ROCKVILLE, Md., July 27, 2026 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the "Bank"), today reported:
Quarter Ended % Change (Annualized) (in millions, except per share data)2Q26 1Q26 2Q25 2Q26 vs 1Q26 2Q26 vs 2Q25 Balance Sheet Summary Gross Loans (1)$3,086 $3,026 $2,740 7.9% 12.6% Total Deposits3,371 3,292 2,941 9.6% 14.6% Customer Deposits(2)3,140 2,989 2,671 20.3% 17.6% Tangible Book Value per share(3)$23.45 $22.62 $20.64 14.7% 13.6%(1) Gross loans represent portfolio loans receivable, net of deferred fees and costs.
(2) Customer deposits represents total deposits excluding brokered deposits.
(3) As used in this press release, Core net income, Core earnings per share - diluted, Core ROA, Core ROTCE, Tangible Book Value per share are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of this and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
“The Board is very pleased that we were able to deliver another quarter of strong operating performance, highlighted by solid loan and deposit growth, diversified fee income generation, and continued growth in tangible book value per share,” said Steven J. Schwartz, Chairman of the Company. “The increase in non-interest expenses year-over-year reflects our continued investment in strategic initiatives, including our unsecured card platform, the expansion of our targeted C&I verticals, and our customer-facing and back-office technology infrastructure. We believe these investments strengthen our franchise and will continue to reduce our exposure to cyber risks, credit losses at OpenSky™, enhance our customers' experience, and, ultimately, improve our operating efficiency, all while supporting our robust, organic, long-term growth goals.”
Second Quarter 2026 Highlights
- Continued to strengthen the funding base, with total deposits, including brokered deposits, increasing 9.6% (annualized) from 1Q 2026; Excluding a $15.0 million reduction associated with the same single customer relationship noted in 1Q 2026, total deposits grew 11.5% (annualized) while reducing brokered deposits by 23.8%
- Sustained strong customer deposit momentum, with customer deposits increasing 20.3% (annualized) from 1Q 2026, or 27.0% (annualized) excluding the relationship referenced above
- Generated 7.9% (annualized) growth in gross loans from 1Q 2026, driven by broad-based production across the portfolio; Through July 15th(1), loan growth totaled $159.2 million, representing an implied annualized growth rate of 10.0%
- Continued tangible book value compounding, with tangible book value(2) per share increasing 14.7% (annualized) from 1Q 2026
- Delivered diluted earnings per share of $0.87, up 19.2% from 1Q 2026, supported by an 18.6% increase in net income
- Produced 29.6% (annualized) fee income growth, with contributions from nearly every major fee category, led by higher USDA volume, continued production from the new SBA team, significant growth in Windsor revenue and increased mortgage production. Fee revenue represented 22.0% of total revenue
- Continued to execute on strategic growth initiatives while maintaining strong expense discipline, with noninterest expense remaining flat despite ongoing investments in unsecured card, card partnerships, data infrastructure and personnel
- The Company also declared a cash dividend on its common stock of $0.14 per share, a 16.7% increase from the prior quarterly dividend. The dividend is payable on August 26, 2026 to shareholders of record on August 10, 2026.
(1) Balances through July 15th are preliminary and unaudited. They have not been subject to customary reconciliations or closing procedures and may not be indicative of final balances at quarter end.
(2) As used in this press release, Core net income, Core earnings per share - diluted, Core ROA, Core ROTCE, Tangible Book Value per share are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of this and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
“We continue to execute on our growth strategy across the franchise, delivering strong customer deposit growth, solid loan production and broad-based fee income expansion" said Ed Barry, CEO of the Company. "The breadth of our performance reflects the strength of our diversified business model and positions us well to continue expanding customer relationships, growing the balance sheet and delivering sustainable long-term growth."
Consolidated financial performance
Net income of $14.3 million increased $2.2 million compared to 1Q 2026, and earnings per share - diluted of $0.87 increased $0.14 per share from 1Q 2026. Net income increased $1.1 million, or 8.5%, compared to $13.1 million, or $0.78 per diluted share, for 2Q 2025. 2Q 2026 Core net income(1) of $14.3 million, or $0.87 per diluted share, increased $2.2 million, or 18.6%, from 1Q 2026 Core net income of $12.0 million, or $0.73 per diluted share. 2Q 2026 Core net income increased $0.1 million from 2Q 2025 Core net income of $14.2 million. 2Q 2026 Core net income excluding purchase accounting accretion ("PAA") was $14.0 million, an increase of $0.8 million from 2Q 2025 Core net income excluding PAA of $13.2 million.
(1) As used in this press release, Core net income and Core noninterest expense are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of this and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Quarterly net interest income:
- Net interest income of $50.9 million increased $1.5 million, or 3.1% (not annualized), compared to 1Q 2026, and increased $3.3 million, or 6.9%, year-over-year.
- Interest income of $70.0 million increased $2.0 million, or 2.9% (not annualized), compared to 1Q 2026, and increased $5.4 million, or 8.3%, year-over-year. The increase from 1Q 2026 was primarily driven by a $0.9 million increase from OpenSky™ due to higher balances and higher yields, $1.0 million from the Commercial Bank driven by $0.5 million from interest bearing cash income, $0.4 million from investment securities, and $0.2 million from loan growth. The increase year-over-year was primarily driven by $3.8 million from the Commercial Bank due to strong organic loan growth, and $1.5 million from OpenSky™ due to strong growth from the unsecured loan product.
- Interest income included $0.2 million from net PAA in 2Q 2026, compared to $0.3 million in 1Q 2026 and $0.4 million in net PAA in 2Q 2025.
- Interest expense of $19.0 million increased $0.5 million, or 2.5% (not annualized), compared to 1Q 2026, and increased $2.1 million, or 12.3%, year-over-year. The increase of $0.5 million compared to 1Q 2026, was primarily driven by growth in the deposit portfolio, and a shift in deposit mix to money markets accounts. The increase of $2.1 million year-over-year was driven by $1.0 million from higher balances and a shift in deposit mix, $0.8 million of lower PAA, and $0.3 million of higher borrowing costs.
- Interest expense included a $0.1 million benefit from net PAA in 2Q 2026, compared to a $0.1 million benefit in 1Q 2026. There was a $0.9 million benefit from net PAA in 2Q 2025.
- Interest expense included a $0.1 million benefit from net PAA in 2Q 2026, compared to a $0.1 million benefit in 1Q 2026. There was a $0.9 million benefit from net PAA in 2Q 2025.
- Interest income of $70.0 million increased $2.0 million, or 2.9% (not annualized), compared to 1Q 2026, and increased $5.4 million, or 8.3%, year-over-year. The increase from 1Q 2026 was primarily driven by a $0.9 million increase from OpenSky™ due to higher balances and higher yields, $1.0 million from the Commercial Bank driven by $0.5 million from interest bearing cash income, $0.4 million from investment securities, and $0.2 million from loan growth. The increase year-over-year was primarily driven by $3.8 million from the Commercial Bank due to strong organic loan growth, and $1.5 million from OpenSky™ due to strong growth from the unsecured loan product.
Quarterly provision:
- The 2Q 2026 provision for credit losses was $3.6 million, an increase of $0.6 million from 1Q 2026. Net charge-offs totaled $3.8 million, or 0.50% of portfolio loans (annualized), up from $3.0 million or 0.40% of portfolio loans (annualized), in 1Q 2026.
- Net charge-offs in the quarter include $2.9 million from OpenSky™ loans and $0.9 million from Commercial Bank loans. Net charge-offs for the Commercial Bank increased $1.0 million quarter-over-quarter primarily due to a $0.7 million recovery in 1Q 2026. OpenSky™ net charge-offs amounted to $2.9 million in 2Q 2026 compared to $3.1 million in 1Q 2026.
