Fourth Quarter 2024 Results
- Net Income of $7.5 million, or $0.45 per share, and return on average assets of 0.96%
- Net Income of $15.5 million, or $0.92 per share, and return on average assets of 1.97% as adjusted to exclude the impact of merger-related expenses, initial Integrated Financial Holdings, Inc. ("IFH") Allowance for Credit Losses ("ACL") provision, and a non-recurring legacy IFH equity and debt investment write-down (non-GAAP)(1)
- Tangible Book Value Per Share(1) of $18.77, decreased 6.8%, or $1.36 as compared to $20.13 (3Q 2024), resulting from the acquisition of IFH and related purchase accounting impacts
- Return on average equity of 8.50%, and return on average tangible common equity(1) of 9.47%
- Core return on average equity(1) of 17.68%, and core return on average tangible common equity(1) of 19.19%
- Net Interest Income increased $6.0 million, or 15.6% (not annualized), from 3Q 2024
- Net Interest Margin ("NIM") decreased to 5.87% as compared to 6.41% (3Q 2024)
- Core NIM, as adjusted to exclude the impact of credit card loans (non-GAAP)(1) decreased to 4.05% as compared to 4.08% (3Q 2024)
- Net purchase accounting accretion of $0.7 million for 4Q 2024 accounted for 9 basis points of the reported 5.87% NIM and 10 basis points of the reported 4.05% core NIM, respectively
- Fee Revenue (noninterest income) totaled $11.9 million, or 21.2% of total revenue for 4Q 2024
- Core Fee Revenue of $14.5 million, or 24.7% of total core revenue, increased $7.9 million from 3Q 2024, excluding a non-recurring equity and debt investment write-down of $2.6 million (non-GAAP)(1), primarily due to the acquisition of IFH
- Gross Loan Growth in the quarter of $522.6 million includes $373.5 million from the acquisition of IFH, and $149.1 million from organic growth, or 28.2% annualized for 4Q 2024
- Commercial and industrial loans of $554.6 million, or 21.0% of total gross loans at December 31, 2024 increased $282.7 million from September 30, 2024
- Total Deposit Growth in the quarter of $575.7 million includes $459.0 million from the acquisition of IFH, and $116.7 million from organic growth, or 21.2% annualized for 4Q 2024
- Noninterest bearing deposits increased $92.8 million, or 51.4% annualized from 3Q 2024
- The ratio of allowance for credit losses to total loans equaled 1.85% at December 31, 2024 including 1.44% for the legacy Capital Bank portfolio, down 7 basis points from 3Q. The additional ACL coverage results from the initial $15.5 million impact from the acquisition of the IFH portfolio.
- Cash Dividend of $0.10 per share declared by the Board of Directors
ROCKVILLE, Md., Jan. 27, 2025 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $7.5 million, or $0.45 per diluted share, for the fourth quarter 2024, compared to net income of $8.7 million, or $0.62 per diluted share, for the third quarter 2024, and $9.0 million, or $0.65 per diluted share, for the fourth quarter 2023. On October 1, 2024, the Company successfully completed its previously announced merger with IFH. Net income for the fourth quarter 2024 would have been $15.5 million, or $0.92 per diluted share if adjusted to exclude the impact of merger-related expenses, the initial IFH ACL provision, and a non-recurring equity and debt investment write down (non-GAAP)(1), compared to $9.2 million, or $0.66 per diluted share, for the third quarter 2024.
The Company also declared a cash dividend on its common stock of $0.10 per share. The dividend is payable on February 26, 2025 to shareholders of record on February 10, 2025.
"We are pleased to have successfully closed our acquisition of Integrated Financial Holdings, and we are now focused on merger integration and executing on the opportunities from our complementary lines of business," said Ed Barry, CEO of the Company and the Bank. "We continue to benefit from our diversified business model which is driving growth across our platforms."
"The really strong performance of the commercial bank during the quarter was highlighted by record loan growth, solid deposit growth, and stable core net interest margin. I am particularly pleased by the growth of our commercial and industrial loans," said Steven J. Schwartz, Chairman of the Company. "This outstanding organic growth is expected to continue to be a major contributing factor in our overall earnings growth in 2025 and beyond. The acquisition of IFH, while creating a lot of noise in the financial results of the 4th quarter, provides us with a new line of business - loan servicing, processing, and packaging - and a significant expansion of our government-guaranteed lending platform."
(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.
Acquisition of Integrated Financial Holdings, Inc.
On October 1, 2024, the Company successfully completed its previously announced merger with IFH. Pursuant to the terms of the Merger Agreement, each share of IFH's common stock, par value $1.00 per share ("IFH Common Stock") was converted into the right to receive (a) 1.115 shares of common stock of the Company, par value $0.01 per share ("Capital Common Stock"); and (b) $5.36 in cash per share of IFH Common Stock held immediately prior to the Effective Time, in addition to cash in lieu of fractional shares. In addition, each stock option granted by IFH to purchase shares of IFH Common Stock, whether vested or unvested, outstanding immediately prior to the Effective Time, was assumed by the Company and converted into an equivalent option to purchase Capital Common Stock, with the same terms and conditions as applied to the IFH stock option.
Total assets, including purchase accounting adjustments, of $559.4 million acquired in connection with the IFH acquisition included gross loans of $373.5 million, loans held for sale of $41.7 million and total deposits of $459.0 million at October 1, 2024.
During 2024, the Company incurred pre-tax merger-related expenses of $3.9 million, including expenses totaling $2.6 million for the fourth quarter 2024, generally consistent with modeled expectations.
The fourth quarter earnings were also impacted by pre-tax provision credit losses on acquired loans of $4.2 million ("Initial IFH ACL Provision") along with a non-recurring $2.6 million write-down of a legacy IFH equity and debt investment in a start-up. The net remaining value of the equity and debt investment is $0.2 million at December 31, 2024.
The following table provides a reconciliation of the Company's net income under GAAP to non-GAAP results excluding merger-related expenses, Initial IFH ACL Provision, and the non-recurring equity and debt write-down.
