Capital Bancorp, Inc. Announces Strong First Quarter Results and Successful IFH Conversion; Continued Strong Organic Loan and Deposit Growth; NIM and Fee Income Drives Robust Returns
First Quarter 2025 Highlights
-- Net Income of $13.9 million, or $0.82 per share, and return on average
assets ("ROA") of 1.75%
-- Core net income(1) of $14.9 million, or $0.88 per share, and core
ROA(1) of 1.87%
-- Book value per common share of $22.19 at March 31, 2025, increased $0.87
compared to 4Q 2024, and increased $3.51 when compared to 1Q 2024.
-- Tangible Book Value Per Share(1) of $19.81, increased 3.7% (not
annualized), or $0.71(2) as compared to 4Q 2024, and increased
6.0%, or $1.13 compared to 1Q 2024
-- Return on average equity ("ROE") of 15.56%, and return on average
tangible common equity ("ROTCE")(1) of 17.57%
-- Core ROE(1) of 16.64%, and core ROTCE(1) of 18.77%
-- Gross Loans grew $48.2 million, or 7.4% (annualized), during 1Q 2025, and
growth of $713.9 million year-over-year including $340.4 million from
organic growth and $373.5 million from the IFH acquisition
-- Total Deposits grew $129.4 million, or 19.0% (annualized), from 4Q 2024.
Year-over-year growth of $885.6 million includes $426.7 million from
organic growth, and $459.0 million from the acquisition of IFH, or 44.2%
from 1Q 2024
-- Customer Deposit growth of $154.6 million, or 25.8% (annualized)
from 4Q 2024, and $738.5 million year-over-year, or 40.0% from 1Q
2024, including $445.0 million of organic growth, and $293.5
million from the acquisition of IFH
-- Net Interest Income increased $1.7 million, or 3.9% (not annualized),
from 4Q 2024 due to balance sheet growth and purchase accounting
accretion, and increased $11.0 million, or 31.5%, year-over-year,
primarily driven by strong organic growth and the acquisition of IFH.
-- Net Interest Margin ("NIM") of 6.05% increased 18 bps compared to 4Q 2024
and decreased 19 bps compared to 1Q 2024 due to the acquisition of
commercial loans from IFH, diluting the impact from OpenSky$(TM)$
-- Commercial Bank NIM(1) of 4.32% increased by 33 bps and 55 bps,
compared to 4Q 2024 and 1Q 2024, respectively
-- Net purchase accounting accretion of $1.5 million for 1Q 2025,
increased $0.8 million compared to 4Q 2024, accounting for 20 bps
of both reported NIM and Commercial Bank NIM(1)
-- Fee Revenue (noninterest income) totaled $12.5 million, or 21.4% of total
revenue for 1Q 2025, an increase of $0.6 million, from 4Q 2024 and
$6.6 million, from 1Q 2024
-- The allowance for credit losses to total loans ("ACL Coverage Ratio")
equaled 1.81% at March 31, 2025 down 4 bps from 4Q 2024 and up 32 bps
from 1Q 2024, primarily due to of the acquisition of IFH loans. The
Commercial Bank ACL Coverage Ratio(1) equaled 1.67% at March 31, 2025,
compared to 1.70% at December 31, 2024.
-- Cash Dividend of $0.10 per share declared by the Board of Directors
________________________
(1) As used in this press release, core net income, core ROA, core ROE, ROTCE, core ROTCE, Commercial Bank NIM, Commercial Bank ACL Coverage Ratio, and Tangible Book Value are non--U.S. generally accepted accounting principles ("GAAP") financial measures. These non-GAAP financial metrics exclude merger-related and other certain one-time non-reoccurring pre-tax adjustments and 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.
(2) 4Q 2024 Tangible Book Value restated to $19.10 from previously reported amount of $18.77 due to exclusion of Loan Servicing Assets.
ROCKVILLE, Md., April 28, 2025 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") $(CBNK)$, the holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $13.9 million, or $0.82 per diluted share, for 1Q 2025, compared to net income of $7.5 million, or $0.45 per diluted share, for 4Q 2024, and $6.6 million, or $0.47 per diluted share, for 1Q 2024. Core net income((3) () for 1Q 2025 of $14.9 million, or $0.88 per diluted share, compared to $15.5 million, or $0.92 per diluted share in 4Q 2024.
The Company also declared a cash dividend on its common stock of $0.10 per share. The dividend is payable on May 28, 2025 to shareholders of record on May 12, 2025.
"The first quarter continues the momentum from 2024 and further demonstrates the value of the larger and more diversified franchise resulting from the acquisition of IFH," said Ed Barry, CEO of the Company and the Bank. "I would like to thank Management and the teams across the organization for a successful integration of IFH in the first quarter. Our continued focused execution of our initiatives and growth objectives will build on a great start to 2025."
"Our record GAAP earnings per share for the quarter, increased net interest margin, solid loan and deposit growth, and superior return on tangible equity all confirm that we are on the right course for continued growth. We continue to benefit from our diversified earnings platform, both in terms of overall performance and risk mitigation," said Steven J. Schwartz, Chairman of the Company. "That said, we intend to continue to monitor closely the possible impact on our businesses from emergent governmental policies, with a view towards insulating ourselves, to the extent we can, from the effects of such policies, including interest rate and price volatility and heightened economic uncertainty."
Reconciliation of GAAP Net Income to Core (Non-GAAP) Net Income
The following table provides a reconciliation of the Company's net income under GAAP to Core net income (non-GAAP) results excluding merger-related expenses and other one-time non-recurring transactions.
First Quarter 2025 Fourth Quarter 2024
Income Diluted Income Diluted
(in thousands, Before Income Earnings Before Income Earnings
except per Income Tax Net per Income Tax Net per
share data) Taxes Expense Income Share Taxes Expense Income Share
------- ------- ------- -------- ------- ------- ------- --------
GAAP Net Income $18,297 $ 4,365 $13,932 $ 0.82 $10,776 $ 3,243 $ 7,533 $ 0.45
Add:
Merger-Related
Expenses 1,266 302 964 2,615 464 2,151
Add:
Non-recurring
Equity and
Debt
Investment
Write-Down -- -- -- 2,620 -- 2,620
Add: Initial
IFH ACL
Provision -- -- -- 4,194 1,025 3,169
------ ------ ------ -------- ------ ------ ------ --------
Core Net
Income(1) $19,563 $ 4,667 $14,896 $ 0.88 $20,205 $ 4,732 $15,473 $ 0.92
====== ====== ====== ======= ====== ====== ====== =======
(Note: The income tax expense reflects the non-deductibility of certain merger-related expenses.)
________________________
(1 As used in this press release, core net income is a non-GAAP financial measure. This non-GAAP financial metric excludes merger-related and other certain one-time non-recurring pre-tax adjustments and 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.)
First Quarter 2025 Results
Earnings Summary
Net income of $13.9 million, or $0.82 per diluted share, compared to net income of $7.5 million, or $0.45 per diluted share, for 4Q 2024, and $6.6 million or $0.47 per diluted share, for 1Q 2024. 1Q 2025 core net income((4) () of $14.9 million, or $0.88 per diluted share, compared to 4Q 2024 of $15.5 million, or $0.92 per diluted share.
-- Net interest income of $46.0 million increased $1.7 million, or 3.9% (not
annualized), compared to 4Q 2024, and increased $11.0 million, or 31.5%
year-over-year.
-- Interest income of $62.8 million increased $1.1 million, or 1.7%
(not annualized), over 4Q 2024, and increased $14.4 million, or
29.8%, year-over-year. The increase quarter-over-quarter was
driven by increases of $1.1 million from net purchase accounting
accretion, $0.7 million from interest-bearing deposits held at
other financial institutions, and $0.3 million from investments
held for sale, partially offset by a decrease in loan interest
income of $1.1 million due to rate and portfolio mix, while the
increase year-over year was primarily driven by organic growth and
the acquisition of IFH.
