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Capital Bancorp Reports 20% Growth in Earnings for the Second Quarter of 2019

ROCKVILLE, Md., July 24, 2019 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") (CBNK), holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $4.0 million, or $0.29 per diluted share, for the second quarter of 2019. By comparison, net income was $3.3 million, or $0.24 per diluted share, for the first quarter of 2019 and net income was $3.1 million, or $0.26 per diluted share, for the second quarter of 2018.  Return on average assets was 1.39% and return on average equity was 13.23% for the second quarter of 2019.  For the three months ended March 31, 2019, the return on average assets was 1.22% and return on average equity was 11.39%.  For the three months ended June 30, 2018, the return on average assets was 1.22% and the return on average equity was 14.77%.  For the six months ended June 30, 2019, net income grew 20% from $6.1 million, or $0.51 per diluted share during 2018 to $7.3 million, or $0.53 per diluted share.

2019 Second Quarter Highlights

  • Strong Quality Earnings - Net income for the second quarter of 2019 increased 21% to $4.0 million compared to $3.3 million for the first quarter of 2019. Diluted earnings per share for the three months ended June 30, 2019 was $0.29, compared to $0.24 per share for the three months ended March 31, 2019.   Return on average assets was 1.39%, an increase of 17 basis points compared to the first quarter of 2019.  Return on average equity was 13.23% for the second quarter of 2019, compared to 11.39% for the previous quarter.

  • Robust Asset Growth - Total assets increased $110.4 million, or 10%, to $1.2 billion during the second quarter 2019, and grew 12% for the six months ended June 30, 2019.  The increase was fueled by loan growth and funded by deposit growth.  For the quarter ending June 30, 2019, total loans increased $48.4 million, or 5% to $1.06 billion compared to $1.01 billion at March 31, 2019.  Total deposits increased $69.3 million, or 7%, to $1.0 billion at June 30, 2019, compared to $967.7 million at March 31, 2019.

  • Continued Loan Growth -  Loans improved year over year with growth of $135.5 million, or 15% compared to $920.8 million at June 30, 2018.  Average loan balances have increased 13% year over year, with the largest growth from residential real estate and commercial loans.

  • Strong Core Deposit Growth and Deposit Mix - The Company continues to execute on its strategic initiative to improve the deposit portfolio mix from wholesale time deposits to noninterest bearing deposits.  Accordingly, at June 30, 2019, noninterest bearing deposits increased by $37.2 million, or 31% annualized, compared to December 31, 2018.  The growth was partially driven by an increase in OpenSky® deposits of $13.7 million, or 23% for the six months ended June 30, 2019.  Noninterest bearing deposits increased 18% to $279.5 million for the six months ended June 30, 2019, compared to $237.4 million for the six months ended June 30, 2018.

  • Improving Net Interest Margin Excluding Credit Cards - Excluding credit card loans, the net interest margin increased for the three months ended June 30, 2019 to 4.37% from 4.30% in the prior quarter, and also increased from 4.29% in the same quarter in the prior year.  Overall, the net interest margin improved 33 basis points to 5.79% for the second quarter of 2019 compared to the prior quarter, and increased 26 basis points from 5.53% in the same quarter of the previous year. The quarter over quarter increase this year was due to the increase in loan volume, yields and late fees on the credit card portfolio. The cost of deposits declined 2 basis points to 1.36% compared to the first quarter of 2019 due to the change in mix from time deposits to noninterest bearing accounts.

  • Record Credit Card Issuances - OpenSky® credit card issuances exceeded our expectations and set a quarterly high for the second consecutive time this year.  During the quarter, new originations totaled 36.7 thousand compared to 35.1 thousand in the prior quarter, and 21.5 thousand in the second quarter of 2018.  By taking advantage of our enhanced customer application and improved mobile servicing functionality, total open customer accounts increased by approximately 45,000, or 27%, from June 30, 2018, and exceeded 210,000 at June 30, 2019.

  • Profitable Mortgage Business - Capital Bank Home Loans ("CBHL"), formerly Church Street Mortgage, the Bank's residential mortgage banking division, increased the number of loans originated by 67% compared to the previous quarter, and continued to contribute to the Company's results of operations for the quarter with higher margins from the previous quarter.

