Equibles

8-K

Capital Bancorp Inc (CBNK)

8-K 2025-01-27 For: 2025-01-27
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Added on April 06, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 27, 2025

CAPITAL BANCORP, INC.

(Exact name of registrant as specified in its charter)

Maryland 001-38671 52-2083046
(State or other jurisdiction of incorporation or organization) (Commission file number) (IRS Employer Identification No.)

2275 Research Boulevard, Suite 600, Rockville, Maryland 20850

(Address of principal executive offices) (Zip Code)

(301) 468-8848

Registrant’s telephone number, including area code

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Trading Symbol Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share CBNK NASDAQ Stock Market

Item 2.02 Results of Operations and Financial Disclosure

On January 27, 2025, Capital Bancorp, Inc. (the “Company”) issued a press release announcing the Company’s unaudited financial results for the three months and year ended December 31, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and hereby incorporated by reference. A presentation regarding the Company's financial results for the three months ended December 31, 2024 is furnished as Exhibit 99.2 and incorporated herein by reference.

The information furnished under Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of the Company under the Securities Act of 1933, as amended, except as shall be set forth by specific reference in such filing.

Item 8.01. Other Events

On January 24, 2025, the Company's Board of Directors declared a $0.10 per share dividend, payable on February 26, 2025 to stockholders of record on February 10, 2025.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

99.1 Press Release, dated January 27, 2025.
99.2 Investor Presentation December 2024.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CAPITAL BANCORP, INC.
Date: January 27, 2025 By: /s/ Dominic Canuso
Name: Dominic Canuso
Title: Chief Financial Officer

3

Document

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Announces 4Q and Full Year 2024 Results;

Successful Close of the IFH Acquisition;

Robust Organic Loan and Deposit Growth;

Diversified Business Model Drives Strong Performance

Fourth Quarter 2024 Results

•Net Income of $7.5 million, or $0.45 per share, and return on average assets of 0.96%

◦Net Income of $15.5 million, or $0.92 per share, and return on average assets of 1.97% as adjusted to exclude the impact of merger-related expenses, initial Integrated Financial Holdings, Inc. ("IFH") Allowance for Credit Losses ("ACL") provision, and a non-recurring legacy IFH equity and debt investment write-down (non-GAAP)(1)

•Tangible Book Value Per Share(1) of $18.77, decreased 6.8%, or $1.36 as compared to $20.13 (3Q 2024), resulting from the acquisition of IFH and related purchase accounting impacts

•Return on average equity of 8.50%, and return on average tangible common equity(1) of 9.47%

◦Core return on average equity(1) of 17.68%, and core return on average tangible common equity(1) of 19.19%

•Net Interest Income increased $6.0 million, or 15.6% (not annualized), from 3Q 2024

•Net Interest Margin ("NIM") decreased to 5.87% as compared to 6.41% (3Q 2024)

◦Core NIM, as adjusted to exclude the impact of credit card loans (non-GAAP)(1) decreased to 4.05% as compared to 4.08% (3Q 2024)

◦Net purchase accounting accretion of $0.7 million for 4Q 2024 accounted for 9 basis points of the reported 5.87% NIM and 10 basis points of the reported 4.05% core NIM, respectively

•Fee Revenue (noninterest income) totaled $11.9 million, or 21.2% of total revenue for 4Q 2024

◦Core Fee Revenue of $14.5 million, or 24.7% of total core revenue, increased $7.9 million from 3Q 2024, excluding a non-recurring equity and debt investment write-down of $2.6 million (non-GAAP)(1), primarily due to the acquisition of IFH

•Gross Loan Growth in the quarter of $522.6 million includes $373.5 million from the acquisition of IFH, and $149.1 million from organic growth, or 28.2% annualized for 4Q 2024

◦Commercial and industrial loans of $554.6 million, or 21.0% of total gross loans at December 31, 2024 increased $282.7 million from September 30, 2024

•Total Deposit Growth in the quarter of $575.7 million includes $459.0 million from the acquisition of IFH, and $116.7 million from organic growth, or 21.2% annualized for 4Q 2024

◦Noninterest bearing deposits increased $92.8 million, or 51.4% annualized from 3Q 2024

•The ratio of allowance for credit losses to total loans equaled 1.85% at December 31, 2024 including 1.44% for the legacy Capital Bank portfolio, down 7 basis points from 3Q. The additional ACL coverage results from the initial $15.5 million impact from the acquisition of the IFH portfolio.

•Cash Dividend of $0.10 per share declared by the Board of Directors

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

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

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

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

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

Acquisition of Integrated Financial Holdings, Inc.

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

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

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

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

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

Fourth Quarter 2024 Third Quarter 2024
(in thousands, except per share data) Income Before Income Taxes Income Tax Expense Net Income Diluted Earnings per Share Income Before Income Taxes Income Tax Expense(Benefit) Net Income Diluted Earnings per Share
GAAP Earnings $ 10,776 $ 3,243 $ 7,533 $ 0.45 $ 11,499 $ 2,827 $ 8,672 $ 0.62
Add: Merger-Related Expenses 2,615 464 2,151 520 (37) 557
Add: Non-recurring Equity and Debt Investment Write-Down 2,620 — 2,620 — — —
Add: Initial IFH ACL Provision 4,194 1,025 3,169 — — —
Non-GAAP Earnings $ 20,205 $ 4,732 $ 15,473 $ 0.92 $ 12,019 $ 2,790 $ 9,229 $ 0.66 Year Ended December 31, 2024
--- --- --- --- --- --- --- --- ---
(in thousands, except per share data) Income Before Income Taxes Income Tax Expense Net Income Diluted Earnings per Share
GAAP Earnings $ 41,832 $ 10,860 $ 30,972 $ 2.11
Add: Merger-Related Expenses 3,930 622 3,308
Add: Non-recurring Equity and Debt Investment Write-Down 2,620 — 2,620
Add: Initial IFH ACL Provision 4,194 1,025 3,169
Non-GAAP Earnings $ 52,576 $ 12,507 $ 40,069 $ 2.73

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

Fourth Quarter 2024 Highlights

Earnings Summary

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

•Net interest income of $44.3 million increased $6.0 million, or 15.6%, compared to the third quarter 2024.

◦Interest income of $61.7 million increased $9.1 million, or 17.3%, over the third quarter 2024, primarily from $7.9 million in portfolio loan interest income, as growth in average balances increased $539.3 million. Interest income from interest-bearing deposits held at other financial institutions increased $0.3 million, as average balances increased $49.1 million to $140.2 million. Interest income included $0.7 million from net purchase accounting amortization.

◦Interest expense of $17.4 million increased $3.1 million, or 21.9% over the third quarter 2024 due to increases in time deposits and borrowed funds of $2.7 million and $0.6 million, respectively, offset by a decrease in customer money market deposits of $0.3 million. Average balances increased $367.8 million, $53.5 million and $65.3 million, respectively. Interest expense included $1.4 million from net purchase accounting accretion.

•The provision for credit losses was $7.8 million, an increase of $4.1 million from the third quarter 2024, which included the Initial IFH ACL Provision of $4.2 million, $2.4 million from organic commercial portfolio loan growth and $1.2 million from OpenSky provision in the quarter. Net charge-offs totaled $2.4 million, a $0.2 million decrease over the third quarter 2024, including $2.1 million from credit card related loans. At December 31, 2024, the allowance for credit losses to total loans ratio was 1.85%, up 34 basis points from the ratio at September 30, 2024 due to the initial purchase credit deteriorated ("PCD") credit mark and initial non-PCD ACL provision. Excluding IFH, legacy Capital Bank ACL coverage ratio was 1.44%, a decrease of 7 basis points from the third quarter 2024.

Earnings Summary (Continued)

•Noninterest income of $11.9 million increased $5.3 million as compared to the third quarter 2024 primarily due to contributions from the IFH acquisition. Government loan servicing revenue (Windsor) totaled $4.0 million, government lending revenue totaled $2.3 million and loan servicing rights totaled $1.0 million, offset by a non-recurring equity and debt write-down of $2.6 million related to an IFH investment. Other income increased $1.0 million including $0.9 million related to an investment in an SBIC, while credit card fees declined $0.3 million.

•Noninterest expense of $37.5 million increased $7.8 million as compared to the third quarter 2024, primarily from the IFH acquisition. Noninterest expense of $34.9 million, excluding merger-related expenses of $2.6 million, increased $5.7 million as compared to the third quarter 2024. Highlights include:

◦The fourth quarter 2024 includes $0.3 million of intangible amortization resulting from the transaction.

◦Salaries and employee benefits expenses of $16.5 million increased $3.2 million, primarily related to the acquisition of IFH.

◦Occupancy and equipment expenses of $3.0 million increased $1.2 million, primarily related to increased contract expense from the IFH acquisition of $0.5 million and software depreciation of $0.4 million.

◦Estimated total cost synergies resulting from the acquisition totaled $1.5 million in the fourth quarter 2024, generally consistent with modeled expectations.