-- Interest income included $0.4 million from net purchase
accounting accretion in 1Q 2025 compared to $0.7 million
from net purchase accounting amortization in 4Q 2024. There
was no related purchase accounting accretion or
amortization during 1Q 2024.
-- Interest expense of $16.7 million decreased $0.7 million, or 3.8%
(not annualized) compared to 4Q 2024, and increased $3.4 million,
or 25.1%, year-over-year. The decrease quarter-over-quarter was
primarily due to a decrease in borrowed funds partially offset by
lower net purchase accounting accretion, and the increase
year-over-year was driven by organic growth and the acquisition of
IFH.
-- Interest expense included $1.1 million from net purchase
accounting accretion in 1Q 2025 compared to $1.4 million
from net purchase accounting accretion in 4Q 2024. There
was no related purchase accounting accretion or
amortization during 1Q 2024.
-- The provision for credit losses was $2.2 million, a decrease of
$5.6 million from 4Q 2024. The decrease over the prior quarter was
primarily driven by the recognition of the Initial IFH ACL Provision of
$4.2 million in 4Q 2024, and a $2.0 million lower provision from the
commercial loan portfolio partially offset by an additional $0.6 million
from OpenSky(TM) provision in the current quarter. Net charge-offs
totaled $2.4 million, or 0.38% of portfolio loans (annualized), including
$2.3 million from OpenSky(TM) loans. By comparison net charge-offs for 4Q
2024 totaled $2.4 million, or 0.37% of portfolio loans (annualized),
including $2.1 million from OpenSky(TM) loans. At March 31, 2025, the ACL
Coverage Ratio was 1.81%, down 4 bps from the ratio of 1.85% at
December 31, 2024, due to the payoff of certain purchase credit
deteriorated ("PCD") loans acquired from IFH, during the quarter. The
provision for credit losses decreased $0.5 million, year-over-year (1Q
2024) primarily from lower commercial loan portfolio provision of $0.7
million, offset by slightly higher provision for OpenSky(TM) of $0.2
million, while the ACL Coverage Ratio increased 32 bps year-over-year
driven by the acquisition of IFH.
________________________
(1 As used in this press release, core net income is a non-GAAP financial measure. This non-GAAP financial metric excludes merger-related and other certain one-time non-recurring pre-tax adjustments and 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.)
Earnings Summary (Continued)
-- Noninterest income of $12.5 million increased $0.6 million compared to 4Q
2024 and increased $6.6 million year-over-year primarily due to the
contributions made by the businesses IFH brought to the merged entity.
Core fee revenue(5) of $12.5 million decreased $2.0 million, as a result
of $1.2 million lower government lending revenue, $0.8 million lower SBIC
investment income, $0.5 million lower loan servicing, $0.4 million lower
government loan servicing revenue (Windsor), offset by a loan termination
fee of $0.7 million during 1Q 2025.
-- Noninterest expense of $38.1 million increased $0.5 million compared to
4Q 2024 and $8.6 million compared to 1Q 2024. Core noninterest expense(1)
of $36.8 million increased $1.9 million compared to 4Q 2024 and
$8.0 million compared to 1Q 2024. Core comparisons include:
-- Salaries and employee benefits expenses increased $1.6 million
from 4Q 2024, primarily the result of $0.7 million lower deferred
expenses related to loan production, $0.6 million from the
seasonality of payroll related taxes, and $0.2 million in employee
benefits.
-- Marketing expenses increased $0.7 million from 4Q 2024, primarily
due to additional OpenSky(TM) advertising-related expenses due to
seasonality.
-- Regulatory assessment expenses increased $0.4 million from 4Q
2024, primarily due to additional assessments from the acquisition
of IFH.
-- Expense reduction of $0.8 million from 4Q 2024, includes $0.3
million from loan processing, $0.2 million from other operating,
and $0.3 million from other areas.
-- Year-over-year expense growth of $8.6 million was primarily due to
the acquisition of IFH.
-- Estimated total cost synergies resulting from the acquisition of
IFH totaled $1.75 million in 1Q 2025, achieving the targeted
savings earlier than anticipated.
-- Income tax expense of $4.4 million, or 23.9% of pre-tax income for 1Q
2025, increased $1.1 million from $3.2 million, or 30.1% of pre-tax
income for 4Q 2024. The core effective income tax rate(1) for 1Q 2025 and
4Q 2024 would have been 23.7% and 22.6%, respectively.
________________________
(1 As used in this press release, core fee revenue, core noninterest expense, and core effective income tax rate are non-GAAP financial measures. These non-GAAP financial metrics exclude merger-related and other certain one-time non-recurring pre-tax adjustments and 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.)
Balance Sheet
Total assets of $3.3 billion at March 31, 2025 increased $142.9 million, or 18.1% (annualized), from December 31, 2024. Total assets growth year-over-year of $1.0 billion, or 44.1%, included $559.4 million acquired with the IFH acquisition, net of purchase accounting, and $465.6 million of organic growth.
-- Cash and cash equivalents of $294.0 million at March 31, 2025 increased
$88.7 million from December 31, 2024 due to portfolio growth, and
increased $208.8 million year-over-year including $130.9 million from
organic growth and $77.8 million from the acquisition of IFH.
-- Total portfolio loans of $2.68 billion at March 31, 2025 increased
$48.2 million, or 7.4% (annualized), from December 31, 2024 and increased
$713.9 million year-over-year including $373.5 million from the
acquisition of IFH and $340.4 million of organic growth.
-- Compared to December 31, 2024, commercial and industrial loans
increased $39.8 million and construction real estate loans
increased $22.0 million, offset by a $9.1 million decrease in
OpenSky(TM) loans and a $6.3 million decrease in commercial real
estate loans.
-- Commercial and industrial loans, and owner-occupied commercial
real estate loans totaled 37.9% of total portfolio loans at
March 31, 2025, compared to 37.8% at December 31, 2024, and 29.6%
at March 31, 2024.
-- Total deposits of $2.89 billion at March 31, 2025 increased
$129.4 million, or 19.0% (annualized), from December 31, 2024, and
increased $885.6 million, or 44.2% (annualized) from March 31, 2024. The
increase quarter-over-quarter includes $95.7 million of growth in
customer money market deposits, $57.6 million of growth in
interest-bearing demand accounts, $1.3 million of noninterest-bearing
deposits, and $0.7 million of customer time deposits, partially offset by
a decrease in brokered time deposits of $25.2 million. The increase
year-over-year is driven by $459.0 million from the acquisition of IFH
and $426.7 million from organic growth.
-- Insured and protected deposits were approximately $2.0 billion as
of March 31, 2025 representing 70.4% of the Company's deposit
portfolio.
-- Low-and-no interest bearing deposits of $1.1 billion, or 38.8% of
deposits, increased $58.2 million, or 22.2% (annualized) from
December 31, 2024, and increased $257.2 million, or 29.8%
year-over-year, including $157.4 million of organic growth, and
$91.5 million from the acquisition of IFH.
-- The average portfolio loans-to-deposit ratio was 95.15% for the three
months ended March 31, 2025, compared to 99.27% from 4Q 2024, and 98.46%
from 1Q 2024.
-- The investment securities portfolio continues to be classified as
available-for-sale and had a fair market value of $213.5 million, or 6.4%
of total assets, an effective duration of 3.0 years, with U.S. Treasury
Securities representing 56% of the overall investment portfolio at
March 31, 2025. The accumulated other comprehensive income (loss) on the
investment securities portfolio decreased $2.3 million during the quarter
to negative $9.2 million after-tax as of March 31, 2025, which represents
2.5% 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 March 31, 2025 totaled $820.9 million, compared
to $803.0 from 4Q 2024. During 1Q 2025 available collateralized lines of
credit of $625.4 million, unsecured lines of credit with other banks of
$76.0 million and unpledged investment securities available as collateral
for potential additional borrowings of $119.5 million.
