Core Insights - Capital Bancorp is expanding its Commercial Banking operations in Delaware by adding experienced relationship managers, which is a significant step in its Mid-Atlantic growth strategy [1][5] - The new hires include Ritchie Francia, Sarah Ferguson, and John Hassiepen, who bring extensive experience and strong community ties to the bank [2][3] - The expansion aims to enhance Capital Bank's ability to serve businesses in Delaware and surrounding areas, reflecting a commitment to local market expertise [5] Company Overview - As of March 31, 2025, Capital Bancorp reported $3.3 billion in assets and was ranked 9 in American Banker's Top 20 High Performing Banks in 2024 [6] - The bank has a consultative approach and has been serving commercial customers in the DC Metro Region for over 25 years [6] - Capital Bank is a member of the Federal Reserve Bank system and is committed to helping customers achieve their financial goals while maintaining fiduciary duties to shareholders [6]

PART I - CONSOLIDATED FINANCIAL INFORMATION [Consolidated Financial Statements (Unaudited)](index=2&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) Presents the unaudited consolidated balance sheets, income statements, and cash flow statements for Q1 2025 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The company's assets, liabilities, and equity are detailed as of March 31, 2025, compared to year-end 2024 Consolidated Balance Sheet Highlights (Unaudited) | (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$3,349,805** | **$3,206,911** | | Total portfolio loans held for investment, net | $2,629,952 | $2,581,511 | | Total cash and cash equivalents | $293,987 | $205,332 | | Goodwill | $24,085 | $21,126 | | **Total Liabilities** | **$2,980,228** | **$2,851,772** | | Total deposits | $2,891,333 | $2,761,939 | | **Total Stockholders' Equity** | **$369,577** | **$355,139** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Reports the company's revenues, expenses, and net income for the three months ended March 31, 2025 Consolidated Income Statement Highlights (Unaudited) | (in thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Interest Income | $46,047 | $35,008 | | Provision for Credit Losses | $2,246 | $2,727 | | Noninterest Income | $12,549 | $5,972 | | Noninterest Expenses | $38,053 | $29,487 | | **Net Income** | **$13,932** | **$6,562** | | **Diluted Earnings Per Share** | **$0.82** | **$0.47** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities for Q1 2025 Consolidated Cash Flow Summary (Unaudited) | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $22,581 | $(3,412) | | Net cash used in investing activities | $(61,079) | $(57,640) | | Net cash provided by financing activities | $127,153 | $92,292 | | **Net increase in cash and cash equivalents** | **$88,655** | **$31,240** | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Provides supplementary details on accounting policies and specific financial statement items - The Company operates through **four reporting segments**: Commercial Banking, OpenSky™, Windsor Advantage™, and Capital Bank Home Loans[15](index=15&type=chunk)[17](index=17&type=chunk) - Goodwill increased by **$3.0 million** in Q1 2025 due to a measurement period adjustment from the IFH acquisition[28](index=28&type=chunk)[30](index=30&type=chunk) - Total nonperforming loans increased to **$42.9 million** as of March 31, 2025, from $30.2 million at December 31, 2024[47](index=47&type=chunk) - The Board of Directors declared a quarterly cash dividend of **$0.10 per share** in April 2025[109](index=109&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 2025 performance, highlighting significant net income growth driven by the IFH acquisition [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Details the key drivers of the company's operating results, comparing Q1 2025 performance to Q1 2024 Q1 2025 vs. Q1 2024 Performance | (in thousands) | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $46,047 | $35,008 | 31.5% | | Noninterest Income | $12,549 | $5,972 | 110.1% | | Noninterest Expenses | $38,053 | $29,487 | 29.1% | | **Net Income** | **$13,932** | **$6,562** | **112.3%** | - The **110.1% increase in noninterest income** was primarily due to contributions from the businesses acquired from IFH[132](index=132&type=chunk)[149](index=149&type=chunk) - The provision for credit losses decreased to **$2.2 million**, with net charge-offs of $2.4 million primarily from the credit card portfolio[131](index=131&type=chunk)[147](index=147&type=chunk) - Noninterest expense increased by **$8.6 million**, driven by higher salaries and merger-related costs from the IFH acquisition[133](index=133&type=chunk)[153](index=153&type=chunk) [Financial Condition](index=51&type=section&id=Financial%20Condition) Analyzes the changes in the company's balance sheet, including loans, deposits, and liquidity position Balance Sheet Changes | (in thousands) | March 31, 2025 | December 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Assets | $3,349,805 | $3,206,911 | 4.5% | | Portfolio loans receivable, net | $2,678,406 | $2,630,163 | 