ROCKVILLE, Md., April 27, 2026 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") $(CBNK)$, the holding company for Capital Bank, N.A. (the "Bank"), today reported:
Quarter Ended % Change(Annualized)
---------------------- --------------------------
(in millions,
except per 1Q26 vs
share data) 1Q26 4Q25 1Q25 1Q26 vs 4Q25 1Q25
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Balance Sheet
Summary
Gross Loans(1) $3,026 $2,959 $2,678 9.2% 13.0%
Total Deposits 3,292 3,093 2,891 26.1% 13.9%
Customer
Deposits((2)
() 2,989 2,717 2,584 40.7% 15.7%
Tangible Book
Value per
share((3) () $22.62 $22.05 $19.81 10.5% 14.2%
-------------- ----- ----- ----- ----- ----- ----- ---
GAAP Core((3) ()
Quarter Ended Change Quarter Ended Change
---------------------------------- ---------------------- ---------------------------------- ----------------------
(in millions,
except per 1Q26 vs 1Q26 vs 1Q26 vs 1Q26 vs
share data) 1Q26 4Q25 1Q25 4Q25 1Q25 1Q26 4Q25 1Q25 4Q25 1Q25
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings
Summary
Net Income $ 12.0 $ 15.0 $ 13.9 (20.0)% (13.7)% $ 12.0 $ 15.0 $ 14.9 (20.0)% (19.5)%
Earnings per
share -
diluted $ 0.73 $ 0.91 $ 0.82 (19.8)% (11.2)% $ 0.73 $ 0.91 $ 0.88 (19.8)% (16.9)%
ROA 1.33% 1.71% 1.75% (38) bps (42) bps 1.33% 1.71% 1.87% (38) bps (54) bps
ROTCE((3) () 13.58% 17.23% 17.57% (365) bps (399) bps 13.58% 17.23% 18.77% (365) bps (519) bps
Including Card Excluding Card
---------------------------------- ----------------------------------
NIM 5.71% 5.94% 6.05% (23) bps (34) bps 4.15% 4.19% 4.36% (4) bps (21) bps
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((1) () Gross loans represent portfolio loans receivable, net of deferred fees and costs.
((2) () Customer deposits represents total deposits excluding brokered deposits.
(3) As used in this press release, Core net income, Core earnings per share - diluted, Core ROA, Core ROTCE, Tangible Book Value per share are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of this and other non--GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
"We are pleased that the sustained organic growth at the Commercial Bank permits us to accommodate an increase in noninterest expenses, while, at the same time, providing our stockholders with reasonable returns and a steadily growing TBV," said Steven J. Schwartz, Chairman of the Company. "We expect these expenditures to enable technology advancements in customer experience and back office efficiency, and to support the introduction by OpenSky$(TM)$ of new products. We remain alert to the possibility that the markets in which we operate remain vulnerable to disruption from geopolitical and other developments, but have not yet seen any macroeconomic signs of credit deterioration in our markets."
First Quarter 2026 Highlights
-- Delivered strong balance sheet growth, with gross loans increasing 9.2%
(annualized) from 4Q 2025, driven by continued momentum in the Commercial
Bank
-- Generated robust deposit growth, with total deposits increasing 26.1%
(annualized) from 4Q 2025. Excluding $107.8 million of deposit growth
tied to a single customer relationship, total deposits grew 11.9%
annualized while reducing brokered deposits by 19.5%
-- Achieved strong customer deposit growth, which increased 40.7%
(annualized) from 4Q 2025, or 27.0% annualized excluding the relationship
noted above
-- Continued tangible book value compounding, with tangible book value(3)
per share increasing 10.5% annualized from 4Q 2025
-- Expanded fee revenue, which increased 29.6% (annualized), primarily
driven by SBA loan sales generated by a new team and increased USDA
volume; fee revenue represented 21.3% of total revenue
-- Advanced strategic investments in unsecured card, card partnerships, data
infrastructure, and back-office support to enhance scalability and
long-term growth
-- Returned capital to shareholders, repurchasing $3.5 million of common
stock under the Company's share repurchase program
-- The Company also declared a cash dividend on its common stock of $0.12
per share. The dividend is payable on May 27, 2026 to shareholders of
record on May 11, 2026.
"We continue to demonstrate our ability to grow across the Company, highlighted by the increase in customer deposits, which positions us for continued balance sheet growth." said Ed Barry, CEO of the Company. "Our investment program is underway across the Commercial and OpenSky(TM) division, including technology and data initiatives that will improve our competitive position."
Consolidated financial performance
Net income of $12.0 million decreased $3.0 million compared to 4Q 2025, and earnings per share - diluted of $0.73 decreased $0.18 per share from 4Q 2025. Net income decreased $1.9 million, or 13.7%, from $13.9 million, or $0.82 per diluted share, for 1Q 2025. 1Q 2026 Core net income((1) () of $12.0 million, or $0.73 per diluted share, decreased $3.0 million, or 20.1%, from 4Q 2025 Core net income of $15.0 million, or $0.91 per diluted share. 1Q 2026 Core net income decreased $2.9 million, or 19.3%, from 1Q 2025 core net income of $14.9 million, or $0.88 per diluted share.
Quarterly net interest income:
-- Net interest income of $49.4 million decreased $0.9 million, or 1.8% (not
annualized), compared to 4Q 2025, and increased $3.4 million, or 7.3%,
year-over-year.
-- Interest income of $68.0 million decreased $0.7 million, or 1.0%
(not annualized), compared to 4Q 2025, and increased $5.2 million,
or 8.3%, year-over-year. The decrease from 4Q 2025 was primarily
driven by a $1.3 million decrease from OpenSky(TM) due to changes
in the rate environment, partially offset by a $0.7 million
increase from the Commercial Bank driven by loan growth. The
increase year-over-year was primarily driven by $4.6 million from
the Commercial Bank due to strong balance sheet growth, and
$0.6 million from OpenSky(TM) due to the growth from the unsecured
loan product.
-- Interest income included $0.3 million from net purchase
accounting accretion ("PAA") in 1Q 2026, compared to
$0.1 million in 4Q 2025 and $0.3 million in net PAA in 1Q
2025.
-- Interest expense of $18.6 million increased $0.2 million, or 1.2%
(not annualized), compared to 4Q 2025, and increased $1.9 million,
or 11.1%, year-over-year. The increase of $0.2 million compared to
4Q 2025, was primarily driven by a shift in deposit mix. The
increase of $1.9 million year-over-year was driven by $0.9 million
of lower PAA, $0.7 million from a shift in deposit mix and $0.3 of
million higher borrowing costs.
-- Interest expense included a $0.1 million benefit from net
PAA in 1Q 2026, compared to a $0.1 million benefit in 4Q
2025. There was a $1.1 million benefit from net PAA in 1Q
2025.
Quarterly provision:
-- The 1Q 2026 provision for credit losses was $3.0 million, a decrease of
$1.0 million from 4Q 2025. Net charge-offs totaled $3.0 million, or 0.40%
of portfolio loans (annualized), up from $2.4 million or 0.32% of
portfolio loans (annualized), in 4Q 2025.
-- Net charge-offs in the quarter include $3.1 million from
OpenSky(TM) loans and a net recovery of $0.1 million from
Commercial Bank loans. Net charge-offs for the Commercial Bank
decreased $2.0 million from 4Q 2025 primarily driven by $1.9
million of legacy Commercial Bank loans that were charged off
during 4Q 2025. OpenSky(TM) net charge-offs amounted to $0.5
million in 4Q 2025 compared to a net charge-offs of $3.1 million
in 1Q 2026. During 4Q 2025, a $2.0 million credit to the allowance
for credit losses was made to reflect recoveries resulting from
the sale of $69.5 million of charged-off OpenSky(TM) credit card
receivables.
-- At March 31, 2026, the ACL Coverage Ratio was 1.81%, down 4 bps
from December 31, 2025, and flat year-over-year.
Quarterly fee revenue:
-- Fee Revenue of $13.4 million increased $0.9 million, compared to 4Q 2025
and increased $0.8 million year-over-year. The increase of $0.9 million
during 1Q 2026 was primarily from a $0.9 million increase in government
lending revenue with other offsetting activity. Year-over-year fee
revenue increased $0.8 million primarily due to a $0.8 million increase
from government loan servicing and packaging revenue (Windsor(TM)) with
other offsetting activity. Fee revenue mix1 was 21.3% of total revenue
for 1Q 2026, compared to 19.9% during 4Q 2025, and 21.4% during 1Q 2025.