•Income tax expense of $3.2 million, or 30.1% of pre-tax income for the fourth quarter 2024, increased $0.4 million from $2.8 million, or 24.6% of pre-tax income for the third quarter 2024. The elevated tax rate in the quarter resulted from non-deductibility of an equity and debt write-down along with some merger-related expenses. Excluding merger-related expenses and the non-recurring equity and debt write-down, the effective income tax rate for the fourth quarter 2024 would have been 22.6%.

Balance Sheet

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

•Cash and cash equivalents of $205.3 million at December 31, 2024 increased $48.6 million from September 30, 2024.

•Total portfolio loans of $2.6 billion at December 31, 2024 increased $522.6 million, or 24.8% (not annualized) from September 30, 2024. Total average loans increased $539.3 million quarter over quarter.

◦Owner-occupied commercial real estate loans increased $88.6 million, or 25.2% (not annualized) from September 30, 2024.

◦The average portfolio loans-to-deposit ratio of 99.27% for the three months ended December 31, 2024 remained stable.

•Total deposits of $2.8 billion at December 31, 2024 increased $575.7 million, or 26.3% (not annualized), from September 30, 2024. The increase includes $190.6 million of customer time deposits, $92.8 million of noninterest-bearing deposits primarily related to growth in title company deposit balances, $130.2 million of growth in customer money market deposits and $180.0 million of growth in brokered time deposits, partially offset by a decrease in interest-bearing demand accounts of $27.6 million.

◦Insured and protected deposits were approximately $1.6 billion as of December 31, 2024, representing 57.1% of the Company's deposit portfolio.

◦Low and no interest bearing deposits of $1.1 billion, 38.5% of deposits, increased $74.9 million, or 7.6% (not annualized) from September 30, 2024. Average noninterest-bearing deposits of $729.9 million increased $49.2 million, or 7.2% (not annualized), and represented 27.9% of total average deposits at December 31, 2024.

•The investment securities portfolio continues to be classified as available-for-sale and had a fair market value of $223.6 million, or 7.0% of total assets, an effective duration of 3.0 years, with U.S. Treasury Securities representing 57% of the overall investment portfolio at December 31, 2024. The accumulated other comprehensive income (loss) on the investment securities portfolio increased $2.9 million during the quarter to ($11.5 million) as of December 31, 2024, which represents 3.2% of total stockholders' equity. The Company does not have a held-to-maturity investment securities portfolio.

•Liquidity – The Company maintains stable and reliable sources of available borrowings, generally consistent with prior quarter. Sources of available borrowings at December 31, 2024 totaled $803.0 million, including available collateralized lines of credit of $595.7 million, unsecured lines of credit with other banks of $76.0 million and unpledged investment securities available as collateral for potential additional borrowings of $131.4 million.

•Capital Positions – As of December 31, 2024, the Company reported a common equity tier 1 capital ratio of 13.74%, compared to 14.78% at September 30, 2024. At December 31, 2024, the Company and the Bank maintain regulatory capital ratios that exceed all capital adequacy requirements.

Financial Metrics

Net Interest Margin – Net interest margin decreased 54 basis points to 5.87% for the three months ended December 31, 2024, compared to prior quarter. Core net interest margin, as adjusted to exclude the impact of OpenSky™ credit card loans (non-GAAP)(1), decreased 3 basis points to 4.05% as compared to prior quarter. Net purchase accounting accretion for the fourth quarter 2024 was 9 basis points and 10 basis points for NIM and core NIM, respectively.

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

•The total cost of deposits decreased 14 basis points to 2.50% for the fourth quarter 2024 as compared to the prior quarter. The total cost of interest-bearing deposits decreased 46 basis points to 3.46% for the fourth quarter 2024 as compared to the prior quarter.

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

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

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

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

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

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

Commercial Bank

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

The $522.9 million gross portfolio loan growth includes commercial real estate loans of $156.4 million, residential real estate loans of $64.9 million and commercial and industrial loans of $282.7 million. Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.

Net Interest Income – Interest income of $45.2 million increased $9.4 million from prior quarter, driven by loan growth and higher loan yields. Interest expense of $17.1 million increased $3.1 million, driven by an increase in average balances in the fourth quarter 2024.

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

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

OpenSky™

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

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

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

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

Capital Bank Home Loans

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

Windsor Advantage

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

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

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

All values are in US Dollars.

______________

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

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

All values are in US Dollars.

______________

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

COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued)
Quarter Ended Quarter Ended
December 31, September 30, June 30, March 31,
(in thousands, except per share data) 2024 2023 % Change 2024 2024 2024
Balance Sheet Highlights
Assets $ 3,206,911 $ 2,226,176 44.1 % $ 2,560,788 $ 2,438,583 $ 2,324,238
Investment securities available-for-sale 223,630 208,329 7.3 % 208,700 207,917 202,254
Mortgage loans held for sale 21,270 7,481 184.3 % 19,554 19,219 10,303
Portfolio loans receivable (2) 2,630,163 1,903,288 38.2 % 2,107,522 2,021,588 1,964,525
Allowance for credit losses 48,652 28,610 70.1 % 31,925 30,832 29,350
Deposits 2,761,939 1,895,996 45.7 % 2,186,224 2,100,428 2,005,695
FHLB borrowings 22,000 22,000 — % 52,000 32,000 22,000
Other borrowed funds 12,062 27,062 (55.4) % 12,062 12,062 12,062
Total stockholders' equity 355,139 254,860 39.3 % 280,111 267,854 259,465
Tangible common equity (1) 312,685 254,860 22.7 % 280,111 267,854 259,465
Common shares outstanding 16,662 13,923 19.7 % 13,918 13,910 13,890
Book value per share $ 21.31 $ 18.31 16.4 % $ 20.13 $ 19.26 $ 18.68
Tangible book value per share (1) $ 18.77 $ 18.31 2.5 % $ 20.13 $ 19.26 $ 18.68
Dividends per share $ 0.10 $ 0.08 25.0 % $ 0.10 $ 0.08 $ 0.08

______________

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

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

Consolidated Statements of Income (Unaudited)
Three Months Ended Year Ended
(in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023
Interest income
Loans, including fees $ 58,602 $ 50,047 $ 48,275 $ 45,991 $ 45,109 $ 202,915 $ 174,760
Investment securities available-for-sale 1,539 1,343 1,308 1,251 1,083 5,441 4,815
Federal funds sold and other 1,566 1,220 1,032 1,127 777 4,945 3,631
Total interest income 61,707 52,610 50,615 48,369 46,969 213,301 183,206
Interest expense
Deposits 16,385 13,902 13,050 12,833 11,759 56,170 39,625
Borrowed funds 995 354 508 528 321 2,385 2,055
Total interest expense 17,380 14,256 13,558 13,361 12,080 58,555 41,680
Net interest income 44,327 38,354 37,057 35,008 34,889 154,746 141,526
Provision for credit losses 7,828 3,748 3,417 2,727 2,808 17,720 9,610
Provision for (release of) credit losses on unfunded commitments 122 17 104 142 (106) 385 (101)
Net interest income after provision for credit losses 36,377 34,589 33,536 32,139 32,187 136,641 132,017
Noninterest income
Service charges on deposits 241 235 200 207 240 883 964
Credit card fees 3,733 4,055 4,330 3,881 3,970 15,999 17,273
Mortgage banking revenue 1,821 1,882 1,990 1,453 1,166 7,146 4,896
Government lending revenue 2,301 — — — — 2,301 —
Government loan servicing revenue 3,993 — — — — 3,993 —
Loan servicing rights (government guaranteed) 1,013 — — — — 1,013 —
Non-recurring equity and debt investment write-down (2,620) — — — — (2,620) —
Other income 1,431 463 370 431 560 2,695 1,842
Total noninterest income 11,913 6,635 6,890 5,972 5,936 31,410 24,975
Noninterest expenses
Salaries and employee benefits 16,513 13,345 13,272 12,907 11,638 56,037 48,754
Occupancy and equipment 2,976 1,791 1,864 1,613 1,573 8,244 5,673
Professional fees 2,150 1,980 1,769 1,947 1,930 7,846 9,270
Data processing 7,210 6,930 6,788 6,761 6,128 27,689 25,686
Advertising 1,032 1,223 2,072 2,032 1,433 6,359 6,161
Loan processing 969 615 476 371 198 2,431 1,633
Foreclosed real estate expenses, net — 1 — 1 — 2 7
Merger-related expenses 2,615 520 83 712 — 3,930 —
Operational losses 993 1,008 782 931 1,490 3,714 4,613
Other operating 3,056 2,312 2,387 2,212 2,517 9,967 8,970
Total noninterest expenses 37,514 29,725 29,493 29,487 26,907 126,219 110,767
Income before income taxes 10,776 11,499 10,933 8,624 11,216 41,832 46,225
Income tax expense 3,243 2,827 2,728 2,062 2,186 10,860 10,354
Net income $ 7,533 $ 8,672 $ 8,205 $ 6,562 $ 9,030 $ 30,972 $ 35,871
Consolidated Balance Sheets
--- --- --- --- --- --- --- --- --- --- ---
(unaudited) (unaudited) (unaudited) (unaudited) (audited)
(in thousands, except share data) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023
Assets
Cash and due from banks $ 25,433 $ 23,462 $ 19,294 $ 12,361 $ 14,513
Interest-bearing deposits at other financial institutions 179,841 133,180 117,160 72,787 39,044
Federal funds sold 58 58 57 56 407
Total cash and cash equivalents 205,332 156,700 136,511 85,204 53,964
Investment securities available-for-sale 223,630 208,700 207,917 202,254 208,329
Restricted investments 4,479 5,895 4,930 4,441 4,353
Loans held for sale 21,270 19,554 19,219 10,303 7,481
Portfolio loans receivable, net of deferred fees and costs 2,630,163 2,107,522 2,021,588 1,964,525 1,903,288
Less allowance for credit losses (48,652) (31,925) (30,832) (29,350) (28,610)
Total portfolio loans held for investment, net 2,581,511 2,075,597 1,990,756 1,935,175 1,874,678
Premises and equipment, net 15,525 5,959 5,551 4,500 5,069
Accrued interest receivable 16,664 12,468 12,162 12,258 11,494
Goodwill 21,126 — — — —
Intangible assets 14,072 — — — —
Loan servicing assets 5,511 — — — —
Deferred tax asset 16,670 10,748 12,150 12,311 12,252
Bank owned life insurance 43,956 38,779 38,414 38,062 37,711
Other assets 37,165 26,388 10,973 19,730 10,845
Total assets $ 3,206,911 $ 2,560,788 $ 2,438,583 $ 2,324,238 $ 2,226,176
Liabilities
Deposits
Noninterest-bearing $ 810,928 $ 718,120 $ 684,574 $ 665,812 $ 617,373
Interest-bearing 1,951,011 1,468,104 1,415,854 1,339,883 1,278,623
Total deposits 2,761,939 2,186,224 2,100,428 2,005,695 1,895,996
Federal Home Loan Bank advances 22,000 52,000 32,000 22,000 22,000
Other borrowed funds 12,062 12,062 12,062 12,062 27,062
Accrued interest payable 9,393 8,503 6,573 6,009 5,583
Other liabilities 46,378 21,888 19,666 19,007 20,675
Total liabilities 2,851,772 2,280,677 2,170,729 2,064,773 1,971,316
Stockholders' equity
Common stock 167 139 139 139 139
Additional paid-in capital 128,598 55,585 55,005 54,229 54,473
Retained earnings 237,843 232,995 225,824 218,731 213,345
Accumulated other comprehensive loss (11,469) (8,608) (13,114) (13,634) (13,097)
Total stockholders' equity 355,139 280,111 267,854 259,465 254,860
Total liabilities and stockholders' equity $ 3,206,911 $ 2,560,788 $ 2,438,583 $ 2,324,238 $ 2,226,176

