Capital Bancorp, Inc. Reports Third Quarter 2023 Net Income of $9.8 million, or $0.70 per share
Net Income Expands 33.8% with Improved Net Interest Margin from 2Q 2023
Diluted EPS of $0.70, ROAA of 1.75%, and ROAE of 16.00% for 3Q 2023
Loan and Deposit Growth Generates Positive Operating Leverage
Tangible Book Value Per Share(1) of $17.48 for 3Q 2023 up 15% from 3Q 2022
Cash dividend of $0.08 per share declared
ROCKVILLE, Md., Oct. 23, 2023 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $9.8 million, or $0.70 per diluted share, for the third quarter 2023, compared to net income of $7.3 million, or $0.52 per diluted share, for the second quarter 2023 and $11.1 million, or $0.77 per diluted share, for the third quarter 2022. For the quarter, total average deposits increased $37.1 million and the average loan portfolio grew $42.9 million. In addition, the net interest margin of 6.71% for the third quarter 2023 improved when compared to 6.63% for the second quarter 2023. Adjusted net interest margin(1) (excluding credit card and SBA-PPP loans) of 4.05% for the third quarter 2023 remained stable when compared to adjusted net interest margin(1) of 4.06% for the second quarter 2023.
The Company also declared a cash dividend on its common stock of $0.08 per share. The dividend is payable on November 22, 2023 to shareholders of record on November 6, 2023.
"Our business model is proving to be stable and resilient against a challenging backdrop," said Ed Barry, Chief Executive Officer of the Company and the Bank. "Our focus on core deposit relationships and differentiated lending has enabled profitable growth. We continue to make investments in technology, people, and asset generation that should further strengthen our franchise. Credit remains stable and we maintained high capital levels allowing us to be opportunistic moving forward."
“The Board is pleased with our improved quarter over quarter performance,” said Steven J. Schwartz, Chairman of the Company. "Our continued, stable net interest margin, coupled with growth in loans and deposits, enabled our ROAA and ROE to bounce back nicely and positions the Bank for continued best-in-class performance. In addition, we are gratified by our year-over-year growth in tangible book value per share, particularly considering the challenges facing banks today due to a rapidly changing interest rate environment, and falling values of certain real estate asset classes.”
(1) Reconciliations of the non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth in the Appendix at the end of this press release.
Third Quarter 2023 Highlights
Capital Bancorp, Inc.
Earnings Summary - Net income of $9.8 million, or $0.70 per diluted share, increased $2.5 million compared to $7.3 million, or $0.52 per diluted share, for the second quarter 2023.
Net interest income of $36.8 million increased $1.5 million compared to $35.3 million for the second quarter 2023. Interest income of $47.7 million increased $2.7 million compared to $45.1 million for the second quarter 2023. Interest expense of $10.9 million increased $1.2 million compared to $9.7 million for the second quarter 2023.
The provision for credit losses was $2.3 million, a decrease of $0.6 million from the second quarter 2023. The change in provision was partially due to lower loan growth of $24.9 million from June 30, 2023 to September 30, 2023 as compared to loan growth of $50.9 million from March 31, 2023 to June 30, 2023.
Noninterest income of $6.3 million decreased $0.4 million compared to $6.7 million for the second quarter 2023. Credit card fees decreased $0.3 million partially due to interchange fees from lower customer purchases as the number of open customer accounts decreased quarter over quarter.
Noninterest expense of $28.0 million decreased $1.5 million compared to $29.6 million for the second quarter 2023 including total advertising expense of $1.6 million decreasing $1.1 million off of seasonally higher second quarter levels.
Performance and Efficiency Ratios – Annualized return on average assets ("ROAA") and annualized return on average equity ("ROAE") were 1.75% and 16.00%, respectively, for the three months ended September 30, 2023, compared to 1.34% and 12.30%, respectively, for the three months ended June 30, 2023.
The efficiency ratio was 65.0% for the three months ended September 30, 2023, compared to 70.4% for the three months ended June 30, 2023. The change was primarily attributable to a $1.5 million increase in net interest income and a $1.5 million reduction in noninterest expense quarter over quarter.
Balance Sheet – Total assets of $2.3 billion at September 30, 2023 increased $44.6 million, or 2.0%, from June 30, 2023.
Cash and cash equivalents increased $26.8 million.
Net portfolio loans of $1.9 billion increased $24.9 million, representing 5.4% annualized growth.
Total deposits of $2.0 billion at September 30, 2023 increased $33.6 million, or 1.7%, from June 30, 2023, while total average deposits increased $37.1 million, or 7.8% annualized, quarter over quarter.
The investment securities portfolio continues to be classified as available for sale and had a fair market value of $206.1 million, or 9.1% of total assets, at September 30, 2023 down slightly from $208.5 million at June 30, 2023. The amortized cost of the investment securities portfolio was $229.4 million, with an effective duration of 3.21 years. U.S. Treasury securities represent 74.8% of the overall investment portfolio. The accumulated other comprehensive loss ("AOCI Loss") on the investment securities portfolio increased $1.8 million during the quarter to $17.8 million as of September 30, 2023, which represents 7.3% of total stockholders' equity. The Company does not have a held to maturity ("HTM") investment securities portfolio.
Net Interest Margin - Net interest margin improved to 6.71% for the three months ended September 30, 2023, compared to 6.63% for the three months ended June 30, 2023. Adjusted net interest margin (excluding credit card and SBA-PPP loans), of 4.05%, remained stable compared to 4.06% for the three months ended June 30, 2023.
The average yield on interest earning assets increased 24 basis points compared to the second quarter 2023. The increase in average yield is due to portfolio loans increasing 17 basis points to 9.72%, and interest-bearing deposits held at other institutions increased 96 basis points to 5.39%. Average portfolio loans increased $46.1 million and average interest-bearing deposits held at other institutions increased $20.7 million, compared to the second quarter 2023.
The average rate on interest-bearing liabilities increased 24 basis points compared to the second quarter 2023. Increases in average rates include money market accounts increasing 38 basis points to 3.85% and time deposits increasing 21 basis points to 4.51%, while average balances increased $30.5 million and $8.0 million, respectively, compared to the second quarter 2023. The average rate on borrowed funds decreased 48 basis points to 2.59%, as a result of a reduction in average short-term FHLB advances of $8.3 million to $0.9 million in the third quarter 2023 from $9.1 million in the second quarter 2023.
Deposits and Cost of Funds - Total deposits at September 30, 2023 increased by $33.6 million, or 1.7%, compared to June 30, 2023.
Interest-bearing deposits of $1.3 billion increased $46.0 million, or 3.7%, compared to June 30, 2023 with growth in money market accounts of $37.6 million, other time deposits of $22.5 million and a reduction in interest-bearing demand accounts of $14.1 million. Noninterest-bearing deposits of $680.8 million decreased $12.3 million, or 1.8%, compared to June 30, 2023. Brokered time deposits totaled $128.7 million at September 30, 2023, unchanged from June 30, 2023.
The elevated interest rate environment has driven up the average cost of interest-bearing liabilities to 3.37% for the quarter ended September 30, 2023, compared to 3.13% for the second quarter 2023.
Average noninterest-bearing deposits of $666.9 million decreased $9.4 million, or 1.4%, compared to June 30, 2023, and represented 34.8% of total average deposits at September 30, 2023.
Average borrowed funds of $34.9 million decreased $8.3 million, or 19.1%, compared to June 30, 2023.
Robust Capital Positions - As of September 30, 2023, the Company reported a common equity tier 1 capital ratio of 15.71%, compared to 14.96% at June 30, 2023, and an allowance for credit losses to total loans ratio of 1.52%, compared to an allowance for credit losses to total loans ratio of 1.50% as June 30, 2023. Management expects the Company to remain well-capitalized for the foreseeable future. Shares repurchased and retired during the three months ended September 30, 2023, as part of the Company's stock repurchase program, totaled 100,575 shares at an average price of $19.47, for a total cost of $2.0 million including commissions. Tangible book value per common share grew 2.9% to $17.48 at September 30, 2023 when compared to June 30, 2023. The company did not have goodwill or other intangible assets during any of the periods presented and therefore, tangible book value per share is equal to book value per share.
Liquidity - Total sources of available borrowings at September 30, 2023 totaled $646.6 million, including available collateralized lines of credit of $514.5 million, unsecured lines of credit with other banks of $76.0 million and unpledged investment securities available as collateral for potential additional borrowings of $56.1 million.
Commercial Bank
Continued Portfolio Loan Growth - Portfolio loans, excluding credit cards, increased by $29.9 million, to $1.7 billion, gross, at September 30, 2023 compared to June 30, 2023.
Net Interest Income - Interest income of $30.4 million increased $1.7 million compared to $28.7 million for the second quarter 2023 driven primarily by loan growth. Interest expense of $10.7 million increased $1.2 million driven by an increase in average interest-bearing deposits with slightly higher rates in the third quarter 2023.
Credit Metrics - Nonperforming assets ("NPAs") decreased 4 basis points to 0.67% of total assets at September 30, 2023 compared to 0.71% at June 30, 2023 as a result of a decrease in nonaccrual loans at September 30, 2023 to $15.2 million compared to $15.7 million at June 30, 2023. Included in nonperforming assets is a single $8.2 million, multi-unit residential real estate loan that was downgraded in the first quarter of 2023. At September 30, 2023 commercial real estate loans with office space exposure totaled $55.4 million, or 3.0% of total portfolio loans, with a weighted average loan-to-value ("LTV") of 48.2%. Owner-occupied commercial real estate loans with office exposure totaled $42.5 million with a weighted average LTV of 47.8% and non owner-occupied commercial real estate loans with office exposure totaled $12.8 million with a weighted average LTV of 49.8%.
OpenSky®
Revenues - Total revenue of $20.5 million increased $0.7 million from the second quarter 2023. Interest income of $16.1 million increased $1.0 million from the second quarter 2023. Average OpenSky® loan balances, net of reserves and deferred fees of $116.8 million for the third quarter 2023, increased $6.2 million, or 5.6%, compared to $110.6 million for the second quarter 2023. Noninterest income of $4.4 million decreased $0.3 million due to a decline in credit card fees as compared to the second quarter 2023.
Noninterest Expense - Total noninterest expense of $10.6 million decreased $1.4 million from the second quarter 2023. Noninterest expense declined in the third quarter off of higher seasonal second quarter levels driven primarily by higher advertising expense. Advertising expense can vary throughout the year based on market opportunities for new account acquisition. During the third quarter 2023, the number of OpenSky® credit card accounts declined by 10,853 to 529,205.
Loan Balances - OpenSky® loan balances, net of reserves, of $122.5 million at September 30, 2023 decreased by $0.4 million, or 0.3%, compared to $122.9 million at June 30, 2023. Corresponding deposit balances of $181.2 million at September 30, 2023 decreased $5.4 million, or 2.9%, compared to $186.6 million at June 30, 2023. Gross unsecured loan balances of $27.4 million at September 30, 2023 increased $2.2 million compared to $25.3 million at June 30, 2023.
OpenSky® Credit - Card delinquencies and utilization remained stable in the third quarter 2023 when compared to the second quarter 2023. The provision for credit losses decreased $0.3 million compared to the second quarter 2023 as card balances, net of reserve decreased $0.4 million during the third quarter 2023 as compared to an increase of $10.1 million during the second quarter 2022.
