Category: Intelligence

Source: GlobeNewswire (MIL-OSI)

Fourth Quarter 2024 Results

• Net Income of $7.5 million, or $0.45 per share, and return on average assets of 0.96%
  • Net Income of $15.5 million, or $0.92 per share, and return on average assets of 1.97% as adjusted to exclude the impact of merger-related expenses, initial Integrated Financial Holdings, Inc. (“IFH”) Allowance for Credit Losses (“ACL”) provision, and a non-recurring legacy IFH equity and debt investment write-down (non-GAAP)⁽¹⁾
• Tangible Book Value Per Share⁽¹⁾ of $18.77, decreased 6.8%, or $1.36 as compared to $20.13 (3Q 2024), resulting from the acquisition of IFH and related purchase accounting impacts
• Return on average equity of 8.50%, and return on average tangible common equity⁽¹⁾ of 9.47%
  • Core return on average equity⁽¹⁾ of 17.68%, and core return on average tangible common equity⁽¹⁾ of 19.19%
• Net Interest Income increased $6.0 million, or 15.6% (not annualized), from 3Q 2024
• Net Interest Margin (“NIM”) decreased to 5.87% as compared to 6.41% (3Q 2024)
  • Core NIM, as adjusted to exclude the impact of credit card loans (non-GAAP)⁽¹⁾ decreased to 4.05% as compared to 4.08% (3Q 2024)
  • Net purchase accounting accretion of $0.7 million for 4Q 2024 accounted for 9 basis points of the reported 5.87% NIM and 10 basis points of the reported 4.05% core NIM, respectively
• Fee Revenue (noninterest income) totaled $11.9 million, or 21.2% of total revenue for 4Q 2024
  • Core Fee Revenue of $14.5 million, or 24.7% of total core revenue, increased $7.9 million from 3Q 2024, excluding a non-recurring equity and debt investment write-down of $2.6 million (non-GAAP)⁽¹⁾, primarily due to the acquisition of IFH
• Gross Loan Growth in the quarter of $522.6 million includes $373.5 million from the acquisition of IFH, and $149.1 million from organic growth, or 28.2% annualized for 4Q 2024
  • Commercial and industrial loans of $554.6 million, or 21.0% of total gross loans at December 31, 2024 increased $282.7 million from September 30, 2024
• Total Deposit Growth in the quarter of $575.7 million includes $459.0 million from the acquisition of IFH, and $116.7 million from organic growth, or 21.2% annualized for 4Q 2024
  • Noninterest bearing deposits increased $92.8 million, or 51.4% annualized from 3Q 2024
• The ratio of allowance for credit losses to total loans equaled 1.85% at December 31, 2024 including 1.44% for the legacy Capital Bank portfolio, down 7 basis points from 3Q. The additional ACL coverage results from the initial $15.5 million impact from the acquisition of the IFH portfolio.
• Cash Dividend of $0.10 per share declared by the Board of Directors

ROCKVILLE, Md., Jan. 27, 2025 (GLOBE NEWSWIRE) — Capital Bancorp, Inc. (the “Company”) (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the “Bank”), today reported net income of $7.5 million, or $0.45 per diluted share, for the fourth quarter 2024, compared to net income of $8.7 million, or $0.62 per diluted share, for the third quarter 2024, and $9.0 million, or $0.65 per diluted share, for the fourth quarter 2023. On October 1, 2024, the Company successfully completed its previously announced merger with IFH. Net income for the fourth quarter 2024 would have been $15.5 million, or $0.92 per diluted share if adjusted to exclude the impact of merger-related expenses, the initial IFH ACL provision, and a non-recurring equity and debt investment write down (non-GAAP)⁽¹⁾, compared to $9.2 million, or $0.66 per diluted share, for the third quarter 2024.

The Company also declared a cash dividend on its common stock of $0.10 per share. The dividend is payable on February 26, 2025 to shareholders of record on February 10, 2025.

“We are pleased to have successfully closed our acquisition of Integrated Financial Holdings, and we are now focused on merger integration and executing on the opportunities from our complementary lines of business,” said Ed Barry, CEO of the Company and the Bank. “We continue to benefit from our diversified business model which is driving growth across our platforms.”

“The really strong performance of the commercial bank during the quarter was highlighted by record loan growth, solid deposit growth, and stable core net interest margin. I am particularly pleased by the growth of our commercial and industrial loans,” said Steven J. Schwartz, Chairman of the Company. “This outstanding organic growth is expected to continue to be a major contributing factor in our overall earnings growth in 2025 and beyond. The acquisition of IFH, while creating a lot of noise in the financial results of the 4th quarter, provides us with a new line of business – loan servicing, processing, and packaging – and a significant expansion of our government-guaranteed lending platform.”

⁽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 successfully completed its previously announced merger with IFH. Pursuant to the terms of the Merger Agreement, each share of IFH’s common stock, par value $1.00 per share (“IFH 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 IFH 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 IFH to purchase shares of IFH 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 IFH stock option.

Total assets, including purchase accounting adjustments, of $559.4 million acquired in connection with the IFH acquisition included gross loans of $373.5 million, loans held for sale of $41.7 million and total deposits of $459.0 million at October 1, 2024.

During 2024, the Company incurred pre-tax merger-related expenses of $3.9 million, including expenses totaling $2.6 million for the fourth quarter 2024, generally consistent with modeled expectations.

The fourth quarter earnings were also impacted by pre-tax provision credit losses on acquired loans of $4.2 million (“Initial IFH ACL Provision”) along with a non-recurring $2.6 million write-down of a legacy IFH equity and debt investment in a start-up. The net remaining value of the equity and debt investment is $0.2 million at December 31, 2024.

The following table provides a reconciliation of the Company’s net income under GAAP to non-GAAP results excluding merger-related expenses, Initial IFH ACL Provision, and the non-recurring equity and debt write-down.

	Fourth Quarter 2024																Third Quarter 2024
(in thousands, except per share data)	Income Before Income Taxes				Income Tax Expense				Net Income				Diluted Earnings per Share				Income Before Income Taxes				Income Tax Expense(Benefit)				Net Income				Diluted Earnings per Share
GAAP Earnings	$	10,776			$	3,243			$	7,533			$	0.45			$	11,499			$	2,827			$	8,672			$	0.62
Add: Merger-Related Expenses		2,615				464				2,151								520				(37	)			557
Add: Non-recurring Equity and Debt Investment Write-Down		2,620				—				2,620								—				—				—
Add: Initial IFH ACL Provision		4,194				1,025				3,169								—				—				—
Non-GAAP Earnings	$	20,205			$	4,732			$	15,473			$	0.92			$	12,019			$	2,790			$	9,229			$	0.66

	Year Ended December 31, 2024
(in thousands, except per share data)	Income Before Income Taxes				Income Tax Expense				Net Income				Diluted Earnings per Share
GAAP Earnings	$	41,832			$	10,860			$	30,972			$	2.11
Add: Merger-Related Expenses		3,930				622				3,308
Add: Non-recurring Equity and Debt Investment Write-Down		2,620				—				2,620
Add: Initial IFH ACL Provision		4,194				1,025				3,169
Non-GAAP Earnings	$	52,576			$	12,507			$	40,069			$	2.73

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

Fourth Quarter 2024 Highlights

Earnings Summary

Net income of $7.5 million, or $0.45 per diluted share, decreased $1.1 million compared to $8.7 million, or $0.62 per diluted share, for the third quarter 2024. Net income of $15.5 million, or $0.92 per diluted share, as adjusted to exclude the impact of merger-related expenses, Initial IFH ACL Provision and a $2.6 million non-recurring equity and debt investment write-down (non-GAAP)⁽¹⁾ for the fourth quarter 2024 compared to $9.2 million, or $0.66 per diluted share, for the third quarter 2024.