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

Three Months Ended<br>December 31, 2024 Three Months Ended<br>September 30, 2024 Three Months Ended<br>December 31, 2023
Average <br>Outstanding <br>Balance Interest Income/ <br>Expense Average <br>Yield/ <br>Rate(1) Average <br>Outstanding <br>Balance Interest Income/ <br>Expense Average <br>Yield/ <br>Rate(1) Average <br>Outstanding <br>Balance Interest Income/ <br>Expense Average <br>Yield/ <br>Rate(1)
(in thousands)
Assets
Interest earning assets:
Interest-bearing deposits $ 140,206 $ 1,446 4.10 % $ 91,089 $ 1,137 4.97 % $ 65,336 $ 680 4.13 %
Federal funds sold 58 — — 57 1 6.98 1,574 21 5.29
Investment securities available-for-sale 236,951 1,539 2.58 221,303 1,343 2.41 223,132 1,083 1.93
Restricted investments 7,292 120 6.55 4,911 82 6.64 4,518 76 6.67
Loans held for sale 25,614 193 3.00 9,967 161 6.43 4,601 83 7.16
Portfolio loans receivable(2)(3) 2,592,960 58,409 8.96 2,053,619 49,886 9.66 1,863,298 45,026 9.59
Total interest earning assets 3,003,081 61,707 8.17 2,380,946 52,610 8.79 2,162,459 46,969 8.62
Noninterest earning assets 117,026 56,924 40,020
Total assets $ 3,120,107 $ 2,437,870 $ 2,202,479
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts $ 257,446 424 0.66 $ 228,365 321 0.56 $ 195,539 90 0.18
Savings 13,497 20 0.59 4,135 5 0.48 5,184 2 0.15
Money market accounts 763,526 7,131 3.72 698,239 7,442 4.24 680,697 7,139 4.16
Time deposits 847,618 8,810 4.13 479,824 6,134 5.09 380,731 4,528 4.72
Borrowed funds 97,116 995 4.08 43,655 354 3.23 41,823 321 3.05
Total interest-bearing liabilities 1,979,203 17,380 3.49 1,454,218 14,256 3.90 1,303,974 12,080 3.68
Noninterest-bearing liabilities:
Noninterest-bearing liabilities 58,460 28,834 27,529
Noninterest-bearing deposits 729,907 680,731 622,941
Stockholders’ equity 352,537 274,087 248,035
Total liabilities and stockholders’ equity $ 3,120,107 $ 2,437,870 $ 2,202,479
Net interest spread 4.68 % 4.89 % 4.94 %
Net interest income $ 44,327 $ 38,354 $ 34,889
Net interest margin(4) 5.87 % 6.41 % 6.40 %

_______________

(1)Annualized.

(2)Includes nonaccrual loans.

(3)For the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, collectively, portfolio loans yield excluding credit card loans was 6.98%, 7.15% and 6.89%, respectively.

(4)For the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, collectively, credit card loans accounted for 182, 233 and 248 basis points of the reported net interest margin, respectively.

Year Ended December 31,
2024 2023
Average <br>Outstanding <br>Balance Interest Income/ <br>Expense Average <br>Yield/ <br>Rate(1) Average <br>Outstanding <br>Balance Interest Income/ <br>Expense Average <br>Yield/ <br>Rate(1)
(in thousands)
Assets
Interest earning assets:
Interest-bearing deposits $ 98,319 $ 4,569 4.65 % $ 70,407 $ 3,211 4.56 %
Federal funds sold 57 3 5.26 1,597 74 4.63
Investment securities available-for-sale 228,909 5,441 2.38 245,466 4,815 1.96
Restricted investments 5,563 373 6.71 5,016 346 6.90
Loans held for sale 12,121 569 4.69 5,755 382 6.64
Portfolio loans receivable(2)(3) 2,142,638 202,346 9.44 1,816,968 174,378 9.60
Total interest earning assets 2,487,607 213,301 8.57 2,145,209 183,206 8.54
Noninterest earning assets 66,442 43,090
Total assets $ 2,554,049 $ 2,188,299
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts $ 221,437 $ 1,003 0.45 % $ 201,194 $ 298 0.15 %
Savings 6,732 27 0.40 5,768 8 0.14
Money market accounts 704,002 28,741 4.08 642,013 23,510 3.66
Time deposits 561,369 26,399 4.70 360,464 15,809 4.39
Borrowed funds 63,686 2,385 3.74 59,302 2,055 3.47
Total interest-bearing liabilities 1,557,226 58,555 3.76 1,268,741 41,680 3.29
Noninterest-bearing liabilities:
Noninterest-bearing liabilities 34,043 24,026
Noninterest-bearing deposits 675,360 655,013
Stockholders’ equity 287,420 240,519
Total liabilities and stockholders’ equity $ 2,554,049 $ 2,188,299
Net interest spread 4.81 % 5.25 %
Net interest income $ 154,746 $ 141,526
Net interest margin(4) 6.22 % 6.60 %

(1)Annualized.

(2)Includes nonaccrual loans.

(3)For the years ended December 31, 2024 and 2023, collectively, portfolio loans yield excluding credit card loans was 7.03% and 6.65%, respectively.

(4)For the years ended December 31, 2024 and 2023, collectively, credit card loans accounted for 222 and 264 basis points of the reported net interest margin, respectively.

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

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

The following schedule presents financial information for the periods indicated. Total assets are presented as of December 31, 2024, September 30, 2024, and December 31, 2023.