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COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited | |||||||||||||||||||||||||
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| Quarter Ended |
| 3Q23 vs 2Q23 |
| 3Q23 vs 3Q22 | ||||||||||||||||||||
(in thousands except per share data) | September 30, 2023 |
| June 30, 2023 |
| September 30, 2022 |
| $ Change |
| % Change |
| $ Change |
| % Change | ||||||||||||
Earnings Summary |
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Interest income | $ | 47,741 |
|
| $ | 45,080 |
|
| $ | 38,340 |
|
| $ | 2,661 |
|
| 5.9 | % |
| $ | 9,401 |
|
| 24.5 | % |
Interest expense |
| 10,931 |
|
|
| 9,740 |
|
|
| 1,663 |
|
|
| 1,191 |
|
| 12.2 | % |
|
| 9,268 |
|
| 557.3 | % |
Net interest income |
| 36,810 |
|
|
| 35,340 |
|
|
| 36,677 |
|
|
| 1,470 |
|
| 4.2 | % |
|
| 133 |
|
| 0.4 | % |
Provision for credit losses |
| 2,280 |
|
|
| 2,862 |
|
|
| 1,260 |
|
|
| (582 | ) |
| (20.3 | )% |
|
| 1,020 |
|
| 81.0 | % |
Provision for credit losses on unfunded commitments |
| 24 |
|
|
| — |
|
|
| — |
|
|
| 24 |
|
| — | % |
|
| 24 |
|
| — | % |
Noninterest income |
| 6,326 |
|
|
| 6,687 |
|
|
| 7,108 |
|
|
| (361 | ) |
| (5.4 | )% |
|
| (782 | ) |
| (11.0 | )% |
Noninterest expense |
| 28,046 |
|
|
| 29,592 |
|
|
| 28,094 |
|
|
| (1,546 | ) |
| (5.2 | )% |
|
| (48 | ) |
| (0.2 | )% |
Income before income taxes |
| 12,786 |
|
|
| 9,573 |
|
|
| 14,431 |
|
|
| 3,213 |
|
| 33.6 | % |
|
| (1,645 | ) |
| (11.4 | )% |
Income tax expense |
| 2,998 |
|
|
| 2,255 |
|
|
| 3,336 |
|
|
| 743 |
|
| 32.9 | % |
|
| (338 | ) |
| (10.1 | )% |
Net income | $ | 9,788 |
|
| $ | 7,318 |
|
| $ | 11,095 |
|
| $ | 2,470 |
|
| 33.8 | % |
| $ | (1,307 | ) |
| (11.8 | )% |
|
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Pre-tax pre-provision net revenue ("PPNR")(1) | $ | 15,090 |
|
| $ | 12,435 |
|
| $ | 15,691 |
|
| $ | 2,655 |
|
| 21.4 | % |
| $ | (601 | ) |
| (3.8 | )% |
Weighted average common shares - Basic |
| 13,933 |
|
|
| 14,025 |
|
|
| 14,030 |
|
|
| (92 | ) |
| (0.7 | )% |
|
| (97 | ) |
| (0.7 | )% |
Weighted average common shares - Diluted |
| 14,024 |
|
|
| 14,059 |
|
|
| 14,375 |
|
|
| (35 | ) |
| (0.2 | )% |
|
| (351 | ) |
| (2.4 | )% |
Earnings per share - Basic | $ | 0.70 |
|
| $ | 0.52 |
|
| $ | 0.79 |
|
| $ | 0.18 |
|
| 34.6 | % |
| $ | (0.09 | ) |
| (11.4 | )% |
Earnings per share - Diluted | $ | 0.70 |
|
| $ | 0.52 |
|
| $ | 0.77 |
|
| $ | 0.18 |
|
| 34.6 | % |
| $ | (0.07 | ) |
| (9.1 | )% |
Return on average assets (annualized) |
| 1.75 | % |
|
| 1.34 | % |
|
| 2.15 | % |
|
| 0.41 | % |
| 30.6 | % |
| (0.40 | )% |
| (18.6 | )% | |
Return on average assets, excluding impact of SBA-PPP loans (annualized)(1) |
| 1.75 | % |
|
| 1.34 | % |
|
| 2.10 | % |
|
| 0.41 | % |
| 30.6 | % |
| (0.35 | )% |
| (16.7 | )% | |
Return on average equity (annualized) |
| 16.00 | % |
|
| 12.30 | % |
|
| 20.32 | % |
|
| 3.70 | % |
| 30.1 | % |
| (4.32 | )% |
| (21.3 | )% | |
______________
(1) Refer to Appendix for reconciliation of non-GAAP measures
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COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued) | |||||||||||||||
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| Nine Months Ended |
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|
| September 30, |
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(in thousands except per share data) |
| 2023 |
| 2022 |
| $ Change |
| % Change | |||||||
Earnings Summary |
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Interest income |
| $ | 136,237 |
|
| $ | 109,298 |
|
| $ | 26,939 |
|
| 24.6 | % |
Interest expense |
|
| 29,600 |
|
|
| 3,890 |
|
|
| 25,710 |
|
| 660.9 | % |
Net interest income |
|
| 106,637 |
|
|
| 105,408 |
|
|
| 1,229 |
|
| 1.2 | % |
Provision for credit losses |
|
| 6,802 |
|
|
| 4,247 |
|
|
| 2,555 |
|
| 60.2 | % |
Provision for credit losses on unfunded commitments |
|
| 5 |
|
|
| — |
|
|
| 5 |
|
| — | % |
Noninterest income |
|
| 19,039 |
|
|
| 23,811 |
|
|
| (4,772 | ) |
| (20.0 | )% |
Noninterest expense |
|
| 83,860 |
|
|
| 82,379 |
|
|
| 1,481 |
|
| 1.8 | % |
Income before income taxes |
|
| 35,009 |
|
|
| 42,593 |
|
|
| (7,584 | ) |
| (17.8 | )% |
Income tax expense |
|
| 8,168 |
|
|
| 9,779 |
|
|
| (1,611 | ) |
| (16.5 | )% |
Net income |
| $ | 26,841 |
|
| $ | 32,814 |
|
| $ | (5,973 | ) |
| (18.2 | )% |
|
|
|
|
|
|
|
|
| |||||||
Pre-tax pre-provision net revenue ("PPNR")(1) |
| $ | 41,816 |
|
| $ | 46,840 |
|
| $ | (5,024 | ) |
| (10.7 | )% |
Weighted average common shares - Basic |
|
| 14,038 |
|
|
| 14,009 |
|
|
| 29 |
|
| 0.2 | % |
Weighted average common shares - Diluted |
|
| 14,112 |
|
|
| 14,329 |
|
|
| (217 | ) |
| (1.5 | )% |
Earnings per share - Basic |
| $ | 1.91 |
|
| $ | 2.34 |
|
| $ | (0.43 | ) |
| (18.4 | )% |
Earnings per share - Diluted |
| $ | 1.90 |
|
| $ | 2.29 |
|
| $ | (0.39 | ) |
| (17.0 | )% |
Return on average assets (annualized) |
|
| 1.64 | % |
|
| 2.13 | % |
| (0.49 | )% |
| (23.0 | )% | |
Return on average assets, excluding impact of SBA-PPP loans (annualized)(1) |
|
| 1.64 | % |
|
| 1.94 | % |
| (0.30 | )% |
| (15.5 | )% | |
Return on average equity (annualized) |
|
| 15.08 | % |
|
| 20.93 | % |
| (5.85 | )% |
| (28.0 | )% | |
|
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|
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| Quarter Ended |
|
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|
| Quarter Ended | ||||||||||||||||
| September 30, |
|
|
|
| June 30, |
| March 31, |
| December 31, | ||||||||||||
(in thousands except per share data) | 2023 |
| 2022 |
| % Change |
| 2023 |
| 2023 |
| 2022 | |||||||||||
Balance Sheet Highlights |
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Assets | $ | 2,272,484 |
|
| $ | 2,009,358 |
|
| 13.1 | % |
| $ | 2,227,866 |
|
| $ | 2,245,286 |
|
| $ | 2,123,655 |
|
Investment securities available for sale |
| 206,055 |
|
|
| 269,620 |
|
| (23.6 | )% |
|
| 208,464 |
|
|
| 255,762 |
|
|
| 252,481 |
|
Mortgage loans held for sale |
| 4,843 |
|
|
| 6,875 |
|
| (29.6 | )% |
|
| 10,146 |
|
|
| 9,620 |
|
|
| 7,416 |
|
SBA-PPP loans, net of fees |
| 750 |
|
|
| 2,662 |
|
| (71.8 | )% |
|
| 1,090 |
|
|
| 2,037 |
|
|
| 2,163 |
|
Portfolio loans receivable(2) |
| 1,861,929 |
|
|
| 1,648,001 |
|
| 13.0 | % |
|
| 1,837,041 |
|
|
| 1,786,109 |
|
|
| 1,728,592 |
|
Allowance for credit losses |
| 28,279 |
|
|
| 26,091 |
|
| 8.4 | % |
|
| 27,495 |
|
|
| 26,216 |
|
|
| 26,385 |
|
Deposits |
| 1,967,988 |
|
|
| 1,737,591 |
|
| 13.3 | % |
|
| 1,934,361 |
|
|
| 1,944,374 |
|
|
| 1,758,072 |
|
FHLB borrowings |
| 22,000 |
|
|
| 22,000 |
|
| — | % |
|
| 22,000 |
|
|
| 32,000 |
|
|
| 107,000 |
|
Other borrowed funds |
| 12,062 |
|
|
| 12,062 |
|
| — | % |
|
| 12,062 |
|
|
| 12,062 |
|
|
| 12,062 |
|
Total stockholders' equity |
| 242,878 |
|
|
| 214,005 |
|
| 13.5 | % |
|
| 237,435 |
|
|
| 234,517 |
|
|
| 224,015 |
|
Tangible common equity(1) |
| 242,878 |
|
|
| 214,005 |
|
| 13.5 | % |
|
| 237,435 |
|
|
| 234,517 |
|
|
| 224,015 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Common shares outstanding |
| 13,896 |
|
|
| 14,039 |
|
| (1.0 | )% |
|
| 13,981 |
|
|
| 14,083 |
|
|
| 14,139 |
|
Book value per share | $ | 17.48 |
|
| $ | 15.24 |
|
| 14.7 | % |
| $ | 16.98 |
|
| $ | 16.65 |
|
| $ | 15.84 |
|
Tangible book value per share(1) | $ | 17.48 |
|
| $ | 15.24 |
|
| 14.7 | % |
| $ | 16.98 |
|
| $ | 16.65 |
|
| $ | 15.84 |
|
Dividends per share | $ | 0.08 |
|
| $ | 0.06 |
|
| 33.3 | % |
| $ | 0.06 |
|
| $ | 0.06 |
|
| $ | 0.06 |
|
______________
(1) Refer to Appendix for reconciliation of non-GAAP measures.
(2) Loans are reflected net of deferred fees and costs.
