Core Viewpoint - Capital Bancorp, Inc. has successfully completed the integration of Integrated Financial Holdings, Inc. into its operations, enhancing service offerings for customers [1][3]. Group 1: Conversion and Integration - The conversion of Integrated Financial Holdings, Inc. into Capital Bancorp's systems was finalized between February 21 and February 24, 2025 [3]. - Customers of IFH, including those from the North Riverside, IL branch, now have access to a broader range of Capital Bancorp products and services, as well as the ability to bank at any CBNK location, through digital banking or ATMs [3]. - Ongoing communications were maintained with customers since the merger announcement on October 1, 2024, to ensure a smooth transition [4]. Group 2: Merger Details - West Town Bank & Trust and Windsor Advantage were previously subsidiaries of IFH, with West Town Bank merging into Capital Bank, N.A. and Windsor Advantage becoming a subsidiary of Capital Bancorp [2]. - A new branch is anticipated to open in Raleigh, NC on March 3, 2025, as part of the expansion following the merger [3]. Group 3: Company Overview - Capital Bancorp, Inc. is a registered bank holding company based in Rockville, Maryland, with assets of approximately $3.2 billion as of December 31, 2024 [5]. - The company operates bank branches in six locations, including Washington D.C., Reston, VA, Ft. Lauderdale, FL, Rockville, MD, Columbia, MD, and North Riverside, IL [5].

Core Insights - Capital Bancorp, Inc. has successfully completed the integration of Integrated Financial Holdings, Inc. into its operations and systems, allowing IFH customer accounts to access CBNK's products and services [1][3] - The merger, which was finalized on October 1, 2024, involved West Town Bank & Trust merging into Capital Bank, N.A., while Windsor Advantage became a subsidiary of Capital Bancorp [2] - The conversion was executed over the weekend from February 21 to February 24, 2025, enabling IFH customers to utilize CBNK's extensive offerings and access banking services at any CBNK location [3][4] Company Overview - Capital Bancorp, Inc. is a registered bank holding company based in Rockville, Maryland, providing financial services since 1999, with assets totaling approximately $3.2 billion as of December 31, 2024 [5] - The company operates bank branches in six locations, including Washington D.C., Reston, VA, Ft. Lauderdale, FL, Rockville, MD, Columbia, MD, and North Riverside, IL [5] - CBNK's common stock is traded on the NASDAQ Global Market under the symbol "CBNK" [5]

Financial Performance - The company reported net income of $7.5 million, or $0.45 per diluted share, for Q4 2024, a decrease from $8.7 million, or $0.62 per diluted share, in Q3 2024, and $9.0 million, or $0.65 per diluted share, in Q4 2023 [2][11][12] - Adjusted net income, excluding merger-related expenses and other non-recurring items, would have been $15.5 million, or $0.92 per diluted share [2][5][11] - Return on average assets was 0.96%, while return on average equity was 8.50% for Q4 2024 [5][21] Acquisition Impact - The company completed its merger with Integrated Financial Holdings (IFH) on October 1, 2024, which contributed to significant changes in financial metrics [2][6] - The acquisition added $559.4 million in total assets, including $373.5 million in gross loans and $459.0 million in total deposits [14][7] - The merger is expected to enhance the company's loan servicing and government-guaranteed lending capabilities [4][6] Loan and Deposit Growth - Gross loan growth for the quarter was $522.6 million, with $373.5 million attributed to the IFH acquisition and $149.1 million from organic growth, representing an annualized growth rate of 28.2% [5][22] - Total deposits increased by $575.7 million, including $459.0 million from the IFH acquisition, resulting in a 26.3% annualized growth rate [5][20] Interest Income and Expenses - Net interest income rose by $6.0 million, or 15.6%, compared to Q3 2024, driven by increased interest income from loans [15][24] - Interest expense increased by $3.1 million, or 21.9%, primarily due to higher balances in time deposits and borrowed funds [15][24] Noninterest Income and Expenses - Noninterest income totaled $11.9 