- At June 30, 2026, the ACL Coverage Ratio was 1.76%, down 5 bps from March 31, 2026.
Quarterly fee revenue:
- Fee Revenue of $14.4 million increased $1.0 million, compared to 1Q 2026 and increased $1.3 million year-over-year. The increase of $1.0 million during 2Q 2026 was the result primarily of a $1.0 million increase in government loan servicing and packaging revenue (Windsor™), a $0.4 million increase in mortgage banking revenue, and a $0.3 million increase in government lending revenue, offset by a $0.3 million decrease in credit card fees and a $0.2 million decrease in loan servicing rights. The year-over-year fee revenue increase of $1.3 million was primarily due to an increase in government loan servicing and packaging revenue (Windsor™). Fee revenue mix(1) was 22.0% of total revenue for 2Q 2026, compared to 21.3% during 1Q 2026, and 21.6% during 2Q 2025.
Quarterly noninterest expense:
- Noninterest expense of $43.2 million decreased $0.5 million compared to 1Q 2026 and increased $3.6 million compared to 2Q 2025. Core noninterest expense(2) of $43.2 million decreased $0.5 million compared to 1Q 2026 and increased $5.0 million compared to 2Q 2025. Core comparisons include:
- The decrease of $0.5 million quarter-over-quarter was primarily driven by the following:
- $0.8 million lower professional fees, attributable to a decrease in consulting expenses and lower audit and accounting related fees; partially offset by a $0.4 million increase in occupancy and costs associated with software upgrades.
- Year-over-year expense growth of $5.0 million was driven by increases in professional fees associated with investments in shared services areas and OpenSky™, expense associated with headcount growth, increased occupancy and equipment costs and an increase in loan processing costs.
- The decrease of $0.5 million quarter-over-quarter was primarily driven by the following:
Quarterly income taxes:
- Income tax expense of $4.2 million, or 22.8% of pre-tax income for 2Q 2026, increased $0.4 million from $3.9 million, or 24.3% of pre-tax income for 1Q 2026. The effective income tax rate change quarter-over-quarter primarily reflects refinement of the quarterly tax provision following an updated estimate related to the deferred tax liability associated with fixed assets acquired in the IFH acquisition.
Total assets:
Total assets of $3.9 billion at June 30, 2026 increased $81.5 million, or 8.6% (annualized) from March 31, 2026. Total assets growth year-over-year was $501.3 million, or 14.8%. The growth quarter-over-quarter, and year-over-year, was primarily driven by increases in portfolio loans, and cash balances.
Gross Loans:
- Gross Loans of $3.1 billion at June 30, 2026 increased $59.5 million, or 7.9% (annualized), from March 31, 2026 and increased $346.1 million, or 12.6%, year-over-year.
- Compared to March 31, 2026, growth was primarily driven by $34.8 million from commercial real estate, $10.5 million from credit cards, and $5.0 million from construction real estate.
- Gross loan growth through July 15th(1) of $159.2 million brings year-to-date loan growth to 10.0% (annualized).
- C&l loans, plus owner-occupied CRE loans, totaled 37.4% of total portfolio loans at June 30, 2026, 38.3% at March 31, 2026, and 37.6% at June 30, 2025.
(1) Fee revenue mix equals fee revenue divided by the sum of fee revenue and net interest income before provision for credit losses.
(2) As used in this press release, Core net income, Core earnings per share - diluted, Core ROA, Core ROTCE, Tangible Book Value per share are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of this and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
(3) Balances through July 15th are preliminary and unaudited. They have not been subject to customary reconciliations or closing procedures and may not be indicative of final balances at quarter end.
Deposits:
- Total deposits of $3.4 billion at June 30, 2026 increased $79.1 million, or 9.6% (annualized), from March 31, 2026, and increased $430.4 million, or 14.6% from June 30, 2025.
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- Excluding a $72.1 million decrease in brokered time deposits, customer deposits increased $151.1 million or 20.3% (annualized), including $114.7 million of growth in customer money market deposits, $49.8 million of growth in interest-bearing demand accounts, $25.7 million of growth in noninterest-bearing deposits, and $1.6 million of growth in savings accounts, partially offset by a decrease of $40.7 million in customer time deposits.
- The increase in total deposits of $430.4 million year-over-year was driven by $430.5 million in growth from customer money market deposits with offsetting activity across other deposit products.
- Total deposit growth through July 15th(1) of $165.3 million brings year-to-date deposit growth to 10.0% (annualized).
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- Insured and protected(2) deposits were approximately $2.2 billion as of June 30, 2026 representing 66.6% of the Company's deposit portfolio.
- Low interest(3) and noninterest-bearing demand deposit account ("DDA") deposits totaled $1.3 billion, or 38.9% of deposits, an increase of $77.1 million, or 25.0% (annualized) from 1Q 2026, and an increase of $142.7 million, or 12.2% year-over-year.
- The average rate on the low interest and noninterest-bearing deposits was 0.29% for 2Q 2026, which increased 13 bps compared to 1Q 2026 and increased 15 bps year-over-year.
- The average portfolio loans-to-deposit ratio was 94.3% for 2Q 2026, compared to 96.1% for 1Q 2026, and 96.2% for 2Q 2025.
(1) Balances through July 15th are preliminary and unaudited. They have not been subject to customary reconciliations or closing procedures and may not be indicative of final balances at quarter end.
(2) Protected deposits include deposits that are indirectly protected under the product terms.
(3) Low interest deposits include interest-bearing demand and savings accounts.
Investment securities:
- The investment securities portfolio continues to be classified as available-for-sale and had a fair market value of $219.9 million, or 5.7% of total assets, and an effective duration of 2.5 years, with U.S. Treasury Securities representing 60% of the overall investment portfolio at June 30, 2026. The accumulated other comprehensive income (loss) on the investment securities portfolio declined $0.1 million during the quarter to $6.3 million after-tax as of June 30, 2026, which represents 1.5% of total stockholders' equity. The Company does not have a held-to-maturity investment securities portfolio.
Liquidity:
- The Company maintains stable and diversified sources of contingent liquidity, generally consistent with prior quarter. Total available borrowing capacity as of June 30, 2026 was $801.6 million, compared to $809.5 million as of March 31, 2026, consisting of $699.4 million of available collateralized borrowing capacity, $96.0 million of unsecured lines of credit with other banks, and $6.2 million of unpledged investment securities available to collateralize potential additional borrowings. Including cash and cash equivalents of $418.3 million, total liquidity was approximately $1.2 billion.
Capital:
- As of June 30, 2026, the Company reported a Common Equity Tier-1 capital ratio of 13.14% and a Tier 1 leverage ratio of 10.59%, compared to 12.92% and 10.48%, respectively, at March 31, 2026. At June 30, 2026, the Company and the Bank maintained regulatory capital ratios that exceed all capital adequacy requirements.
- Shares repurchased and retired during the three months ended June 30, 2026, as part of the Company's stock repurchase program, totaled 1,213 shares at an average price of $30.03, for a total cost of $36 thousand. As of June 30, 2026, there was $12.4 million remaining to be repurchased under the current $15.0 million authorization repurchase program, which will expire on December 31, 2026.
Financial Metrics
Net Interest Margin:
NIM of 5.64% for 2Q 2026, decreased 7 bps compared to the prior quarter, and decreased 40 bps year-over-year. Core NIM(1) of 4.04% decreased 11 bps (but decreased 9 bps when excluding PAA) compared to the prior quarter, and decreased 38 bps year-over-year. Net PAA for 2Q 2026 was 3 bps for NIM and 4 bps for Core NIM(1). The decrease quarter-over-quarter in Core NIM includes 3 bps from lower deferred origination fees and net PAA and 3 bps from one non-performing loan relationship.
