Third Quarter 2025 Highlights
-- GAAP Net Income of $15.1 million, or $0.89 per share, and return on
average assets ("ROA") of 1.77%
-- Core net income(1) of $12.2 million, or $0.72 per share, and Core
ROA(1) of 1.43%
-- Book value per common share of $23.80 at September 30, 2025, increased
$0.88 compared to 2Q 2025, and increased $3.67 when compared to 3Q 2024
-- Tangible book value per share(1) of $21.27, increased 3.1% (not
annualized), or $0.63 as compared to 2Q 2025, and increased 5.7%,
or $1.15 compared to 3Q 2024
-- Return on average equity ("ROE") of 15.57%, and return on average
tangible common equity ("ROTCE")(1) of 17.49%
-- Core ROE(1) of 12.56%, and Core ROTCE(1) of 14.15%
-- Gross Loans(2) grew $82.2 million, or 11.9% (annualized), during 3Q 2025,
and growth of $714.5 million year-over-year including $341.0 million from
organic growth and $373.5 million from the IFH acquisition
-- Total deposits decreased $28.7 million, or (3.9)% (annualized), from 2Q
2025. Year-over-year growth of $725.8 million includes $459.0 million
from the acquisition of IFH, and $266.8 million from organic growth, or
33.2% from 3Q 2024
-- Customer Deposit3 growth of $3.9 million, or 0.6% (annualized)
from 2Q 2025, and $641.3 million year-over-year, or 31.5% from 3Q
2024, including $347.8 million of organic growth, and $293.5
million from the acquisition of IFH
-- Net Interest Income increased $4.4 million, or 9.2% (not annualized),
from 2Q 2025, mainly due to the $4.6 million acceleration of accretion
from refinancing callable brokered time deposits acquired in the IFH
transaction, and increased $13.7 million, or 35.6%, year-over-year,
primarily driven by strong organic growth and the acquisition of IFH
-- Net Interest Margin ("NIM") of 6.36% increased 32 bps compared to 2Q 2025
and decreased 5 bps compared to 3Q 2024 due to the acquisition of
commercial loans from IFH, diluting the impact from OpenSky$(TM)$
-- Commercial Bank NIM(1) of 4.64% increased by 28 bps (but decreased
43 bps when excluding purchase accounting accretion ("PAA")), when
compared to 2Q 2025, and increased 82 bps (or 12 bps excluding
PAA), compared to 3Q 2024
-- 3Q 2025 net PAA of $5.5 million, or 67 bps of NIM and 70
bps of Commercial Bank NIM(1), increased $4.7 million, or
59 bps, compared to 2Q 2025
-- The allowance for credit losses to total loans ("ACL Coverage Ratio")
equaled 1.88% at September 30, 2025, and represented a 15 bps increase
from June 30, 2025 and a 37 bps increase from September 30, 2024,
primarily due to the acquisition of IFH loans. The Commercial Bank ACL
Coverage Ratio(1) equaled 1.70% at September 30, 2025, compared to 1.56%
at June 30, 2025
-- Fee Revenue (noninterest income) totaled $11.1 million, or 18.9% of total
revenue for 3Q 2025, a decrease of $2.0 million, from 2Q 2025 primarily
due to decreased government lending revenue (net gain on sale) and an
increase of $4.4 million, from 3Q 2024
-- Cash Dividend of $0.12 per share declared by the Board of Directors
_______________
((1) () As used in this press release, Core net income, Core ROA, Core ROE, ROTCE, Core ROTCE, Commercial Bank NIM, Commercial Bank ACL Coverage Ratio, and Tangible Book Value are non--U.S. generally accepted accounting principles ("GAAP") financial measures. These non-GAAP financial metrics excludes the impact of income from the call of brokered time deposits, merger-related expenses and other certain one-time non-recurring pre-tax adjustments and tax impacts of such adjustments. Reconciliations of these and other non--GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
((2) () Gross loans represent portfolio loans receivable, net of deferred fees and costs.
((3) () Customer Deposits represents total deposits excluding brokered deposits.
ROCKVILLE, Md., Oct. 27, 2025 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") $(CBNK)$, the holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $15.1 million, or $0.89 per diluted share, for 3Q 2025, compared to net income of $13.1 million, or $0.78 per diluted share, for 2Q 2025, and $8.7 million, or $0.62 per diluted share, for 3Q 2024. Core net income((4) () for 3Q 2025 of $12.2 million, or $0.72 per diluted share, compared to $14.2 million, or $0.85 per diluted share in 2Q 2025, and $9.2 million, or $0.66 per diluted share, for 3Q 2024.
The Company also declared a cash dividend on its common stock of $0.12 per share. The dividend is payable on November 26, 2025 to shareholders of record on November 10, 2025.
"We continue to execute on our strategic plan and see progress in driving long term growth and profitability," said Ed Barry, CEO of the Company and the Bank. "The diversity of our business continues to be a strength as outperformance in our government servicing business offset a decline in USDA gain-on-sales revenues."
"With and without the one-time items this quarter, we continue to grow our tangible book value and report solid returns on equity and tangible book value," said Steven J Schwartz, Chairman of the Company. "We believe our continued investment in technology and infrastructure, while negatively impacting our current core earnings, will help us provide long-term superior returns to our shareholders. I am also pleased that the uptick in our credit metrics is almost entirely due to loans acquired in the IFH transaction, not to loans originated by Capital Bank. That gives me reason for confidence that our credit discipline, combined with our superior net interest margin, continues to constitute a core competency."
Reconciliation of GAAP Net Income to Core (Non-GAAP) Net Income
The following table provides a reconciliation of the Company's net income under GAAP to Core net income (non-GAAP) results excluding brokered time deposit call, merger-related expenses and other one-time non-recurring transactions.
Third Quarter 2025 Second Quarter 2025
Income Diluted Income Diluted
(in thousands, Before Income Tax Earnings Before Income Earnings
except per Income Expense Net per Income Tax Net per
share data) Taxes (Benefit) Income Share Taxes Expense Income Share
------------ ------------ -------- -------- ------- -------- ------- --------
GAAP Net Income $19,867 $ 4,802 $15,065 $ 0.89 $17,099 $ 3,963 $13,136 $ 0.78
Deduct: Income
from the Call
of Brokered
Time Deposits (4,618) (1,129) (3,489)
Add:
Merger-Related
Expenses 697 122 575 1,398 328 1,070
------ --- ------ --- ------ -------- ------ ------- ------ --------
Core Net
Income(1) $15,946 $ 3,795 $12,151 $ 0.72 $18,497 $ 4,291 $14,206 $ 0.85
====== === ====== === ====== ======= ====== ======= ====== =======
Nine Months Ended September 30, 2025
------------------------------------------------
Income
(in thousands Before Income Tax Diluted
except per Income Expense Net Earnings
share data) Taxes (Benefit) Income per Share
------------ ------------ -------- ----------
GAAP Net Income $55,263 $13,130 $42,133 $ 2.50
Deduct: Income
from the Call
of Brokered
Time Deposits (4,618) (1,129) (3,489)
Add:
Merger-Related
Expenses 3,361 752 2,609
------ --- ------ --- ------ ----------
Core Net
Income(1) $54,006 $12,753 $41,253 $ 2.45
====== === ====== === ====== =========
(Note: The income tax expense reflects the non-deductibility of certain merger-related expenses.)
_______________
(1) As used in this press release, Core net income is a non-GAAP financial measure. This non-GAAP financial metric excludes the impact of income from the call of brokered time deposits, merger-related expenses and other certain one-time non-recurring pre-tax adjustments and tax impacts of such adjustments. Reconciliations of this and other non--GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Third Quarter 2025 Results
Earnings Summary
Net income of $15.1 million, or $0.89 per diluted share, compared to net income of $13.1 million, or $0.78 per diluted share, for 2Q 2025, and $8.7 million or $0.62 per diluted share, for 3Q 2024. 3Q 2025 core net income((1) () of $12.2 million, or $0.72 per diluted share, compared to 2Q 2025 of $14.2 million, or $0.85 per diluted share.
During the quarter there were two non-recurring events that impacted net income:
-- The Bank identified Fee Revenue that was also previously recognized as
Interest Income in the first and second quarter. As a result, the Bank
recorded a one-time reversal of $1.3 million of interest income
("Interest Income Adjustment"). There was no corresponding adjustment
needed to Fee Revenue as the fee income was correctly recognized during
those periods.
-- Also, during the quarter, the Bank issued a call of brokered time
deposits acquired from the IFH transaction, resulting in the accelerated
accretion of $4.6 million ("Call of Brokered Time Deposits").
-- Net interest income of $52.0 million increased $4.4 million, or 9.2% (not
annualized), compared to 2Q 2025, and increased $13.7 million, or 35.6%,
year-over-year.
-- Interest income of $64.9 million increased $0.3 million, or 0.5%
(not annualized), over 2Q 2025, and increased $12.3 million, or
23.3%, year-over-year. When excluding the $1.3 million Interest
Income Adjustment, interest income increased $1.6 million from 2Q
2025, primarily driven by $1.3 million of growth from OpenSky(TM)
and $0.3 million from the investment portfolio, while the increase
year-over-year was primarily driven by organic growth and the
acquisition of IFH.
-- Interest income included $0.2 million from net purchase
accounting accretion in 3Q 2025, compared to $0.4 million
in 2Q 2025. There was no impact related to purchase
accounting during 3Q 2024.
-- Interest expense of $12.9 million decreased $4.1 million, or 24.0%
(not annualized) compared to 2Q 2025, and decreased $1.4 million,
or 9.7%, year-over-year. When excluding the $4.6 million one-time
impact from the Call of Brokered Time Deposits, interest expense
increased $0.5 million, or 3.2%, compared to 2Q 2025, primarily
driven by a shift in portfolio mix.
-- Interest expense included a $5.3 million benefit from net
purchase accounting accretion in 3Q 2025, which included
$4.6 million from the Call of Brokered Time Deposits,
compared to a $0.9 million benefit in 2Q 2025. There was no
impact related to purchase accounting during 3Q 2024.
-- The 3Q 2025 provision for credit losses was $4.7 million, an increase of
$0.6 million from 2Q 2025. Excluding the impact of a loan sale during 2Q
2025 from the acquired IFH portfolio, the provision decreased $0.9
million quarter over quarter. Net charge-offs totaled $2.5 million, or
0.35% of portfolio loans (annualized), down from $5.1 million or 0.75% of
portfolio loans (annualized), in 2Q 2025. Net charge-offs in the quarter
include $0.3 million from the Commercial Bank and $2.1 million from
OpenSky(TM) loans.
-- At September 30, 2025, the ACL Coverage Ratio was 1.88%, up $5.6
million or 15 bps from June 30, 2025. The increase in the ACL
Coverage Ratio over prior quarter was primarily driven by a 12 bps
impact resulting from the reassignment of an IFH acquired loan
from non-purchase credit deteriorated ("non-PCD") loan to a
purchase credit deteriorated ("PCD") loan during the quarter as a
measurement period adjustment to the Day-1 purchase accounting,
increasing the allowance for credit losses ("ACL") by $3.4
million.
_______________
(1) As used in this press release, Core net income is a non-GAAP financial measure. This non-GAAP financial metric excludes the impact of income from the call of brokered time deposits, merger-related expenses and other certain one-time non-recurring pre-tax adjustments and tax impacts of such adjustments. Reconciliations of this and other non--GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Earnings Summary (Continued)
-- Fee Revenue of $11.1 million decreased $2.0 million, compared to 2Q 2025
and increased $4.4 million year-over-year primarily due to the
contributions made by the businesses IFH brought to the merged entity.