_____________________
(1) As used in this press release, Core net income, and Core noninterest expense, are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of this and other non--GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Quarterly noninterest expense:
-- Noninterest expense of $43.7 million increased $4.6 million compared to
4Q 2025 and increased $5.6 million compared to 1Q 2025. Core noninterest
expense(1) of $43.7 million increased $4.6 million compared to 4Q 2025
and increased $6.9 million compared to 1Q 2025. Core comparisons include:
-- The increase of $4.6 million quarter-over-quarter was primarily
driven by the following:
-- $2.4 million from personnel expenses, driven by planned
investment and expansion in headcount;
-- $0.9 million from occupancy & equipment, driven by an
increase in software contracts, acceleration of
depreciation of capitalized assets related to OpenSky(TM)
technology, and an increase in lease expenses;
-- $0.7 million from professional fees, driven by planned
investment in OpenSky(TM) initiatives and other
professional fees;
-- $0.3 million from data processing driven by OpenSky(TM) and
other core processing costs; and
-- $0.2 million from loan processing, driven by loan expenses
associated with our government guaranteed lending
portfolio;
-- Year-over-year expense growth of $6.9 million was driven by
professional fees associated with investments in shared services
areas and OpenSky(TM), personnel expense due to headcount growth,
growth in data processing costs from OpenSky(TM) and core
processing for the Commercial Bank, and an increase in loan
processing costs and loan expenses associated with our government
guaranteed lending portfolio.
Quarterly income taxes:
-- Income tax expense of $3.9 million, or 24.3% of pre-tax income for 1Q
2026, decreased $0.8 million from $4.6 million, or 23.6% of pre-tax
income for 4Q 2025. The effective income tax rate change
quarter-over-quarter was primarily due to certain one-time tax benefits
recognized during 4Q 2025.
Total assets:
Total assets of $3.8 billion at March 31, 2026 increased $202.3 million, or 22.7% (annualized) from December 31, 2025. Total assets growth year-over-year was $458.7 million, or 13.7%. The growth quarter-over-quarter, and year-over-year, was primarily driven by increases in portfolio loans, and cash balances.
Gross Loans:
-- Gross Loans of $3.0 billion at March 31, 2026 increased $67.0 million, or
9.2% (annualized), from December 31, 2025 and increased $348.0 million,
or 13.0%, year-over-year.
-- Compared to December 31, 2025, growth was primarily driven by
$32.3 million from commercial and industrial ("C&I"),
$29.7 million from residential real estate, and $6.1 million from
construction real estate. C&I contributed 48.2% of total loan
growth in the quarter.
-- C&l loans, plus owner-occupied CRE loans, totaled 38.3% of total
portfolio loans at March 31, 2026, 37.7% for the prior quarter,
and 37.9% at March 31, 2025.
_____________________(1) Fee revenue mix equals fee revenue divided by the sum of fee revenue and net interest income before provision for credit losses
Consolidated financial performance (Continued)
Deposits:
-- Total deposits of $3.3 billion at March 31, 2026 increased $198.8 million,
or 26.1% (annualized), from December 31, 2025, and increased
$400.7 million, or 13.9% from March 31, 2025.
-- When excluding the decrease in brokered time deposits of
$73.6 million, customer deposits increased $272.5 million or 40.7%
(annualized), including $170.9 million of growth in customer money
market deposits, $84.5 million of growth in interest-bearing
demand accounts, $18.9 million of growth in noninterest-bearing
deposits, and $9.8 million of growth in savings accounts, offset
by a decrease of $11.6 million in customer time deposits.
-- The growth in the quarter includes $107.8 million of
deposits tied to one customer. Excluding this
relationship, total deposits increased $91.0 million,
or 11.9% (annualized) and customer deposits
increased $164.7 million, or 27.0% (annualized).
-- The increase in total deposits of $400.7 million
year-over-year was driven by $363.6 million in growth from
customer money market deposits, $59.5 million from
noninterest-bearing deposits, $45.3 million from
interest-bearing demand accounts, and $8.7 million from
savings accounts, offset by a decrease of $71.5 million
from customer time deposits, and $4.7 million from brokered
time deposits.
-- Insured and protected1 deposits were approximately $2.3 billion as
of March 31, 2026 representing 69.4% of the Company's deposit
portfolio.
-- Low interest2 and noninterest-bearing demand deposit account
("DDA") deposits of $1.2 billion, or 37.5% of deposits, increased
$113.2 million, or 40.9% (annualized) from 4Q 2025, and increased
$113.4 million, or 10.1% year-over-year.
-- The growth in the quarter of low interest and
noninterest-bearing DDA deposits includes $36.1
million of deposits tied to one customer, the same
relationship mentioned above. Excluding this
relationship, total low interest and
noninterest-bearing DDA deposits increased
$77.1 million, or 27.9% from 4Q 2025, and increased
$77.3 million, or 27.9% year-over-year.
-- The average rate on the low interest and
noninterest-bearing deposits was 0.16% for 1Q 2026,
which increased 2 bps compared to 4Q 2025 and
increased 1 bps year-over-year.
-- The average portfolio loans-to-deposit ratio was 96.1% for 1Q 2026,
compared to 97.0% for 4Q 2025, and 95.2% for 1Q 2025.
Investment securities:
-- The investment securities portfolio continues to be classified as
available-for-sale and had a fair market value of $230.5 million, or 6.1%
of total assets, and an effective duration of 2.3 years, with U.S.
Treasury Securities representing 61% of the overall investment portfolio
at March 31, 2026. The accumulated other comprehensive income (loss) on
the investment securities portfolio declined $0.6 million during the
quarter to $(6.4) million after-tax as of March 31, 2026, which
represents 1.6% of total stockholders' equity. The Company does not have
a held-to-maturity investment securities portfolio.
The Company maintains stable and diversified sources of contingent liquidity, generally consistent with prior quarter. Total available borrowing capacity as of March 31, 2026 was $809.5 million, compared to $816.9 million as of December 31, 2025, consisting of $705.3 million of available collateralized borrowing capacity, $96.0 million of unsecured lines of credit with other banks, and $8.2 million of unpledged investment securities available to collateralize potential additional borrowings.
_____________________
(1) Protected deposits includes deposits that are indirectly protected under the product terms.
(2) Low interest deposits include interest-bearing demand and savings accounts
Consolidated financial performance (Continued)
Capital:
As of March 31, 2026, the Company reported a Common Equity Tier-1 capital ratio of 12.92%, compared to 12.98% at December 31, 2025. At March 31, 2026, the Company and the Bank maintained regulatory capital ratios that exceed all capital adequacy requirements.
Shares repurchased and retired during the three months ended March 31, 2026, as part of the Company's stock repurchase program, totaled 122,757 shares at an average price of $28.89, for a total cost of $3.5 million. The share repurchases consisted of $0.9 million under the Company's previous stock repurchase program, which expired on February 28, 2026, and $2.6 million under the new stock repurchase program. As of March 31, 2026, there was $12.4 million remaining to be repurchased under the current $15.0 million authorization repurchase program, which will expire on December 31, 2026.
Financial Metrics
Net Interest Margin:
NIM of 5.71% for 1Q 2026, decreased 23 bps compared to the prior quarter, and decreased 34 bps year-over-year. Core NIM(1) of 4.15% decreased 4 bps (but decreased 7 bps when excluding PAA) compared to the prior quarter, and decreased 21 bps year-over-year. Net PAA for 1Q 2026 was 5 bps for NIM and 5 bps for Core NIM(1) .
-- The average yield on interest earning assets of 7.86% decreased 24 bps
compared to the prior quarter and decreased 38 bps year-over-year. The
decreases quarter-over-quarter and year-over-year were primarily due to
OpenSky(TM) as a result of changes in the rate environment.
-- The Core Loan Yield(1) of 6.93% for 1Q 2026 decreased 2 bps
compared to 4Q 2025, and decreased 21 bps year-over-year. The
decrease year-over-year was primarily a result of changes in the
rate environment.
-- The total cost of deposits of 2.34% for 1Q 2026 decreased 2 bps compared
to the prior quarter and decreased 8 bps year-over-year. The decrease
year-over-year was primarily a result of a shift in the product mix of
the portfolio, and changes in the rate environment.
-- The total cost of interest-bearing deposits of 3.17% for 1Q 2026
decreased 11 bps quarter-over-quarter, and decreased 20 bps
year-over-year. The decreases quarter-over-quarter and year-over-year
were due to a shift in product mix as well as changes in the rate
environment.
-- Net PAA of $0.4 million, or 5 bps of NIM and 5 bps of Core NIM(1), during
1Q 2026, increased $0.2 million from 4Q 2025 mainly due to a loan payoff
during the quarter. There was $1.4 million from net PAA during 1Q 2025.