• Net interest income of $44.3 million increased $6.0 million, or 15.6%, compared to the third quarter 2024.
  • Interest income of $61.7 million increased $9.1 million, or 17.3%, over the third quarter 2024, primarily from $7.9 million in portfolio loan interest income, as growth in average balances increased $539.3 million. Interest income from interest-bearing deposits held at other financial institutions increased $0.3 million, as average balances increased $49.1 million to $140.2 million. Interest income included $0.7 million from net purchase accounting amortization.
  • Interest expense of $17.4 million increased $3.1 million, or 21.9% over the third quarter 2024 due to increases in time deposits and borrowed funds of $2.7 million and $0.6 million, respectively, offset by a decrease in customer money market deposits of $0.3 million. Average balances increased $367.8 million, $53.5 million and $65.3 million, respectively. Interest expense included $1.4 million from net purchase accounting accretion.
• The provision for credit losses was $7.8 million, an increase of $4.1 million from the third quarter 2024, which included the Initial IFH ACL Provision of $4.2 million, $2.4 million from organic commercial portfolio loan growth and $1.2 million from OpenSky provision in the quarter. Net charge-offs totaled $2.4 million, a $0.2 million decrease over the third quarter 2024, including $2.1 million from credit card related loans. At December 31, 2024, the allowance for credit losses to total loans ratio was 1.85%, up 34 basis points from the ratio at September 30, 2024 due to the initial purchase credit deteriorated (“PCD”) credit mark and initial non-PCD ACL provision. Excluding IFH, legacy Capital Bank ACL coverage ratio was 1.44%, a decrease of 7 basis points from the third quarter 2024.

Earnings Summary (Continued)

• Noninterest income of $11.9 million increased $5.3 million as compared to the third quarter 2024 primarily due to contributions from the IFH acquisition. Government loan servicing revenue (Windsor) totaled $4.0 million, government lending revenue totaled $2.3 million and loan servicing rights totaled $1.0 million, offset by a non-recurring equity and debt write-down of $2.6 million related to an IFH investment. Other income increased $1.0 million including $0.9 million related to an investment in an SBIC, while credit card fees declined $0.3 million.
• Noninterest expense of $37.5 million increased $7.8 million as compared to the third quarter 2024, primarily from the IFH acquisition. Noninterest expense of $34.9 million, excluding merger-related expenses of $2.6 million, increased $5.7 million as compared to the third quarter 2024. Highlights include:
  • The fourth quarter 2024 includes $0.3 million of intangible amortization resulting from the transaction.
  • Salaries and employee benefits expenses of $16.5 million increased $3.2 million, primarily related to the acquisition of IFH.
  • Occupancy and equipment expenses of $3.0 million increased $1.2 million, primarily related to increased contract expense from the IFH acquisition of $0.5 million and software depreciation of $0.4 million.
  • Estimated total cost synergies resulting from the acquisition totaled $1.5 million in the fourth quarter 2024, generally consistent with modeled expectations.
• Income tax expense of $3.2 million, or 30.1% of pre-tax income for the fourth quarter 2024, increased $0.4 million from $2.8 million, or 24.6% of pre-tax income for the third quarter 2024. The elevated tax rate in the quarter resulted from non-deductibility of an equity and debt write-down along with some merger-related expenses. Excluding merger-related expenses and the non-recurring equity and debt write-down, the effective income tax rate for the fourth quarter 2024 would have been 22.6%.

Balance Sheet

Total assets of $3.2 billion at December 31, 2024 increased $646.1 million, or 25.2% (not annualized), from September 30, 2024. Total assets, including $559.4 million acquired with the IFH acquisition, net of purchase accounting, included gross loans of $373.5 million, loans held for sale of $41.7 million and total deposits of $459.0 million at October 1, 2024.

• Cash and cash equivalents of $205.3 million at December 31, 2024 increased $48.6 million from September 30, 2024.
• Total portfolio loans of $2.6 billion at December 31, 2024 increased $522.6 million, or 24.8% (not annualized) from September 30, 2024. Total average loans increased $539.3 million quarter over quarter.
  • Owner-occupied commercial real estate loans increased $88.6 million, or 25.2% (not annualized) from September 30, 2024.
  • The average portfolio loans-to-deposit ratio of 99.27% for the three months ended December 31, 2024 remained stable.
• Total deposits of $2.8 billion at December 31, 2024 increased $575.7 million, or 26.3% (not annualized), from September 30, 2024. The increase includes $190.6 million of customer time deposits, $92.8 million of noninterest-bearing deposits primarily related to growth in title company deposit balances, $130.2 million of growth in customer money market deposits and $180.0 million of growth in brokered time deposits, partially offset by a decrease in interest-bearing demand accounts of $27.6 million.
  • Insured and protected deposits were approximately $1.6 billion as of December 31, 2024, representing 57.1% of the Company’s deposit portfolio.
  • Low and no interest bearing deposits of $1.1 billion, 38.5% of deposits, increased $74.9 million, or 7.6% (not annualized) from September 30, 2024. Average noninterest-bearing deposits of $729.9 million increased $49.2 million, or 7.2% (not annualized), and represented 27.9% of total average deposits at December 31, 2024.
• The investment securities portfolio continues to be classified as available-for-sale and had a fair market value of $223.6 million, or 7.0% of total assets, an effective duration of 3.0 years, with U.S. Treasury Securities representing 57% of the overall investment portfolio at December 31, 2024. The accumulated other comprehensive income (loss) on the investment securities portfolio increased $2.9 million during the quarter to ($11.5 million) as of December 31, 2024, which represents 3.2% 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, generally consistent with prior quarter. Sources of available borrowings at December 31, 2024 totaled $803.0 million, including available collateralized lines of credit of $595.7 million, unsecured lines of credit with other banks of $76.0 million and unpledged investment securities available as collateral for potential additional borrowings of $131.4 million.
• Capital Positions – As of December 31, 2024, the Company reported a common equity tier 1 capital ratio of 13.74%, compared to 14.78% at September 30, 2024. At December 31, 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 54 basis points to 5.87% for the three months ended December 31, 2024, compared to prior quarter. Core net interest margin, as adjusted to exclude the impact of OpenSky^™ credit card loans (non-GAAP)⁽¹⁾, decreased 3 basis points to 4.05% as compared to prior quarter. Net purchase accounting accretion for the fourth quarter 2024 was 9 basis points and 10 basis points for NIM and core NIM, respectively.

• The average yield on interest earning assets of 8.17% decreased 62 basis points compared to the prior quarter, including 40 basis points from inclusion of IFH commercial assets. The yield on portfolio loans, as adjusted to exclude the impact of OpenSky^™ credit card loans (non-GAAP)⁽¹⁾, of 6.98% for the fourth quarter 2024, decreased 17 basis points, primarily as a consequence of reduced market interest rates.
• The total cost of deposits decreased 14 basis points to 2.50% for the fourth quarter 2024 as compared to the prior quarter. The total cost of interest-bearing deposits decreased 46 basis points to 3.46% for the fourth quarter 2024 as compared to the prior quarter.

Efficiency Ratios – The efficiency ratio was 66.7% for the three months ended December 31, 2024, compared to 66.1% for the three months ended September 30, 2024. The efficiency ratio was 59.3%, as adjusted to exclude the impact of merger-related expenses and a non-recurring equity and debt investment write-down (non-GAAP)⁽¹⁾, for the three months ended December 31, 2024 compared to 64.9% for the three months ended September 30, 2024.

Credit Metrics and Asset Quality – The ratio of allowance for credit losses to total loans equaled 1.85% at December 31, 2024, an increase of 34 basis points from September 20, 2024, which includes a 1.44% ACL coverage ratio for the legacy Capital Bank portfolio, down 7 basis points from 3Q. The additional ACL coverage results from the initial $15.5 million reserve on the $373.5 million IFH loan portfolio. Underlying credit performance and metrics were relatively stable and consistent with prior quarter when excluding the impact of the combination with IFH.