During 3Q 2025, core fee revenue(1) of $11.1 million decreased
$2.0 million as a result of a $3.1 million decrease in government lending
revenue (net gain on sale), $0.8 million lower SBIC investment income,
and a $0.1 million decrease in other income, offset by a $1.0 million
increase in loan servicing revenue, a $0.6 million increase in government
loan servicing revenue (Windsor Advantage(TM)), a $0.2 million increase
in credit card fees from OpenSky(TM), and $0.2 million increase in
mortgage banking revenue. Core fee revenue mix was 18.9% of total revenue
for 3Q 2025, compared to 21.6% during 2Q 2025, and 14.7% during 3Q 2024.
-- Noninterest expense of $38.4 million decreased $1.2 million compared to
2Q 2025 and increased $8.6 million compared to 3Q 2024. Core noninterest
expense(1) of $37.7 million decreased $0.5 million compared to 2Q 2025
and increased $8.5 million compared to 3Q 2024. Core comparisons include:
-- The decrease of $0.5 million quarter-over-quarter was driven by
decreases from personnel expenses and regulatory related expenses,
offset by growth in advertising expense mainly from OpenSky(TM).
-- Year-over-year expense growth of $8.6 million was primarily due to
the acquisition of IFH.
-- Income tax expense of $4.8 million, or 24.2% of pre-tax income for 3Q
2025, increased $0.8 million from $4.0 million, or 23.2% of pre-tax
income for 2Q 2025. The Core effective income tax rate(1) for 3Q 2025 and
2Q 2025 would have been 23.8% and 23.2%, respectively.
_______________
(1) As used in this press release, Core fee revenue, Core noninterest expense, and Core effective income tax rate are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of income from the call of brokered time deposits, merger-related expenses and other certain one-time non-recurring pre-tax adjustments and tax impacts of such adjustments. Reconciliations of these and other non--GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Balance Sheet
Total assets of $3.4 billion at September 30, 2025 increased $0.8 million from June 30, 2025. Total assets growth year-over-year of $828.7 million, or 32.4%, included $559.4 million acquired with the IFH acquisition, net of purchase accounting, and $269.3 million of organic growth.
-- Gross Loans of $2.82 billion at September 30, 2025 increased
$82.2 million, or 11.9% (annualized), from June 30, 2025 and increased
$714.5 million year-over-year including $373.5 million from the
acquisition of IFH and $341.0 million of organic growth.
-- Compared to June 30, 2025, growth was primarily driven by
$29.3 million from residential real estate, $25.9 million from
commercial and industrial ("C&I"), $20.9 million from commercial
real estate ("CRE"), and $5.5 million from OpenSky(TM).
-- C&l loans, plus owner-occupied commercial real estate loans
totaled 37.6% of total portfolio loans at September 30, 2025,
consistent with the prior quarter, and 29.6% at September 30,
2024.
-- Total deposits of $2.91 billion at September 30, 2025 decreased
$28.7 million, or 3.9% (annualized), from June 30, 2025, and increased
$725.8 million, or 33.2% (annualized) from September 30, 2024. When
excluding a decrease in brokered time deposits of $32.6 million, customer
deposits increased $3.9 million or 0.5% (annualized), including
$28.9 million of growth in customer money market deposits, $20.6 million
growth of noninterest-bearing deposits, offset by $43.7 million decrease
from interest-bearing demand accounts and a $1.9 million decrease in
customer time deposits. The increase of $725.8 million year-over-year was
driven by $459.0 million from the acquisition of IFH, and $266.8 million
from organic growth.
-- Insured and protected1 deposits were approximately $2.0 billion as
of September 30, 2025 representing 67.0% of the Company's deposit
portfolio.
-- Low-and-no interest-bearing DDA deposits of $1.1 billion, or 39.4%
of deposits, increased $23.1 million, or 7.9% (annualized) from 2Q
2025, and increased $157.8 million, or 16.0% year-over-year,
including $91.5 million from the acquisition of IFH, and $66.3
million of organic growth.
-- The average rate on the low-and-no interest-bearing
deposits was 0.14% for 3Q 2025, which remained flat
compared to 2Q 2025 and year-over-year.
-- The average portfolio loans-to-deposit ratio was 95.6% for 3Q 2025,
compared to 96.2% for 2Q 2025, and 98.2% for 3Q 2024.
-- The investment securities portfolio continues to be classified as
available-for-sale and had a fair market value of $232.6 million, or 6.9%
of total assets, an effective duration of 2.6 years, with U.S. Treasury
Securities representing 59% of the overall investment portfolio at
September 30, 2025. The accumulated other comprehensive income (loss) on
the investment securities portfolio improved $1.3 million during the
quarter to negative $6.8 million after-tax as of September 30, 2025,
which represents 1.7% 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 September 30, 2025 totaled $858.4 million,
compared to $834.8 from 2Q 2025. During 3Q 2025, available collateralized
lines of credit totaled $767.8 million, unsecured lines of credit with
other banks totaled $76.0 million and unpledged investment securities
available as collateral for potential additional borrowings totaled $14.5
million.
-- Capital Positions -- As of September 30, 2025, the Company reported a
Common Equity Tier-1 capital ratio of 13.51%, compared to 13.58% at June
30, 2025. At September 30, 2025, the Company and the Bank maintained
regulatory capital ratios that exceed all capital adequacy requirements.
-- There were no shares repurchased and retired during the three
months ended September 30, 2025, as part of the Company's stock
repurchase program. There is $11.9 million remaining to be
repurchased under the current $15.0 million authorization
repurchase program, which will expire on February 28, 2026.
_______________
(1) Protected deposits includes deposits that are indirectly protected under the product terms
Financial Metrics
Net Interest Margin -- NIM of 6.36% for 3Q 2025, increased 32 bps compared to the prior quarter, and decreased 5 bps year-over-year. Commercial Bank NIM(1) , of 4.64% increased 28 bps compared to the prior quarter, and increased 82 bps year-over-year. Net purchase accounting accretion for 3Q 2025 was 67 bps for NIM and 70 bps for Commercial Bank NIM(1) .
-- 3Q 2025 includes the previously mentioned $4.6 million (59 bps) Call of
Brokered Time Deposits and $1.3 million (17 bps) Interest Income
Adjustment. Excluding these items, 3Q 2025 NIM would have been 5.95% and
Commercial Bank NIM would have been 4.21%.
-- The average yield on interest earning assets of 7.93% decreased 26 bps
compared to the prior quarter, mainly due to a 16 bps impact from the
Interest Income Adjustment. Excluding this item, the average yield in the
quarter would have been 7.77% a decrease of 10 bps compared to 2Q 2025 as
a result of the overall rate environment. The average yield decreased 86
bps year-over-year primarily due to the acquisition of commercial loans
diluting the positive impact from OpenSky(TM) as well as the Interest
Income Adjustment.
-- The Commercial Bank Loan Yield(1) of 6.74% for 3Q 2025 decreased
40 bps compared to 2Q 2025, and decreased 41 bps year-over-year.
Excluding the Interest Income Adjustment, average yield in the
quarter would have been 6.94%, a decrease of 21 bps compared to 2Q
2025 and 22 bps year-over-year as a result of rate environment.
-- The total cost of deposits of 1.73% for 3Q 2025 decreased 63 bps compared
to the prior quarter and decreased 91 bps year-over-year, both mainly due
to the Call of Brokered Time Deposits. Excluding this item, total costs
of deposits for the quarter would have been 2.36%, consistent with 2Q
2025, and a decrease of 29 bps year-over-year due to shifts in product
mix from the acquisition of IFH.
-- The total cost of interest-bearing deposits decreased 88 bps
quarter-over-quarter, due to the Call of Brokered Time Deposits. Total
cost of interest-bearing deposits decreased 151 bps year-over-year, to
2.41% for 3Q 2025 primarily due to the Call of Brokered Time Deposits as
well as shifts in product mix from the acquisition of IFH.
-- Net purchase accounting accretion of $5.5 million, or 67 bps of NIM and
70 bps of Commercial Bank NIM, during 3Q 2025, which includes $4.6
million, or 59 bps, from the Call of Brokered Time Deposits, increased
$4.4 million from 2Q 2025. There was no impact from purchase accounting
during 3Q 2024.
Fee Revenue Mix -- The fee revenue mix was 18.9% of total revenue for 3Q 2025, compared to 21.6% during 2Q 2025, and 14.7% during 3Q 2024. The core fee revenue mix(1() was consistent with fee revenue mix for these periods.
_______________
(1) As used in this press release, Commercial Bank NIM, Commercial Bank Loan Yield, Core fee revenue mix and Core efficiency ratio are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of income from the call of brokered time deposits, merger-related expenses and other certain one-time non-recurring pre-tax adjustments and tax impacts of such adjustments. Reconciliations of these and other non--GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Credit Metrics and Asset Quality -- The ACL Coverage Ratio equaled 1.88% at September 30, 2025, an increase of 15 bps from June 30, 2025, and an increase of 37 bps year-over-year driven by a 12 bps impact resulting from the inclusion of an IFH acquired loan discussed below.
Credit metrics in the quarter were impacted by two loan relationships, both of which were acquired as part of the IFH transaction:
-- One relationship across three loans accounted for an $8.8 million
increase to nonperforming assets. One loan of $5.0 million was previously
identified as a PCD loan, which had a specific ACL reserve of $3.8
million established from Day-1 purchase accounting of the IFH
acquisition. The other two are USDA loans with an unguaranteed balance of
$3.8 million secured by underlying assets, which have no ACL reserve
recorded.
-- The other relationship accounted for a $7.1 million increase to
nonperforming assets. As previously mentioned, the loan was reassigned to
a PCD loan as a measurement period adjustment to the Day-1 purchase
accounting from the IFH acquisition. The measurement period adjustment
for this loan resulted in recording a specific ACL reserve of $3.4
million during the quarter, or a 12 bps impact to the ACL Coverage Ratio.
Nonperforming assets were $52.2 million or 1.54% of total assets at September 30, 2025, an increase of $16.1 million or 47 bps compared to June 30, 2025, due to the $15.9 million or 47 bps of loans described above. Nonperforming assets increased $36.8 million or 94 bps year-over-year, mainly due to the acquisition of IFH. At September 30, 2025, substandard loans totaled $56.8 million, or 2.0% of total portfolio loans, compared to $44.6 million, or 1.7% of total portfolio loans, at June 30, 2025 and $23.8 million, or 1.2% of total portfolio loans, at September 30, 2024. The $12.2 million increase in substandard loans during the quarter was primarily driven by the $15.9 million of loans described above. At September 30, 2025, special mention loans totaled $71.5 million, or 2.5% of total portfolio loans, compared to $54.2 million, or 2.0% of total portfolio loans, at June 30, 2025, and $20.3 million, or 1.0% of total portfolio loans, at September 30, 2024.
Efficiency Ratios -- The efficiency ratio was 60.8% for 3Q 2025, compared to 65.1% for 2Q 2025 and 66.1% for 3Q 2024. The core efficiency ratio(1) was 64.4%, for 3Q 2025, which increased from 62.8% compared to the prior quarter, and 64.9% for 3Q 2024.
Financial Metrics (Continued)
Performance Ratios -- ROA was 1.77% for 3Q 2025, compared to 1.60% for 2Q 2025, and 1.42% for 3Q 2024. Core ROA((1) () for 3Q 2025 was 1.43%, compared to 1.73% for 2Q 2025, and 1.51% for 3Q 2024.