- The average yield on interest earning assets of 7.75% decreased 11 bps compared to the prior quarter and decreased 44 bps year-over-year. The decrease quarter-over-quarter was primarily due to the Commercial Bank loan portfolio. The decrease year-over-year was primarily due to the impact of changes in the rate environment to the Commercial Bank and OpenSky™ portfolios, as well as lower loan PAA for the Commercial Bank.
- The Core Loan Yield(1) of 6.77% for 2Q 2026 decreased 16 bps compared to 1Q 2026, and decreased 37 bps year-over-year. The decrease quarter-over-quarter includes 5 bps from lower deferred origination fees and loan PAA, and 4 bps from one non-performing loan relationship. The decrease year-over-year was primarily a result of changes in the rate environment offsetting organic portfolio growth.
- The total cost of deposits of 2.29% for 2Q 2026 decreased 5 bps compared to the prior quarter and decreased 7 bps year-over-year. The decrease quarter-over-quarter was primarily due to a shift in product mix, and the decrease year-over-year was primarily due to a shift in product mix as well as changes in the rate environment.
- The total cost of interest-bearing deposits of 3.09% for 2Q 2026 decreased 8 bps quarter-over-quarter, and decreased 20 bps year-over-year. The decrease quarter-over-quarter was primarily due to a shift in product mix, and the decrease year-over-year was primarily due to a shift in product mix as well as changes in the rate environment.
- Net PAA of $0.3 million, or 3 bps of NIM and 4 bps of Core NIM(1), during 2Q 2026, decreased $0.1 million from 1Q 2026 due to a loan that paid off during 1Q 2026. There was $1.3 million from net PAA during 2Q 2025.
(1) As used in this press release, Core NIM, Core Loan Yield, and Core efficiency ratio are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of these and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Credit Metrics and Asset Quality:
Nonperforming assets were $60.8 million, or 1.56% of total assets, at June 30, 2026, an increase of $1.6 million from March 31, 2026, while remaining unchanged as a percentage of total assets. The increase in nonperforming assets from 1Q 2026 was primarily driven by a $5.3 million net increase in nonaccrual loans from the legacy CBNK portfolio, slightly offset by a $3.7 million net decrease from the acquired IFH portfolio. The legacy CBNK increase reflected $10.6 million of new nonaccruals, primarily attributable to one $9.7 million legacy bank loan relationship, partially offset by $5.3 million of nonaccrual resolutions. The acquired IFH portfolio decrease reflected $4.7 million of nonaccrual loan resolutions, partially offset by $1.0 million of new nonaccruals. Nonperforming assets increased $24.7 million or 49 bps year-over-year, mainly due to the $15.9 million increase during 3Q 2025 from two loan relationships acquired as part of the IFH transaction and the $9.7 million increase during 2Q 2026 related to the legacy bank loan relationship referenced above. At June 30, 2026, substandard loans totaled $70.6 million, or 2.3% of total portfolio loans, compared to $71.8 million, or 2.4% of total portfolio loans, at March 31, 2026 and $44.6 million, or 1.7% of total portfolio loans, at June 30, 2025. The $26.1 million year-over-year increase in substandard loans was primarily driven by $15.9 million from two loan relationships acquired as part of the IFH transaction, and $9.7 million from the legacy bank relationship that is referenced above. At June 30, 2026, special mention loans totaled $61.5 million, or 2.0% of total portfolio loans, compared to $60.3 million, or 2.0% of total portfolio loans, at March 31, 2026, and $54.2 million, or 2.0% of total portfolio loans, at June 30, 2025.
Through July 15, 2026, management did not identify any significant changes in nonperforming assets, special mention loans, or substandard loans from June 30, 2026.
Efficiency Ratio:
The efficiency ratio was 66.1% for 2Q 2026, compared to 69.6% for 1Q 2026 and 65.1% for 2Q 2025. The core efficiency ratio(1) was 66.1% for 2Q 2026, which decreased from 69.6% compared to the prior quarter, and increased from 62.8% for 2Q 2025.
Returns:
ROA was 1.52% for 2Q 2026, compared to 1.33% for 1Q 2026, and 1.60% for 2Q 2025. Core ROA(1) for 2Q 2026 was 1.52%, compared to 1.33% for 1Q 2026, and 1.73% for 2Q 2025.
- ROE was 13.80% for 2Q 2026, compared to 12.03% for 1Q 2026, and 14.17% for 2Q 2025. Core ROE(1) was 13.80% for 2Q 2026, compared to 12.03% for 1Q 2026, and 15.33% for 2Q 2025.
- ROTCE(1) was 15.51% for 2Q 2026, compared to 13.58% for 1Q 2026, and 16.10% for 2Q 2025. Core ROTCE(1) for 2Q 2026 was 15.51%, compared to 13.58% for 1Q 2026, and 17.39% for 2Q 2025.
(1) As used in this press release, Core ROA, Core ROE, ROTCE, Core ROTCE, and Tangible Book Value are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of these and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Book Value:
Book value per common share of $25.92 at June 30, 2026, increased $0.82 when compared to March 31, 2026, and increased $3.00 when compared to June 30, 2025. Tangible book value per common share(1) increased $0.83, or 3.7% (not annualized), to $23.45 at June 30, 2026 when compared to March 31, 2026, and increased $2.81, or 13.6%, when compared to June 30, 2025.
Reportable Segments
Commercial Bank
Loan Growth – Portfolio loans(1) increased $49.0 million at June 30, 2026 compared to March 31, 2026, driven by $34.8 million from CRE, $5.0 million from construction real estate, $2.2 million from residential real estate, and $1.0 million from C&I. Portfolio loans increased $327.6 million at June 30, 2026 compared to June 30, 2025, driven by $138.3 million from C&I, $87.0 million from residential real estate, and $54.2 million from CRE. [C&I loans grew an additional 2.5% through July 15, 2026(2).] Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.
(1) Portfolio loans represents portfolio loans receivable excluding deferred origination fees, net.
(2) Balances through July 15th are preliminary and unaudited. They have not been subject to customary reconciliations or closing procedures and may not be indicative of final balances at quarter end.
Net Interest Income – Interest income of $53.7 million increased $1.0 million from the prior quarter, $0.5 million from interest bearing cash income, $0.4 million from investment securities, and $0.2 million from loan growth. Interest expense of $18.9 million increased $0.4 million, driven by growth and a mix shift in the deposit portfolio.
Credit Metrics – Nonperforming assets increased 1 bp to 1.65% of total assets at June 30, 2026 compared to March 31, 2026. Total nonaccrual loans at June 30, 2026 were $57.0 million, an increase of $1.6 million or 2.8% compared to $55.4 million at March 31, 2026.
Classified and Criticized Loans – At June 30, 2026, special mention loans totaled $61.5 million, or 2.0% of total portfolio loans, compared to $60.3 million, or 2.0% of total portfolio loans, at March 31, 2026. At June 30, 2026, substandard loans totaled $70.6 million, or 2.3% of total portfolio loans, compared to $71.8 million, or 2.4% of total portfolio loans, at March 31, 2026.
OpenSky™
OpenSky™ results reflected continued loan balance growth, stable account levels, lower operating expenses and credit performance consistent with management expectations. Higher net interest income from loan growth was partially offset by lower fee revenue and a higher provision for credit losses primarily related to portfolio growth.
Accounts – During 2Q 2026, credit card accounts grew to 588.6 thousand, increasing 0.4 thousand, or 0.1% (not annualized) from March 31, 2026, and increasing 3.2 thousand, or 0.6% year-over-year.