Credit Metrics and Asset Quality:
Nonperforming assets were $59.3 million or 1.56% of total assets at March 31, 2026, an increase of $1.0 million but a decrease of 6 bps compared to December 31, 2025. The increase in nonperforming assets from 4Q 2025 was primarily driven by a $0.8 million increase from the legacy CBNK portfolio and a $0.2 million increase from the acquired IFH portfolio. Nonperforming assets increased $16.3 million or 28 bps year-over-year, mainly due to the $15.9 million increase during 3Q 2025 from two loan relationships acquired as part of the IFH transaction. At March 31, 2026, substandard loans totaled $71.8 million, or 2.4% of total portfolio loans, compared to $58.5 million, or 2.0% of total portfolio loans, at December 31, 2025 and $45.7 million, or 1.7% of total portfolio loans, at March 31, 2025. The increase from December 31, 2025 of $13.3 million was primarily driven by one legacy bank loan relationship, with three loans accounting for $9.7 million of the increase quarter-over-quarter. The $26.1 million year-over-year increase in substandard loans was primarily driven by $15.9 million from the two loan relationships acquired as part of the IFH transaction, and the one legacy bank relationship accounting for $9.7 million. At March 31, 2026, special mention loans totaled $60.3 million, or 2.0% of total portfolio loans, compared to $57.9 million, or 2.0% of total portfolio loans, at December 31, 2025, and $63.0 million, or 2.4% of total portfolio loans, at March 31, 2025.
Efficiency Ratio:
The efficiency ratio was 69.6% for 1Q 2026, compared to 62.3% for 4Q 2025 and 64.9% for 1Q 2025. The core efficiency ratio(1) was 69.6% for 1Q 2026, which increased from 62.3% compared to the prior quarter, and increased from 62.8% for 1Q 2025.
_____________________(1) As used in this press release, Core NIM, Core Loan Yield, and Core efficiency ratio are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of these and other non--GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Financial Metrics (Continued)
Returns:
ROA was 1.33% for 1Q 2026, compared to 1.71% for 4Q 2025, and 1.75% for 1Q 2025. Core ROA((1) () for 1Q 2026 was 1.33%, compared to 1.71% for 4Q 2025, and 1.87% for 1Q 2025.
-- ROE was 12.03% for 1Q 2026, compared to 15.23% for 4Q 2025, and 15.56%
for 1Q 2025. Core ROE(1) was 12.03% for 1Q 2026, compared to 15.23% for
4Q 2025, and 16.64% for 1Q 2025.
-- ROTCE(1) was 13.58% for 1Q 2026, compared to 17.23% for 4Q 2025, and
17.57% for 1Q 2025. Core ROTCE(1) for 1Q 2026 was 13.58%, compared to
17.23% for 4Q 2025, and 18.77% for 1Q 2025.
Book Value:
Book value per common share of $25.10 at March 31, 2026, increased $0.57 when compared to December 31, 2025, and increased $2.91 when compared to March 31, 2025. Tangible book value per common share(1) increased $0.57, or 2.6% (not annualized), to $22.62 at March 31, 2026 when compared to December 31, 2025, and increased $2.81, or 14.2%, when compared to March 31, 2025.
_____________________
(1) As used in this press release, Core ROA, Core ROE, ROTCE, Core ROTCE, and Tangible Book Value are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of these and other non--GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Reportable Segments
Commercial Bank
Loan Growth -- Portfolio loans((1) () increased $73.0 million at March 31, 2026 compared to December 31, 2025, driven by $32.3 million from C&I, $29.7 million from residential real estate, and $6.1 million from construction real estate. Portfolio loans increased $330.6 million at March 31, 2026 compared to March 31, 2025, driven by $136.2 million from C&I, $101.9 million from residential real estate, and $46.1 million from CRE. Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.
Net Interest Income -- Interest income of $52.7 million increased $0.7 million from the prior quarter, $0.5 million of which was due to growth in the Commercial Bank loan portfolio and $0.2 million of which was from higher loan PAA. Interest expense of $18.5 million increased $0.2 million, primarily due to a mix shift in the deposit portfolio.
Credit Metrics -- Nonperforming assets decreased 7 bps to 1.64% of total assets at March 31, 2026 compared to December 31, 2025. Total nonaccrual loans at March 31, 2026 were $55.4 million, an increase of $1.0 million or 1.8% compared to $54.4 million at December 31, 2025.
Classified and Criticized Loans -- At March 31, 2026, special mention loans totaled $60.3 million, or 2.0% of total portfolio loans, compared to $57.9 million, or 2.0% of total portfolio loans, at December 31, 2025. At March 31, 2026, substandard loans totaled $71.8 million, or 2.4% of total portfolio loans, compared to $58.5 million, or 2.0% of total portfolio loans, at December 31, 2025.
_____________________(1) Portfolio loans represents portfolio loans receivable excluding deferred origination fees, net.
OpenSky(TM)
Accounts -- During 1Q 2026, credit card accounts grew to 588.2 thousand, increasing 2.7 thousand, or 0.5% (not annualized) from December 31, 2025, and increasing 24.5 thousand, or 4.3% year-over-year.
Loan and Deposit Balances -- Secured and unsecured loan balances, net of reserves for interest and fees, of $134.8 million at March 31, 2026 decreased by $7.6 million, or 5.3% (not annualized), compared to December 31, 2025 and increased $16.1 million, or 13.5%, year-over-year. Deposit balances of $165.5 million at March 31, 2026 increased $2.3 million compared to December 31, 2025 and decreased $3.3 million, or 1.9% year-over-year. Gross unsecured loan balances of $46.6 million at March 31, 2026 decreased $0.6 million, or 1.2% (not annualized), compared to $47.1 million at December 31, 2025, and increased $19.9 million year-over-year. Gross secured loan balances of $90.0 million at March 31, 2026 decreased $7.3 million, or 7.5% (not annualized), compared to $97.3 million at December 31, 2025, and decreased $3.5 million, or 3.8% (not annualized) year-over-year.
Net Interest Income -- Interest income of $15.1 million decreased $1.3 million compared to 4Q 2025. Average OpenSky(TM) credit card loan balances, net of reserves and deferred fees of $133.7 million for 1Q 2026, decreased $0.1 million, or 0.1% (not annualized), compared to 4Q 2025.
Fee Revenue -- Total fee revenue of $4.7 million decreased $0.1 million from the prior quarter primarily driven by lower interchange and other credit-card related fees.
Noninterest Expense -- Total noninterest expense of $16.2 million increased $1.6 million compared to 4Q 2025, driven by professional fees associated with the legacy and unsecured products, investment in headcount for initiatives, the acceleration of depreciation of capitalized assets related to OpenSky(TM) technology, and data processing costs.
OpenSky(TM) Credit -- Portfolio credit metrics continued to be consistent with modeled expectations during 1Q 2026. The provision for credit losses of $2.7 million increased $1.4 million when compared to the prior quarter, primarily due to a $2.0 million credit in 4Q 2025 to the allowance for credit losses that was made to reflect the debt sale. Excluding this item in 4Q 2025, the provision for credit losses would have decreased $0.6 million primarily due to lower balances in the loan portfolio. OpenSky's(TM) unsecured loan product is offered exclusively to current and former secured card customers. Unsecured loans have been offered by OpenSky(TM) since the fourth quarter of 2021 and have generally performed in alignment with management expectations over that time period.
Capital Bank Home Loans
Originations of loans held for sale totaled $72.9 million during 1Q 2026, with $52.4 million of mortgage loans sold resulting in a gain on sale of loans of $1.5 million, representing a 2.85% gain on sale as a percentage of total loans sold. Originations of loans held for sale totaled $107.3 million during 4Q 2025, with $83.0 million of mortgage loans sold resulting in a gain on sale of loans of $2.1 million, representing a 2.58% gain on sale as a percentage of total loans sold.