Nonperforming assets increased 34 basis points to 0.94% of total assets at December 31, 2024 as compared to September 30, 2024. Total nonaccrual loans at December 31, 2024 increased $14.8 million to $30.2 million compared to September 30, 2024. At December 31, 2024, special mention loans totaled $60.0 million, or 2.3% of total portfolio loans, as compared to $20.3 million, or 1.0% of total portfolio loans, at September 30, 2024. At December 31, 2024, substandard loans totaled $48.4 million, or 1.8% of total portfolio loans, as compared to $23.8 million, or 1.1% of total portfolio loans, at September 30, 2024.

Performance Ratios – Annualized return on average assets (“ROAA”) and annualized return on average equity (“ROAE”), and ROATCE were 0.96%, 8.50%, and 9.47% respectively, for the three months ended December 31, 2024, compared to 1.42%, 12.59%, and 12.59% respectively, for the three months ended September 30, 2024.

• Annualized ROAA, annualized ROAE, and annualized ROATCE were 1.97%, 17.46%, and 19.19% respectively, as adjusted to exclude the impact of merger-related expenses, Initial IFH ACL Provision, and a non-recurring equity and debt investment write-down (non-GAAP)⁽¹⁾, for the three months ended December 31, 2024, compared to 1.51%, 13.40%, and 13.40% respectively, for the three months ended September 30, 2024.

Tangible Book Value – Book value per common share of $21.31 at December 31, 2024 increased $1.19 when compared to September 30, 2024. Tangible book value per common share⁽¹⁾ decreased $1.36, or 6.8%, to $18.77 at December 31, 2024 when compared to September 30, 2024. Tangible book value was impacted by the purchase accounting adjustments made in consequence of the IFH acquisition. The Company did not have goodwill or other intangible assets prior to the fourth quarter 2024. Therefore, tangible book value per share⁽¹⁾ was equal to book value per share for periods prior to the fourth quarter 2024.

Commercial Bank

Continued Portfolio Loan Growth – Gross portfolio loans, excluding OpenSky^™ credit card loans, increased $522.9 million, to $2.5 billion, at December 31, 2024 compared to September 30, 2024.

The $522.9 million gross portfolio loan growth includes commercial real estate loans of $156.4 million, residential real estate loans of $64.9 million and commercial and industrial loans of $282.7 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 $45.2 million increased $9.4 million from prior quarter, driven by loan growth and higher loan yields. Interest expense of $17.1 million increased $3.1 million, driven by an increase in average balances in the fourth quarter 2024.

Credit Metrics – Nonperforming assets, comprised solely of nonaccrual loans, increased 34 basis point to 0.94% of total assets at December 31, 2024 compared to September 30, 2024. Total nonaccrual loans at December 31, 2024 increased to $30.2 million compared to $15.5 million at September 30, 2024 due primarily to the acquisition of IFH.

Classified and Criticized Loans – At December 31, 2024, special mention loans totaled $60.0 million, or 2.3% of total portfolio loans, as compared to $20.3 million, or 1.0% of total portfolio loans, at September 30, 2024. At December 31, 2024, substandard loans totaled $48.4 million, or 1.8% of total portfolio loans, as compared to $23.8 million, or 1.1% of total portfolio loans, at September 30, 2024.

OpenSky^™

Revenues – Total revenue of $19.2 million decreased $0.5 million from the prior quarter. Interest income of $15.5 million decreased $0.2 million from the prior quarter. Average OpenSky^™ credit card loan balances, net of reserves and deferred fees of $121.0 million for the fourth quarter 2024, increased $1.5 million, or 1.3% (not annualized), compared to prior quarter. Noninterest income of $3.7 million decreased $0.4 million as compared to the prior quarter, primarily related to lower annual fee income.

Noninterest Expense – Total noninterest expense of $12.6 million decreased $0.7 million, primarily related to a reduction in quarterly advertising expense.

Loan and Deposit Balances – Loan balances, net of reserves, of $127.8 million at December 31, 2024 increased by $0.7 million, or 0.5%, compared to $127.1 million at September 30, 2024. Corresponding deposit balances of $166.4 million at December 31, 2024 decreased $4.4 million, or 2.6%, compared to $170.8 million at September 30, 2024. Gross unsecured loan balances of $42.4 million at December 31, 2024 increased $2.7 million, or 6.8%, compared to $39.7 million at September 30, 2024. During the fourth quarter 2024, the number of credit card accounts increased by 3,614 to 552,566 from September 30, 2024.

OpenSky^™Credit – Portfolio credit metrics continue to be generally consistent with modeled expectations during the fourth quarter 2024. The provision for credit losses of $1.2 million decreased $1.1 million when compared to the prior quarter.

Capital Bank Home Loans

Originations of loans held for sale totaled $90.0 million during the fourth quarter, with $77.4 million of mortgage loans sold resulting in a gain on sale of loans of $1.9 million, representing a 2.45% of gain on sale as a percentage of total loans sold.

Windsor Advantage

Windsor Advantage is a loan service provider that offers community banks and credit unions with a comprehensive outsourced U.S. Small Business Association (“SBA”) 7(a) and U.S. Department of Agriculture (“USDA”) lending platform. Windsor Advantage generates fee income for the Company in connection with its servicing, processing and packaging of such loans for its financial institution clients.

Fee Income – Gross government loan servicing revenue totaled $4.6 million, including $0.5 million of Capital Bank related servicing fees, during the fourth quarter 2024. Windsor’s total servicing portfolio was $2.5 billion at December 31, 2024.

COMPARATIVE FINANCIAL HIGHLIGHTS – Unaudited
	Quarter Ended												4Q24 vs 3Q24							4Q24 vs 4Q23
(in thousands, except per share data)	December 31, 2024				September 30, 2024				December 31, 2023				$ Change				% Change			$ Change				% Change
Earnings Summary
Interest income	$	61,707			$	52,610			$	46,969			$	9,097			17.3	%		$	14,738			31.4	%
Interest expense		17,380				14,256				12,080				3,124			21.9	%			5,300			43.9	%
Net interest income		44,327				38,354				34,889				5,973			15.6	%			9,438			27.1	%
Provision for credit losses		7,828				3,748				2,808				4,080			108.9	%			5,020			178.8	%
Provision for (release of) credit losses on unfunded commitments		122				17				(106	)			105			617.6	%			228			(215.1	)%
Noninterest income		11,913				6,635				5,936				5,278			79.5	%			5,977			100.7	%
Noninterest expense		37,514				29,725				26,907				7,789			26.2	%			10,607			39.4	%
Income before income taxes		10,776				11,499				11,216				(723	)		(6.3	)%			(440	)		(3.9	)%
Income tax expense		3,243				2,827				2,186				416			14.7	%			1,057			48.4	%
Net income	$	7,533			$	8,672			$	9,030			$	(1,139	)		(13.1	)%		$	(1,497	)		(16.6	)%
Pre-tax pre-provision net revenue (“PPNR”) (1)	$	18,726			$	15,264			$	13,918			$	3,462			22.7	%		$	4,808			34.5	%
PPNR, as adjusted(1)	$	23,961			$	15,784			$	13,918			$	8,177			51.8	%		$	10,043			72.2	%
Common Share Data
Earnings per share – Basic	$	0.45			$	0.62			$	0.65			$	(0.17	)		(27.4	)%		$	(0.20	)		(30.8	)%
Earnings per share – Diluted	$	0.45			$	0.62			$	0.65			$	(0.17	)		(27.4	)%		$	(0.20	)		(30.8	)%
Earnings per share – Diluted, as adjusted(1)	$	0.92			$	0.66			$	0.65			$	0.26			39.4	%		$	0.27			41.5	%
Weighted average common shares – Basic		16,595				13,914				13,897
Weighted average common shares – Diluted		16,729				13,951				13,989
Return Ratios
Return on average assets (annualized)		0.96	%			1.42	%			1.63	%
Return on average assets, as adjusted (annualized)(1)		1.97	%			1.51	%			1.63	%
Return on average equity (annualized)		8.50	%			12.59	%			14.44	%
Return on average equity, as adjusted (annualized)(1)		17.46	%			13.40	%			14.44	%
Return on average tangible common equity (annualized)(1)		9.47	%			12.59	%			14.44	%
Core return on average equity, as adjusted (annualized)(1)		17.68	%			13.40	%			14.44	%
Core return on average tangible common equity, as adjusted (annualized)(1)		19.19	%			13.40	%			14.44	%