Segments
For the three months ended December 31, 2024
(in thousands) Commercial Bank CBHL OpenSky™ Windsor Advantage Corporate(2) Eliminations Consolidated
Interest income $ 45,195 $ 192 $ 15,454 $ — $ 874 $ (8) $ 61,707
Interest expense 17,086 131 — — 171 (8) 17,380
Net interest income 28,109 61 15,454 — 703 — 44,327
Provision for credit losses 6,651 — 1,177 — — — 7,828
Provision for credit losses on unfunded commitments 122 — — — — — 122
Net interest income after provision 21,336 61 14,277 — 703 — 36,377
Noninterest income (loss) 4,547 1,676 3,743 4,566 (2,619) — 11,913
Noninterest expense(1) 16,539 2,377 12,595 2,670 3,333 — 37,514
Net income (loss) before taxes $ 9,344 $ (640) $ 5,425 $ 1,896 $ (5,249) $ — $ 10,776
Total assets $ 2,994,356 $ 21,691 $ 125,913 $ 7,922 $ 376,930 $ (319,901) $ 3,206,911
For the three months ended September 30, 2024
(in thousands) Commercial Bank CBHL OpenSky™ Windsor Advantage Corporate(2) Eliminations Consolidated
Interest income $ 35,805 $ 161 $ 15,625 $ — $ 1,049 $ (30) $ 52,610
Interest expense 13,984 108 — — 194 (30) 14,256
Net interest income 21,821 53 15,625 — 855 — 38,354
Provision for credit losses 1,453 — 2,294 — 1 — 3,748
Provision for credit losses on unfunded commitments 17 — — — — — 17
Net interest income after provision 20,351 53 13,331 — 854 — 34,589
Noninterest income 726 1,811 4,096 — 2 — 6,635
Noninterest expense(1) 12,422 2,395 13,276 — 1,632 — 29,725
Net income (loss) before taxes $ 8,655 $ (531) $ 4,151 $ — $ (776) $ — $ 11,499
Total assets $ 2,358,555 $ 19,831 $ 121,587 $ — $ 300,325 $ (239,510) $ 2,560,788
For the three months ended December 31, 2023
(in thousands) Commercial Bank CBHL OpenSky™ Windsor Advantage Corporate(2) Eliminations Consolidated
Interest income $ 30,957 $ 83 $ 15,035 $ — $ 964 $ (70) $ 46,969
Interest expense 11,884 31 — — 235 (70) 12,080
Net interest income 19,073 52 15,035 — 729 — 34,889
Provision for (release of) credit losses 691 — 2,125 — (8) — 2,808
Release of credit losses on unfunded commitments (106) — — — — — (106)
Net interest income after provision 18,488 52 12,910 — 737 — 32,187
Noninterest income 773 1,166 3,996 — 1 — 5,936
Noninterest expense(1) 12,303 1,617 12,669 — 318 — 26,907
Net income (loss) before taxes $ 6,958 $ (399) $ 4,237 $ — $ 420 $ — $ 11,216
Total assets $ 2,051,945 $ 8,589 $ 117,477 $ — $ 277,565 $ (229,400) $ 2,226,176

________________________

(1)     Noninterest expense includes $6.3 million, $6.2 million, and $5.7 million in data processing expense in OpenSky’s™ segment for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively.

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

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

(1)     Noninterest expense includes $24.9 million and $23.7 million in data processing expense in OpenSky’s™ segment for the years ended December 31, 2024 and 2023, respectively.

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

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

_______________

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

(2)Annualized.

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

_______________

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

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

Appendix

Reconciliation of Non-GAAP Measures

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

Appendix

Reconciliation of Non-GAAP Measures

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

_______________

(1)Annualized.

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

Appendix

Reconciliation of Non-GAAP Measures

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

_______________

(1)Annualized.

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

Appendix

Reconciliation of Non-GAAP Measures

Net Interest Margin, as Adjusted Quarter Ended
(in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023
Net Interest Income $ 44,327 $ 38,354 $ 37,057 $ 35,008 $ 34,889
Less: Credit Card Loan Income 15,022 15,137 15,205 14,457 14,677
Net Interest Income, as Adjusted $ 29,305 $ 23,217 $ 21,852 $ 20,551 $ 20,212
Average Interest Earning Assets 3,003,081 2,380,946 2,307,070 2,254,663 2,162,459
Less: Average Credit Card Loans 120,993 119,458 111,288 110,483 114,551
Total Average Interest Earning Assets, as Adjusted $ 2,882,088 $ 2,261,488 $ 2,195,782 $ 2,144,180 $ 2,047,908
Net Interest Margin, as Adjusted 4.05% 4.08% 4.00% 3.85% 3.92%
Net Interest Margin, as Adjusted Year Ended
--- --- --- --- ---
(in thousands) December 31, 2024 December 31, 2023
Net Interest Income $ 154,746 $ 141,526
Less: Credit Card Loan Income 59,821 61,096
Net Interest Income, as Adjusted $ 94,925 $ 80,430
Average Interest Earning Assets 2,487,607 2,145,209
Less: Average Credit Card Loans 115,581 114,450
Total Average Interest Earning Assets, as Adjusted $ 2,372,026 $ 2,030,759
Net Interest Margin, as Adjusted 4.00% 3.96% Portfolio Loans Receivable Yield, as Adjusted Quarter Ended
--- --- --- --- --- --- --- --- --- --- ---
(in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023
Portfolio Loans Receivable Interest Income $ 58,409 $ 49,886 $ 48,143 $ 45,908 $ 45,026
Less: Credit Card Loan Income 15,022 15,137 15,205 14,457 14,677
Portfolio Loans Receivable Interest Income, as Adjusted $ 43,387 $ 34,749 $ 32,938 $ 31,451 $ 30,349
Average Portfolio Loans Receivable 2,592,960 2,053,619 1,992,630 1,927,372 1,863,298
Less: Average Credit Card Loans 120,993 119,458 111,288 110,483 114,551
Total Average Portfolio Loans Receivable, as Adjusted $ 2,471,967 $ 1,934,161 $ 1,881,342 $ 1,816,889 $ 1,748,747
Portfolio Loans Receivable Yield, as Adjusted 6.98% 7.15% 7.04% 6.96% 6.89% Portfolio Loans Receivable Yield, as Adjusted Year Ended
--- --- --- --- ---
(in thousands) December 31, 2024 December 31, 2023
Portfolio Loans Receivable Interest Income $ 202,346 $ 174,378
Less: Credit Card Loan Income 59,821 61,096
Portfolio Loans Receivable Interest Income, as Adjusted $ 142,525 $ 113,282
Average Portfolio Loans Receivable 2,142,638 1,816,968
Less: Average Credit Card Loans 115,581 114,450
Total Average Portfolio Loans Receivable, as Adjusted $ 2,027,057 $ 1,702,518
Portfolio Loans Receivable Yield, as Adjusted 7.03% 6.65%

Appendix

Reconciliation of Non-GAAP Measures

Pre-tax, Pre-Provision Net Revenue ("PPNR") Quarter Ended
(in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023
Net Income $ 7,533 $ 8,672 $ 8,205 $ 6,562 $ 9,030
Add: Income Tax Expense 3,243 2,827 2,728 2,062 2,186
Add: Provision for Credit Losses 7,828 3,748 3,417 2,727 2,808
Add: Provision for (Release of) Credit Losses on Unfunded Commitments 122 17 104 142 (106)
Pre-tax, Pre-Provision Net Revenue ("PPNR") $ 18,726 $ 15,264 $ 14,454 $ 11,493 $ 13,918 Pre-tax, Pre-Provision Net Revenue ("PPNR") Year Ended
--- --- --- --- ---
(in thousands) December 31, 2024 December 31, 2023
Net Income $ 30,972 $ 35,871
Add: Income Tax Expense 10,860 10,354
Add: Provision for Credit Losses 17,720 9,610
Add: Provision for (Release of) Credit Losses on Unfunded Commitments 385 (101)
Pre-tax, Pre-Provision Net Revenue ("PPNR") $ 59,937 $ 55,734
PPNR, as Adjusted Quarter Ended
--- --- --- --- --- --- --- --- --- --- ---
(in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023
Net Income $ 7,533 $ 8,672 $ 8,205 $ 6,562 $ 9,030
Add: Income Tax Expense 3,243 2,827 2,728 2,062 2,186
Add: Provision for Credit Losses 7,828 3,748 3,417 2,727 2,808
Add: Provision for (Release of) Credit Losses on Unfunded Commitments 122 17 104 142 (106)
Add: Merger-Related Expenses 2,615 520 83 712 —
Add: Non-recurring equity and debt investment write-down 2,620 — — — —
PPNR, as Adjusted $ 23,961 $ 15,784 $ 14,537 $ 12,205 $ 13,918
PPNR, as Adjusted Year Ended
--- --- --- --- ---
(in thousands) December 31, 2024 December 31, 2023
Net Income $ 30,972 $ 35,871
Add: Income Tax Expense 10,860 10,354
Add: Provision for Credit Losses 17,720 9,610
Add: Provision for (Release of) Credit Losses on Unfunded Commitments 385 (101)
Add: Merger-Related Expenses 3,930 —
Add: Non-recurring equity and debt investment write-down 2,620 —
PPNR, as Adjusted $ 66,487 $ 55,734

