1.1% of total portfolio loans, as compared to $22.1 million, or 1.2% of total portfolio loans, at June 30, 2024.

    Performance Ratios – Annualized return on average assets ("ROAA") and annualized return on average equity ("ROAE") were 1.42% and 12.59%, respectively, for the three months ended September 30, 2024, compared to 1.40% and 12.53%, respectively, for the three months ended June 30, 2024.

    • Annualized ROAA and annualized ROAE, as adjusted to exclude the impact of merger-related expenses (non-GAAP)(1), were 1.51% and 13.40%, respectively, for the three months ended September 30, 2024, compared to 1.41% and 12.62%, respectively, for the three months ended June 30, 2024.

    Consistent Tangible Book Value Growth - Tangible book value per common share(1) grew $0.87, or 4.5%, to $20.13 at September 30, 2024 when compared to June 30, 2024. The Company did not have goodwill or other intangible assets during any of the periods presented and therefore, tangible book value per share(1) is equal to book value per share.

    Commercial Bank

    Continued Portfolio Loan Growth - Gross portfolio loans, excluding OpenSky™ credit card loans, increased $80.5 million, to $2.0 billion, at September 30, 2024 compared to June 30, 2024.

    The $80.5 million gross portfolio loan growth includes commercial real estate loans of $38.5 million, residential real estate loans of $22.4 million and commercial and industrial loans of $16.1 million. Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.

    Net Interest Income - Interest income of $35.8 million increased $1.9 million from prior quarter, driven by loan growth and higher loan yields. Interest expense of $14.0 million increased $0.7 million, driven by an increase in average balances in the third quarter 2024.

    Credit Metrics - Nonperforming assets increased 2 basis point to 0.60% of total assets at September 30, 2024 compared to June 30, 2024. Total nonaccrual loans at September 30, 2024 increased to $15.5 million compared to June 30, 2024.

    The following tables present non-owner-occupied and owner-occupied commercial real estate loans and multi-family loans and the weighted average loan-to-value ("LTV").

    Non-owner-occupied commercial real estate loans, including multi-family

     As of September 30, 2024
    (in thousands)Amount Average Loan Size Weighted Average LTV(1) % of Non-Owner-Occupied Commercial Real Estate Loans % of Total Portfolio Loans, Gross
    Loan type:         
    Multi-family$170,513  $1,853  58.1% Not Applicable 8.1%
              
    Retail$116,324  $1,454  56.6% 28.8% 5.5%
    Mixed use 96,337   1,189  52.8% 23.9% 4.6%
    Hotel 74,343   4,130  52.4% 18.4% 3.5%
    Industrial 63,109   1,127  54.2% 15.6% 3.0%
    Office 13,356   557  63.2% 3.3% 0.6%
    Other 40,018   1,819  55.4% 10.0% 1.9%
    Total non-owner-occupied commercial real estate loans$403,487  $1,436  54.6% 100.0% 19.1%
    Total portfolio loans, gross$2,113,705         
                

    Owner-occupied commercial real estate loans

     As of September 30, 2024
    (in thousands)Amount Average Loan Size Weighted Average LTV(1) % of Owner-Occupied Commercial Real Estate Loans % of Total Portfolio Loans, Gross
    Loan type:         
    Industrial$108,048  $1,522  56.9% 30.7% 5.1%
    Office 44,781   640  57.5% 12.7% 2.1%
    Retail 41,137   762  59.2% 11.7% 1.9%
    Mixed use 17,550   924  65.2% 5.0% 0.8%
    Other(2) 139,946   2,799  61.6% 39.9% 6.6%
    Total owner-occupied commercial real estate loans$351,462  $1,331  59.6% 100.0% 16.6%
    Total portfolio loans, gross$2,113,705         
                

    (1) The weighted average LTV of the loan categories previously mentioned are calculated by reference to the most recent appraisal of the property securing each loan.
    (2) Other owner-occupied commercial real estate loans include special purpose loans of $57.9 million, skilled nursing loans of $53.8 million, and other loans of $28.2 million.

    Classified and Criticized Loans - At September 30, 2024, special mention loans totaled $20.3 million, or 1.0% of total portfolio loans, as compared to $23.3 million, or 1.2% of total portfolio loans, at June 30, 2024. At September 30, 2024, substandard loans totaled $23.8 million, or 1.1% of total portfolio loans, as compared to $22.1 million, or 1.2% of total portfolio loans, at June 30, 2024.

    OpenSky™

    Revenues - Total revenue of $19.7 million decreased $0.4 million from the prior quarter. Interest income of $15.6 million decreased $0.2 million from the prior quarter. Average OpenSky™ credit card loan balances, net of reserves and deferred fees of $119.5 million for the third quarter 2024, increased $8.2 million, or 7.3% (not annualized), compared to prior quarter. Noninterest income of $4.1 million decreased $0.3 million as compared to prior quarter primarily related to lower annual fee income.

    Noninterest Expense - Total noninterest expense of $13.3 million decreased $0.5 million primarily related to a reduction in seasonally high advertising expense in the second quarter 2024.

    Loan and Deposit Balances - Loan balances, net of reserves, of $127.1 million at September 30, 2024 increased by $4.9 million, or 4.0%, compared to $122.2 million at June 30, 2024. Corresponding deposit balances of $170.8 million at September 30, 2024 decreased $2.7 million, or 1.6%, compared to $173.5 million at June 30, 2024. Gross unsecured loan balances of $39.7 million at September 30, 2024 increased $6.2 million, or 18.4%, compared to $33.6 million at June 30, 2024. During the third quarter 2024, the number of credit card accounts increased by 11,218 to 548,952 from June 30, 2024.

    OpenSky™ Credit - Portfolio credit metrics continue to be stable and generally consistent with modeled expectations during the third quarter 2024. The provision for credit losses of $2.3 million remained flat when compared to the prior quarter.