million, a significant increase from the previous quarter, largely due to contributions from the IFH acquisition [5][15] - Noninterest expenses rose to $37.5 million, reflecting costs associated with the merger, including $2.6 million in merger-related expenses [15][17] Credit Quality Metrics - The allowance for credit losses to total loans ratio was 1.85%, reflecting an increase due to the initial impact from the IFH loan portfolio [5][18] - Nonperforming assets increased to 0.94% of total assets, with total nonaccrual loans rising to $30.2 million [19][25] Capital and Liquidity - The company maintained a common equity tier 1 capital ratio of 13.74%, exceeding regulatory requirements [20] - Cash and cash equivalents increased to $205.3 million, up $48.6 million from the previous quarter [15][20]

Financial Performance - Net income for Q4 2024 was $7.5 million, or $0.45 per diluted share, a decrease from $8.7 million, or $0.62 per diluted share in Q3 2024[4] - Adjusted net income, excluding merger-related expenses and other impacts, was $15.5 million, or $0.92 per diluted share for Q4 2024[11] - Net income for Q4 2024 was $7,533,000, a decrease of 13.1% from $8,672,000 in Q3 2024[37] - The net income for the year ended December 31, 2024, was $30,972,000, compared to $35,871,000 for the year ended December 31, 2023, reflecting a decrease of approximately 13.3%[67] - Earnings per share (diluted) for the year ended December 31, 2024, was $2.11, down 17.3% from 2023[33] - Earnings per Share (EPS) for Q4 2024 was $0.45, down from $0.62 in Q3 2024[59] - Adjusted EPS for Q4 2024 was $0.92, an increase from $0.66 in Q3 2024[59] Revenue and Income Sources - Total revenue for OpenSky decreased by $0.5 million to $19.2 million in the fourth quarter 2024[25] - Noninterest income for Q4 2024 totaled $11.9 million, contributing to a 21.2% share of total revenue[3] - Noninterest income for the year ended December 31, 2024, was $31,410,000, a 25.8% increase from 2023[33] - Total Revenue for Q4 2024 reached $56,240,000, representing a 25.3% increase compared to $44,989,000 in Q3 2024[59] - Noninterest Income for Q4 2024 was $11,913,000, more than doubling from $6,635,000 in Q3 2024[59] Assets and Liabilities - Total assets reached $3.2 billion at December 31, 2024, reflecting a $646.1 million, or 25.2% increase from September 30, 2024[15] - Total assets as of December 31, 2024, were $3,206,911,000, a 44.1% increase compared to December 31, 2023[35] - Total assets as of December 31, 2024, reached $3,206,911, up from $2,560,788 as of September 30, 2024, indicating a growth of 25.2%[47] - The company’s total liabilities and stockholders' equity as of December 31, 2024, were $2,554,049 thousand, compared to $2,188,299 thousand in 2023, representing a growth of 16.7%[42] Loan and Deposit Growth - Gross loan growth for Q4 2024 was $522.6 million, with $373.5 million attributed to the IFH acquisition and $149.1 million from organic growth[3] - Total deposit growth for Q4 2024 was $575.7 million, including $459.0 million from the IFH acquisition and $116.7 million from organic growth[3] - Total portfolio loans rose by $522.6 million, or 24.8%, to $2.6 billion at December 31, 2024[16] - Total deposits increased by $575.7 million, or 26.3%, to $2.8 billion at December 31, 2024[16] - Total deposits reached $2,761,939,000, reflecting a 45.6% increase compared to $1,895,996,000 in the previous year[53] Credit Quality and Provisions - The allowance for credit losses to total loans ratio was 1.85% at December 31, 2024, including 1.44% for the legacy Capital Bank portfolio[3] - Provision for credit losses increased to $7,828,000 in Q4 2024, up 108.9% from Q3 2024 and up 178.8% from Q4 2023[32] - The allowance for credit losses increased to $48,652,000 as of December 31, 2024, up from $31,925,000 as of September 30, 2024, indicating a rise in provisions[70] - Nonperforming assets increased by 34 basis points to 0.94% of total assets at December 31, 2024[19] - Nonperforming assets to total assets ratio improved to 0.94% as of December 31, 2024, from 0.60% as of September 30, 2024[70] Efficiency and Ratios - Efficiency ratio was 66.7% for the three months ended December 31, 2024, compared to 66.1% for the prior