Loan and Deposit Balances – Secured and unsecured loan balances, net of reserves for interest and fees, of $145.3 million at June 30, 2026 increased by $10.5 million, or 7.8% (not annualized), compared to March 31, 2026 and increased $14.2 million, or 10.9%, year-over-year. Deposit balances of $166.2 million at June 30, 2026 increased $0.7 million compared to March 31, 2026 and decreased $2.8 million, or 1.6% year-over-year. Gross unsecured loan balances of $51.2 million at June 30, 2026 increased $4.7 million, or 10.0% (not annualized), compared to $46.6 million at March 31, 2026, and increased $18.5 million, or 56.6% (not annualized), year-over-year. Gross secured loan balances of $96.0 million at June 30, 2026 increased $6.0 million, or 6.7% (not annualized), compared to $90.0 million at March 31, 2026, and decreased $4.0 million, or 4.0% (not annualized) year-over-year.
Net Interest Income – Interest income of $16.0 million increased $0.9 million compared to 1Q 2026, supported by higher average OpenSky™ credit card loan balances. Average OpenSky™ credit card loan balances, net of reserves and deferred fees of $137.1 million for 2Q 2026, increased $3.3 million, or 2.5% (not annualized), compared to 1Q 2026.
Fee Revenue – Total fee revenue of $4.4 million decreased $0.3 million from the prior quarter primarily driven by lower credit-card fees from the unsecured product. The decline was partially offset by continued growth in net interest income as loan balances increased.
Noninterest Expense – Total noninterest expense of $15.4 million decreased $0.8 million compared to 1Q 2026, driven by savings from professional fees, lower depreciation of capitalized assets related to OpenSky™ technology, lower data processing costs, and lower marketing spend.
OpenSky™ Credit – Portfolio credit metrics continued to be generally consistent with modeled expectations during 2Q 2026. The provision for credit losses of $4.0 million increased $1.3 million when compared to the prior quarter, primarily due to the growth of $10.5 million in the loan portfolio. Net charge-offs remained generally stable, decreasing $0.2 million to $2.9 million in 2Q 2026 from $3.1 million in 1Q 2026. The majority of OpenSky's™ unsecured loan product is offered to current and former secured card customers, where the Company has historical customer performance data. Unsecured loans have been offered by OpenSky™ since the fourth quarter of 2021 and have generally performed in alignment with management expectations over that time period. OpenSky™ has begun testing limited offers to new customers; however, this activity remains insignificant to the overall unsecured loan portfolio and total accounts, and balances are expected to remain de minimis through year-end as management monitors performance.
Capital Bank Home Loans
Originations of loans held for sale totaled $106.9 million during 2Q 2026 (46.6% growth in volume compared to 1Q 2026 on an unannualized basis), with $87.1 million of mortgage loans sold resulting in a gain on sale of loans of $2.4 million, representing a 2.71% gain on sale as a percentage of total loans sold. Originations of loans held for sale totaled $72.9 million during 1Q 2026, with $52.4 million of mortgage loans sold resulting in a gain on sale of loans of $1.5 million, representing a 2.85% gain on sale as a percentage of total loans sold.
Windsor Advantage™
Gross government loan servicing revenue totaled $6.6 million, including $1.3 million of Capital Bank related servicing fees, during 2Q 2026. Gross government loan servicing revenue totaled $5.6 million, including $1.3 million of Capital Bank related servicing fees, during 1Q 2026. Windsor's™ total servicing portfolio was $3.4 billion at June 30, 2026, and $3.2 billion at March 31, 2026. In 2Q 2026, Windsor processed the closing of $223.6 million of government guaranteed loans, an 84.3% increase from $121.4 million in 1Q 2026 and a 142.7% increase from $92.1 million in 2Q 2025.
COMPARATIVE FINANCIAL HIGHLIGHTS - UnauditedQuarter Ended 2Q26 vs 1Q26 2Q26 vs 2Q25(in thousands, except per share data)June 30, 2026 March 31, 2026 June 30, 2025 $ Change % Change $ Change % ChangeEarnings Summary Interest income$69,959 $67,970 $64,586 $1,989 2.9% $5,373 8.3%Interest expense 19,030 18,572 16,940 458 2.5% 2,090 12.3%Net interest income 50,929 49,398 47,646 1,531 3.1% 3,283 6.9%Provision for credit losses 3,585 3,014 4,081 571 18.9% (496) (12.2)%Provision for credit losses on unfunded commitments 65 205 — (140) (68.3)% 65 —%Noninterest income 14,361 13,373 13,106 988 7.4% 1,255 9.6%Noninterest expense 43,186 43,681 39,572 (495) (1.1)% 3,614 9.1%Income before income taxes 18,454 15,871 17,099 2,583 16.3% 1,355 7.9%Income tax expense 4,204 3,853 3,963 351 9.1% 241 6.1%Net income$14,250 $12,018 $13,136 $2,232 18.6% $1,114 8.5% Pre-tax pre-provision net revenue ("PPNR")(1)$22,104 $19,090 $21,180 $3,014 15.8% $924 4.4%Core PPNR(1)$22,104 $19,090 $22,578 $3,014 15.8% $(474) (2.1)% Common Share Data Earnings per share - Basic$0.87 $0.74 $0.79 $0.13 17.6% $0.08 10.1%Earnings per share - Diluted$0.87 $0.73 $0.78 $0.14 19.2% $0.09 11.5%Core earnings per share - Diluted(1)$0.87 $0.73 $0.85 $0.14 19.2% $0.02 2.4%Weighted average common shares - Basic 16,288 16,345 16,584 Weighted average common shares - Diluted 16,373 16,441 16,802 Return Ratios Return on average assets (annualized) 1.52% 1.33% 1.60% Core return on average assets (annualized)(1) 1.52% 1.33% 1.73% Return on average equity (annualized) 13.80% 12.03% 14.17% Core return on average equity (annualized)(1) 13.80% 12.03% 15.33% Return on average tangible common equity (annualized)(1) 15.51% 13.58% 16.10% Core return on average tangible common equity (annualized)(1) 15.51% 13.58% 17.39%
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(1) Refer to Appendix for reconciliation of non-GAAP measures.
Six Months Ended June 30, (in thousands, except per share data) 2026
2025
$ Change % ChangeEarnings Summary Interest income $137,929 $127,346 $10,583 8.3%Interest expense 37,602 33,653 3,949 11.7%Net interest income 100,327 93,693 6,634 7.1%Provision for credit losses 6,599 6,327 272 4.3%Provision for credit losses on unfunded commitments 270 — 270 —%Noninterest income 27,734 25,655 2,079 8.1%Noninterest expense 86,867 77,625 9,242 11.9%Income before income taxes 34,325 35,396 (1,071) (3.0)%Income tax expense 8,057 8,328 (271) (3.3)%Net income $26,268 $27,068 $(800) (3.0)% Pre-tax pre-provision net revenue ("PPNR")(1) $41,194 $41,723 $(529) (1.3)%Core PPNR(1) $41,194 $44,387 $(3,193) (7.2)% Common Share Data Earnings per share - Basic $1.61 $1.63 $(0.02) (1.2)%Earnings per share - Diluted $1.60 $1.60 $— —%Core earnings per share - Diluted(1) $1.60 $1.72 $(0.12) (7.0)%Weighted average common shares - Basic 16,316 16,624 Weighted average common shares - Diluted 16,404 16,872 Return Ratios Return on average assets (annualized) 1.43% 1.68% Core return on average assets (annualized)(1) 1.43% 1.80% Return on average equity (annualized) 12.93% 14.85% Core return on average equity (annualized)(1) 12.93% 15.97% Return on average tangible common equity (annualized)(1) 14.57% 16.82% Core return on average tangible common equity (annualized)(1) 14.57% 18.07%
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(1) Refer to Appendix for reconciliation of non-GAAP measures.