  • Strong Asset Quality - Asset quality measures remain sound.  Non-performing assets as a percentage of total assets decreased to 0.57% at June 30, 2019, compared to 0.63% at March 31, 2019, and increased 22 basis points from 0.35% at June 30, 2018.  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 the increase in non-performing assets.  Net charge-offs for the six months ended June 30, 2019 were $192 thousand, a decrease from $731 thousand for the same period last year.

"During the second quarter, we showed continued progress on our solutions and technology enabled strategy.  Strong growth of commercial loans and deposits emerged as our new sales teams began to deliver results.  The bank was also able to capitalize on a strong housing market and to utilize our direct marketing efforts to post good mortgage and card volume.  We see continued opportunity to capitalize on market disruption and to recruit talent while keeping a close eye on credit risk and risk adjusted returns," said Ed Barry, CEO of Capital Bancorp.

                       
COMPARATIVE FINANCIAL
HIGHLIGHTS - Unaudited
                     
  Quarter Ended   2nd Quarter   Six Months Ended   YTD
  June 30,   2019 - 2018   June 30,   2019 - 2018
(in thousands except per share data) 2019   2018   % Change   2019   2018   % Change
Earnings Summary                      
Interest income $ 20,289     $ 16,767     21.0 %   $ 38,607     $ 33,431     15.5 %
Interest expense 3,758     2,645     42.1 %   7,332     4,924     48.9 %
Net interest income 16,531     14,122     17.1 %   31,275     28,507     9.7 %
Provision for loan losses 677     630     7.5 %   798     1,145     (30.3 )%
Noninterest income 5,927     4,339     36.6 %   10,019     8,417     19.0 %
Noninterest expense 16,210     13,528     19.8 %   30,540     27,128     12.6 %
Income before income taxes 5,571     4,303     29.5 %   9,956     8,651     15.1 %
Income tax expense 1,548     1,158     33.7 %   2,614     2,516     3.9 %
Net income $ 4,023     $ 3,145     27.9 %   $ 7,342     $ 6,135     19.7 %
                       
Weighted average common shares - Basic(1) 13,719     11,611     18.2 %   13,708     11,587     18.3 %
Weighted average common shares - Diluted(1) 13,914     11,995     16.0 %   13,888     11,986     15.9 %
Earnings - Basic(1) $ 0.30     $ 0.27     11.1 %   $ 0.54     $ 0.53     1.9 %
Earnings - Diluted(1) $ 0.29     $ 0.26     11.5 %   $ 0.53     $ 0.51     3.9 %
Return on average assets 1.39 %   1.22 %   13.9 %   1.30 %   1.20 %   8.3 %
Return on average equity 13.23 %   14.77 %   (10.4 )%   12.33 %   14.92 %   (17.4 )%

_______________
(1)  Gives effect to a four-for-one common stock split completed effective August 15, 2018.

  Quarter Ended   2nd Quarter   Quarter Ended
  June 30,   2019
vs. 2018
  March 31,   December 31,   September 30,
(in thousands except per share data) 2019   2018   % Change   2019   2018   2018
Balance Sheet Highlights                      
Assets $ 1,234,157     $ 1,067,786     15.6 %   $ 1,123,752     $ 1,105,058     $ 1,072,905  
Investment securities 39,157     49,799     (21.4 )%   46,080     46,932     48,067  
Mortgage loans held for sale 47,744     21,370     123.4 %   21,630     18,526     21,373  
Loans(1) 1,056,290     920,783     14.7 %   1,007,928     1,000,268     955,412  
Allowance for loan losses 11,913     10,447     14.0 %   11,347     11,308     10,892  
Deposits 1,037,004     938,364     10.5 %   967,722     955,240     911,116  
Borrowings and repurchase agreements 38,889     14,445     169.2 %   3,010     7,332     28,239  
Subordinated debentures 15,409     15,378     0.2 %   15,401     15,393     15,386  
Total stockholders' equity 123,118     86,994     41.5 %   118,550     114,564     106,657  
Tangible common equity 123,118     86,994     41.5 %   118,550     114,564     106,657  
                       