Operating Results - Comparison of Three Months Ended September 30, 2023 and 2022
For the three months ended September 30, 2023, net interest income of $36.8 million increased slightly from $36.7 million in the same period in 2022, primarily due to increased average balances of $245.3 million in portfolio loans combined with a 78 basis point increase in yield for portfolio loans partially offset by significant increases in the cost of funding. The net interest margin decreased 53 basis points to 6.71% for the three months ended September 30, 2023, from the same period in 2022 as interest income on credit cards decreased $1.0 million and interest income on SBA-PPP totaled $0.3 million for the three months ended September 30, 2022 with no comparable amount in 2023. Net interest margin, excluding credit card and SBA-PPP loans, decreased to 4.05% for the three months ended September 30, 2023, compared to 4.16% for the same period in 2022 as the costs of deposits, including money market accounts and time deposits, outpaced the increases in yields on interest-bearing deposits and portfolio loans.
For the three months ended September 30, 2023, average interest earning assets increased $166.4 million, or 8.3%, to $2.2 billion as compared to the same period in 2022, and the average yield on interest earning assets increased 113 basis points. Compared to the same period in the prior year, average interest-bearing liabilities increased $280.9 million, or 27.9%, and the average cost of interest-bearing liabilities increased to 3.37%, a 271 basis point increase from 0.66%.
For the three months ended September 30, 2023, the provision for credit losses was $2.3 million, an increase of $1.0 million from the same period in 2022. Net charge-offs for the three months ended September 30, 2023 were $1.8 million, or 0.38% on an annualized basis of average portfolio loans, compared to $1.6 million, or 0.39% on an annualized basis of average loans for the same period in 2022. Of the $1.8 million in net charge-offs during the quarter, $1.4 million related to secured and partially secured cards in the credit card portfolio and $0.3 million related to unsecured cards.
For the three months ended September 30, 2023, noninterest income of $6.3 million decreased $0.8 million, or 11.0%, from the same period in 2022. Credit card fees declined by $1.1 million as the number of open customer accounts declined year over year, which resulted in lower interchange and other fee income.
Credit card loan balances, net of reserves, decreased by $14.1 million to $122.5 million as of September 30, 2023, from $136.7 million at September 30, 2022. The related deposit account balances decreased 10.0% to $181.2 million at September 30, 2023 when compared to $201.3 million at September 30, 2022 reflecting the reduction in the number of open customer accounts year over year.
The efficiency ratio for the three months ended September 30, 2023 was 65.02% compared to 64.16% for the three months ended September 30, 2022.
For the three months ended September 30, 2023, noninterest expense of $28.0 million decreased slightly from $28.1 million for the same period in 2022. The change includes decreases in professional fees of $1.5 million and data processing expense of $0.8 million partially offset by increases in salaries and employee benefits of $1.7 million and other operating expense of $0.5 million.
Operating Results - Comparison of Nine Months Ended September 30, 2023 and 2022
For the nine months ended September 30, 2023, net interest income of $106.6 million increased $1.2 million from the same period in 2022, primarily due to increased average balances of $252.4 million in portfolio loans combined with the 81 basis point increase in yield for portfolio loans offset by significant increases in the cost of funding. The net interest margin decreased 35 basis points to 6.66% for the nine months ended September 30, 2023 from the same period in 2022. Net interest margin, excluding credit card and SBA-PPP loans, was 3.98% for the nine months ended September 30, 2023, compared to 3.94% for the same period in 2022.
For the nine months ended September 30, 2023, average interest earning assets increased $129.2 million, or 6.4%, to $2.1 billion as compared to the same period in 2022, and the average yield on interest earning assets increased 124 basis points. Compared to the same period in the prior year, average interest-bearing liabilities increased $229.8 million, or 22.4%, while the average cost of interest-bearing liabilities increased 264 basis points to 3.15% from 0.51%.
For the nine months ended September 30, 2023, the provision for credit losses was $6.8 million, an increase of $2.6 million from the prior year, attributable primarily to the credit card portfolio. Net charge-offs for the nine months ended September 30, 2023 were $6.0 million, or 0.45% annualized of average portfolio loans, compared to $1.7 million, or 0.23% annualized of average portfolio loans, for the same period in 2022. The $6.0 million in net charge-offs during the nine months ended September 30, 2023 was comprised primarily of credit card portfolio net charge-offs with $4.1 million related to secured and partially secured cards while $1.0 million was related to unsecured cards.
For the nine months ended September 30, 2023, noninterest income of $19.0 million decreased $4.8 million, or 20.0%, from the same period in 2022. The decrease was primarily driven by the decline in credit card fees of $4.4 million as the number of open customer accounts declined to 529,205 at September 30, 2023 from 576,844 year over year, which resulted in lower interchange and other fee income recognized compared to the prior year. The elevated interest rate environment continues to put pressure on the mortgage market, resulting in declines in home loan sales and home loan refinances, which has resulted in a $0.6 million decrease in mortgage banking revenue compared to the prior year.
The efficiency ratio for the nine months ended September 30, 2023 was 66.73% compared to 63.75% for the nine months ended September 30, 2022.
For the nine months ended September 30, 2023, noninterest expense of $83.9 million increased $1.5 million, or 1.8%, from the same period in 2022. The increase was primarily driven by a $6.0 million, or 19.2%, increase in salaries and employee benefits, partially offset by a $3.2 million, or 13.9%, decrease in data processing expense and a $1.2 million decrease in professional fees due to a reduction in third party consulting fees. The decrease in data processing expense was the result of a contract renegotiation entered into in the first quarter 2022 in the OpenSky® Division as well as fewer average open cards during the period.
Financial Condition
Total assets at September 30, 2023 were $2.3 billion, an increase of $44.6 million, or 2.0%, from the balance at June 30, 2023 and an increase of $263.1 million, or 13.1%, from the balance at September 30, 2022. Net portfolio loans, which exclude mortgage loans held for sale and SBA-PPP loans, totaled $1.9 billion at September 30, 2023, an increase of $24.9 million, up 1.4% or 5.4% annualized, compared to June 30, 2023, and an increase of $213.9 million, or 13.0%, compared to $1.6 billion at September 30, 2022.
The Company recorded a provision for credit losses of $6.8 million during the nine months ended September 30, 2023, which increased the allowance for credit losses to $28.3 million, or 1.52% of total loans at September 30, 2023, representing an increase of $0.8 million or 2.9%, from the balance at June 30, 2023. Nonperforming assets, which were comprised solely of nonperforming loans as of September 30, 2023, were $15.2 million, or 0.67% of total assets, down from $15.7 million, or 0.71% of total assets at June 30, 2023 and up from $8.6 million, or 0.43% of total assets at September 30, 2022. Included in nonperforming assets is a single $8.2 million, multi-unit residential real estate loan that was downgraded in the first quarter of 2023.
Deposits were $2.0 billion at September 30, 2023, an increase of $33.6 million, or 1.7%, from the balance at June 30, 2023 and an increase of $230.4 million, or 13.3%, from the balance at September 30, 2022. Average deposits of $1.9 billion for the three months ended September 30, 2023, increased $37.1 million, or 2.0%, as compared to the three months ended June 30, 2023. Rising interest rates have resulted in some customers moving balances from noninterest-bearing deposit accounts to interest-bearing deposit accounts. As a result of the migration, average noninterest-bearing deposit balances decreased $135.5 million to $666.9 million for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. These deposits represented 34.6% of total deposits at September 30, 2023 compared to 46.4% at September 30, 2022. Uninsured deposits were approximately $857.7 million as of September 30, 2023, representing 43.6% of the Company's deposit portfolio, compared to $860.4 million, or 44.5%, at June 30, 2023, and $960.2 million, or 55.3%, at September 30, 2022.
Stockholders’ equity increased to $242.9 million as of September 30, 2023, compared to $237.4 million at June 30, 2023 and $214.0 million at September 30, 2022. Shares repurchased and retired through September 30, 2023 as part of the Company's stock repurchase program totaled 385,919 shares at an average price of $18.12, for a total cost of $7.0 million including commissions. As of September 30, 2023, the Bank's capital ratios continued to exceed the regulatory requirements for a “well-capitalized” institution.
| |||||||||||||||||||||||||||
Consolidated Statements of Income (Unaudited) | |||||||||||||||||||||||||||
| Three Months Ended |
| Nine Months Ended | ||||||||||||||||||||||||
(in thousands) | September 30, 2023 |
| June 30, 2023 |
| March 31, 2023 |
| December 31, 2022 |
| September 30, 2022 |
| September 30, 2023 |
| September 30, 2022 | ||||||||||||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Loans, including fees | $ | 45,385 |
|
| $ | 42,991 |
|
| $ | 41,275 |
|
| $ | 38,763 |
|
| $ | 36,451 |
|
| $ | 129,651 |
|
| $ | 105,645 |
|
Investment securities available for sale |
| 1,089 |
|
|
| 1,266 |
|
|
| 1,377 |
|
|
| 1,402 |
|
|
| 1,362 |
|
|
| 3,732 |
|
|
| 2,510 |
|
Federal funds sold and other |
| 1,267 |
|
|
| 823 |
|
|
| 764 |
|
|
| 1,183 |
|
|
| 527 |
|
|
| 2,854 |
|
|
| 1,143 |
|
Total interest income |
| 47,741 |
|
|
| 45,080 |
|
|
| 43,416 |
|
|
| 41,348 |
|
|
| 38,340 |
|
|
| 136,237 |
|
|
| 109,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Deposits |
| 10,703 |
|
|
| 9,409 |
|
|
| 7,754 |