-- ROE was 15.57% for 3Q 2025, compared to 14.17% for 2Q 2025, and 12.59%
for 3Q 2024. Core ROE(1) was 12.56% for 3Q 2025, compared to 15.33% for
2Q 2025, and 13.40% for 3Q 2024.
-- ROTCE(1) was 17.49% for 3Q 2025, compared to 16.10% for 2Q 2025, and
12.59% for 3Q 2024. Core ROTCE(1) for 3Q 2025 was 14.15%, compared to
17.39% for 2Q 2025, and 13.40% for 3Q 2024.
Book Value and Tangible Book Value -- Book value per common share of $23.80 at September 30, 2025, increased $0.88 when compared to June 30, 2025, and increased $3.67 when compared to September 30, 2024. Tangible book value per common share(1) increased $0.63, or 3.1%, to $21.27 at September 30, 2025 when compared to June 30, 2025, and increased $1.15, or 5.7%, when compared to September 30, 2024. Tangible book value was impacted by the purchase accounting adjustments required as part of the IFH acquisition. Tangible book value per share(1) was equal to book value per share for periods prior to 4Q 2024.
_______________
(1) As used in this press release, Core ROA, Core ROE, ROTCE, Core ROTCE, and Tangible Book Value are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of income from the call of brokered time deposits, merger-related expenses and other certain one-time non-recurring pre-tax adjustments and tax impacts of such adjustments. Reconciliations of these and other non--GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Commercial Bank
Loan Growth -- Portfolio loans((1) () increased $76.0 million at September 30, 2025 compared to June 30, 2025, driven by $29.3 million from residential real estate, $25.9 million from C&I, and $20.9 million from CRE owner and non-owner occupied. Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.
Net Interest Income -- Interest income of $49.0 million decreased $0.9 million from the prior quarter, primarily due to the Interest Income Adjustment, offset by growth in the Commercial Bank loan portfolio during the quarter. Interest expense of $12.8 million decreased $4.1 million, primarily due to the Call of Brokered Time Deposits offset by growth from money market deposits in 3Q 2025.
Credit Metrics -- Nonperforming assets, comprised solely of nonaccrual loans, increased 50 bps to 1.63% of total assets at September 30, 2025 compared to June 30, 2025. Total nonaccrual loans at September 30, 2025 increased to $52.2 million compared to $36.2 million at June 30, 2025 primarily due to the two loan relationships acquired as part of the IFH transaction discussed previously.
Classified and Criticized Loans -- At September 30, 2025, special mention loans totaled $71.5 million, or 2.5% of total portfolio loans, compared to $54.2 million, or 2.0% of total portfolio loans, at June 30, 2025. At September 30, 2025, substandard loans totaled $56.8 million, or 2.0% of total portfolio loans, compared to $44.6 million, or 1.7% of total portfolio loans, at June 30, 2025.
OpenSky(TM)
Accounts -- During 3Q 2025, credit card accounts of 587.6 thousand increased by 2.3 thousand, or 0.4% (not annualized) from June 30, 2025, and increased 38.7 thousand, or 7.0% year-over-year.
Loan and Deposit Balances -- Secured and unsecured loan balances, net of reserves, of $136.5 million at September 30, 2025 increased by $5.5 million, or 4.2% (not annualized), compared to June 30, 2025 and $9.4 million, or 7.4%, year-over-year. Deposit balances of $166.9 million for 3Q 2025 decreased $2.1 million compared to 2Q 2025 and decreased $3.9 million, or 2.3% year-over-year. Gross unsecured loan balances of $53.6 million at September 30, 2025 increased $7.3 million, or 15.7% (not annualized), compared to $46.4 million at June 30, 2025, and increased $13.9 million year-over-year. Gross secured loan balances of $84.7 million at September 30, 2025 decreased $1.7 million, or 1.9% (not annualized), compared to $86.4 million at June 30, 2025, and decreased $4.9 million, or 5.5% (not annualized) year-over-year.
Net Interest Income -- Interest income of $15.6 million increased $1.1 million compared to 2Q 2025. Average OpenSky credit card loan balances, net of reserves and deferred fees of $129.1 million for 3Q 2025, increased $7.7 million, or 6.3% (not annualized), compared to 2Q 2025.
Fee Revenue - Total fee revenue of $4.5 million increased $0.2 million from the prior quarter primarily driven by other credit-card related fees associated with the unsecured product.
Noninterest Expense -- Total noninterest expense of $14.0 million increased $0.9 million compared to 2Q 2025, driven by growth from the unsecured product associated with advertising spend, data processing and professional fees.
OpenSky(TM) Credit -- Portfolio credit metrics continued to be consistent with modeled expectations during 3Q 2025. The provision for credit losses of $2.8 million decreased $0.1 million when compared to the prior quarter. OpenSky's unsecured loan product continues to be offered exclusively to current and former secured card customers to retain customers who have successfully improved their credit profiles. Unsecured loans have been offered by OpenSky since the fourth quarter of 2021 and have generally performed in accordance with management expectations over that time period.
_______________
(1) Portfolio loans represents portfolio loans receivable excluding deferred origination fee
Capital Bank Home Loans
Originations of loans held for sale totaled $80.7 million during 3Q 2025, with $66.4 million of mortgage loans sold resulting in a gain on sale of loans of $1.7 million, representing a 2.56% gain on sale as a percentage of total loans sold. Originations of loans held for sale totaled $80.3 million during 2Q 2025, with $59.7 million of mortgage loans sold resulting in a gain on sale of loans of $1.6 million, representing a 2.68% gain on sale as a percentage of total loans sold.
Windsor Advantage(TM)
Gross government loan servicing revenue totaled $5.3 million, including $1.1 million of Capital Bank related servicing fees, during 3Q 2025. Gross government loan servicing revenue totaled $4.7 million, including $1.1 million of Capital Bank related servicing fees, during 2Q 2025. Windsor's(TM) total servicing portfolio was $3.2 billion at September 30, 2025, and $2.9 billion at June 30, 2025.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited
-----------------------------------------------------------------
Quarter Ended 3Q25 vs 2Q25 3Q25 vs 3Q24
-------------------- ---------------------
(in thousands,
except per share September June 30, September
data) 30, 2025 2025 30, 2024 $ Change % Change $ Change % Change
----------- ----------- ----------- -------- ---------- -------- -----------
Earnings Summary
Interest income $64,891 $64,586 $52,610 $ 305 0.5% $12,281 23.3%
Interest expense 12,871 16,940 14,256 (4,069) (24.0)% (1,385) (9.7)%
------ ------ ------ ------ ------ ------ -------
Net interest
income 52,020 47,646 38,354 4,374 9.2% 13,666 35.6%
Provision for
credit losses 4,650 4,081 3,748 569 13.9% 902 24.1%
Provision for
credit losses
on unfunded
commitments 217 -- 17 217 --% 200 1,176.5%
Noninterest
income 11,068 13,106 6,635 (2,038) (15.6)% 4,433 66.8%
Noninterest
expense 38,354 39,572 29,725 (1,218) (3.1)% 8,629 29.0%
------ ------ ------ ------ ------ ------ -------
Income before
income
taxes 19,867 17,099 11,499 2,768 16.2% 8,368 72.8%
------ ------ ------ ------ ------ ------ -------
Income tax
expense 4,802 3,963 2,827 839 21.2% 1,975 69.9%
------ ------ ------ ------ ------ ------ -------
Net income $15,065 $13,136 $ 8,672 $ 1,929 14.7% $ 6,393 73.7%
------ ------ ------ ------ ------ ------ -------
Pre-tax
pre-provision
net revenue
("PPNR")(1) $24,734 $21,180 $15,264 $ 3,554 16.8% $ 9,470 62.0%
Core PPNR(1) $20,813 $22,578 $15,784 $(1,765) (7.8)% $ 5,029 31.9%
Common Share
Data
Earnings per
share - Basic $ 0.91 $ 0.79 $ 0.62 $ 0.12 15.2% $ 0.29 46.8%
Earnings per
share -
Diluted $ 0.89 $ 0.78 $ 0.62 $ 0.11 14.1% $ 0.27 43.5%
Core earnings
per share -
Diluted(1) $ 0.72 $ 0.85 $ 0.66 $ (0.13) (15.3)% $ 0.06 9.1%
Weighted average
common shares -
Basic 16,586 16,584 13,914
Weighted average
common shares -
Diluted 16,844 16,802 13,951
Return Ratios
Return on
average assets
(annualized) 1.77% 1.60% 1.42%
Core return on
average assets
(annualized)(1) 1.43% 1.73% 1.51%
Return on
average equity
(annualized) 15.57% 14.17% 12.59%
Core return on
average equity
(annualized)(1) 12.56% 15.33% 13.40%
Return on
average
tangible common
equity
(annualized)(1) 17.49% 16.10% 12.59%
Core return on
average
tangible common
equity
(annualized)(1) 14.15% 17.39% 13.40%
______________
(1) Refer to Appendix for reconciliation of non-GAAP measures.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited
(Continued)
-------------------------------------------------------
Nine Months Ended
----------
September 30,
--------------------------
(in thousands,
except per share
data) 2025 2024 $ Change % Change
------- ------- -------- ----------
Earnings Summary
Interest income $192,237 $151,594 $40,643 26.8%
Interest expense 46,524 41,175 5,349 13.0%
------- ------- ------ ------
Net interest
income 145,713 110,419 35,294 32.0%
Provision for
credit losses 10,977 9,892 1,085 11.0%
Provision for
credit losses on
unfunded
commitments 217 263 (46) (17.5)%
Noninterest
income 36,723 19,497 17,226 88.4%
Noninterest
expense 115,979 88,705 27,274 30.7%
------- ------- ------ ------
Income before
income taxes 55,263 31,056 24,207 77.9%
------- ------- ------ ------
Income tax
expense 13,130 7,617 5,513 72.4%
------- ------- ------ ------
Net income $ 42,133 $ 23,439 $18,694 79.8%
------- ------- ------ ------
Pre-tax
pre-provision
net revenue
("PPNR")(1) $ 66,457 $ 41,211 $25,246 61.3%
Core PPNR(1) $ 65,200 $ 42,526 $22,674 53.3%
Common Share
Data
Earnings per
share - Basic $ 2.54 $ 1.69 $ 0.85 50.3% Earnings per share - Diluted $ 2.50 $ 1.69 $ 0.81 47.9% Core earnings per share - Diluted(1) $ 2.45 $ 1.77 Weighted average common shares - Basic 16,611 13,909 Weighted average common shares - Diluted 16,850 13,909 Return Ratios Return on average assets (annualized) 1.71% 1.32% Core return on average assets (annualized)(1) 1.67% 1.39% Return on average equity (annualized) 15.10% 11.79% Core return on average equity (annualized)(1) 14.79% 12.37% Return on average tangible common equity (annualized)(1) 17.06% 11.79% Core return on average tangible common equity (annualized)(1) 16.70% 12.37%
______________
(1) Refer to Appendix for reconciliation of non-GAAP measures.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued)
-------------------------------------------------------------------
Quarter Ended Quarter Ended
---------------------- ------ ----------------------------------
December
September 30, June 30, March 31, 31,
---------- ---------- ---------- ----------
(in thousands,
except per share
data) 2025 2024 % Change 2025 2025 2024
---------- ---------- ---------- ---------- ---------- ----------
Balance Sheet
Highlights
Assets $3,389,442 $2,560,788 32.4% $3,388,662 $3,349,805 $3,206,911
Investment
securities
available-for-sale 232,640 208,700 11.5% 228,923 213,452 223,630
Mortgage loans held
for sale 19,679 19,554 0.6% 20,925 34,656 21,270
Portfolio loans
receivable(2) 2,821,983 2,107,522 33.9% 2,739,808 2,678,406 2,630,163
Allowance for
credit losses 53,045 31,925 66.2% 47,447 48,454 48,652
Goodwill 26,806 -- 100.0% 22,478 24,085 21,126
Intangible assets 13,457 -- 100.0% 13,668 13,861 14,072
Core deposit
intangibles 1,576 -- 100.0% 1,627 1,695 1,745
Deposits 2,912,053 2,186,224 33.2% 2,940,738 2,891,333 2,761,939
FHLB borrowings 22,000 52,000 (57.7)% 22,000 22,000 22,000
Other borrowed
funds 12,062 12,062 --% 12,062 12,062 12,062
Total stockholders'
equity 394,770 280,111 40.9% 380,035 369,577 355,139
Tangible common
equity(1) 352,931 280,111 26.0% 342,262 329,936 318,196
Common shares
outstanding 16,589 13,918 19.2% 16,582 16,657 16,663
Book value per
share $ 23.80 $ 20.13 18.2% $ 22.92 $ 22.19 $ 21.31
Tangible book value
per share(1) $ 21.27 $ 20.13 5.7% $ 20.64 $ 19.81 $ 19.10
Dividends per share $ 0.12 $ 0.10 20.0% $ 0.10 $ 0.10 $ 0.10
______________
(1) Refer to Appendix for reconciliation of non-GAAP measures.