Common shares outstanding 13,719     11,661     17.6 %   13,713     13,672     13,191  
Tangible book value per share $ 8.97     $ 7.46     20.2 %   $ 8.65     $ 8.38     $ 8.09  

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

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

Net interest income increased $2.4 million, or 17%, to $16.5 million for the three months ended June 30, 2019 compared to the same period in 2018.  Net interest margin increased 26 basis points to 5.79% for the three months ended June 30, 2019 from 5.53% for the three months ended June 30, 2018. For the three months ended June 30, 2019, our average interest-earning assets increased by $121.3 million, or 12%, compared to the three months ended June 30, 2018, and the average yield on our interest-earning assets increased by 54 basis points. In comparison, our average interest-bearing liabilities increased $53.8 million, or 7%, from the second quarter of 2018 to the second quarter of 2019, with the respective average rate increasing by 48 basis points.

During the three months ended June 30, 2019, we recorded a provision for loan losses of $677 thousand, compared to $630 thousand during the three months ended June 30, 2018.  Net charge-offs for the second quarter of 2019 were $111 thousand, or 0.04% of average loans, annualized.  Net charge-offs for the second quarter of 2018 were $341 thousand, or 0.16% of average loans, annualized.

Noninterest income increased by $1.6 million, or 37% from $4.3 million for the three months ended June 30, 2018 to $5.9 million for the three months ended June 30, 2019, due largely to mortgage banking revenue. Noninterest expense was $16.2 million and $13.5 million for the three months ended June 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, data processing expenses, advertising, and other operating expenses.

Operating Results -  six months ended June 30, 2019 compared to six months ended June 30, 2018

Net interest income increased $2.8 million, or 10%, to $31.3 million for the six months ended June 30, 2019 compared to the same period in 2018.  Net interest margin decreased 3 basis points to 5.63% for the six months ended June 30, 2019 from 5.66% for the six months ended June 30, 2018. For the six months ended June 30, 2019, our average interest-earning assets had increased by $104.6 million, compared to the six months ended June 30, 2018, and the average yield on our interest-earning assets increased by 31 basis points. In comparison, our average interest-bearing liabilities increased $35.3 million from the second quarter of 2018 to the second quarter of 2019, with the respective average rate increasing by 58 basis points.

During the six months ended June 30, 2019, we recorded a provision for loan losses of $798 thousand, compared to $1.1 million during the six months ended June 30, 2018.  Net charge-offs for the six months ended June 30, 2019 were $192 thousand, or 0.04% of average loans, annualized.  Net charge-offs for the same period in 2018 were $731 thousand, or 0.16% of average loans, annualized.

Noninterest income increased by $1.6 million, or 19% from $8.4 million for the six months ended June 30, 2018 to $10.0 million for the six months ended June 30, 2019, due largely to mortgage banking revenue. Noninterest expense was $30.5 million and $27.1 million for the six months ended June 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, advertising and other expenses.

Financial Condition

Total assets at June 30, 2019 were $1.2 billion, up 15.6% as compared to $1.1 billion at June 30, 2018. Gross loans, excluding mortgage loans held for sale, were $1.1 billion as of June 30, 2019, compared to $920.8 million at June 30, 2018, an increase of 15%.  Deposits were $1.0 billion at June 30, 2019, an increase of 11%, as compared to $938.4 million at June 30, 2018.

Our allowance for loan losses was $11.9 million, or 1.13% of loans, at June 30, 2019, which provided approximately 174% coverage of nonperforming loans at such date, compared to $10.4 million, or 1.13% of loans, and approximately 321% coverage of nonperforming loans at June 30, 2018.  Nonperforming assets were $7.0 million, or 0.57% of total assets, as of June 30, 2019. Comparatively, nonperforming assets were $3.7 million, or 0.35% of total assets, at June 30, 2018. Of the $7.0 million in total nonperforming assets as of June 30, 2019, nonperforming loans represented $6.8 million and other real estate owned totaled $149 thousand.  Included in nonperforming loans are troubled debt restructurings of $473 thousand, and one borrower relationship totaling $2.1 million that is well secured, on which no impairment is expected.