|
|
| 4,377 |
|
|
| 1,386 |
|
|
| 27,866 |
|
|
| 3,234 |
|
Borrowed funds |
| 228 |
|
|
| 331 |
|
|
| 1,175 |
|
|
| 1,772 |
|
|
| 277 |
|
|
| 1,734 |
|
|
| 656 |
|
Total interest expense |
| 10,931 |
|
|
| 9,740 |
|
|
| 8,929 |
|
|
| 6,149 |
|
|
| 1,663 |
|
|
| 29,600 |
|
|
| 3,890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Net interest income |
| 36,810 |
|
|
| 35,340 |
|
|
| 34,487 |
|
|
| 35,199 |
|
|
| 36,677 |
|
|
| 106,637 |
|
|
| 105,408 |
|
Provision for credit losses |
| 2,280 |
|
|
| 2,862 |
|
|
| 1,660 |
|
|
| 2,384 |
|
|
| 1,260 |
|
|
| 6,802 |
|
|
| 4,247 |
|
Provision for (release of) credit losses on unfunded commitments |
| 24 |
|
|
| — |
|
|
| (19 | ) |
|
| — |
|
|
| — |
|
|
| 5 |
|
|
| — |
|
Net interest income after provision for credit losses |
| 34,506 |
|
|
| 32,478 |
|
|
| 32,846 |
|
|
| 32,815 |
|
|
| 35,417 |
|
|
| 99,830 |
|
|
| 101,161 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Service charges on deposits |
| 250 |
|
|
| 245 |
|
|
| 229 |
|
|
| 222 |
|
|
| 199 |
|
|
| 724 |
|
|
| 545 |
|
Credit card fees |
| 4,387 |
|
|
| 4,706 |
|
|
| 4,210 |
|
|
| 4,314 |
|
|
| 5,524 |
|
|
| 13,303 |
|
|
| 17,658 |
|
Mortgage banking revenue |
| 1,243 |
|
|
| 1,332 |
|
|
| 1,155 |
|
|
| 554 |
|
|
| 969 |
|
|
| 3,730 |
|
|
| 4,312 |
|
Other income |
| 446 |
|
|
| 404 |
|
|
| 432 |
|
|
| 471 |
|
|
| 416 |
|
|
| 1,282 |
|
|
| 1,296 |
|
Total noninterest income |
| 6,326 |
|
|
| 6,687 |
|
|
| 6,026 |
|
|
| 5,561 |
|
|
| 7,108 |
|
|
| 19,039 |
|
|
| 23,811 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Noninterest expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Salaries and employee benefits |
| 12,419 |
|
|
| 12,143 |
|
|
| 12,554 |
|
|
| 11,769 |
|
|
| 10,747 |
|
|
| 37,116 |
|
|
| 31,129 |
|
Occupancy and equipment |
| 1,351 |
|
|
| 1,536 |
|
|
| 1,213 |
|
|
| 1,388 |
|
|
| 1,138 |
|
|
| 4,100 |
|
|
| 3,476 |
|
Professional fees |
| 2,358 |
|
|
| 2,608 |
|
|
| 2,374 |
|
|
| 2,426 |
|
|
| 3,848 |
|
|
| 7,340 |
|
|
| 8,586 |
|
Data processing |
| 6,469 |
|
|
| 6,559 |
|
|
| 6,530 |
|
|
| 6,697 |
|
|
| 7,178 |
|
|
| 19,558 |
|
|
| 22,721 |
|
Advertising |
| 1,565 |
|
|
| 2,646 |
|
|
| 517 |
|
|
| 726 |
|
|
| 1,632 |
|
|
| 4,728 |
|
|
| 5,494 |
|
Loan processing |
| 426 |
|
|
| 660 |
|
|
| 349 |
|
|
| 350 |
|
|
| 625 |
|
|
| 1,435 |
|
|
| 1,352 |
|
Foreclosed real estate expenses, net |
| 1 |
|
|
| — |
|
|
| 6 |
|
|
| — |
|
|
| — |
|
|
| 7 |
|
|
| — |
|
Other operating |
| 3,457 |
|
|
| 3,440 |
|
|
| 2,679 |
|
|
| 3,378 |
|
|
| 2,926 |
|
|
| 9,576 |
|
|
| 9,621 |
|
Total noninterest expenses |
| 28,046 |
|
|
| 29,592 |
|
|
| 26,222 |
|
|
| 26,734 |
|
|
| 28,094 |
|
|
| 83,860 |
|
|
| 82,379 |
|
Income before income taxes |
| 12,786 |
|
|
| 9,573 |
|
|
| 12,650 |
|
|
| 11,642 |
|
|
| 14,431 |
|
|
| 35,009 |
|
|
| 42,593 |
|
Income tax expense |
| 2,998 |
|
|
| 2,255 |
|
|
| 2,915 |
|
|
| 2,651 |
|
|
| 3,336 |
|
|
| 8,168 |
|
|
| 9,779 |
|
Net income | $ | 9,788 |
|
| $ | 7,318 |
|
| $ | 9,735 |
|
| $ | 8,991 |
|
| $ | 11,095 |
|
| $ | 26,841 |
|
| $ | 32,814 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Consolidated Balance Sheets | |||||||||||||||||||
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (audited) |
| (unaudited) | ||||||||||
(in thousands except share data) | September 30, 2023 |
| June 30, 2023 |
| March 31, 2023 |
| December 31, 2022 |
| September 30, 2022 | ||||||||||
Assets |
|
|
|
|
|
|
|
|
| ||||||||||
Cash and due from banks | $ | 13,767 |
|
| $ | 18,619 |
|
| $ | 14,477 |
|
| $ | 19,963 |
|
| $ | 14,774 |
|
Interest-bearing deposits at other financial institutions |
| 130,428 |
|
|
| 100,343 |
|
|
| 125,448 |
|
|
| 39,764 |
|
|
| 20,867 |
|
Federal funds sold |
| 1,957 |
|
|
| 376 |
|
|
| 462 |
|
|
| 20,688 |
|
|
| 1,421 |
|
Total cash and cash equivalents |
| 146,152 |
|
|
| 119,338 |
|
|
| 140,387 |
|
|
| 80,415 |
|
|
| 37,062 |
|
Investment securities available for sale |
| 206,055 |
|
|
| 208,464 |
|
|
| 255,762 |
|
|
| 252,481 |
|
|
| 269,620 |
|
Marketable equity securities |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 232 |
|
Restricted investments |
| 4,340 |
|
|
| 3,803 |
|
|
| 4,215 |
|
|
| 7,362 |
|
|
| 3,627 |
|
Loans held for sale |
| 4,843 |
|
|
| 10,146 |
|
|
| 9,620 |
|
|
| 7,416 |
|
|
| 6,875 |
|
U.S. Small Business Administration (“SBA”) Payroll Protection Program (“PPP”) loans receivable, net of fees and costs |
| 750 |
|
|
| 1,090 |
|
|
| 2,037 |
|
|
| 2,163 |
|
|
| 2,662 |
|
Portfolio loans receivable, net of deferred fees and costs |
| 1,861,929 |
|
|
| 1,837,041 |
|
|
| 1,786,109 |
|
|
| 1,728,592 |
|
|
| 1,648,001 |
|
Less allowance for credit losses |
| (28,279 | ) |
|
| (27,495 | ) |
|
| (26,216 | ) |
|
| (26,385 | ) |
|
| (26,091 | ) |
Total portfolio loans held for investment, net |
| 1,833,650 |
|
|
| 1,809,546 |
|
|
| 1,759,893 |
|
|
| 1,702,207 |
|
|
| 1,621,910 |
|
Premises and equipment, net |
| 5,297 |
|
|
| 5,494 |
|
|
| 5,367 |
|
|
| 3,386 |
|
|
| 3,212 |
|
Accrued interest receivable |
| 11,231 |
|
|
| 10,155 |
|
|
| 9,985 |
|
|
| 9,489 |
|
|
| 7,890 |
|
Deferred tax asset |
| 13,644 |
|
|
| 13,616 |
|
|
| 12,898 |
|
|
| 13,777 |
|
|
| 14,047 |
|
Bank owned life insurance |
| 37,315 |
|
|
| 37,041 |
|
|
| 36,781 |
|
|
| 36,524 |
|
|
| 36,267 |
|
Other assets |
| 9,207 |
|
|
| 9,173 |
|
|
| 8,341 |
|
|
| 8,435 |
|
|
| 5,954 |
|
Total assets | $ | 2,272,484 |
|
| $ | 2,227,866 |
|
| $ | 2,245,286 |
|
| $ | 2,123,655 |
|
| $ | 2,009,358 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Liabilities |
|
|
|
|
|
|
|
|
| ||||||||||
Deposits |
|
|
|
|
|
|
|
|
| ||||||||||
Noninterest-bearing | $ | 680,803 |
|
| $ | 693,129 |
|
| $ | 705,801 |
|
| $ | 674,313 |
|
| $ | 806,033 |
|
Interest-bearing |
| 1,287,185 |
|
|
| 1,241,232 |
|
|
| 1,238,573 |
|
|
| 1,083,759 |
|
|
| 931,558 |
|
Total deposits |
| 1,967,988 |
|
|
| 1,934,361 |
|
|
| 1,944,374 |
|
|
| 1,758,072 |
|
|
| 1,737,591 |
|
Federal Home Loan Bank advances |
| 22,000 |
|
|
| 22,000 |
|
|
| 32,000 |
|
|
| 107,000 |
|
|
| 22,000 |
|
Other borrowed funds |
| 12,062 |
|
|
| 12,062 |
|
|
| 12,062 |
|
|
| 12,062 |
|
|
| 12,062 |
|
Accrued interest payable |
| 5,204 |
|
|
| 3,029 |
|
|
| 1,977 |
|
|
| 1,031 |
|
|
| 481 |
|
Other liabilities |
| 22,352 |
|
|
| 18,979 |
|
|
| 20,356 |
|
|
| 21,475 |
|
|
| 23,219 |
|
Total liabilities |
| 2,029,606 |
|
|
| 1,990,431 |
|
|
| 2,010,769 |
|
|
| 1,899,640 |
|
|
| 1,795,353 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Stockholders' equity |
|
|
|
|
|
|
|
|
| ||||||||||
Common stock |
| 139 |
|
|
| 140 |
|
|
| 141 |
|
|
| 141 |
|
|
| 140 |
|
Additional paid-in capital |
| 54,549 |
|
|
| 55,856 |
|
|
| 57,277 |
|
|
| 58,190 |
|
|
| 56,532 |
|
Retained earnings |
| 206,033 |
|
|
| 197,490 |
|
|
| 191,058 |
|
|
| 182,435 |
|
|
| 174,916 |
|
Accumulated other comprehensive loss |
| (17,843 | ) |
|
| (16,051 | ) |
|
| (13,959 | ) |
|
| (16,751 | ) |
|
| (17,583 | ) |
Total stockholders' equity |
| 242,878 |
|
|
| 237,435 |
|
|
| 234,517 |
|
|
| 224,015 |
|
|
| 214,005 |
|
Total liabilities and stockholders' equity | $ | 2,272,484 |
|
| $ | 2,227,866 |
|
| $ | 2,245,286 |
|
| $ | 2,123,655 |
|
| $ | 2,009,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables show 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 |
| Three Months Ended |
| Three Months Ended | |||||||||||||||||||||||||||
| Average |
| Interest Income/ |
| Average |
| Average |
| Interest Income/ |
| Average |
| Average |
| Interest Income/ |
| Average | |||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Interest-bearing deposits | $ | 87,112 |
|
| $ | 1,183 |
|
| 5.39 | % |
| $ | 66,401 |
|
| $ | 733 |
|
| 4.43 | % |
| $ | 101,187 |
|
| $ | 471 |
|
| 1.85 | % |
Federal funds sold |
| 1,134 |
|
|
| 15 |
|
| 5.25 |
|
|
| 1,638 |
|
|
| 20 |
|
| 4.90 |
|
|
| 1,492 |
|
|
| 7 |
|
| 1.87 |
|
Investment securities available for sale |
| 229,731 |
|
|
| 1,089 |
|
| 1.88 |
|
|
| 255,057 |
|
|
| 1,266 |
|
| 1.99 |
|
|
| 287,944 |
|
|
| 1,362 |
|
| 1.88 |
|
Restricted investments |
| 4,058 |
|
|
| 69 |
|
| 6.75 |
|
|
| 4,185 |
|
|
| 71 |
|
| 6.80 |
|
|
| 4,116 |
|
|
| 49 |
|
| 4.72 |
|
Loans held for sale |
| 6,670 |
|
|
| 111 |
|
| 6.60 |
|
|
| 7,047 |
|
|
| 111 |
|
| 6.32 |
|
|
| 7,879 |
|
|
| 102 |
|
| 5.15 |
|
SBA-PPP loans receivable |
| 906 |
|
|
| 11 |
|
| 4.82 |
|
|
| 1,808 |
|
|
| 7 |
|
| 1.55 |
|
|
| 5,906 |
|
|
| 263 |
|
| 17.66 |
|
Portfolio loans receivable(2) |
| 1,846,866 |
|
|
| 45,263 |
|
| 9.72 |
|
|
| 1,800,800 |
|
|
| 42,872 |
|
| 9.55 |
|
|
| 1,601,546 |
|
|
| 36,086 |
|
| 8.94 |
|
Total interest earning assets |
| 2,176,477 |
|
|
| 47,741 |
|
| 8.70 |
|
|
| 2,136,936 |
|
|
| 45,080 |
|
| 8.46 |
|
|
| 2,010,070 |
|
|
| 38,340 |
|
| 7.57 |
|
Noninterest earning assets |
| 44,640 |
|
|
|
|
|
|
| 47,415 |
|
|
|
|
|
|
| 39,008 |
|
|
|
|
| |||||||||
Total assets | $ | 2,221,117 |
|
|
|
|
|
| $ | 2,184,351 |
|
|
|
|
|
| $ | 2,049,078 |
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Interest-bearing demand accounts | $ | 215,527 |
|
|
| 71 |
|
| 0.13 |
|
| $ | 207,264 |
|
|
| 67 |
|
| 0.13 |
|
| $ | 244,929 |
|
|
| 39 |
|
| 0.06 |
|
Savings |
| 5,582 |
|
|
| 3 |
|
| 0.21 |
|
|
| 5,822 |
|
|
| 2 |
|
| 0.14 |
|
|
| 9,216 |
|
|
| 1 |
|
| 0.04 |
|
Money market accounts |
| 655,990 |
|
|
| 6,373 |
|
| 3.85 |
|
|
| 625,515 |
|
|
| 5,411 |
|
| 3.47 |
|
|
| 555,634 |
|
|
| 815 |
|
| 0.58 |
|
Time deposits |
| 374,429 |
|
|
| 4,256 |
|
| 4.51 |
|
|
| 366,421 |
|
|
| 3,929 |
|
| 4.30 |
|
|
| 155,091 |
|
|
| 531 |
|
| 1.36 |
|
Borrowed funds |
| 34,932 |
|
|
| 228 |
|
| 2.59 |
|
|
| 43,183 |
|
|
| 331 |
|
| 3.07 |
|
|
| 40,700 |
|
|
| 277 |
|
| 2.70 |
|
Total interest-bearing liabilities |
| 1,286,460 |
|
|
| 10,931 |
|
| 3.37 |
|
|
| 1,248,205 |
|
|
| 9,740 |
|
| 3.13 |
|
|
| 1,005,570 |
|
|
| 1,663 |
|
| 0.66 |
|
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Noninterest-bearing liabilities |
| 25,047 |
|
|
|
|
|
|
| 21,104 |
|
|
|
|
|
|
| 24,440 |
|
|
|
|
| |||||||||
Noninterest-bearing deposits |
| 666,939 |
|
|
|
|
|
|
| 676,358 |
|
|
|
|
|
|
| 802,458 |
|
|
|
|
| |||||||||
Stockholders’ equity |
| 242,671 |
|
|
|
|
|
|
| 238,684 |
|
|
|
|
|
|
| 216,610 |
|
|
|
|
| |||||||||
Total liabilities and stockholders’ equity | $ | 2,221,117 |
|
|
|
|
|
| $ | 2,184,351 |
|
|
|
|
|
| $ | 2,049,078 |
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net interest spread |
|
|
|
| 5.33 | % |
|
|
|
|
| 5.33 | % |
|
|
|
|
| 6.91 | % | ||||||||||||
Net interest income |
|
| $ | 36,810 |
|
|
|
|
|
| $ | 35,340 |
|
|
|
|
|
| $ | 36,677 |
|
|
| |||||||||
Net interest margin(3) |
|
|
|
| 6.71 | % |
|
|
|
|
| 6.63 | % |
|
|
|
|
| 7.24 | % | ||||||||||||
_______________
(1) Annualized.