     
    COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited
                  
     Quarter Ended 3Q24 vs 2Q24 3Q24 vs 3Q23
    (in thousands, except per share data)September 30, 2024 June 30, 2024 September 30, 2023 $ Change % Change $ Change % Change
    Earnings Summary             
    Interest income$52,610  $50,615  $47,741  $1,995  3.9% $4,869  10.2%
    Interest expense 14,256   13,558   10,931   698  5.1%  3,325  30.4%
    Net interest income 38,354   37,057   36,810   1,297  3.5%  1,544  4.2%
    Provision for credit losses 3,748   3,417   2,280   331  9.7%  1,468  64.4%
    Provision for credit losses on unfunded commitments 17   104   24   (87) (83.7)%  (7) (29.2)%
    Noninterest income 6,635   6,890   6,326   (255) (3.7)%  309  4.9%
    Noninterest expense 29,725   29,493   28,046   232  0.8%  1,679  6.0%
    Income before income taxes 11,499   10,933   12,786   566  5.2%  (1,287) (10.1)%
    Income tax expense 2,827   2,728   2,998   99  3.6%  (171) (5.7)%
    Net income$8,672  $8,205  $9,788  $467  5.7% $(1,116) (11.4)%
                  
    Pre-tax pre-provision net revenue ("PPNR")(1)$15,264  $14,454  $15,090  $810  5.6% $174  1.2%
    PPNR, as adjusted(1)$15,784  $14,537  $15,090  $1,247  8.6% $694  4.6%
                  
    Common Share Data             
    Earnings per share - Basic$0.62  $0.59  $0.70  $0.03  5.1% $(0.08) (11.4)%
    Earnings per share - Diluted$0.62  $0.59  $0.70  $0.03  5.1% $(0.08) (11.4)%
    Earnings per share - Diluted, as adjusted(1)$0.66  $0.59  $0.70  $0.07  11.9% $(0.04) (5.7)%
    Weighted average common shares - Basic 13,914   13,895   13,933         
    Weighted average common shares - Diluted 13,951   13,895   14,024         
                  
    Return Ratios             
    Return on average assets (annualized) 1.42%  1.40%  1.75%        
    Return on average assets, as adjusted (annualized)(1) 1.51%  1.41%  1.75%        
    Return on average equity (annualized) 12.59%  12.53%  16.00%        
    Return on average equity, as adjusted (annualized)(1) 13.40%  12.62%  16.00%        

    ______________
    (1) Refer to Appendix for reconciliation of non-GAAP measures.

     
    COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued)
             
      Nine Months Ended    
      September 30,    
    (in thousands, except per share data) 2024 2023 $ Change % Change
    Earnings Summary        
    Interest income $151,594  $136,237  $15,357  11.3%
    Interest expense  41,175   29,600   11,575  39.1%
    Net interest income  110,419   106,637   3,782  3.5%
    Provision for credit losses  9,892   6,802   3,090  45.4%
    Provision for credit losses on unfunded commitments  263   5   258  5,160.0%
    Noninterest income  19,497   19,039   458  2.4%
    Noninterest expense  88,705   83,860   4,845  5.8%
    Income before income taxes  31,056   35,009   (3,953) (11.3)%
    Income tax expense  7,617   8,168   (551) (6.7)%
    Net income $23,439  $26,841  $(3,402) (12.7)%
             
    Pre-tax pre-provision net revenue ("PPNR")(1) $41,211  $41,816  $(605) (1.4)%
    PPNR, as adjusted(1) $42,526  $41,816  $710  1.7%
             
    Common Share Data        
    Earnings per share - Basic $1.69  $1.91  $(0.22) (11.5)%
    Earnings per share - Diluted $1.69  $1.90  $(0.21) (11.1)%
    Earnings per share - Diluted, as adjusted(1) $1.77  $1.90     
    Weighted average common shares - Basic  13,909   14,038     
    Weighted average common shares - Diluted  13,909   14,112     
             
    Return Ratios        
    Return on average assets (annualized)  1.32%  1.64%    
    Return on average assets, as adjusted (annualized)(1)  1.39%  1.64%    
    Return on average equity (annualized)  11.79%  15.08%    
    Return on average equity, as adjusted (annualized)(1)  12.37%  15.08%    

    ______________
    (1) Refer to Appendix for reconciliation of non-GAAP measures.

     
    COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued)
                
     Quarter Ended   Quarter Ended
     September 30,  June 30, March 31, December 31,
    (in thousands, except per share data)2024
    		 2023
    		 % Change 2024
    		 2023
    		 2023
    Balance Sheet Highlights           
    Assets$2,560,788  $2,272,484  12.7% $2,438,583  $2,324,238  $2,226,176 
    Investment securities available for sale 208,700   206,055  1.3%  207,917   202,254   208,329 
    Mortgage loans held for sale 19,554   4,843  303.8%  19,219   10,303   7,481 
    Portfolio loans receivable(2) 2,107,522   1,862,679  13.1%  2,021,588   1,964,525   1,903,288 
    Allowance for credit losses 31,925   28,279  12.9%  30,832   29,350   28,610 
    Deposits 2,186,224   1,967,988  11.1%  2,100,428   2,005,695   1,895,996 
    FHLB borrowings 52,000   22,000  136.4%  32,000   22,000   22,000 
    Other borrowed funds 12,062   12,062  —%  12,062   12,062   27,062 
    Total stockholders' equity 280,111   242,878  15.3%  267,854   259,465   254,860 
    Tangible common equity(1) 280,111   242,878  15.3%  267,854   259,465   254,860 
                
    Common shares outstanding 13,918   13,893  0.2%  13,910   13,890   13,923 
    Book value per share$20.13  $17.48  15.2% $19.26  $18.68  $18.31 
    Tangible book value per share(1)$20.13  $17.48  15.2% $19.26  $18.68  $18.31 
    Dividends per share$0.10  $0.08  25.0% $0.08  $0.08  $0.08 

    ______________
    (1) Refer to Appendix for reconciliation of non-GAAP measures.
    (2) Loans are reflected net of deferred fees and costs.