Stockholders’ equity totaled $123.1 million as of June 30, 2019, compared to $87.0 million at June 30, 2018. The increase was due to increased earnings and net proceeds from the Company's initial public offering on September 28, 2018 of approximately $19.8 million.  As of June 30, 2019, the Bank's capital ratios continue to exceed the regulatory requirements for a “well-capitalized” institution.

               
Consolidated Statements of Income
(Unaudited)
             
  Three Months Ended June 30,   Six Months Ended June 30,
(in thousands) 2019   2018   2019   2018
Interest income              
Loans, including fees $ 19,804     $ 16,232     $ 37,648     $ 32,500  
Investment securities available for sale 234     276     492     515  
Federal funds sold and other 251     259     467     416  
Total interest income 20,289     16,767     38,607     33,431  
Interest expense              
Deposits 3,195     2,309     6,438     4,259  
Borrowed funds 563     336     894     665  
Total interest expense 3,758     2,645     7,332     4,924  
Net interest income 16,531     14,122     31,275     28,507  
Provision for loan losses 677     630     798     1,145  
Net interest income after provision for loan losses 15,854     13,492     30,477     27,362  
Noninterest income              
Service charges on deposits 138     117     236     242  
Credit card fees 1,970     1,562     3,462     3,017  
Mortgage banking revenue 3,715     2,499     6,091     4,928  
Gain(loss) on sale of investment securities available for sale 26     1     26     (2 )
Other fees and charges 78     160     204     232  
Total noninterest income 5,927     4,339     10,019     8,417  
Noninterest expenses              
Salaries and employee benefits 8,111     6,211     14,898     12,512  
Occupancy and equipment 1,102     1,088     2,196     2,171  
Professional fees 609     471     1,228     845  
Data processing 3,716     3,540     7,029     7,222  
Advertising 531     331     973     755  
Loan processing 340     348     645     609  
Other real estate expenses, net 28     7     50     31  
Other operating 1,773     1,532     3,521     2,983  
Total noninterest expenses 16,210     13,528     30,540     27,128  
Income before income taxes 5,571     4,303     9,956     8,651  
Income tax expense 1,548     1,158     2,614     2,516  
Net income $ 4,023     $ 3,145     $ 7,342     $ 6,135  


       
Consolidated Balance Sheets (unaudited)    
(in thousands) June 30,
 2019
  December 31,
2018
Assets      
Cash and due from banks $ 12,253     $ 10,431  
Interest bearing deposits at other financial institutions 65,284     22,007  
Federal funds sold 1,991     2,285  
Total cash and cash equivalents 79,528     34,723  
Investment securities available for sale 39,157     46,932  
Restricted investments 4,137     2,503  
Loans held for sale 47,744     18,526  
Loans receivable, net of allowance for loan losses of $11,913 and $11,308 at June 30, 2019 and December 31, 2018, respectively 1,044,377     988,960  
Premises and equipment, net 7,202     2,975  
Accrued interest receivable 4,649     4,462  
Deferred income taxes 3,504     3,654  
Foreclosed real estate 149     142  
Prepaid income taxes 268     90  
Other assets 3,442     2,091  
Total assets $ 1,234,157     $ 1,105,058  
       
Liabilities      
Deposits      
Noninterest bearing $ 279,484     $ 242,259  
Interest bearing 757,520     712,981  
Total deposits 1,037,004     955,240  
Securities sold under agreements to repurchase     3,332  
Federal funds purchased     2,000  
Federal Home Loan Bank advances 38,889     2,000  
Other borrowed funds 15,409     15,393  
Accrued interest payable 2,039     1,565  
Other liabilities 17,698     10,964  
Total liabilities 1,111,039     990,494  
       