quarter[18] - The Efficiency Ratio for Q4 2024 improved to 66.70%, compared to 66.07% in Q3 2024[59] - Annualized return on average assets (ROAA) was 0.96% for the three months ended December 31, 2024, down from 1.42% in the prior quarter[20] - Return on Average Assets (ROAA) for Q4 2024 was 0.96%, down from 1.42% in Q3 2024[59] - Return on average tangible common equity for the quarter ended December 31, 2024, was 9.47%, down from 12.59% in the previous quarter[72] Dividends and Shareholder Equity - The company declared a cash dividend of $0.10 per share, payable on February 26, 2025[4] - Total stockholders' equity increased to $355,139,000 as of December 31, 2024, a 39.3% increase from 2023[35] - The company reported a total stockholders' equity of $355,139,000 as of December 31, 2024, compared to $280,111,000 as of September 30, 2024, an increase of 26.8%[38] - Book value per share increased to $21.31, a 16.4% increase from the previous year[35] Acquisitions and Strategic Moves - The acquisition of Integrated Financial Holdings, Inc. was completed on October 1, 2024, adding significant assets and expanding the company's lending platform[6] - The company reported merger-related expenses of $3,930,000 for the year ended December 31, 2024[67] Forward-Looking Statements and Risks - The company emphasizes that forward-looking statements may not guarantee future performance and actual results could differ materially from expectations[75] - Key risks include geopolitical concerns, changes in economic conditions, and competitive pressures on pricing and services[76] - The company does not intend to update forward-looking statements after the date they are made, except as required by law[77]

Group 1 - Mulvihill Canadian Bank Enhanced Yield ETF has declared a monthly cash distribution of $0.058333 per unit [1] - The distribution is payable on February 7, 2025, to unitholders of record on January 31, 2025 [1] - For further inquiries, contact information for Investor Relations is provided [1]

Core Insights - Capital Bank has been recognized as one of American Banker's 2024 Best Banks to Work For, ranking No. 79 among 90 banks [1][2] - This recognition highlights Capital Bank's commitment to creating a positive workplace for its employees, marking the fifth time the bank has received this award [2] Employee Engagement and Programs - Capital Bank emphasizes employee growth and well-being through various programs, including employee rewards, wellness initiatives, and DEIB (Diversity, Equity, Inclusion, and Belonging) awareness [3] - The bank has launched a signature initiative called Capital Bank Immersion, which helps new employees connect with senior leaders and understand the bank's operations during onboarding [4] Company Overview - Capital Bancorp, Inc. operates with approximately $2.6 billion in assets as of September 30, 2024, and has branches in six locations, including Washington D.C. and Florida [5] - The bank has been providing financial services since 1999 and is traded on the NASDAQ Global Market under the symbol "CBNK" [5] Industry Context - The Best Banks to Work For ranking is based on anonymous employee surveys and a review of benefits, showcasing the importance of employee satisfaction in the banking industry [2][5]

Group 1 - The stock of Capital Bancorp, Inc. (CBNK) is experiencing significant attention due to high implied volatility in the options market, particularly the Apr 17, 2025 $35 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in Capital Bancorp's stock price, possibly due to an upcoming event [2] - Currently, Capital Bancorp holds a Zacks Rank 3 (Hold) in the Banks - Northeast industry, which is in the top 18% of the Zacks Industry Rank, but analysts have not increased earnings estimates for the current quarter, with a slight downward revision affecting the consensus estimate from 67 cents to 66 cents per share [3] Group 2 - The high implied volatility surrounding Capital Bancorp may indicate a developing trading opportunity, as options traders often seek to sell premium on such options, hoping the stock does not move as much as expected by expiration [4]