| Fourth Quarter 2024 | Third Quarter 2024 | ||||||||||||||||||||||||||||||
| (in thousands, except per share data) | Income Before Income Taxes | Income Tax Expense | Net Income | Diluted Earnings per Share | Income Before Income Taxes | Income Tax Expense(Benefit) | Net Income | Diluted Earnings per Share | |||||||||||||||||||||||
| GAAP Earnings | $ | 10,776 | $ | 3,243 | $ | 7,533 | $ | 0.45 | $ | 11,499 | $ | 2,827 | $ | 8,672 | $ | 0.62 | |||||||||||||||
| Add: Merger-Related Expenses | 2,615 | 464 | 2,151 | 520 | (37 | ) | 557 | ||||||||||||||||||||||||
| Add: Non-recurring Equity and Debt Investment Write-Down | 2,620 | - | 2,620 | - | - | - | |||||||||||||||||||||||||
| Add: Initial IFH ACL Provision | 4,194 | 1,025 | 3,169 | - | - | - | |||||||||||||||||||||||||
| Non-GAAP Earnings | $ | 20,205 | $ | 4,732 | $ | 15,473 | $ | 0.92 | $ | 12,019 | $ | 2,790 | $ | 9,229 | $ | 0.66 | |||||||||||||||
| Year Ended December 31, 2024 | |||||||||||||||
| (in thousands, except per share data) | Income Before Income Taxes | Income Tax Expense | Net Income | Diluted Earnings per Share | |||||||||||
| GAAP Earnings | $ | 41,832 | $ | 10,860 | $ | 30,972 | $ | 2.11 | |||||||
| Add: Merger-Related Expenses | 3,930 | 622 | 3,308 | ||||||||||||
| Add: Non-recurring Equity and Debt Investment Write-Down | 2,620 | - | 2,620 | ||||||||||||
| Add: Initial IFH ACL Provision | 4,194 | 1,025 | 3,169 | ||||||||||||
| Non-GAAP Earnings | $ | 52,576 | $ | 12,507 | $ | 40,069 | $ | 2.73 | |||||||
Note: The tax benefit associated with merger-related expenses has been adjusted to reflect the estimated nondeductible portion of the expenses.
Fourth Quarter 2024 Highlights
Earnings Summary
Net income of $7.5 million, or $0.45 per diluted share, decreased $1.1 million compared to $8.7 million, or $0.62 per diluted share, for the third quarter 2024. Net income of $15.5 million, or $0.92 per diluted share, as adjusted to exclude the impact of merger-related expenses, Initial IFH ACL Provision and a $2.6 million non-recurring equity and debt investment write-down (non-GAAP)(1) for the fourth quarter 2024 compared to $9.2 million, or $0.66 per diluted share, for the third quarter 2024.
- Net interest income of $44.3 million increased $6.0 million, or 15.6%, compared to the third quarter 2024.
- Interest income of $61.7 million increased $9.1 million, or 17.3%, over the third quarter 2024, primarily from $7.9 million in portfolio loan interest income, as growth in average balances increased $539.3 million. Interest income from interest-bearing deposits held at other financial institutions increased $0.3 million, as average balances increased $49.1 million to $140.2 million. Interest income included $0.7 million from net purchase accounting amortization.
- Interest expense of $17.4 million increased $3.1 million, or 21.9% over the third quarter 2024 due to increases in time deposits and borrowed funds of $2.7 million and $0.6 million, respectively, offset by a decrease in customer money market deposits of $0.3 million. Average balances increased $367.8 million, $53.5 million and $65.3 million, respectively. Interest expense included $1.4 million from net purchase accounting accretion.
- The provision for credit losses was $7.8 million, an increase of $4.1 million from the third quarter 2024, which included the Initial IFH ACL Provision of $4.2 million, $2.4 million from organic commercial portfolio loan growth and $1.2 million from OpenSky provision in the quarter. Net charge-offs totaled $2.4 million, a $0.2 million decrease over the third quarter 2024, including $2.1 million from credit card related loans. At December 31, 2024, the allowance for credit losses to total loans ratio was 1.85%, up 34 basis points from the ratio at September 30, 2024 due to the initial purchase credit deteriorated ("PCD") credit mark and initial non-PCD ACL provision. Excluding IFH, legacy Capital Bank ACL coverage ratio was 1.44%, a decrease of 7 basis points from the third quarter 2024.
Earnings Summary (Continued)
- Noninterest income of $11.9 million increased $5.3 million as compared to the third quarter 2024 primarily due to contributions from the IFH acquisition. Government loan servicing revenue (Windsor) totaled $4.0 million, government lending revenue totaled $2.3 million and loan servicing rights totaled $1.0 million, offset by a non-recurring equity and debt write-down of $2.6 million related to an IFH investment. Other income increased $1.0 million including $0.9 million related to an investment in an SBIC, while credit card fees declined $0.3 million.
- Noninterest expense of $37.5 million increased $7.8 million as compared to the third quarter 2024, primarily from the IFH acquisition. Noninterest expense of $34.9 million, excluding merger-related expenses of $2.6 million, increased $5.7 million as compared to the third quarter 2024. Highlights include:
- The fourth quarter 2024 includes $0.3 million of intangible amortization resulting from the transaction.
- Salaries and employee benefits expenses of $16.5 million increased $3.2 million, primarily related to the acquisition of IFH.
- Occupancy and equipment expenses of $3.0 million increased $1.2 million, primarily related to increased contract expense from the IFH acquisition of $0.5 million and software depreciation of $0.4 million.
- Estimated total cost synergies resulting from the acquisition totaled $1.5 million in the fourth quarter 2024, generally consistent with modeled expectations.
- Income tax expense of $3.2 million, or 30.1% of pre-tax income for the fourth quarter 2024, increased $0.4 million from $2.8 million, or 24.6% of pre-tax income for the third quarter 2024. The elevated tax rate in the quarter resulted from non-deductibility of an equity and debt write-down along with some merger-related expenses. Excluding merger-related expenses and the non-recurring equity and debt write-down, the effective income tax rate for the fourth quarter 2024 would have been 22.6%.
Balance Sheet
Total assets of $3.2 billion at December 31, 2024 increased $646.1 million, or 25.2% (not annualized), from September 30, 2024. Total assets, including $559.4 million acquired with the IFH acquisition, net of purchase accounting, included gross loans of $373.5 million, loans held for sale of $41.7 million and total deposits of $459.0 million at October 1, 2024.
- Cash and cash equivalents of $205.3 million at December 31, 2024 increased $48.6 million from September 30, 2024.
- Total portfolio loans of $2.6 billion at December 31, 2024 increased $522.6 million, or 24.8% (not annualized) from September 30, 2024. Total average loans increased $539.3 million quarter over quarter.
- Owner-occupied commercial real estate loans increased $88.6 million, or 25.2% (not annualized) from September 30, 2024.
- The average portfolio loans-to-deposit ratio of 99.27% for the three months ended December 31, 2024 remained stable.
- Total deposits of $2.8 billion at December 31, 2024 increased $575.7 million, or 26.3% (not annualized), from September 30, 2024. The increase includes $190.6 million of customer time deposits, $92.8 million of noninterest-bearing deposits primarily related to growth in title company deposit balances, $130.2 million of growth in customer money market deposits and $180.0 million of growth in brokered time deposits, partially offset by a decrease in interest-bearing demand accounts of $27.6 million.
- Insured and protected deposits were approximately $1.6 billion as of December 31, 2024, representing 57.1% of the Company's deposit portfolio.
- Low and no interest bearing deposits of $1.1 billion, 38.5% of deposits, increased $74.9 million, or 7.6% (not annualized) from September 30, 2024. Average noninterest-bearing deposits of $729.9 million increased $49.2 million, or 7.2% (not annualized), and represented 27.9% of total average deposits at December 31, 2024.