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

COMPARATIVE FINANCIAL HIGHLIGHTS – Unaudited (Continued)
	Year Ended
	December 31,
(in thousands, except per share data)		2024				2023			$ Change				% Change
Earnings Summary
Interest income	$	213,301			$	183,206			$	30,095			16.4	%
Interest expense		58,555				41,680				16,875			40.5	%
Net interest income		154,746				141,526				13,220			9.3	%
Provision for credit losses		17,720				9,610				8,110			84.4	%
Provision for (release of) credit losses on unfunded commitments		385				(101	)			486			(481.2	)%
Noninterest income		31,410				24,975				6,435			25.8	%
Noninterest expense		126,219				110,767				15,452			14.0	%
Income before income taxes		41,832				46,225				(4,393	)		(9.5	)%
Income tax expense		10,860				10,354				506			4.9	%
Net income	$	30,972			$	35,871			$	(4,899	)		(13.7	)%
Pre-tax pre-provision net revenue (“PPNR”) (1)	$	59,937			$	55,734			$	4,203			7.5	%
PPNR, as adjusted(1)	$	66,487			$	55,734			$	10,753			19.3	%
Common Share Data
Earnings per share – Basic	$	2.12			$	2.56			$	(0.44	)		(17.2	)%
Earnings per share – Diluted	$	2.11			$	2.55			$	(0.44	)		(17.3	)%
Earnings per share – Diluted, as adjusted(1)	$	2.73			$	2.55
Weighted average common shares – Basic		14,584				14,003
Weighted average common shares – Diluted		14,660				14,081
Return Ratios
Return on average assets (annualized)		1.21	%			1.64	%
Return on average assets, as adjusted (annualized)(1)		1.57	%			1.64	%
Return on average equity (annualized)		10.78	%			14.91	%
Return on average equity, as adjusted (annualized)(1)		13.94	%			14.91	%

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

COMPARATIVE FINANCIAL HIGHLIGHTS – Unaudited (Continued)
	Quarter Ended												Quarter Ended
	December 31,												September 30,				June 30,				March 31,
(in thousands, except per share data)		2024				2023			% Change					2024				2024				2024
Balance Sheet Highlights
Assets	$	3,206,911			$	2,226,176				44.1	%		$	2,560,788			$	2,438,583			$	2,324,238
Investment securities available-for-sale		223,630				208,329				7.3	%			208,700				207,917				202,254
Mortgage loans held for sale		21,270				7,481				184.3	%			19,554				19,219				10,303
Portfolio loans receivable (2)		2,630,163				1,903,288				38.2	%			2,107,522				2,021,588				1,964,525
Allowance for credit losses		48,652				28,610				70.1	%			31,925				30,832				29,350
Deposits		2,761,939				1,895,996				45.7	%			2,186,224				2,100,428				2,005,695
FHLB borrowings		22,000				22,000				—	%			52,000				32,000				22,000
Other borrowed funds		12,062				27,062				(55.4	)%			12,062				12,062				12,062
Total stockholders’ equity		355,139				254,860				39.3	%			280,111				267,854				259,465
Tangible common equity (1)		312,685				254,860				22.7	%			280,111				267,854				259,465
Common shares outstanding		16,662				13,923				19.7	%			13,918				13,910				13,890
Book value per share	$	21.31			$	18.31				16.4	%		$	20.13			$	19.26			$	18.68
Tangible book value per share (1)	$	18.77			$	18.31				2.5	%		$	20.13			$	19.26			$	18.68
Dividends per share	$	0.10			$	0.08				25.0	%		$	0.10			$	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 Ended																				Year Ended
(in thousands)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Interest income
Loans, including fees	$	58,602			$	50,047			$	48,275			$	45,991			$	45,109			$	202,915			$	174,760
Investment securities available-for-sale		1,539				1,343				1,308				1,251				1,083				5,441				4,815
Federal funds sold and other		1,566				1,220				1,032				1,127				777				4,945				3,631
Total interest income		61,707				52,610				50,615				48,369				46,969				213,301				183,206
Interest expense
Deposits		16,385				13,902				13,050				12,833				11,759				56,170				39,625
Borrowed funds		995				354				508				528				321				2,385				2,055
Total interest expense		17,380				14,256				13,558				13,361				12,080				58,555				41,680
Net interest income		44,327				38,354				37,057				35,008				34,889				154,746				141,526
Provision for credit losses		7,828				3,748				3,417				2,727				2,808				17,720				9,610
Provision for (release of) credit losses on unfunded commitments		122				17				104				142				(106	)			385				(101	)
Net interest income after provision for credit losses		36,377				34,589				33,536				32,139				32,187				136,641				132,017
Noninterest income
Service charges on deposits		241				235				200				207				240				883				964
Credit card fees		3,733				4,055				4,330				3,881				3,970				15,999				17,273
Mortgage banking revenue		1,821				1,882				1,990				1,453				1,166				7,146				4,896
Government lending revenue		2,301				—				—				—				—				2,301				—
Government loan servicing revenue		3,993				—				—				—				—				3,993				—
Loan servicing rights (government guaranteed)		1,013				—				—				—				—				1,013				—
Non-recurring equity and debt investment write-down		(2,620	)			—				—				—				—				(2,620	)			—
Other income		1,431				463				370				431				560				2,695				1,842
Total noninterest income		11,913				6,635				6,890				5,972				5,936				31,410				24,975
Noninterest expenses
Salaries and employee benefits		16,513				13,345				13,272				12,907				11,638				56,037				48,754
Occupancy and equipment		2,976				1,791				1,864				1,613				1,573				8,244				5,673
Professional fees		2,150				1,980				1,769				1,947				1,930				7,846				9,270
Data processing		7,210				6,930				6,788				6,761				6,128				27,689				25,686
Advertising		1,032				1,223				2,072				2,032				1,433				6,359				6,161
Loan processing		969				615				476				371				198				2,431				1,633
Foreclosed real estate expenses, net		—				1				—				1				—				2				7
Merger-related expenses		2,615				520				83				712				—				3,930				—
Operational losses		993				1,008				782				931				1,490				3,714				4,613
Other operating		3,056				2,312				2,387				2,212				2,517				9,967				8,970
Total noninterest expenses		37,514				29,725				29,493				29,487				26,907				126,219				110,767
Income before income taxes		10,776				11,499				10,933				8,624				11,216				41,832				46,225
Income tax expense		3,243				2,827				2,728				2,062				2,186				10,860				10,354
Net income	$	7,533			$	8,672			$	8,205			$	6,562			$	9,030			$	30,972			$	35,871