Capital Position and Regulatory Compliance - As of September 30, 2024, the Bank was classified as "well capitalized" and in compliance with all applicable regulatory capital requirements[131]. - The Company monitors its capital position closely to ensure it remains strong following the recent merger[131]. - The Company reported a Tier 1 capital ratio of 14.88% and a total capital ratio of 16.65% as of September 30, 2024[254]. - The common equity tier 1 capital ratio was 14.78% as of September 30, 2024, compared to 15.43% as of December 31, 2023[254]. - The common equity to total assets ratio was 10.94% at September 30, 2024, down from 11.45% at December 31, 2023[246]. Merger and Business Segments - The Company completed its merger with Integrated Financial Holdings, Inc. on October 1, 2024, with IFHI having over $541 million in assets and $450 million in total deposits[133][135]. - The Company operates through four business segments: commercial banking, mortgage lending, credit cards, and corporate activities[127]. Financial Performance - Net income for the three months ended September 30, 2024 was $8.7 million, an 11.4% decrease from $9.8 million in the same period in 2023[140]. - Net income for the nine months ended September 30, 2024 was $23.4 million, a 12.7% decrease from $26.8 million in the same period in 2023[143]. - Total revenue for the three months ended September 30, 2024, was $44,989,000, compared to $43,136,000 for the same period in 2023, reflecting a growth of 4.3%[269]. - The efficiency ratio for the three months ended September 30, 2024, was 66.07%, slightly higher than 65.02% in the previous year[269]. Income and Expenses - Net interest income increased by $1.5 million, or 4.2%, to $38.4 million, primarily due to increased average balances of $205.8 million in portfolio loans[140]. - Noninterest income for the three months ended September 30, 2024 was $6.6 million, a 4.9% increase from $6.3 million in the prior year[141]. - Noninterest expenses increased to $29.7 million for the three months ended September 30, 2024, compared to $28.0 million in the same period in 2023[142]. - Salaries and employee benefits increased by $0.9 million, or 7.5%, for the three months ended September 30, 2024, compared to the same period in 2023[171]. Loan and Credit Quality - Provision for credit losses for the three months ended September 30, 2024 was $3.7 million, an increase of $1.5 million from the same period in 2023[140]. - The allowance for credit losses (ACL) was $31.9 million as of September 30, 2024, up from $28.6 million at December 31, 2023[220]. - Net charge-offs for the three months ended September 30, 2024, were $2.7 million, or 0.51% on an annualized basis of average portfolio loans, compared to $1.8 million, or 0.38% for the same period in 2023[162]. - Nonperforming assets are monitored closely, with loans placed on nonaccrual status generally when they become 90 days past due[204]. Asset and Deposit Growth - Total assets reached $2,363,928 thousand for the three months ended September 30, 2024, up from $2,183,521 thousand in the same period in 2023[154]. - Total liabilities increased by $309.4 million from December 31, 2023, primarily due to a $290.2 million growth in the deposit portfolio[221]. - Total interest-bearing deposits increased to $1,468.1 million as of September 30, 2024, up from $1,278.6 million at December 31, 2023, representing a growth of 14.8%[223]. - Average total deposits for the nine months ended September 30, 2024, were $2,020.1 million, with an average rate of 2.63%, compared to $1,864.5 million and 2.13% for the year ended December 31, 2023[225]. Interest Rate Sensitivity and Risk Management - The Earnings at Risk (EAR) analysis indicated a potential decrease in net interest income of 4.6% under a -400 bps interest rate shock scenario as of September 30, 2024[293]. - The Economic Value of Equity (EVE) analysis showed a decrease of 20.0% under a -400 bps interest rate shock scenario, indicating significant sensitivity to interest rate changes[294]. - The company utilizes both static and dynamic simulation models to assess interest rate impacts, indicating a comprehensive risk management approach[289]. - Management has the ability to adjust asset and liability durations to manage interest rate sensitivity, showcasing proactive risk management strategies[292].