- The investment securities portfolio continues to be classified as available-for-sale and had a fair market value of $223.6 million, or 7.0% of total assets, an effective duration of 3.0 years, with U.S. Treasury Securities representing 57% of the overall investment portfolio at December 31, 2024. The accumulated other comprehensive income (loss) on the investment securities portfolio increased $2.9 million during the quarter to ($11.5 million) as of December 31, 2024, which represents 3.2% of total stockholders' equity. The Company does not have a held-to-maturity investment securities portfolio.
- Liquidity - The Company maintains stable and reliable sources of available borrowings, generally consistent with prior quarter. Sources of available borrowings at December 31, 2024 totaled $803.0 million, including available collateralized lines of credit of $595.7 million, unsecured lines of credit with other banks of $76.0 million and unpledged investment securities available as collateral for potential additional borrowings of $131.4 million.
- Capital Positions - As of December 31, 2024, the Company reported a common equity tier 1 capital ratio of 13.74%, compared to 14.78% at September 30, 2024. At December 31, 2024, the Company and the Bank maintain regulatory capital ratios that exceed all capital adequacy requirements.
Financial Metrics
Net Interest Margin - Net interest margin decreased 54 basis points to 5.87% for the three months ended December 31, 2024, compared to prior quarter. Core net interest margin, as adjusted to exclude the impact of OpenSky credit card loans (non-GAAP)(1), decreased 3 basis points to 4.05% as compared to prior quarter. Net purchase accounting accretion for the fourth quarter 2024 was 9 basis points and 10 basis points for NIM and core NIM, respectively.
- The average yield on interest earning assets of 8.17% decreased 62 basis points compared to the prior quarter, including 40 basis points from inclusion of IFH commercial assets. The yield on portfolio loans, as adjusted to exclude the impact of OpenSky credit card loans (non-GAAP)(1), of 6.98% for the fourth quarter 2024, decreased 17 basis points, primarily as a consequence of reduced market interest rates.
- The total cost of deposits decreased 14 basis points to 2.50% for the fourth quarter 2024 as compared to the prior quarter. The total cost of interest-bearing deposits decreased 46 basis points to 3.46% for the fourth quarter 2024 as compared to the prior quarter.
Efficiency Ratios - The efficiency ratio was 66.7% for the three months ended December 31, 2024, compared to 66.1% for the three months ended September 30, 2024. The efficiency ratio was 59.3%, as adjusted to exclude the impact of merger-related expenses and a non-recurring equity and debt investment write-down (non-GAAP)(1), for the three months ended December 31, 2024 compared to 64.9% for the three months ended September 30, 2024.
Credit Metrics and Asset Quality - The ratio of allowance for credit losses to total loans equaled 1.85% at December 31, 2024, an increase of 34 basis points from September 20, 2024, which includes a 1.44% ACL coverage ratio for the legacy Capital Bank portfolio, down 7 basis points from 3Q. The additional ACL coverage results from the initial $15.5 million reserve on the $373.5 million IFH loan portfolio. Underlying credit performance and metrics were relatively stable and consistent with prior quarter when excluding the impact of the combination with IFH.
Nonperforming assets increased 34 basis points to 0.94% of total assets at December 31, 2024 as compared to September 30, 2024. Total nonaccrual loans at December 31, 2024 increased $14.8 million to $30.2 million compared to September 30, 2024. At December 31, 2024, special mention loans totaled $60.0 million, or 2.3% of total portfolio loans, as compared to $20.3 million, or 1.0% of total portfolio loans, at September 30, 2024. At December 31, 2024, substandard loans totaled $48.4 million, or 1.8% of total portfolio loans, as compared to $23.8 million, or 1.1% of total portfolio loans, at September 30, 2024.
Performance Ratios - Annualized return on average assets ("ROAA") and annualized return on average equity ("ROAE"), and ROATCE were 0.96%, 8.50%, and 9.47% respectively, for the three months ended December 31, 2024, compared to 1.42%, 12.59%, and 12.59% respectively, for the three months ended September 30, 2024.
- Annualized ROAA, annualized ROAE, and annualized ROATCE were 1.97%, 17.46%, and 19.19% respectively, as adjusted to exclude the impact of merger-related expenses, Initial IFH ACL Provision, and a non-recurring equity and debt investment write-down (non-GAAP)(1), for the three months ended December 31, 2024, compared to 1.51%, 13.40%, and 13.40% respectively, for the three months ended September 30, 2024.
Tangible Book Value - Book value per common share of $21.31 at December 31, 2024 increased $1.19 when compared to September 30, 2024. Tangible book value per common share(1) decreased $1.36, or 6.8%, to $18.77 at December 31, 2024 when compared to September 30, 2024. Tangible book value was impacted by the purchase accounting adjustments made in consequence of the IFH acquisition. The Company did not have goodwill or other intangible assets prior to the fourth quarter 2024. Therefore, tangible book value per share(1) was equal to book value per share for periods prior to the fourth quarter 2024.
Commercial Bank
Continued Portfolio Loan Growth - Gross portfolio loans, excluding OpenSky credit card loans, increased $522.9 million, to $2.5 billion, at December 31, 2024 compared to September 30, 2024.
The $522.9 million gross portfolio loan growth includes commercial real estate loans of $156.4 million, residential real estate loans of $64.9 million and commercial and industrial loans of $282.7 million. Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.
Net Interest Income - Interest income of $45.2 million increased $9.4 million from prior quarter, driven by loan growth and higher loan yields. Interest expense of $17.1 million increased $3.1 million, driven by an increase in average balances in the fourth quarter 2024.
Credit Metrics - Nonperforming assets, comprised solely of nonaccrual loans, increased 34 basis point to 0.94% of total assets at December 31, 2024 compared to September 30, 2024. Total nonaccrual loans at December 31, 2024 increased to $30.2 million compared to $15.5 million at September 30, 2024 due primarily to the acquisition of IFH.
Classified and Criticized Loans - At December 31, 2024, special mention loans totaled $60.0 million, or 2.3% of total portfolio loans, as compared to $20.3 million, or 1.0% of total portfolio loans, at September 30, 2024. At December 31, 2024, substandard loans totaled $48.4 million, or 1.8% of total portfolio loans, as compared to $23.8 million, or 1.1% of total portfolio loans, at September 30, 2024.
OpenSky
Revenues - Total revenue of $19.2 million decreased $0.5 million from the prior quarter. Interest income of $15.5 million decreased $0.2 million from the prior quarter. Average OpenSky credit card loan balances, net of reserves and deferred fees of $121.0 million for the fourth quarter 2024, increased $1.5 million, or 1.3% (not annualized), compared to prior quarter. Noninterest income of $3.7 million decreased $0.4 million as compared to the prior quarter, primarily related to lower annual fee income.