     
    Consolidated Statements of Income (Unaudited)
     Three Months EndedNine Months Ended
    (in thousands)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 September 30, 2024 September 30, 2023
    Interest income             
    Loans, including fees$50,047  $48,275  $45,991  $45,109  $45,385  $144,313  $129,651 
    Investment securities available for sale 1,343   1,308   1,251   1,083   1,089   3,902   3,732 
    Federal funds sold and other 1,220   1,032   1,127   777   1,267   3,379   2,854 
    Total interest income 52,610   50,615   48,369   46,969   47,741   151,594   136,237 
                  
    Interest expense             
    Deposits 13,902   13,050   12,833   11,759   10,703   39,785   27,866 
    Borrowed funds 354   508   528   321   228   1,390   1,734 
    Total interest expense 14,256   13,558   13,361   12,080   10,931   41,175   29,600 
                  
    Net interest income 38,354   37,057   35,008   34,889   36,810   110,419   106,637 
    Provision for credit losses 3,748   3,417   2,727   2,808   2,280   9,892   6,802 
    Provision for (release of) credit losses on unfunded commitments 17   104   142   (106)  24   263   5 
    Net interest income after provision for credit losses 34,589   33,536   32,139   32,187   34,506   100,264   99,830 
                  
    Noninterest income             
    Service charges on deposits 235   200   207   240   250   642   724 
    Credit card fees 4,055   4,330   3,881   3,970   4,387   12,266   13,303 
    Mortgage banking revenue 1,882   1,990   1,453   1,166   1,243   5,325   3,730 
    Other income 463   370   431   560   446   1,264   1,282 
    Total noninterest income 6,635   6,890   5,972   5,936   6,326   19,497   19,039 
                  
    Noninterest expenses             
    Salaries and employee benefits 13,345   13,272   12,907   11,638   12,419   39,524   37,116 
    Occupancy and equipment 1,791   1,864   1,613   1,573   1,351   5,268   4,100 
    Professional fees 1,980   1,769   1,947   1,930   2,358   5,696   7,340 
    Data processing 6,930   6,788   6,761   6,128   6,469   20,479   19,558 
    Advertising 1,223   2,072   2,032   1,433   1,565   5,327   4,728 
    Loan processing 615   476   371   198   426   1,462   1,435 
    Foreclosed real estate expenses, net 1   —   1   —   1   2   7 
    Merger-related expenses 520   83   712   —   —   1,315   — 
    Operational losses 1,008   782   931   1,490   953   2,721   3,123 
    Other operating 2,312   2,387   2,212   2,517   2,504   6,911   6,453 
    Total noninterest expenses 29,725   29,493   29,487   26,907   28,046   88,705   83,860 
    Income before income taxes 11,499   10,933   8,624   11,216   12,786   31,056   35,009 
    Income tax expense 2,827   2,728   2,062   2,186   2,998   7,617   8,168 
    Net income$8,672  $8,205  $6,562  $9,030  $9,788  $23,439  $26,841 
                                


    Consolidated Balance Sheets
     (unaudited) (unaudited) (unaudited) (audited) (unaudited)
    (in thousands, except share data)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023
    Assets         
    Cash and due from banks$23,462  $19,294  $12,361  $14,513  $13,767 
    Interest-bearing deposits at other financial institutions 133,180   117,160   72,787   39,044   130,428 
    Federal funds sold 58   57   56   407   1,957 
    Total cash and cash equivalents 156,700   136,511   85,204   53,964   146,152 
    Investment securities available for sale 208,700   207,917   202,254   208,329   206,055 
    Restricted investments 5,895   4,930   4,441   4,353   4,340 
    Loans held for sale 19,554   19,219   10,303   7,481   4,843 
    Portfolio loans receivable, net of deferred fees and costs 2,107,522   2,021,588   1,964,525   1,903,288   1,862,679 
    Less allowance for credit losses (31,925)  (30,832)  (29,350)  (28,610)  (28,279)
    Total portfolio loans held for investment, net 2,075,597   1,990,756   1,935,175   1,874,678   1,834,400 
    Premises and equipment, net 5,959   5,551   4,500   5,069   5,297 
    Accrued interest receivable 12,468   12,162   12,258   11,494   11,231 
    Deferred tax asset 10,748   12,150   12,311   12,252   13,644 
    Bank owned life insurance 38,779   38,414   38,062   37,711   37,315 
    Accounts receivable 597   1,336   11,637   1,055   696 
    Other assets 25,791   9,637   8,093   9,790   8,511 
    Total assets$2,560,788  $2,438,583  $2,324,238  $2,226,176  $2,272,484 
              
    Liabilities         
    Deposits         
    Noninterest-bearing$718,120  $684,574  $665,812  $617,373  $680,803 
    Interest-bearing 1,468,104   1,415,854   1,339,883   1,278,623   1,287,185 
    Total deposits 2,186,224   2,100,428   2,005,695   1,895,996   1,967,988 
    Federal Home Loan Bank advances 52,000   32,000   22,000   22,000   22,000 
    Other borrowed funds 12,062   12,062   12,062   27,062   12,062 
    Accrued interest payable 8,503   6,573   6,009   5,583   5,204 
    Other liabilities 21,888   19,666   19,007   20,675   22,352 
    Total liabilities 2,280,677   2,170,729   2,064,773   1,971,316   2,029,606 
              
    Stockholders' equity         
    Common stock 139   139   139   139   139 
    Additional paid-in capital 55,585   55,005   54,229   54,473   54,549 
    Retained earnings 232,995   225,824   218,731   213,345   206,033 
    Accumulated other comprehensive loss (8,608)  (13,114)  (13,634)  (13,097)  (17,843)
    Total stockholders' equity 280,111   267,854   259,465   254,860   242,878 
    Total liabilities and stockholders' equity$2,560,788  $2,438,583  $2,324,238  $2,226,176  $2,272,484 
                        

    The following tables show the average outstanding balance of each principal category of our assets, liabilities and stockholders’ equity, together with the average yields on our assets and the average costs of our liabilities for the periods indicated. Such yields and costs are calculated by dividing the annualized income or expense by the average daily balances of the corresponding assets or liabilities for the same period.