Windsor Advantage(TM)
Gross government loan servicing revenue totaled $5.6 million, including $1.3 million of Capital Bank related servicing fees, during 1Q 2026. Gross government loan servicing revenue totaled $5.0 million, including $1.0 million of Capital Bank related servicing fees, during 4Q 2025. Windsor's(TM) total servicing portfolio was $3.2 billion at March 31, 2026, and $3.1 billion at December 31, 2025.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited
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Quarter Ended 1Q26 vs 4Q25 1Q26 vs 1Q25
-------------------- --------------------
(in thousands,
except per share March 31, December March 31,
data) 2026 31, 2025 2025 $ Change % Change $ Change % Change
----------- ----------- ----------- -------- ---------- -------- ----------
Earnings Summary
Interest income $67,970 $68,634 $62,760 $ (664) (1.0)% $ 5,210 8.3 %
Interest expense 18,572 18,355 16,713 217 1.2 % 1,859 11.1 %
------ ------ ------ ------ ------ ------ ------
Net interest
income 49,398 50,279 46,047 (881) (1.8)% 3,351 7.3 %
Provision for
credit losses 3,014 3,988 2,246 (974) (24.4)% 768 34.2 %
Provision for
(release of)
credit losses
on unfunded
commitments 205 (29) -- 234 (806.9)% 205 -- %
Noninterest
income 13,373 12,464 12,549 909 7.3 % 824 6.6 %
Noninterest
expense 43,681 39,103 38,053 4,578 11.7 % 5,628 14.8 %
------ ------ ------ ------ ------ ------ ------
Income before
income
taxes 15,871 19,681 18,297 (3,810) (19.4)% (2,426) (13.3)%
------ ------ ------ ------ ------ ------ ------
Income tax
expense 3,853 4,644 4,365 (791) (17.0)% (512) (11.7)%
------ ------ ------ ------ ------ ------ ------
Net income $12,018 $15,037 $13,932 $(3,019) (20.1)% $(1,914) (13.7)%
------ ------ ------ ------ ------ ------ ------
Pre-tax
pre-provision
net revenue
("PPNR")(1) $19,090 $23,640 $20,543 $(4,550) (19.2)% $(1,453) (7.1)%
Core PPNR(1) $19,090 $23,640 $21,809 $(4,550) (19.2)% $(2,719) (12.5)%
Common Share
Data
Earnings per
share - Basic $ 0.74 $ 0.91 $ 0.84 $ (0.17) (18.7)% $ (0.10) (11.9)%
Earnings per
share -
Diluted $ 0.73 $ 0.91 $ 0.82 $ (0.18) (19.8)% $ (0.09) (11.0)%
Core earnings
per share -
Diluted(1) $ 0.73 $ 0.91 $ 0.88 $ (0.18) (19.8)% $ (0.15) (17.0)%
Weighted average
common shares -
Basic 16,345 16,493 16,666
Weighted average
common shares -
Diluted 16,441 16,493 16,925
Return Ratios
Return on
average assets
(annualized) 1.33 % 1.71 % 1.75 %
Core return on
average assets
(annualized)(1) 1.33 % 1.71 % 1.87 %
Return on
average equity
(annualized) 12.03 % 15.23 % 15.56 %
Core return on
average equity
(annualized)(1) 12.03 % 15.23 % 16.64 %
Return on
average
tangible common
equity
(annualized)(1) 13.58 % 17.23 % 17.57 %
Core return on
average
tangible common
equity
(annualized)(1) 13.58 % 17.23 % 18.77 %
______________
(1) Refer to Appendix for reconciliation of non-GAAP measures.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued)
--------------------------------------------------------------------
Quarter Ended Quarter Ended
---------------------- ------ -----------------------------------
December September
March 31, 31, 30, June 30,
---------- ----------- ---------- ----------
(in thousands,
except per share
data) 2026 2025 % Change 2025 2025 2025
---------- ---------- ---------- ----------- ---------- ----------
Balance Sheet
Highlights
Assets $3,808,467 $3,349,805 13.7% $ 3,606,207 $3,389,442 $3,388,662
Investment
securities
available-for-sale 230,525 213,452 8.0% 230,083 232,640 228,923
Mortgage loans held
for sale 13,739 30,005 (54.2)% 25,828 14,146 15,933
Portfolio loans
receivable(2) 3,026,431 2,678,406 13.0% 2,959,457 2,821,983 2,739,808
Allowance for
credit losses 54,680 48,454 12.8% 54,660 53,045 47,447
Goodwill 25,969 24,085 7.8% 25,969 25,969 22,478
Intangible assets 14,511 15,556 (6.7)% 14,771 15,033 15,295
Deposits 3,292,047 2,891,333 13.9% 3,093,200 2,912,053 2,940,738
FHLB borrowings 50,000 22,000 127.3% 50,000 22,000 22,000
Other borrowed
funds 2,062 12,062 (82.9)% 2,062 12,062 12,062
Total stockholders'
equity 408,859 369,577 10.6% 401,757 394,770 380,035
Tangible common
equity(1) 368,379 329,936 11.7% 361,017 353,768 342,262
Common shares
outstanding 16,286 16,657 (2.2)% 16,373 16,589 16,582
Book value per
share $ 25.10 $ 22.19 13.1% $ 24.54 $ 23.80 $ 22.92
Tangible book value
per share(1) $ 22.62 $ 19.81 14.2% $ 22.05 $ 21.33 $ 20.64
Dividends per share $ 0.12 $ 0.10 20.0% $ 0.12 $ 0.12 $ 0.10
______________
(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
March December March
31, 31, September June 30, 31,
(in thousands) 2026 2025 30, 2025 2025 2025
------- -------- ----------- -------- --------
Interest income
Loans, including
fees $64,186 $64,933 $ 60,838 $60,810 $ 58,691
Investment
securities
available-for-sale 1,459 1,728 1,805 1,582 1,861
Federal funds sold
and other 2,325 1,973 2,248 2,194 2,208
------ ------ ------ ------ -------
Total interest
income 67,970 68,634 64,891 64,586 62,760
------ ------ ------ ------ -------
Interest expense
Deposits 18,070 17,805 12,732 16,722 16,512
Borrowed funds 502 550 139 218 201
------ ------ ------ ------ -------
Total interest
expense 18,572 18,355 12,871 16,940 16,713
------ ------ ------ ------ -------
Net interest income 49,398 50,279 52,020 47,646 46,047
Provision for
credit losses 3,014 3,988 4,650 4,081 2,246
Provision for
(release of)
credit losses on
unfunded
commitments 205 (29) 217 -- --
------ ------ ------ ------ -------
Net interest income
after provision
for credit losses 46,179 46,320 47,153 43,565 43,801
Noninterest income
Service charges on
deposits 403 371 425 262 258
Credit card fees 4,692 4,837 4,509 4,298 3,722
Mortgage banking
revenue 1,556 1,960 1,927 1,754 1,831
Government lending
revenue 923 -- 14 3,112 1,096
Government loan
servicing revenue 4,345 4,036 4,265 3,644 3,568
Loan servicing
rights 497 295 368 (590) 472
Other income (loss) 957 965 (440) 626 1,602
------ ------ ------ ------ -------
Total
noninterest
income 13,373 12,464 11,068 13,106 12,549
Noninterest expenses
Salaries and
employee benefits 20,317 17,914 17,728 18,460 18,067
Occupancy and
equipment 3,562 2,638 2,849 2,995 2,910
Professional fees 4,965 4,294 2,131 2,422 2,112
Data processing 7,767 7,502 7,654 7,520 7,112
Advertising 1,466 1,398 1,714 1,371 1,779
Loan processing 1,383 1,152 1,114 979 743
Merger-related
expenses -- -- 697 1,398 1,266
Operational and
other card fraud
related losses 690 750 923 933 903
Regulatory
assessment
expenses 941 858 740 884 889
Other operating 2,590 2,597 2,804 2,610 2,272
------ ------ ------ ------ -------
Total
noninterest
expenses 43,681 39,103 38,354 39,572 38,053
------ ------ ------ ------ -------
Income before income
taxes 15,871 19,681 19,867 17,099 18,297
Income tax expense 3,853 4,644 4,802 3,963 4,365
------ ------ ------ ------ -------
Net income $12,018 $15,037 $ 15,065 $13,136 $ 13,932
====== ====== ====== ====== =======
Consolidated Balance
Sheets
-----------------------
(unaudited) (audited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- ----------- -------------
(in thousands, except March 31, December September June 30, March 31,
share data) 2026 31, 2025 30, 2025 2025 2025
----------- ----------- ----------- ----------- -------------
Assets
Cash and due from banks $ 20,182 $ 30,894 $ 25,724 $ 26,843 $ 27,836
Interest-bearing
deposits at other
financial
institutions 379,069 224,611 163,078 247,704 266,092
Federal funds sold 60 60 59 59 59
--------- --------- --------- --------- ---------
Total cash and
cash
equivalents 399,311 255,565 188,861 274,606 293,987
Investment securities
available-for-sale 230,525 230,083 232,640 228,923 213,452
Restricted investments 8,691 8,397 7,057 7,043 7,031
Loans held for sale 13,739 25,828 14,146 15,933 30,005
Portfolio loans
receivable, net of
deferred fees and
costs 3,026,431 2,959,457 2,821,983 2,739,808 2,678,406
