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CST: 13/11/2019 02:20:16   

Capital Bancorp Reports Record Third Quarter 2019 Earnings

21 Days ago

Increases in Net Interest Income and Noninterest Income contributed to a 42% year-over-year increase in Net Income

ROCKVILLE, Md., Oct. 22, 2019 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $4.5 million, or $0.32 per diluted share, for the third quarter of 2019. By comparison, net income was $3.1 million, or $0.26 per diluted share, for the third quarter of 2018.  Return on average assets was 1.42% and return on average equity was 14.04% for the third quarter of 2019.

"The third quarter saw continued robust growth in commercial loans and deposits.  Despite fierce competition and a declining rate environment, our margin remained stable, which is a testament to our solutions-driven approach, sales discipline and quality hirings.  The mortgage and credit card businesses continue to experience higher than anticipated growth and profits to complement and enhance the commercial franchise," said Ed Barry, CEO of Capital Bancorp.

2019 Third Quarter Highlights

  • Record Net Income - Net income for the third quarter of 2019 increased 11% to $4.5 million compared to $4.0 million for the second quarter of 2019. Diluted earnings per share for the three months ended September 30, 2019 was $0.32, compared to $0.29 per share for the three months ended June 30, 2019.  Return on average assets was 1.42%, an increase of 3 basis points compared to the second quarter of 2019.  Return on average equity for the third quarter of 2019 was 14.04%, compared to 13.23% for the previous quarter.
  • Robust Loan Growth - For the quarter ended September 30, 2019, total loans increased $84.0 million, or 8%, to $1.14 billion compared to $1.06 billion at June 30, 2019.  Loans increased year over year with growth of $184.9 million, or 19%, from $955.4 million at September 30, 2018.  Average loan balances have increased 15% year over year, with the largest growth from residential real estate and commercial loans.
  • Strong Core Deposit Growth and Improving Deposit Profile - The Company continues to execute on its strategic initiative to improve the deposit portfolio mix away from wholesale time deposits.  Accordingly, at September 30, 2019, noninterest bearing deposits increased by $13.9 million, or 20% annualized, compared to June 30, 2019.  The growth was partially driven by a 5% increase in OpenSky® deposits of $4.0 million for the three months ended September 30, 2019.  Noninterest bearing deposits increased 25% to $293.4 million at September 30, 2019, compared to $234.1 million at September 30, 2018. The cost of interest bearing deposits declined 1 basis point to 1.83% compared to the second quarter of 2019, and the cost of borrowed funds decreased 39 basis points to 3.19% due to in part to two market rate decreases in the third quarter.
  • Stable Net Interest Margin - The net interest margin improved 4 basis points to 5.83% for the third quarter of 2019 compared to the prior quarter, and increased 27 basis points from 5.56% in the same quarter of the previous year. The quarter over quarter increase this year was primarily due to an increase in loan yield.  Excluding credit card loans, the net interest margin remained flat for the three months ended September 30, 2019 at 4.37% compared to the prior quarter, and increased from 4.26% in the same quarter of 2018.
  • Credit Card Issuances Continue at a Record Pace - OpenSky® credit card issuances continue at higher levels with new originations for the quarter totaling 31,400, compared to 36,700 in the prior quarter due to seasonal factors.  New originations increased 11,700, or 59%, from 19,700 in the third quarter of 2018.  Our enhanced customer application and improved mobile servicing functionality contributed to an increase in customer accounts of approximately 52,000, or 30%, from September 30, 2018, and exceeded 220,000 at September 30, 2019.
  • Profitable Mortgage Business - The Bank's residential mortgage banking division increased the number of loans originated by 40% compared to the previous quarter, and continued to contribute to the Company's results of operations for the quarter with higher gains on sales.  The decline in gain-on-sale margin during the third quarter is attributable to the large increase in price sensitive refinance activity driven by the lower rate environment.
  • Sound Asset Quality - Non-performing assets as a percentage of total assets decreased to 0.51% at September 30, 2019, compared to 0.57% at June 30, 2019, and increased 9 basis points from 0.42% at September 30, 2018.  The quarterly decrease is due to a reduction of non-performing loans of approximately $302 thousand. The increase from the previous year is attributable to a single borrower relationship totaling $2.1 million that is well secured, on which no impairment is expected.  As such, there have been no losses related to this increase in non-performing assets.  Net charge-offs for the nine months ended September 30, 2019 were $369 thousand, a decrease from $781 thousand for the same period last year.