          
     Three Months Ended
    September 30, 2024    		 Three Months Ended
    June 30, 2024    		 Three Months Ended
    September 30, 2023
     Average
    Outstanding
    Balance    		 Interest Income/
    Expense    		 Average
    Yield/
    Rate(1)    		 Average
    Outstanding
    Balance    		 Interest Income/
    Expense    		 Average
    Yield/
    Rate(1)    		 Average
    Outstanding
    Balance    		 Interest Income/
    Expense    		 Average
    Yield/
    Rate(1)
     (in thousands)
    Assets                 
    Interest earning assets:                 
    Interest-bearing deposits$91,089 $1,137 4.97% $77,069 $937 4.89% $87,112 $1,183 5.39%
    Federal funds sold 57  1 6.98   56  1 7.18   1,134  15 5.25 
    Investment securities available for sale 221,303  1,343 2.41   223,973  1,308 2.35   229,731  1,089 1.88 
    Restricted investments 4,911  82 6.64   5,435  94 6.96   4,058  69 6.75 
    Loans held for sale 9,967  161 6.43   7,907  132 6.71   6,670  111 6.60 
    Portfolio loans receivable(2)(3) 2,053,619  49,886 9.66   1,992,630  48,143 9.72   1,847,772  45,274 9.72 
    Total interest earning assets 2,380,946  52,610 8.79   2,307,070  50,615 8.82   2,176,477  47,741 8.70 
    Noninterest earning assets 56,924      46,798      44,640    
    Total assets$2,437,870     $2,353,868     $2,221,117    
                      
    Liabilities and Stockholders’ Equity                 
    Interest-bearing liabilities:                 
    Interest-bearing demand accounts$228,365  321 0.56  $216,247  148 0.28  $215,527  71 0.13 
    Savings 4,135  5 0.48   4,409  1 0.09   5,582  3 0.21 
    Money market accounts 698,239  7,442 4.24   671,240  7,032 4.21   655,990  6,373 3.85 
    Time deposits 479,824  6,134 5.09   465,822  5,869 5.07   374,429  4,256 4.51 
    Borrowed funds 43,655  354 3.23   54,863  508 3.72   34,932  228 2.59 
    Total interest-bearing liabilities 1,454,218  14,256 3.90   1,412,581  13,558 3.86   1,286,460  10,931 3.37 
    Noninterest-bearing liabilities:                 
    Noninterest-bearing liabilities 28,834      24,844      25,047    
    Noninterest-bearing deposits 680,731      653,018      666,939    
    Stockholders’ equity 274,087      263,425      242,671    
    Total liabilities and stockholders’ equity$2,437,870     $2,353,868     $2,221,117    
                      
    Net interest spread    4.89%     4.96%     5.33%
    Net interest income  $38,354     $37,057     $36,810  
    Net interest margin(4)    6.41%     6.46%     6.71%

    _______________
    (1) Annualized.
    (2) Includes nonaccrual loans.
    (3) For the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, collectively, portfolio loans yield excluding credit card loans was 7.15%, 7.04% and 6.76%, respectively.
    (4) For the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, collectively, credit card loans accounted for 233, 246 and 266 basis points of the reported net interest margin, respectively.

      
     Nine Months Ended September 30,
     2024
    		 2023
     Average
    Outstanding
    Balance    		 Interest Income/
    Expense    		 Average
    Yield/
    Rate(1)    		 Average
    Outstanding
    Balance    		 Interest Income/
    Expense    		 Average
    Yield/
    Rate(1)
     (in thousands)
    Assets           
    Interest earning assets:           
    Interest-bearing deposits$84,254 $3,123 4.95% $72,116 $2,531 4.69%
    Federal funds sold 57  3 7.03   1,605  53 4.42 
    Investment securities available for sale 226,151  3,902 2.30   252,993  3,732 1.97 
    Restricted investments 4,982  253 6.78   5,184  270 6.96 
    Loans held for sale 7,591  376 6.62   6,145  299 6.51 
    Portfolio loans receivable(2)(3) 1,991,435  143,937 9.65   1,801,355  129,352 9.60 
    Total interest earning assets 2,314,470  151,594 8.75   2,139,398  136,237 8.51 
    Noninterest earning assets 49,458      44,123    
    Total assets$2,363,928     $2,183,521    
                
    Liabilities and Stockholders’ Equity           
    Interest-bearing liabilities:           
    Interest-bearing demand accounts$209,346  579 0.37  $203,099  208 0.14 
    Savings 4,460  7 0.21   5,965  6 0.13 
    Money market accounts 684,017  21,610 4.22   628,977  16,371 3.48 
    Time deposits 465,256  17,589 5.05   353,635  11,281 4.27 
    Borrowed funds 52,461  1,390 3.54   65,192  1,734 3.56 
    Total interest-bearing liabilities 1,415,540  41,175 3.89   1,256,868  29,600 3.15 
    Noninterest-bearing liabilities:           
    Noninterest-bearing liabilities 25,844      22,846    
    Noninterest-bearing deposits 657,044      665,821    
    Stockholders’ equity 265,500      237,986    
    Total liabilities and stockholders’ equity$2,363,928     $2,183,521    
                
    Net interest spread    4.86%     5.36%
    Net interest income  $110,419     $106,637  
    Net interest margin(4)    6.37%     6.66%
                  

    (1) Annualized.
    (2) Includes nonaccrual loans.
    (3) For the nine months ended September 30, 2024 and 2023, collectively, portfolio loans yield excluding credit card loans was 7.05% and 6.57%, respectively.
    (4) For the nine months ended September 30, 2024 and 2023, collectively, credit card loans accounted for 239 and 268 basis points of the reported net interest margin, respectively.

    The Company’s reportable segments represent business units with discrete financial information whose results are regularly reviewed by management. The four segments include Commercial Banking, Capital Bank Home Loans (the Company’s mortgage loan division), OpenSky™ (the Company’s credit card division) and the Corporate Office.

    Effective January 1, 2024, the Company allocated certain expenses previously recorded directly to the Commercial Bank segment to the other segments. These expenses are for shared services also consumed by OpenSky™, CBHL, and Corporate. The Company performs an allocation process based on several metrics the Company believes more accurately ascribe shared service overhead to each segment. The Company believes this reflects the cost of support for each segment that should be considered in assessing segment performance. Historical information has been recast to reflect financial information consistently with the 2024 presentation.

    The following schedule presents financial information for the periods indicated. Total assets are presented as of September 30, 2024, June 30, 2024, and September 30, 2023.