Consolidated Balance Sheets
	(unaudited)				(unaudited)				(unaudited)				(unaudited)				(audited)
(in thousands, except share data)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Assets
Cash and due from banks	$	25,433			$	23,462			$	19,294			$	12,361			$	14,513
Interest-bearing deposits at other financial institutions		179,841				133,180				117,160				72,787				39,044
Federal funds sold		58				58				57				56				407
Total cash and cash equivalents		205,332				156,700				136,511				85,204				53,964
Investment securities available-for-sale		223,630				208,700				207,917				202,254				208,329
Restricted investments		4,479				5,895				4,930				4,441				4,353
Loans held for sale		21,270				19,554				19,219				10,303				7,481
Portfolio loans receivable, net of deferred fees and costs		2,630,163				2,107,522				2,021,588				1,964,525				1,903,288
Less allowance for credit losses		(48,652	)			(31,925	)			(30,832	)			(29,350	)			(28,610	)
Total portfolio loans held for investment, net		2,581,511				2,075,597				1,990,756				1,935,175				1,874,678
Premises and equipment, net		15,525				5,959				5,551				4,500				5,069
Accrued interest receivable		16,664				12,468				12,162				12,258				11,494
Goodwill		21,126				—				—				—				—
Intangible assets		14,072				—				—				—				—
Loan servicing assets		5,511				—				—				—				—
Deferred tax asset		16,670				10,748				12,150				12,311				12,252
Bank owned life insurance		43,956				38,779				38,414				38,062				37,711
Other assets		37,165				26,388				10,973				19,730				10,845
Total assets	$	3,206,911			$	2,560,788			$	2,438,583			$	2,324,238			$	2,226,176
Liabilities
Deposits
Noninterest-bearing	$	810,928			$	718,120			$	684,574			$	665,812			$	617,373
Interest-bearing		1,951,011				1,468,104				1,415,854				1,339,883				1,278,623
Total deposits		2,761,939				2,186,224				2,100,428				2,005,695				1,895,996
Federal Home Loan Bank advances		22,000				52,000				32,000				22,000				22,000
Other borrowed funds		12,062				12,062				12,062				12,062				27,062
Accrued interest payable		9,393				8,503				6,573				6,009				5,583
Other liabilities		46,378				21,888				19,666				19,007				20,675
Total liabilities		2,851,772				2,280,677				2,170,729				2,064,773				1,971,316
Stockholders’ equity
Common stock		167				139				139				139				139
Additional paid-in capital		128,598				55,585				55,005				54,229				54,473
Retained earnings		237,843				232,995				225,824				218,731				213,345
Accumulated other comprehensive loss		(11,469	)			(8,608	)			(13,114	)			(13,634	)			(13,097	)
Total stockholders’ equity		355,139				280,111				267,854				259,465				254,860
Total liabilities and stockholders’ equity	$	3,206,911			$	2,560,788			$	2,438,583			$	2,324,238			$	2,226,176

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 December 31, 2024												Three Months Ended September 30, 2024												Three Months Ended December 31, 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	$	140,206			$	1,446				4.10	%		$	91,089			$	1,137				4.97	%		$	65,336			$	680				4.13	%
Federal funds sold		58				—				—				57				1				6.98				1,574				21				5.29
Investment securities available-for-sale		236,951				1,539				2.58				221,303				1,343				2.41				223,132				1,083				1.93
Restricted investments		7,292				120				6.55				4,911				82				6.64				4,518				76				6.67
Loans held for sale		25,614				193				3.00				9,967				161				6.43				4,601				83				7.16
Portfolio loans receivable(2)(3)		2,592,960				58,409				8.96				2,053,619				49,886				9.66				1,863,298				45,026				9.59
Total interest earning assets		3,003,081				61,707				8.17				2,380,946				52,610				8.79				2,162,459				46,969				8.62
Noninterest earning assets		117,026												56,924												40,020
Total assets	$	3,120,107											$	2,437,870											$	2,202,479
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts	$	257,446				424				0.66			$	228,365				321				0.56			$	195,539				90				0.18
Savings		13,497				20				0.59				4,135				5				0.48				5,184				2				0.15
Money market accounts		763,526				7,131				3.72				698,239				7,442				4.24				680,697				7,139				4.16
Time deposits		847,618				8,810				4.13				479,824				6,134				5.09				380,731				4,528				4.72
Borrowed funds		97,116				995				4.08				43,655				354				3.23				41,823				321				3.05
Total interest-bearing liabilities		1,979,203				17,380				3.49				1,454,218				14,256				3.90				1,303,974				12,080				3.68
Noninterest-bearing liabilities:
Noninterest-bearing liabilities		58,460												28,834												27,529
Noninterest-bearing deposits		729,907												680,731												622,941
Stockholders’ equity		352,537												274,087												248,035
Total liabilities and stockholders’ equity	$	3,120,107											$	2,437,870											$	2,202,479
Net interest spread										4.68	%											4.89	%											4.94	%
Net interest income					$	44,327											$	38,354											$	34,889
Net interest margin(4)										5.87	%											6.41	%											6.40	%

_______________
⁽¹⁾   Annualized.
⁽²⁾   Includes nonaccrual loans.
⁽³⁾   For the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, collectively, portfolio loans yield excluding credit card loans was 6.98%, 7.15% and 6.89%, respectively.
⁽⁴⁾   For the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, collectively, credit card loans accounted for 182, 233 and 248 basis points of the reported net interest margin, respectively.

	Year Ended December 31,
		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	$	98,319			$	4,569				4.65	%		$	70,407			$	3,211				4.56	%
Federal funds sold		57				3				5.26				1,597				74				4.63
Investment securities available-for-sale		228,909				5,441				2.38				245,466				4,815				1.96
Restricted investments		5,563				373				6.71				5,016				346				6.90
Loans held for sale		12,121				569				4.69				5,755				382				6.64
Portfolio loans receivable(2)(3)		2,142,638				202,346				9.44				1,816,968				174,378				9.60
Total interest earning assets		2,487,607				213,301				8.57				2,145,209				183,206				8.54
Noninterest earning assets		66,442												43,090
Total assets	$	2,554,049											$	2,188,299
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts	$	221,437			$	1,003				0.45	%		$	201,194			$	298				0.15	%
Savings		6,732				27				0.40				5,768				8				0.14
Money market accounts		704,002				28,741				4.08				642,013				23,510				3.66
Time deposits		561,369				26,399				4.70				360,464				15,809				4.39
Borrowed funds		63,686				2,385				3.74				59,302				2,055				3.47
Total interest-bearing liabilities		1,557,226				58,555				3.76				1,268,741				41,680				3.29
Noninterest-bearing liabilities:
Noninterest-bearing liabilities		34,043												24,026
Noninterest-bearing deposits		675,360												655,013
Stockholders’ equity		287,420												240,519
Total liabilities and stockholders’ equity	$	2,554,049											$	2,188,299
Net interest spread										4.81	%											5.25	%
Net interest income					$	154,746											$	141,526
Net interest margin(4)										6.22	%											6.60	%

⁽¹⁾   Annualized.
⁽²⁾   Includes nonaccrual loans.
⁽³⁾   For the years ended December 31, 2024 and 2023, collectively, portfolio loans yield excluding credit card loans was 7.03% and 6.65%, respectively.
⁽⁴⁾   For the years ended December 31, 2024 and 2023, collectively, credit card loans accounted for 222 and 264 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 five segments include Commercial Banking, Capital Bank Home Loans (the Company’s mortgage loan division), OpenSky^™ (the Company’s credit card division), Windsor Advantage 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 December 31, 2024, September 30, 2024, and December 31, 2023.