COMPARATIVE FINANCIAL
HIGHLIGHTS - Unaudited
                     
  Quarter Ended   3rd Quarter   Nine Months Ended   YTD
  September 30,   2019 - 2018   September 30,   2019 - 2018
(in thousands except per share data) 2019   2018   % Change   2019   2018   % Change
Earnings Summary                      
Interest income $ 22,354     $ 17,447     28.1 %   $ 60,961     $ 50,890     19.8 %
Interest expense 4,170     2,955     41.1 %   11,502     7,891     45.8 %
Net interest income 18,184     14,492     25.5 %   49,459     42,999     15.0 %
Provision for loan losses 1,071     495     116.4 %   1,869     1,640     14.0 %
Noninterest income 7,221     4,240     70.3 %   17,240     12,657     36.2 %
Noninterest expense 18,228     13,900     31.1 %   48,768     41,028     18.9 %
Income before income taxes 6,106     4,337     40.8 %   16,062     12,988     23.7 %
Income tax expense 1,625     1,190     36.6 %   4,239     3,706     14.4 %
Net income $ 4,481     $ 3,147     42.4 %   $ 11,823     $ 9,282     27.4 %
                       
Weighted average common shares - Basic 13,728     11,720     17.1 %   13,714     11,632     17.9 %
Weighted average common shares - Diluted 13,986     12,103     15.6 %   13,922     12,033     15.7 %
Earnings - Basic(1) $ 0.33     $ 0.27     22.2 %   $ 0.86     $ 0.80     7.5 %
Earnings - Diluted(1) $ 0.32     $ 0.26     23.1 %   $ 0.85     $ 0.77     10.4 %
Return on average assets 1.42 %   1.19 %   19.3 %   1.35 %   1.20 %   12.5 %
Return on average equity 14.04 %   13.69 %   2.6 %   12.93 %   14.61 %   (11.5 )%


      3rd Quarter    
  Quarter Ended September 30,   2019 vs. 2018       Quarter Ended    
(in thousands except per share data) 2019   2018   % Change   June 30, 2019   March 31, 2019   December 31, 2018
Balance Sheet Highlights                      
Assets $ 1,311,407     $ 1,072,905     22.2 %   $ 1,234,157     $ 1,123,752     $ 1,105,058  
Investment securities available for sale 37,073     48,067     (22.9 )%   39,157     46,080     46,932  
Mortgage loans held for sale 68,982     21,373     222.8 %   47,744     21,630     18,526  
Loans receivable (1) 1,140,310     955,412     19.4 %   1,056,290     1,007,928     1,000,268  
Allowance for loan losses 12,808     10,892     17.6 %   11,913     11,347     11,308  
Deposits 1,112,444     911,116     22.1 %   1,037,004     967,722     955,240  
Borrowings and repurchase agreements 35,556     28,239     25.9 %   38,889     3,010     7,332  
Subordinated debentures 15,416     15,386     0.2 %   15,409     15,401     15,393  
Total stockholders' equity 127,829     106,657     19.9 %   123,118     118,550     114,564  
Tangible common equity 127,829     106,657     19.9 %   123,118     118,550     114,564  
                       
Common shares outstanding 13,783     13,191     4.5 %   13,719     13,713     13,672  
Tangible book value per share $ 9.27     $ 8.09     14.6 %   $ 8.97     $ 8.65     $ 8.38  