Noninterest Expense - Total noninterest expense of $12.6 million decreased $0.7 million, primarily related to a reduction in quarterly advertising expense.
Loan and Deposit Balances - Loan balances, net of reserves, of $127.8 million at December 31, 2024 increased by $0.7 million, or 0.5%, compared to $127.1 million at September 30, 2024. Corresponding deposit balances of $166.4 million at December 31, 2024 decreased $4.4 million, or 2.6%, compared to $170.8 million at September 30, 2024. Gross unsecured loan balances of $42.4 million at December 31, 2024 increased $2.7 million, or 6.8%, compared to $39.7 million at September 30, 2024. During the fourth quarter 2024, the number of credit card accounts increased by 3,614 to 552,566 from September 30, 2024.
OpenSky Credit - Portfolio credit metrics continue to be generally consistent with modeled expectations during the fourth quarter 2024. The provision for credit losses of $1.2 million decreased $1.1 million when compared to the prior quarter.
Capital Bank Home Loans
Originations of loans held for sale totaled $90.0 million during the fourth quarter, with $77.4 million of mortgage loans sold resulting in a gain on sale of loans of $1.9 million, representing a 2.45% of gain on sale as a percentage of total loans sold.
Windsor Advantage
Windsor Advantage is a loan service provider that offers community banks and credit unions with a comprehensive outsourced U.S. Small Business Association ("SBA") 7(a) and U.S. Department of Agriculture ("USDA") lending platform. Windsor Advantage generates fee income for the Company in connection with its servicing, processing and packaging of such loans for its financial institution clients.
Fee Income - Gross government loan servicing revenue totaled $4.6 million, including $0.5 million of Capital Bank related servicing fees, during the fourth quarter 2024. Windsor's total servicing portfolio was $2.5 billion at December 31, 2024.
| COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited | |||||||||||||||||||||||||
| Quarter Ended | 4Q24 vs 3Q24 | 4Q24 vs 4Q23 | |||||||||||||||||||||||
| (in thousands, except per share data) | December 31, 2024 | September 30, 2024 | December 31, 2023 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Earnings Summary | |||||||||||||||||||||||||
| Interest income | $ | 61,707 | $ | 52,610 | $ | 46,969 | $ | 9,097 | 17.3 | % | $ | 14,738 | 31.4 | % | |||||||||||
| Interest expense | 17,380 | 14,256 | 12,080 | 3,124 | 21.9 | % | 5,300 | 43.9 | % | ||||||||||||||||
| Net interest income | 44,327 | 38,354 | 34,889 | 5,973 | 15.6 | % | 9,438 | 27.1 | % | ||||||||||||||||
| Provision for credit losses | 7,828 | 3,748 | 2,808 | 4,080 | 108.9 | % | 5,020 | 178.8 | % | ||||||||||||||||
| Provision for (release of) credit losses on unfunded commitments | 122 | 17 | (106 | ) | 105 | 617.6 | % | 228 | (215.1 | )% | |||||||||||||||
| Noninterest income | 11,913 | 6,635 | 5,936 | 5,278 | 79.5 | % | 5,977 | 100.7 | % | ||||||||||||||||
| Noninterest expense | 37,514 | 29,725 | 26,907 | 7,789 | 26.2 | % | 10,607 | 39.4 | % | ||||||||||||||||
| Income before income taxes | 10,776 | 11,499 | 11,216 | (723 | ) | (6.3 | )% | (440 | ) | (3.9 | )% | ||||||||||||||
| Income tax expense | 3,243 | 2,827 | 2,186 | 416 | 14.7 | % | 1,057 | 48.4 | % | ||||||||||||||||
| Net income | $ | 7,533 | $ | 8,672 | $ | 9,030 | $ | (1,139 | ) | (13.1 | )% | $ | (1,497 | ) | (16.6 | )% | |||||||||
| Pre-tax pre-provision net revenue ("PPNR") (1) | $ | 18,726 | $ | 15,264 | $ | 13,918 | $ | 3,462 | 22.7 | % | $ | 4,808 | 34.5 | % | |||||||||||
| PPNR, as adjusted(1) | $ | 23,961 | $ | 15,784 | $ | 13,918 | $ | 8,177 | 51.8 | % | $ | 10,043 | 72.2 | % | |||||||||||
| Common Share Data | |||||||||||||||||||||||||
| Earnings per share - Basic | $ | 0.45 | $ | 0.62 | $ | 0.65 | $ | (0.17 | ) | (27.4 | )% | $ | (0.20 | ) | (30.8 | )% | |||||||||
| Earnings per share - Diluted | $ | 0.45 | $ | 0.62 | $ | 0.65 | $ | (0.17 | ) | (27.4 | )% | $ | (0.20 | ) | (30.8 | )% | |||||||||
| Earnings per share - Diluted, as adjusted(1) | $ | 0.92 | $ | 0.66 | $ | 0.65 | $ | 0.26 | 39.4 | % | $ | 0.27 | 41.5 | % | |||||||||||
| Weighted average common shares - Basic | 16,595 | 13,914 | 13,897 | ||||||||||||||||||||||
| Weighted average common shares - Diluted | 16,729 | 13,951 | 13,989 | ||||||||||||||||||||||
| Return Ratios | |||||||||||||||||||||||||
| Return on average assets (annualized) | 0.96 | % | 1.42 | % | 1.63 | % | |||||||||||||||||||
| Return on average assets, as adjusted (annualized)(1) | 1.97 | % | 1.51 | % | 1.63 | % | |||||||||||||||||||
| Return on average equity (annualized) | 8.50 | % | 12.59 | % | 14.44 | % | |||||||||||||||||||
| Return on average equity, as adjusted (annualized)(1) | 17.46 | % | 13.40 | % | 14.44 | % | |||||||||||||||||||
| Return on average tangible common equity (annualized)(1) | 9.47 | % | 12.59 | % | 14.44 | % | |||||||||||||||||||
| Core return on average equity, as adjusted (annualized)(1) | 17.68 | % | 13.40 | % | 14.44 | % | |||||||||||||||||||
| Core return on average tangible common equity, as adjusted (annualized)(1) | 19.19 | % | 13.40 | % | 14.44 | % | |||||||||||||||||||
______________
(1) Refer to Appendix for reconciliation of non-GAAP measures.
| COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued) | ||||||||||||||
| Year Ended | ||||||||||||||
| December 31, | ||||||||||||||
| (in thousands, except per share data) | 2024 | 2023 | $ Change | % Change | ||||||||||
| Earnings Summary | ||||||||||||||
| Interest income | $ | 213,301 | $ | 183,206 | $ | 30,095 | 16.4 | % | ||||||
| Interest expense | 58,555 | 41,680 | 16,875 | 40.5 | % | |||||||||
| Net interest income | 154,746 | 141,526 | 13,220 | 9.3 | % | |||||||||
| Provision for credit losses | 17,720 | 9,610 | 8,110 | 84.4 | % | |||||||||
| Provision for (release of) credit losses on unfunded commitments | 385 | (101 | ) | 486 | (481.2 | )% | ||||||||
| Noninterest income | 31,410 | 24,975 | 6,435 | 25.8 | % | |||||||||
| Noninterest expense | 126,219 | 110,767 | 15,452 | 14.0 | % | |||||||||
| Income before income taxes | 41,832 | 46,225 | (4,393 | ) | (9.5 | )% | ||||||||
| Income tax expense | 10,860 | 10,354 | 506 | 4.9 | % | |||||||||
| Net income | $ | 30,972 | $ | 35,871 | $ | (4,899 | ) | (13.7 | )% | |||||
| Pre-tax pre-provision net revenue ("PPNR") (1) | $ | 59,937 | $ | 55,734 | $ | 4,203 | 7.5 | % | ||||||
| PPNR, as adjusted(1) | $ | 66,487 | $ | 55,734 | $ | 10,753 | 19.3 | % | ||||||
| Common Share Data | ||||||||||||||
| Earnings per share - Basic | $ | 2.12 | $ | 2.56 | $ | (0.44 | ) | (17.2 | )% | |||||
| Earnings per share - Diluted | $ | 2.11 | $ | 2.55 | $ | (0.44 | ) | (17.3 | )% | |||||
| Earnings per share - Diluted, as adjusted(1) | $ | 2.73 | $ | 2.55 | ||||||||||
| Weighted average common shares - Basic | 14,584 | 14,003 | ||||||||||||
| Weighted average common shares - Diluted | 14,660 | 14,081 | ||||||||||||
| Return Ratios | ||||||||||||||
| Return on average assets (annualized) | 1.21 | % | 1.64 | % | ||||||||||
| Return on average assets, as adjusted (annualized)(1) | 1.57 | % | 1.64 | % | ||||||||||
| Return on average equity (annualized) | 10.78 | % | 14.91 | % | ||||||||||
| Return on average equity, as adjusted (annualized)(1) | 13.94 | % | 14.91 | % | ||||||||||
______________
(1) Refer to Appendix for reconciliation of non-GAAP measures.
| COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued) | |||||||||||||||||||||||
| Quarter Ended | Quarter Ended | ||||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||
| (in thousands, except per share data) | 2024 | 2023 | % Change | 2024 | 2024 | 2024 | |||||||||||||||||
| Balance Sheet Highlights | |||||||||||||||||||||||
| Assets | $ | 3,206,911 | $ | 2,226,176 | 44.1 | % | $ | 2,560,788 | $ | 2,438,583 | $ | 2,324,238 | |||||||||||
| Investment securities available-for-sale | 223,630 | 208,329 | 7.3 | % | 208,700 | 207,917 | 202,254 | ||||||||||||||||
| Mortgage loans held for sale | 21,270 | 7,481 | 184.3 | % | 19,554 | 19,219 | 10,303 | ||||||||||||||||
| Portfolio loans receivable (2) | 2,630,163 | 1,903,288 | 38.2 | % | 2,107,522 | 2,021,588 | 1,964,525 | ||||||||||||||||
| Allowance for credit losses | 48,652 | 28,610 | 70.1 | % | 31,925 | 30,832 | 29,350 | ||||||||||||||||
| Deposits | 2,761,939 | 1,895,996 | 45.7 | % | 2,186,224 | 2,100,428 | 2,005,695 | ||||||||||||||||
| FHLB borrowings | 22,000 | 22,000 | - | % | 52,000 | 32,000 | 22,000 | ||||||||||||||||
| Other borrowed funds | 12,062 | 27,062 | (55.4 | )% | 12,062 | 12,062 | 12,062 | ||||||||||||||||
| Total stockholders' equity | 355,139 | 254,860 | 39.3 | % | 280,111 | 267,854 | 259,465 | ||||||||||||||||
| Tangible common equity (1) | 312,685 | 254,860 | 22.7 | % | 280,111 | 267,854 | 259,465 | ||||||||||||||||
| Common shares outstanding | 16,662 | 13,923 | 19.7 | % | 13,918 | 13,910 | 13,890 | ||||||||||||||||
| Book value per share | $ | 21.31 | $ | 18.31 | 16.4 | % | $ | 20.13 | $ | 19.26 | $ | 18.68 | |||||||||||
| Tangible book value per share (1) | $ | 18.77 | $ | 18.31 | 2.5 | % | $ | 20.13 | $ | 19.26 | $ | 18.68 | |||||||||||
| Dividends per share | $ | 0.10 | $ | 0.08 | 25.0 | % | $ | 0.10 | $ | 0.08 | $ | 0.08 | |||||||||||
______________
(1) Refer to Appendix for reconciliation of non-GAAP measures.
(2) Loans are reflected net of deferred fees and costs.