-- Capital Positions -- As of March 31, 2025, the Company reported a Common
Equity Tier-1 capital ratio of 13.33%, compared to 13.74% at December 31,
2024. At March 31, 2025, the Company and the Bank maintain regulatory
capital ratios that exceed all capital adequacy requirements.
Financial Metrics
Net Interest Margin -- Net interest margin of 6.05% for the three months ended March 31, 2025, increased 18 bps compared to the prior quarter, and decreased 19 bps year-over-year. Commercial Bank net interest margin(1) , of 4.32% increased 33 bps compared to the prior quarter, and increased 55 bps year-over-year. Net purchase accounting accretion for 1Q 2025 was 20 bps for NIM and Commercial Bank NIM(1) .
-- The average yield on interest earning assets of 8.24% increased 7 bps
compared to the prior quarter, due to portfolio mix, and decreased 39 bps
year-over-year primarily due to the acquisition of commercial loans
diluting the impact from OpenSky(TM). The Commercial Bank Loan Yield(1)
of 7.14% for 1Q 2025, increased 16 bps 4Q 2024, and increased 18 bps
year-over-year.
-- The total cost of deposits of 2.42% for 1Q 2025 decreased 8 bps compared
to the prior quarter due to rate and mix shift and decreased 22 bps
year-over-year. The total cost of interest-bearing deposits decreased 9
bps quarter-over-quarter, and 54 bps year-over-year, to 3.37% for 1Q 2025
due to rate environment and product mix.
-- Net purchase accounting accretion of $1.5 million during 1Q 2025,
increased $0.8 million from 4Q 2024. There was no related purchase
accounting accretion or amortization during 1Q 2024.
Efficiency Ratios -- The efficiency ratio was 64.9% for the three months ended March 31, 2025, compared to 66.7% for the three months ended December 31, 2024 and 72.0% for the three months ended March 31, 2024. The core efficiency ratio((6) () was 62.8%, for the three months ended March 31, 2025. The core efficiency ratio(1) was 59.3% for the three months ended December 31, 2024, and 70.2% for the three months ended March 31, 2024.
Credit Metrics and Asset Quality -- The ACL Coverage Ratio equaled 1.81% at March 31, 2025, a decrease of 4 bps from December 31, 2024, and an increase of 32 bps year-over-year driven by the acquisition of IFH.
Nonperforming assets increased 27 bps to 1.21% of total assets at March 31, 2025 compared to December 31, 2024, and increased 59 bps year-over-year. Total nonaccrual loans at March 31, 2025 increased $10.2 million to $40.5 million compared to December 31, 2024, and increased $26.1 million year-over-year, mainly due to the acquisition of IFH. At March 31, 2025, special mention loans totaled $63.0 million, or 2.4% of total portfolio loans, compared to $60.0 million, or 2.3% of total portfolio loans, at December 31, 2024, and $27.5 million, or 1.4% of total portfolio loans, at March 31, 2024. At March 31, 2025, substandard loans totaled $45.7 million, or 1.7% of total portfolio loans, compared to $48.4 million, or 1.8% of total portfolio loans, at December 31, 2024 and $14.1 million, or 0.7% of total portfolio loans, at March 31, 2024.
________________________
(1 As used in this press release, Commercial Bank NIM, Commercial Bank Loan Yield, and core efficiency ratio are non-GAAP financial measures. These non-GAAP financial metrics exclude merger-related and other certain one-time non-recurring pre-tax adjustments and 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)
Performance Ratios -- ROA, ROE, ROTCE were 1.75%, 15.56%, and 17.57% respectively, for the three months ended March 31, 2025, compared to 0.96%, 8.50%, and 9.33%(1) respectively, for the three months ended December 31, 2024. For the three months ended March 31, 2024, ROA, ROE, and ROTCE were 1.15%, 10.19%, and 10.19%, respectively. As of March 31, 2024, the Company did not have goodwill or other intangible assets.
-- Core ROA(2), core ROE(2), and core ROTCE(2) for the three months ended
March 31, 2025 were 1.87%, 16.64%, and 18.77% respectively. Core ROA(2),
core ROE(2), and core ROTCE(2) for the three months ended December 31,
2024, were 1.97%, 17.46%, and 18.91%(1), respectively. Core ROA(2), core
ROE(2), and core ROTCE(2) for the three months ended March 31, 2024 were
1.24%, 11.03%, and 11.03%, respectively.
Book Value and Tangible Book Value -- Book value per common share of $22.19 at March 31, 2025, increased $0.87 when compared to December 31, 2024, and increased $3.51 when compared to March 31, 2024. Tangible book value per common share(2) increased $0.71(3() , or 3.7%, to $19.81 at March 31, 2025 when compared to December 31, 2024, and increased $1.13, or 6.0%, when compared to March 31, 2024. Tangible book value was impacted by the purchase accounting adjustments required as part of the IFH acquisition. Therefore, tangible book value per share(1) was equal to book value per share for periods prior to 4Q 2024.
____________
(1 Core ROTCE and core ROTCE for the three months ended December 31, 2024 were restated to 9.33% and 18.91%, respectively, from 9.47% and 19.19%, due to exclusion of Loan Servicing Assets.)
(2 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 merger-related and other certain one-time non-recurring pre-tax adjustments and 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.)
(3 4Q 2024 Tangible Book Value restated to $19.10 from previously reported amount of $18.77 due to exclusion of Loan Servicing Assets.)
Commercial Bank
Continued Portfolio Loan Growth -- Gross portfolio loans increased $55.6 million at March 31, 2025 compared to December 31, 2024, including $39.8 million of commercial and industrial loans, and $22.0 million of construction real estate loans. Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.
Net Interest Income -- Interest income of $48.2 million increased $2.1 million from the prior quarter, driven by loan growth and higher loan yields. Interest expense of $16.6 million decreased $0.6 million, resulting from a decrease in the average balance of borrowings in 1Q 2025.
Credit Metrics -- Nonperforming assets, comprised solely of nonaccrual loans, increased 27 bps to 1.21% of total assets at March 31, 2025 compared to December 31, 2024. Total nonaccrual loans at March 31, 2025 increased to $40.5 million compared to $30.2 million at December 31, 2024.
Classified and Criticized Loans -- At March 31, 2025, special mention loans totaled $63.0 million, or 2.4% of total portfolio loans, compared to $60.0 million, or 2.3% of total portfolio loans, at December 31, 2024. At March 31, 2025, substandard loans totaled $45.7 million, or 1.7% of total portfolio loans, compared to $48.4 million, or 1.8% of total portfolio loans, at December 31, 2024.
OpenSky(TM) Accounts -- During 1Q 2025, the number of credit card accounts of 563.7 thousand increased by 11.2 thousand, or 2.0% (not annualized) from December 31, 2024, and increased 36.8 thousand, or 7.0% year-over-year.
Loan and Deposit Balances -- Loan balances, net of reserves, of $118.7 million at March 31, 2025 decreased by $9.1 million, or 28.7% (annualized), compared to December 31, 2024. Corresponding deposit balances of $168.8 million at March 31, 2025 increased $2.4 million, or 6.0% (annualized), compared to December 31, 2024. Gross unsecured loan balances of $39.0 million at March 31, 2025 decreased $3.4 million, or 32.9% (annualized), compared to $42.4 million at December 31, 2024, and increased $10.5 million year-over-year.