(2) Loans are reflected net of deferred fees and costs.
Consolidated Statements of Income (Unaudited)
---------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
------------------------
March
September June 30, 31, December September 30, September September
(in thousands) 30, 2025 2025 2025 31, 2024 2024 30, 2025 30, 2024
----------- -------- ------- ----------- ------------- ----------- -----------
Interest income
Loans, including fees $60,838 $60,810 $58,691 $58,602 $ 50,047 $ 180,339 $ 144,313
Investment securities
available-for-sale 1,805 1,582 1,861 1,539 1,343 5,248 3,902
Federal funds sold and
other 2,248 2,194 2,208 1,566 1,220 6,650 3,379
------ ------ ------ ------ ------------ ------- -------
Total interest income 64,891 64,586 62,760 61,707 52,610 192,237 151,594
------ ------ ------ ------ ------------ ------- -------
Interest expense
Deposits 12,732 16,722 16,512 16,385 13,902 45,966 39,785
Borrowed funds 139 218 201 995 354 558 1,390
------ ------ ------ ------ ------------ ------- -------
Total interest
expense 12,871 16,940 16,713 17,380 14,256 46,524 41,175
------ ------ ------ ------ ------------ ------- -------
Net interest income 52,020 47,646 46,047 44,327 38,354 145,713 110,419
Provision for credit
losses 4,650 4,081 2,246 7,828 3,748 10,977 9,892
Provision for credit
losses on unfunded
commitments 217 -- -- 122 17 217 263
------ ------ ------ ------ ------------ ------- -------
Net interest income
after provision for
credit losses 47,153 43,565 43,801 36,377 34,589 134,519 100,264
Noninterest income
Service charges on
deposits 425 262 258 241 235 945 642
Credit card fees 4,509 4,298 3,722 3,733 4,055 12,529 12,266
Mortgage banking revenue 1,927 1,754 1,831 1,821 1,882 5,512 5,325
Government lending
revenue 14 3,112 1,096 2,301 -- 4,222 --
Government loan
servicing revenue 4,265 3,644 3,568 3,993 -- 11,477 --
Loan servicing rights
(government
guaranteed) 368 (590) 472 1,013 -- 250 --
Non-recurring equity and
debt investment
write-down -- -- -- (2,620) -- -- --
Other income (440) 626 1,602 1,431 463 1,788 1,264
------ ------ ------ ------ ------------ ------- -------
Total noninterest
income 11,068 13,106 12,549 11,913 6,635 36,723 19,497
Noninterest expenses
Salaries and employee
benefits 17,728 18,460 18,067 16,513 13,345 54,255 39,524
Occupancy and equipment 2,849 2,995 2,910 2,976 1,791 8,754 5,268
Professional fees 2,131 2,422 2,112 2,150 1,980 6,665 5,696
Data processing 7,654 7,520 7,112 7,210 6,930 22,286 20,479
Advertising 1,714 1,371 1,779 1,032 1,223 4,864 5,327
Loan processing 1,114 979 743 969 615 2,836 1,462
Foreclosed real estate
expenses, net -- -- 1 -- 1 1 2
Merger-related expenses 697 1,398 1,266 2,615 520 3,361 1,315
Operational losses 923 933 903 993 1,008 2,759 2,721
Regulatory assessment
expenses 740 884 889 554 483 2,513 1,384
Other operating 2,804 2,610 2,271 2,502 1,829 7,685 5,527
------ ------ ------ ------ ------------ ------- -------
Total noninterest
expenses 38,354 39,572 38,053 37,514 29,725 115,979 88,705
------ ------ ------ ------ ------------ ------- -------
Income before income taxes 19,867 17,099 18,297 10,776 11,499 55,263 31,056
Income tax expense 4,802 3,963 4,365 3,243 2,827 13,130 7,617
------ ------ ------ ------ ------------ ------- -------
Net income $15,065 $13,136 $13,932 $ 7,533 $ 8,672 $ 42,133 $ 23,439
====== ====== ====== ====== ============ ======= =======
Consolidated Balance
Sheets
--------------------------
(unaudited) (unaudited) (unaudited) (audited) (unaudited)
----------- ----------- ----------- ----------- -------------
(in thousands, except September June 30, March 31, December September 30,
share data) 30, 2025 2025 2025 31, 2024 2024
----------- ----------- ----------- ----------- -------------
Assets
Cash and due from banks $ 25,724 $ 26,843 $ 27,836 $ 25,433 $ 23,462
Interest-bearing deposits
at other financial
institutions 163,078 247,704 266,092 179,841 133,180
Federal funds sold 59 59 59 58 58
--------- --------- --------- --------- ---------
Total cash and cash
equivalents 188,861 274,606 293,987 205,332 156,700
Investment securities
available-for-sale 232,640 228,923 213,452 223,630 208,700
Restricted investments 7,057 7,043 7,031 4,479 5,895
Loans held for sale 19,679 20,925 34,656 21,270 19,554
Portfolio loans
receivable, net of
deferred fees and costs 2,821,983 2,739,808 2,678,406 2,630,163 2,107,522
Less allowance for
credit losses (53,045) (47,447) (48,454) (48,652) (31,925)
--------- --------- --------- --------- ---------
Total portfolio
loans held for
investment, net 2,768,938 2,692,361 2,629,952 2,581,511 2,075,597
Premises and equipment,
net 15,304 14,863 15,085 15,525 5,959
Accrued interest
receivable 19,011 15,149 19,458 16,664 12,468
Goodwill 26,806 22,478 24,085 21,126 --
Intangible assets 13,457 13,668 13,861 14,072 --
Core deposit intangibles 1,576 1,627 1,695 1,745 --
Loan servicing assets 2,070 2,221 2,244 5,511 --
Deferred tax asset 14,048 15,667 15,902 16,670 10,748
Bank owned life insurance 45,105 44,721 44,335 43,956 38,779
Other assets 34,890 34,410 34,062 35,420 26,388
--------- --------- --------- --------- ---------
Total assets $3,389,442 $3,388,662 $3,349,805 $3,206,911 $2,560,788
========= ========= ========= ========= =========
Liabilities
Deposits
Noninterest-bearing $ 857,543 $ 836,979 $ 812,224 $ 810,928 $ 718,120
Interest-bearing 2,054,510 2,103,759 2,079,109 1,951,011 1,468,104
--------- --------- --------- --------- ---------
Total deposits 2,912,053 2,940,738 2,891,333 2,761,939 2,186,224
Federal Home Loan Bank
advances 22,000 22,000 22,000 22,000 52,000
Other borrowed funds 12,062 12,062 12,062 12,062 12,062
Accrued interest payable 8,045 8,158 9,995 9,393 8,503
Other liabilities 40,512 25,669 44,838 46,378 21,888
--------- --------- --------- --------- ---------
Total liabilities 2,994,672 3,008,627 2,980,228 2,851,772 2,280,677
--------- --------- --------- --------- ---------
Stockholders' equity
Common stock 166 166 167 167 139
Additional paid-in capital 127,359 126,888 128,692 128,598 55,585
Retained earnings 274,041 261,093 249,925 237,843 232,995
Accumulated other
comprehensive loss (6,796) (8,112) (9,207) (11,469) (8,608)
--------- --------- --------- --------- ---------
Total stockholders'
equity 394,770 380,035 369,577 355,139 280,111
--------- --------- --------- --------- ---------
Total liabilities
and stockholders'
equity $3,389,442 $3,388,662 $3,349,805 $3,206,911 $2,560,788
========= ========= ========= ========= =========
The following tables show the average outstanding balance of each principal category of our assets, liabilities and stockholders' equity, together with the average yields on our assets and the average costs of our liabilities for the periods indicated. Such yields and costs are calculated by dividing the annualized income or expense by the average daily balances of the corresponding assets or liabilities for the same period.
Three Months Ended Three Months Ended Three Months Ended
September 30, 2025 June 30, 2025 September 30, 2024
--------------------------------- --------------------------------- ---------------------------------
Average Interest Average Average Interest Average Average Interest Average
Outstanding Income/ Yield/ Outstanding Income/ Yield/ Outstanding Income/ Yield/
Balance Expense Rate(1) Balance Expense Rate(1) Balance Expense Rate(1)
----------- --------- --------- ----------- --------- --------- ----------- --------- ---------
(in thousands)
Assets
Interest earning
assets:
Interest-bearing
deposits $ 194,858 $ 2,139 4.36% $ 182,192 $ 2,065 4.55% $ 91,089 $ 1,137 4.97%
Federal funds sold 59 1 5.79 59 -- -- 57 1 6.98
Investment
securities
available-for-sale 241,086 1,805 2.97 230,317 1,582 2.76 221,303 1,343 2.41
Restricted
investments 7,052 108 6.06 7,038 129 7.35 4,911 82 6.64
Loans held for sale 13,783 228 6.57 9,950 163 6.57 9,967 161 6.43
Portfolio loans
receivable(2)(3) 2,789,815 60,610 8.62 2,733,865 60,647 8.90 2,053,619 49,886 9.66
---------- -------- ----- ---------- -------- ----- ---------- -------- -----
Total interest
earning assets 3,246,653 64,891 7.93 3,163,421 64,586 8.19 2,380,946 52,610 8.79
-------- -------- --------
Noninterest earning
assets 131,643 129,112 56,924
---------- ---------- ----------
Total assets $ 3,378,296 $ 3,292,533 $ 2,437,870
========== ========== ==========
Liabilities and
Stockholders'
Equity
Interest-bearing
liabilities:
Interest-bearing
demand accounts $ 282,873 388 0.54 $ 281,878 391 0.56 $ 228,365 321 0.56
Savings 12,887 15 0.47 13,043 16 0.49 4,135 5 0.48
Money market
accounts 985,106 8,650 3.48 924,784 8,022 3.48 698,239 7,442 4.24
Time deposits 815,302 3,679 1.79 816,809 8,293 4.07 479,824 6,134 5.09
Borrowed funds 34,062 139 1.62 34,062 218 2.57 43,655 354 3.23
---------- -------- ----- ---------- -------- ----- ---------- -------- -----
Total
interest-bearing
liabilities 2,130,230 12,871 2.40 2,070,576 16,940 3.28 1,454,218 14,256 3.90
-------- -------- --------
Noninterest-bearing
liabilities:
Noninterest-bearing
liabilities 43,245 45,523 28,834
Noninterest-bearing
deposits 820,899 804,639 680,731
Stockholders' equity 383,922 371,795 274,087
---------- ---------- ----------
Total liabilities
and
stockholders'
equity $ 3,378,296 $ 3,292,533 $ 2,437,870
========== ========== ==========
Net interest spread 5.53% 4.91% 4.89%
===== ===== =====
Net interest income $ 52,020 $ 47,646 $ 38,354
======== ======== ========
Net interest margin(4) 6.36% 6.04% 6.41%
===== ===== =====
_______________
(1) Annualized.