Appendix

Reconciliation of Non-GAAP Measures

Allowance for Credit Losses to Total Portfolio Loans Quarter Ended
(in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023
Allowance for Credit Losses $ 48,652 $ 31,925 $ 30,832 $ 29,350 $ 28,610
Total Portfolio Loans 2,630,163 2,107,522 2,021,588 1,964,525 1,903,288
Allowance for Credit Losses to Total Portfolio Loans 1.85% 1.51% 1.53% 1.49% 1.50%
Nonperforming Assets to Total Assets Quarter Ended
--- --- --- --- --- --- --- --- --- --- ---
(in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023
Total Nonperforming Assets $ 30,241 $ 15,460 $ 14,053 $ 14,361 $ 16,042
Total Assets 3,206,911 2,560,788 2,438,583 2,324,238 2,226,176
Nonperforming Assets to Total Assets 0.94% 0.60% 0.58% 0.62% 0.72%
Nonperforming Loans to Total Portfolio Loans Quarter Ended
--- --- --- --- --- --- --- --- --- --- ---
(in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023
Total Nonperforming Loans $ 30,241 $ 15,460 $ 14,053 $ 14,361 $ 16,042
Total Portfolio Loans 2,630,163 2,107,522 2,021,588 1,964,525 1,903,288
Nonperforming Loans to Total Portfolio Loans 1.15% 0.73% 0.70% 0.73% 0.84%
Net Charge-Offs to Average Portfolio Loans Quarter Ended
--- --- --- --- --- --- --- --- --- --- ---
(in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023
Total Net Charge-Offs $ 2,427 $ 2,655 $ 1,935 $ 1,987 $ 2,477
Total Average Portfolio Loans 2,592,960 2,053,619 1,992,630 1,927,372 1,863,298
Net Charge-Offs to Average Portfolio Loans, Annualized 0.37% 0.51% 0.39% 0.41% 0.53%
Net Charge-offs to Average Portfolio Loans Year Ended
--- --- --- --- ---
(in thousands) December 31, 2024 December 31, 2023
Total Net Charge-Offs $ 9,004 $ 8,473
Total Average Portfolio Loans 2,142,638 1,816,968
Net Charge-Offs to Average Portfolio Loans, Annualized 0.42% 0.47%
Tangible Book Value per Share Quarter Ended
--- --- --- --- --- --- --- --- --- --- ---
(in thousands, except share and per share data) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023
Total Stockholders' Equity $ 355,139 $ 280,111 $ 267,854 $ 259,465 $ 254,860
Less: Preferred Equity — — — — —
Less: Intangible Assets 42,454 — — — —
Tangible Common Equity $ 312,685 $ 280,111 $ 267,854 $ 259,465 $ 254,860
Period End Shares Outstanding 16,662,405 13,917,891 13,910,467 13,889,563 13,922,532
Tangible Book Value per Share $ 18.77 $ 20.13 $ 19.26 $ 18.68 $ 18.31

Appendix

Reconciliation of Non-GAAP Measures

Return on Average Tangible Common Equity Quarter Ended
(in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023
Net Income $ 7,533 $ 8,672 $ 8,205 $ 6,562 $ 9,030
Add: Intangible Amortization, Net of Tax 198 — — — —
Net Tangible Income $ 7,731 $ 8,672 $ 8,205 $ 6,562 $ 9,030
Average Equity 352,537 274,087 263,425 258,892 248,035
Less: Average Intangible Assets 27,653 — — — —
Net Average Tangible Common Equity $ 324,884 $ 274,087 $ 263,425 $ 258,892 $ 248,035
Return on Average Equity 8.50 % 12.59 % 12.53 % 10.19 % 14.44 %
Return on Average Tangible Common Equity 9.47 % 12.59 % 12.53 % 10.19 % 14.44 %
Core Return on Average Tangible Common Equity Quarter Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023
Net Income, as Adjusted $ 15,473 $ 9,229 $ 8,267 $ 7,100 $ 9,030
Add: Intangible Amortization, Net of Tax 198 — — — —
Net Tangible Income, as Adjusted $ 15,671 $ 9,229 $ 8,267 $ 7,100 $ 9,030
Core Return on Average Equity, as Adjusted 17.68 % 13.40 % 12.62 % 11.03 % 14.44 %
Core Return on Average Tangible Common Equity, as Adjusted 19.19 % 13.40 % 12.62 % 11.03 % 14.44 %

ABOUT CAPITAL BANCORP, INC.

Capital Bancorp, Inc., Rockville, Maryland is a registered bank holding company incorporated under the laws of Maryland. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in six locations in the greater Washington, D.C. and Baltimore, Maryland markets, one bank branch in Fort Lauderdale, Florida and one bank branch in Chicago, Illinois. Capital Bancorp had assets of approximately $3.2 billion at December 31, 2024 and its common stock is traded in the NASDAQ Global Market under the symbol “CBNK.” More information can be found at the Company's website www.CapitalBankMD.com under its investor relations page.

FORWARD-LOOKING STATEMENTS

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

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

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

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

MEDIA CONTACT: Ed Barry (240) 283-1912

WEB SITE: www.CapitalBankMD.com

29

investoroverview12312024

4Q 2024 Investor Overview

Forward Looking Statements The statements contained in this presentation that are not historical facts are forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on Capital Bancorp, Inc. (the “Company” or “Capital”) including, without limitation, plans, strategies and goals, and statements about the Company’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, and shareholder value creation. These statements are often, but not always, made through the use of words or phrases such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” "projects", "can", "ongoing", “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. The inclusion of or reference to forward-looking information in this presentation should not be regarded as a representation by Capital or any other person that the future plans, estimates or expectations contemplated by the Company will be achieved. Any or all of the forward-looking statements in (or conveyed orally regarding) this presentation may turn out to be inaccurate. Accordingly, you are cautioned not to place undue reliance on forward-looking statements and that any such forward- looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the expected results expressed or implied by such forward-looking statements. 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. Except as otherwise indicated, this presentation speaks as of the date hereof. The delivery of this presentation shall not, under any circumstances, create any implication that there has been no change in the affairs of Capital after the date hereof. Certain of the information contained herein may be derived from information provided by industry sources. The Company believes that such information is accurate and that the sources from which it has been obtained are reliable. Capital cannot guarantee the accuracy of such information, however, and has not independently verified such information. While Capital is not aware of any misstatements regarding the industry data presented in this presentation, Capital's estimates involve risks and uncertainties and are subject to change based on various factors. Similarly, Capital believes that its internal research is reliable, even though such research has not been verified by independent sources. Non-U.S. GAAP Financial Measures This presentation may include certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. These non-GAAP financial measures should not be considered in isolation, and should be considered as additions to, and not substitutes for or superior to, measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the Company's non-GAAP financial measures as tools for comparison. If included in this presentation, see the Appendix to this presentation for a reconciliation of the non-GAAP financial measures used in (or conveyed orally during) this presentation to their most directly comparable GAAP financial measures. 2

(in millions except per share data) Balance Sheet Dec. 31, 2024 Sep. 30, 2024 Annualized Dec. 31, 2023 YoY Assets $ 3,207 $ 2,561 100.3% $ 2,226 44.1% Portfolio Loans 2,630 2,108 95.5% 1,903 38.2% Deposits 2,762 2,186 104.8% 1,896 45.7% Quarterly Financial Performance Dec. 31, 2024 Sep. 30, 2024 QoQ Dec. 31, 2023 YoY Tangible Book Value per Share(1) $ 18.77 $ 20.13 (6.8)% $ 18.31 2.5% Earnings per Share, Diluted $ 0.45 $ 0.62 (27.4)% $ 0.65 (30.8)% Earnings per Share, Diluted, as adjusted(1) $ 0.92 $ 0.66 39.4% $ 0.65 41.5% ROAA, annualized 0.96% 1.42% -46 bps 1.63% -67 bps ROAA, annualized, as adjusted(1) 1.97% 1.51% 46 bps 1.63% 34 bps ROAE, annualized 8.50% 12.59% -409 bps 14.44% -594 bps ROAE, annualized, as adjusted(1) 17.46% 13.40% 406 bps 14.44% 302 bps Core ROAE, annualized(1) 17.68% 13.40% 428 bps 14.44% 324 bps ROATCE, annualized(1) 9.47% 12.59% -312 bps 14.44% -497 bps Core ROATCE, annualized(1) 19.19% 13.40% 579 bps 14.44% 475 bps Efficiency Ratio 66.70% 66.07% 63 bps 65.91% 79 bps Efficiency Ratio, as adjusted(1) 59.29% 64.92% -563 bps 65.91% -662 bps Net Interest Margin 5.87% 6.41% -54 bps 6.40% -53 bps Net Interest Margin, as adjusted(1)(2) 4.05% 4.08% -3 bps 3.92% 13 bps Capital Bancorp, Inc. (NASDAQ-CBNK) Financial Highlights Corporate Timeline Founded as Harbor Capital National Bank Recapitalized by investor group led by Stephen Ashman Acquired three failed institutions including OpenSky® CEO Ed Barry joined Capital Bank Assets exceed $1 billion Successful IPO and inclusion in R2000 OpenSky® accounts exceed 168,000 1999 2002 2011 2012 2017 2018 Originated $371 million SBA-PPP loans (2020 & 2021) 2020 $40MM net income, dividend initiated, assets exceed $2 billion OpenSky® accounts exceed 700,000 2021 Capital Bank reports record earnings 2022 (1) Refer to Appendix for reconciliation of non-GAAP measures. (2) Excluding credit card loans Capital Bank completes acquisition of Integrated Financial Holdings, Inc. (“IFHI”) 2024 3