| Consolidated Statements of Income (Unaudited) | |||||||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||||||
| (in thousands) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||
| Loans, including fees | $ | 58,602 | $ | 50,047 | $ | 48,275 | $ | 45,991 | $ | 45,109 | $ | 202,915 | $ | 174,760 | |||||||||||||
| Investment securities available-for-sale | 1,539 | 1,343 | 1,308 | 1,251 | 1,083 | 5,441 | 4,815 | ||||||||||||||||||||
| Federal funds sold and other | 1,566 | 1,220 | 1,032 | 1,127 | 777 | 4,945 | 3,631 | ||||||||||||||||||||
| Total interest income | 61,707 | 52,610 | 50,615 | 48,369 | 46,969 | 213,301 | 183,206 | ||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||
| Deposits | 16,385 | 13,902 | 13,050 | 12,833 | 11,759 | 56,170 | 39,625 | ||||||||||||||||||||
| Borrowed funds | 995 | 354 | 508 | 528 | 321 | 2,385 | 2,055 | ||||||||||||||||||||
| Total interest expense | 17,380 | 14,256 | 13,558 | 13,361 | 12,080 | 58,555 | 41,680 | ||||||||||||||||||||
| Net interest income | 44,327 | 38,354 | 37,057 | 35,008 | 34,889 | 154,746 | 141,526 | ||||||||||||||||||||
| Provision for credit losses | 7,828 | 3,748 | 3,417 | 2,727 | 2,808 | 17,720 | 9,610 | ||||||||||||||||||||
| Provision for (release of) credit losses on unfunded commitments | 122 | 17 | 104 | 142 | (106 | ) | 385 | (101 | ) | ||||||||||||||||||
| Net interest income after provision for credit losses | 36,377 | 34,589 | 33,536 | 32,139 | 32,187 | 136,641 | 132,017 | ||||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||
| Service charges on deposits | 241 | 235 | 200 | 207 | 240 | 883 | 964 | ||||||||||||||||||||
| Credit card fees | 3,733 | 4,055 | 4,330 | 3,881 | 3,970 | 15,999 | 17,273 | ||||||||||||||||||||
| Mortgage banking revenue | 1,821 | 1,882 | 1,990 | 1,453 | 1,166 | 7,146 | 4,896 | ||||||||||||||||||||
| Government lending revenue | 2,301 | - | - | - | - | 2,301 | - | ||||||||||||||||||||
| Government loan servicing revenue | 3,993 | - | - | - | - | 3,993 | - | ||||||||||||||||||||
| Loan servicing rights (government guaranteed) | 1,013 | - | - | - | - | 1,013 | - | ||||||||||||||||||||
| Non-recurring equity and debt investment write-down | (2,620 | ) | - | - | - | - | (2,620 | ) | - | ||||||||||||||||||
| Other income | 1,431 | 463 | 370 | 431 | 560 | 2,695 | 1,842 | ||||||||||||||||||||
| Total noninterest income | 11,913 | 6,635 | 6,890 | 5,972 | 5,936 | 31,410 | 24,975 | ||||||||||||||||||||
| Noninterest expenses | |||||||||||||||||||||||||||
| Salaries and employee benefits | 16,513 | 13,345 | 13,272 | 12,907 | 11,638 | 56,037 | 48,754 | ||||||||||||||||||||
| Occupancy and equipment | 2,976 | 1,791 | 1,864 | 1,613 | 1,573 | 8,244 | 5,673 | ||||||||||||||||||||
| Professional fees | 2,150 | 1,980 | 1,769 | 1,947 | 1,930 | 7,846 | 9,270 | ||||||||||||||||||||
| Data processing | 7,210 | 6,930 | 6,788 | 6,761 | 6,128 | 27,689 | 25,686 | ||||||||||||||||||||
| Advertising | 1,032 | 1,223 | 2,072 | 2,032 | 1,433 | 6,359 | 6,161 | ||||||||||||||||||||
| Loan processing | 969 | 615 | 476 | 371 | 198 | 2,431 | 1,633 | ||||||||||||||||||||
| Foreclosed real estate expenses, net | - | 1 | - | 1 | - | 2 | 7 | ||||||||||||||||||||
| Merger-related expenses | 2,615 | 520 | 83 | 712 | - | 3,930 | - | ||||||||||||||||||||
| Operational losses | 993 | 1,008 | 782 | 931 | 1,490 | 3,714 | 4,613 | ||||||||||||||||||||
| Other operating | 3,056 | 2,312 | 2,387 | 2,212 | 2,517 | 9,967 | 8,970 | ||||||||||||||||||||
| Total noninterest expenses | 37,514 | 29,725 | 29,493 | 29,487 | 26,907 | 126,219 | 110,767 | ||||||||||||||||||||
| Income before income taxes | 10,776 | 11,499 | 10,933 | 8,624 | 11,216 | 41,832 | 46,225 | ||||||||||||||||||||
| Income tax expense | 3,243 | 2,827 | 2,728 | 2,062 | 2,186 | 10,860 | 10,354 | ||||||||||||||||||||
| Net income | $ | 7,533 | $ | 8,672 | $ | 8,205 | $ | 6,562 | $ | 9,030 | $ | 30,972 | $ | 35,871 | |||||||||||||
| Consolidated Balance Sheets | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (audited) | |||||||||||||||
| (in thousands, except share data) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Assets | |||||||||||||||||||
| Cash and due from banks | $ | 25,433 | $ | 23,462 | $ | 19,294 | $ | 12,361 | $ | 14,513 | |||||||||
| Interest-bearing deposits at other financial institutions | 179,841 | 133,180 | 117,160 | 72,787 | 39,044 | ||||||||||||||
| Federal funds sold | 58 | 58 | 57 | 56 | 407 | ||||||||||||||
| Total cash and cash equivalents | 205,332 | 156,700 | 136,511 | 85,204 | 53,964 | ||||||||||||||
| Investment securities available-for-sale | 223,630 | 208,700 | 207,917 | 202,254 | 208,329 | ||||||||||||||
| Restricted investments | 4,479 | 5,895 | 4,930 | 4,441 | 4,353 | ||||||||||||||
| Loans held for sale | 21,270 | 19,554 | 19,219 | 10,303 | 7,481 | ||||||||||||||
| Portfolio loans receivable, net of deferred fees and costs | 2,630,163 | 2,107,522 | 2,021,588 | 1,964,525 | 1,903,288 | ||||||||||||||
| Less allowance for credit losses | (48,652 | ) | (31,925 | ) | (30,832 | ) | (29,350 | ) | (28,610 | ) | |||||||||
| Total portfolio loans held for investment, net | 2,581,511 | 2,075,597 | 1,990,756 | 1,935,175 | 1,874,678 | ||||||||||||||
| Premises and equipment, net | 15,525 | 5,959 | 5,551 | 4,500 | 5,069 | ||||||||||||||
| Accrued interest receivable | 16,664 | 12,468 | 12,162 | 12,258 | 11,494 | ||||||||||||||
| Goodwill | 21,126 | - | - | - | - | ||||||||||||||
| Intangible assets | 14,072 | - | - | - | - | ||||||||||||||
| Loan servicing assets | 5,511 | - | - | - | - | ||||||||||||||
| Deferred tax asset | 16,670 | 10,748 | 12,150 | 12,311 | 12,252 | ||||||||||||||
| Bank owned life insurance | 43,956 | 38,779 | 38,414 | 38,062 | 37,711 | ||||||||||||||
| Other assets | 37,165 | 26,388 | 10,973 | 19,730 | 10,845 | ||||||||||||||
| Total assets | $ | 3,206,911 | $ | 2,560,788 | $ | 2,438,583 | $ | 2,324,238 | $ | 2,226,176 | |||||||||
| Liabilities | |||||||||||||||||||
| Deposits | |||||||||||||||||||
| Noninterest-bearing | $ | 810,928 | $ | 718,120 | $ | 684,574 | $ | 665,812 | $ | 617,373 | |||||||||
| Interest-bearing | 1,951,011 | 1,468,104 | 1,415,854 | 1,339,883 | 1,278,623 | ||||||||||||||
| Total deposits | 2,761,939 | 2,186,224 | 2,100,428 | 2,005,695 | 1,895,996 | ||||||||||||||
| Federal Home Loan Bank advances | 22,000 | 52,000 | 32,000 | 22,000 | 22,000 | ||||||||||||||
| Other borrowed funds | 12,062 | 12,062 | 12,062 | 12,062 | 27,062 | ||||||||||||||
| Accrued interest payable | 9,393 | 8,503 | 6,573 | 6,009 | 5,583 | ||||||||||||||