Less allowance for
credit losses (54,680) (54,660) (53,045) (47,447) (48,454)
--------- --------- --------- --------- ---------
Total portfolio
loans held for
investment, net 2,971,751 2,904,797 2,768,938 2,692,361 2,629,952
Premises and equipment,
net 17,732 15,072 15,304 14,863 15,085
Accrued interest
receivable 16,795 16,695 19,011 15,149 19,458
Goodwill 25,969 25,969 25,969 22,478 24,085
Intangible assets 14,511 14,771 15,033 15,295 15,556
Loan servicing assets 1,957 1,816 2,070 2,221 2,244
Deferred tax asset 15,187 14,992 14,885 15,667 15,902
Bank owned life
insurance 45,871 45,488 45,105 44,721 44,335
Other assets 46,428 46,734 40,423 39,402 38,713
--------- --------- --------- --------- ---------
Total assets $3,808,467 $3,606,207 $3,389,442 $3,388,662 $3,349,805
========= ========= ========= ========= =========
Liabilities
Deposits
Noninterest-bearing $ 871,677 $ 852,741 $ 857,543 $ 836,979 $ 812,224
Interest-bearing 2,420,370 2,240,459 2,054,510 2,103,759 2,079,109
--------- --------- --------- --------- ---------
Total deposits 3,292,047 3,093,200 2,912,053 2,940,738 2,891,333
Federal Home Loan Bank
advances 50,000 50,000 22,000 22,000 22,000
Other borrowed funds 2,062 2,062 12,062 12,062 12,062
Accrued interest
payable 8,944 8,745 8,045 8,158 9,995
Other liabilities 46,555 50,443 40,512 25,669 44,838
--------- --------- --------- --------- ---------
Total liabilities 3,399,608 3,204,450 2,994,672 3,008,627 2,980,228
--------- --------- --------- --------- ---------
Stockholders' equity
Common stock 163 164 166 166 167
Additional paid-in
capital 112,268 114,604 121,707 121,362 123,476
Retained earnings 302,808 292,749 279,693 266,619 255,141
Accumulated other
comprehensive loss (6,380) (5,760) (6,796) (8,112) (9,207)
--------- --------- --------- --------- ---------
Total
stockholders'
equity 408,859 401,757 394,770 380,035 369,577
--------- --------- --------- --------- ---------
Total liabilities
and
stockholders'
equity $3,808,467 $3,606,207 $3,389,442 $3,388,662 $3,349,805
========= ========= ========= ========= =========
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 Three Months Ended Three Months Ended
March 31, 2026 December 31, 2025 March 31, 2025
--------------------------------- --------------------------------- ---------------------------------
Average Interest Average Average Interest Average Average Interest Average
Outstanding Income/ Yield/ Outstanding Income/ Yield/ Outstanding Income/ Yield/
Balance Expense Rate(1) Balance Expense Rate(1) Balance Expense Rate(1)
----------- --------- --------- ----------- --------- --------- ----------- --------- ---------
(in thousands)
Assets
Interest earning assets:
Interest-bearing
deposits $ 246,346 $ 2,200 3.62% $ 196,281 $ 1,868 3.78% $ 203,053 $ 2,138 4.27%
Federal funds sold 60 1 6.76 60 1 6.61 58 1 6.99
Investment
securities
available-for-sale 233,165 1,459 2.54 238,295 1,728 2.88 235,605 1,861 3.20
Restricted
investments 8,441 124 5.96 6,725 104 6.14 5,761 69 4.86
Loans held for sale 12,916 177 5.56 17,118 263 6.10 9,356 238 10.32
Portfolio loans
receivable(2)(3) 3,008,187 64,009 8.63 2,902,033 64,670 8.84 2,634,110 58,453 9.00
---------- -------- ----- ---------- -------- ----- ---------- -------- -----
Total interest
earning assets 3,509,115 67,970 7.86 3,360,512 68,634 8.10 3,087,943 62,760 8.24
-------- -------- --------
Noninterest earning assets 142,697 138,028 134,021
---------- ---------- ----------
Total assets $ 3,651,812 $ 3,498,540 $ 3,221,964
========== ========== ==========
Liabilities and
Stockholders' Equity
Interest-bearing
liabilities:
Interest-bearing
demand accounts $ 263,645 414 0.64 $ 269,342 366 0.54 $ 242,355 368 0.62
Savings 13,701 30 0.89 12,033 11 0.36 13,204 18 0.55
Money market
accounts 1,189,642 9,479 3.23 1,061,293 9,124 3.41 869,978 7,399 3.45
Time deposits 842,137 8,147 3.92 812,186 8,304 4.06 859,729 8,727 4.12
Borrowed funds 52,062 502 3.91 46,497 550 4.69 34,062 201 2.39
---------- -------- ----- ---------- -------- ----- ---------- -------- -----
Total
interest-bearing
liabilities 2,361,187 18,572 3.19 2,201,351 18,355 3.31 2,019,328 16,713 3.36
-------- -------- --------
Noninterest-bearing
liabilities:
Noninterest-bearing
liabilities 64,056 67,509 56,503
Noninterest-bearing
deposits 821,267 837,930 783,018
Stockholders' equity 405,302 391,750 363,115
---------- ---------- ----------
Total liabilities
and stockholders'
equity $ 3,651,812 $ 3,498,540 $ 3,221,964
========== ========== ==========
Net interest spread 4.67% 4.79% 4.88%
===== ===== =====
Net interest income $ 49,398 $ 50,279 $ 46,047
======== ======== ========
Net interest margin(4) 5.71% 5.94% 6.05%
===== ===== =====
_______________
(1) Annualized.
(2) Includes nonaccrual loans.
(3) For the three months ended March 31, 2026, December 31, 2025, and March 31, 2025, collectively, Core Loan Yield was 6.93%, 6.95% and 7.14%, respectively.
(4) For the three months ended March 31, 2026, December 31, 2025, and March 31, 2025, collectively, Core Net Interest Margin was 4.15%, 4.19% and 4.36%, 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, OpenSky(TM) (the Company's credit card division), Windsor Advantage(TM) and Capital Bank Home Loans (the Company's mortgage loan division).
The following schedules reported internally for performance assessment by the chief operating decision maker presents financial information for each reportable segment for the periods indicated. Total assets are presented as of March 31, 2026, December 31, 2025, and March 31, 2025.
Segments
For the three months ended March 31, 2026
---------------------------------------------------------------
Commercial Windsor
(in thousands) Bank OpenSky(TM) Advantage(TM) CBHL Consolidated
----------- ------------- --------------- -------- --------------
Interest income $ 52,732 $ 15,061 $ -- $ 177 $ 67,970
Interest expense 18,472 -- -- 100 18,572
--------- --------- --- ---------- ------ ----------
Net interest
income 34,260 15,061 -- 77 49,398
Provision for
credit losses 344 2,670 -- -- 3,014
Provision for
credit losses on
unfunded
commitments 205 -- -- -- 205
--------- --------- --- ---------- ------ ----------
Net interest
income after
provision 33,711 12,391 -- 77 46,179
Noninterest income
Service charges
on deposits 403 -- -- -- 403
Credit card
fees -- 4,692 -- -- 4,692
Mortgage
banking
revenue 416 -- -- 1,140 1,556
Government
lending
revenue 923 -- -- -- 923
Government loan
servicing
revenue(1) (1,262) -- 5,607 -- 4,345
Loan servicing
rights 497 -- -- -- 497
Other income 707 12 -- 238 957
--------- --------- --- ---------- ------ ----------
Total
noninterest
income 1,684 4,704 5,607 1,378 13,373
--------- --------- --- ---------- ------ ----------
Noninterest
expenses
Salaries and
employee
benefits 12,090 3,887 2,664 1,676 20,317
Occupancy and
equipment 1,870 1,118 392 182 3,562
Professional
fees 2,468 1,861 278 358 4,965
Data processing 545 7,107 59 56 7,767
Advertising 718 592 60 96 1,466
Loan processing 1,076 47 22 238 1,383
Merger-related
expenses -- -- -- -- --
Operational and
other card
fraud related
losses 65 625 -- -- 690
Regulatory
assessment
expenses 598 215 66 62 941
Other operating 1,140 715 605 130 2,590
--------- --------- --- ---------- ------ ----------
Total
noninterest
expenses 20,570 16,167 4,146 2,798 43,681
--------- --------- --- ---------- ------ ----------
Net income
(loss) before
taxes $ 14,825 $ 928 $ 1,461 $(1,343) $ 15,871
========= ========= === ========== ====== ==========
Total assets $3,624,207 $ 135,414 $ 28,535 $20,311 $ 3,808,467
========= ========= === ========== ====== ==========
________________________
(1) Gross government loan servicing revenue totaled $5.6 million, including $1.3 million of servicing fees earned from the Commercial Bank by Windsor(TM), for the three months ended March 31, 2026.