$2.5Bn Q4 '24 Servicing Portfolio $4.6mm Q4 '24 Revenue3 • Loan service provider that offers community banks and credit unions with a comprehensive outsourced U.S. Small Business Association (“SBA”) 7(a) and U.S. Department of Agriculture (“USDA”) lending platform • $2.5Bn servicing portfolio complements USDA / SBA gain on sale revenue within commercial bank • Poised to benefit from steeper yield curve and higher industry-wide SBA volumes Q4 2024 5 ~77% Commercial Pro Forma Business Model is Uniquely Diversified Source: Company Documents. Note: CBNK financial metrics as of December 31, 2024 unless otherwise stated. . 1 Volume in FY 2021 was approximately $1.0 billion and volume in FY 2022 was approximately $300 million. 2 Credit card loans are presented net of reserve for interest and fees. 3 Includes $0.5 million of Capital Bank related servicing fees 4 This illustration includes certain expenses previously recorded directly to the Commercial Bank segment, allocated to the other segments for 2023. Excludes $1.8 million loss in Capital Bank Home Loans, $1.4 of net income in Church Street Capital and $0.2mm of other income. 5 Excludes $640k of net loss in Capital Bank Home Loans and $2.6mm of net loss allocated to Corporate. Excludes merger-related expenses, non-recurring IFH equity and debt investment write-down and IFH ACL provision. Commercial Bank OpenSky Windsor Advantage Commercial Banking Government Guaranty Lending (GGL) • Nationwide GGL business with niche expertise in Solar and Renewable Energy • Strong C&I pipeline with proven ability to originate $100+ million per year of loans $2.5B Portfolio Gross Loans, ex. OpenSky $2.3B Deposits • Focused on our core markets and filling out our national deposit vertical strategy • High value-added services and targeted vertical expertise generates above-average risk- adjusted loan yields $32.7mm Q4 '24 Revenue Fully-Allocated Illustrative Net Income Contribution 4 $90mm Q4 '24 Volume1 $1.7mm Q4 '24 Revenue • Gain on sale margin and pipeline returning to normalized levels • Expense management has reduced losses while maintaining robust origination capabilities • Well-positioned for stabilization or decline in rates • Natural hedge against asset sensitivity of the balance sheet $166mm Deposits $128mm Loans, net2 • Nationwide, secured credit card to help under-banked customers (re)establish their credit with opportunities for graduation into unsecured credit • Building capabilities to cross-sell products and services as card-holders progress on their customer journeys • Extend unsecured to graduating customers and starting to build capabilities around a straight to unsecured product $19.2mm Q4 '24 Revenue Capital Bank Home Loans OpenSky Windsor Advantage ~55% Commercial FY 2023 4

Recently Completed Strategic Acquisition of IFHI

Source: S&P Global Market Intelligence; FactSet. 1 Based on IFH 2023Y core revenue; excludes one-time, non-recurring items. 2 Based on IFH 2023Y core net income based on reported net income of $11.2 million less $4.7 million in pre-tax adjustments, tax effected at 22.5%. 3 Return on invested capital represents IFH fully-synergized net income divided by the sum of deal value at announcement plus after-tax transaction charges less excess capital at closing. 4 Reflects the time it would have taken CBNK to achieve pro forma 2025 EPS on a standalone basis; based on median consensus estimates at announcement with a growth rate applied post-2025. Transaction Overview and Strategic Rationale Strategic Acquisition of IFH Transaction Materially Accelerates CBNK’s Strategic Plan Initiatives • Capital Bancorp, Inc. (NASDAQ: CBNK) acquired Integrated Financial Holdings, Inc. (OTCQX:IFHI), a $518 million asset bank holding company at announcement of the transaction • Announced aggregate purchase price of $66.5 million ‒ 81% stock / 19% cash at announcement • IFH is headquartered in Raleigh, North Carolina • Branch-lite (single location) business model specializing in C&I, Government Guaranteed Lending (“GGL”) and renewables loan origination and servicing on a nationwide basis • High degree of fee income (48% of revenue1) and top-tier profitability track record (1.55% core ROAA2) CBNK Strategic Initiative ~17% 2025E EPS Accretion ~1.8 Yrs TBV per share Earnback (Years) 20%+ Return on Invested Capital3 ~2 Yrs EPS Pull- Forward (Years)4 • Growth in the commercial bank business line • Growth in fee income • Build domain expertise in new product / industry verticals • Further shift in the loan mix toward C&I and growth in regional C&I lending capabilities • Value accretive deployment of excess capital 6 As of Merger Announcement on March 27, 2024

Merger Updates 7 Merger Closed October 1, 2024 ▪ On track to achieve the full run-rate level of ~$7mm in annual cost savings ▪ Executed on Day 1 cost savings and organizational changes ▪ Enacted required policy changes and Government Guaranteed lending committee ▪ Conducted CBNK cultural immersion sessions at all IFH locations, each attended by key CBNK executives ▪ Completed initial conversion data validation ▪ Validated view on revenue synergies and pro forma USDA volumes realizable utilizing our larger balance sheet ▪ Converted acquired bank and Windsor general ledgers Next Steps ▪ Core system conversion scheduled for late February 2022 ▪ Ongoing focus on transaction revenue synergies and the potential for higher USDA and renewables volume leveraging our larger balance sheet ▪ Ongoing vendor consolidation ▪ Execute on Windsor Advantage / Capital Bank lender service provider relationship to efficiently grow SBA and small-ticket C&I loans ▪ Utilize combined bank products to deepen client relationships and drive growth

8 Asset Pre-tax Marks (Negative Mark is Dilutive to TBV) Liability Pre-Tax Marks (Negative Mark is Accretive to TBV) Announcement Estimate Current Estimate Announcement Estimate Current Estimate Gross Loans – Non-PCD Credit Mark $(2.7) million $(4.1) million Gross Loans – PCD Credit Mark $(6.9) million $(11.3) million Loans – Interest Rate Mark $(8.6) million $(7.1) million Securities – Accumulated Other Comprehensive Income $(2.1) million $(2.0) million Fixed Assets Mark $2.4 million $3.6 million Core Deposit Intangible $3.4 million $1.8 million Trade Name Intangible $2.1 million $2.1 million Customer List Intangible $2.4 million $12.2 million Certificate of Deposits Mark $0.3 million $9.1 million Total Asset Marks ($12.7) million ($9.1) million Mortgage Repurchase Reserve $0.3 million $0.3 million SBA Repurchase Reserve $2.6 million $1.0 million Total Liability Marks $3.2 million $10.4 million ▪ Total restructuring charge expected to be ~$12.3mm vs. ~$10.9mm pre-tax at announcement ▪ Increase in estimated value of customer list intangible reflects strong relationship value, profitability profile and growth within Windsor Advantage’s SBA / USDA servicing client base ▪ Significant portion of increased PCD mark due to an increased mark on a specifically identified credit that had increased in exposure between announcement and close; This credit was not part of the core government guaranteed lending business that will be grown going forward; Long-term view on USDA lending credit quality continues to remain unchanged Purchase Accounting Update Gross Loans – Day 2 Non-PCD ACL $(2.7) million $(4.2) million

Renewables Business Poised to Grow as Energy Transition Continues to Take Hold OperationsProject AssemblyDevelopment Project Lifecycle LTC Development Loans Formula based on mid and late-stage development assets Rate: Prime + 1.0% to 3.0% Variable, quarterly adjust Term: 24 months Loan to Cost: Up to 90% Solar Project Assembly Loan Formula based for projects that have reached NTP (“Notice to Proceed”) Rate: 1YR Treasury + 2.75% to 4.0% Variable, quarterly adjust Term: 12 months to 18 months Loan to Cost: Up to 95% USDA Guaranteed Term Loans Structured fully-amortizing USDA term loans. Up to 80% USDA Guarantee Rate: 5/7/10YR Treasury + 2.75% to 4.0% Reset at 5/7/10YR Term: 300 months Loan to Cost: Up to 75% Investors typically offer secondary market premiums for USDA guaranteed solar loans ✓ Longer loan terms relative to conventional lending products ✓ Minimal financial covenants with a focus on payment defaults ✓ Guaranteed lending products offer competitive pricing ✓ USDA programs require matching amortization and loan terms ✓ Up to 80% loan guarantee (US Government) ✓ Full discretion to sell the guaranteed portion of the loan into a liquid and lucrative secondary market at any time ✓ Increased loan sizes but only the unguaranteed portion of the loan is considered for legal lending purposes Borrower Lender Key Milestones Mechanical Completion Permission to Operation Commercial Operations Date Placed in Service Substantial Completion Final Completion Notice to Proceed U.S. Electricity Generation from Selected Fuels Billion kilowatt-hours 0 1,000 2,000 3,000 4,000 5,000 6,000 2005 2020 2035 2050 2022 History Projections Solar* Data source: U.S. Energy Information Administration, Annual Energy Outlook 2023 (AEO2023) *Includes utility-scale and end-use photovoltaic generation and excludes off-grid photovoltaics. **Includes petroleum, conventional hydroelectric power, geothermal, wood and other biomass, pumped storage, non-biogenic municipal waste in the electric power sector, refinery gas, still gas, batteries, chemicals, hydrogen, pitch, purchased steam, sulfur, and miscellaneous technologies. Wind Natural Gas Coal Nuclear Other**9% 18% 20% 39% 10% 5% 6% 11% 5% 22% 22% 33% Significant Market Opportunity Given Renewables Growth Benefits of USDA Loans Loan Products are Designed to Provide Efficient and Effective Capital Through Every Phase of the Renewable Energy Project Lifecycle 9