1.8% | | Deposits | $2,891,333 | $2,761,939 | 4.7% | | Total Stockholders' Equity | $369,577 | $355,139 | 4.1% | - The Allowance for Credit Losses (ACL) as a percentage of total portfolio loans was **1.81%** at March 31, 2025[148](index=148&type=chunk)[192](index=192&type=chunk) - The company had significant available liquidity, including **$509.7 million** from the FHLB and **$115.7 million** from the Federal Reserve[215](index=215&type=chunk) [Capital Resources](index=63&type=section&id=Capital%20Resources) Outlines the company's capital position, regulatory capital ratios, and compliance status - As of March 31, 2025, both the Company and the Bank were in compliance with all regulatory capital requirements and classified as **'well capitalized'**[223](index=223&type=chunk) Regulatory Capital Ratios (The Company) | Ratio | March 31, 2025 | Minimum Adequacy | To Be Well Capitalized | | :--- | :--- | :--- | :--- | | Tier 1 leverage ratio | 10.68% | 4.00% | 5.00% | | Common equity tier 1 capital ratio | 13.24% | 4.50% | 6.50% | | Total capital ratio | 14.97% | 8.00% | 10.00% | [Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details the company's primary market risk from interest rate volatility and its management through ALCO - The company's primary market risk is **interest rate volatility**, which is managed by the Asset/Liability Management Committee (ALCO)[247](index=247&type=chunk)[250](index=250&type=chunk) Earnings at Risk (EAR) - Impact on Net Interest Income | Interest Rate Shock | % Change in NII (12-Month Horizon) | | :--- | :--- | | +300 bps | +10.6% | | +200 bps | +7.1% | | +100 bps | +3.6% | | -100 bps | -3.2% | | -200 bps | -6.1% | Economic Value of Equity (EVE) Analysis | Interest Rate Shock | % Change in EVE | | :--- | :--- | | +300 bps | +4.3% | | +200 bps | +2.9% | | +100 bps | +1.9% | | -100 bps | -3.0% | | -200 bps | -7.3% | [Controls and Procedures](index=74&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms the effectiveness of disclosure controls and notes enhancements to internal controls - The Principal Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures were **effective**[260](index=260&type=chunk) - During Q1 2025, the Company **enhanced internal controls** over business combinations, specifically for Day 1 accounting[261](index=261&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=75&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal proceedings expected to have a significant adverse financial impact - The Company is not presently a party to any legal proceedings which are believed to have a **material adverse impact** on its operations or financial condition[262](index=262&type=chunk) [Risk Factors](index=75&type=section&id=Item%201A.%20Risk%20Factors) Confirms no material changes to risk factors disclosed in the 2024 Annual Report on Form 10-K - There are **no material changes** to the risk factors as previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[263](index=263&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=76&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the new $15 million stock repurchase program and Q1 2025 repurchase activity - On February 21, 2025, the Company announced a new stock repurchase program authorizing up to **$15 million** of its Common Stock[265](index=265&type=chunk) Share Repurchase Activity (Q1 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Maximum Value Remaining ($) | | :--- | :--- | :--- | :--- | | Jan 2025 | 0 | N/A | $15,000,000 | | Feb 2025 | 0 | N/A | $15,000,000 | | Mar 2025 | 22,185 | $27.85 | $14,382,077 | [Other Information](index=77&type=section&id=Item%205.%20Other%20Information) Reports no adoption or termination of Rule 10b5-1 trading plans by officers or directors in Q1 2025 - **No officer or director** adopted or terminated any Rule 10b5-1 trading plan during the quarter ended March 31, 2025[270](index=270&type=chunk)

Core Viewpoint - Capital Bancorp (CBNK) shows a significant improvement in earnings outlook, making it an attractive investment option as analysts continue to raise earnings estimates for the company [1][3]. Earnings Estimate Revisions - The upward trend in earnings estimate revisions reflects growing analyst optimism, which is expected to positively impact the stock price [2]. - The current-quarter earnings estimate is projected at $0.89 per share, indicating a year-over-year increase of +50.85%, with a 15.58% rise in the Zacks Consensus Estimate over the last 30 days [5]. - For the full year, the earnings estimate stands at $3.41 per share, representing a +24.91% change from the previous year, with no negative revisions noted [6]. Zacks Rank and Performance - Capital Bancorp holds a Zacks Rank 1 (Strong Buy), supported by strong agreement among analysts in revising earnings estimates upward, which historically correlates with stock performance [3][7]. - Stocks with a Zacks Rank 1 and 2 have shown significant outperformance compared to the S&P 500 [7]. Stock Performance - The stock has gained 20.2% over the past four weeks, driven by solid estimate revisions, suggesting potential for further growth in earnings [8].