| Other liabilities | 46,378 | 21,888 | 19,666 | 19,007 | 20,675 | ||||||||||||||
| Total liabilities | 2,851,772 | 2,280,677 | 2,170,729 | 2,064,773 | 1,971,316 | ||||||||||||||
| Stockholders' equity | |||||||||||||||||||
| Common stock | 167 | 139 | 139 | 139 | 139 | ||||||||||||||
| Additional paid-in capital | 128,598 | 55,585 | 55,005 | 54,229 | 54,473 | ||||||||||||||
| Retained earnings | 237,843 | 232,995 | 225,824 | 218,731 | 213,345 | ||||||||||||||
| Accumulated other comprehensive loss | (11,469 | ) | (8,608 | ) | (13,114 | ) | (13,634 | ) | (13,097 | ) | |||||||||
| Total stockholders' equity | 355,139 | 280,111 | 267,854 | 259,465 | 254,860 | ||||||||||||||
| Total liabilities and stockholders' equity | $ | 3,206,911 | $ | 2,560,788 | $ | 2,438,583 | $ | 2,324,238 | $ | 2,226,176 | |||||||||
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 December 31, 2024 | Three Months Ended September 30, 2024 | Three Months Ended December 31, 2023 | |||||||||||||||||||||||||||||||||
| Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate(1) | Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate(1) | Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate(1) | |||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Interest earning assets: | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 140,206 | $ | 1,446 | 4.10 | % | $ | 91,089 | $ | 1,137 | 4.97 | % | $ | 65,336 | $ | 680 | 4.13 | % | |||||||||||||||||
| Federal funds sold | 58 | - | - | 57 | 1 | 6.98 | 1,574 | 21 | 5.29 | ||||||||||||||||||||||||||
| Investment securities available-for-sale | 236,951 | 1,539 | 2.58 | 221,303 | 1,343 | 2.41 | 223,132 | 1,083 | 1.93 | ||||||||||||||||||||||||||
| Restricted investments | 7,292 | 120 | 6.55 | 4,911 | 82 | 6.64 | 4,518 | 76 | 6.67 | ||||||||||||||||||||||||||
| Loans held for sale | 25,614 | 193 | 3.00 | 9,967 | 161 | 6.43 | 4,601 | 83 | 7.16 | ||||||||||||||||||||||||||
| Portfolio loans receivable(2)(3) | 2,592,960 | 58,409 | 8.96 | 2,053,619 | 49,886 | 9.66 | 1,863,298 | 45,026 | 9.59 | ||||||||||||||||||||||||||
| Total interest earning assets | 3,003,081 | 61,707 | 8.17 | 2,380,946 | 52,610 | 8.79 | 2,162,459 | 46,969 | 8.62 | ||||||||||||||||||||||||||
| Noninterest earning assets | 117,026 | 56,924 | 40,020 | ||||||||||||||||||||||||||||||||
| Total assets | $ | 3,120,107 | $ | 2,437,870 | $ | 2,202,479 | |||||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand accounts | $ | 257,446 | 424 | 0.66 | $ | 228,365 | 321 | 0.56 | $ | 195,539 | 90 | 0.18 | |||||||||||||||||||||||
| Savings | 13,497 | 20 | 0.59 | 4,135 | 5 | 0.48 | 5,184 | 2 | 0.15 | ||||||||||||||||||||||||||
| Money market accounts | 763,526 | 7,131 | 3.72 | 698,239 | 7,442 | 4.24 | 680,697 | 7,139 | 4.16 | ||||||||||||||||||||||||||
| Time deposits | 847,618 | 8,810 | 4.13 | 479,824 | 6,134 | 5.09 | 380,731 | 4,528 | 4.72 | ||||||||||||||||||||||||||
| Borrowed funds | 97,116 | 995 | 4.08 | 43,655 | 354 | 3.23 | 41,823 | 321 | 3.05 | ||||||||||||||||||||||||||
| Total interest-bearing liabilities | 1,979,203 | 17,380 | 3.49 | 1,454,218 | 14,256 | 3.90 | 1,303,974 | 12,080 | 3.68 | ||||||||||||||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing liabilities | 58,460 | 28,834 | 27,529 | ||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 729,907 | 680,731 | 622,941 | ||||||||||||||||||||||||||||||||
| Stockholders' equity | 352,537 | 274,087 | 248,035 | ||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 3,120,107 | $ | 2,437,870 | $ | 2,202,479 | |||||||||||||||||||||||||||||
| Net interest spread | 4.68 | % | 4.89 | % | 4.94 | % | |||||||||||||||||||||||||||||
| Net interest income | $ | 44,327 | $ | 38,354 | $ | 34,889 | |||||||||||||||||||||||||||||
| Net interest margin(4) | 5.87 | % | 6.41 | % | 6.40 | % | |||||||||||||||||||||||||||||
_______________
(1)Annualized.
(2)Includes nonaccrual loans.
(3)For the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, collectively, portfolio loans yield excluding credit card loans was 6.98%, 7.15% and 6.89%, respectively.
(4)For the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, collectively, credit card loans accounted for 182, 233 and 248 basis points of the reported net interest margin, respectively.
| Year Ended December 31, | |||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate(1) | Average Outstanding Balance | Interest Income/ Expense | Average Yield/ Rate(1) | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Interest earning assets: | |||||||||||||||||||||||
| Interest-bearing deposits | $ | 98,319 | $ | 4,569 | 4.65 | % | $ | 70,407 | $ | 3,211 | 4.56 | % | |||||||||||
| Federal funds sold | 57 | 3 | 5.26 | 1,597 | 74 | 4.63 | |||||||||||||||||
| Investment securities available-for-sale | 228,909 | 5,441 | 2.38 | 245,466 | 4,815 | 1.96 | |||||||||||||||||
| Restricted investments | 5,563 | 373 | 6.71 | 5,016 | 346 | 6.90 | |||||||||||||||||
| Loans held for sale | 12,121 | 569 | 4.69 | 5,755 | 382 | 6.64 | |||||||||||||||||
| Portfolio loans receivable(2)(3) | 2,142,638 | 202,346 | 9.44 | 1,816,968 | 174,378 | 9.60 | |||||||||||||||||
| Total interest earning assets | 2,487,607 | 213,301 | 8.57 | 2,145,209 | 183,206 | 8.54 | |||||||||||||||||
| Noninterest earning assets | 66,442 | 43,090 | |||||||||||||||||||||
| Total assets | $ | 2,554,049 | $ | 2,188,299 | |||||||||||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||
| Interest-bearing demand accounts | $ | 221,437 | $ | 1,003 | 0.45 | % | $ | 201,194 | $ | 298 | 0.15 | % | |||||||||||
| Savings | 6,732 | 27 | 0.40 | 5,768 | 8 | 0.14 | |||||||||||||||||
| Money market accounts | 704,002 | 28,741 | 4.08 | 642,013 | 23,510 | 3.66 | |||||||||||||||||
| Time deposits | 561,369 | 26,399 | 4.70 | 360,464 | 15,809 | 4.39 | |||||||||||||||||
| Borrowed funds | 63,686 | 2,385 | 3.74 | 59,302 | 2,055 | 3.47 | |||||||||||||||||
| Total interest-bearing liabilities | 1,557,226 | 58,555 | 3.76 | 1,268,741 | 41,680 | 3.29 | |||||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||
| Noninterest-bearing liabilities | 34,043 | 24,026 | |||||||||||||||||||||
| Noninterest-bearing deposits | 675,360 | 655,013 | |||||||||||||||||||||
| Stockholders' equity | 287,420 | 240,519 | |||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 2,554,049 | $ | 2,188,299 | |||||||||||||||||||
| Net interest spread | 4.81 | % | 5.25 | % | |||||||||||||||||||
| Net interest income | $ | 154,746 | $ | 141,526 | |||||||||||||||||||
| Net interest margin(4) | 6.22 | % | 6.60 | % | |||||||||||||||||||
(1)Annualized.