Revenues -- Total revenue of $18.2 million decreased $1.0 million from the prior quarter. Interest income of $14.4 million decreased $1.0 million from the prior quarter. Average OpenSky(TM) credit card loan balances, net of reserves and deferred fees of $118.7 million for 1Q 2025, decreased $2.3 million, or 1.9% (not annualized), compared to the prior quarter. Noninterest income of $3.7 million remained generally consistent compared to the prior quarter.
Noninterest Expense -- Total noninterest expense of $13.3 million decreased $0.7 million, primarily related to advertising related expenses due to seasonality.
OpenSky(TM) Credit -- Portfolio credit metrics continue to be generally consistent with modeled expectations during 1Q 2025. The provision for credit losses of $1.8 million increased $0.6 million when compared to the prior quarter. OpenSky's unsecured loan product continues to be offered exclusively to current and former secured card customers in order to retain customer who have successfully improved their credit profiles. Unsecured loans have been offered by OpenSky since the fourth quarter of 2021 and have performed according to management expectations over that time period.
Capital Bank Home Loans
Originations of loans held for sale totaled $65.8 million during 1Q 2025, with $54.1 million of mortgage loans sold resulting in a gain on sale of loans of $1.7 million, representing a 3.07% of gain on sale as a percentage of total loans sold. Originations of loans held for sale totaled $90.0 million during 4Q 2024, 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
Gross government loan servicing revenue totaled $4.6 million, including $1.0 million of Capital Bank related servicing fees, during 1Q 2025. Gross government loan servicing revenue totaled $4.6 million, including $0.9 million of Capital Bank related servicing fees, during 4Q 2024. Windsor's total servicing portfolio was $2.6 billion at March 31, 2025, and $2.5 billion at December 31, 2024.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited
---------------------------------------------------------------------------------------------------
Quarter Ended 1Q25 vs 4Q24 1Q25 vs 1Q24
-------------------- --------------------
(in thousands,
except per share March 31, December March 31, $ % $ %
data) 2025 31, 2024 2024 Change Change Change Change
----------- ----------- ----------- -------- ---------- -------- ----------
Earnings Summary
Interest income $62,760 $61,707 $48,369 $ 1,053 1.7% $14,391 29.8%
Interest expense 16,713 17,380 13,361 (667) (3.8)% 3,352 25.1%
------ ------ ------ ------ ------ ------ ------
Net interest
income 46,047 44,327 35,008 1,720 3.9% 11,039 31.5%
Provision for
credit losses 2,246 7,828 2,727 (5,582) (71.3)% (481) (17.6)%
Provision for
credit losses
on unfunded
commitments -- 122 142 (122) (100.0)% (142) (100.0)%
Noninterest
income 12,549 11,913 5,972 636 5.3% 6,577 110.1%
Noninterest
expense 38,053 37,514 29,487 539 1.4% 8,566 29.1%
------ ------ ------ ------ ------ ------ ------
Income before
income
taxes 18,297 10,776 8,624 7,521 69.8% 9,673 112.2%
------ ------ ------ ------ ------ ------ ------
Income tax
expense 4,365 3,243 2,062 1,122 34.6% 2,303 111.7%
------ ------ ------ ------ ------ ------ ------
Net income $13,932 $ 7,533 $ 6,562 $ 6,399 84.9% $ 7,370 112.3%
------ ------ ------ ------ ------ ------ ------
Pre-tax
pre-provision
net revenue
("PPNR") (1) $20,543 $18,726 $11,493 $ 1,817 9.7% $ 9,050 78.7%
Core PPNR(1) $21,809 $23,961 $12,205 $(2,152) (9.0)% $ 9,604 78.7%
Common Share
Data
Earnings per
share - Basic $ 0.84 $ 0.45 $ 0.47 $ 0.39 86.7% $ 0.37 78.7%
Earnings per
share -
Diluted $ 0.82 $ 0.45 $ 0.47 $ 0.37 82.2% $ 0.35 74.5%
Core earnings
per share -
Diluted(1) $ 0.88 $ 0.92 $ 0.51 $ (0.04) (4.3)% $ 0.37 72.5%
Weighted average
common shares -
Basic 16,666 16,595 13,919
Weighted average
common shares -
Diluted 16,925 16,729 13,919
Return Ratios
Return on
average assets
(annualized) 1.75% 0.96% 1.15%
Core return on
average assets
(annualized)(1) 1.87% 1.97% 1.24%
Return on
average equity
(annualized) 15.56% 8.50% 10.19%
Core return on
average equity
(annualized)(1) 16.64% 17.46% 11.03%
Return on
average
tangible common
equity
(annualized)(1) 17.57% 9.33% 10.19%
Core return on
average
tangible common
equity
(annualized)(1) 18.77% 18.91% 11.03%
______________
(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) 2025 2024 % Change 2024 2024 2024
--------- --------- ---------- --------- --------- ---------
Balance Sheet
Highlights
Assets $3,349,805 $2,324,238 44.1% $3,206,911 $2,560,788 $2,438,583
Investment
securities
available-for-sale 213,452 202,254 5.5% 223,630 208,700 207,917
Mortgage loans held
for sale 34,656 10,303 236.4% 21,270 19,554 19,219
Portfolio loans
receivable (2) 2,678,406 1,964,525 36.3% 2,630,163 2,107,522 2,021,588
Allowance for
credit losses 48,454 29,350 65.1% 48,652 31,925 30,832
Deposits 2,891,333 2,005,695 44.2% 2,761,939 2,186,224 2,100,428
FHLB borrowings 22,000 22,000 --% 22,000 52,000 32,000
Other borrowed
funds 12,062 12,062 --% 12,062 12,062 12,062
Total stockholders'
equity 369,577 259,465 42.4% 355,139 280,111 267,854
Tangible common
equity (1) 329,936 259,465 27.2% 318,196 280,111 267,854
Common shares
outstanding 16,657 13,890 19.9% 16,663 13,918 13,910
Book value per
share $ 22.19 $ 18.68 18.8% $ 21.31 $ 20.13 $ 19.26
Tangible book value
per share (1) $ 19.81 $ 18.68 6.0% $ 19.10 $ 20.13 $ 19.26
Dividends per share $ 0.10 $ 0.08 25.0% $ 0.10 $ 0.10 $ 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
March December June March
31, 31, September 30, 31,
(in thousands) 2025 2024 30, 2024 2024 2024
------- -------- ---------- ------- --------
Interest income
Loans, including fees $58,691 $58,602 $ 50,047 $48,275 $ 45,991
Investment securities
available-for-sale 1,861 1,539 1,343 1,308 1,251
Federal funds sold and
other 2,208 1,566 1,220 1,032 1,127
------ ------ --------- ------ -------
Total interest
income 62,760 61,707 52,610 50,615 48,369
------ ------ --------- ------ -------
Interest expense
Deposits 16,512 16,385 13,902 13,050 12,833
Borrowed funds 201 995 354 508 528
------ ------ --------- ------ -------
Total interest
expense 16,713 17,380 14,256 13,558 13,361
------ ------ --------- ------ -------
Net interest income 46,047 44,327 38,354 37,057 35,008
Provision for credit
losses 2,246 7,828 3,748 3,417 2,727
Provision for credit
losses on unfunded
commitments -- 122 17 104 142
------ ------ --------- ------ -------
Net interest income after
provision for credit
losses 43,801 36,377 34,589 33,536 32,139
Noninterest income
Service charges on
deposits 258 241 235 200 207
Credit card fees 3,722 3,733 4,055 4,330 3,881
Mortgage banking revenue 1,831 1,821 1,882 1,990 1,453
Government lending
