Capital Bancorp(CBNK) - 2024 Q3 - Quarterly Results

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].