(2) Includes nonaccrual loans.
(3) For the three months ended September 30, 2023, June 30, 2023, and September 30, 2022, collectively, SBA-PPP loans and credit card loans accounted for 266, 257 and 308 basis points of the reported net interest margin, respectively.
|
| ||||||||||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2023 |
| 2022 | ||||||||||||||||||
| Average |
| Interest Income/ |
| Average |
| Average |
| Interest Income/ |
| Average | ||||||||||
| (in thousands) | ||||||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Interest-bearing deposits | $ | 72,116 |
|
| $ | 2,531 |
|
| 4.69 | % |
| $ | 172,033 |
|
| $ | 1,001 |
|
| 0.78 | % |
Federal funds sold |
| 1,605 |
|
|
| 53 |
|
| 4.42 |
|
|
| 2,590 |
|
|
| 9 |
|
| 0.48 |
|
Investment securities available for sale |
| 252,993 |
|
|
| 3,732 |
|
| 1.97 |
|
|
| 234,294 |
|
|
| 2,510 |
|
| 1.43 |
|
Restricted investments |
| 5,184 |
|
|
| 270 |
|
| 6.96 |
|
|
| 3,913 |
|
|
| 133 |
|
| 4.54 |
|
Loans held for sale |
| 6,145 |
|
|
| 299 |
|
| 6.51 |
|
|
| 10,921 |
|
|
| 347 |
|
| 4.25 |
|
SBA-PPP loans receivable |
| 1,600 |
|
|
| 26 |
|
| 2.17 |
|
|
| 39,063 |
|
|
| 3,449 |
|
| 11.80 |
|
Portfolio loans receivable(2) |
| 1,799,755 |
|
|
| 129,326 |
|
| 9.61 |
|
|
| 1,547,386 |
|
|
| 101,849 |
|
| 8.80 |
|
Total interest earning assets |
| 2,139,398 |
|
|
| 136,237 |
|
| 8.51 |
|
|
| 2,010,200 |
|
|
| 109,298 |
|
| 7.27 |
|
Noninterest earning assets |
| 44,123 |
|
|
|
|
|
|
| 47,936 |
|
|
|
|
| ||||||
Total assets | $ | 2,183,521 |
|
|
|
|
|
| $ | 2,058,136 |
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Interest-bearing demand accounts | $ | 203,099 |
|
|
| 208 |
|
| 0.14 |
|
| $ | 265,854 |
|
|
| 114 |
|
| 0.06 |
|
Savings |
| 5,965 |
|
|
| 6 |
|
| 0.13 |
|
|
| 9,138 |
|
|
| 4 |
|
| 0.06 |
|
Money market accounts |
| 628,977 |
|
|
| 16,371 |
|
| 3.48 |
|
|
| 553,794 |
|
|
| 1,512 |
|
| 0.37 |
|
Time deposits |
| 353,635 |
|
|
| 11,281 |
|
| 4.27 |
|
|
| 161,982 |
|
|
| 1,604 |
|
| 1.32 |
|
Borrowed funds |
| 65,192 |
|
|
| 1,734 |
|
| 3.56 |
|
|
| 36,299 |
|
|
| 656 |
|
| 2.41 |
|
Total interest-bearing liabilities |
| 1,256,868 |
|
|
| 29,600 |
|
| 3.15 |
|
|
| 1,027,067 |
|
|
| 3,890 |
|
| 0.51 |
|
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Noninterest-bearing liabilities |
| 22,846 |
|
|
|
|
|
|
| 23,748 |
|
|
|
|
| ||||||
Noninterest-bearing deposits |
| 665,821 |
|
|
|
|
|
|
| 797,660 |
|
|
|
|
| ||||||
Stockholders’ equity |
| 237,986 |
|
|
|
|
|
|
| 209,661 |
|
|
|
|
| ||||||
Total liabilities and stockholders’ equity | $ | 2,183,521 |
|
|
|
|
|
| $ | 2,058,136 |
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Net interest spread |
|
|
|
| 5.36 | % |
|
|
|
|
| 6.76 | % | ||||||||
Net interest income |
|
| $ | 106,637 |
|
|
|
|
|
| $ | 105,408 |
|
|
| ||||||
Net interest margin(3) |
|
|
|
| 6.66 | % |
|
|
|
|
| 7.01 | % | ||||||||
(1) Annualized.
(2) Includes nonaccrual loans.
(3) For the nine months ended September 30, 2023 and 2022, collectively, SBA-PPP loans and credit card loans accounted for 268 and 307 basis points of the reported net interest margin, respectively.
The Company’s reportable segments represent business units with discrete financial information whose results are regularly reviewed by management. The four segments include Commercial Banking, Capital Bank Home Loans (the Company’s mortgage loan division), OpenSky® (the Company’s credit card division) and the Corporate Office. The following schedule presents financial information for each reportable segment for the three and nine months ended September 30, 2023 and September 30, 2022.
| ||||||||||||||||||||||||
Segments | ||||||||||||||||||||||||
For the three months ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||
(in thousands) |
| Commercial Bank |
| CBHL |
| OpenSky® |
| Corporate(2) |
| Eliminations |
| Consolidated | ||||||||||||
Interest income |
| $ | 30,409 |
|
| $ | 111 |
|
| $ | 16,143 |
|
| $ | 1,162 |
|
| $ | (84 | ) |
| $ | 47,741 |
|
Interest expense |
|
| 10,736 |
|
|
| 32 |
|
|
| — |
|
|
| 247 |
|
|
| (84 | ) |
|
| 10,931 |
|
Net interest income |
|
| 19,673 |
|
|
| 79 |
|
|
| 16,143 |
|
|
| 915 |
|
|
| — |
|
|
| 36,810 |
|
Provision for credit losses |
|
| 275 |
|
|
| — |
|
|
| 1,875 |
|
|
| 130 |
|
|
| — |
|
|
| 2,280 |
|
Release of credit losses on unfunded commitments |
|
| 24 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 24 |
|
Net interest income after provision |
|
| 19,374 |
|
|
| 79 |
|
|
| 14,268 |
|
|
| 785 |
|
|
| — |
|
|
| 34,506 |
|
Noninterest income |
|
| 665 |
|
|
| 1,255 |
|
|
| 4,405 |
|
|
| 1 |
|
|
| — |
|
|
| 6,326 |
|
Noninterest expense(1) |
|
| 15,784 |
|
|
| 1,502 |
|
|
| 10,637 |
|
|
| 123 |
|
|
| — |
|
|
| 28,046 |
|
Net income (loss) before taxes |
| $ | 4,255 |
|
| $ | (168 | ) |
| $ | 8,036 |
|
| $ | 663 |
|
| $ | — |
|
| $ | 12,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Total assets |
| $ | 2,102,749 |
|
| $ | 5,280 |
|
| $ | 116,318 |
|
| $ | 264,950 |
|
| $ | (216,813 | ) |
| $ | 2,272,484 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
For the three months ended June 30, 2023 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||
(in thousands) |
| Commercial Bank |
| CBHL |
| OpenSky® |
| Corporate(2) |
| Eliminations |
| Consolidated | ||||||||||||
Interest income |
| $ | 28,742 |
|
| $ | 111 |
|
| $ | 15,168 |
|
| $ | 1,134 |
|
| $ | (75 | ) |
| $ | 45,080 |
|
Interest expense |
|
| 9,537 |
|
|
| 42 |
|
|
| — |
|
|
| 236 |
|
|
| (75 | ) |
|
| 9,740 |
|
Net interest income |
|
| 19,205 |
|
|
| 69 |
|
|
| 15,168 |
|
|
| 898 |
|
|
| — |
|
|
| 35,340 |
|
Provision for credit losses |
|
| 735 |
|
|
| — |
|
|
| 2,127 |
|
|
| — |
|
|
| — |
|
|
| 2,862 |
|
Net interest income after provision |
|
| 18,470 |
|
|
| 69 |
|
|
| 13,041 |
|
|
| 898 |
|
|
| — |
|
|
| 32,478 |
|
Noninterest income |
|
| 810 |
|
|
| 1,161 |
|
|
| 4,714 |
|
|
| 2 |
|
|
| — |
|
|
| 6,687 |
|
Noninterest expense(1) |
|
| 15,918 |
|
|
| 1,481 |
|
|
| 12,059 |
|
|
| 134 |
|
|
| — |
|
|
| 29,592 |
|
Net income (loss) before taxes |
| $ | 3,362 |
|
| $ | (251 | ) |
| $ | 5,696 |
|
| $ | 766 |
|
| $ | — |
|
| $ | 9,573 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Total assets |
| $ | 2,047,400 |
|
| $ | 10,605 |
|
| $ | 116,123 |
|
| $ | 260,309 |
|
| $ | (206,571 | ) |
| $ | 2,227,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
For the three months ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||
(in thousands) |
| Commercial Bank |
| CBHL |
| OpenSky® |
| Corporate(2) |
| Eliminations |
| Consolidated | ||||||||||||
Interest income |
| $ | 20,382 |
|
| $ | 102 |
|
| $ | 17,103 |
|
| $ | 812 |
|
| $ | (59 | ) |
| $ | 38,340 |
|
Interest expense |
|
| 1,449 |
|
|
| 40 |
|
|
| — |
|
|
| 233 |
|
|
| (59 | ) |
|
| 1,663 |
|
Net interest income |
|
| 18,933 |
|
|
| 62 |
|
|
| 17,103 |
|
|
| 579 |
|
|
| — |
|
|
| 36,677 |
|
Provision (release of provision) for loan losses |
|
| (980 | ) |
|
| — |
|
|
| 2,240 |
|
|
| — |
|
|
| — |
|
|
| 1,260 |
|
Net interest income after provision |
|
| 19,913 |
|
|
| 62 |
|
|
| 14,863 |
|
|
| 579 |
|
|
| — |
|
|
| 35,417 |
|
Noninterest income |
|
| 468 |
|
|
| 1,115 |
|
|
| 5,524 |
|
|
| 1 |
|
|
| — |
|
|
| 7,108 |
|
Noninterest expense(1) |
|
| 13,798 |
|
|
| 2,017 |
|
|
| 12,101 |
|
|
| 178 |
|
|
| — |
|
|
| 28,094 |
|
Net income (loss) before taxes |
| $ | 6,583 |
|
| $ | (840 | ) |
| $ | 8,286 |
|
| $ | 402 |
|
| $ | — |
|
| $ | 14,431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Total assets |
| $ | 1,823,049 |
|
| $ | 7,664 |
|
| $ | 128,842 |
|
| $ | 234,731 |
|
| $ | (184,928 | ) |
| $ | 2,009,358 |
|
________________________
(1) Noninterest expense includes $6.1 million, $5.9 million and $6.6 million in data processing expense in OpenSky’s® segment for the three months ended September 30, 2023 June 30, 2023, and September 30, 2022, respectively.