_______________
(1) Loans are reflected net of deferred fees and costs.

Operating Results - three months ended September 30, 2019 compared to three months ended September 30, 2018

Net interest income increased $3.7 million, or 25%, to $18.2 million for the three months ended September 30, 2019 compared to the same period in 2018.  Net interest margin increased 27 basis points to 5.83% for the three months ended September 30, 2019 from 5.56% for the three months ended September 30, 2018. For the three months ended September 30, 2019, our average interest-earning assets increased by $202.3 million, or 20%, compared to the three months ended September 30, 2018, and the average yield on our interest-earning assets increased by 48 basis points. In comparison, our average interest-bearing liabilities increased $117.0 million, or 16%, from the third quarter of 2018 to the third quarter of 2019, with the respective average rate increasing by 35 basis points.

Strong loan growth during the three months ended September 30, 2019 led to a provision for loan losses of $1.1 million, compared to $495 thousand during the three months ended September 30, 2018.  Net charge-offs for the third quarter of 2019 were $188 thousand, or 0.07% of average loans, annualized.  Net charge-offs for the third quarter of 2018 were $50 thousand, or 0.04% of average loans, annualized.

Noninterest income increased by $3.0 million, or 70% from $4.2 million for the three months ended September 30, 2018 to $7.2 million for the three months ended September 30, 2019, due to increased credit card fees and mortgage banking revenues.

Noninterest expense was $18.2 million and $13.9 million for the three months ended September 30, 2019 and 2018, respectively. The increase in noninterest expense was driven primarily by increases in salaries and benefits, which include commissions paid on mortgage originations, and to a lesser degree by increases in data processing expenses, advertising, and other operating expenses. Other operating expenses were also impacted by a $216 thousand credit to our FDIC assessment expense in the third quarter of 2019 as a result of the FDIC Deposit Insurance Fund exceeding 1.38% of insured deposits at June 30, 2019.

Operating Results - nine months ended September 30, 2019 compared to nine months ended September 30, 2018

Net interest income increased $6.5 million, or 15%, to $49.5 million for the nine months ended September 30, 2019 compared to the same period in 2018.  Net interest margin increased 7 basis points to 5.70% for the nine months ended September 30, 2019 from 5.63% for the nine months ended September 30, 2018. For the nine months ended September 30, 2019, our average interest-earning assets increased by $138.1 million, compared to the nine months ended September 30, 2018, and the average yield on our interest-earning assets increased by 37 basis points. In comparison, our average interest-bearing liabilities increased $63.0 million from the third quarter of 2018 to the third quarter of 2019, with the respective average rate increasing by 50 basis points.

During the nine months ended September 30, 2019, we recorded a provision for loan losses of $1.9 million, compared to $1.6 million during the nine months ended September 30, 2018.  Net charge-offs for the nine months ended September 30, 2019 were $369 thousand, or 0.05% of average loans, annualized.  Net charge-offs for the same period in 2018 were $781 thousand, or 0.11% of average loans, annualized.

Noninterest income increased by $4.6 million, or 36% from $12.7 million for the nine months ended September 30, 2018 to $17.2 million for the nine months ended September 30, 2019, due largely to increased mortgage banking revenue.

Noninterest expense was $48.8 million and $41.0 million for the nine months ended September 30, 2019 and 2018, respectively. The increase in noninterest expense was driven primarily by increases in salaries and benefits, which include commissions paid on mortgage originations, professional fees and other expenses.

Financial Condition

Total assets at September 30, 2019 were $1.3 billion, up 22% as compared to $1.1 billion at September 30, 2018. Gross loans, excluding mortgage loans held for sale, were $1.1 billion as of September 30, 2019, compared to $955.4 million at September 30, 2018, an increase of 19%.  Deposits were $1.1 billion at September 30, 2019, an increase of 22%, as compared to $911.1 million at September 30, 2018.