     
    Segments
    For the three months ended September 30, 2024
    (in thousands) Commercial Bank CBHL OpenSky™ Corporate(2) Eliminations Consolidated
    Interest income $35,805  $161  $15,625  $1,049  $(30) $52,610 
    Interest expense  13,984   108   —   194   (30)  14,256 
    Net interest income  21,821   53   15,625   855   —   38,354 
    Provision for credit losses  1,453   —   2,294   1   —   3,748 
    Provision for credit losses on unfunded commitments  17   —   —   —   —   17 
    Net interest income after provision  20,351   53   13,331   854   —   34,589 
    Noninterest income  726   1,811   4,096   2   —   6,635 
    Noninterest expense(1)  12,422   2,395   13,276   1,632   —   29,725 
    Net income (loss) before taxes $8,655  $(531) $4,151  $(776) $—  $11,499 
                 
    Total assets $2,358,555  $19,831  $121,587  $300,325  $(239,510) $2,560,788 
                 
    For the three months ended June 30, 2024
    (in thousands) Commercial Bank CBHL OpenSky™ Corporate(2) Eliminations Consolidated
    Interest income $33,935  $132  $15,785  $824  $(61) $50,615 
    Interest expense  13,312   83   —   224   (61)  13,558 
    Net interest income  20,623   49   15,785   600   —   37,057 
    Provision for credit losses  1,118   —   2,299   —   —   3,417 
    Provision for credit losses on unfunded commitments  104   —   —   —   —   104 
    Net interest income after provision  19,401   49   13,486   600   —   33,536 
    Noninterest income  677   1,845   4,368   —   —   6,890 
    Noninterest expense(1)  12,209   2,500   13,775   1,009   —   29,493 
    Net income (loss) before taxes $7,869  $(606) $4,079  $(409) $—  $10,933 
                 
    Total assets $2,254,198  $19,622  $115,593  $288,872  $(239,702) $2,438,583 
                 
    For the three months ended September 30, 2023
    (in thousands) Commercial Bank CBHL OpenSky™ Corporate(2) Eliminations Consolidated
    Interest income $30,409  $111  $16,143  $1,162  $(84) $47,741 
    Interest expense  10,736   32   —   247   (84)  10,931 
    Net interest income  19,673   79   16,143   915   —   36,810 
    Provision for credit losses  275   —   1,875   130   —   2,280 
    Provision for credit losses on unfunded commitments  24   —   —   —   —   24 
    Net interest income after provision  19,374   79   14,268   785   —   34,506 
    Noninterest income  665   1,255   4,405   1   —   6,326 
    Noninterest expense(1)  12,610   1,880   13,227   329   —   28,046 
    Net income (loss) before taxes $7,429  $(546) $5,446  $457  $—  $12,786 
                 
    Total assets $2,102,749  $5,280  $116,318  $264,950  $(216,813) $2,272,484 

    ________________________
    (1) Noninterest expense includes $6.2 million, $6.3 million, and $6.1 million in data processing expense in OpenSky’s™ segment for the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
    (2) The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.

     
    Segments
    For the nine months ended September 30, 2024
    (in thousands) Commercial Bank CBHL OpenSky™ Corporate(2) Eliminations Consolidated
    Interest income $102,269  $376  $46,331  $2,772  $(154) $151,594 
    Interest expense  40,450   232   —   647   (154)  41,175 
    Net interest income  61,819   144   46,331   2,125   —   110,419 
    Provision for credit losses  3,680   —   6,152   60   —   9,892 
    Provision for credit losses on unfunded commitments  263   —   —   —   —   263 
    Net interest income after provision  57,876   144   40,179   2,065   —   100,264 
    Noninterest income  2,107   5,008   12,379   3   —   19,497 
    Noninterest expense(1)  36,890   7,000   40,650   4,165   —   88,705 
    Net income (loss) before taxes $23,093  $(1,848) $11,908  $(2,097) $—  $31,056 
                 
    Total assets $2,358,555  $19,831  $121,587  $300,325  $(239,510) $2,560,788 
                 
    For the nine months ended September 30, 2023
    (in thousands) Commercial Bank CBHL OpenSky™ Corporate(2) Eliminations Consolidated
    Interest income $85,451  $299  $47,441  $3,274  $(228) $136,237 
    Interest expense  29,012   104   —   712   (228)  29,600 
    Net interest income  56,439   195   47,441   2,562   —   106,637 
    Provision for credit losses  849   —   5,823   130   —   6,802 
    Provision for credit losses on unfunded commitments  5   —   —   —   —   5 
    Net interest income after provision  55,585   195   41,618   2,432   —   99,830 
    Noninterest income  1,964   3,743   13,329   3   —   19,039 
    Noninterest expense(1)  36,043   6,538   40,083   1,196   —   83,860 
    Net income (loss) before taxes $21,506  $(2,600) $14,864  $1,239  $—  $35,009 
                 
    Total assets $2,102,749  $5,280  $116,318  $264,950  $(216,813) $2,272,484 
                             

    (1) Noninterest expense includes $18.7 million and $17.9 million in data processing expense in OpenSky’s™ segment for the nine months ended September 30, 2024 and 2023, respectively.
    (2) The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.

     
    HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited
      Quarter Ended
    (in thousands, except per share data) September 30,
    2024    		 June 30, 2024 March 31,
    2024    		 December 31,
    2023    		 September 30,
    2023
    Earnings:          
    Net income $8,672  $8,205  $6,562  $9,030  $9,788 
    Earnings per common share, diluted  0.62   0.59   0.47   0.65   0.70 
    Net interest margin  6.41%  6.46%  6.24%  6.40%  6.71%
    Net interest margin, excluding credit card loans(1)  4.08%  4.00%  3.85%  3.92%  4.05%
    Return on average assets(2)  1.42%  1.40%  1.15%  1.63%  1.75%
    Return on average equity(2)  12.59%  12.53%  10.19%  14.44%  16.00%
    Efficiency ratio  66.07%  67.11%  71.95%  65.91%  65.02%
               