(2) Includes nonaccrual loans.
(3) For the three months ended September 30, 2025, June 30, 2025, and September 30, 2024, collectively, Commercial Bank Loan Yield was 6.74%, 7.14% and 7.15%, respectively.
(4) For the three months ended September 30, 2025, June 30, 2025, and September 30, 2024, collectively, Commercial Bank Net Interest Margin was 4.64%, 4.38% and 4.01%, respectively.
Nine Months Ended September 30,
--------------------------------------------------------------------
2025 2024
---------------------------- ----------------------------
Average Interest Average Average Interest Average
Outstanding Income/ Yield/ Outstanding Income/ Yield/
Balance Expense Rate(1) Balance Expense Rate(1)
----------- --------- --------- ----------- --------- ---------
(in thousands)
Assets
Interest earning
assets:
Interest-bearing
deposits $ 193,337 $ 6,342 4.39% $ 84,254 $ 3,123 4.95%
Federal funds sold 59 2 4.24 57 3 7.03
Investment
securities
available-for-sale 235,690 5,248 2.98 226,151 3,902 2.30
Restricted
investments 6,622 306 6.17 4,982 253 6.78
Loans held for sale 11,046 629 7.62 7,591 376 6.62
Portfolio loans
receivable(2)(3) 2,719,834 179,710 8.83 1,991,435 143,937 9.65
---------- -------- ----- ---------- -------- -----
Total interest
earning assets 3,166,588 192,237 8.12 2,314,470 151,594 8.75
-------- --------
Noninterest earning
assets 131,582 49,458
---------- ----------
Total assets $ 3,298,170 $ 2,363,928
========== ==========
Liabilities and
Stockholders'
Equity
Interest-bearing
liabilities:
Interest-bearing
demand accounts $ 269,184 $ 1,147 0.57% $ 209,346 $ 579 0.37%
Savings 13,044 49 0.51 4,460 7 0.21
Money market
accounts 927,044 24,071 3.47 684,017 21,610 4.22
Time deposits 830,451 20,699 3.33 465,256 17,589 5.05
Borrowed funds 34,062 558 2.19 52,461 1,390 3.54
---------- -------- ----- ---------- -------- -----
Total
interest-bearing
liabilities 2,073,785 46,524 3.00 1,415,540 41,175 3.89
-------- --------
Noninterest-bearing
liabilities:
Noninterest-bearing
liabilities 48,374 25,844
Noninterest-bearing
deposits 802,991 657,044
Stockholders'
equity 373,020 265,500
---------- ----------
Total liabilities
and
stockholders'
equity $ 3,298,170 $ 2,363,928
========== ==========
Net interest spread 5.12% 4.86%
===== =====
Net interest income $ 145,713 $ 110,419
======== ========
Net interest margin(4) 6.15% 6.37%
===== =====
(1) Annualized.
(2) Includes nonaccrual loans.
(3) For the nine months ended September 30, 2025 and 2024, collectively. Commercial Bank Loan Yield was 7.01% and 7.05%, respectively.
(4) For the nine months ended September 30, 2025 and 2024, collectively. Commercial Bank Net Interest Margin was 4.45% and 4.13%, respectively.
The Company's reportable segments represent business units with discrete financial information whose results are regularly reviewed by management. The four segments include Commercial Banking, OpenSky(TM) (the Company's credit card division), Windsor Advantage(TM) and Capital Bank Home Loans (the Company's mortgage loan division).
Prior to March 31, 2025, the Company disclosed Corporate as a reportable segment. The Company has determined that what was previously deemed the Corporate reportable segment consists of other business activities that are associated with the Commercial Bank and are reflected in the tabular disclosures that follow. It should be noted that such restructuring of the tabular disclosure did not result in any changes to the Company's revenue and expense allocation methodology. The Company restructured prior period tabular disclosures to achieve appropriate comparability.
The following schedules reported internally for performance assessment by the chief operating decision maker presents financial information for each reportable segment for the periods indicated. Total assets are presented as of September 30, 2025, June 30, 2025, and September 30, 2024.
Segments
For the three months ended September 30, 2025
------------------------------------------------------------------------------
Commercial Windsor
(in thousands) Bank OpenSky(TM) Advantage(TM) CBHL Consolidated
----------- ------------- ----------------- -------- ----------------
Interest income(2) $ 49,035 $ 15,628 $ -- $ 228 $ 64,891
Interest expense 12,768 -- -- 103 12,871
--------- -------- --- -------- ------ ---------
Net interest income 36,267 15,628 -- 125 52,020
Provision for credit losses 1,852 2,798 -- -- 4,650
Provision for credit losses on
unfunded commitments 217 -- -- -- 217
--------- -------- --- -------- ------ ---------
Net interest income after
provision 34,198 12,830 -- 125 47,153
Noninterest income
Service charges on deposits 425 -- -- -- 425
Credit card fees -- 4,509 -- -- 4,509
Mortgage banking revenue 315 -- -- 1,612 1,927
Government lending revenue 14 -- -- -- 14
Government loan servicing
revenue(1) (1,074) -- 5,339 -- 4,265
Loan servicing rights
(government guaranteed)(2) 368 -- -- -- 368
Other (loss) income (557) (33) -- 150 (440)
--------- -------- --- -------- ------ ---------
Total noninterest income (509) 4,476 5,339 1,762 11,068
--------- -------- --- -------- ------ ---------
Noninterest expenses
Salaries and employee
benefits 10,559 3,271 2,455 1,443 17,728
Occupancy and equipment 1,635 632 416 166 2,849
Professional fees 1,079 571 198 283 2,131
Data processing 350 7,154 97 53 7,654
Advertising 694 833 76 111 1,714
Loan processing 740 15 67 292 1,114
Foreclosed real estate
expenses, net -- -- -- -- --
Merger-related expenses 697 -- -- -- 697
Operational losses -- 923 -- -- 923
Regulatory assessment
expenses 788 (30) (11) (7) 740
Other operating 1,493 587 614 110 2,804
--------- -------- --- -------- ------ ---------
Total noninterest
expenses 18,035 13,956 3,912 2,451 38,354
--------- -------- --- -------- ------ ---------
Net income (loss) before
taxes $ 15,654 $ 3,350 $ 1,427 $ (564) $ 19,867
========= ======== === ======== ====== =========
Total assets $3,213,222 $ 134,422 $ 21,743 $20,055 $ 3,389,442
========= ======== === ======== ====== =========
________________________
(1) Gross government loan servicing revenue totaled $5.3 million, including $1.1 million of servicing fees earned from the Commercial Bank by Windsor, for the three months ended September 30, 2025.
(2) Interest income of $49.0 million for the Commercial Bank includes the $1.3 million Interest Income Adjustment.
Segments
For the three months ended June 30, 2025
----------------------------------------------------------------------------
Commercial Windsor
(in thousands) Bank OpenSky(TM) Advantage(TM) CBHL Consolidated
----------- ------------- --------------- -------- ----------------
Interest income $ 49,929 $ 14,494 $ -- $ 163 $ 64,586
Interest expense 16,856 -- -- 84 16,940
--------- --------- ---- --------- ------ ---------
Net interest income 33,073 14,494 -- 79 47,646
Provision for credit losses 1,159 2,922 -- -- 4,081
Provision for credit losses on
unfunded commitments -- -- -- -- --
--------- --------- ---- --------- ------ ---------
Net interest income after
provision 31,914 11,572 -- 79 43,565
Noninterest income
Service charges on deposits 262 -- -- -- 262
Credit card fees -- 4,298 -- -- 4,298
Mortgage banking revenue 465 -- -- 1,289 1,754
Government lending revenue 3,112 -- -- -- 3,112
Government loan servicing
revenue(1) (1,052) -- 4,696 -- 3,644
Loan servicing rights
(government guaranteed)(2) (590) -- -- -- (590)
Other income 349 25 -- 252 626
--------- --------- ---- --------- ------ ---------
Total noninterest income 2,546 4,323 4,696 1,541 13,106
--------- --------- ---- --------- ------ ---------
Noninterest expenses
Salaries and employee
benefits 11,090 3,403 2,509 1,458 18,460
Occupancy and equipment 1,903 573 368 151 2,995
Professional fees 1,572 552 71 227 2,422
Data processing 454 6,897 133 36 7,520
Advertising 795 470 35 71 1,371
Loan processing 650 24 54 251 979
Foreclosed real estate
expenses, net -- -- -- -- --
Merger-related expenses 1,398 -- -- -- 1,398
Operational losses 100 833 -- -- 933
Regulatory assessment
expenses 860 15 6 3 884
Other operating 1,817 338 354 101 2,610
--------- --------- ---- --------- ------ ---------
Total noninterest
expenses 20,639 13,105 3,530 2,298 39,572
--------- --------- ---- --------- ------ ---------
Net income (loss) before
taxes $ 13,821 $ 2,790 $ 1,166 $ (678) $ 17,099
========= ========= ==== ========= ====== =========
Total assets $3,211,421 $ 129,397 $ 25,936 $21,908 $ 3,388,662
========= ========= ==== ========= ====== =========
________________________
(1) Gross government loan servicing revenue totaled $4.7 million, including $1.1 million of servicing fees earned from the Commercial Bank by Windsor, for the three months ended June 30, 2025
(2) Loan servicing rights of negative $0.6 million for the Commercial Bank includes a $1.1 million negative fair value adjustment associated with loan servicing portfolio
Segments
For the three months ended September 30, 2024
---------------------------------------------------------------
Commercial Windsor
(in thousands) Bank OpenSky(TM) Advantage(TM) CBHL Consolidated
---------- ------------- --------------- -------- --------------
Interest income $ 36,824 $ 15,625 $ -- $ 161 $ 52,610
Interest expense 14,148 -- -- 108 14,256
--------- --------- ------ ------- ------ ----------
Net interest
income 22,676 15,625 -- 53 38,354
Provision for
credit losses 1,454 2,294 -- -- 3,748
Provision for
credit losses on
unfunded
commitments 17 -- -- -- 17
--------- --------- ------ ------- ------ ----------
Net interest
income after
provision 21,205 13,331 -- 53 34,589
Noninterest income
Service charges
on deposits 235 -- -- -- 235
Credit card fees -- 4,055 -- -- 4,055
Mortgage banking
revenue 166 -- -- 1,716 1,882
Other income 327 41 -- 95 463
--------- --------- ------ ------- ------ ----------
Total
noninterest
income 728 4,096 -- 1,811 6,635
--------- --------- ------ ------- ------ ----------
Noninterest
expense
Salaries and
employee
benefits 8,542 3,273 -- 1,530 13,345
Occupancy and
equipment 1,165 485 -- 141 1,791
Professional
fees 1,005 722 -- 253 1,980
Data processing 396 6,492 -- 42 6,930
Advertising 429 697 -- 97 1,223
Loan processing 371 16 -- 228 615
Foreclosed real
estate
expenses, net 1 -- -- -- 1
Merger-related
expenses 520 -- -- -- 520
Operational
losses 8 1,000 -- -- 1,008
Regulatory
assessment
expenses 483 -- -- -- 483