Group 1 - GeneDx Holdings Corp. has a Zacks Rank 1 with a 12.4% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [1] - GeneDx's shares increased by 8.2% over the last three months, while the S&P 500 declined by 6.5% [1] - Eagle Bancorp Montana, Inc. also holds a Zacks Rank 1, with a nearly 9% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [2] Group 2 - Eagle Bancorp's shares gained 16.6% over the last three months compared to the S&P 500's decline of 6.5% [2] - Capital Bancorp, Inc. has a Zacks Rank 1, with a 7.2% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [3] - Capital's shares increased by 6.8% over the last six months, while the S&P 500 declined by 4% [3] Group 3 - All three companies mentioned possess strong momentum characteristics, with GeneDx and Eagle Bancorp having a Momentum Score of A, while Capital Bancorp has a Momentum Score of B [1][2][3]

Group 1: Earnings Performance - Capital Bancorp reported quarterly earnings of $0.88 per share, exceeding the Zacks Consensus Estimate of $0.67 per share, and up from $0.51 per share a year ago, representing an earnings surprise of 31.34% [1] - The company posted revenues of $58.6 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.96%, compared to year-ago revenues of $40.98 million [2] - Over the last four quarters, Capital Bancorp has surpassed consensus EPS estimates two times and topped consensus revenue estimates twice [2] Group 2: Stock Performance and Outlook - Capital Bancorp shares have declined approximately 1.4% since the beginning of the year, while the S&P 500 has decreased by 6.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.77 on $57 million in revenues, and for the current fiscal year, it is $3.18 on $229.8 million in revenues [7] Group 3: Industry Context - The Banks - Northeast industry, to which Capital Bancorp belongs, is currently in the top 23% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Capital Bancorp's stock performance [5] - Another company in the same industry, Arrow Financial, is expected to report quarterly earnings of $0.44 per share, reflecting a year-over-year change of -2.2% [9]

Financial Performance - The company reported net income of $13.9 million, or $0.82 per diluted share, for Q1 2025, an increase from $7.5 million, or $0.45 per diluted share, in Q4 2024, and $6.6 million, or $0.47 per diluted share, in Q1 2024 [4][10] - Core net income for Q1 2025 was $14.9 million, or $0.88 per diluted share, compared to $15.5 million, or $0.92 per diluted share in Q4 2024 [4][10] - Return on average assets (ROA) was 1.75%, and return on average equity (ROE) was 15.56% for Q1 2025, compared to 0.96% and 8.50% respectively in Q4 2024 [24][41] Balance Sheet Highlights - Total assets increased to $3.3 billion at March 31, 2025, up $142.9 million, or 18.1% (annualized), from December 31, 2024 [17] - Total deposits grew to $2.89 billion, an increase of $129.4 million, or 19.0% (annualized), from Q4 2024 [18] - Gross loans increased by $48.2 million, or 7.4% (annualized), during Q1 2025, with a year-over-year growth of $713.9 million [5][18] Income and Expense Analysis - Net interest income for Q1 2025 was $46.0 million, an increase of $1.7 million, or 3.9% (not annualized), from Q4 2024, and $11.0 million, or 31.5%, year-over-year [11][41] - Noninterest income totaled $12.5 million, representing 21.4% of total revenue for Q1 2025, an increase of $0.6 million from Q4 2024 and $6.6 million from Q1 2024 [5][15] - Noninterest expense was $38.1 million, an increase of $0.5 million from Q4 2024 and $8.6 million from Q1 2024, primarily due to the acquisition of IFH [15][41] Credit Quality Metrics - The allowance for credit losses (ACL) coverage ratio was 1.81% at March 31, 2025, down 4 bps from Q4 2024 and up 32 bps year-over-year [21] - Nonperforming assets increased to 1.21% of total assets at March 31, 2025, compared to 0.94% at December 31, 2024 [22][31] - Total nonaccrual loans increased to $40.5 million at March 31, 2025, up from $30.2 million at December 31, 2024 [22][31] Capital and Liquidity - The company maintained a Common Equity Tier-1 capital ratio of 13.33% as of March 31, 2025, compared to 13.74% at December 31, 2024 [18] - Cash and cash equivalents increased to $294.0 million at March 31, 2025, up $88.7 million from December 31, 2024 [18] - The average portfolio loans-to-deposit ratio was 95.15% for Q1 2025, compared to 99.27% in Q4 2024 [18]