    Balance Sheet:          
    Total portfolio loans receivable, net deferred fees $2,107,522  $2,021,588  $1,964,525  $1,902,643  $1,861,929 
    Total deposits  2,186,224   2,100,428   2,005,695   1,895,996   1,967,988 
    Total assets  2,560,788   2,438,583   2,324,238   2,226,176   2,272,484 
    Total stockholders' equity  280,111   267,854   259,465   254,860   242,878 
    Total average portfolio loans receivable, net deferred fees  2,053,619   1,992,630   1,927,372   1,863,298   1,847,772 
    Total average deposits  2,091,294   2,010,736   1,957,559   1,885,092   1,918,467 
    Portfolio loans-to-deposit ratio (period-end balances)  96.40%  96.25%  97.95%  100.35%  94.61%
    Portfolio loans-to-deposit ratio (average balances)  98.20%  99.10%  98.46%  98.84%  96.32%
               
    Asset Quality Ratios:          
    Nonperforming assets to total assets  0.60%  0.58%  0.62%  0.72%  0.67%
    Nonperforming loans to total loans  0.73%  0.70%  0.73%  0.84%  0.82%
    Net charge-offs to average portfolio loans(2)  0.51%  0.39%  0.41%  0.53%  0.38%
    Allowance for credit losses to total loans  1.51%  1.53%  1.49%  1.50%  1.52%
    Allowance for credit losses to non-performing loans  206.50%  219.40%  204.37%  178.34%  185.61%
               
    Bank Capital Ratios:          
    Total risk based capital ratio  13.76%  14.51%  14.36%  14.81%  14.51%
    Tier 1 risk based capital ratio  12.50%  13.25%  13.10%  13.56%  13.25%
    Leverage ratio  9.84%  10.36%  10.29%  10.51%  10.04%
    Common equity Tier 1 capital ratio  12.50%  13.25%  13.10%  13.56%  13.25%
    Tangible common equity  9.12%  9.53%  9.66%  9.91%  9.08%
    Holding Company Capital Ratios:          
    Total risk based capital ratio  16.65%  16.98%  16.83%  17.38%  17.11%
    Tier 1 risk based capital ratio  14.88%  15.19%  15.03%  15.55%  15.27%
    Leverage ratio  11.85%  11.93%  11.87%  12.14%  11.62%
    Common equity Tier 1 capital ratio  14.78%  15.08%  14.92%  15.43%  15.27%
    Tangible common equity  10.94%  10.98%  11.16%  11.45%  10.69%

    _______________
    (1) Refer to Appendix for reconciliation of non-GAAP measures.
    (2) Annualized.

     
    HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited (Continued)
      Quarter Ended
    (in thousands, except per share data) September 30,
    2024    		 June 30, 2024 March 31,
    2024    		 December 31,
    2023    		 September 30,
    2023
    Composition of Loans:          
    Commercial real estate, non owner-occupied $403,487  $397,080  $377,224  $351,116  $350,637 
    Commercial real estate, owner-occupied  351,462   319,370   330,840   307,911   305,802 
    Residential real estate  623,684   601,312   577,112   573,104   558,147 
    Construction real estate  301,909   294,489   290,016   290,108   280,905 
    Commercial and industrial  271,811   255,686   254,577   239,208   237,549 
    Lender finance  29,546   33,294   13,484   11,085   — 
    Business equity lines of credit  2,663   2,989   14,768   14,117   14,155 
    Credit card, net of reserve(3)  127,098   122,217   111,898   123,331   122,533 
    Other consumer loans  2,045   1,930   738   950   948 
    Portfolio loans receivable $2,113,705  $2,028,367  $1,970,657  $1,910,930  $1,870,676 
    Deferred origination fees, net  (6,183)  (6,779)  (6,132)  (7,642)  (7,997)
    Portfolio loans receivable, net $2,107,522  $2,021,588  $1,964,525  $1,903,288  $1,862,679 
               
    Composition of Deposits:          
    Noninterest-bearing $718,120  $684,574  $665,812  $617,373  $680,803 
    Interest-bearing demand  266,493   266,070   193,963   199,308   229,035 
    Savings  3,763   4,270   4,525   5,211   5,686 
    Money markets  686,526   672,455   678,435   663,129   668,774 
    Brokered time deposits  153,022   155,148   160,641   142,356   128,665 
    Other time deposits  358,300   317,911   302,319   268,619   255,025 
    Total deposits $2,186,224  $2,100,428  $2,005,695  $1,895,996  $1,967,988 
               
    Capital Bank Home Loan Metrics:          
    Origination of loans held for sale $74,690  $82,363  $52,080  $45,152  $50,023 
    Mortgage loans sold  67,296   66,417   40,377   34,140   39,364 
    Gain on sale of loans  1,644   1,732   1,238   1,015   1,011 
    Purchase volume as a % of originations  90.98%  96.48%  97.83%  89.99%  92.29%
    Gain on sale as a % of loans sold(4)  2.44%  2.61%  3.07%  2.97%  2.57%
    Mortgage commissions $598  $582  $490  $465  $528 
               
    OpenSky™Portfolio Metrics:          
    Open customer accounts  548,952   537,734   526,950   525,314   529,205 
    Secured credit card loans, gross $89,641  $90,961  $85,663  $95,300  $98,138 
    Unsecured credit card loans, gross  39,730   33,560   28,508   30,817   27,430 
    Noninterest secured credit card deposits  170,750   173,499   171,771   173,857   181,185 

    _______________
    (3) Credit card loans are presented net of reserve for interest and fees.
    (4) Gain on sale percentage is calculated as gain on sale of loans divided by mortgage loans sold.

    Appendix

    Reconciliation of Non-GAAP Measures

    The Company has presented the following non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Company’s results of operations and financial condition. Presentation of these non-GAAP financial measures is consistent with how the Company evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company’s industry. Investors should recognize that the Company’s presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Company strongly encourages a review of its condensed consolidated financial statements in their entirety.