Our allowance for loan losses was $12.8 million, or 1.12% of loans, at September 30, 2019, which provided approximately 196% coverage of nonperforming loans at such date, compared to $10.9 million, or 1.14% of loans, and approximately 258% coverage of nonperforming loans at September 30, 2018.  Nonperforming assets were $6.7 million, or 0.51% of total assets, as of September 30, 2019. Comparatively, nonperforming assets were $4.5 million, or 0.42% of total assets, at September 30, 2018. Of the $6.7 million in total nonperforming assets as of September 30, 2019, nonperforming loans represented $6.5 million and other real estate owned totaled $149 thousand.  Included in nonperforming loans at September 30, 2019 are troubled debt restructurings of $465 thousand, and one borrower relationship totaling $2.1 million that is well secured, on which no impairment is expected.

Stockholders’ equity totaled $127.8 million as of September 30, 2019, compared to $106.7 million at September 30, 2018. The increase was due to increased earnings and the net underwriter overallotment purchase of $3.4 million in October 2018 following the Company's initial public offering on September 28, 2018.  Shares repurchased and retired for the third quarter of 2019 as part of the Company's stock repurchase program totaled 21,130 shares at a weighted average price of $12.44, for a total cost of $263 thousand including commissions.  As of September 30, 2019, the Bank's capital ratios continued to exceed the regulatory requirements for a “well-capitalized” institution.

Consolidated Statements of Income
(Unaudited)
             
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
(in thousands) 2019   2018   2019   2018
Interest income              
Loans, including fees $ 21,900     $ 16,955     $ 59,548     $ 49,455  
Investment securities available for sale 215     272     707     786  
Federal funds sold and other 239     220     706     649  
Total interest income 22,354     17,447     60,961     50,890  
Interest expense              
Deposits 3,449     2,616     9,887     6,876  
Borrowed funds 721     339     1,615     1,015  
Total interest expense 4,170     2,955     11,502     7,891  
Net interest income 18,184     14,492     49,459     42,999  
Provision for loan losses 1,071     495     1,869     1,640  
Net interest income after provision for loan losses 17,113     13,997     47,590     41,359  
Noninterest income              
Service charges on deposits 146     123     382     365  
Credit card fees 2,059     1,592     5,521     4,609  
Mortgage banking revenue 4,900     2,451     10,991     7,379  
Gain (loss) on sale of investment securities available for sale         26     (2 )
Other fees and charges 116     74     320     306  
Total noninterest income 7,221     4,240     17,240     12,657  
Noninterest expenses              
Salaries and employee benefits 9,238     6,571     24,136     19,083  
Occupancy and equipment 1,111     1,070     3,307     3,241  
Professional fees 724     520     1,952     1,365  
Data processing 4,193     3,636     11,222     10,858  
Advertising 584     358     1,557     1,113  
Loan processing 634     202     1,279     811  
Other real estate expenses, net 7     7     57     38  
Other operating 1,737     1,536     5,258     4,519  
Total noninterest expenses 18,228     13,900     48,768     41,028  
Income before income taxes 6,106     4,337     16,062     12,988  
Income tax expense 1,625     1,190     4,239     3,706  
Net income $ 4,481     $ 3,147     $ 11,823     $ 9,282  


Consolidated Balance Sheets (unaudited)    
(in thousands except share data) September 30,
 2019
  December 31,
2018
Assets      
Cash and due from banks $ 11,093     $ 10,431  
Interest bearing deposits at other financial institutions 40,521     22,007  
Federal funds sold 3,464     2,285  
Total cash and cash equivalents 55,078     34,723  
Investment securities available for sale 37,073     46,932  
Restricted investments 4,007     2,503  
Loans held for sale 68,982     18,526  
Loans receivable, net of allowance for loan losses of $12,808 and $11,308 at
September 30, 2019 and December 31, 2018, respectively
1,127,502     988,960  
Premises and equipment, net 6,667     2,975  
Accrued interest receivable 4,636     4,462  
Deferred income taxes 3,556     3,654  
Foreclosed real estate 149     142  
Prepaid income taxes 353     90  
Other assets 3,403     2,091  
Total assets $ 1,311,406     $ 1,105,058  
       