Segments
For the three months ended December 31, 2024
(in thousands)		Commercial Bank				CBHL				OpenSky™				Windsor Advantage				Corporate(2)				Eliminations				Consolidated
Interest income		$	45,195			$	192			$	15,454			$	—			$	874			$	(8	)		$	61,707
Interest expense			17,086				131				—				—				171				(8	)			17,380
Net interest income			28,109				61				15,454				—				703				—				44,327
Provision for credit losses			6,651				—				1,177				—				—				—				7,828
Provision for credit losses on unfunded commitments			122				—				—				—				—				—				122
Net interest income after provision			21,336				61				14,277				—				703				—				36,377
Noninterest income (loss)			4,547				1,676				3,743				4,566				(2,619	)			—				11,913
Noninterest expense(1)			16,539				2,377				12,595				2,670				3,333				—				37,514
Net income (loss) before taxes		$	9,344			$	(640	)		$	5,425			$	1,896			$	(5,249	)		$	—			$	10,776
Total assets		$	2,994,356			$	21,691			$	125,913			$	7,922			$	376,930			$	(319,901	)		$	3,206,911
For the three months ended September 30, 2024
(in thousands)		Commercial Bank				CBHL				OpenSky™				Windsor Advantage				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 December 31, 2023
(in thousands)		Commercial Bank				CBHL				OpenSky™				Windsor Advantage				Corporate(2)				Eliminations				Consolidated
Interest income		$	30,957			$	83			$	15,035			$	—			$	964			$	(70	)		$	46,969
Interest expense			11,884				31				—				—				235				(70	)			12,080
Net interest income			19,073				52				15,035				—				729				—				34,889
Provision for (release of) credit losses			691				—				2,125				—				(8	)			—				2,808
Release of credit losses on unfunded commitments			(106	)			—				—				—				—				—				(106	)
Net interest income after provision			18,488				52				12,910				—				737				—				32,187
Noninterest income			773				1,166				3,996				—				1				—				5,936
Noninterest expense(1)			12,303				1,617				12,669				—				318				—				26,907
Net income (loss) before taxes		$	6,958			$	(399	)		$	4,237			$	—			$	420			$	—			$	11,216
Total assets		$	2,051,945			$	8,589			$	117,477			$	—			$	277,565			$	(229,400	)		$	2,226,176

________________________
⁽¹⁾ Noninterest expense includes $6.3 million, $6.2 million, and $5.7 million in data processing expense in OpenSky’s^™ segment for the three months ended December 31, 2024, September 30, 2024, and December 31, 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 year ended December 31, 2024
(in thousands)		Commercial Bank				CBHL				OpenSky™				Windsor Advantage				Corporate(2)				Eliminations				Consolidated
Interest income		$	147,464			$	568			$	61,785			$	—			$	3,646			$	(162	)		$	213,301
Interest expense			57,536				363				—				—				818				(162	)			58,555
Net interest income			89,928				205				61,785				—				2,828				—				154,746
Provision for credit losses			10,331				—				7,329				—				60				—				17,720
Provision for credit losses on unfunded commitments			385				—				—				—				—				—				385
Net interest income after provision			79,212				205				54,456				—				2,768				—				136,641
Noninterest income (loss)			6,654				6,684				16,122				4,566				(2,616	)			—				31,410
Noninterest expense(1)			53,429				9,377				53,245				2,670				7,498				—				126,219
Net income (loss) before taxes		$	32,437			$	(2,488	)		$	17,333			$	1,896			$	(7,346	)		$	—			$	41,832
Total assets		$	2,994,356			$	21,691			$	125,913			$	7,922			$	376,930			$	(319,901	)		$	3,206,911
For the year ended December 31, 2023
(in thousands)		Commercial Bank				CBHL				OpenSky™				Windsor Advantage				Corporate(2)				Eliminations				Consolidated
Interest income		$	116,408			$	382			$	62,476			$	—			$	4,238			$	(298	)		$	183,206
Interest expense			40,896				135				—				—				947				(298	)			41,680
Net interest income			75,512				247				62,476				—				3,291				—				141,526
Provision for credit losses			1,540				—				7,948				—				122				—				9,610
Release of credit losses on unfunded commitments			(101	)			—				—				—				—				—				(101	)
Net interest income after provision			74,073				247				54,528				—				3,169				—				132,017
Noninterest income			2,737				4,909				17,325				—				4				—				24,975
Noninterest expense(1)			48,347				8,155				52,752				—				1,513				—				110,767
Net income (loss) before taxes		$	28,463			$	(2,999	)		$	19,101			$	—			$	1,660			$	—			$	46,225
Total assets		$	2,051,945			$	8,589			$	117,477			$	—			$	277,565			$	(229,400	)		$	2,226,176

⁽¹⁾ Noninterest expense includes $24.9 million and $23.7 million in data processing expense in OpenSky’s^™ segment for the years ended December 31, 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)		December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Earnings:
Net income		$	7,533			$	8,672			$	8,205			$	6,562			$	9,030
Earnings per common share, diluted			0.45				0.62				0.59				0.47				0.65
Net interest margin			5.87	%			6.41	%			6.46	%			6.24	%			6.40	%
Net interest margin, excluding credit card loans (1)			4.05	%			4.08	%			4.00	%			3.85	%			3.92	%
Return on average assets(2)			0.96	%			1.42	%			1.40	%			1.15	%			1.63	%
Return on average equity(2)			8.50	%			12.59	%			12.53	%			10.19	%			14.44	%
Efficiency ratio			66.70	%			66.07	%			67.11	%			71.95	%			65.91	%
Balance Sheet:
Total portfolio loans receivable, net deferred fees		$	2,630,163			$	2,107,522			$	2,021,588			$	1,964,525			$	1,902,643
Total deposits			2,761,939				2,186,224				2,100,428				2,005,695				1,895,996
Total assets			3,206,911				2,560,788				2,438,583				2,324,238				2,226,176
Total stockholders’ equity			355,139				280,111				267,854				259,465				254,860
Total average portfolio loans receivable, net deferred fees			2,592,960				2,053,619				1,992,630				1,927,372				1,863,298
Total average deposits			2,611,994				2,091,294				2,010,736				1,957,559				1,885,092
Portfolio loans-to-deposit ratio (period-end balances)			95.23	%			96.40	%			96.25	%			97.95	%			100.35	%
Portfolio loans-to-deposit ratio (average balances)			99.27	%			98.20	%			99.10	%			98.46	%			98.84	%
Asset Quality Ratios:
Nonperforming assets to total assets			0.94	%			0.60	%			0.58	%			0.62	%			0.72	%
Nonperforming loans to total loans			1.15	%			0.73	%			0.70	%			0.73	%			0.84	%
Net charge-offs to average portfolio loans (2)			0.37	%			0.51	%			0.39	%			0.41	%			0.53	%
Allowance for credit losses to total loans			1.85	%			1.51	%			1.53	%			1.49	%			1.50	%
Allowance for credit losses to non-performing loans			160.88	%			206.50	%			219.40	%			204.37	%			178.34	%
Bank Capital Ratios:
Total risk based capital ratio			12.82	%			13.76	%			14.51	%			14.36	%			14.81	%
Tier 1 risk based capital ratio			11.56	%			12.50	%			13.25	%			13.10	%			13.56	%
Leverage ratio			9.12	%			9.84	%			10.36	%			10.29	%			10.51	%
Common equity Tier 1 capital ratio			11.56	%			12.50	%			13.25	%			13.10	%			13.56	%
Tangible common equity			9.31	%			9.12	%			9.53	%			9.66	%			9.91	%
Holding Company Capital Ratios:
Total risk based capital ratio			15.48	%			16.65	%			16.98	%			16.83	%			17.38	%
Tier 1 risk based capital ratio			13.83	%			14.88	%			15.19	%			15.03	%			15.55	%
Leverage ratio			11.07	%			11.85	%			11.93	%			11.87	%			12.14	%
Common equity Tier 1 capital ratio			13.74	%			14.78	%			15.08	%			14.92	%			15.43	%
Tangible common equity			11.07	%			10.94	%			10.98	%			11.16	%			11.45	%