Segments
For the three months ended December 31, 2025
-----------------------------------------------------------------
Commercial Windsor
(in thousands) Bank OpenSky(TM) Advantage(TM) CBHL Consolidated
----------- ------------- ----------------- -------- ----------------
Interest income(2) $ 51,994 $ 16,377 $ -- $ 263 $ 68,634
Interest
expense(3) 18,230 -- -- 125 18,355
--------- --------- --- -------- ------ ---------
Net interest
income 33,764 16,377 -- 138 50,279
Provision for
credit losses 2,715 1,273 -- -- 3,988
Release of credit
losses on
unfunded
commitments (29) -- -- -- (29)
--------- --------- --- -------- ------ ---------
Net interest
income after
provision 31,078 15,104 -- 138 46,320
Noninterest income
Service charges
on deposits 371 -- -- -- 371
Credit card
fees -- 4,837 -- -- 4,837
Mortgage
banking
revenue 433 -- -- 1,527 1,960
Government
lending
revenue -- -- -- -- --
Government loan
servicing
revenue(1) (952) -- 4,988 -- 4,036
Loan servicing
rights 295 -- -- -- 295
Other income 698 10 -- 257 965
--------- --------- --- -------- ------ ---------
Total
noninterest
income 845 4,847 4,988 1,784 12,464
--------- --------- --- -------- ------ ---------
Noninterest
expenses
Salaries and
employee
benefits 11,071 3,038 2,425 1,380 17,914
Occupancy and
equipment 1,773 688 40 137 2,638
Professional
fees 3,047 947 53 247 4,294
Data processing 1,026 6,687 (165) (46) 7,502
Advertising 608 634 (3) 159 1,398
Loan processing 101 475 163 413 1,152
Merger-related
expenses -- -- -- -- --
Operational and
other card
fraud related
losses 13 737 -- -- 750
Regulatory
assessment
expenses 230 388 143 97 858
Other operating 639 966 763 229 2,597
--------- --------- --- -------- ------ ---------
Total
noninterest
expenses 18,508 14,560 3,419 2,616 39,103
--------- --------- --- -------- ------ ---------
Net income
(loss) before
taxes $ 13,415 $ 5,391 $ 1,569 $ (694) $ 19,681
========= ========= === ======== ====== =========
Total assets $3,407,326 $ 140,914 $ 25,993 $31,974 $ 3,606,207
========= ========= === ======== ====== =========
________________________
(1) Gross government loan servicing revenue totaled $5.0 million, including $1.0 million of servicing fees earned from the Commercial Bank by Windsor(TM), for the three months ended December 31, 2025.
Segments
For the three months ended March 31, 2025
---------------------------------------------------------------
Commercial Windsor
(in thousands) Bank OpenSky(TM) Advantage(TM) CBHL Consolidated
----------- ------------- --------------- -------- --------------
Interest income $ 48,164 $ 14,444 $ -- $ 152 $ 62,760
Interest expense 16,649 -- -- 64 16,713
--------- --------- --- ---------- ------ ----------
Net interest
income 31,515 14,444 -- 88 46,047
Provision for
credit losses 446 1,800 -- -- 2,246
Provision for
credit losses on
unfunded
commitments -- -- -- -- --
--------- --------- --- ---------- ------ ----------
Net interest
income after
provision 31,069 12,644 -- 88 43,801
Noninterest income
Service charges
on deposits 258 -- -- -- 258
Credit card
fees -- 3,722 -- -- 3,722
Mortgage
banking
revenue 263 -- -- 1,568 1,831
Government
lending
revenue 1,096 -- -- -- 1,096
Government loan
servicing
revenue(1) (1,038) -- 4,606 -- 3,568
Loan servicing
rights 472 -- -- -- 472
Non-recurring
equity and debt
investment
write-down -- -- -- -- --
Other income 1,423 11 30 139 1,603
--------- --------- --- ---------- ------ ----------
Total
noninterest
income 2,474 3,733 4,636 1,707 12,550
--------- --------- --- ---------- ------ ----------
Noninterest
expenses
Salaries and
employee
benefits 10,626 3,345 2,406 1,690 18,067
Occupancy and
equipment 1,577 488 711 134 2,910
Professional
fees 1,151 591 120 250 2,112
Data processing 440 6,582 53 37 7,112
Advertising 718 874 104 83 1,779
Loan processing 477 19 7 240 743
Merger-related
expenses 1,266 -- -- -- 1,266
Operational and
other card
fraud related
losses 31 872 -- -- 903
Regulatory
assessment
expenses 865 15 5 4 889
Other operating 1,409 516 254 93 2,272
--------- --------- --- ---------- ------ ----------
Total
noninterest
expenses 18,560 13,302 3,660 2,531 38,053
--------- --------- --- ---------- ------ ----------
Net income
(loss) before
taxes $ 14,983 $ 3,075 $ 976 $ (736) $ 18,298
========= ========= === ========== ====== ==========
Total assets $3,192,327 $ 119,636 $ 23,750 $14,092 $ 3,349,805
========= ========= === ========== ====== ==========
________________________
(1) Gross government loan servicing revenue totaled $4.6 million, including $1.0 million of servicing fees earned from the Commercial Bank by Windsor(TM), for the three months ended March 31, 2025.
HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited
------------------------------------------------------------------------------------------------------
Quarter Ended
(in thousands, except March 31, December 31, September 30, June 30, March 31,
per share data) 2026 2025 2025 2025 2025
-------------- -------------- -------------- -------------- --------------
Earnings:
----------------------
Net income $ 12,018 $ 15,037 $ 15,065 $ 13,136 $ 13,932
Earnings per common
share, diluted 0.73 0.91 0.89 0.78 0.82
Net interest margin 5.71% 5.94% 6.36% 6.04% 6.05%
Core net interest
margin(2) 4.15% 4.19% 4.66% 4.42% 4.36%
Return on average
assets(1) 1.33% 1.71% 1.77% 1.60% 1.75%
Return on average
equity(1) 12.03% 15.23% 15.57% 14.17% 15.56%
Efficiency ratio 69.59% 62.32% 60.79% 65.14% 64.94%
Balance Sheet:
----------------------
Total portfolio loans
receivable, net
deferred fees $3,026,431 $2,959,457 $2,821,983 $2,739,808 $2,678,406
Total deposits 3,292,047 3,093,200 2,912,053 2,940,738 2,891,333
Total assets 3,808,467 3,606,207 3,389,442 3,388,662 3,349,805
Total stockholders'
equity 408,859 401,757 394,770 380,035 369,577
Total average
portfolio loans
receivable, net
deferred fees 3,008,187 2,902,033 2,789,815 2,733,865 2,634,110
Total average deposits 3,130,392 2,992,784 2,917,067 2,841,153 2,768,284
Portfolio
loans-to-deposit
ratio (period-end
balances) 91.93% 95.68% 96.91% 93.17% 92.64%
Portfolio
loans-to-deposit
ratio (average
balances) 96.10% 96.97% 95.64% 96.22% 95.15%
Asset Quality Ratios:
----------------------
Nonperforming assets
to total assets 1.56% 1.62% 1.54% 1.07% 1.28%
Nonperforming loans to
total loans 1.83% 1.84% 1.85% 1.32% 1.60%
Net charge-offs to
average portfolio
loans(1) 0.40% 0.32% 0.35% 0.75% 0.38%
Allowance for credit
losses to total
loans 1.81% 1.85% 1.88% 1.73% 1.81%
Allowance for credit
losses to
non-performing loans 98.67% 100.44% 101.53% 131.19% 112.86% Bank Capital Ratios: ---------------------- Total risk based capital ratio 12.52% 12.60% 12.95% 13.13% 12.93% Tier-1 risk based capital ratio 11.26% 11.34% 11.69% 11.87% 11.67% Leverage ratio 9.00% 9.24% 9.34% 9.39% 9.27% Common Equity Tier-1 capital ratio 11.26% 11.34% 11.69% 11.87% 11.67% Tangible common equity 8.40% 8.75% 9.06% 8.84% 8.66% Holding Company Capital Ratios: ---------------------- Total risk based capital ratio 14.25% 14.31% 15.25% 15.30% 14.97% Tier-1 risk based capital ratio 12.99% 13.05% 13.62% 13.66% 13.32% Leverage ratio 10.48% 10.71% 10.98% 10.90% 10.68% Common Equity Tier-1 capital ratio 12.92% 12.98% 13.54% 13.58% 13.24% Tangible common equity 9.73% 10.07% 10.60% 10.22% 9.94%
_______________
(1) Annualized.
(2) Refer to Appendix for reconciliation of non-GAAP measures.
HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited (Continued)
-----------------------------------------------------------------------------------------------------
Quarter Ended
(in thousands, except March 31, December 31, September 30, June 30, March 31,
per share data) 2026 2025 2025 2025 2025
-------------- -------------- -------------- -------------- --------------
Composition of Loans:
---------------------
Commercial real
estate, non
owner-occupied $ 522,498 $ 533,141 $ 509,878 $ 495,341 $ 484,399
Commercial real
estate,
owner-occupied 428,632 418,701 442,827 436,421 420,643
Residential real
estate 795,505 765,808 740,060 710,730 693,597
Construction real
estate 365,706 359,566 344,290 343,189 343,280
Commercial and
industrial 730,576 698,289 619,148 593,279 594,331
Lender finance 43,775 41,421 31,883 32,494 23,165
Business equity lines
of credit 4,170 3,818 2,931 2,853 3,468
Credit card, net of
reserve(3) 134,789 142,397 136,483 131,029 118,709
Other consumer loans 4,779 1,930 2,010 2,727 2,200
--------- --------- --------- --------- ---------
Portfolio loans
receivable $3,030,430 $2,965,071 $2,829,510 $2,748,063 $2,683,792
Deferred origination
fees, net (3,999) (5,614) (7,527) (8,255) (5,386)
--------- --------- --------- --------- ---------
Portfolio loans
receivable, net $3,026,431 $2,959,457 $2,821,983 $2,739,808 $2,678,406
--------- --------- --------- --------- ---------
Composition of
Deposits:
---------------------
Noninterest-bearing $ 871,677 $ 852,741 $ 857,543 $ 836,979 $ 812,224
Interest-bearing
demand 341,723 257,233 275,767 319,431 296,455
Savings 21,471 11,679 12,835 12,879 12,819
Money markets 1,276,034 1,105,183 989,159 960,237 912,418
Customer time
deposits 478,085 489,687 539,207 541,079 549,630
Brokered time
deposits 303,057 376,677 237,542 270,133 307,787
--------- --------- --------- --------- ---------
Total deposits $3,292,047 $3,093,200 $2,912,053 $2,940,738 $2,891,333
Capital Bank Home
Loan Metrics:
---------------------
Origination of loans
held for sale $ 72,933 $ 107,283 $ 80,651 $ 80,334 $ 65,815
Mortgage loans sold 52,423 82,998 66,409 59,663 54,144
Gain on sale of loans 1,496 2,145 1,698 1,597 1,664
Purchase volume as a
% of originations 73.15% 72.77% 92.32% 91.61% 90.73%
Gain on sale as a %
of loans sold(4) 2.85% 2.58% 2.56% 2.68% 3.07%
Mortgage commissions $ 594 $ 899 $ 656 $ 501 $ 545
OpenSky(TM)Portfolio
Metrics:
---------------------
Open customer
accounts 588,190 585,492 587,641 585,372 563,718
Secured credit card
loans, gross $ 90,021 $ 97,313 $ 98,793 $ 100,037 $ 93,570
Unsecured credit card
loans, gross 46,574 47,131 39,576 32,715 26,670
Noninterest secured
credit card
deposits 165,506 163,184 166,874 168,936 168,796
_______________
(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.
Core Earnings
Metrics Quarter Ended
(in thousands,
except per March 31, December 31, September 30, June 30, March 31,
share data) 2026 2025 2025 2025 2025
-------------- -------------- -------------- -------------- --------------
Net Income $ 12,018 $ 15,037 $ 15,065 $ 13,136 $ 13,932
Deduct: Income
from the Call
of Brokered
Time Deposits,
Net of Tax -- -- (3,489) -- --
Add:
Merger-Related
Expenses, Net
of Tax -- -- 575 1,070 964
Core Net Income $ 12,018 $ 15,037 $ 12,151 $ 14,206 $ 14,896
========= ========= ========= ========= =========
Weighted
Average Common
Shares -
Diluted 16,441 16,493 16,844 16,802 16,925
Earnings per
Share -
Diluted $ 0.73 $ 0.91 $ 0.89 $ 0.78 $ 0.82
Core Earnings
per Share -
Diluted $ 0.73 $ 0.91 $ 0.72 $ 0.85 $ 0.88
Average Assets $3,651,812 $3,498,540 $3,378,296 $3,292,533 $3,221,964
Return on
Average
Assets(1) 1.33% 1.71% 1.77% 1.60% 1.75%
Core Return on
Average
Assets(1) 1.33% 1.71% 1.43% 1.73% 1.87%
Average Equity $ 405,302 $ 391,750 $ 383,922 $ 371,795 $ 363,115
Return on
Average
Equity(1) 12.03% 15.23% 15.57% 14.17% 15.56%
Core Return on
Average
Equity(1) 12.03% 15.23% 12.56% 15.33% 16.64%
Net Interest
Income $ 49,398 $ 50,279 $ 52,020 $ 47,646 $ 46,047
Noninterest
Income 13,373 12,464 11,068 13,106 12,549
--------- --------- --------- --------- ---------
Total Revenue $ 62,771 $ 62,743 $ 63,088 $ 60,752 $ 58,596
Noninterest
Expense 43,681 39,103 38,354 39,572 38,053
--------- --------- --------- --------- ---------
Efficiency
Ratio(2) 69.6% 62.3% 60.8% 65.1% 64.9%
========= ========= ========= ========= =========
Net Interest
Income $ 49,398 $ 50,279 $ 52,020 $ 47,646 $ 46,047
Deduct: Income
from the Call
of Brokered
Time Deposits -- -- 4,618 -- --
--------- --------- --------- --------- ---------
Core Net
Interest
Income (a) $ 49,398 $ 50,279 $ 47,402 $ 47,646 $ 46,047
Noninterest
Income 13,373 12,464 11,068 13,106 12,549
Core Fee
Revenue (b) $ 13,373 $ 12,464 $ 11,068 $ 13,106 $ 12,549
--------- --------- --------- --------- ---------
Core Revenue
(a) + (b) $ 62,771 $ 62,743 $ 58,470 $ 60,752 $ 58,596
Noninterest
Expense $ 43,681 $ 39,103 $ 38,354 $ 39,572 $ 38,053
Less:
Merger-Related
Expenses -- -- 697 1,398 1,266
--------- --------- --------- --------- ---------
Core
Noninterest
Expense $ 43,681 $ 39,103 $ 37,657 $ 38,174 $ 36,787
--------- --------- --------- --------- ---------
Core Efficiency
Ratio(2) 69.6% 62.3% 64.4% 62.8% 62.8%
========= ========= ========= ========= =========
_______________
(1) Annualized.