Other operating 1,134 591 -- 104 1,829
--------- --------- ------ ------- ------ ----------
Total
noninterest
expenses 14,054 13,276 -- 2,395 29,725
--------- --------- ------ ------- ------ ----------
Net income
(loss) before
taxes $ 7,879 $ 4,151 $ -- $ (531) $ 11,499
========= ========= ====== ======= ====== ==========
Total assets $2,419,370 $ 121,587 $ -- $19,831 $ 2,560,788
========= ========= ====== ======= ====== ==========
Segments
For the nine months ended September 30, 2025
-------------------------------------------------------------------------
Commercial Windsor
(in thousands) Bank OpenSky(TM) Advantage(TM) CBHL Consolidated
----------- ------------- --------------- -------- --------------
Interest income(2) $ 147,128 $ 44,566 $ -- $ 543 $ 192,237
Interest expense 46,273 -- -- 251 46,524
--------- --------- ---- --------- ------ ----------
Net interest income 100,855 44,566 -- 292 145,713
Provision for credit losses 3,457 7,520 -- -- 10,977
Provision for credit losses
on unfunded commitments 217 -- -- -- 217
--------- --------- ---- --------- ------ ----------
Net interest income after
provision 97,181 37,046 -- 292 134,519
Noninterest income
Service charges on
deposits 945 -- -- -- 945
Credit card fees -- 12,529 -- -- 12,529
Mortgage banking revenue 1,043 -- -- 4,469 5,512
Government lending
revenue 4,222 -- -- -- 4,222
Government loan servicing
revenue(1) (3,164) -- 14,641 -- 11,477
Loan servicing rights
(government guaranteed) 250 -- -- -- 250
Other income 1,215 3 -- 570 1,788
--------- --------- ---- --------- ------ ----------
Total noninterest
income 4,511 12,532 14,641 5,039 36,723
Noninterest expenses
Salaries and employee
benefits 32,275 10,019 7,370 4,591 54,255
Occupancy and equipment 5,115 1,693 1,495 451 8,754
Professional fees 3,802 1,714 389 760 6,665
Data processing 1,244 20,633 283 126 22,286
Advertising 2,207 2,177 215 265 4,864
Loan processing 1,867 58 128 783 2,836
Foreclosed real estate
expenses, net 1 -- -- -- 1
Merger-related expenses 3,361 -- -- -- 3,361
Operational losses 131 2,628 -- -- 2,759
Regulatory assessment
expenses 2,513 -- -- -- 2,513
Other operating 4,718 1,441 1,222 304 7,685
--------- --------- ---- --------- ------ ----------
Total noninterest
expenses 57,234 40,363 11,102 7,280 115,979
--------- --------- ---- --------- ------ ----------
Net income (loss) before
taxes $ 44,458 $ 9,215 $ 3,539 $(1,949) $ 55,263
========= ========= ==== ========= ====== ==========
Total assets $3,213,222 $ 134,422 $ 21,743 $20,055 $ 3,389,442
========= ========= ==== ========= ====== ==========
________________________
(1) Gross government loan servicing revenue totaled $14.6 million, including $3.2 million of servicing fees earned from the Commercial Bank by Windsor, for the nine months ended September 30, 2025.
(2() Interest income of $147.1 million for the Commercial Bank includes the $1.3 million Interest Income Adjustment.
Segments
For the nine months ended September 30, 2024
---------------------------------------------------------------
Commercial Windsor
(in thousands) Bank OpenSky(TM) Advantage(TM) CBHL Consolidated
---------- ------------- --------------- -------- --------------
Interest income $ 104,887 $ 46,331 $ -- $ 376 $ 151,594
Interest expense 40,943 -- -- 232 41,175
--------- --------- ------ ------- ------ ----------
Net interest
income 63,944 46,331 -- 144 110,419
Provision for
credit losses 3,740 6,152 -- -- 9,892
Provision for
credit losses on
unfunded
commitments 263 -- -- -- 263
--------- --------- ------ ------- ------ ----------
Net interest
income after
provision 59,941 40,179 -- 144 100,264
Noninterest income
Service charges
on deposits 642 -- -- -- 642
Credit card fees -- 12,266 -- -- 12,266
Mortgage banking
revenue 788 -- -- 4,537 5,325
Other income 680 113 -- 471 1,264
--------- --------- ------ ------- ------ ----------
Total
noninterest
income 2,110 12,379 -- 5,008 19,497
Noninterest
expenses
Salaries and
employee
benefits 25,846 9,171 -- 4,507 39,524
Occupancy and
equipment 3,430 1,418 -- 420 5,268
Professional
fees 2,661 2,338 -- 697 5,696
Data processing 857 19,496 -- 126 20,479
Advertising 1,215 3,865 -- 247 5,327
Loan processing 763 45 -- 654 1,462
Foreclosed real
estate
expenses, net 2 -- -- -- 2
Merger-related
expenses 1,315 -- -- -- 1,315
Operational
losses 13 2,708 -- -- 2,721
Regulatory
assessment
expenses 1,384 -- -- -- 1,384
Other operating 3,569 1,609 -- 349 5,527
--------- --------- ------ ------- ------ ----------
Total
noninterest
expenses 41,055 40,650 -- 7,000 88,705
--------- --------- ------ ------- ------ ----------
Net income
(loss) before
taxes $ 20,996 $ 11,908 $ -- $(1,848) $ 31,056
========= ========= ====== ======= ====== ==========
Total assets $2,419,370 $ 121,587 $ -- $19,831 $ 2,560,788
========= ========= ====== ======= ====== ==========
HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited
-------------------------------------------------------------------------------------------------------
Quarter Ended
(in thousands, except September 30, June 30, March 31, December 31, September 30,
per share data) 2025 2025 2025 2024 2024
-------------- -------------- -------------- -------------- --------------
Earnings:
----------------------
Net income $ 15,065 $ 13,136 $ 13,932 $ 7,533 $ 8,672
Earnings per common
share, diluted 0.89 0.78 0.82 0.45 0.62
Net interest margin 6.36% 6.04% 6.05% 5.87% 6.41%
Commercial Bank net
interest margin(2) 4.64% 4.38% 4.32% 3.99% 4.01%
Return on average
assets(1) 1.77% 1.60% 1.75% 0.96% 1.42%
Return on average
equity(1) 15.57% 14.17% 15.56% 8.50% 12.59%
Efficiency ratio 60.79% 65.14% 64.94% 66.70% 66.07%
Balance Sheet:
----------------------
Total portfolio loans
receivable, net
deferred fees $2,821,983 $2,739,808 $2,678,406 $2,630,163 $2,107,522
Total deposits 2,912,053 2,940,738 2,891,333 2,761,939 2,186,224 Total assets 3,389,442 3,388,662 3,349,805 3,206,911 2,560,788 Total stockholders' equity 394,770 380,035 369,577 355,139 280,111 Total average portfolio loans receivable, net deferred fees 2,789,815 2,733,865 2,634,110 2,592,960 2,053,619 Total average deposits 2,917,067 2,841,153 2,768,284 2,611,994 2,091,294 Portfolio loans-to-deposit ratio (period-end balances) 96.91% 93.17% 92.64% 95.23% 96.40% Portfolio loans-to-deposit ratio (average balances) 95.64% 96.22% 95.15% 99.27% 98.20% Asset Quality Ratios: ---------------------- Nonperforming assets to total assets 1.54% 1.07% 1.28% 0.94% 0.60% Nonperforming loans to total loans 1.85% 1.32% 1.60% 1.15% 0.73% Net charge-offs to average portfolio loans(1) 0.35% 0.75% 0.38% 0.37% 0.51% Allowance for credit losses to total loans 1.88% 1.73% 1.81% 1.85% 1.51% Allowance for credit losses to non-performing loans 101.53% 131.19% 112.86% 160.88% 206.50% Bank Capital Ratios: ---------------------- Total risk based capital ratio 12.92% 13.13% 12.93% 12.79% 13.76% Tier-1 risk based capital ratio 11.66% 11.87% 11.67% 11.54% 12.50% Leverage ratio 9.31% 9.39% 9.27% 9.17% 9.84% Common Equity Tier-1 capital ratio 11.66% 11.87% 11.67% 11.54% 12.50% Tangible common equity 9.04% 8.84% 8.66% 9.31% 9.12% Holding Company Capital Ratios: ---------------------- Total risk based capital ratio 15.22% 15.30% 14.97% 15.48% 16.65% Tier-1 risk based capital ratio 13.59% 13.66% 13.32% 13.83% 14.88% Leverage ratio 10.96% 10.90% 10.68% 11.07% 11.85% Common Equity Tier-1 capital ratio 13.51% 13.58% 13.24% 13.74% 14.78% Tangible common equity 10.57% 10.22% 9.94% 11.07% 10.94%
_______________
(1) Annualized.
(2) Refer to Appendix for reconciliation of non-GAAP measures.
HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited (Continued)
-----------------------------------------------------------------------------------------------------
Quarter Ended
(in thousands,
except per share September 30, June 30, March 31, December 31, September 30,
data) 2025 2025 2025 2024 2024
-------------- -------------- -------------- -------------- --------------
Composition of
Loans:
--------------------
Commercial real
estate, non
owner-occupied $ 509,878 $ 495,341 $ 484,399 $ 471,329 $ 403,487
Commercial real
estate,
owner-occupied 442,827 436,421 420,643 440,026 351,462
Residential real
estate 740,060 710,730 693,597 688,552 623,684
Construction real
estate 344,290 343,189 343,280 321,252 301,909
Commercial and
industrial 619,148 593,279 594,331 554,550 271,811
Lender finance 31,883 32,494 23,165 28,574 29,546
Business equity lines
of credit 2,931 2,853 3,468 3,090 2,663
Credit card, net of
reserve(3) 136,483 131,029 118,709 127,766 127,098
Other consumer loans 2,010 2,727 2,200 2,089 2,045
--------- --------- --------- --------- ---------
Portfolio loans
receivable $2,829,510 $2,748,063 $2,683,792 $2,637,228 $2,113,705
Deferred origination
fees, net (7,527) (8,255) (5,386) (7,065) (6,183)
--------- --------- --------- --------- ---------
Portfolio loans
receivable, net $2,821,983 $2,739,808 $2,678,406 $2,630,163 $2,107,522
--------- --------- --------- --------- ---------
Composition of
Deposits:
--------------------
Noninterest-bearing $ 857,542 $ 836,979 $ 812,224 $ 810,928 $ 718,120
Interest-bearing
demand 275,767 319,431 296,455 238,881 266,493
Savings 12,835 12,879 12,819 13,488 3,763
Money markets 989,160 960,237 912,418 816,708 686,526
Customer time
deposits 539,207 541,079 549,630 548,901 358,300
Brokered time
deposits 237,542 270,133 307,787 333,033 153,022
--------- --------- --------- --------- ---------
Total deposits $2,912,053 $2,940,738 $2,891,333 $2,761,939 $2,186,224
Capital Bank Home
Loan Metrics:
--------------------
Origination of loans
held for sale $ 80,651 $ 80,334 $ 65,815 $ 89,998 $ 74,690
Mortgage loans sold 66,409 59,663 54,144 77,399 67,296
Gain on sale of loans 1,698 1,597 1,664 1,897 1,644
Purchase volume as a
% of originations 92.32% 91.61% 90.73% 90.42% 90.98%
Gain on sale as a %
of loans sold(4) 2.56% 2.68% 3.07% 2.45% 2.44%
Mortgage commissions $ 656 $ 501 $ 545 $ 620 $ 598
OpenSky(TM)
Portfolio Metrics:
--------------------
Open customer
accounts 587,641 585,372 563,718 552,566 548,952
Secured credit card
loans, gross $ 84,737 $ 86,400 $ 81,252 $ 87,226 $ 89,641
Unsecured credit card
loans, gross 53,633 46,352 38,987 42,430 39,730
Noninterest secured
credit card
deposits 166,874 168,936 168,796 166,355 170,750
_______________
(3) Credit card loans are presented net of reserve for interest and fees.