    Earnings Metrics, as AdjustedQuarter Ended
    (in thousands, except per share data)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023
              
    Net Income$8,672  $8,205  $6,562  $9,030  $9,788 
    Add: Merger-Related Expenses, net of tax 557   62   538   —   — 
    Net Income, as Adjusted$9,229  $8,267  $7,100  $9,030  $9,788 
              
    Weighted Average Common Shares - Diluted 13,951   13,895   13,919   13,989   14,024 
    Earnings per Share - Diluted$0.62  $0.59  $0.47  $0.65  $0.70 
    Earnings per Share - Diluted, as Adjusted$0.66  $0.59  $0.51  $0.65  $0.70 
              
    Average Assets$2,437,870  $2,353,868  $2,299,234  $2,202,479  $2,221,117 
    Return on Average Assets(1) 1.42%  1.40%  1.15%  1.63%  1.75%
    Return on Average Assets, as Adjusted(1) 1.51%  1.41%  1.24%  1.63%  1.75%
              
    Average Equity$274,087  $263,425  $258,892  $248,035  $242,671 
    Return on Average Equity(1) 12.59%  12.53%  10.19%  14.44%  16.00%
    Return on Average Equity, as Adjusted(1) 13.40%  12.62%  11.03%  14.44%  16.00%
              
    Net Interest Income$38,354  $37,057  $35,008  $34,889  $36,810 
    Noninterest Income 6,635   6,890   5,972   5,936   6,326 
    Total Revenue$44,989  $43,947  $40,980  $40,825  $43,136 
    Noninterest Expense$29,725  $29,493  $29,487  $26,907  $28,046 
    Efficiency Ratio(2) 66.07%  67.11%  71.95%  65.91%  65.02%
              
    Noninterest Expense$29,725  $29,493  $29,487  $26,907  $28,046 
    Less: Merger-Related Expenses 520   83   712   —   — 
    Noninterest Expense, as Adjusted$29,205  $29,410  $28,775  $26,907  $28,046 
    Efficiency Ratio, as Adjusted(2) 64.92%  66.92%  70.22%  65.91%  65.02%

    _______________
    (1) Annualized.
    (2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).

      
    Earnings Metrics, as AdjustedNine Months Ended
    (in thousands, except per share data)September 30, 2024 September 30, 2023
        
    Net Income$23,439  $26,841 
    Add: Merger-Related Expenses, Net of Tax 1,157   — 
    Net Income, as Adjusted$24,596  $26,841 
        
    Weighted average common shares - Diluted 13,909   14,112 
    Earnings per share - Diluted$1.69  $1.90 
    Earnings per share - Diluted, as Adjusted$1.77  $1.90 
        
    Average Assets$2,363,928  $2,183,521 
    Return on Average Assets(1) 1.32%  1.64%
    Return on Average Assets, as Adjusted(1) 1.39%  1.64%
        
    Average Equity$265,500  $237,986 
    Return on Average Equity(1) 11.79%  15.08%
    Return on Average Equity, as Adjusted(1) 12.37%  15.08%
        
    Net Interest Income$110,419  $106,637 
    Noninterest Income 19,497   19,039 
    Total Revenue$129,916  $125,676 
    Noninterest Expense$88,705  $83,860 
    Efficiency Ratio(2) 68.28%  66.73%
        
    Noninterest Expense$88,705  $83,860 
    Less: Merger-Related Expenses 1,315   — 
    Noninterest Expense, as Adjusted$87,390  $83,860 
    Efficiency Ratio, as Adjusted(2) 67.27%  66.73%

    _______________
    (1) Annualized.
    (2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).

      
    Net Interest Margin, as AdjustedQuarter Ended
    (in thousands)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023
              
    Net Interest Income$38,354  $37,057  $35,008  $34,889  $36,810 
    Less: Credit Card Loan Income 15,137   15,205   14,457   14,677   15,792 
    Net Interest Income, as Adjusted$23,217  $21,852  $20,551  $20,212  $21,018 
    Average Interest Earning Assets 2,380,946   2,307,070   2,254,663   2,162,459   2,176,477 
    Less: Average Credit Card Loans 119,458   111,288   110,483   114,551   116,814 
    Total Average Interest Earning Assets, as Adjusted$2,261,488  $2,195,782  $2,144,180  $2,047,908  $2,059,663 
    Net Interest Margin, as Adjusted 4.08%  4.00%  3.85%  3.92%  4.05%


    Net Interest Margin, as AdjustedNine Months Ended
    (in thousands)September 30, 2024 September 30, 2023
        
    Net Interest Income$110,419  $106,637 
    Less: Credit Card Loan Income 44,798   46,419 
    Net Interest Income, as Adjusted$65,621  $60,218 
    Average Interest Earning Assets 2,314,470   2,139,398 
    Less: Average Credit Card Loans 113,764   114,416 
    Total Average Interest Earning Assets, as Adjusted$2,200,706  $2,024,982 
    Net Interest Margin, as Adjusted 3.98%  3.98%


    Portfolio Loans Receivable Yield, as AdjustedQuarter Ended
    (in thousands)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023
              
    Portfolio Loans Receivable Interest Income$49,886  $48,143  $45,908  $45,026  $45,274 
    Less: Credit Card Loan Income 15,137   15,205   14,457   14,677   15,792 
    Portfolio Loans Receivable Interest Income, as Adjusted$34,749  $32,938  $31,451  $30,349  $29,482 
    Average Portfolio Loans Receivable 2,053,619   1,992,630   1,927,372   1,863,298   1,847,772 
    Less: Average Credit Card Loans 119,458   111,288   110,483   114,551   116,814 
    Total Average Portfolio Loans Receivable, as Adjusted$1,934,161  $1,881,342  $1,816,889  $1,748,747  $1,730,958 
    Portfolio Loans Receivable Yield, as Adjusted 7.15%  7.04%  6.96%  6.89%  6.76%


    Portfolio Loans Receivable Yield, as AdjustedNine Months Ended
    (in thousands)September 30, 2024 September 30, 2023
        
    Portfolio Loans Receivable Interest Income$143,937  $129,352 
    Less: Credit Card Loan Income 44,798   46,419 
    Portfolio Loans Receivable Interest Income, as Adjusted$99,139  $82,933 
    Average Portfolio Loans Receivable 1,991,435   1,801,355 
    Less: Average Credit Card Loans 113,764   114,416 
    Total Average Portfolio Loans Receivable, as Adjusted$1,877,671  $1,686,939 
    Portfolio Loans Receivable Yield, as Adjusted 7.05%  6.57%


    Pre-tax, Pre-Provision Net Revenue ("PPNR")Quarter Ended
    (in thousands)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023
              