(2) The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.
| ||||||||||||||||||||||||
Segments | ||||||||||||||||||||||||
For the nine months ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||
(in thousands) |
| Commercial Bank |
| CBHL |
| OpenSky® |
| Corporate(2) |
| Eliminations |
| Consolidated | ||||||||||||
Interest income |
| $ | 85,451 |
|
| $ | 299 |
|
| $ | 47,441 |
|
| $ | 3,274 |
|
| $ | (228 | ) |
| $ | 136,237 |
|
Interest expense |
|
| 29,012 |
|
|
| 104 |
|
|
| — |
|
|
| 712 |
|
|
| (228 | ) |
|
| 29,600 |
|
Net interest income |
|
| 56,439 |
|
|
| 195 |
|
|
| 47,441 |
|
|
| 2,562 |
|
|
| — |
|
|
| 106,637 |
|
Provision for credit losses |
|
| 849 |
|
|
| — |
|
|
| 5,823 |
|
|
| 130 |
|
|
| — |
|
|
| 6,802 |
|
Release of credit losses on unfunded commitments |
|
| 5 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 5 |
|
Net interest income after provision |
|
| 55,585 |
|
|
| 195 |
|
|
| 41,618 |
|
|
| 2,432 |
|
|
| — |
|
|
| 99,830 |
|
Noninterest income |
|
| 1,964 |
|
|
| 3,743 |
|
|
| 13,329 |
|
|
| 3 |
|
|
| — |
|
|
| 19,039 |
|
Noninterest expense(1) |
|
| 46,701 |
|
|
| 4,564 |
|
|
| 32,146 |
|
|
| 449 |
|
|
| — |
|
|
| 83,860 |
|
Net income (loss) before taxes |
| $ | 10,848 |
|
| $ | (626 | ) |
| $ | 22,801 |
|
| $ | 1,986 |
|
| $ | — |
|
| $ | 35,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Total assets |
| $ | 2,102,749 |
|
| $ | 5,280 |
|
| $ | 116,318 |
|
| $ | 264,950 |
|
| $ | (216,813 | ) |
| $ | 2,272,484 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
For the nine months ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||
(in thousands) |
| Commercial Bank |
| CBHL |
| OpenSky® |
| Corporate(2) |
| Eliminations |
| Consolidated | ||||||||||||
Interest income |
| $ | 57,794 |
|
| $ | 347 |
|
| $ | 48,823 |
|
| $ | 2,457 |
|
| $ | (123 | ) |
| $ | 109,298 |
|
Interest expense |
|
| 3,255 |
|
|
| 185 |
|
|
| — |
|
|
| 573 |
|
|
| (123 | ) |
|
| 3,890 |
|
Net interest income |
|
| 54,539 |
|
|
| 162 |
|
|
| 48,823 |
|
|
| 1,884 |
|
|
| — |
|
|
| 105,408 |
|
Provision (release of provision) for loan losses |
|
| (980 | ) |
|
| — |
|
|
| 5,227 |
|
|
| — |
|
|
| — |
|
|
| 4,247 |
|
Net interest income after provision |
|
| 55,519 |
|
|
| 162 |
|
|
| 43,596 |
|
|
| 1,884 |
|
|
| — |
|
|
| 101,161 |
|
Noninterest income |
|
| 1,571 |
|
|
| 4,580 |
|
|
| 17,658 |
|
|
| 2 |
|
|
| — |
|
|
| 23,811 |
|
Noninterest expense(1) |
|
| 38,741 |
|
|
| 6,364 |
|
|
| 36,923 |
|
|
| 351 |
|
|
| — |
|
|
| 82,379 |
|
Net income (loss) before taxes |
| $ | 18,349 |
|
| $ | (1,622 | ) |
| $ | 24,331 |
|
| $ | 1,535 |
|
| $ | — |
|
| $ | 42,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Total assets |
| $ | 1,823,049 |
|
| $ | 7,664 |
|
| $ | 128,842 |
|
| $ | 234,731 |
|
| $ | (184,928 | ) |
| $ | 2,009,358 |
|
(1) Noninterest expense includes $17.9 million and $20.9 million in data processing expense in OpenSky’s® segment for the nine months ended September 30, 2023 and 2022, respectively.
(2) The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.
| ||||||||||||||||||||
HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited | ||||||||||||||||||||
|
| Quarter Ended | ||||||||||||||||||
(in thousands except per share data) |
| September 30, 2023 |
| June 30, 2023 |
| March 31, |
| December 31, |
| September 30, | ||||||||||
Earnings: |
|
|
|
|
|
|
|
|
|
| ||||||||||
Net income |
| $ | 9,788 |
|
| $ | 7,318 |
|
| $ | 9,735 |
|
| $ | 8,991 |
|
| $ | 11,095 |
|
Earnings per common share, diluted |
|
| 0.70 |
|
|
| 0.52 |
|
|
| 0.68 |
|
|
| 0.62 |
|
|
| 0.77 |
|
Net interest margin |
|
| 6.71 | % |
|
| 6.63 | % |
|
| 6.65 | % |
|
| 6.64 | % |
|
| 7.24 | % |
Net interest margin, excluding credit cards & SBA-PPP loans(1) |
|
| 4.05 | % |
|
| 4.06 | % |
|
| 3.81 | % |
|
| 3.91 | % |
|
| 4.16 | % |
Return on average assets(2) |
|
| 1.75 | % |
|
| 1.34 | % |
|
| 1.84 | % |
|
| 1.67 | % |
|
| 2.15 | % |
Return on average assets, excluding impact of SBA-PPP loans(1)(2) |
|
| 1.75 | % |
|
| 1.34 | % |
|
| 1.84 | % |
|
| 1.67 | % |
|
| 2.10 | % |
Return on average equity(2) |
|
| 16.00 | % |
|
| 12.30 | % |
|
| 16.98 | % |
|
| 16.18 | % |
|
| 20.32 | % |
Efficiency ratio |
|
| 65.02 | % |
|
| 70.41 | % |
|
| 64.73 | % |
|
| 65.59 | % |
|
| 64.16 | % |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Balance Sheet: |
|
|
|
|
|
|
|
|
|
| ||||||||||
Total portfolio loans receivable, net deferred fees |
| $ | 1,861,929 |
|
| $ | 1,837,041 |
|
| $ | 1,786,109 |
|
| $ | 1,728,592 |
|
| $ | 1,648,001 |
|
Total deposits |
|
| 1,967,988 |
|
|
| 1,934,361 |
|
|
| 1,944,374 |
|
|
| 1,758,072 |
|
|
| 1,737,591 |
|
Total assets |
|
| 2,272,484 |
|
|
| 2,227,866 |
|
|
| 2,245,286 |
|
|
| 2,123,655 |
|
|
| 2,009,358 |
|
Total stockholders' equity |
|
| 242,878 |
|
|
| 237,435 |
|
|
| 234,517 |
|
|
| 224,015 |
|
|
| 214,005 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Asset Quality Ratios: |
|
|
|
|
|
|
|
|
|
| ||||||||||
Nonperforming assets to total assets |
|
| 0.67 | % |
|
| 0.71 | % |
|
| 0.73 | % |
|
| 0.46 | % |
|
| 0.43 | % |
Nonperforming assets to total assets, excluding the SBA-PPP loans(1) |
|
| 0.67 | % |
|
| 0.71 | % |
|
| 0.73 | % |
|
| 0.46 | % |
|
| 0.43 | % |
Nonperforming loans to total loans |
|
| 0.82 | % |
|
| 0.85 | % |
|
| 0.91 | % |
|
| 0.56 | % |
|
| 0.52 | % |
Nonperforming loans to portfolio loans(1) |
|
| 0.82 | % |
|
| 0.86 | % |
|
| 0.91 | % |
|
| 0.56 | % |
|
| 0.52 | % |
Net charge-offs to average portfolio loans(1)(2) |
|
| 0.38 | % |
|
| 0.35 | % |
|
| 0.61 | % |
|
| 0.49 | % |
|
| 0.39 | % |
Allowance for credit losses to total loans |
|
| 1.52 | % |
|
| 1.50 | % |
|
| 1.47 | % |
|
| 1.52 | % |
|
| 1.58 | % |
Allowance for credit losses to portfolio loans(1) |
|
| 1.52 | % |
|
| 1.50 | % |
|
| 1.47 | % |
|
| 1.53 | % |
|
| 1.58 | % |
Allowance for credit losses to non-performing loans |
|
| 185.61 | % |
|
| 175.03 | % |
|
| 160.91 | % |
|
| 270.46 | % |
|
| 303.76 | % |
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Bank Capital Ratios: |
|
|
|
|
|
|
|
|
|
| ||||||||||
Total risk based capital ratio |
|
| 14.51 | % |
|
| 14.08 | % |
|
| 14.09 | % |
|
| 14.21 | % |
|
| 14.65 | % |
Tier 1 risk based capital ratio |
|
| 13.25 | % |
|
| 12.82 | % |
|
| 12.84 | % |
|
| 12.95 | % |
|
| 13.39 | % |
Leverage ratio |
|
| 10.04 | % |
|
| 9.77 | % |
|
| 9.78 | % |
|
| 9.47 | % |
|
| 9.60 | % |
Common equity Tier 1 capital ratio |
|
| 13.25 | % |
|
| 12.82 | % |
|
| 12.84 | % |
|
| 12.95 | % |
|
| 13.39 | % |
Tangible common equity |
|
| 9.08 | % |
|
| 8.93 | % |
|
| 8.79 | % |
|
| 8.85 | % |
|
| 9.00 | % |
Holding Company Capital Ratios: |
|
|
|
|
|
|
|
|
|
| ||||||||||
Total risk based capital ratio |
|
| 17.61 | % |
|
| 16.81 | % |
|
| 16.75 | % |
|
| 16.33 | % |
|
| 17.41 | % |
Tier 1 risk based capital ratio |
|
| 15.71 | % |
|
| 14.96 | % |
|
| 14.90 | % |
|
| 15.13 | % |
|
| 15.49 | % |
Leverage ratio |
|
| 11.62 | % |
|
| 11.50 | % |
|
| 11.47 | % |
|
| 11.24 | % |
|
| 11.31 | % |
Common equity Tier 1 capital ratio |
|
| 15.71 | % |
|
| 14.96 | % |
|
| 14.90 | % |
|
| 15.00 | % |
|
| 15.36 | % |
Tangible common equity |
|
| 10.69 | % |
|
| 10.66 | % |
|
| 10.44 | % |
|
| 10.55 | % |
|
| 10.65 | % |
Composition of Loans: |
|
|
|
|
|
|
|
|
|
| ||||||||||
SBA-PPP loans, net |
| $ | 750 |
|
| $ | 1,090 |
|
| $ | 2,037 |
|
| $ | 2,163 |
|
| $ | 2,662 |
|
Commercial real estate |
| $ | 670,594 |
|
| $ | 674,141 |
|
| $ | 660,218 |
|
| $ | 664,551 |
|
| $ | 626,030 |
|
Residential real estate |
|
| 558,147 |
|
|
| 555,133 |
|
|
| 545,899 |
|
|
| 484,735 |
|
|
| 466,849 |