Quarter Ended Quarter Ended June 30, March 31, December 31, September 30,(in thousands, except per share data)2026
2025
% Change 2026
2025
2025
Balance Sheet Highlights Assets$3,889,938 $3,388,662 14.8% $3,808,467 $3,606,207 $3,389,442Investment securities available-for-sale 219,947 228,923 (3.9)% 230,525 230,083 232,640Mortgage loans held for sale 22,370 15,933 40.4% 13,739 25,828 14,146Portfolio loans receivable(2) 3,085,950 2,739,808 12.6% 3,026,431 2,959,457 2,821,983Allowance for credit losses 54,431 47,447 14.7% 54,680 54,660 53,045Goodwill 25,969 22,478 15.5% 25,969 25,969 25,969Intangible assets 14,250 15,295 (6.8)% 14,511 14,771 15,033Deposits 3,371,103 2,940,738 14.6% 3,292,047 3,093,200 2,912,053FHLB borrowings 50,000 22,000 127.3% 50,000 50,000 22,000Other borrowed funds 2,062 12,062 (82.9)% 2,062 2,062 12,062Total stockholders' equity 422,205 380,035 11.1% 408,859 401,757 394,770Tangible common equity(1) 381,986 342,262 11.6% 368,379 361,017 353,768 Common shares outstanding 16,289 16,582 (1.8)% 16,286 16,373 16,589Book value per share$25.92 $22.92 13.1% $25.10 $24.54 $23.80Tangible book value per share(1)$23.45 $20.64 13.6% $22.62 $22.05 $21.33Dividends per share$0.12 $0.10 20.0% $0.12 $0.12 $0.12
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(1) Refer to Appendix for reconciliation of non-GAAP measures.
(2) Loans are reflected net of deferred fees and costs.
Three Months Ended
Six Months Ended(in thousands)June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025Interest income Loans, including fees$65,362 $64,186 $64,933 $60,838 $60,810 $129,548 $119,501 Investment securities available-for-sale 1,814 1,459 1,728 1,805 1,582 3,273 3,443 Federal funds sold and other 2,783 2,325 1,973 2,248 2,194 5,108 4,402 Total interest income 69,959 67,970 68,634 64,891 64,586 137,929 127,346 Interest expense Deposits 18,522 18,070 17,805 12,732 16,722 36,592 33,234 Borrowed funds 508 502 550 139 218 1,010 419 Total interest expense 19,030 18,572 18,355 12,871 16,940 37,602 33,653 Net interest income 50,929 49,398 50,279 52,020 47,646 100,327 93,693 Provision for credit losses 3,585 3,014 3,988 4,650 4,081 6,599 6,327 Provision for (release of) credit losses on unfunded commitments 65 205 (29) 217 — 270 — Net interest income after provision for credit losses 47,279 46,179 46,320 47,153 43,565 93,458 87,366 Noninterest income Service charges on deposits 409 403 371 425 262 812 520 Credit card fees 4,395 4,692 4,837 4,509 4,298 9,087 8,020 Mortgage banking revenue 1,960 1,556 1,960 1,927 1,754 3,516 3,585 Government lending revenue 1,207 923 — 14 3,112 2,130 4,208 Government loan servicing revenue 5,303 4,345 4,036 4,265 3,644 9,648 7,212 Loan servicing rights 292 497 295 368 (590) 789 (118)Other income (loss) 795 957 965 (440) 626 1,752 2,228 Total noninterest income 14,361 13,373 12,464 11,068 13,106 27,734 25,655 Noninterest expenses Salaries and employee benefits 20,067 20,317 17,914 17,728 18,460 40,384 36,527 Occupancy and equipment 3,942 3,562 2,638 2,849 2,995 7,504 5,905 Professional fees 4,125 4,965 4,294 2,131 2,422 9,090 4,534 Data processing 7,551 7,767 7,502 7,654 7,520 15,318 14,632 Advertising 1,816 1,466 1,398 1,714 1,371 3,282 3,150 Loan processing 1,475 1,383 1,152 1,114 979 2,858 1,722 Merger-related expenses — — — 697 1,398 — 2,664 Operational and other card fraud related losses 690 690 750 923 933 1,380 1,836 Regulatory assessment expenses 925 941 858 740 884 1,866 1,773 Other operating 2,595 2,590 2,597 2,804 2,610 5,185 4,882 Total noninterest expenses 43,186 43,681 39,103 38,354 39,572 86,867 77,625 Income before income taxes 18,454 15,871 19,681 19,867 17,099 34,325 35,396 Income tax expense 4,204 3,853 4,644 4,802 3,963 8,057 8,328 Net income$14,250 $12,018 $15,037 $15,065 $13,136 $26,268 $27,068
(unaudited) (unaudited) (audited) (unaudited) (unaudited)(in thousands, except share data)June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025Assets Cash and due from banks$24,771 $20,182 $30,894 $25,724 $26,843 Interest-bearing deposits at other financial institutions 393,428 379,069 224,611 163,078 247,704 Federal funds sold 60 60 60 59 59 Total cash and cash equivalents 418,259 399,311 255,565 188,861 274,606 Investment securities available-for-sale 219,947 230,525 230,083 232,640 228,923 Restricted investments 8,707 8,691 8,397 7,057 7,043 Loans held for sale 22,370 13,739 25,828 14,146 15,933 Portfolio loans receivable, net of deferred fees and costs 3,085,950 3,026,431 2,959,457 2,821,983 2,739,808 Less allowance for credit losses (54,431) (54,680) (54,660) (53,045) (47,447)Total portfolio loans held for investment, net 3,031,519 2,971,751 2,904,797 2,768,938 2,692,361 Premises and equipment, net 17,669 17,732 15,072 15,304 14,863 Accrued interest receivable 19,429 16,795 16,695 19,011 15,149 Goodwill 25,969 25,969 25,969 25,969 22,478 Intangible assets 14,250 14,511 14,771 15,033 15,295 Loan servicing assets 1,847 1,957 1,816 2,070 2,221 Deferred tax asset 16,504 15,187 14,992 14,885 15,667 Bank owned life insurance 46,260 45,871 45,488 45,105 44,721 Other assets 47,208 46,428 46,734 40,423 39,402 Total assets$3,889,938 $3,808,467 $3,606,207 $3,389,442 $3,388,662 Liabilities Deposits Noninterest-bearing$897,363 $871,677 $852,741 $857,543 $836,979 Interest-bearing 2,473,740 2,420,370 2,240,459 2,054,510 2,103,759 Total deposits 3,371,103 3,292,047 3,093,200 2,912,053 2,940,738 Federal Home Loan Bank advances 50,000 50,000 50,000 22,000 22,000 Other borrowed funds 2,062 2,062 2,062 12,062 12,062 Accrued interest payable 6,606 8,944 8,745 8,045 8,158 Other liabilities 37,962 46,555 50,443 40,512 25,669 Total liabilities 3,467,733 3,399,608 3,204,450 2,994,672 3,008,627 Stockholders' equity Common stock 163 163 164 166 166 Additional paid-in capital 113,217 112,268 114,604 121,707 121,362 Retained earnings 315,103 302,808 292,749 279,693 266,619 Accumulated other comprehensive loss (6,278) (6,380) (5,760) (6,796) (8,112)Total stockholders' equity 422,205 408,859 401,757 394,770 380,035 Total liabilities and stockholders' equity$3,889,938 $3,808,467 $3,606,207 $3,389,442 $3,388,662
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 EndedJune 30, 2026 Three Months Ended