revenue 1,096 2,301 -- -- --
Government loan
servicing revenue 3,568 3,993 -- -- --
Loan servicing rights
(government
guaranteed) 472 1,013 -- -- --
Non-recurring equity and
debt investment
write-down -- (2,620) -- -- --
Other income 1,602 1,431 463 370 431
------ ------ --------- ------ -------
Total noninterest
income 12,549 11,913 6,635 6,890 5,972
Noninterest expenses
Salaries and employee
benefits 18,067 16,513 13,345 13,272 12,907
Occupancy and equipment 2,910 2,976 1,791 1,864 1,613
Professional fees 2,112 2,150 1,980 1,769 1,947
Data processing 7,112 7,210 6,930 6,788 6,761
Advertising 1,779 1,032 1,223 2,072 2,032
Loan processing 743 969 615 476 371
Foreclosed real estate
expenses, net 1 -- 1 -- 1
Merger-related expenses 1,266 2,615 520 83 712
Operational losses 903 993 1,008 782 931
Regulatory assessment
expenses 889 484 427 553 473
Other operating 2,271 2,572 1,885 1,834 1,739
------ ------ --------- ------ -------
Total noninterest
expenses 38,053 37,514 29,725 29,493 29,487
------ ------ --------- ------ -------
Income before income taxes 18,297 10,776 11,499 10,933 8,624
Income tax expense 4,365 3,243 2,827 2,728 2,062
------ ------ --------- ------ -------
Net income $13,932 $ 7,533 $ 8,672 $ 8,205 $ 6,562
====== ====== ========= ====== =======
Consolidated Balance Sheets
-----------------------------------------------------------------------------------------
(unaudited) (audited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- ----------- -------------
(in thousands, except March 31, December September June 30, March 31,
share data) 2025 31, 2024 30, 2024 2024 2024
----------- ----------- ----------- ----------- -------------
Assets
Cash and due from
banks $ 27,836 $ 25,433 $ 23,462 $ 19,294 $ 12,361
Interest-bearing
deposits at other
financial
institutions 266,092 179,841 133,180 117,160 72,787
Federal funds sold 59 58 58 57 56
--------- --------- --------- --------- ---------
Total cash and
cash
equivalents 293,987 205,332 156,700 136,511 85,204
Investment securities
available-for-sale 213,452 223,630 208,700 207,917 202,254
Restricted investments 7,031 4,479 5,895 4,930 4,441
Loans held for sale 34,656 21,270 19,554 19,219 10,303
Portfolio loans
receivable, net of
deferred fees and
costs 2,678,406 2,630,163 2,107,522 2,021,588 1,964,525
Less allowance for
credit losses (48,454) (48,652) (31,925) (30,832) (29,350)
--------- --------- --------- --------- ---------
Total portfolio
loans held for
investment,
net 2,629,952 2,581,511 2,075,597 1,990,756 1,935,175
Premises and
equipment, net 15,085 15,525 5,959 5,551 4,500
Accrued interest
receivable 19,458 16,664 12,468 12,162 12,258
Goodwill 24,085 21,126 -- -- --
Intangible assets 13,861 14,072 -- -- --
Core deposit
intangibles 1,695 1,745 -- -- --
Loan servicing assets 2,244 5,511 -- -- --
Deferred tax asset 15,902 16,670 10,748 12,150 12,311
Bank owned life
insurance 44,335 43,956 38,779 38,414 38,062
Other assets 34,062 35,420 26,388 10,973 19,730
--------- --------- --------- --------- ---------
Total assets $3,349,805 $3,206,911 $2,560,788 $2,438,583 $2,324,238
========= ========= ========= ========= =========
Liabilities
Deposits
Noninterest-bearing $ 812,224 $ 810,928 $ 718,120 $ 684,574 $ 665,812
Interest-bearing 2,079,109 1,951,011 1,468,104 1,415,854 1,339,883
--------- --------- --------- --------- ---------
Total deposits 2,891,333 2,761,939 2,186,224 2,100,428 2,005,695
Federal Home Loan Bank
advances 22,000 22,000 52,000 32,000 22,000
Other borrowed funds 12,062 12,062 12,062 12,062 12,062
Accrued interest
payable 9,995 9,393 8,503 6,573 6,009
Other liabilities 44,838 46,378 21,888 19,666 19,007
--------- --------- --------- --------- ---------
Total
liabilities 2,980,228 2,851,772 2,280,677 2,170,729 2,064,773
--------- --------- --------- --------- ---------
Stockholders' equity
Common stock 167 167 139 139 139
Additional paid-in
capital 128,692 128,598 55,585 55,005 54,229
Retained earnings 249,925 237,843 232,995 225,824 218,731
Accumulated other
comprehensive loss (9,207) (11,469) (8,608) (13,114) (13,634)
--------- --------- --------- --------- ---------
Total
stockholders'
equity 369,577 355,139 280,111 267,854 259,465
--------- --------- --------- --------- ---------
Total
liabilities and
stockholders'
equity $3,349,805 $3,206,911 $2,560,788 $2,438,583 $2,324,238
========= ========= ========= ========= =========
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, 2025 December 31, 2024 March 31, 2024
---------------------------------- ---------------------------------- ----------------------------------
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 $ 203,053 $ 2,138 4.27% $ 140,206 $ 1,446 4.10% $ 84,531 $ 1,049 4.99%
Federal funds sold 58 1 6.99 58 -- -- 56 1 7.18
Investment
securities
available-for-sale 235,605 1,861 3.20 236,951 1,539 2.58 233,231 1,251 2.16
Restricted
investments 5,761 69 4.86 7,292 120 6.55 4,601 77 6.73
Loans held for sale 9,356 238 10.32 25,614 193 3.00 4,872 83 6.85
Portfolio loans
receivable(2)(3) 2,634,110 58,453 9.00 2,592,960 58,409 8.96 1,927,372 45,908 9.58
---------- ------ ----- ---------- ------ ----- ---------- ------ -----
Total interest
earning assets 3,087,943 62,760 8.24 3,003,081 61,707 8.17 2,254,663 48,369 8.63
------ ------ ------
Noninterest earning
assets 134,021 117,026 44,571
---------- ---------- ----------
Total assets $ 3,221,964 $ 3,120,107 $ 2,299,234
========== ========== ==========
Liabilities and
Stockholders'
Equity
Interest-bearing
liabilities:
Interest-bearing
demand accounts $ 242,355 368 0.62 $ 257,446 424 0.66 $ 183,217 110 0.24
Savings 13,204 18 0.55 13,497 20 0.59 4,841 1 0.08
Money market
accounts 869,978 7,399 3.45 763,526 7,131 3.72 682,414 7,136 4.21
Time deposits 859,729 8,727 4.12 847,618 8,810 4.13 449,963 5,586 4.99
Borrowed funds 34,062 201 2.39 97,116 995 4.08 58,963 528 3.60
---------- ------ ----- ---------- ------ ----- ---------- ------ -----
Total
interest-bearing
liabilities 2,019,328 16,713 3.36 1,979,203 17,380 3.49 1,379,398 13,361 3.90
------ ------ ------
Noninterest-bearing
liabilities:
Noninterest-bearing
liabilities 56,503 58,460 23,820
Noninterest-bearing
deposits 783,018 729,907 637,124
Stockholders' equity 363,115 352,537 258,892
---------- ---------- ----------
Total liabilities
and
stockholders'
equity $ 3,221,964 $ 3,120,107 $ 2,299,234
========== ========== ==========
Net interest spread 4.88% 4.68% 4.73%
===== ===== =====
Net interest income $ 46,047 $ 44,327 $ 35,008
====== ====== ======
Net interest margin(4) 6.05% 5.87% 6.24%
===== ===== =====
_______________
(1) Annualized.
(2) Includes nonaccrual loans.
(3) For the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, collectively, Commercial Bank Loan Yield was 7.14%, 6.98% and 6.96%, respectively.