Core Viewpoint - Capital Bancorp, Inc. reported strong financial performance in the first quarter of 2025, with significant increases in net income, core net income, and growth in loans and deposits, driven by the successful integration of the IFH acquisition and a diversified earnings platform [3][5][10]. Financial Performance - Net income for 1Q 2025 was $13.9 million, or $0.82 per diluted share, compared to $7.5 million, or $0.45 per diluted share in 4Q 2024, and $6.6 million, or $0.47 per diluted share in 1Q 2024 [3][10]. - Core net income for 1Q 2025 was $14.9 million, or $0.88 per diluted share, down from $15.5 million, or $0.92 per diluted share in 4Q 2024 [3][10]. - Return on average assets (ROA) was 1.75%, and return on average equity (ROE) was 15.56% for 1Q 2025, showing significant improvement from previous quarters [6][25]. Growth Metrics - Gross loans increased by $48.2 million, or 7.4% (annualized), during 1Q 2025, with year-over-year growth of $713.9 million [6][18]. - Total deposits grew by $129.4 million, or 19.0% (annualized), from 4Q 2024, and increased by $885.6 million, or 44.2% year-over-year [6][23]. - Customer deposits increased by $154.6 million, or 25.8% (annualized) from 4Q 2024, and $738.5 million year-over-year [6][23]. Interest Income and Margin - Net interest income for 1Q 2025 was $46.0 million, an increase of $1.7 million, or 3.9% (not annualized), from 4Q 2024, and up $11.0 million, or 31.5% year-over-year [11][30]. - Net interest margin (NIM) was 6.05%, up 18 basis points from 4Q 2024, but down 19 basis points year-over-year [19][30]. Asset Quality and Credit Metrics - The allowance for credit losses (ACL) coverage ratio was 1.81% at March 31, 2025, down 4 basis points from 4Q 2024, but up 32 basis points year-over-year [21][22]. - Nonperforming assets increased to 1.21% of total assets at March 31, 2025, compared to 0.94% at December 31, 2024 [22][31]. Capital and Liquidity - Total assets reached $3.3 billion at March 31, 2025, an increase of $142.9 million, or 18.1% (annualized), from December 31, 2024 [16][42]. - The Common Equity Tier-1 capital ratio was 13.33% as of March 31, 2025, exceeding all regulatory capital requirements [16][42]. Dividend Declaration - The company declared a cash dividend of $0.10 per share, payable on May 28, 2025, to shareholders of record on May 12, 2025 [4].

Financial Performance - Net income for Q1 2025 was $13.9 million, or $0.82 per diluted share, compared to $7.5 million, or $0.45 per diluted share in Q4 2024, and $6.6 million, or $0.47 per diluted share in Q1 2024[4] - Core net income for Q1 2025 was $14.9 million, or $0.88 per diluted share, down from $15.5 million, or $0.92 per diluted share in Q4 2024[8] - Net income for Q1 2025 reached $13,932,000, representing an 84.9% increase from Q4 2024 and a 112.3% increase from Q1 2024[27] - Earnings per share (Basic) for Q1 2025 was $0.84, an increase of 86.7% from $0.45 in Q4 2024[27] - Core Earnings per Share - Diluted for Q1 2025 was $0.88, compared to $0.92 in Q4 2024, reflecting a decrease of 4.3%[46] Revenue and Income - Total Revenue for Q1 2025 reached $58,596,000, up from $56,240,000 in Q4 2024, indicating a growth of 4.2%[46] - Noninterest income for Q1 2025 was $12,549,000, up 5.3% from Q4 2024 and 110.1% from Q1 2024[27] - Total interest income for Q1 2025 was $62,760,000, an increase of 1.7% from $61,707,000 in Q4 2024[29] - Interest income for Q1 2025 was $62,760,000, an increase of 1.7% from Q4 2024 and 29.8% from Q1 2024[27] Assets and Deposits - Total assets increased to $3.3 billion as of March 31, 2025, up $142.9 million or 18.1% annualized from December 31, 2024, and up $1.0 billion or 44.1% year-over-year[12] - Total deposits grew by $129.4 million, or 19.0% (annualized), from Q4 2024, with year-over-year growth of $885.6 million, including $426.7 million from organic growth and $459.0 million from the IFH acquisition[3] - Total deposits reached $2.89 billion, increasing by $129.4 million or 19.0% annualized from December 31, 2024, and $885.6 million or 44.2% year-over-year, with $459.0 million attributed to the