Capital Bancorp(CBNK) - 2025 Q3 - Quarterly Results

Financial Performance - GAAP net income for Q3 2025 was $15.1 million, or $0.89 per diluted share, compared to $13.1 million, or $0.78 per diluted share in Q2 2025, and $8.7 million, or $0.62 per diluted share in Q3 2024[5]. - Core net income for Q3 2025 was $12.2 million, or $0.72 per diluted share, down from $14.2 million, or $0.85 per diluted share in Q2 2025[10]. - Net income for the quarter was $15.1 million, a 14.7% increase from the previous quarter, with earnings per share rising to $0.91[35]. - Net income for the three months ended September 30, 2025, was $15,065,000, up from $13,136,000 in the same period last year, marking a year-over-year increase of 14.7%[39]. - The net income before taxes for the three months ended September 30, 2025, was $19.87 million, up from $17.10 million in the previous quarter[47][48]. - The net income for the nine months ended September 30, 2025, was $42,133,000, compared to $23,439,000 for the same period in 2024, reflecting an increase of 79.5%[69]. Revenue and Income Sources - Total Revenue for Q3 2025 was $58,470,000, slightly down from $60,752,000 in Q2 2025, a decrease of 3.8%[60]. - Net interest income rose by $4.4 million, or 9.2% (not annualized), from Q2 2025, and increased by $13.7 million, or 35.6%, year-over-year[4]. - Noninterest income surged by 88.4% to $36,723, compared to $19,497 in 2024[36]. - Noninterest income for Q3 2025 was $11,068,000, a decrease of 15.6% from $13,106,000 in the previous quarter[39]. - Total noninterest income for the nine months ended September 30, 2025, was $36.7 million, up from $19.5 million in 2024, indicating an increase of 88.1%[50][51]. Assets and Loans - Total assets reached $3.4 billion as of September 30, 2025, reflecting a year-over-year growth of $828.7 million, or 32.4%, including $559.4 million from the IFH acquisition[15]. - Gross loans increased by $82.2 million, or 11.9% (annualized), in Q3 2025, with a year-over-year growth of $714.5 million, including $341.0 million from organic growth and $373.5 million from the IFH acquisition[4]. - Total portfolio loans receivable, net, reached $2,821,983,000, an increase from $2,739,808,000 in the previous quarter, marking a growth of 3%[54]. - The average outstanding balance of portfolio loans receivable for the nine months ended September 30, 2025, was $2,719,834, yielding interest income of $179,710, with an average yield of 8.83%[44]. Deposits and Funding - Total deposits decreased by $28.7 million, or 3.9% (annualized), from Q2 2025, but showed a year-over-year growth of $725.8 million, including $459.0 million from the IFH acquisition[4]. - Total deposits were $2.91 billion, a decrease of $28.7 million, or 3.9% (annualized), from June 30, 2025, but an increase of $725.8 million, or 33.2% year-over-year[16]. - Deposits increased by 33.2% to $2,912,053, compared to $2,186,224 in 2024[38]. Credit Quality and Losses - The allowance for credit losses to total loans (ACL Coverage Ratio) was 1.88% at September 30, 2025, reflecting a 15 basis points increase from June 30, 2025[4]. - The provision for credit losses was $4.7 million, an increase of $0.6 million from Q2 2025, with net charge-offs totaling $2.5 million, or 0.35% of portfolio loans (annualized)[10]. - Nonperforming assets increased to $52.2 million, or 1.54% of total assets, reflecting a year-over-year increase of $36.8 million, primarily due to the IFH acquisition[21]. - The provision for credit losses for the quarter ended September 30, 2025, was $4,650,000, compared to $4,081,000 in the previous quarter, indicating a rise in credit loss provisions[68]. Efficiency and Ratios - The efficiency ratio improved to 60.8% for Q3 2025, compared to 65.1% for Q2 2025 and 66.1% for Q3 2024[22]. - Return on assets (ROA) was 1.77% for Q3 2025, up from 1.60% in Q2 2025 and 1.42% in Q3 2024[23]. - The efficiency ratio for Q3 2025 was 65.6%, slightly higher than 65.1% in Q2 2025[60]. - The total risk-based capital ratio stood at 12.92%, slightly down from 13.13% in the previous quarter, reflecting a stable capital position[53]. Dividends and Shareholder Value - The company declared a cash dividend of $0.12 per share, payable on November 26, 2025[5]. - Book value per common share increased to $23.80, up $0.88 from June 30, 2025, and $3.67 from September 30, 2024[23]. - Earnings per diluted share improved to $2.50, up 47.9% from $1.69 in 2024[36]. - Dividends per share increased to $0.12, a 20.0% increase from $0.10 in 2024[38]. Strategic Initiatives and Market Outlook - The company restructured its reportable segments, which now include Commercial Banking, OpenSky, Windsor Advantage, and Capital Bank Home Loans[45]. - Forward-looking statements indicate potential risks including economic conditions, geopolitical concerns, and competitive pressures that could impact future performance[80][81]. - The company emphasizes the importance of market acceptance for new products and services as part of its business strategy[81]. - The impact of acquisitions, including the IFH acquisition, is highlighted as a factor that could affect revenue growth and operational integration[81].