|
Construction real estate |
|
| 280,905 |
|
|
| 258,400 |
|
|
| 251,494 |
|
|
| 238,099 |
|
|
| 235,045 |
|
Commercial and industrial |
|
| 236,782 |
|
|
| 233,598 |
|
|
| 221,258 |
|
|
| 220,221 |
|
|
| 192,207 |
|
Credit card, net of reserve(3) |
|
| 122,533 |
|
|
| 122,925 |
|
|
| 112,860 |
|
|
| 128,434 |
|
|
| 136,658 |
|
Other consumer loans |
|
| 948 |
|
|
| 1,187 |
|
|
| 1,578 |
|
|
| 1,179 |
|
|
| 1,055 |
|
Portfolio loans receivable |
| $ | 1,869,909 |
|
| $ | 1,845,384 |
|
| $ | 1,793,307 |
|
| $ | 1,737,219 |
|
| $ | 1,657,844 |
|
Deferred origination fees, net |
|
| (7,980 | ) |
|
| (8,343 | ) |
|
| (7,198 | ) |
|
| (8,627 | ) |
|
| (9,843 | ) |
Portfolio loans receivable, net |
| $ | 1,861,929 |
|
| $ | 1,837,041 |
|
| $ | 1,786,109 |
|
| $ | 1,728,592 |
|
| $ | 1,648,001 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Composition of Deposits: |
|
|
|
|
|
|
|
|
|
| ||||||||||
Noninterest-bearing |
| $ | 680,803 |
|
| $ | 693,129 |
|
| $ | 705,801 |
|
| $ | 674,313 |
|
| $ | 806,033 |
|
Interest-bearing demand |
|
| 229,035 |
|
|
| 243,095 |
|
|
| 219,685 |
|
|
| 207,836 |
|
|
| 252,135 |
|
Savings |
|
| 5,686 |
|
|
| 5,816 |
|
|
| 5,835 |
|
|
| 7,530 |
|
|
| 8,861 |
|
Money markets |
|
| 668,774 |
|
|
| 631,148 |
|
|
| 632,087 |
|
|
| 574,978 |
|
|
| 518,184 |
|
Brokered time deposits |
|
| 128,665 |
|
|
| 128,665 |
|
|
| 181,820 |
|
|
| 131,819 |
|
|
| — |
|
Other time deposits |
|
| 255,025 |
|
|
| 232,508 |
|
|
| 199,146 |
|
|
| 161,596 |
|
|
| 152,378 |
|
Total deposits |
| $ | 1,967,988 |
|
| $ | 1,934,361 |
|
| $ | 1,944,374 |
|
| $ | 1,758,072 |
|
| $ | 1,737,591 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Capital Bank Home Loan Metrics: |
|
|
|
| ||||||||||||||||
Origination of loans held for sale |
| $ | 50,023 |
|
| $ | 61,480 |
|
| $ | 44,448 |
|
| $ | 43,956 |
|
| $ | 60,516 |
|
Mortgage loans sold |
|
| 39,364 |
|
|
| 49,231 |
|
|
| 40,483 |
|
|
| 43,415 |
|
|
| 65,349 |
|
Gain on sale of loans |
|
| 1,011 |
|
|
| 1,262 |
|
|
| 1,223 |
|
|
| 912 |
|
|
| 1,340 |
|
Purchase volume as a % of originations |
|
| 92.29 | % |
|
| 93.12 | % |
|
| 90.72 | % |
|
| 88.94 | % |
|
| 81.85 | % |
Gain on sale as a % of loans sold(4) |
|
| 2.57 | % |
|
| 2.56 | % |
|
| 3.02 | % |
|
| 2.10 | % |
|
| 2.05 | % |
Mortgage commissions |
| $ | 528 |
|
| $ | 621 |
|
| $ | 378 |
|
| $ | 451 |
|
| $ | 587 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
OpenSky®Portfolio Metrics: |
|
|
|
| ||||||||||||||||
Open customer accounts |
|
| 529,205 |
|
|
| 540,058 |
|
|
| 527,231 |
|
|
| 533,855 |
|
|
| 576,844 |
|
Secured credit card loans, gross |
| $ | 98,138 |
|
| $ | 100,218 |
|
| $ | 89,078 |
|
| $ | 104,157 |
|
| $ | 111,842 |
|
Unsecured credit card loans, gross |
|
| 27,430 |
|
|
| 25,254 |
|
|
| 25,782 |
|
|
| 26,795 |
|
|
| 27,335 |
|
Noninterest secured credit card deposits |
|
| 181,185 |
|
|
| 186,566 |
|
|
| 184,809 |
|
|
| 187,412 |
|
|
| 201,277 |
|
_______________
(1) Refer to Appendix for reconciliation of non-GAAP measures.
(2) Annualized.
(3) Credit card loans are presented net of reserve for interest and fees.
(4) Gain on sale percentage is calculated as gain on sale of loans divided by mortgage loans sold.
Appendix
Reconciliation of Non-GAAP Measures
The Company has presented the following non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Company’s results of operations and financial condition. Presentation of these non-GAAP financial measures is consistent with how the Company evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company’s industry. Investors should recognize that the Company’s presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Company strongly encourages a review of its condensed consolidated financial statements in their entirety.
|
| ||||||||||||||||||
Return on Average Assets, as Adjusted | Quarters Ended | ||||||||||||||||||
(in thousands) | September 30, 2023 |
| June 30, 2023 |
| March 31, 2023 |
| December 31, 2022 |
| September 30, 2022 | ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
Net Income | $ | 9,788 |
|
| $ | 7,318 |
|
| $ | 9,735 |
|
| $ | 8,991 |
|
| $ | 11,095 |
|
Less: SBA-PPP loan income |
| 11 |
|
|
| 7 |
|
|
| 8 |
|
|
| 28 |
|
|
| 263 |
|
Net Income, as Adjusted | $ | 9,777 |
|
| $ | 7,311 |
|
| $ | 9,727 |
|
| $ | 8,963 |
|
| $ | 10,832 |
|
Average Total Assets |
| 2,221,117 |
|
|
| 2,184,351 |
|
|
| 2,144,249 |
|
|
| 2,136,156 |
|
|
| 2,049,078 |
|
Less: Average SBA-PPP Loans |
| 906 |
|
|
| 1,808 |
|
|
| 2,099 |
|
|
| 2,435 |
|
|
| 5,906 |
|
Average Total Assets, as Adjusted | $ | 2,220,211 |
|
| $ | 2,182,543 |
|
| $ | 2,142,150 |
|
| $ | 2,133,721 |
|
| $ | 2,043,172 |
|
Return on Average Assets, as Adjusted |
| 1.75 | % |
|
| 1.34 | % |
|
| 1.84 | % |
|
| 1.67 | % |
|
| 2.10 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average Assets, as Adjusted | Nine Months Ended | ||||||
(in thousands) | September 30, 2023 |
| September 30, 2022 | ||||
|
|
|
| ||||
Net Income | $ | 26,841 |
|
| $ | 32,814 |
|
Less: SBA-PPP loan income |
| 26 |
|
|
| 3,449 |
|
Net Income, as Adjusted | $ | 26,815 |
|
| $ | 29,365 |
|
Average Total Assets |
| 2,183,521 |
|
|
| 2,058,136 |
|
Less: Average SBA-PPP Loans |
| 1,600 |
|
|
| 39,063 |
|
Average Total Assets, as Adjusted | $ | 2,181,921 |
|
| $ | 2,019,073 |
|
Return on Average Assets, as Adjusted |
| 1.64 | % |
|
| 1.94 | % |
|
|
|
|
|
|
|
|
Net Interest Margin, as Adjusted | Quarters Ended | ||||||||||||||||||
(in thousands) | September 30, 2023 |
| June 30, 2023 |
| March 31, 2023 |
| December 31, 2022 |
| September 30, 2022 | ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
Net Interest Income | $ | 36,810 |
|
| $ | 35,340 |
|
| $ | 34,487 |
|
| $ | 35,199 |
|
| $ | 36,677 |
|
Less Credit card loan income |
| 15,792 |
|
|
| 14,818 |
|
|
| 15,809 |
|
|
| 15,717 |
|
|
| 16,768 |
|
Less SBA-PPP loan income |
| 11 |
|
|
| 7 |
|
|
| 8 |
|
|
| 28 |
|
|
| 263 |
|
Net Interest Income, as Adjusted | $ | 21,007 |
|
| $ | 20,515 |
|
| $ | 18,670 |
|
| $ | 19,454 |
|
| $ | 19,646 |
|
Average Interest Earning Assets |
| 2,176,477 |
|
|
| 2,136,936 |
|
|
| 2,103,984 |
|
|
| 2,101,617 |
|
|
| 2,010,070 |
|
Less Average credit card loans |
| 116,814 |
|
|
| 110,574 |
|
|
| 115,850 |
|
|
| 124,120 |
|
|
| 132,246 |
|
Less Average SBA-PPP loans |
| 906 |
|
|
| 1,808 |
|
|
| 2,099 |
|
|
| 2,435 |
|
|
| 5,906 |
|
Total Average Interest Earning Assets, as Adjusted | $ | 2,058,757 |
|
| $ | 2,024,554 |
|
| $ | 1,986,035 |
|
| $ | 1,975,062 |
|
| $ | 1,871,918 |
|
Net Interest Margin, as Adjusted |
| 4.05 | % |
|
| 4.06 | % |
|
| 3.81 | % |
|
| 3.91 | % |
|
| 4.16 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Margin, as Adjusted | Nine Months Ended | ||||||
(in thousands) | September 30, 2023 |
| September 30, 2022 | ||||
|
|
|
| ||||
Net Interest Income | $ | 106,637 |
|
| $ | 105,408 |
|
Less Credit card loan income |
| 46,419 |
|
|
| 47,631 |
|
Less SBA-PPP loan income |
| 26 |
|
|
| 3,449 |
|
Net Interest Income, as Adjusted | $ | 60,192 |
|
| $ | 54,328 |
|
Average Interest Earning Assets |
| 2,139,398 |
|
|
| 2,010,200 |
|
Less Average credit card loans |
| 114,416 |
|
|
| 127,266 |
|
Less Average SBA-PPP loans |
| 1,600 |
|
|
| 39,063 |
|
Total Average Interest Earning Assets, as Adjusted | $ | 2,023,382 |
|
| $ | 1,843,871 |
|
Net Interest Margin, as Adjusted |
| 3.98 | % |
|
| 3.94 | % |
|
|
|
|
|
|
|
|
Pre-tax, Pre-Provision Net Revenue ("PPNR") | Quarters Ended | ||||||||||||||||||
(in thousands) | September 30, 2023 |
| June 30, 2023 |
| March 31, 2023 |
| December 31, 2022 |