IFH acquisition[12] - Deposits increased to $2,891,333,000, reflecting a 44.2% growth from $2,005,695,000 in Q1 2024[28] Loan Performance - Gross loans increased by $48.2 million, or 7.4% (annualized), in Q1 2025, with a year-over-year growth of $713.9 million, including $340.4 million from organic growth and $373.5 million from the IFH acquisition[3] - Originations of loans held for sale totaled $65.8 million during Q1 2025, with a gain on sale of loans of $1.7 million, representing a 3.07% gain on sale percentage[25] - The portfolio loans receivable, net, reached $2,678,406,000 as of March 31, 2025, showing growth from $2,630,163,000 in the previous quarter[40] Credit Quality - The allowance for credit losses to total loans (ACL Coverage Ratio) was 1.81% at March 31, 2025, down 4 basis points from Q4 2024 and up 32 basis points from Q1 2024[3] - The allowance for credit losses rose to $48,454,000, a 65.1% increase from $29,350,000 in Q1 2024[28] - The company reported a provision for credit losses of $2,246,000 in Q1 2025, down from $7,828,000 in Q4 2024[29] - Nonperforming assets increased to 1.21% of total assets as of March 31, 2025, up 27 basis points from December 31, 2024, and 59 basis points year-over-year[14] - Total Nonperforming Loans reached $40,471 thousand, with a Nonperforming Loans to Total Portfolio Loans ratio of 1.51% as of March 31, 2025, up from 1.15% in the previous quarter[53] Efficiency and Profitability - Efficiency ratio improved to 64.9% for Q1 2025, compared to 66.7% in Q4 2024 and 72.0% in Q1 2024[13] - Return on Average Tangible Common Equity improved to 17.57% for the quarter ended March 31, 2025, up from 9.33% in the previous quarter[56] - Core return on average assets (annualized) for Q1 2025 was 1.87%, compared to 1.24% in Q1 2024[27] - The average yield on interest-earning assets was 8.24%, up 7 basis points from the prior quarter but down 39 basis points year-over-year[15] Acquisitions and Synergies - Estimated total cost synergies from the IFH acquisition reached $1.75 million in Q1 2025, achieving targeted savings earlier than anticipated[11] - Noninterest expense for Q1 2025 was $38.1 million, an increase of $0.5 million from Q4 2024 and $8.6 million from Q1 2024, primarily due to the acquisition of IFH[11] Stockholders' Equity - Stockholders' equity increased to $369,577,000 as of March 31, 2025, compared to $355,139,000 at the end of Q4 2024, reflecting a growth of 4.1%[30] - Tangible Book Value per Share increased to $19.81 as of March 31, 2025, compared to $19.10 at December 31, 2024[55] - The book value per common share increased to $22.19 as of March 31, 2025, up $0.87 from December 31, 2024, and $3.51 year-over-year[16]

Group 1: Fund Performance - The Fund reported an increase in net assets attributable to holders of units amounting to $27.25 million or $2.00 per unit for the year ended December 31, 2024 [1] - As of December 31, 2024, net assets attributable to holders of units were $122.66 million or $8.43 per unit [1] - Cash distributions to unitholders totaled $9.65 million or $0.70 per unit during the year [1] Group 2: Investment Strategy - The Fund aims to provide long-term capital appreciation through a portfolio primarily consisting of common shares of major Canadian banks [2] - The Fund will utilize modest leverage of 25.0 percent and may write call and put options to enhance investment returns and reduce acquisition costs [3] - The target yield for the Fund is set at 7.0 percent, with potential for additional capital growth beyond this yield [3] Group 3: Financial Overview - As of December 31, 2024, the Fund's total assets were $154.54 million, with liabilities of $31.88 million [5] - The Fund generated income, including net gains on investments, amounting to $29.45 million, with expenses recorded at $2.20 million [5] - The increase in net assets attributable to holders of units for the year was $27.25 million [5]