(4) For the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, collectively, Commercial Bank Net Interest Margin was 4.32%, 3.99% and 3.77%, respectively.
The Company's reportable segments represent business units with discrete financial information whose results are regularly reviewed by management. The four segments include Commercial Banking, Capital Bank Home Loans (the Company's mortgage loan division), OpenSky(TM) (the Company's credit card division) and Windsor Advantage.
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(TM) , CBHL, and Windsor. 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 March 31, 2025, December 31, 2024, and March 31, 2024.
Segments
For the three months ended March 31, 2025
-----------------------------------------------------
Commercial Windsor
(in thousands) Bank CBHL OpenSky(TM) Advantage Consolidated
---------- -------- ------------- ----------- --------------
Interest income $ 48,164 $ 152 $ 14,444 $ -- $ 62,760
Interest expense 16,649 64 -- -- 16,713
--------- ------ --------- ------- ----------
Net interest
income 31,515 88 14,444 -- 46,047
Provision for
credit losses 446 -- 1,800 -- 2,246
Net interest
income after
provision 31,069 88 12,644 -- 43,801
Noninterest
income 2,474 1,736 3,733 4,606 12,549
Noninterest
expense(1) 18,560 2,531 13,302 3,660 38,053
--------- ------ --------- ------- ----------
Net income
(loss)
before
taxes $ 14,983 $ (707) $ 3,075 $ 946 $ 18,297
========= ====== ========= ======= ==========
Total assets $3,192,327 $14,092 $ 119,636 $ 23,750 $ 3,349,805
========= ====== ========= ======= ==========
For the three months ended December 31, 2024
-----------------------------------------------------
Commercial Windsor
(in thousands) Bank CBHL OpenSky(TM) Advantage Consolidated
---------- -------- ------------- ----------- --------------
Interest income $ 46,061 $ 192 $ 15,454 $ -- $ 61,707
Interest expense 17,249 131 -- -- 17,380
--------- ------ --------- ------- ----------
Net interest
income 28,812 61 15,454 -- 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 22,039 61 14,277 -- 36,377
Noninterest
income 1,928 1,676 3,743 4,566 11,913
Noninterest
expense(1) 19,872 2,377 12,595 2,670 37,514
--------- ------ --------- ------- ----------
Net income
(loss)
before
taxes $ 4,095 $ (640) $ 5,425 $ 1,896 $ 10,776
========= ====== ========= ======= ==========
Total assets $3,033,792 $21,691 $ 125,913 $ 25,515 $ 3,206,911
========= ====== ========= ======= ==========
For the three months ended March 31, 2024
-----------------------------------------------------
Commercial Windsor
(in thousands) Bank CBHL OpenSky(TM) Advantage Consolidated
---------- -------- ------------- ----------- --------------
Interest income $ 33,365 $ 83 $ 14,921 $ -- $ 48,369
Interest expense 13,320 41 -- -- 13,361
--------- ------ --------- ------- ----------
Net interest
income 20,045 42 14,921 -- 35,008
Provision for
credit losses 1,168 -- 1,559 -- 2,727
Provision for
credit losses
on unfunded
commitments 142 -- -- -- 142
--------- ------ --------- ------- ----------
Net interest
income after
provision 18,735 42 13,362 -- 32,139
Noninterest
income 705 1,352 3,915 -- 5,972
Noninterest
expense(1) 13,783 2,105 13,599 -- 29,487
--------- ------ --------- ------- ----------
Net income
(loss)
before
taxes $ 5,657 $ (711) $ 3,678 $ -- $ 8,624
========= ====== ========= ======= ==========
Total assets $2,208,135 $10,785 $ 105,318 $ -- $ 2,324,238
========= ====== ========= ======= ==========
________________________
(1) Noninterest expense includes $6.4 million, $6.3 million, and $6.1 million in data processing expense in OpenSky's(TM) segment for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively.
HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited
-------------------------------------------------------------------------------------------------------
Quarter Ended
(in thousands, except March 31, December 31, September 30, June 30, March 31,
per share data) 2025 2024 2024 2024 2024
-------------- -------------- -------------- -------------- --------------
Earnings:
----------------------
Net income $ 13,932 $ 7,533 $ 8,672 $ 8,205 $ 6,562
Earnings per common
share, diluted 0.82 0.45 0.62 0.59 0.47
Net interest margin 6.05% 5.87% 6.41% 6.46% 6.24%
Commercial Bank net
interest margin(2) 4.32% 3.99% 4.01% 3.90% 3.77%
Return on average
assets(1) 1.75% 0.96% 1.42% 1.40% 1.15%
Return on average
equity(1) 15.56% 8.50% 12.59% 12.53% 10.19%
Efficiency ratio 64.94% 66.70% 66.07% 67.11% 71.95%
Balance Sheet:
---------------------- Total portfolio loans receivable, net deferred fees $2,678,406 $2,630,163 $2,107,522 $2,021,588 $1,964,525 Total deposits 2,891,333 2,761,939 2,186,224 2,100,428 2,005,695 Total assets 3,349,805 3,206,911 2,560,788 2,438,583 2,324,238 Total stockholders' equity 369,577 355,139 280,111 267,854 259,465 Total average portfolio loans receivable, net deferred fees 2,634,110 2,592,960 2,053,619 1,992,630 1,927,372 Total average deposits 2,768,284 2,611,994 2,091,294 2,010,736 1,957,559 Portfolio loans-to-deposit ratio (period-end balances) 92.64% 95.23% 96.40% 96.25% 97.95% Portfolio loans-to-deposit ratio (average balances) 95.15% 99.27% 98.20% 99.10% 98.46% Asset Quality Ratios: ---------------------- Nonperforming assets to total assets 1.21% 0.94% 0.60% 0.58% 0.62% Nonperforming loans to total loans 1.51% 1.15% 0.73% 0.70% 0.73% Net charge-offs to average portfolio loans (1) 0.38% 0.37% 0.51% 0.39% 0.41% Allowance for credit losses to total loans 1.81% 1.85% 1.51% 1.53% 1.49% Allowance for credit losses to non-performing loans 119.73% 160.88% 206.50% 219.40% 204.37% Bank Capital Ratios: ---------------------- Total risk based capital ratio 13.00% 12.79% 13.76% 14.51% 14.36% Tier-1 risk based capital ratio 11.75% 11.54% 12.50% 13.25% 13.10% Leverage ratio 9.27% 9.17% 9.84% 10.36% 10.29% Common Equity Tier-1 capital ratio 11.75% 11.54% 12.50% 13.25% 13.10% Tangible common equity 8.66% 9.31% 9.12% 9.53% 9.66% Holding Company Capital Ratios: ---------------------- Total risk based capital ratio 15.05% 15.48% 16.65% 16.98% 16.83% Tier-1 risk based capital ratio 13.41% 13.83% 14.88% 15.19% 15.03% Leverage ratio 10.68% 11.07% 11.85% 11.93% 11.87% Common Equity Tier-1 capital ratio 13.33% 13.74% 14.78% 15.08% 14.92% Tangible common equity 9.94% 11.07% 10.94% 10.98% 11.16%
_______________
(1) Annualized.
(2) Refer to Appendix for reconciliation of non-GAAP measures.
HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited (Continued)
-----------------------------------------------------------------------------------------------------
Quarter Ended
(in thousands,
except per share March 31, December 31, September 30, June 30, March 31,
data) 2025 2024 2024 2024 2024
-------------- -------------- -------------- -------------- --------------
Composition of
Loans:
--------------------
Commercial real
estate, non
owner-occupied $ 484,399 $ 471,329 $ 403,487 $ 397,080 $ 377,224
Commercial real
estate,
owner-occupied 420,643 440,026 351,462 319,370 330,840
Residential real
estate 693,597 688,552 623,684 601,312 577,112
Construction real
estate 343,280 321,252 301,909 294,489 290,016
Commercial and
industrial 594,331 554,550 271,811 255,686 254,577
Lender finance 23,165 28,574 29,546 33,294 13,484
Business equity lines
of credit 3,468 3,090 2,663 2,989 14,768
Credit card, net of
reserve(2) 118,709 127,766 127,098 122,217 111,898
Other consumer loans 2,200 2,089 2,045 1,930 738
--------- --------- --------- --------- ---------
Portfolio loans
receivable $2,683,792 $2,637,228 $2,113,705 $2,028,367 $1,970,657
Deferred origination
fees, net (5,386) (7,065) (6,183) (6,779) (6,132)
--------- --------- --------- --------- ---------
Portfolio loans
receivable, net $2,678,406 $2,630,163 $2,107,522 $2,021,588 $1,964,525
--------- --------- --------- --------- ---------
Composition of
Deposits:
--------------------
Noninterest-bearing $ 812,224 $ 810,928 $ 718,120 $ 684,574 $ 665,812
Interest-bearing
demand 296,455 238,881 266,493 266,070 193,963
Savings 12,819 13,488 3,763 4,270 4,525
Money markets 912,418 816,708 686,526 672,455 678,435
Customer time
deposits 549,630 548,901 358,300 317,911 302,319
Brokered time
deposits 307,787 333,033 153,022 155,148 160,641
--------- --------- --------- --------- ---------
Total deposits $2,891,333 $2,761,939 $2,186,224 $2,100,428 $2,005,695
Capital Bank Home
Loan Metrics:
--------------------
Origination of loans
held for sale $ 65,815 $ 89,998 $ 74,690 $ 82,363 $ 52,080
Mortgage loans sold 54,144 77,399 67,296 66,417 40,377
Gain on sale of loans 1,664 1,897 1,644 1,732 1,238
Purchase volume as a
% of originations 90.73% 90.42% 90.98% 96.48% 97.83%
Gain on sale as a %
of loans sold(3) 3.07% 2.45% 2.44% 2.61% 3.07%
Mortgage commissions $ 545 $ 620 $ 598 $ 582 $ 490
OpenSky(TM)
Portfolio Metrics:
--------------------
Open customer
accounts 563,718 552,566 548,952 537,734 526,950
Secured credit card
loans, gross $ 81,252 $ 87,226 $ 89,641 $ 90,961 $ 85,663
Unsecured credit card
loans, gross 38,987 42,430 39,730 33,560 28,508
Noninterest secured
credit card
deposits 168,796 166,355 170,750 173,499 171,771
_______________
(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) 2025 2024 2024 2024 2024
-------------- -------------- -------------- -------------- --------------
Net Income $ 13,932 $ 7,533 $ 8,672 $ 8,205 $ 6,562
Add:
Merger-Related
Expenses, net
of tax 964 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 -- -- --
--------- --------- --------- --------- ---------
Core Net Income $ 14,896 $ 15,473 $ 9,229 $ 8,267 $ 7,100
========= ========= ========= ========= =========
Weighted
Average Common
Shares -
Diluted 16,925 16,729 13,951 13,895 13,919
Earnings per
Share -
Diluted $ 0.82 $ 0.45 $ 0.62 $ 0.59 $ 0.47
Core Earnings
per Share -
Diluted $ 0.88 $ 0.92 $ 0.66 $ 0.59 $ 0.51
Average Assets $3,221,964 $3,120,107 $2,437,870 $2,353,868 $2,299,234
Return on
Average
Assets(1) 1.75% 0.96% 1.42% 1.40% 1.15%
Core Return on
Average
Assets(1) 1.87% 1.97% 1.51% 1.41% 1.24%
Average Equity $ 363,115 $ 352,537 $ 274,087 $ 263,425 $ 258,892
Return on
Average
Equity(1) 15.56% 8.50% 12.59% 12.53% 10.19%
Core Return on
Average
Equity(1) 16.64% 17.46% 13.40% 12.62% 11.03%
Net Interest
Income (a) $ 46,047 $ 44,327 $ 38,354 $ 37,057 $ 35,008
Noninterest
Income 12,549 11,913 6,635 6,890 5,972
--------- --------- --------- --------- ---------
Total Revenue $ 58,596 $ 56,240 $ 44,989 $ 43,947 $ 40,980
Noninterest
Expense $ 38,053 $ 37,514 $ 29,725 $ 29,493 $ 29,487
--------- --------- --------- --------- ---------
Efficiency
Ratio(2) 64.9% 66.7% 66.1% 67.1% 72.0%
========= ========= ========= ========= =========
Noninterest
Income $ 12,549 $ 11,913 $ 6,635 $ 6,890 $ 5,972
Add:
Non-recurring
equity and debt
investment
write-down -- 2,620 -- -- --
--------- --------- --------- --------- ---------
Core Fee
Revenue (b) $ 12,549 $ 14,533 $ 6,635 $ 6,890 $ 5,972
--------- --------- --------- --------- ---------
Core Revenue
(a) + (b) $ 58,596 $ 58,860 $ 44,989 $ 43,947 $ 40,980
Noninterest
Expense $ 38,053 $ 37,514 $ 29,725 $ 29,493 $ 29,487
Less:
Merger-Related
Expenses 1,266 2,615 520 83 712
--------- --------- --------- --------- ---------
Core
Noninterest
Expense $ 36,787 $ 34,899 $ 29,205 $ 29,410 $ 28,775
--------- --------- --------- --------- ---------
Core Efficiency
Ratio(2) 62.8% 59.3% 64.9% 66.9% 70.2%
========= ========= ========= ========= =========
_______________
(1) Annualized.