_______________
⁽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)		December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Composition of Loans:
Commercial real estate, non owner-occupied		$	471,329			$	403,487			$	397,080			$	377,224			$	351,116
Commercial real estate, owner-occupied			440,026				351,462				319,370				330,840				307,911
Residential real estate			688,552				623,684				601,312				577,112				573,104
Construction real estate			321,252				301,909				294,489				290,016				290,108
Commercial and industrial			554,550				271,811				255,686				254,577				239,208
Lender finance			28,574				29,546				33,294				13,484				11,085
Business equity lines of credit			3,090				2,663				2,989				14,768				14,117
Credit card, net of reserve(3)			127,766				127,098				122,217				111,898				123,331
Other consumer loans			2,089				2,045				1,930				738				950
Portfolio loans receivable		$	2,637,228			$	2,113,705			$	2,028,367			$	1,970,657			$	1,910,930
Deferred origination fees, net			(7,065	)			(6,183	)			(6,779	)			(6,132	)			(7,642	)
Portfolio loans receivable, net		$	2,630,163			$	2,107,522			$	2,021,588			$	1,964,525			$	1,903,288
Composition of Deposits:
Noninterest-bearing		$	810,928			$	718,120			$	684,574			$	665,812			$	617,373
Interest-bearing demand			238,881				266,493				266,070				193,963				199,308
Savings			13,488				3,763				4,270				4,525				5,211
Money markets			816,708				686,526				672,455				678,435				663,129
Customer time deposits			548,901				358,300				317,911				302,319				268,619
Brokered time deposits			333,033				153,022				155,148				160,641				142,356
Total deposits		$	2,761,939			$	2,186,224			$	2,100,428			$	2,005,695			$	1,895,996
Capital Bank Home Loan Metrics:
Origination of loans held for sale		$	89,998			$	74,690			$	82,363			$	52,080			$	45,152
Mortgage loans sold			77,399				67,296				66,417				40,377				34,140
Gain on sale of loans			1,897				1,644				1,732				1,238				1,015
Purchase volume as a % of originations			90.42	%			90.98	%			96.48	%			97.83	%			89.99	%
Gain on sale as a % of loans sold(4)			2.45	%			2.44	%			2.61	%			3.07	%			2.97	%
Mortgage commissions		$	620			$	598			$	582			$	490			$	465
OpenSky™Portfolio Metrics:
Open customer accounts			552,566				548,952				537,734				526,950				525,314
Secured credit card loans, gross		$	87,226			$	89,641			$	90,961			$	85,663			$	95,300
Unsecured credit card loans, gross			42,430				39,730				33,560				28,508				30,817
Noninterest secured credit card deposits			166,355				170,750				173,499				171,771				173,857

_______________
⁽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 Adjusted	Quarter Ended
(in thousands, except per share data)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Net Income	$	7,533			$	8,672			$	8,205			$	6,562			$	9,030
Add: Merger-Related Expenses, net of tax		2,151				557				62				538				—
Add: Non-recurring equity and debt investment write-down		2,620				—				—				—				—
Add: IFH ACL Provision, net of tax		3,169				—				—				—				—
Net Income, as Adjusted	$	15,473			$	9,229			$	8,267			$	7,100			$	9,030
Weighted Average Common Shares – Diluted		16,729				13,951				13,895				13,919				13,989
Earnings per Share – Diluted	$	0.45			$	0.62			$	0.59			$	0.47			$	0.65
Earnings per Share – Diluted, as Adjusted	$	0.92			$	0.66			$	0.59			$	0.51			$	0.65
Average Assets	$	3,120,107			$	2,437,870			$	2,353,868			$	2,299,234			$	2,202,479
Return on Average Assets(1)		0.96	%			1.42	%			1.40	%			1.15	%			1.63	%
Return on Average Assets, as Adjusted(1)		1.97	%			1.51	%			1.41	%			1.24	%			1.63	%
Average Equity	$	352,537			$	274,087			$	263,425			$	258,892			$	248,035
Return on Average Equity(1)		8.50	%			12.59	%			12.53	%			10.19	%			14.44	%
Return on Average Equity, as Adjusted(1)		17.46	%			13.40	%			12.62	%			11.03	%			14.44	%
Net Interest Income (a)	$	44,327			$	38,354			$	37,057			$	35,008			$	34,889
Noninterest Income		11,913				6,635				6,890				5,972				5,936
Total Revenue	$	56,240			$	44,989			$	43,947			$	40,980			$	40,825
Noninterest Expense	$	37,514			$	29,725			$	29,493			$	29,487			$	26,907
Efficiency Ratio(2)		66.70	%			66.07	%			67.11	%			71.95	%			65.91	%
Noninterest Income	$	11,913			$	6,635			$	6,890			$	5,972			$	5,936
Add: Non-recurring equity and debt investment write-down		2,620				—				—				—				—
Noninterest Income, as Adjusted (b)	$	14,533			$	6,635			$	6,890			$	5,972			$	5,936
Total Revenue, as Adjusted (a) + (b)	$	58,860			$	44,989			$	43,947			$	40,980			$	40,825
Noninterest Expense	$	37,514			$	29,725			$	29,493			$	29,487			$	26,907
Less: Merger-Related Expenses		2,615				520				83				712				—
Noninterest Expense, as Adjusted	$	34,899			$	29,205			$	29,410			$	28,775			$	26,907
Efficiency Ratio, as Adjusted(2)		59.29	%			64.92	%			66.92	%			70.22	%			65.91	%

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

Earnings Metrics, as Adjusted	Year Ended
(in thousands, except per share data)	December 31, 2024				December 31, 2023
Net Income	$	30,972			$	35,871
Add: Merger-Related Expenses, net of tax		3,308				—
Add: Non-recurring equity and debt investment write-down		2,620				—
Add: IFH ACL Provision, net of tax		3,169				—
Net Income, as Adjusted	$	40,069			$	35,871
Weighted average common shares – Diluted		14,660				14,081
Earnings per share – Diluted	$	2.11			$	2.55
Earnings per share – Diluted, as Adjusted	$	2.73			$	2.55
Average Assets	$	2,554,049			$	2,188,299
Return on Average Assets(1)		1.21	%			1.64	%
Return on Average Assets, as Adjusted(1)		1.57	%			1.64	%
Average Equity	$	287,420			$	240,519
Return on Average Equity(1)		10.78	%			14.91	%
Return on Average Equity, as Adjusted(1)		13.94	%			14.91	%
Net Interest Income (a)	$	154,746			$	141,526
Noninterest Income		31,410				24,975
Total Revenue	$	186,156			$	166,501
Noninterest Expense	$	126,219			$	110,767
Efficiency Ratio(2)		67.80	%			66.53	%
Noninterest Income	$	31,410			$	24,975
Add: Non-recurring equity and debt investment write-down		2,620				—
Noninterest Income, as Adjusted (b)	$	34,030			$	24,975
Total Revenue, as Adjusted (a) + (b)	$	188,776			$	166,501
Noninterest Expense	$	126,219			$	110,767
Less: Merger-Related Expenses		3,930				—
Noninterest Expense, as Adjusted	$	122,289			$	110,767
Efficiency Ratio, as Adjusted(2)		64.78	%			66.53	%

_______________
⁽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 Adjusted	Quarter Ended
(in thousands)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Net Interest Income	$	44,327			$	38,354			$	37,057			$	35,008			$	34,889
Less: Credit Card Loan Income		15,022				15,137				15,205				14,457				14,677
Net Interest Income, as Adjusted	$	29,305			$	23,217			$	21,852			$	20,551			$	20,212
Average Interest Earning Assets		3,003,081				2,380,946				2,307,070				2,254,663				2,162,459
Less: Average Credit Card Loans		120,993				119,458				111,288				110,483				114,551
Total Average Interest Earning Assets, as Adjusted	$	2,882,088			$	2,261,488			$	2,195,782			$	2,144,180			$	2,047,908
Net Interest Margin, as Adjusted		4.05	%			4.08	%			4.00	%			3.85	%			3.92	%

Net Interest Margin, as Adjusted	Year Ended
(in thousands)	December 31, 2024				December 31, 2023
Net Interest Income	$	154,746			$	141,526
Less: Credit Card Loan Income		59,821				61,096
Net Interest Income, as Adjusted	$	94,925			$	80,430
Average Interest Earning Assets		2,487,607				2,145,209
Less: Average Credit Card Loans		115,581				114,450
Total Average Interest Earning Assets, as Adjusted	$	2,372,026			$	2,030,759
Net Interest Margin, as Adjusted		4.00	%			3.96	%