Stockholders' equity      
Preferred stock, $.01 par value; 1,000,000 shares authorized; no shares issued or outstanding at June 30, 2019 and December 31, 2018      
Common stock, $.01 par value; 49,000,000 shares authorized:  13,718,665 and 13,672,479 issued and outstanding at June 30, 2019 and December 31, 2018, respectively 137     137  
Additional paid-in capital 50,071     49,321  
Retained earnings 72,940     65,701  
Accumulated other comprehensive loss (30 )   (595 )
Total stockholders' equity 123,118     114,564  
Total liabilities and stockholders' equity $ 1,234,157     $ 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 June 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 $ 38,573     $ 210     2.19 %   $ 48,682     $ 219     1.80 %
Federal funds sold 2,111         0.00 %   1,483     6     1.62 %
Investment securities 42,031     234     2.23 %   50,739     276     2.18 %
Restricted stock 4,428     41     3.75 %   2,553     35     5.50 %
 Loans held for sale 34,635     681     7.88 %   17,217     397     9.25 %
Loans(2)(3) 1,024,306     19,123     7.49 %   904,149     15,835     7.02 %
Total interest earning assets 1,146,084     20,289     7.10 %   1,024,823     16,768     6.56 %
Noninterest earning assets 17,233             11,179          
Total assets $ 1,163,317             $ 1,036,002          
Liabilities and Stockholders’ Equity                      
Interest bearing liabilities:                      
Now accounts $ 96,702     89     0.37 %   $ 76,770     53     0.28 %
Savings 3,577     3     0.35 %   3,602     3     0.33 %
Money market accounts 333,248     1,434     1.73 %   286,836     931     1.30 %
Time deposits 277,402     1,669     2.41 %   323,840     1,323     1.64 %
Borrowed funds 63,083     563     3.58 %   29,129     336     4.63 %
Total interest bearing liabilities 774,012     3,758     1.95 %   720,177     2,646     1.47 %
Noninterest bearing liabilities:                      
Noninterest bearing liabilities 15,963             8,499          
Noninterest bearing deposits 251,408             221,896          
Stockholders’ equity 121,934             85,430          
Total liabilities and stockholders’ equity $ 1,163,317             $ 1,036,002          
                       
Net interest spread(4)         5.15 %           5.09 %
Net interest income     $ 16,531             $ 14,122      
Net interest margin(5)         5.79 %           5.53 %
Net interest margin excluding credit cards         4.37 %           4.29 %

_______________
(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.

   
  Six Months Ended June 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 $ 34,879     $ 374     2.16 %   $ 45,435     $ 338     1.50 %
Federal funds sold 1,869     1     0.06 %   1,644     12     1.50 %
Investment securities 44,259     492     2.24 %   51,917     514     2.00 %
Restricted stock 3,588     92     5.17 %   2,528     67     5.35 %
Loans held for sale 24,519     1,032     8.49 %   17,729     771     8.77 %
Loans(2)(3) 1,011,971     36,616     7.30 %   897,193     31,729     7.13 %
Total interest earning assets 1,121,085     38,607     6.94 %   1,016,446     33,431     6.63 %
Noninterest earning assets 14,712             10,324          
Total assets $ 1,135,797             $ 1,026,770          
Liabilities and Stockholders’ Equity                      
Interest bearing liabilities:                      
Now accounts $ 87,416     167     0.38 %   $ 72,252     99     0.28 %
Savings 3,460     6     0.35 %   3,501     4     0.26 %
Money market accounts 325,173     2,748     1.70 %   294,305     1,706     1.17 %
Time deposits 298,805     3,517     2.37 %   323,124     2,450     1.53 %
Borrowed funds 44,603     894     4.04 %   31,005     665     4.32 %
Total interest bearing liabilities 759,457     7,332     1.95 %   724,187     4,924     1.37 %
Noninterest bearing liabilities:                      
Noninterest bearing liabilities 13,856             9,558          
Noninterest bearing deposits 242,443             210,081          
Stockholders’ equity 120,041             82,944          
Total liabilities and stockholders’ equity $ 1,135,797             $ 1,026,770          
                       