(2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
Commercial Bank
Net Interest
Margin Quarter Ended
March 31, December 31, September 30, June 30, March 31,
(in thousands) 2025 2024 2024 2024 2024
-------------- -------------- -------------- -------------- --------------
Commercial Bank
Net Interest
Income $ 31,515 $ 28,812 $ 22,676 $ 21,223 $ 20,045
Average Interest
Earning Assets 3,087,943 3,003,081 2,380,946 2,307,070 2,254,663
Less: Average
Non-Commercial
Bank Interest
Earning
Assets 128,278 133,401 129,906 119,801 116,197
--------- --------- --------- --------- ---------
Average
Commercial Bank
Interest Earning
Assets $2,959,665 $2,869,680 $2,251,040 $2,187,269 $2,138,466
Commercial Bank
Net Interest
Margin 4.32% 3.99% 4.01% 3.90% 3.77%
Commercial Bank
Portfolio Loans
Receivable
Yield Quarter Ended
March 31, December 31, September 30, June 30, March 31,
(in thousands) 2025 2024 2024 2024 2024
-------------- -------------- -------------- -------------- --------------
Portfolio Loans
Receivable
Interest
Income $ 58,453 $ 58,409 $ 49,886 $ 48,143 $ 45,908
Less: Credit
Card Loan
Income 14,148 15,022 15,137 15,205 14,457
--------- --------- --------- --------- ---------
Commercial Bank
Portfolio
Loans
Receivable
Interest
Income $ 44,305 $ 43,387 $ 34,749 $ 32,938 $ 31,451
Average
Portfolio
Loans
Receivable 2,634,110 2,592,960 2,053,619 1,992,630 1,927,372
Less: Average
Credit Card
Loans 118,723 120,993 119,458 111,288 110,483
--------- --------- --------- --------- ---------
Total
Commercial
Bank Average
Portfolio
Loans
Receivable $2,515,387 $2,471,967 $1,934,161 $1,881,342 $1,816,889
Commercial Bank
Portfolio
Loans
Receivable
Yield 7.14% 6.98% 7.15% 7.04% 6.96%
Pre-tax,
Pre-Provision
Net Revenue
("PPNR") Quarter Ended
March June March
31, December September 30, 31,
(in thousands) 2025 31, 2024 30, 2024 2024 2024
------- --------- ---------- ------- --------
Net Income $13,932 $ 7,533 $ 8,672 $ 8,205 $ 6,562
Add: Income
Tax Expense 4,365 3,243 2,827 2,728 2,062
Add:
Provision
for Credit
Losses 2,246 7,828 3,748 3,417 2,727
Add:
Provision
for Credit
Losses on
Unfunded
Commitments -- 122 17 104 142
------ -------- --------- ------ -------
Pre-tax,
Pre-Provision
Net Revenue
("PPNR") $20,543 $ 18,726 $ 15,264 $14,454 $ 11,493
Core PPNR Quarter Ended
March June March
31, December September 30, 31,
(in thousands) 2025 31, 2024 30, 2024 2024 2024
------- --------- ---------- ------- --------
Net Income $13,932 $ 7,533 $ 8,672 $ 8,205 $ 6,562
Add: Income Tax
Expense 4,365 3,243 2,827 2,728 2,062
Add: Provision
for Credit
Losses 2,246 7,828 3,748 3,417 2,727
Add: Provision
for Credit
Losses on
Unfunded
Commitments -- 122 17 104 142
Add:
Merger-Related
Expenses 1,266 2,615 520 83 712
Add:
Non-recurring
equity and debt
investment
write-down -- 2,620 -- -- --
------ -------- --------- ------ -------
Core PPNR $21,809 $ 23,961 $ 15,784 $14,537 $ 12,205
Allowance for
Credit Losses
to Total
Portfolio
Loans Quarter Ended
March 31, December 31, September 30, June 30, March 31,
(in thousands) 2025 2024 2024 2024 2024
-------------- -------------- -------------- -------------- --------------
Allowance for
Credit Losses $ 48,454 $ 48,652 $ 31,925 $ 30,832 $ 29,350
Total Portfolio
Loans 2,678,406 2,630,163 2,107,522 2,021,588 1,964,525
Allowance for
Credit Losses
to Total
Portfolio
Loans 1.81% 1.85% 1.51% 1.53% 1.49%
Commercial Bank
Allowance for
Credit Losses
to Commercial
Bank Portfolio
Loans Quarter Ended
March 31, December 31, September 30, June 30, March 31,
(in thousands) 2025 2024 2024 2024 2024
-------------- -------------- -------------- -------------- --------------
Allowance for
Credit Losses $ 48,454 $ 48,652 $ 31,925 $ 30,832 $ 29,350
Less: Credit
Card
Allowance
for Credit
Losses 5,905 6,402 7,339 6,768 5,991
--------- --------- --------- --------- ---------
Commercial Bank
Allowance for
Credit Losses 42,549 42,250 24,586 24,064 23,359
Total Portfolio
Loans 2,678,406 2,630,163 2,107,522 2,021,588 1,964,525
Less: Gross
Credit Card
Loans 115,991 122,928 121,718 116,180 106,572
--------- --------- --------- --------- ---------
Commercial Bank
Portfolio
Loans 2,562,415 2,507,235 1,985,804 1,905,408 1,857,953
Commercial Bank
Allowance for
Credit Losses
to Total
Portfolio
Loans 1.67% 1.70% 1.24% 1.26% 1.26%
Nonperforming
Assets to Total
Assets Quarter Ended
March 31, December 31, September 30, June 30, March 31,
(in thousands) 2025 2024 2024 2024 2024
-------------- -------------- -------------- -------------- --------------
Total
Nonperforming
Assets $ 40,471 $ 30,241 $ 15,460 $ 14,053 $ 14,361
Total Assets 3,349,805 3,206,911 2,560,788 2,438,583 2,324,238
Nonperforming
Assets to
Total Assets 1.21% 0.94% 0.60% 0.58% 0.62%
Nonperforming
Loans to Total
Portfolio
Loans Quarter Ended
March 31, December 31, September 30, June 30, March 31,
(in thousands) 2025 2024 2024 2024 2024
-------------- -------------- -------------- -------------- --------------
Total
Nonperforming
Loans $ 40,471 $ 30,241 $ 15,460 $ 14,053 $ 14,361
Total Portfolio
Loans 2,678,406 2,630,163 2,107,522 2,021,588 1,964,525
Nonperforming
Loans to Total
Portfolio
Loans 1.51% 1.15% 0.73% 0.70% 0.73%
Net Charge-Offs
to Average
Portfolio
Loans Quarter Ended
March 31, December 31, September 30, June 30, March 31,
(in thousands) 2025 2024 2024 2024 2024
-------------- -------------- -------------- -------------- --------------
Total Net
Charge-Offs $ 2,444 $ 2,427 $ 2,655 $ 1,935 $ 1,987
Total Average
Portfolio
Loans 2,634,110 2,592,960 2,053,619 1,992,630 1,927,372
Net Charge-Offs
to Average
Portfolio
Loans,
Annualized 0.38% 0.37% 0.51% 0.39% 0.41%
Tangible Book
Value per
Share Quarter Ended
(in thousands,
except share
and per share March 31, December September June 30, March 31,
data) 2025 31, 2024 30, 2024 2024 2024
----------- ----------- ----------- ----------- -----------
Total
Stockholders'
Equity $ 369,577 $ 355,139 $ 280,111 $ 267,854 $ 259,465
Less:
Preferred
Equity -- -- -- -- --
Less:
Intangible
Assets 39,641 36,943 -- -- --
---------- ---------- ---------- ---------- ----------
Tangible Common
Equity $ 329,936 $ 318,196 $ 280,111 $ 267,854 $ 259,465
Period End
Shares
Outstanding 16,657,168 16,662,626 13,917,891 13,910,467 13,889,563
Tangible Book
Value per
Share $ 19.81 $ 19.10 $ 20.13 $ 19.26 $ 18.68
Return on
Average Tangible
Common Equity Quarter Ended
March 31, December 31, September June 30, March 31,
(in thousands) 2025 2024 30, 2024 2024 2024
------------ ------------ ------------ ------------ ------------
Net Income $ 13,932 $ 7,533 $ 8,672 $ 8,205 $ 6,562
Add:
Intangible
Amortization,
Net of Tax 199 198 -- -- --
------- ------- ------- ------- -------
Net Tangible
Income $ 14,131 $ 7,731 $ 8,672 $ 8,205 $ 6,562
Average Equity 363,115 352,537 274,087 263,425 258,892
Less: Average
Intangible
Assets 36,896 22,890 -- -- --
------- ------- ------- ------- -------
Net Average
Tangible Common
Equity $326,219 $329,647 $274,087 $263,425 $258,892
Return on
Average Equity 15.56% 8.50% 12.59% 12.53% 10.19%
Return on
Average
Tangible Common
Equity 17.57% 9.33% 12.59% 12.53% 10.19%
Core Return on
Average Tangible
Common Equity Quarter Ended
March 31, December September June 30, March 31,
(in thousands) 2025 31, 2024 30, 2024 2024 2024
----------- ----------- ----------- ---------- ----------
Net Income, as
Adjusted $14,896 $15,473 $9,229 $8,267 $7,100
Add:
Intangible
Amortization,
Net of Tax 199 198 -- -- --
------ ------ ----- --- ----- -----
Core Net
Tangible
Income $15,095 $15,671 $9,229 $8,267 $7,100
Core Return on
Average
Tangible Common
Equity 18.77% 18.91% 13.40% 12.62% 11.03%
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 $3.3 billion at March 31, 2025 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
(END) Dow Jones Newswires
April 28, 2025 17:21 ET (21:21 GMT)
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