| September 30, 2022 | ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
Net income | $ | 9,788 |
|
| $ | 7,318 |
|
| $ | 9,735 |
|
| $ | 8,991 |
|
| $ | 11,095 |
|
Add: Income Tax Expense |
| 2,998 |
|
|
| 2,255 |
|
|
| 2,915 |
|
|
| 2,651 |
|
|
| 3,336 |
|
Add: Provision for Credit Losses |
| 2,280 |
|
|
| 2,862 |
|
|
| 1,660 |
|
|
| 2,384 |
|
|
| 1,260 |
|
Add: Provision (release of provision) for Credit Losses on Unfunded Commitments |
| 24 |
|
|
| — |
|
|
| (19 | ) |
|
| — |
|
|
| — |
|
Pre-tax, Pre-Provision Net Revenue ("PPNR") | $ | 15,090 |
|
| $ | 12,435 |
|
| $ | 14,291 |
|
| $ | 14,026 |
|
| $ | 15,691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax, Pre-Provision Net Revenue ("PPNR") | Nine Months Ended | ||||||
(in thousands) | September 30, 2023 |
| September 30, 2022 | ||||
|
|
|
| ||||
Net income | $ | 26,841 |
|
| $ | 32,814 |
|
Add: Income Tax Expense |
| 8,168 |
|
|
| 9,779 |
|
Add: Provision for Credit Losses |
| 6,802 |
|
|
| 4,247 |
|
Add: Provision for Credit Losses on Unfunded Commitments |
| 5 |
|
|
| — |
|
Pre-tax, Pre-Provision Net Revenue ("PPNR") | $ | 41,816 |
|
| $ | 46,840 |
|
|
|
|
|
|
|
|
|
Allowance for Credit Losses to Total Portfolio Loans | Quarters Ended | ||||||||||||||||||
(in thousands) | September 30, 2023 |
| June 30, 2023 |
| March 31, 2023 |
| December 31, 2022 |
| September 30, 2022 | ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
Allowance for Credit Losses | $ | 28,279 |
|
| $ | 27,495 |
|
| $ | 26,216 |
|
| $ | 26,385 |
|
| $ | 26,091 |
|
Total Loans |
| 1,862,679 |
|
|
| 1,838,131 |
|
|
| 1,788,146 |
|
|
| 1,730,755 |
|
|
| 1,650,663 |
|
Less: SBA-PPP loans |
| 750 |
|
|
| 1,090 |
|
|
| 2,037 |
|
|
| 2,163 |
|
|
| 2,662 |
|
Total Portfolio Loans | $ | 1,861,929 |
|
| $ | 1,837,041 |
|
| $ | 1,786,109 |
|
| $ | 1,728,592 |
|
| $ | 1,648,001 |
|
Allowance for Credit Losses to Total Portfolio Loans |
| 1.52 | % |
|
| 1.50 | % |
|
| 1.47 | % |
|
| 1.53 | % |
|
| 1.58 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming Assets to Total Assets, net SBA-PPP Loans | Quarters Ended | ||||||||||||||||||
(in thousands) | September 30, 2023 |
| June 30, 2023 |
| March 31, 2023 |
| December 31, 2022 |
| September 30, 2022 | ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
Total Nonperforming Assets | $ | 15,236 |
|
| $ | 15,709 |
|
| $ | 16,293 |
|
| $ | 9,756 |
|
| $ | 8,589 |
|
Total Assets |
| 2,272,484 |
|
|
| 2,227,866 |
|
|
| 2,245,286 |
|
|
| 2,123,655 |
|
|
| 2,009,358 |
|
Less: SBA-PPP loans |
| 750 |
|
|
| 1,090 |
|
|
| 2,037 |
|
|
| 2,163 |
|
|
| 2,662 |
|
Total Assets, net SBA-PPP Loans | $ | 2,271,734 |
|
| $ | 2,226,776 |
|
| $ | 2,243,249 |
|
| $ | 2,121,492 |
|
| $ | 2,006,696 |
|
Nonperforming Assets to Total Assets, net SBA-PPP Loans |
| 0.67 | % |
|
| 0.71 | % |
|
| 0.73 | % |
|
| 0.46 | % |
|
| 0.43 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming Loans to Total Portfolio Loans | Quarters Ended | ||||||||||||||||||
(in thousands) | September 30, 2023 |
| June 30, 2023 |
| March 31, 2023 |
| December 31, 2022 |
| September 30, 2022 | ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
Total Nonperforming Loans | $ | 15,236 |
|
| $ | 15,709 |
|
| $ | 16,293 |
|
| $ | 9,756 |
|
| $ | 8,589 |
|
Total Loans |
| 1,862,679 |
|
|
| 1,838,131 |
|
|
| 1,788,146 |
|
|
| 1,730,755 |
|
|
| 1,650,663 |
|
Less: SBA-PPP loans |
| 750 |
|
|
| 1,090 |
|
|
| 2,037 |
|
|
| 2,163 |
|
|
| 2,662 |
|
Total Portfolio Loans | $ | 1,861,929 |
|
| $ | 1,837,041 |
|
| $ | 1,786,109 |
|
| $ | 1,728,592 |
|
| $ | 1,648,001 |
|
Nonperforming Loans to Total Portfolio Loans |
| 0.82 | % |
|
| 0.86 | % |
|
| 0.91 | % |
|
| 0.56 | % |
|
| 0.52 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Charge-offs to Average Portfolio Loans | Quarters Ended | ||||||||||||||||||
(in thousands) | September 30, 2023 |
| June 30, 2023 |
| March 31, 2023 |
| December 31, 2022 |
| September 30, 2022 | ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
Total Net Charge-offs | $ | 1,780 |
|
| $ | 1,583 |
|
| $ | 2,633 |
|
| $ | 2,090 |
|
| $ | 1,588 |
|
Total Average Loans |
| 1,847,772 |
|
|
| 1,802,608 |
|
|
| 1,752,638 |
|
|
| 1,677,869 |
|
|
| 1,607,452 |
|
Less: Average SBA-PPP loans |
| 906 |
|
|
| 1,808 |
|
|
| 2,099 |
|
|
| 2,435 |
|
|
| 5,906 |
|
Total Average Portfolio Loans | $ | 1,846,866 |
|
| $ | 1,800,800 |
|
| $ | 1,750,539 |
|
| $ | 1,675,434 |
|
| $ | 1,601,546 |
|
Net Charge-offs to Average Portfolio Loans |
| 0.38 | % |
|
| 0.35 | % |
|
| 0.61 | % |
|
| 0.49 | % |
|
| 0.39 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Charge-offs to Average Portfolio Loans | Nine Months Ended | ||||||
(in thousands) | September 30, 2023 |
| September 30, 2022 | ||||
|
|
|
| ||||
Total Net Charge-offs | $ | 5,996 |
|
| $ | 1,749 |
|
Total Average Loans |
| 1,801,355 |
|
|
| 1,586,449 |
|
Less: Average SBA-PPP loans |
| 1,600 |
|
|
| 39,063 |
|
Total Average Portfolio Loans | $ | 1,799,755 |
|
| $ | 1,547,386 |
|
Net Charge-offs to Average Portfolio Loans |
| 0.45 | % |
|
| 0.23 | % |
|
|
|
|
|
|
|
|
Tangible Book Value per Share | Quarters Ended | ||||||||||||||||||
(in thousands, except per share amounts) | September 30, 2023 |
| June 30, 2023 |
| March 31, 2023 |
| December 31, 2022 |
| September 30, 2022 | ||||||||||
|
|
|
|
|
|
|
|
|
| ||||||||||
Total Stockholders' Equity | $ | 242,878 |
|
| $ | 237,435 |
|
| $ | 234,517 |
|
| $ | 224,015 |
|
| $ | 214,005 |
|
Less: Preferred equity |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Less: Intangible assets |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Tangible Common Equity | $ | 242,878 |
|
| $ | 237,435 |
|
| $ | 234,517 |
|
| $ | 224,015 |
|
| $ | 214,005 |
|
Period End Shares Outstanding |
| 13,896,062 |
|
|
| 13,981,414 |
|
|
| 14,082,657 |
|
|
| 14,138,829 |
|
|
| 14,038,599 |
|
Tangible Book Value per Share | $ | 17.48 |
|
| $ | 16.98 |
|
| $ | 16.65 |
|
| $ | 15.84 |
|
| $ | 15.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 fourth largest bank headquartered in Maryland at September 30, 2023. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in four locations in the greater Washington, D.C. and Baltimore, Maryland markets. Capital Bancorp had assets of approximately $2.3 billion at September 30, 2023 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,” "optimistic," “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. For details on some of the factors that could affect these expectations, see risk factors and other cautionary language included in the Company's Annual Report on Form 10-K and other periodic and current reports filed with the Securities and Exchange Commission.
While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: changes in general economic, political, or industry conditions; geopolitical concerns, including the ongoing wars in Ukraine and in the Middle East; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations; volatility and disruptions in global capital and credit markets; any failure to adequately manage the transition from USD LIBOR as a reference rate; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; cybersecurity threats and the cost of defending against them, including the costs of compliance with potential legislation to combat cybersecurity at a state, national, or global level; climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs; and other factors that may affect our future results.
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: Jay Walker (301) 468-8848 x1223
MEDIA CONTACT: Ed Barry (240) 283-1912
WEB SITE: www.CapitalBankMD.com