Net interest spread(4)         4.99 %           5.26 %
Net interest income     $ 31,275             $ 28,507      
Net interest margin(5)         5.63 %           5.66 %
Net interest margin excluding credit cards         4.34 %           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)   June 30,
 2019
  March 31,
2019
  December 31,
2018
  September 30,
2018
  June 30,
2018
Earnings:                    
Net income   $ 4,023     $ 3,319     $ 3,486     $ 3,147     $ 3,145  
Earnings per common share, diluted(1)(2)   0.29     0.24     0.25     0.26     0.26  
Net interest margin   5.79 %   5.46 %   5.46 %   5.56 %   5.53 %
Net interest margin, excluding credit cards   4.37 %   4.30 %   4.28 %   4.26 %   4.29 %
Return on average assets(1)   1.39 %   1.22 %   1.27 %   1.19 %   1.22 %
Return on average equity(1)   13.23 %   11.39 %   12.26 %   13.69 %   14.77 %
Efficiency ratio   72.18 %   76.08 %   71.34 %   74.20 %   73.64 %
Balance Sheet:                    
Loans(3)   $ 1,056,290     $ 1,007,928     $ 1,000,268     $ 955,412     $ 920,783  
Deposits   1,037,004     967,722     955,240     911,116     938,364  
Total assets   1,234,157     1,123,752     1,105,058     1,072,905     1,067,786  
Asset Quality Ratios:                    
Nonperforming assets to total assets   0.57 %   0.63 %   0.44 %   0.42 %   0.35 %
Nonperforming loans to total loans   0.65 %   0.69 %   0.47 %   0.44 %   0.35 %
Net charge-offs to average loans (YTD annualized)   0.04 %   0.03 %   0.09 %   0.11 %   0.16 %
Allowance for loan losses to total loans   1.13 %   1.13 %   1.13 %   1.14 %   1.13 %
Allowance for loan losses to non-performing loans   174.05 %   162.52 %   241.72 %   257.83 %   320.78 %
Bank Capital Ratios:                    
Total risk based capital ratio   11.91 %   12.23 %   12.25 %   12.36 %   12.34 %
Tier 1 risk based capital ratio   10.65 %   10.98 %   11.00 %   11.11 %   11.09 %
Leverage ratio   8.91 %   9.05 %   9.06 %   9.01 %   8.91 %
Common equity Tier 1 ratio   10.65 %   10.98 %   11.00 %   11.11 %   11.09 %
Tangible common equity   8.40 %   8.93 %   8.89 %   8.72 %   8.58 %
Composition of Loans:                    
Residential real estate   $ 426,887     $ 421,346     $ 407,844     $ 388,141     $ 366,465  
Commercial real estate   297,891     277,905     278,691     276,726     271,800  
Construction real estate   169,225     157,338     157,586     144,012     149,192  
Commercial and industrial   124,436     120,191     122,264     113,473     101,752  
Credit card   40,141     32,359     34,673     33,821     32,522  
Other   1,015     1,195     1,202     1,270     1,244  
Composition of Deposits:                    
Non interest bearing   $ 279,484     $ 262,235     $ 242,259     $ 234,094     $ 237,361  
Interest bearing demand   129,199     85,969     85,747     66,170     88,077  
Savings   3,572     3,595     2,866     4,597     3,902  
Time Deposits   277,048     295,809     335,471     330,423     333,083  
Money Markets   347,701     320,114     288,897     275,832     275,941  
Capital Bank Home Loan Metrics:                
Origination of loans held for sale   $ 134,409     $ 74,128     $ 70,826     $ 81,665     $ 95,570  
Proceeds from loans held for sale, net of gains   105,418     71,693     73,883     81,029     92,195  
Gain on sale of loans   3,715     2,375     2,097     2,451     2,500  
Purchase volume as a % of originations   79.07 %   78.42 %   86.72 %   92.72 %   85.09 %
Gain on sale as a % of loans sold(4)   3.40 %   3.21 %   2.76 %   2.94 %   2.64 %
OpenSky Credit Card Portfolio Metrics:                
Total active customer accounts   211,408     187,423     169,981     170,160     166,661  
Total loans   $ 40,141     $ 32,359     $ 34,673     $ 33,821     $ 32,522  
Total deposits at the Bank   $ 73,666     $ 65,808     $ 59,954     $ 59,978     $ 58,951  

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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 $1.2 billion at June 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