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

Third Quarter 2024 Results

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

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

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

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

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

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

Acquisition of Integrated Financial Holdings, Inc.

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

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

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

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

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

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

Third Quarter 2024 Highlights

Earnings Summary

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

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

Balance Sheet

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

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

Financial Metrics

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

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

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

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

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

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

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

Commercial Bank

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

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

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

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

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

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

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

Owner-occupied commercial real estate loans

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

⁽¹⁾ The weighted average LTV of the loan categories previously mentioned are calculated by reference to the most recent appraisal of the property securing each loan.

⁽²⁾ Other owner-occupied commercial real estate loans include special purpose loans of $57.9 million, skilled nursing loans of $53.8 million, and other loans of $28.2 million.

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

OpenSky^™

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

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

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

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

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

______________

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

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

______________

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

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

______________

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

⁽²⁾ Loans are reflected net of deferred fees and costs.

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

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

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

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

_______________

⁽¹⁾ Annualized.

⁽²⁾ Includes nonaccrual loans.

⁽³⁾ For the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, collectively, portfolio loans yield excluding credit card loans was 7.15%, 7.04% and 6.76%, respectively.

⁽⁴⁾ For the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, collectively, credit card loans accounted for 233, 246 and 266 basis points of the reported net interest margin, respectively.

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

⁽¹⁾ Annualized.

⁽²⁾ Includes nonaccrual loans.

⁽³⁾ For the nine months ended September 30, 2024 and 2023, collectively, portfolio loans yield excluding credit card loans was 7.05% and 6.57%, respectively.

⁽⁴⁾ For the nine months ended September 30, 2024 and 2023, collectively, credit card loans accounted for 239 and 268 basis points of the reported net interest margin, respectively.

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

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

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

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

________________________

⁽¹⁾ Noninterest expense includes $6.2 million, $6.3 million, and $6.1 million in data processing expense in OpenSky's^™ segment for the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively.

⁽²⁾ The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.

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

⁽¹⁾ Noninterest expense includes $18.7 million and $17.9 million in data processing expense in OpenSky's^™ segment for the nine months ended September 30, 2024 and 2023, respectively.

⁽²⁾ The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.

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

_______________

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

⁽²⁾ Annualized.

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

_______________

⁽³⁾ Credit card loans are presented net of reserve for interest and fees.

⁽⁴⁾ Gain on sale percentage is calculated as gain on sale of loans divided by mortgage loans sold.

Appendix

Reconciliation of Non-GAAP Measures

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

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

_______________

⁽¹⁾ Annualized.

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

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

_______________

⁽¹⁾ Annualized.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ABOUT CAPITAL BANCORP, INC.

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

FORWARD-LOOKING STATEMENTS

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

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

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

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

MEDIA CONTACT: Ed Barry (240) 283-1912

WEB SITE: www.CapitalBankMD.com