Portfolio Loans Receivable Yield, as Adjusted	Quarter Ended
(in thousands)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Portfolio Loans Receivable Interest Income	$	58,409			$	49,886			$	48,143			$	45,908			$	45,026
Less: Credit Card Loan Income		15,022				15,137				15,205				14,457				14,677
Portfolio Loans Receivable Interest Income, as Adjusted	$	43,387			$	34,749			$	32,938			$	31,451			$	30,349
Average Portfolio Loans Receivable		2,592,960				2,053,619				1,992,630				1,927,372				1,863,298
Less: Average Credit Card Loans		120,993				119,458				111,288				110,483				114,551
Total Average Portfolio Loans Receivable, as Adjusted	$	2,471,967			$	1,934,161			$	1,881,342			$	1,816,889			$	1,748,747
Portfolio Loans Receivable Yield, as Adjusted		6.98	%			7.15	%			7.04	%			6.96	%			6.89	%

Portfolio Loans Receivable Yield, as Adjusted	Year Ended
(in thousands)	December 31, 2024				December 31, 2023
Portfolio Loans Receivable Interest Income	$	202,346			$	174,378
Less: Credit Card Loan Income		59,821				61,096
Portfolio Loans Receivable Interest Income, as Adjusted	$	142,525			$	113,282
Average Portfolio Loans Receivable		2,142,638				1,816,968
Less: Average Credit Card Loans		115,581				114,450
Total Average Portfolio Loans Receivable, as Adjusted	$	2,027,057			$	1,702,518
Portfolio Loans Receivable Yield, as Adjusted		7.03	%			6.65	%

Pre-tax, Pre-Provision Net Revenue (“PPNR”)	Quarter Ended
(in thousands)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Net Income	$	7,533			$	8,672			$	8,205			$	6,562			$	9,030
Add: Income Tax Expense		3,243				2,827				2,728				2,062				2,186
Add: Provision for Credit Losses		7,828				3,748				3,417				2,727				2,808
Add: Provision for (Release of) Credit Losses on Unfunded Commitments		122				17				104				142				(106	)
Pre-tax, Pre-Provision Net Revenue (“PPNR”)	$	18,726			$	15,264			$	14,454			$	11,493			$	13,918

Pre-tax, Pre-Provision Net Revenue (“PPNR”)	Year Ended
(in thousands)	December 31, 2024				December 31, 2023
Net Income	$	30,972			$	35,871
Add: Income Tax Expense		10,860				10,354
Add: Provision for Credit Losses		17,720				9,610
Add: Provision for (Release of) Credit Losses on Unfunded Commitments		385				(101	)
Pre-tax, Pre-Provision Net Revenue (“PPNR”)	$	59,937			$	55,734

PPNR, as Adjusted	Quarter Ended
(in thousands)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Net Income	$	7,533			$	8,672			$	8,205			$	6,562			$	9,030
Add: Income Tax Expense		3,243				2,827				2,728				2,062				2,186
Add: Provision for Credit Losses		7,828				3,748				3,417				2,727				2,808
Add: Provision for (Release of) Credit Losses on Unfunded Commitments		122				17				104				142				(106	)
Add: Merger-Related Expenses		2,615				520				83				712				—
Add: Non-recurring equity and debt investment write-down		2,620				—				—				—				—
PPNR, as Adjusted	$	23,961			$	15,784			$	14,537			$	12,205			$	13,918

PPNR, as Adjusted	Year Ended
(in thousands)	December 31, 2024				December 31, 2023
Net Income	$	30,972			$	35,871
Add: Income Tax Expense		10,860				10,354
Add: Provision for Credit Losses		17,720				9,610
Add: Provision for (Release of) Credit Losses on Unfunded Commitments		385				(101	)
Add: Merger-Related Expenses		3,930				—
Add: Non-recurring equity and debt investment write-down		2,620				—
PPNR, as Adjusted	$	66,487			$	55,734

Allowance for Credit Losses to Total Portfolio Loans	Quarter Ended
(in thousands)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Allowance for Credit Losses	$	48,652			$	31,925			$	30,832			$	29,350			$	28,610
Total Portfolio Loans		2,630,163				2,107,522				2,021,588				1,964,525				1,903,288
Allowance for Credit Losses to Total Portfolio Loans		1.85	%			1.51	%			1.53	%			1.49	%			1.50	%

Nonperforming Assets to Total Assets	Quarter Ended
(in thousands)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Total Nonperforming Assets	$	30,241			$	15,460			$	14,053			$	14,361			$	16,042
Total Assets		3,206,911				2,560,788				2,438,583				2,324,238				2,226,176
Nonperforming Assets to Total Assets		0.94	%			0.60	%			0.58	%			0.62	%			0.72	%

Nonperforming Loans to Total Portfolio Loans	Quarter Ended
(in thousands)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Total Nonperforming Loans	$	30,241			$	15,460			$	14,053			$	14,361			$	16,042
Total Portfolio Loans		2,630,163				2,107,522				2,021,588				1,964,525				1,903,288
Nonperforming Loans to Total Portfolio Loans		1.15	%			0.73	%			0.70	%			0.73	%			0.84	%

Net Charge-Offs to Average Portfolio Loans	Quarter Ended
(in thousands)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Total Net Charge-Offs	$	2,427			$	2,655			$	1,935			$	1,987			$	2,477
Total Average Portfolio Loans		2,592,960				2,053,619				1,992,630				1,927,372				1,863,298
Net Charge-Offs to Average Portfolio Loans, Annualized		0.37	%			0.51	%			0.39	%			0.41	%			0.53	%

Net Charge-offs to Average Portfolio Loans	Year Ended
(in thousands)	December 31, 2024				December 31, 2023
Total Net Charge-Offs	$	9,004			$	8,473
Total Average Portfolio Loans		2,142,638				1,816,968
Net Charge-Offs to Average Portfolio Loans, Annualized		0.42	%			0.47	%

Tangible Book Value per Share	Quarter Ended
(in thousands, except share and per share data)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Total Stockholders’ Equity	$	355,139			$	280,111			$	267,854			$	259,465			$	254,860
Less: Preferred Equity		—				—				—				—				—
Less: Intangible Assets		42,454				—				—				—				—
Tangible Common Equity	$	312,685			$	280,111			$	267,854			$	259,465			$	254,860
Period End Shares Outstanding		16,662,405				13,917,891				13,910,467				13,889,563				13,922,532
Tangible Book Value per Share	$	18.77			$	20.13			$	19.26			$	18.68			$	18.31

Return on Average Tangible Common Equity	Quarter Ended
(in thousands)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Net Income	$	7,533			$	8,672			$	8,205			$	6,562			$	9,030
Add: Intangible Amortization, Net of Tax		198				—				—				—				—
Net Tangible Income	$	7,731			$	8,672			$	8,205			$	6,562			$	9,030
Average Equity		352,537				274,087				263,425				258,892				248,035
Less: Average Intangible Assets		27,653				—				—				—				—
Net Average Tangible Common Equity	$	324,884			$	274,087			$	263,425			$	258,892			$	248,035
Return on Average Equity		8.50	%			12.59	%			12.53	%			10.19	%			14.44	%
Return on Average Tangible Common Equity		9.47	%			12.59	%			12.53	%			10.19	%			14.44	%

Core Return on Average Tangible Common Equity	Quarter Ended
(in thousands)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Net Income, as Adjusted	$	15,473			$	9,229			$	8,267			$	7,100			$	9,030
Add: Intangible Amortization, Net of Tax		198				—				—				—				—
Net Tangible Income, as Adjusted	$	15,671			$	9,229			$	8,267			$	7,100			$	9,030
Core Return on Average Equity, as Adjusted		17.68	%			13.40	%			12.62	%			11.03	%			14.44	%
Core Return on Average Tangible Common Equity, as Adjusted		19.19	%			13.40	%			12.62	%			11.03	%			14.44	%

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 six locations in the greater Washington, D.C. and Baltimore, Maryland markets, one bank branch in Fort Lauderdale, Florida and one bank branch in Chicago, Illinois. Capital Bancorp had assets of approximately $3.2 billion at December 31, 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 IFH 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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