Financial Performance - Net income for the year ended December 31, 2024, was $31.0 million, a decrease of $4.9 million, or 13.7%, compared to the prior year[194]. - Net income for the year ended December 31, 2024 was $31.0 million, a decrease of 13.7% compared to $35.9 million in 2023[207]. - Net income decreased to $30,972 thousand in 2024 from $35,871 thousand in 2023, a decline of 13.4%[313]. - Total revenue increased to $186,156 thousand in 2024, compared to $166,501 thousand in 2023, reflecting a growth of 11.8%[313]. Interest Income and Margin - Net interest income increased by $13.2 million to $154.7 million, driven by an increase in average portfolio loans of $325.7 million[194]. - Net interest income increased by $13.2 million, or 9.3%, to $154.7 million, driven by an increase in average portfolio loans of $325.7 million[207]. - The net interest margin decreased by 38 basis points to 6.22% for the year ended December 31, 2024, compared to 6.60% for the prior year[194]. - Net interest margin decreased by 38 basis points to 6.22% for the year ended December 31, 2024[216]. - For the year ended December 31, 2024, total interest income was $30.1 million, an increase of $5.6 million, or 22.9%, compared to $24.5 million in 2023, driven by growth in interest-earning assets and elevated interest rates on portfolio loans[220]. Assets and Liabilities - Total assets increased by $980.7 million, or 44.1%, to $3.2 billion as of December 31, 2024[198]. - Total liabilities increased by $880.5 million from December 31, 2023, primarily due to the IFH acquisition[269]. - Average interest-earning assets increased by $342.4 million, or 16.0%, to $2.5 billion compared to the same period in 2023[195]. - Total interest-bearing deposits rose to $1,951.0 million as of December 31, 2024, up from $1,278.6 million in 2023[271]. Credit Losses and Provisions - The provision for credit losses was $17.7 million, an increase of $8.1 million from the prior year, influenced by organic commercial portfolio loan growth[195]. - Provision for credit losses rose to $17.7 million, an increase of 84.4% from $9.6 million in 2023[207]. - The allowance for credit losses (ACL) increased to $48.7 million as of December 31, 2024, compared to $28.6 million in 2023[268]. - The allowance for credit losses (ACL) as a percentage of portfolio loans was 1.85% at December 31, 2024, compared to 1.50% at December 31, 2023[222]. Noninterest Income and Expenses - Noninterest income increased by $6.4 million, or 25.8%, to $31.4 million, primarily due to contributions from the IFH acquisition[196]. - Noninterest income for 2024 was $31.4 million, up 25.8% from $25.0 million in the prior year, primarily due to contributions from the IFH acquisition[209]. - Noninterest expense increased by $15.5 million, or 14.0%, to $126.2 million, largely due to the IFH acquisition[210]. - Total noninterest expense for 2024 was $126.2 million, an increase of $15.5 million, or 14.0%, from $110.8 million in 2023, primarily due to the IFH acquisition[231]. Equity and Dividends - Stockholders' equity increased to $355.1 million as of December 31, 2024, compared to $254.9 million at December 31, 2023[198]. - Book value per share increased by $3.00, or 16.4%, from $18.31 in 2023 to $21.31 in 2024[235]. - Dividends per share increased by $0.08, or 28.6%, from $0.28 in 2023 to $0.36 in 2024[235]. Acquisitions - The acquisition of IFH on October 1, 2024, added total assets of $559.4 million, including gross loans of $373.5 million[197]. - The company acquired total assets of $559.4 million in connection with the IFH acquisition, including gross loans of $373.5 million[236]. Interest Rate Sensitivity - The bank's interest rate sensitivity position is asset-sensitive, meaning rising interest rates are expected to positively impact net interest income[327]. - The cumulative gap ratio to total earning assets is 35.12% as of December 31, 2024, indicating a significant asset sensitivity[329]. - The Asset/Liability Management Committee (ALCO) regularly reviews interest rate sensitivity and formulates strategies based on perceived levels of interest rate risk[326]. - The bank's exposure to interest rate risk is managed through a combination of static and dynamic simulation models to assess the impact of changing interest rates[329]. Other Financial Metrics - Return on average assets decreased to 1.21% in 2024 from 1.64% in 2023[313]. - Return on average equity decreased to 10.78% in 2024 from 14.91% in 2023[313]. - Core return on average tangible common equity, as adjusted, was 14.36% in 2024, compared to 14.91% in 2023[317].