Liabilities      
Deposits      
Noninterest bearing $ 293,378     $ 242,259  
Interest bearing 819,066     712,981  
Total deposits 1,112,444     955,240  
Securities sold under agreements to repurchase     3,332  
Federal funds purchased     2,000  
Federal Home Loan Bank advances 35,556     2,000  
Other borrowed funds 15,416     15,393  
Accrued interest payable 2,113     1,565  
Other liabilities 18,048     10,964  
Total liabilities 1,183,577     990,494  
       
Stockholders' equity      
Preferred stock, $.01 par value; 1,000,000 shares authorized; no shares
issued or outstanding at September 30, 2019 and December 31, 2018
     
Common stock, $.01 par value; 49,000,000 shares authorized; 13,782,538
and 13,672,479 issued and outstanding at September 30, 2019 and
December 31, 2018, respectively
138     137  
Additional paid-in capital 50,585     49,321  
Retained earnings 77,095     65,701  
Accumulated other comprehensive income (loss) 11     (595 )
Total stockholders' equity 127,829     114,564  
Total liabilities and stockholders' equity $ 1,311,406     $ 1,105,058  


The following table shows 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 Ended September 30,
  2019   2018
  Average
Outstanding 
Balance
  Interest
Income/
Expense
  Average 
Yield/ 
Rate(1)
  Average
Outstanding 
Balance
  Interest
Income/
Expense
  Average 
Yield/ 
Rate(1)
  (Dollars in thousands)
Assets                      
Interest earning assets:                      
Interest bearing deposits $ 35,723     $ 164     1.83 %   $ 42,734     $ 176     1.63 %
Federal funds sold 1,325     7     2.12 %   1,354     6     1.76 %
Investment securities available for sale 38,389     215     2.22 %   49,159     272     2.20 %
Restricted stock 5,629     68     4.77 %   2,604     38     5.79 %
 Loans held for sale 56,301     896     6.31 %   18,671     412     8.75 %
Loans(2) (3) 1,099,191     21,004     7.58 %   919,759     16,543     7.14 %
Total interest earning assets 1,236,558     22,354     7.17 %   1,034,281     17,447     6.69 %
Noninterest earning assets 15,908             11,924          
Total assets $ 1,252,466             $ 1,046,205          
Liabilities and Stockholders’ Equity                      
Interest bearing liabilities:                      
Interest bearing demand accounts $ 116,820     191     0.65 %   $ 74,854     55     0.29 %
Savings 3,913     3     0.35 %   4,062     4     0.39 %
Money market accounts 339,751     1,484     1.73 %   270,697     972     1.42 %
Time deposits 286,605     1,771     2.45 %   338,005     1,585     1.86 %
Borrowed funds 89,746     721     3.19 %   32,248     339     4.17 %
Total interest bearing liabilities 836,835     4,170     1.98 %   719,866     2,955     1.63 %
Noninterest bearing liabilities:                      
Noninterest bearing liabilities 17,163             10,250          
Noninterest bearing deposits 271,851             224,877          
Stockholders’ equity 126,617             91,212          
Total liabilities and stockholders’ equity $ 1,252,466             $ 1,046,205          
                       
Net interest spread(4)         5.19 %           5.06 %
Net interest income     $ 18,184             $ 14,492      
Net interest margin(5)         5.83 %           5.56 %
Net interest margin excluding credit cards         4.37 %           4.26 %

_______________
(1)       Annualized.
(2)       Includes nonaccrual loans.
(3)       Interest income includes amortization of deferred loan fees, net of deferred loan costs.
(4)       Net interest spread is the difference between interest rates earned on interest earning assets and interest rates paid on interest bearing liabilities.
(5)       Net interest margin is a ratio calculated as annualized net interest income divided by average interest earning assets for the same period.