Financial Information

Net Interest Income and Net Interest Margin $19,073 $19,375 $20,623 $21,821 $27,394 $15,035 $14,921 $15,785 $15,625 $15,454 $715 $34,889 $35,008 $37,057 $38,354 $44,327 6.40% 6.24% 6.46% 6.41% 5.87% 3.92% 3.85% 4.00% 4.08% 4.05% 4Q23 1Q24 2Q24 3Q24 4Q24 Commercial Bank Other OpenSky Net Purchase Accounting Accretion Net Interest Margin Net Interest Margin, as Adjusted(1) $ i n t h o u s a n d s 11 (1) Refer to Appendix for reconciliation of non-GAAP measures. Note: Other includes CBHL and Corporate

Noninterest Income – Quarter to Date $3,996 $3,915 $4,368 $4,096 $3,743 $1,166 $1,352 $1,845 $1,811 $1,676 $773 $704 $677 $726 $4,547 $4,566 $(2,619) $5,936 $5,972 $6,890 $6,635 $11,913 14.5% 14.6% 15.7% 14.7% 24.7% 4Q23 1Q24 2Q24 3Q24 4Q24 OpenSky CBHL Commercial Bank (incl. GGL) Windsor Advantage Corporate Core Fee Revenue as a % of Total Core Revenue $ i n t h o u s a n d s 12 Note: The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company. - 4Q24 Corporate includes a $2.6mm non-recurring legacy IFH equity and debt investment write-down .

Noninterest Expense – Quarter to Date $11,638 $12,907 $13,272 $13,345 $16,513 $1,573 $1,613 $1,864 $1,791 $2,976 $1,930 $1,947 $1,769 $1,980 $2,150 $6,128 $6,761 $6,788 $6,930 $7,210 $1,433 $2,032 $2,072 $1,223 $1,032 $4,205 $3,515 $3,645 $3,936 $5,018 $712 $83 $520 $2,615 $26,907 $29,487 $29,493 $29,725 $37,514 65.91% 70.22% 66.92% 64.92% 59.29% 4Q23 1Q24 2Q24 3Q24 4Q24 Salaries and employee benefits Occupancy and equipment Professional fees Data processing Advertising Other expense Merger-related expenses $ i n t h o u s a n d s 13 Note: Other expense includes loan processing expense, outside service providers expense, regulatory expense, office expense and other operational losses Refer to Appendix for reconciliation of adjusted, non-GAAP measures.

Profitability 1.63% 1.15% 1.40% 1.42% 0.96% 1.24% 1.41% 1.51% 1.97% 4Q23 1Q24 2Q24 3Q24 4Q24 Return on Average Assets ROAA ROAA, as Adjusted 14 14.44% 10.19% 12.53% 12.59% 8.50% 11.03% 12.62% 13.40% 17.46% 4Q23 1Q24 2Q24 3Q24 4Q24 Return on Average Equity ROAE ROAE, as Adjusted 14.44% 10.19% 12.53% 12.59% 9.47% 11.03% 12.62% 13.40% 19.19% 4Q23 1Q24 2Q24 3Q24 4Q24 Return on Average Tangible Common Equity ROATCE ROATCE, as Adjusted $0.65 $0.47 $0.59 $0.62 $0.45 $0.51 $0.59 $0.66 $0.92 4Q23 1Q24 2Q24 3Q24 4Q24 Earnings Per Share, diluted EPS EPS, as Adjusted Note: Refer to Appendix for reconciliation of adjusted, non-GAAP measures.

Balance Sheet Composition Cash & Cash Equivalents 6% Portfolio Loans 82% AFS Securities Portfolio 7% Other Assets 5% Asset Composition Owner Occupied Commercial Real Estate 17% Non Owner- Occupied Commercial Real Estate 18% Residential Real Estate 26% Construction Real Estate 12%Other(1) 1% Credit Card 5% Commercial and Industrial 21% Portfolio Loan Composition 4Q24 Total Loans: $2.64B 4Q24 Total Assets: $3.21B Portfolio Loan Composition Changes • Gross loan growth in the quarter of $522.6 million includes $373.5 million from the acquisition of IFH, and $116.7 million from organic growth, or 21.2% annualized for 4Q24. • Commercial and industrial loans of $554.6 million, or 21.0% of total gross loans at December 31, 2024 increased $282.7 million from September 30, 2024. • Owner Occupied Commercial Real Estate Loans totaled $440.0 million. • Non-Owner Occupied Commercial Real Estate Loans totaled $471.3 million. • Average Portfolio Loans increased $539.3 million, or 26.3% (not annualized), from the third quarter 2024. • Average Portfolio loans-to-deposit ratio of 99.3%. 15 (1) Other is comprised of lender finance of $28.6 million, business equity lines of credit of $3.1 million, other consumer loans of $2.1 million and deferred origination fees, net of $7.1 million. Note: Portfolio loans are presented net of deferred fees and costs of $7.1 million. Credit Card loans are presented net of reserve for interest and fees. C&I + OO-CRE represents 38% of total Portfolio Loans

Composition of Deposits Noninterest-bearing 29% Money Markets 30% Customer Time Deposits 20% Brokered Time Deposits 12% Interest-bearing Demand 9% Savings <1% 4Q24 Total Deposits: $2.76B Deposit Composition and Costs • Deposits growth of $575.7 million, includes $459.0 million from the acquisition of IFH, and $149.1 million from organic growth, or 28.2% annualized for 4Q24. • Average deposits increased $520.7 million, or 24.9% (not annualized), from the third quarter 2024. • Interest bearing deposit costs decreased 46bps to 3.46% from 3.92% in the prior quarter and total deposit costs decreased 14bps to 2.50% from 2.64% in the prior quarter. • Transaction accounts (noninterest-bearing and interest-bearing demand) represent 38% of overall deposit funding at Dec. 31, 2024. 16 (1) Annualized As of For the Three Months Ended (in thousands) December 31, 2024 December 31, 2024 Deposits: Spot Balance Average Balance Average Rate(1) Noninterest-bearing $ 810,928 $ 729,907 0.00% Interest-bearing demand 238,881 257,446 0.59% Savings 13,488 13,497 0.48% Money markets 816,708 763,526 3.72% Time deposits 881,934 847,618 4.13% Total deposits $ 2,761,939 $2,611,994 2.50%

High Quality, Low Risk Investment Portfolio U.S. Treasuries 57% Municipal 4% Corporate 2% Asset-backed 2% Mortgage-backed 35% 4Q24 Investment Securities: $224MM Investment Securities Portfolio • Classified as available for sale with a fair market value of $224 million, or 7% of total assets, with an effective duration of 3.0 years. • U.S. Treasuries represent 57% of the overall investment portfolio. • The accumulated other comprehensive loss on the investment securities portfolio of $11.5 million represents 3.2% of total stockholders’ equity and $0.69 of TBVPS. • The Company does not have a held to maturity investment securities portfolio. 17

$596 $76 $131 $205 $1,008 December 31, 2024 Cash and Cash Equivalents Unpledged Investment Securities Unsecured LOC with Other Banks Collateralized LOC Liquidity $ i n m ill io n s 18 Sources of Liquidity at December 31, 2024: • $596 million of collateralized lines of credit include: • $486 million of available borrowing capacity from the FHLB. • $110 million of available borrowing capacity from the Federal Reserve Bank of Richmond’s discount window. • Available lines of credit with other correspondent banks totaled $76 million. • Unpledged investment securities available as collateral for potential additional borrowings totaled $131 million. $803mm

Loan Yield and Deposit Rate Trends (including net purchase accounting adjustments) 9.59% 9.58% 9.72% 9.66% 8.96% 6.89% 6.96% 7.04% 7.15% 6.98% 3.70% 3.91% 3.87% 3.92% 3.46% 2.47% 2.64% 2.61% 2.64% 2.50% 4Q23 1Q24 2Q24 3Q24 4Q24 Loan Yield Loan Yield, adjusted(1) Interest Bearing Deposits Rate Total Cost of Deposits 19 (1) Excluding credit card loans

Credit Metrics 0.72% 0.62% 0.58% 0.60% 0.94% 4Q23 1Q24 2Q24 3Q24 4Q24 Non-performing Assets / Total Assets 20 0.53% 0.41% 0.39% 0.51% 0.37% 4Q23 1Q24 2Q24 3Q24 4Q24 Annualized Net Charge-Offs / Average Portfolio Loans(1) 0.84% 0.73% 0.70% 0.73% 1.15% 4Q23 1Q24 2Q24 3Q24 4Q24 Non-performing Loans / Total Portfolio Loans(1) 1.50% 1.49% 1.53% 1.51% 1.85% 4Q23 1Q24 2Q24 3Q24 4Q24 Allowance for Credit Losses / Total Portfolio Loans(1) (1) Refer to Appendix for reconciliation of non-GAAP measures.