March 31, 2026 Three Months Ended
June 30, 2025 Average
Outstanding
Balance Interest Income/
Expense Average
Yield/
Rate(1) Average
Outstanding
Balance Interest Income/
Expense Average
Yield/
Rate(1) Average
Outstanding
Balance Interest Income/
Expense Average
Yield/
Rate(1) (in thousands)Assets Interest earning assets: Interest-bearing deposits$295,167 $2,646 3.60% $246,346 $2,200 3.62% $182,192 $2,065 4.55%Federal funds sold 60 — — 60 1 6.76 59 — — Investment securities available-for-sale 240,102 1,814 3.03 233,165 1,459 2.54 230,317 1,582 2.76 Restricted investments 8,701 137 6.32 8,441 124 5.96 7,038 129 7.35 Loans held for sale 17,381 252 5.82 12,916 177 5.56 9,950 163 6.57 Portfolio loans receivable(2)(3) 3,058,476 65,110 8.54 3,008,187 64,009 8.63 2,733,865 60,647 8.90 Total interest earning assets 3,619,887 69,959 7.75 3,509,115 67,970 7.86 3,163,421 64,586 8.19 Noninterest earning assets 141,624 142,697 129,112 Total assets$3,761,511 $3,651,812 $3,292,533 Liabilities and Stockholders’ Equity Interest-bearing liabilities: Interest-bearing demand accounts$346,671 816 0.94 $263,645 414 0.64 $281,878 391 0.56 Savings 17,790 70 1.58 13,701 30 0.89 13,043 16 0.49 Money market accounts 1,315,061 10,797 3.29 1,189,642 9,479 3.23 924,784 8,022 3.48 Time deposits 722,144 6,839 3.80 842,137 8,147 3.92 816,809 8,293 4.07 Borrowed funds 52,062 508 3.91 52,062 502 3.91 34,062 218 2.57 Total interest-bearing liabilities 2,453,728 19,030 3.11 2,361,187 18,572 3.19 2,070,576 16,940 3.28 Noninterest-bearing liabilities: Noninterest-bearing liabilities 51,427 64,056 45,523 Noninterest-bearing deposits 842,312 821,267 804,639 Stockholders’ equity 414,044 405,302 371,795 Total liabilities and stockholders’ equity$3,761,511 $3,651,812 $3,292,533 Net interest spread 4.64% 4.67% 4.91%Net interest income $50,929 $49,398 $47,646 Net interest margin(4) 5.64% 5.71% 6.04%
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(1) Annualized.
(2) Includes nonaccrual loans.
(3) For the three months ended June 30, 2026, March 31, 2026, and June 30, 2025, Core Loan Yield was 6.77%, 6.93% and 7.14%, respectively.
(4) For the three months ended June 30, 2026, March 31, 2026, and June 30, 2025, Core Net Interest Margin was 4.04%, 4.15% and 4.42%, respectively.
2025
Average
Outstanding
Balance Interest Income/
Expense Average
Yield/
Rate Average
Outstanding
Balance Interest Income/
Expense Average
Yield/
Rate(1) (in thousands)Assets Interest earning assets: Interest-bearing deposits$270,892 $4,846 3.61% $192,565 $4,203 4.40%Federal funds sold 60 1 3.36 59 1 3.42 Investment securities available-for-sale 236,653 3,273 2.79 232,947 3,443 2.98 Restricted investments 8,572 261 6.14 6,403 198 6.24 Loans held for sale 15,161 429 5.71 9,654 401 8.38 Portfolio loans receivable(1)(2) 3,033,470 129,119 8.58 2,684,263 119,100 8.95 Total interest earning assets 3,564,808 137,929 7.80 3,125,891 127,346 8.22 Noninterest earning assets 142,157 131,552 Total assets$3,706,965 $3,257,443 Liabilities and Stockholders’ Equity Interest-bearing liabilities: Interest-bearing demand accounts$305,388 $1,230 0.81% $262,226 $759 0.58%Savings 15,757 100 1.28 13,123 34 0.52 Money market accounts 1,252,698 20,276 3.26 897,532 15,421 3.46 Time deposits 781,809 14,986 3.87 838,151 17,020 4.09 Borrowed funds 52,062 1,010 3.91 34,062 419 2.48 Total interest-bearing liabilities 2,407,714 37,602 3.15 2,045,094 33,653 3.32 Noninterest-bearing liabilities: Noninterest-bearing liabilities 57,707 50,982 Noninterest-bearing deposits 831,847 793,888 Stockholders’ equity 409,697 367,479 Total liabilities and stockholders’ equity$3,706,965 $3,257,443 Net interest spread 4.65% 4.90%Net interest income $100,327 $93,693 Net interest margin(3) 5.68% 6.04%
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(1) Includes nonaccrual loans.
(2) For the six months ended June 30, 2026 and 2025, collectively. Core Loan Yield was 6.85% and 7.14%, respectively.
(3) For the six months ended June 30, 2026 and 2025, collectively. Core Net Interest Margin was 4.09% and 4.39%, 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™ (the Company’s credit card division), Windsor Advantage™ and Capital Bank Home Loans (the Company’s mortgage loan division).
The following schedules reported internally for performance assessment by the chief operating decision maker presents financial information for each reportable segment for the periods indicated. Total assets are presented as of June 30, 2026, March 31, 2026, and June 30, 2025.
SegmentsFor the three months ended June 30, 2026
(in thousands) Commercial Bank OpenSky™ Windsor Advantage™ CBHL ConsolidatedInterest income $53,712 $15,995 $— $252 $69,959Interest expense 18,894 — — 136 19,030Net interest income 34,818 15,995 — 116 50,929Provision for (release of) credit losses (432) 4,017 — — 3,585Provision for credit losses on unfunded commitments 65 — — — 65Net interest income after provision 35,185 11,978 — 116 47,279Noninterest income Service charges on deposits 409 — — — 409Credit card fees — 4,395 — — 4,395Mortgage banking revenue 278 — — 1,682 1,960Government lending revenue 1,207 — — — 1,207Government loan servicing revenue(1) (1,256) — 6,559 — 5,303Loan servicing rights 292 — — — 292Other income 618 30 — 147 795Total noninterest income 1,548 4,425 6,559 1,829 14,361Noninterest expenses Salaries and employee benefits 12,048 3,792 2,625 1,602 20,067Occupancy and equipment 2,315 1,047 391 189 3,942Professional fees 2,233 1,228 271 393 4,125Data processing 452 6,983 67 49 7,551Advertising 765 598 297 156 1,816Loan processing 927 271 9 268 1,475Merger-related expenses — — — — —Operational and other card fraud related losses 72 618 — — 690Regulatory assessment expenses 583 214 64 64 925Other operating 1,277 639 558 121 2,595Total noninterest expenses 20,672 15,390 4,282 2,842 43,186Net income (loss) before taxes $16,061 $1,013 $2,277 $(897) $18,454 Total assets $3,689,273 $143,716 $27,818 $29,131 $3,889,938
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(1) Gross government loan servicing revenue totaled $6.6 million, including $1.3 million of servicing fees earned from the Commercial Bank by WindsorTM, for the three months ended June 30, 2026.