    Net Income$8,672  $8,205  $6,562  $9,030  $9,788 
    Add: Income Tax Expense 2,827   2,728   2,062   2,186   2,998 
    Add: Provision for Credit Losses 3,748   3,417   2,727   2,808   2,280 
    Add: Provision for (Release of) Credit Losses on Unfunded Commitments 17   104   142   (106)  24 
    Pre-tax, Pre-Provision Net Revenue ("PPNR")$15,264  $14,454  $11,493  $13,918  $15,090 


    Pre-tax, Pre-Provision Net Revenue ("PPNR")Nine Months Ended
    (in thousands)September 30, 2024 September 30, 2023
        
    Net Income$23,439  $26,841 
    Add: Income Tax Expense 7,617   8,168 
    Add: Provision for Credit Losses 9,892   6,802 
    Add: Provision for Credit Losses on Unfunded Commitments 263   5 
    Pre-tax, Pre-Provision Net Revenue ("PPNR")$41,211  $41,816 


    PPNR, as AdjustedQuarter Ended
    (in thousands)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023
              
    Net Income$8,672  $8,205  $6,562  $9,030  $9,788 
    Add: Income Tax Expense 2,827   2,728   2,062   2,186   2,998 
    Add: Provision for Credit Losses 3,748   3,417   2,727   2,808   2,280 
    Add: Provision for (Release of) Credit Losses on Unfunded Commitments 17   104   142   (106)  24 
    Add: Merger-Related Expenses 520   83   712   —   — 
    PPNR, as Adjusted$15,784  $14,537  $12,205  $13,918  $15,090 


        
    PPNR, as AdjustedNine Months Ended
    (in thousands)September 30, 2024 September 30, 2023
        
    Net Income$23,439  $26,841 
    Add: Income Tax Expense 7,617   8,168 
    Add: Provision for Credit Losses 9,892   6,802 
    Add: Provision for Credit Losses on Unfunded Commitments 263   5 
    Add: Merger-Related Expenses 1,315   — 
    PPNR, as Adjusted$42,526  $41,816 


    Allowance for Credit Losses to Total Portfolio LoansQuarter Ended
    (in thousands)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023
              
    Allowance for Credit Losses$31,925  $30,832  $29,350  $28,610  $28,279 
    Total Portfolio Loans 2,107,522   2,021,588   1,964,525   1,903,288   1,862,679 
    Allowance for Credit Losses to Total Portfolio Loans 1.51%  1.53%  1.49%  1.50%  1.52%


    Nonperforming Assets to Total AssetsQuarter Ended
    (in thousands)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023
              
    Total Nonperforming Assets$15,460  $14,053  $14,361  $16,042  $15,236 
    Total Assets 2,560,788   2,438,583   2,324,238   2,226,176   2,272,484 
    Nonperforming Assets to Total Assets 0.60%  0.58%  0.62%  0.72%  0.67%


    Nonperforming Loans to Total Portfolio LoansQuarter Ended
    (in thousands)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023
              
    Total Nonperforming Loans$15,460  $14,053  $14,361  $16,042  $15,236 
    Total Portfolio Loans 2,107,522   2,021,588   1,964,525   1,903,288   1,862,679 
    Nonperforming Loans to Total Portfolio Loans 0.73%  0.70%  0.73%  0.84%  0.82%


    Net Charge-Offs to Average Portfolio LoansQuarter Ended
    (in thousands)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023
              
    Total Net Charge-Offs$2,655  $1,935  $1,987  $2,477  $1,780 
    Total Average Portfolio Loans 2,053,619   1,992,630   1,927,372   1,863,298   1,847,772 
    Net Charge-Offs to Average Portfolio Loans, Annualized 0.51%  0.39%  0.41%  0.53%  0.38%


    Net Charge-offs to Average Portfolio LoansNine Months Ended
    (in thousands)September 30, 2024 September 30, 2023
        
    Total Net Charge-Offs$6,577  $5,996 
    Total Average Portfolio Loans 1,991,435   1,801,355 
    Net Charge-Offs to Average Portfolio Loans, Annualized 0.44%  0.45%


    Tangible Book Value per ShareQuarter Ended
    (in thousands, except share and per share data)September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023
              
    Total Stockholders' Equity$280,111  $267,854  $259,465  $254,860  $242,878 
    Less: Preferred Equity —   —   —   —   — 
    Less: Intangible Assets —   —   —   —   — 
    Tangible Common Equity$280,111  $267,854  $259,465  $254,860  $242,878 
    Period End Shares Outstanding 13,917,891   13,910,467   13,889,563   13,922,532   13,893,083 
    Tangible Book Value per Share$20.13  $19.26  $18.68  $18.31  $17.48 
                        

    ABOUT CAPITAL BANCORP, INC.

    Capital Bancorp, Inc., Rockville, Maryland is a registered bank holding company incorporated under the laws of Maryland. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in four locations in the greater Washington, D.C. and Baltimore, Maryland markets and one bank branch in Fort Lauderdale, Florida. Capital Bancorp had assets of approximately $2.6 billion at September 30, 2024 and its common stock is traded in the NASDAQ Global Market under the symbol “CBNK.” More information can be found at the Company's website www.CapitalBankMD.com under its investor relations page.

    FORWARD-LOOKING STATEMENTS

    This earnings release contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” "optimistic," “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements.  Accordingly, we caution you that any such forward-looking statements are not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors. For details on some of the factors that could affect these expectations, see risk factors and other cautionary language included in the Company's Annual Report on Form 10-K and other periodic and current reports filed with the Securities and Exchange Commission.

    While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: changes in general economic, political, or industry conditions; geopolitical concerns, including the ongoing wars in Ukraine and in the Middle East; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations; volatility and disruptions in global capital and credit markets; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; cybersecurity threats and the cost of defending against them, including the costs of compliance with potential legislation to combat cybersecurity at a state, national, or global level; climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs; the expected cost savings, synergies and other financial benefits from the acquisition of IFHI or any other acquisition the Company has made or may make might not be realized within the expected time frames or at all; the effect of acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; and other factors that may affect our future results.

    These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.

    FINANCIAL CONTACT: Dominic Canuso (301) 468-8848 x1403

    MEDIA CONTACT: Ed Barry (240) 283-1912

    WEB SITE: www.CapitalBankMD.com


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