Financial Performance - Net income for Q3 2024 was $8.7 million, or $0.62 per diluted share, an increase from $8.2 million, or $0.59 per diluted share in Q2 2024[1]. - Net income for Q3 2024 was $8,672, representing a 5.7% increase from Q2 2024 but a decrease of 11.4% compared to Q3 2023[40]. - Net income for the nine months ended September 30, 2024, was $23,439, down 12.7% from $26,841 in the same period of 2023[41]. - Adjusted net income for the nine months ended September 30, 2024, was $24,596,000, down from $26,841,000 for the same period in 2023, reflecting a decrease of approximately 8.4%[72]. - Earnings per share (diluted) for Q3 2024 was $0.62, a 5.1% increase from Q2 2024 but down 11.4% from Q3 2023[40]. Asset and Deposit Growth - Total assets increased by $122.2 million, or 5.0%, to $2.6 billion as of September 30, 2024[15]. - Total assets increased to $2,560,788, a 12.7% increase from $2,272,484[43]. - Total deposits reached $2,186,224 thousand in September 2024, up from $2,100,428 thousand in June 2024, marking an increase of 4.1%[49]. - Deposit growth for Q3 2024 was $85.8 million, or 16.2% annualized, with noninterest-bearing deposits increasing by $33.5 million, or 19.5% annualized[1]. - Deposits grew by 11.1% to $2,186,224 from $1,967,988[43]. Loan Growth - Loan growth for Q3 2024 was $85.9 million, representing a 16.9% annualized increase[1]. - Gross portfolio loans increased by $80.5 million to $2.0 billion at September 30, 2024, with contributions from commercial real estate loans ($38.5 million), residential real estate loans ($22.4 million), and commercial and industrial loans ($16.1 million)[29]. - Average OpenSky credit card loan balances increased by $8.2 million, or 7.3%, to $119.5 million for the third quarter 2024[36]. - Total portfolio loans receivable increased to $2,107,522 thousand from $2,021,588 thousand, reflecting a growth of 4.9% quarter-over-quarter[63]. Interest Income and Margin - Net interest income increased by $1.3 million, or 3.5%, from Q2 2024, totaling $38.4 million[8]. - Interest income for Q3 2024 increased to $52,610, up 3.9% from Q2 2024 and up 10.2% from Q3 2023[40]. - Net interest income for Q3 2024 was $38,354, reflecting a 3.5% increase from Q2 2024 and a 4.2% increase from Q3 2023[40]. - The net interest margin decreased to 6.41%, while the core net interest margin increased to 4.08%[23]. - The adjusted net interest margin for the quarter ended September 30, 2024, was 4.08%, up from 4.00% in the previous quarter, reflecting an improvement in profitability[74]. Credit Losses and Nonperforming Assets - The provision for credit losses was $3.7 million, an increase of $0.3 million from Q2 2024, primarily due to unsecured credit card loan growth[11]. - Nonperforming assets increased by 2 basis points to 0.60% of total assets at September 30, 2024, with total nonaccrual loans rising to $15.5 million[30]. - Provision for credit losses rose to $3,748 in Q3 2024, a 9.7% increase from Q2 2024 and a significant 64.4% increase from Q3 2023[40]. - Total nonperforming assets amounted to $15,460 thousand as of September 30, 2024, representing 0.60% of total assets[82]. Efficiency and Return Metrics - The efficiency ratio was 66.1% for the three months ended September 30, 2024, down from 67.1% for the three months ended June 30, 2024; adjusted efficiency ratio was 64.9% compared to 66.9%[25]. - Annualized return on average assets (ROAA) was 1.42% and annualized return on average equity (ROAE) was 12.59% for the three months ended September 30, 2024, slightly up from 1.40% and 12.53% respectively for the prior quarter[26]. - The return on average equity for the quarter ended September 30, 2024, was 12.59%, compared to 12.53% in the previous quarter, showing stable profitability[62]. - The efficiency ratio for the nine months ended September 30, 2024, was 68.28%, compared to 66.73% for the same period in 2023, indicating a decrease in operational efficiency[72]. Capital and Regulatory Ratios - The common equity tier 1 capital ratio was reported at 14.78%, exceeding all capital adequacy requirements[21]. - The total risk-based capital ratio decreased to 13.76% from 14.51% in the previous quarter[64]. - The allowance for credit losses to total portfolio loans ratio was 1.51% as of September 30, 2024, compared to 1.52% as of September 30, 2023[81]. Company Overview and Risks - Capital Bancorp, Inc. had total assets of approximately $2.6 billion as of September 30, 2024[89]. - The company operates bank branches in four locations in the greater Washington, D.C. and Baltimore markets, and one branch in Fort Lauderdale, Florida[89]. - Key risks include geopolitical concerns, changes in economic conditions, and competitive pressures on product pricing and services[91]. - The company acknowledges that forward-looking statements may not be accurate and actual results could differ materially from expectations due to various factors[90].