(2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
Core Net
Interest
Margin Quarter Ended
March 31, December 31, September 30, June 30, March 31,
(in thousands) 2026 2025 2025 2025 2025
-------------- -------------- -------------- -------------- --------------
Net Interest
Income $ 49,398 $ 50,279 $ 52,020 $ 47,646 $ 46,047
Less: Credit
Card Loan
Income 14,882 16,196 15,386 14,116 14,147
--------- --------- --------- --------- ---------
Core Net
Interest
Income 34,516 34,083 36,634 33,530 31,900
Average
Interest
Earning
Assets 3,509,115 3,360,576 3,246,653 3,163,421 3,087,943
Less: Average
Credit Card
Loans 133,712 133,858 129,100 121,414 118,723
--------- --------- --------- --------- ---------
Average Core
Interest
Earning
Assets $3,375,403 $3,226,718 $3,117,553 $3,042,007 $2,969,220
Core Net
Interest
Margin 4.15% 4.19% 4.66% 4.42% 4.36%
Core Loan Yield Quarter Ended
March 31, December 31, September 30, June 30, March 31,
(in thousands) 2026 2025 2025 2025 2025
-------------- -------------- -------------- -------------- --------------
Portfolio Loans
Receivable
Interest
Income $ 64,009 $ 64,670 $ 60,610 $ 60,647 $ 58,453
Less: Credit
Card Loan
Income 14,882 16,197 15,387 14,116 14,148
--------- --------- --------- --------- ---------
Core Portfolio
Loans
Receivable
Interest
Income $ 49,127 $ 48,473 $ 45,223 $ 46,531 $ 44,305
Average
Portfolio
Loans
Receivable 3,008,187 2,902,033 2,789,815 2,733,865 2,634,110
Less: Average
Credit Card
Loans 133,712 133,858 129,100 121,414 118,723
--------- --------- --------- --------- ---------
Total Core
Average
Portfolio
Loans
Receivable $2,874,475 $2,768,175 $2,660,715 $2,612,451 $2,515,387
Core Portfolio
Loans
Receivable
Yield 6.93% 6.95% 6.74% 7.14% 7.14%
Pre-tax,
Pre-Provision
Net Revenue
("PPNR") Quarter Ended
March June March
31, December September 30, 31,
(in thousands) 2026 31, 2025 30, 2025 2025 2025
------- ----------- ---------- ------- --------
Net Income $12,018 $15,037 $ 15,065 $13,136 $ 13,932
Add: Income
Tax Expense 3,853 4,644 4,802 3,963 4,365
Add:
Provision
for Credit
Losses 3,014 3,988 4,650 4,081 2,246
Add:
Provision
for (Release
of) Credit
Losses on
Unfunded
Commitments 205 (29) 217 -- --
------ ------ --------- ------ -------
Pre-tax,
Pre-Provision
Net Revenue
("PPNR") $19,090 $23,640 $ 24,734 $21,180 $ 20,543
Core PPNR Quarter Ended
March June March
31, December September 30, 31,
(in thousands) 2026 31, 2025 30, 2025 2025 2025
------- ----------- ----------- ------- --------
Net Income $12,018 $15,037 $15,065 $13,136 $ 13,932
Add: Income Tax
Expense 3,853 4,644 4,802 3,963 4,365
Add: Provision
for Credit
Losses 3,014 3,988 4,650 4,081 2,246
Add: Provision
for (Release
of) Credit
Losses on
Unfunded
Commitments 205 (29) 217 -- --
Deduct: Income
from the Call
of Brokered
Time Deposits -- -- (4,618) -- --
Add:
Merger-Related
Expenses -- -- 697 1,398 1,266
Add:
Non-Recurring
Equity and Debt
Investment
Write-Down -- -- -- -- --
------ ------ ------ ------ -------
Core PPNR $19,090 $23,640 $20,813 $22,578 $ 21,809
Allowance for
Credit Losses
to Total
Portfolio
Loans Quarter Ended
December 31, September 30,
(in thousands) March 31, 2026 2025 2025 June 30, 2025 March 31, 2025
-------------- -------------- --------------- -------------- --------------
Allowance for
Credit Losses $ 54,680 $ 54,660 $ 53,045 $ 47,447 $ 48,454
Total Portfolio
Loans 3,026,431 2,959,457 2,821,983 2,739,808 2,678,406
Allowance for
Credit Losses
to Total
Portfolio
Loans 1.81% 1.85% 1.88% 1.73% 1.81%
Commercial Bank
Allowance for
Credit Losses
to Commercial
Bank Portfolio
Loans Quarter Ended
-------------------------------------------------------------------------------
December 31, September 30,
(in thousands) March 31, 2026 2025 2025 June 30, 2025 March 31, 2025
-------------- -------------- --------------- -------------- --------------
Allowance for
Credit Losses $ 54,680 $ 54,660 $ 53,045 $ 47,447 $ 48,454
Less: Credit
Card
Allowance
for Credit
Losses 7,802 8,232 7,413 6,762 5,905
--------- --------- --------- --- --------- ---------
Commercial Bank
Allowance for
Credit Losses $ 46,878 $ 46,428 $ 45,632 $ 40,685 $ 42,549
Total Portfolio
Loans 3,026,431 2,959,457 2,821,983 2,739,808 2,678,406
Less: Gross
Credit Card
Loans 131,887 137,905 130,897 126,233 115,991
--------- --------- --------- --- --------- ---------
Commercial Bank
Portfolio
Loans $2,894,544 $2,821,552 $2,691,086 $2,613,575 $2,562,415
Commercial Bank
Allowance for
Credit Losses
to Total
Portfolio
Loans 1.62% 1.65% 1.70% 1.56% 1.67%
Nonperforming
Assets to Total
Assets Quarter Ended
December 31, September 30,
(in thousands) March 31, 2026 2025 2025 June 30, 2025 March 31, 2025
-------------- -------------- --------------- -------------- --------------
Total
Nonperforming
Assets $ 59,273 $ 58,276 $ 52,247 $ 36,167 $ 42,934
Total Assets 3,808,467 3,606,207 3,389,442 3,388,662 3,349,805
Nonperforming
Assets to
Total Assets 1.56% 1.62% 1.54% 1.07% 1.28%
Nonperforming
Loans to Total
Portfolio
Loans Quarter Ended
December 31, September 30,
(in thousands) March 31, 2026 2025 2025 June 30, 2025 March 31, 2025
-------------- -------------- --------------- -------------- --------------
Total
Nonperforming
Loans $ 55,417 $ 54,421 $ 52,247 $ 36,167 $ 42,934
Total Portfolio
Loans 3,026,431 2,959,457 2,821,983 2,739,808 2,678,406
Nonperforming
Loans to Total
Portfolio
Loans 1.83% 1.84% 1.85% 1.32% 1.60%
Net Charge-Offs
to Average
Portfolio
Loans Quarter Ended
December 31, September 30,
(in thousands) March 31, 2026 2025 2025 June 30, 2025 March 31, 2025
-------------- -------------- --------------- -------------- --------------
Total Net
Charge-Offs $ 2,994 $ 2,373 $ 2,476 $ 5,088 $ 2,444
Total Average
Portfolio
Loans 3,008,187 2,902,033 2,789,815 2,733,865 2,634,110
Net Charge-Offs
to Average
Portfolio
Loans,
Annualized 0.40% 0.32% 0.35% 0.75% 0.38%
Tangible Book
Value per
Share Quarter Ended
(in thousands,
except share
and per share March 31, December September June 30, March 31,
data) 2026 31, 2025 30, 2025 2025 2025
----------- ----------- ----------- ----------- -----------
Total
Stockholders'
Equity $ 408,859 $ 401,757 $ 394,770 $ 380,035 $ 369,577
Less:
Intangible
Assets 40,480 40,740 41,002 37,773 39,641
---------- ---------- ---------- ---------- ----------
Tangible Common
Equity $ 368,379 $ 361,017 $ 353,768 $ 342,262 $ 329,936
Period End
Shares
Outstanding 16,286,480 16,373,288 16,589,241 16,581,990 16,657,168
Tangible Book
Value per
Share $ 22.62 $ 22.05 $ 21.33 $ 20.64 $ 19.81
Return on
Average Tangible
Common Equity Quarter Ended
March 31, December 31, September 30, June 30, March 31,
(in thousands) 2026 2025 2025 2025 2025
------------ ------------- ------------- ------------ ------------
Net Income $ 12,018 $ 15,037 $ 15,065 $ 13,136 $ 13,932
Add:
Intangible
Amortization,
Net of Tax 197 200 199 200 199
------- ------- --- ------- --- ------- -------
Net Tangible
Income $ 12,215 $ 15,237 $ 15,264 $ 13,336 $ 14,131
Average Equity 405,302 391,750 383,922 371,795 363,115
Less: Average
Intangible
Assets 40,628 40,884 37,706 39,534 36,896
------- ------- --- ------- --- ------- -------
Net Average
Tangible Common
Equity $364,674 $350,866 $346,216 $332,261 $326,219
Return on
Average Equity 12.03% 15.23% 15.57% 14.17% 15.56%
Return on
Average
Tangible Common
Equity 13.58% 17.23% 17.49% 16.10% 17.57%
Core Return on
Average Tangible
Common Equity Quarter Ended
March 31, December 31, September 30, June 30, March 31,
(in thousands) 2026 2025 2025 2025 2025
------------ ------------ ------------- ----------- ------------
Core Net Income $12,018 $15,037 $12,151 $14,206 $14,896
Add:
Intangible
Amortization,
Net of Tax 197 200 199 200 199
------ --- ------ --- ------ ---- ------ ------ ---
Core Net
Tangible
Income $12,215 $15,237 $12,350 $14,406 $15,095
Core Return on
Average
Tangible Common
Equity 13.58% 17.23% 14.15% 17.39% 18.77%
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 Washington, D.C., Baltimore, other Maryland markets, one bank branch in Fort Lauderdale, Florida, one bank branch in Chicago, Illinois and one bank branch in Raleigh, North Carolina. Capital Bancorp had assets of approximately $3.8 billion at March 31, 2026 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: the strength of the United States ("U.S.") economy in general and the strength of the local economies in
which we conduct operations; geopolitical concerns, including acts or threats of terrorism and the ongoing wars in Israel, Iran and Ukraine; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market, and monetary fluctuations; volatility and disruptions in global capital and credit markets; changes in U.S. trade policies, including the implementation of tariffs and other protectionist trade policies; the effects of federal government shutdowns, debt ceiling standoff, or other fiscal policy uncertainty; 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; climate change, and other catastrophic disasters; the effectiveness of the Company's internal control over financial reporting and disclosure controls and procedures; the Company's ability to remediate the material weakness in the Company's internal control over financial reporting; the effect of the IFH acquisition or any other 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, including the planned growth of Windsor Advantage(TM); 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: Jake Dalaya (301) 637-5118
MEDIA CONTACT: Ed Barry (240) 283-1912
WEB SITE: www.CapitalBankMD.com
(END) Dow Jones Newswires
April 27, 2026 16:10 ET (20:10 GMT)