Robust Capital Ratios 13.56% 13.10% 13.25% 12.50% 11.56% 4Q23 1Q24 2Q24 3Q24 4Q24 Tier 1 Risk Based Capital Ratio Tier 1 Risk Based Capital Ratio 8.0% Well Capitalized Threshold 21 11.45% 11.16% 10.98% 10.94% 11.07% 9.91% 9.66% 9.53% 9.12% 9.31% 4Q23 1Q24 2Q24 3Q24 4Q24 Tangible Common Equity Holding Company Tangible Common Equity Capital Bank Tangible Common Equity Note: Ratios presented are for Capital Bank unless otherwise noted 14.81% 14.36% 14.51% 13.76% 12.82% 4Q23 1Q24 2Q24 3Q24 4Q24 Total Risk Based Capital Ratio Total Risk Based Capital Ratio 10.0% Well Capitalized Threshold 10.51% 10.29% 10.36% 9.84% 9.12% 4Q23 1Q24 2Q24 3Q24 4Q24 Tier 1 Leverage Ratio Tier 1 Leverage Ratio 5.0% Well Capitalized Threshold

Share Appreciation Outperforms Industry Source: S&P Global Market Intelligence; FactSet. Note: Market data as of 1/23/2025. 1 CBNK IPO price of $12.50 used as starting price for price change calculation. 2 Select banks with assets between $1.5 billion and $5.0 billion in the Mid-Atlantic (North of Richmond) and New England Region. (ACNB, BCBP, BPRN, BWFG, FRBA, FRST, FVCB, HNVR, JMSB, MNSB, MRBK, MVBF, NBN, PKBK, PVBC, UNTY). 22 Share Price Change Since CBNK IPO on 9/26/20181TBVPS + Dividend Growth Since 2018Q3 80%+ Outperformance vs. both groups 120%+ Outperformance vs. both groups

Dominic Canuso Chief Financial Officer (301) 468-8848 x1403 Ed Barry Chief Executive Officer (240) 283-1912 NASDAQ: CBNK

Non-U.S. GAAP Financial Measures

Tangible Book Value Per Share (in thousands, except per share amount) December 31, 2024 September 30, 2024 December 31, 2023 Total Stockholders' Equity 355,139$ 280,111$ 254,860$ Less: Preferred equity - - - Less: Intangible assets 42,454 - - Tangible Common Equity 312,685$ 280,111$ 254,860$ Period End Shares Outstanding 16,662,405 13,917,891 13,922,532 Tangible Book Value Per Share 18.77$ 20.13$ 18.31$ Net Interest Margin, as Adjusted (1) (in thousands) December 31, 2024 September 30, 2024 December 31, 2023 Net Interest Income 44,327$ 38,354$ 34,889$ Less: Credit card loan income 15,022 15,137 14,677 Net Interest Income, as Adjusted 29,305$ 23,217$ 20,212$ Average Interest Earning Assets 3,003,081 2,380,946 2,162,459 Less: Average credit card loans 120,993 119,458 114,551 Total Average Interest Earning Assets, as Adjusted 2,882,088$ 2,261,488$ 2,047,908$ Net Interest Margin, as Adjusted (1) 4.05% 4.08% 3.92% (1) Annualized Quarters Ended Quarters Ended Reconciliation of Non-GAAP Information 25

Net Charge-offs to Average Portfolio Loans (1) (in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Total Net Charge-offs 2,427$ 2,655$ 1,935$ 1,987$ 2,477$ Total Average Portfolio Loans 2,592,960 2,053,619 1,992,630 1,927,372 1,863,298 Net Charge-offs to Average Portfolio Loans (1) 0.37% 0.51% 0.39% 0.41% 0.53% Nonperforming Loans to Total Portfolio Loans (in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Total Nonperforming Loans 30,241$ 15,460$ 14,053$ 14,361$ 16,042$ Total Portfolio Loans 2,630,163 2,107,522 2,021,588 1,964,525 1,903,288 Nonperforming Loans to Total Portfolio Loans 1.15% 0.73% 0.70% 0.73% 0.84% Allowance for Credit Losses to Total Portfolio Loans (in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Allowance for Credit Losses 48,652$ 31,925$ 30,832$ 29,350$ 28,610$ Total Portfolio Loans 2,630,163 2,107,522 2,021,588 1,964,525 1,903,288 Nonperforming Loans to Total Portfolio Loans 1.85% 1.51% 1.53% 1.49% 1.50% (1) Annualized Quarters Ended Quarters Ended Quarters Ended Reconciliation of Non-GAAP Information 26

Reconciliation of Non-GAAP Information 27 Earnings Metrics, as Adjusted (in thousands, except per share data) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Net Income 7,533$ 8,672$ 8,205$ 6,562$ 9,030$ Add: Merger-Related Expenses, net of tax 2,151 557 62 538 - Add: Non-recurring equity and debt investment write-down 2,620 - - - - Add: IFH ACL Provision, net of tax 3,169 - - - - Net Income, as Adjusted 15,473$ 9,229$ 8,267$ 7,100$ 9,030$ Weighted average common shares - Diluted 16,729 13,951 13,895 13,919 13,989 Earnings per share - Diluted 0.45$ 0.62$ 0.59$ 0.47$ 0.65$ Earnings per share - Diluted, as Adjusted 0.92$ 0.66$ 0.59$ 0.51$ 0.65$ Average Assets 3,120,107$ 2,437,870$ 2,353,868$ 2,299,234$ 2,202,479$ Return on Average Assets (1) 0.96% 1.42% 1.40% 1.15% 1.63% Return on Average Assets, as Adjusted (1) 1.97% 1.51% 1.41% 1.24% 1.63% Average Equity 352,537$ 274,087$ 263,425$ 258,892$ 248,035$ Return on Average Equity (1) 8.50% 12.59% 12.53% 10.19% 14.44% Return on Average Equity, as Adjusted (1) 17.46% 13.40% 12.62% 11.03% 14.44% Net Interest Income (a) 44,327$ 38,354$ 37,057$ 35,008$ 34,889$ Noninterest Income 11,913 6,635 6,890 5,972 5,936 Total Revenue 56,240$ 44,989$ 43,947$ 40,980$ 40,825$ Noninterest Expense 37,514 29,725 29,493 29,487 26,907 Efficiency Ratio (2) 66.70% 66.07% 67.11% 71.95% 65.91% Noninterest Income 11,913$ 6,635$ 6,890$ 5,972$ 5,936$ Add: Non-recurring equity and debt investment write-down 2,620 - - - - Noninterest Income, as Adjusted (b) 14,533$ 6,635$ 6,890$ 5,972$ 5,936$ Total Revenue, as Adjusted (a) + (b) 58,860$ 44,989$ 43,947$ 40,980$ 40,825$ Noninterest Expense 37,514$ 29,725$ 29,493$ 29,487$ 26,907$ Less: Merger-Related Expenses 2,615 520 83 712 - Noninterest Expense, as Adjusted 34,899$ 29,205$ 29,410$ 28,775$ 26,907$ Efficiency Ratio, as Adjusted (2) 59.29% 64.92% 66.92% 70.22% 65.91% (1) Annualized (2) The eff iciency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income). Quarters Ended

Reconciliation of Non-GAAP Information 28 Return on Average Tangible Common Equity (in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Net Income 7,533$ 8,672$ 8,205$ 6,562$ 9,030$ Add: Intangible Amortization, net of tax 198 - - - - Net Tangible Income 7,731$ 8,672$ 8,205$ 6,562$ 9,030$ Average Equity 352,537 274,087 263,425 258,892 248,035 Less: Average Intangible Assets 27,653 - - - - Net Average Tangible Common Equity 324,884$ 274,087$ 263,425$ 258,892$ 248,035$ Return on Average Equity 8.50% 12.59% 12.53% 10.19% 14.44% Return on Average Tangible Common Equity 9.47% 12.59% 12.53% 10.19% 14.44% Core Return on Average Tangible Common Equity (in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Net Income, as Adjusted 15,473$ 9,229$ 8,267$ 7,100$ 9,030$ Add: Intangible Amortization, net of tax 198 - - - - Net Tangible Income, as Adjusted 15,671$ 9,229$ 8,267$ 7,100$ 9,030$ Core Return on Average Equity, as Adjusted 17.68% 13.40% 12.62% 11.03% 14.44% Core Return on Average Tangible Common Equity, as Adjusted 19.19% 13.40% 12.62% 11.03% 14.44% Quarters Ended Quarters Ended

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