  Nine Months Ended September 30, 2019
  2019   2018
  Average
Outstanding 
Balance
  Interest
Income/
Expense
  Average 
Yield/ 
Rate(1)
  Average
Outstanding 
Balance
  Interest
Income/
Expense
  Average 
Yield/ 
Rate(1)
  (Dollars in thousands)
Assets                      
Interest earning assets:                      
Interest bearing deposits $ 35,164     $ 518     1.97 %   $ 44,525     $ 526     1.58 %
Federal funds sold 1,685     28     2.23 %   1,546     18     1.56 %
Investment securities available for sale 42,281     707     2.24 %   50,987     786     2.06 %
Restricted stock 4,276     160     4.99 %   2,554     105     5.50 %
Loans held for sale 35,229     1,928     7.32 %   18,047     1,182     8.76 %
Loans(2) (3) 1,041,364     57,620     7.40 %   904,279     48,273     7.14 %
Total interest earning assets 1,159,999     60,961     7.03 %   1,021,938     50,890     6.66 %
Noninterest earning assets 15,115             10,419          
Total assets $ 1,175,114             $ 1,032,357          
Liabilities and Stockholders’ Equity                      
Interest bearing liabilities:                      
Interest bearing demand accounts $ 97,325     387     0.53 %   $ 73,129     154     0.28 %
Savings 3,613     9     0.35 %   3,690     8     0.29 %
Money market accounts 330,086     4,203     1.70 %   286,349     2,678     1.25 %
Time deposits 294,693     5,288     2.40 %   328,139     4,036     1.64 %
Borrowed funds 59,816     1,615     3.61 %   31,233     1,015     4.34 %
Total interest bearing liabilities 785,533     11,502     1.96 %   722,540     7,891     1.46 %
Noninterest bearing liabilities:                      
Noninterest bearing liabilities 14,971             9,765          
Noninterest bearing deposits 252,353             215,133          
Stockholders’ equity 122,257             84,919          
Total liabilities and stockholders’ equity $ 1,175,114             $ 1,032,357          
                       
Net interest spread(4)         5.07 %           5.20 %
Net interest income     $ 49,459             $ 42,999      
Net interest margin(5)         5.70 %           5.63 %
Net interest margin excluding credit cards         4.35 %           4.27 %

_______________
(1)       Annualized.
(2)       Includes nonaccrual loans.
(3)       Interest income includes amortization of deferred loan fees, net of deferred loan costs.
(4)       Net interest spread is the difference between interest rates earned on interest earning assets and interest rates paid on interest bearing liabilities.
(5)       Net interest margin is a ratio calculated as annualized net interest income divided by average interest earning assets for the same period.


HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited        
    Quarter Ended
(Dollars in thousands except per share data)   September 30,
 2019
  June 30,
2019
  March 31,
2019
  December 31,
2018
  September 30,
2018
Earnings:                    
Net income   $ 4,481     $ 4,023     $ 3,319     $ 3,486     $ 3,147  
Earnings per common share, diluted(1) (2)   0.32     0.29     0.24     0.25     0.26  
Net interest margin   5.83 %   5.79 %   5.46 %   5.46 %   5.56 %
Net interest margin, excluding credit cards   4.37 %   4.37 %   4.30 %   4.28 %   4.26 %
Return on average assets(1)   1.42 %   1.39 %   1.22 %   1.27 %   1.19 %
Return on average equity(1)   14.04 %   13.23 %   11.39 %   12.26 %   13.69 %
Efficiency ratio   71.75 %   72.18 %   76.08 %   71.34 %   74.20 %
Balance Sheet:                    
Loans(3)   $ 1,140,310     $ 1,056,290     $ 1,007,928     $ 1,000,268     $ 955,412  
Deposits   1,112,444     1,037,004     967,722     955,240     911,116  
Total assets   1,311,407     1,234,157     1,123,752     1,105,058     1,072,905  
Asset Quality Ratios:                    
Nonperforming assets to total assets   0.51 %   0.57 %   0.63 %   0.44 %   0.42 %
Nonperforming loans to total loans   0.57 %   0.65 %   0.69 %   0.47 %   0.44 %
Net charge-offs to average loans (YTD annualized)   0.05 %   0.04 %   0.03 %   0.09 %   0.11 %
Allowance for loan losses to total loans   1.12 %   1.13 %   1.13 %   1.13 %   1.14 %
Allowance for loan losses to non-performing loans   195.76 %   174.05 %   162.52 %   241.72 %   257.83 %
Bank Capital Ratios:                    
Total risk based capital ratio   11.44 %   11.91 %   12.23 %   12.25 %   12.36 %
Tier 1 risk based capital ratio   10.19 %   10.65 %   10.98 %   11.00 %   11.11 %
Leverage ratio   8.60 %   8.91 %   9.05 %   9.06 %   9.01 %
Common equity Tier 1 ratio   10.19 %   10.65 %   10.98 %   11.00 %   11.11 %
Tangible common equity   8.21 %   8.40 %   8.93 %   8.89 %   8.72 %
Composition of Loans:                    
Residential real estate   $ 443,961     $ 426,887     $ 421,346     $ 407,844     $ 388,141  
Commercial real estate   339,448     297,891     277,905     278,691     276,726  
Construction real estate   182,224     169,225     157,338     157,586     144,012  
Commercial and industrial   132,935     124,436     120,191     122,264     113,473  
Credit card   44,058     40,141     32,359     34,673     33,821  
Other   1,148     1,015     1,195     1,202     1,270  
Composition of Deposits:                    
Non interest bearing   $ 293,378     $ 279,484     $ 262,235     $ 242,259     $ 234,094  
Interest bearing demand   186,422     129,199     85,969     85,747     66,170  
Savings   3,994     3,572     3,595     2,866     4,597  
Money Markets   313,131     347,701     320,114     288,897     275,832  
Time Deposits   315,520     277,048     295,809     335,471     330,423  
Capital Bank Home Loan Metrics:                
Origination of loans held for sale   $ 197,754     $ 134,409     $ 74,128     $ 70,826     $ 81,665  
Proceeds from loans held for sale, net of gains   171,880     105,418     71,693     73,883     81,029  
Gain on sale of loans   4,900     3,715     2,375     2,097     2,451  
Purchase volume as a % of originations   44.02 %   79.07 %   78.42 %   86.72 %   92.72 %
Gain on sale as a % of loans sold(4)   2.77 %   3.40 %   3.21 %   2.76 %   2.94 %
OpenSky Credit Card Portfolio Metrics:                
Total active customer accounts   221,913     211,408     187,423     169,981     170,160  
Total loans   $ 44,058     $ 40,141     $ 32,359     $ 34,673     $ 33,821  
Total deposits at the Bank   $ 77,689     $ 73,666     $ 65,808     $ 59,954     $ 59,978  

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(1)         Annualized.
(2)         Gives effect to a four-for-one common stock split completed effective August 15, 2018.
(3)         Loans are reflected net of deferred fees and costs.
(4)         Gain on sale percentage is calculated as gain on sale of loans divided by the sum of gain on sale of loans and proceeds from loans held for sale, net of gains.

ABOUT CAPITAL BANCORP, INC.

Capital Bancorp, Inc., Rockville, Maryland is a registered bank holding company incorporated under the laws of Maryland. The Company’s wholly-owned subsidiary, Capital Bank, N.A., is the eighth largest bank headquartered in Maryland. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in five locations in the greater Washington, D.C. and Baltimore, Maryland markets.  Capital Bancorp had assets of approximately $1.3 billion at September 30, 2019 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,” “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. Such factors include, without limitation, those listed from time to time in reports that the Company files with the Securities and Exchange Commission. 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: Alan Jackson (240) 283-0402

MEDIA CONTACT: Ed Barry (240) 283-1912

WEB SITE: www.CapitalBankMD.com

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