Financial Performance - Net income for the three months ended June 30, 2024 was $8.2 million, a 12.1% increase from $7.3 million in the same period of 2023[119] - Net income for the six months ended June 30, 2024 was $14.8 million, a 13.4% decrease from $17.1 million in the same period of 2023[122] - Total revenue for the three months ended June 30, 2024, was $43,947,000, compared to $42,027,000 for the same period in 2023, reflecting an increase of 4.3%[232] - The return on average assets, as adjusted, was 1.41% for the three months ended June 30, 2024, up from 1.34% in the same period of 2023, reflecting improved profitability[232] - The return on average equity, as adjusted, was 12.62% for the three months ended June 30, 2024, compared to 12.30% in the same period of 2023, indicating enhanced shareholder returns[232] Interest Income and Expenses - Net interest income increased by $1.7 million, or 4.9%, to $37.1 million, primarily due to increased average balances of $190.0 million in portfolio loans[119] - Net interest income for the six months ended June 30, 2024 increased by $2.2 million, or 3.2%, to $72.1 million[122] - Average interest-earning assets increased by $170.1 million, or 8.0%, to $2.3 billion for the three months ended June 30, 2024, compared to the same period in 2023[130] - Average yield on interest-earning assets rose to 8.82%, a 36 basis point increase from 8.46%[130] - Net interest margin decreased by 17 basis points to 6.46% for the three months ended June 30, 2024, due to rising deposit costs outpacing loan yield increases[130] Noninterest Income and Expenses - Noninterest income for the three months ended June 30, 2024 was $6.9 million, a 3.0% increase from $6.7 million in the prior year[120] - Noninterest expenses were $29.5 million for the three months ended June 30, 2024, slightly down from $29.6 million in the same period of 2023[121] - Noninterest income for the six months ended June 30, 2024 was $12.9 million, a 1.2% increase from $12.7 million in the prior year[123] - Noninterest expenses for the six months ended June 30, 2024 were $59.0 million, an increase of 5.7% from $55.8 million in the same period of 2023[124] Credit Losses and Asset Quality - Provision for credit losses for the three months ended June 30, 2024 was $3.4 million, an increase of $0.6 million from the same period in 2023[119] - Provision for credit losses for the six months ended June 30, 2024 was $6.1 million, an increase of 35.9% from the prior year[123] - The allowance for credit losses to total portfolio loans increased to 1.53% as of June 30, 2024, compared to 1.50% as of December 31, 2023, indicating a slight increase in risk provisioning[238] - Nonperforming assets to total assets decreased to 0.58% as of June 30, 2024, down from 0.72% as of December 31, 2023, showing improvement in asset quality[239] - Net charge-offs to average portfolio loans increased to 0.39% for the three months ended June 30, 2024, compared to 0.35% in the same period of 2023, indicating a rise in loan losses[241] Balance Sheet and Capital - Total assets increased to $2,353.868 million as of June 30, 2024, from $2,184.351 million in the prior year[130] - Stockholders' equity rose to $263.425 million as of June 30, 2024, compared to $238.684 million in the previous year[130] - Total liabilities increased by $199.4 million from December 31, 2023, primarily due to a growth in the deposit portfolio of $204.4 million[193] - Total interest-bearing deposits reached $1,415.9 million as of June 30, 2024, an increase from $1,278.6 million at December 31, 2023[194] - The Company reported a Tier 1 leverage ratio of 11.93% and a total capital ratio of 16.98%[219] Loan Portfolio and Credit Risk - Net portfolio loans totaled $2.0 billion as of June 30, 2024, an increase of $118.3 million, or 6.2%, from $1.9 billion at the end of 2023[155] - The allowance for credit losses increased by $2.2 million, or 7.8%, to $30.8 million as of June 30, 2024[155] - The total gross loan portfolio amounted to $2,028.4 million, with residential loans at $601.3 million, commercial loans at $752.7 million, and construction loans at $294.5 million[171] - The company maintains a strong credit review function and risk rating process to manage problem loans effectively[182] - The total allowance for credit losses is allocated among various loan categories, ensuring flexibility to absorb losses from any category[190] Regulatory Compliance and Risk Management - The Bank was classified as "well capitalized" and in compliance with all applicable regulatory capital requirements as of June 30, 2024[216] - The Company intends to monitor and control growth relative to earnings to remain compliant with regulatory capital standards[216] - The Company maintains a reserve for unfunded commitments and certain off-balance sheet credit risks, recorded in other liabilities[221] - The company performs annual stress tests on the construction loan portfolio to monitor underlying real estate conditions and borrower progress[166] - The company monitors trends in sales outcomes versus underwriting valuations as part of ongoing risk management efforts[166]