(4) Gain on sale percentage is calculated as gain on sale of loans divided by mortgage loans sold.
Appendix Reconciliation of Non-GAAP Measures
The Company has presented the following non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Company's results of operations and financial condition. Presentation of these non-GAAP financial measures is consistent with how the Company evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company's industry. Investors should recognize that the Company's presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Company strongly encourages a review of its condensed consolidated financial statements in their entirety.
Core Earnings
Metrics Quarter Ended
(in thousands,
except per September 30, December 31, September 30,
share data) 2025 June 30, 2025 March 31, 2025 2024 2024
--------------- -------------- -------------- -------------- ---------------
Net Income $ 15,065 $ 13,136 $ 13,932 $ 7,533 $ 8,672
Add: Income
from the Call
of Brokered
Time Deposits,
Net of Tax (3,489) -- -- -- --
Add:
Merger-Related
Expenses, Net
of Tax 575 1,070 964 2,151 557
Add:
Non-Recurring
Equity and Debt
Investment
Write-Down -- -- -- 2,620 --
Add: IFH ACL
Provision, Net
of Tax -- -- -- 3,169 --
--------- --- --------- --------- --------- --------- ---
Core Net Income $ 12,151 $ 14,206 $ 14,896 $ 15,473 $ 9,229
========= === ========= ========= ========= ========= ===
Weighted
Average Common
Shares -
Diluted 16,844 16,802 16,925 16,729 13,951
Earnings per
Share -
Diluted $ 0.89 $ 0.78 $ 0.82 $ 0.45 $ 0.62
Core Earnings
per Share -
Diluted $ 0.72 $ 0.85 $ 0.88 $ 0.92 $ 0.66
Average Assets $3,378,296 $3,292,533 $3,221,964 $3,120,107 $2,437,870
Return on
Average
Assets(1) 1.77% 1.60% 1.75% 0.96% 1.42%
Core Return on
Average
Assets(1) 1.43% 1.73% 1.87% 1.97% 1.51%
Average Equity $ 383,922 $ 371,795 $ 363,115 $ 352,537 $ 274,087
Return on
Average
Equity(1) 15.57% 14.17% 15.56% 8.50% 12.59%
Core Return on
Average
Equity(1) 12.56% 15.33% 16.64% 17.46% 13.40%
Net Interest
Income $ 52,020 $ 47,646 $ 46,047 $ 44,327 $ 38,354
Less: Brokered
Time Deposit
Call 4,618 -- -- -- --
--------- --- --------- --------- --------- --------- ---
Core Net
Interest
Income (a) $ 47,402 $ 47,646 $ 46,047 $ 44,327 $ 38,354
Noninterest
Income 11,068 13,106 12,549 11,913 6,635
--------- --- --------- --------- --------- --------- ---
Total Revenue $ 58,470 $ 60,752 $ 58,596 $ 56,240 $ 44,989
Noninterest
Expense $ 38,354 $ 39,572 $ 38,053 $ 37,514 $ 29,725
--------- --- --------- --------- --------- --------- ---
Efficiency
Ratio(2) 65.6% 65.1% 64.9% 66.7% 66.1%
========= ========= ========= ========= =========
Noninterest
Income $ 11,068 $ 13,106 $ 12,549 $ 11,913 $ 6,635
Add:
Non-Recurring
Equity and Debt
Investment
Write-Down -- -- -- 2,620 --
--------- --- --------- --------- --------- --------- ---
Core Fee
Revenue (b) $ 11,068 $ 13,106 $ 12,549 $ 14,533 $ 6,635
--------- --- --------- --------- --------- --------- ---
Core Revenue
(a) + (b) $ 58,470 $ 60,752 $ 58,596 $ 58,860 $ 44,989
Noninterest
Expense $ 38,354 $ 39,572 $ 38,053 $ 37,514 $ 29,725
Less:
Merger-Related
Expenses 697 1,398 1,266 2,615 520
--------- --- --------- --------- --------- --------- ---
Core
Noninterest
Expense $ 37,657 $ 38,174 $ 36,787 $ 34,899 $ 29,205
--------- --- --------- --------- --------- --------- ---
Core Efficiency
Ratio(2) 64.4% 62.8% 62.8% 59.3% 64.9%
========= ========= ========= ========= =========
_______________
(1) Annualized.
(2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
Core Earnings Metrics Nine Months Ended
----------------------------------------------
(in thousands, except per
share data) September 30, 2025 September 30, 2024
---------------------- ----------------------
Net Income $ 42,133 $ 23,439
Add: Income from the Call of
Brokered Time Deposits, Net
of Tax (3,489) --
Add: Merger-Related
Expenses, Net of Tax 2,609 1,157
Add: Non-Recurring Equity
and Debt Investment
Write-Down -- --
Add: IFH ACL Provision, Net
of Tax -- --
------------- --- ------------- ---
Core Net Income $ 41,253 $ 24,596
============= === ============= ===
Weighted Average Common
Shares - Diluted 16,850 13,909
Earnings per Share - Diluted $ 2.50 $ 1.69
Core Earnings per Share -
Diluted $ 2.45 $ 1.77
Average Assets $ 3,298,170 $ 2,363,928
Return on Average Assets(1) 1.71% 1.32%
Core Return on Average
Assets 1.67% 1.39%
Average Equity $ 373,020 $ 265,500
Return on Average Equity(1) 15.10% 11.79%
Core Return on Average
Equity 14.79% 12.37%
Net Interest Income $ 145,713 $ 110,419
Less: Income from the Call
of Brokered Time Deposits 4,618 --
------------- --- ------------- ---
Core Net Interest Income (a) $ 141,095 $ 110,419
Noninterest Income 36,723 19,497
------------- --- ------------- ---
Total Revenue $ 177,818 $ 129,916
Noninterest Expense $ 115,979 $ 88,705
------------- --- ------------- ---
Efficiency Ratio(2) 65.2% 68.3%
============= =============
Noninterest Income $ 36,723 $ 19,497
Add: Non-Recurring Equity
and Debt Investment
Write-Down -- --
------------- --- ------------- ---
Core Fee Revenue (b) $ 36,723 $ 19,497
------------- --- ------------- ---
Core Revenue (a) + (b) $ 177,818 $ 129,916
Noninterest Expense $ 115,979 $ 88,705
Less: Merger-Related
Expenses 3,361 1,315
------------- --- ------------- ---
Core Noninterest Expense $ 112,618 $ 87,390
------------- --- ------------- ---
Core Efficiency Ratio(2) 63.3% 67.3%
============= =============
_______________
(1) Annualized.
(2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
Commercial Bank
Net Interest
Margin Quarter Ended
September 30, December 31, September 30,
(in thousands) 2025 June 30, 2025 March 31, 2025 2024 2024
--------------- -------------- -------------- -------------- ---------------
Commercial Bank
Net Interest
Income $ 36,267 $ 33,073 $ 31,515 $ 28,812 $ 22,676
Average Interest
Earning Assets 3,246,653 3,163,421 3,087,943 3,003,081 2,380,946
Less: Average
Non-Commercial
Bank Interest
Earning
Assets 144,558 132,196 128,278 133,401 129,906
--------- --- --------- --------- --------- --------- ---
Average
Commercial Bank
Interest Earning
Assets $3,102,095 $3,031,225 $2,959,665 $2,869,680 $2,251,040
Commercial Bank
Net Interest
Margin 4.64% 4.38% 4.32% 3.99% 4.01%
Commercial Bank Net Interest
Margin Nine Months Ended
----------------------------------------------
(in thousands) September 30, 2025 September 30, 2024
---------------------- ----------------------
Commercial Bank Net Interest
Income $ 100,855 $ 63,944
Average Interest Earning
Assets 3,166,588 2,314,470
Less: Average
Non-Commercial Bank
Interest Earning Assets 135,146 247,905
------------- --- ------------- ---
Average Commercial Bank
Interest Earning Assets $ 3,031,442 $ 2,066,565
Commercial Bank Net Interest
Margin 4.45% 4.13%
Commercial Bank
Portfolio Loans
Receivable
Yield Quarter Ended
September 30, December 31, September 30,
(in thousands) 2025 June 30, 2025 March 31, 2025 2024 2024
--------------- -------------- -------------- -------------- ---------------
Portfolio Loans
Receivable
Interest
Income $ 60,610 $ 60,647 $ 58,453 $ 58,409 $ 49,886
Less: Credit
Card Loan
Income 15,387 14,116 14,148 15,022 15,137
--------- --- --------- --------- --------- --------- ---
Commercial Bank
Portfolio
Loans
Receivable
Interest
Income $ 45,223 $ 46,531 $ 44,305 $ 43,387 $ 34,749
Average
Portfolio
Loans
Receivable 2,789,815 2,733,865 2,634,110 2,592,960 2,053,619
Less: Average
Credit Card
Loans 129,100 121,414 118,723 120,993 119,458
--------- --- --------- --------- --------- --------- ---
Total
Commercial
Bank Average
Portfolio
Loans
Receivable $2,660,715 $2,612,451 $2,515,387 $2,471,967 $1,934,161
Commercial Bank
Portfolio
Loans
Receivable
Yield 6.74% 7.14% 7.14% 6.98% 7.15%
Commercial Bank Portfolio
Loans Receivable Yield Nine Months Ended
----------------------------------------------
(in thousands) September 30, 2025 September 30, 2024
---------------------- ----------------------
Portfolio Loans Receivable
Interest Income $ 179,710 $ 143,937
Less: Credit Card Loan
Income 43,651 44,798
------------- --- ------------- ---
Commercial Bank Portfolio
Loans Receivable Interest
Income $ 136,059 $ 99,139
Average Portfolio Loans
Receivable 2,719,834 1,991,435
Less: Average Credit Card
Loans 123,117 113,764
------------- --- ------------- ---
Total Commercial Bank
Average Portfolio Loans
Receivable $ 2,596,717 $ 1,877,671
Commercial Bank Portfolio
Loans Receivable Yield 7.01% 7.05%
Pre-tax,
Pre-Provision
Net Revenue
("PPNR") Quarter Ended
June March
September 30, 31, December September
(in thousands) 30, 2025 2025 2025 31, 2024 30, 2024
---------- ------- ------- --------- -----------
Net Income $ 15,065 $13,136 $13,932 $ 7,533 $ 8,672
Add: Income
Tax Expense 4,802 3,963 4,365 3,243 2,827
Add:
Provision
for Credit
Losses 4,650 4,081 2,246 7,828 3,748
Add:
Provision
for Credit
Losses on
Unfunded
Commitments 217 -- -- 122 17
--------- ------ ------ -------- -------
Pre-tax,
Pre-Provision
Net Revenue
("PPNR") $ 24,734 $21,180 $20,543 $ 18,726 $ 15,264
Pre-tax, Pre-Provision Net
Revenue ("PPNR") Nine Months Ended
------------------------------------------
(in thousands) September 30, 2025 September 30, 2024
-------------------- --------------------
Net Income $ 42,133 $ 23,439
Add: Income Tax Expense 13,130 7,617
Add: Provision for Credit
Losses 10,977 9,892
Add: Provision for Credit
Losses on Unfunded
Commitments 217 263
--- --------------- --- ---------------
Pre-tax, Pre-Provision Net
Revenue ("PPNR") $ 66,457 $ 41,211
Core PPNR Quarter Ended
June March
September 30, 31, December September
(in thousands) 30, 2025 2025 2025 31, 2024 30, 2024
----------- ------- ------- --------- -----------