For the three months ended March 31, 2026
(in thousands) Commercial Bank OpenSky™ Windsor Advantage™ CBHL ConsolidatedInterest income $52,732 $15,061 $— $177 $67,970Interest expense 18,472 — — 100 18,572Net interest income 34,260 15,061 — 77 49,398Provision for credit losses 344 2,670 — — 3,014Provision for credit losses on unfunded commitments 205 — — — 205Net interest income after provision 33,711 12,391 — 77 46,179Noninterest income Service charges on deposits 403 — — — 403Credit card fees — 4,692 — — 4,692Mortgage banking revenue 416 — — 1,140 1,556Government lending revenue 923 — — — 923Government loan servicing revenue(1) (1,262) — 5,607 — 4,345Loan servicing rights 497 — — — 497Other income 707 12 — 238 957Total noninterest income 1,684 4,704 5,607 1,378 13,373Noninterest expenses Salaries and employee benefits 12,090 3,887 2,664 1,676 20,317Occupancy and equipment 1,870 1,118 392 182 3,562Professional fees 2,468 1,861 278 358 4,965Data processing 545 7,107 59 56 7,767Advertising 718 592 60 96 1,466Loan processing 1,076 47 22 238 1,383Merger-related expenses — — — — —Operational and other card fraud related losses 65 625 — — 690Regulatory assessment expenses 598 215 66 62 941Other operating 1,140 715 605 130 2,590Total noninterest expenses 20,570 16,167 4,146 2,798 43,681Net income (loss) before taxes $14,825 $928 $1,461 $(1,343) $15,871 Total assets $3,624,207 $135,414 $28,535 $20,311 $3,808,467
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(1) Gross government loan servicing revenue totaled $5.6 million, including $1.3 million of servicing fees earned from the Commercial Bank by WindsorTM, for the three months ended March 31, 2026.
For the three months ended June 30, 2025
(in thousands) Commercial Bank OpenSky™ Windsor Advantage™ CBHL ConsolidatedInterest 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(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 Merger-related expenses 1,398 — — — 1,398 Operational and other card fraud related 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
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(1) Gross government loan servicing revenue totaled $4.7 million, including $1.1 million of servicing fees earned from the Commercial Bank by WindsorTM, 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.
For the six months ended June 30, 2026
(in thousands) Commercial Bank OpenSky™ Windsor Advantage™ CBHL ConsolidatedInterest income $106,444 $31,056 $— $429 $137,929Interest expense 37,366 — — 236 37,602Net interest income 69,078 31,056 — 193 100,327Provision for (release of) credit losses (88) 6,687 — — 6,599Provision for credit losses on unfunded commitments 270 — — — 270Net interest income after provision 68,896 24,369 — 193 93,458Noninterest income Service charges on deposits 812 — — — 812Credit card fees — 9,087 — — 9,087Mortgage banking revenue 694 — — 2,822 3,516Government lending revenue 2,130 — — — 2,130Government loan servicing revenue(1) (2,518) — 12,166 — 9,648Loan servicing rights (government guaranteed) 789 — — — 789Other income 1,325 42 — 385 1,752Total noninterest income 3,232 9,129 12,166 3,207 27,734Noninterest expenses Salaries and employee benefits 24,138 7,679 5,289 3,278 40,384Occupancy and equipment 4,185 2,165 783 371 7,504Professional fees 4,701 3,089 549 751 9,090Data processing 997 14,090 126 105 15,318Advertising 1,483 1,190 357 252 3,282Loan processing 2,003 318 31 506 2,858Merger-related expenses — — — — —Operational and other card fraud related losses 137 1,243 — — 1,380Regulatory assessment expenses 1,181 429 130 126 1,866Other operating 2,417 1,354 1,163 251 5,185Total noninterest expenses 41,242 31,557 8,428 5,640 86,867Net income (loss) before taxes $30,886 $1,941 $3,738 $(2,240) $34,325 Total assets $3,689,273 $143,716 $27,818 $29,131 $3,889,938
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(1) Gross government loan servicing revenue totaled $12.2 million, including $2.5 million of servicing fees earned from the Commercial Bank by WindsorTM, for the six months ended June 30, 2026.
For the six months ended June 30, 2025
(in thousands) Commercial Bank OpenSky™ Windsor Advantage™ CBHL ConsolidatedInterest income $98,093 $28,938 $— $315 $127,346 Interest expense 33,505 — — 148 33,653 Net interest income 64,588 28,938 — 167 93,693 Provision for credit losses 1,605 4,722 — — 6,327 Provision for credit losses on unfunded commitments — — — — — Net interest income after provision 62,983 24,216 — 167 87,366 Noninterest income Service charges on deposits 520 — — — 520 Credit card fees — 8,020 — — 8,020 Mortgage banking revenue 728 — — 2,857 3,585 Government lending revenue 4,208 — — — 4,208 Government loan servicing revenue(1) (2,090) — 9,302 — 7,212 Loan servicing rights (government guaranteed) (118) — — — (118)Other income 1,772 36 — 420 2,228 Total noninterest income 5,020 8,056 9,302 3,277 25,655 Noninterest expenses Salaries and employee benefits 21,716 6,748 4,915 3,148 36,527 Occupancy and equipment 3,480 1,061 1,079 285 5,905 Professional fees 2,723 1,143 191 477 4,534 Data processing 894 13,479 186 73 14,632 Advertising 1,513 1,344 139 154 3,150 Loan processing 1,127 43 61 491 1,722 Merger-related expenses 2,664 — — — 2,664 Operational and other card fraud related losses 131 1,705 — — 1,836 Regulatory assessment expenses 1,725 30 11 7 1,773 Other operating 3,226 854 608 194 4,882 Total noninterest expenses 39,199 26,407 7,190 4,829 77,625 Net income (loss) before taxes $28,804 $5,865 $2,112 $(1,385) $35,396 Total assets $3,211,421 $129,397 $25,936 $21,908 $3,388,662
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(1) Gross government loan servicing revenue totaled $9.3 million, including $2.1 million of servicing fees earned from the Commercial Bank by WindsorTM, for the six months ended June 30, 2025.
2026 March 31, 2026 December 31,
2025 September 30,
2025 June 30,
2025Earnings: Net income $14,250 $12,018 $15,037 $15,065 $13,136 Earnings per common share, diluted 0.87 0.73 0.91 0.89 0.78 Net interest margin 5.64% 5.71% 5.94% 6.36% 6.04%Core net interest margin(2) 4.04% 4.15% 4.19% 4.66% 4.42%Return on average assets(1) 1.52% 1.33% 1.71% 1.77% 1.60%Return on average equity(1) 13.80% 12.03% 15.23% 15.57% 14.17%Efficiency ratio 66.14% 69.59% 62.32% 60.79% 65.14% Balance Sheet: Total portfolio loans receivable, net deferred fees $3,085,950 $3,026,431 $2,959,457 $2,821,983 $2,739,808 Total deposits 3,371,103 3,292,047 3,093,200 2,912,053 2,940,738 Total assets 3,889,938 3,808,467 3,606,207 3,389,442 3,388,662 Total stockholders' equity 422,205 408,859 401,757 394,770 380,035 Total average portfolio loans receivable, net deferred fees 3,058,476 3,008,187 2,902,033 2,789,815 2,733,865 Total average deposits 3,243,978 3,130,392 2,992,784 2,917,067 2,841,153 Portfolio loans-to-deposit ratio (period-end balances) 91.54% 91.93% 95.68% 96.91% 93.17%Portfolio loans-to-deposit ratio (average balances) 94.28% 96.10% 96.97% 95.64% 96.22% Asset Quality Ratios: Nonperforming assets to total assets 1.56% 1.56% 1.62% 1.54% 1.07%Nonperforming loans to total loans 1.85% 1.83% 1.84% 1.85% 1.32%Net charge-offs to average portfolio loans(1) 0.50% 0.40% 0.32% 0.35% 0.75%Allowance for credit losses to total loans 1.76% 1.81% 1.85% 1.88% 1.73%Allowance for credit losses to non-performing loans 95.51% 98.67% 100.44% 101.53% 131.19% Bank Capital Ratios: Total risk based capital ratio(3) 12.60% 12.52% 12.60% 12.95% 13.13%Tier-1 risk based capital ratio(3) 11.34% 11.26% 11.34% 11.69% 11.87%Leverage ratio(3) 8.97% 9.00% 9.24% 9.34% 9.39%Common Equity Tier-1 capital ratio(3) 11.34% 11.26% 11.34% 11.69% 11.87%Tangible common equity(3) 8.47% 8.40% 8.75% 9.06% 8.84%Holding Company Capital Ratios: Total risk based capital ratio(3) 14.47% 14.25% 14.31% 15.25% 15.30%Tier-1 risk based capital ratio(3) 13.21% 12.99% 13.05% 13.62% 13.66%Leverage ratio(3) 10.59% 10.48% 10.71% 10.98% 10.90%Common Equity Tier-1 capital ratio(3) 13.14% 12.92% 12.98% 13.54% 13.58%Tangible common equity(3) 9.86% 9.73% 10.07% 10.60% 10.22%
_______________
(1) Annualized.
(2) Refer to Appendix for reconciliation of non-GAAP measures.
(3) Estimated ratio at June 30, 2026.
2026 March 31, 2026 December 31,
2025 September 30,
2025 June 30,
2025Composition of Loans: Commercial real estate, non owner-occupied $561,805 $522,498 $533,141 $509,878 $495,341 Commercial real estate, owner-occupied 424,109 428,632 418,701 442,827 436,421 Residential real estate 797,745 795,505 765,808 740,060 710,730 Construction real estate 370,710 365,706 359,566 344,290 343,189 Commercial and industrial 731,575 730,576 698,289 619,148 593,279 Lender finance 50,020 43,775 41,421 31,883 32,494 Business equity lines of credit 4,930 4,170 3,818 2,931 2,853 Credit card, net of reserve(4) 145,266 134,789 142,397 136,483 131,029 Other consumer loans 3,772 4,779 1,930 2,010 2,727 Portfolio loans receivable $3,089,932 $3,030,430 $2,965,071 $2,829,510 $2,748,063 Deferred origination fees, net (3,982) (3,999) (5,614) (7,527) (8,255)Portfolio loans receivable, net $3,085,950 $3,026,431 $2,959,457 $2,821,983 $2,739,808 Composition of Deposits: Noninterest-bearing $897,363 $871,677 $852,741 $857,543 $836,979 Interest-bearing demand 391,544 341,723 257,233 275,767 319,431 Savings 23,077 21,471 11,679 12,835 12,879 Money markets 1,390,778 1,276,034 1,105,183 989,159 960,237 Customer time deposits 437,358 478,085 489,687 539,207 541,079 Brokered time deposits 230,983 303,057 376,677 237,542 270,133 Total deposits $3,371,103 $3,292,047 $3,093,200 $2,912,053 $2,940,738 Capital Bank Home Loan Metrics: Origination of loans held for sale $106,885 $72,933 $107,283 $80,651 $80,334 Mortgage loans sold 87,059 52,423 82,998 66,409 59,663 Gain on sale of loans 2,362 1,496 2,145 1,698 1,597 Purchase volume as a % of originations 86.14% 73.15% 72.77% 92.32% 91.61%Gain on sale as a % of loans sold(5) 2.71% 2.85% 2.58% 2.56% 2.68%Mortgage commissions $947 $594 $899 $656 $501 OpenSky™Portfolio Metrics: Open customer accounts 588,594 588,190 585,492 587,641 585,372 Secured credit card loans, gross $96,026 $90,021 $97,313 $98,793 $100,037 Unsecured credit card loans, gross 51,234 46,574 47,131 39,576 32,715 Noninterest secured credit card deposits 166,174 165,506 163,184 166,874 168,936
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(4) Credit card loans are presented net of reserve for interest and fees.
(5) 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 MetricsQuarter Ended(in thousands, except per share data)June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Net Income$14,250 $12,018 $15,037 $15,065 $13,136 Deduct: Income from the Call of Brokered Time Deposits, Net of Tax — — — (3,489) — Add: Merger-Related Expenses, Net of Tax — — — 575 1,070 Core Net Income$14,250 $12,018 $15,037 $12,151 $14,206 Weighted Average Common Shares - Diluted 16,373 16,441 16,493 16,844 16,802 Earnings per Share - Diluted$0.87 $0.73 $0.91 $0.89 $0.78 Core Earnings per Share - Diluted$0.87 $0.73 $0.91 $0.72 $0.85 Average Assets$3,761,511 $3,651,812 $3,498,540 $3,378,296 $3,292,533 Return on Average Assets(1) 1.52% 1.33% 1.71% 1.77% 1.60%Core Return on Average Assets(1) 1.52% 1.33% 1.71% 1.43% 1.73% Average Equity$414,044 $405,302 $391,750 $383,922 $371,795 Return on Average Equity(1) 13.80% 12.03% 15.23% 15.57% 14.17%Core Return on Average Equity(1) 13.80% 12.03% 15.23% 12.56% 15.33% Net Interest Income$50,929 $49,398 $50,279 $52,020 $47,646 Noninterest Income 14,361 13,373 12,464 11,068 13,106 Total Revenue$65,290 $62,771 $62,743 $63,088 $60,752 Noninterest Expense 43,186 43,681 39,103 38,354 39,572 Efficiency Ratio(2) 66.1% 69.6% 62.3% 60.8% 65.1% Net Interest Income$50,929 $49,398 $50,279 $52,020 $47,646 Deduct: Income from the Call of Brokered Time Deposits — — — 4,618 — Core Net Interest Income (a)$50,929 $49,398 $50,279 $47,402 $47,646 Noninterest Income (b) 14,361 13,373 12,464 11,068 13,106 Core Revenue (a) + (b)$65,290 $62,771 $62,743 $58,470 $60,752 Noninterest Expense$43,186 $43,681 $39,103 $38,354 $39,572 Less: Merger-Related Expenses — — — 697 1,398 Core Noninterest Expense$43,186 $43,681 $39,103 $37,657 $38,174 Core Efficiency Ratio(2) 66.1% 69.6% 62.3% 64.4% 62.8%_______________
(1) Annualized.
(2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
_______________
(1) Annualized.
(2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
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., and Baltimore, Maryland metropolitan 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 $3.9 billion at June 30, 2026 and its common stock is traded in the NASDAQ Global Market under the symbol “CBNK.” More information can be found at the Company's website www.CapitalBankMD.com under its investor relations page.
FORWARD-LOOKING STATEMENTS
This earnings release contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” "optimistic," “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements. Accordingly, we caution you that any such forward-looking statements are not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors. For details on some of the factors that could affect these expectations, see risk factors and other cautionary language included in the Company's Annual Report on Form 10-K and other periodic and current reports filed with the Securities and Exchange Commission.
While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors that 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 Iran and Ukraine; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market, and monetary fluctuations; volatility and disruptions in global capital and credit markets; changes in U.S. trade policies, including the implementation of tariffs and other protectionist trade policies; the effects of federal government shutdowns, debt ceiling standoff, or other fiscal policy uncertainty; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; cybersecurity threats and the cost of defending against them; climate change, and other catastrophic disasters; the effectiveness of the Company's internal control over financial reporting and disclosure controls and procedures; the Company’s ability to remediate the material weakness in the Company’s internal control over financial reporting; the effect of the IFH acquisition or any other acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations, including the planned growth of Windsor AdvantageTM; and other factors that may affect our future results.
These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.
FINANCIAL CONTACT: Jake Dalaya (301) 637-5118
MEDIA CONTACT: Ed Barry (240) 283-1912
WEB SITE: www.CapitalBankMD.com