Net Income $15,065 $13,136 $13,932 $ 7,533 $ 8,672
Add: Income Tax
Expense 4,802 3,963 4,365 3,243 2,827
Add: Provision
for Credit
Losses 4,650 4,081 2,246 7,828 3,748
Add: Provision
for Credit
Losses on
Unfunded
Commitments 217 -- -- 122 17
Add: Income
from the Call
of Brokered
Time Deposits (4,618) -- -- -- --
Add:
Merger-Related
Expenses 697 1,398 1,266 2,615 520
Add:
Non-Recurring
Equity and Debt
Investment
Write-Down -- -- -- 2,620 --
------ ------ ------ -------- -------
Core PPNR $20,813 $22,578 $21,809 $ 23,961 $ 15,784
Core PPNR Nine Months Ended
--------------------------------------------
(in thousands) September 30, 2025 September 30, 2024
---------------------- --------------------
Net Income $ 42,133 $ 23,439
Add: Income Tax Expense 13,130 7,617
Add: Provision for Credit
Losses 10,977 9,892
Add: Provision for Credit
Losses on Unfunded
Commitments 217 263
Add: Income from the Call of
Brokered Time Deposits (4,618) --
Add: Merger-Related Expenses 3,361 1,315
Core PPNR $ 65,200 $ 42,526
Allowance for
Credit Losses
to Total
Portfolio
Loans Quarter Ended
September 30, December 31, September 30,
(in thousands) 2025 June 30, 2025 March 31, 2025 2024 2024
--------------- -------------- -------------- -------------- ---------------
Allowance for
Credit Losses $ 53,045 $ 47,447 $ 48,454 $ 48,652 $ 31,925
Total Portfolio
Loans 2,821,983 2,739,808 2,678,406 2,630,163 2,107,522
Allowance for
Credit Losses
to Total
Portfolio
Loans 1.88% 1.73% 1.81% 1.85% 1.51%
Commercial Bank
Allowance for
Credit Losses
to Commercial
Bank Portfolio
Loans Quarter Ended
--------------------------------------------------------------------------------
September 30, December 31, September 30,
(in thousands) 2025 June 30, 2025 March 31, 2025 2024 2024
--------------- -------------- -------------- -------------- ---------------
Allowance for
Credit Losses $ 53,045 $ 47,447 $ 48,454 $ 48,652 $ 31,925
Less: Credit
Card
Allowance
for Credit
Losses 7,413 6,762 5,905 6,402 7,339
--------- --- --------- --------- --------- --------- ---
Commercial Bank
Allowance for
Credit Losses 45,632 40,685 42,549 42,250 24,586
Total Portfolio
Loans 2,821,983 2,739,808 2,678,406 2,630,163 2,107,522
Less: Gross
Credit Card
Loans 130,897 126,233 115,991 122,928 121,718
--------- --- --------- --------- --------- --------- ---
Commercial Bank
Portfolio
Loans 2,691,086 2,613,575 2,562,415 2,507,235 1,985,804
Commercial Bank
Allowance for
Credit Losses
to Total
Portfolio
Loans 1.70% 1.56% 1.67% 1.70% 1.24%
Nonperforming
Assets to Total
Assets Quarter Ended
September 30, December 31, September 30,
(in thousands) 2025 June 30, 2025 March 31, 2025 2024 2024
--------------- -------------- -------------- -------------- ---------------
Total
Nonperforming
Assets $ 52,247 $ 36,167 $ 42,934 $ 30,241 $ 15,460
Total Assets 3,389,442 3,388,662 3,349,805 3,206,911 2,560,788
Nonperforming
Assets to
Total Assets 1.54% 1.07% 1.28% 0.94% 0.60%
Nonperforming
Loans to Total
Portfolio
Loans Quarter Ended
September 30, December 31, September 30,
(in thousands) 2025 June 30, 2025 March 31, 2025 2024 2024
--------------- -------------- -------------- -------------- ---------------
Total
Nonperforming
Loans $ 52,247 $ 36,167 $ 42,934 $ 30,241 $ 15,460
Total Portfolio
Loans 2,821,983 2,739,808 2,678,406 2,630,163 2,107,522
Nonperforming
Loans to Total
Portfolio
Loans 1.85% 1.32% 1.60% 1.15% 0.73%
Net Charge-Offs
to Average
Portfolio
Loans Quarter Ended
September 30, December 31, September 30,
(in thousands) 2025 June 30, 2025 March 31, 2025 2024 2024
--------------- -------------- -------------- -------------- ---------------
Total Net
Charge-Offs $ 2,476 $ 5,088 $ 2,444 $ 2,427 $ 2,655
Total Average
Portfolio
Loans 2,789,815 2,733,865 2,634,110 2,592,960 2,053,619
Net Charge-Offs
to Average
Portfolio
Loans,
Annualized 0.35% 0.75% 0.38% 0.37% 0.51%
Tangible Book
Value per
Share Quarter Ended
(in thousands,
except share
and per share
data) September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024
------------------- ------------------- ------------------- ------------------- -------------------
Total
Stockholders'
Equity $ 394,770 $ 380,035 $ 369,577 $ 355,139 $ 280,111
Less:
Preferred
Equity -- -- -- -- --
Less:
Intangible
Assets 41,839 37,773 39,641 36,943 --
------------------ ------------------ ------------------ ------------------ ------------------
Tangible Common
Equity $ 352,931 $ 342,262 $ 329,936 $ 318,196 $ 280,111
Period End
Shares
Outstanding 16,589,241 16,581,990 16,657,168 16,662,626 13,917,891
Tangible Book
Value per
Share $ 21.27 $ 20.64 $ 19.81 $ 19.10 $ 20.13
Return on
Average Tangible
Common Equity Quarter Ended
September 30, June 30, March 31, December 31, September 30,
(in thousands) 2025 2025 2025 2024 2024
------------- ------------ ------------ ------------- -------------
Net Income $ 15,065 $ 13,136 $ 13,932 $ 7,533 $ 8,672
Add:
Intangible
Amortization,
Net of Tax 199 200 199 198 --
------- --- ------- ------- ------- --- ------- ---
Net Tangible
Income $ 15,264 $ 13,336 $ 14,131 $ 7,731 $ 8,672
Average Equity 383,922 371,795 363,115 352,537 274,087
Less: Average
Intangible
Assets 37,715 39,534 36,896 22,890 --
------- --- ------- ------- ------- --- ------- ---
Net Average
Tangible Common
Equity $346,207 $332,261 $326,219 $329,647 $274,087
Return on
Average Equity 15.57% 14.17% 15.56% 8.50% 12.59%
Return on
Average
Tangible Common
Equity 17.49% 16.10% 17.57% 9.33% 12.59%
Return on Average Tangible
Common Equity Nine Months Ended
----------------------------------------------
(in thousands) September 30, 2025 September 30, 2024
---------------------- ----------------------
Net Income $ 42,133 $ 23,439
Add: Intangible
Amortization, Net of Tax 599 --
------------- --- ------------- ---
Net Tangible Income $ 42,732 $ 23,439
Average Equity 373,020 265,500
Less: Average Intangible
Assets 38,051 --
------------- --- ------------- ---
Net Average Tangible Common
Equity $ 334,969 $ 265,500
Return on Average Equity 15.10% 11.79%
Return on Average Tangible
Common Equity 17.06% 11.79%
Core Return on
Average Tangible
Common Equity Quarter Ended
September 30, June 30, March 31, December 31, September
(in thousands) 2025 2025 2025 2024 30, 2024
------------- ----------- ------------ ------------ ------------
Net Income, as
Adjusted $12,151 $14,206 $14,896 $15,473 $9,229
Add:
Intangible
Amortization,
Net of Tax 199 200 199 198 --
------ ---- ------ ------ --- ------ --- ----- ----
Core Net
Tangible
Income $12,350 $14,406 $15,095 $15,671 $9,229
Core Return on
Average
Tangible Common
Equity 14.15% 17.39% 18.77% 18.91% 13.40%
Core Return on Average
Tangible Common Equity Nine Months Ended
----------------------------------------------
(in thousands) September 30, 2025 September 30, 2024
---------------------- ----------------------
Net Income, as Adjusted $ 41,253 $ 24,596
Add: Intangible
Amortization, Net of Tax 599 --
------------ ---- ------------ ----
Core Net Tangible Income $ 41,852 $ 24,596
Core Return on Average
Tangible Common Equity 16.70% 12.37%
ABOUT CAPITAL BANCORP, INC.
Capital Bancorp, Inc., Rockville, Maryland is a registered bank holding company incorporated under the laws of Maryland. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in four locations in the Washington, D.C., Baltimore, other Maryland markets, one bank branch in Fort Lauderdale, Florida, one bank branch in Chicago, Illinois and one bank branch in Raleigh, North Carolina. Capital Bancorp had assets of approximately $3.4 billion at September 30, 2025 and its common stock is traded in the NASDAQ Global Market under the symbol "CBNK." More information can be found at the Company's website www.CapitalBankMD.com under its investor relations page.
FORWARD-LOOKING STATEMENTS
This earnings release contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management's expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "optimistic," "intends" and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements. Accordingly, we caution you that any such forward-looking statements are not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors. For details on some of the factors that could affect these expectations, see risk factors and other cautionary language included in the Company's Annual Report on Form 10-K and other periodic and current reports filed with the Securities and Exchange Commission.
While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: the strength of the United States ("U.S.") economy in general and the strength of the local economies in which we conduct operations; geopolitical concerns, including acts or threats of terrorism and the ongoing wars in 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, interest rate, market, and monetary fluctuations; volatility and disruptions in global capital and credit markets; changes in U.S. trade policies, including the implementation of tariffs and other protectionist trade policies; the effects of federal government shutdowns, debt ceiling standoff, or other fiscal policy uncertainty; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; cybersecurity threats and the cost of defending against them; climate change, and other catastrophic disasters; the effect of the IFH acquisition or any other acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations, including the planned growth of Windsor Advantage(TM) ; and other factors that may affect our future results.
These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.
FINANCIAL CONTACT: Ed Barry (240) 283-1912
MEDIA CONTACT: Ed Barry (240) 283-1912
WEB SITE: www.CapitalBankMD.com
(END) Dow Jones Newswires
October 27, 2025 17:05 ET (21:05 GMT)