(2)Includes nonaccrual loans.
(3)For the years ended December 31, 2024 and 2023, collectively, portfolio loans yield excluding credit card loans was 7.03% and 6.65%, respectively.
(4)For the years ended December 31, 2024 and 2023, collectively, credit card loans accounted for 222 and 264 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 five segments include Commercial Banking, Capital Bank Home Loans (the Company's mortgage loan division), OpenSky (the Company's credit card division), Windsor Advantage and the Corporate Office.
Effective January 1, 2024, the Company allocated certain expenses previously recorded directly to the Commercial Bank segment to the other segments. These expenses are for shared services also consumed by OpenSky, CBHL, and Corporate. The Company performs an allocation process based on several metrics the Company believes more accurately ascribe shared service overhead to each segment. The Company believes this reflects the cost of support for each segment that should be considered in assessing segment performance. Historical information has been recast to reflect financial information consistently with the 2024 presentation.
The following schedule presents financial information for the periods indicated. Total assets are presented as of December 31, 2024, September 30, 2024, and December 31, 2023.
| Segments | ||||||||||||||||||||||||||||
| For the three months ended December 31, 2024 | ||||||||||||||||||||||||||||
| (in thousands) | Commercial Bank | CBHL | OpenSky | Windsor Advantage | Corporate(2) | Eliminations | Consolidated | |||||||||||||||||||||
| Interest income | $ | 45,195 | $ | 192 | $ | 15,454 | $ | - | $ | 874 | $ | (8 | ) | $ | 61,707 | |||||||||||||
| Interest expense | 17,086 | 131 | - | - | 171 | (8 | ) | 17,380 | ||||||||||||||||||||
| Net interest income | 28,109 | 61 | 15,454 | - | 703 | - | 44,327 | |||||||||||||||||||||
| Provision for credit losses | 6,651 | - | 1,177 | - | - | - | 7,828 | |||||||||||||||||||||
| Provision for credit losses on unfunded commitments | 122 | - | - | - | - | - | 122 | |||||||||||||||||||||
| Net interest income after provision | 21,336 | 61 | 14,277 | - | 703 | - | 36,377 | |||||||||||||||||||||
| Noninterest income (loss) | 4,547 | 1,676 | 3,743 | 4,566 | (2,619 | ) | - | 11,913 | ||||||||||||||||||||
| Noninterest expense(1) | 16,539 | 2,377 | 12,595 | 2,670 | 3,333 | - | 37,514 | |||||||||||||||||||||
| Net income (loss) before taxes | $ | 9,344 | $ | (640 | ) | $ | 5,425 | $ | 1,896 | $ | (5,249 | ) | $ | - | $ | 10,776 | ||||||||||||
| Total assets | $ | 2,994,356 | $ | 21,691 | $ | 125,913 | $ | 7,922 | $ | 376,930 | $ | (319,901 | ) | $ | 3,206,911 | |||||||||||||
| For the three months ended September 30, 2024 | ||||||||||||||||||||||||||||
| (in thousands) | Commercial Bank | CBHL | OpenSky | Windsor Advantage | Corporate(2) | Eliminations | Consolidated | |||||||||||||||||||||
| Interest income | $ | 35,805 | $ | 161 | $ | 15,625 | $ | - | $ | 1,049 | $ | (30 | ) | $ | 52,610 | |||||||||||||
| Interest expense | 13,984 | 108 | - | - | 194 | (30 | ) | 14,256 | ||||||||||||||||||||
| Net interest income | 21,821 | 53 | 15,625 | - | 855 | - | 38,354 | |||||||||||||||||||||
| Provision for credit losses | 1,453 | - | 2,294 | - | 1 | - | 3,748 | |||||||||||||||||||||
| Provision for credit losses on unfunded commitments | 17 | - | - | - | - | - | 17 | |||||||||||||||||||||
| Net interest income after provision | 20,351 | 53 | 13,331 | - | 854 | - | 34,589 | |||||||||||||||||||||
| Noninterest income | 726 | 1,811 | 4,096 | - | 2 | - | 6,635 | |||||||||||||||||||||
| Noninterest expense(1) | 12,422 | 2,395 | 13,276 | - | 1,632 | - | 29,725 | |||||||||||||||||||||
| Net income (loss) before taxes | $ | 8,655 | $ | (531 | ) | $ | 4,151 | $ | - | $ | (776 | ) | $ | - | $ | 11,499 | ||||||||||||
| Total assets | $ | 2,358,555 | $ | 19,831 | $ | 121,587 | $ | - | $ | 300,325 | $ | (239,510 | ) | $ | 2,560,788 | |||||||||||||
| For the three months ended December 31, 2023 | ||||||||||||||||||||||||||||
| (in thousands) | Commercial Bank | CBHL | OpenSky | Windsor Advantage | Corporate(2) | Eliminations | Consolidated | |||||||||||||||||||||
| Interest income | $ | 30,957 | $ | 83 | $ | 15,035 | $ | - | $ | 964 | $ | (70 | ) | $ | 46,969 | |||||||||||||
| Interest expense | 11,884 | 31 | - | - | 235 | (70 | ) | 12,080 | ||||||||||||||||||||
| Net interest income | 19,073 | 52 | 15,035 | - | 729 | - | 34,889 | |||||||||||||||||||||
| Provision for (release of) credit losses | 691 | - | 2,125 | - | (8 | ) | - | 2,808 | ||||||||||||||||||||
| Release of credit losses on unfunded commitments | (106 | ) | - | - | - | - | - | (106 | ) | |||||||||||||||||||
| Net interest income after provision | 18,488 | 52 | 12,910 | - | 737 | - | 32,187 | |||||||||||||||||||||
| Noninterest income | 773 | 1,166 | 3,996 | - | 1 | - | 5,936 | |||||||||||||||||||||
| Noninterest expense(1) | 12,303 | 1,617 | 12,669 | - | 318 | - | 26,907 | |||||||||||||||||||||
| Net income (loss) before taxes | $ | 6,958 | $ | (399 | ) | $ | 4,237 | $ | - | $ | 420 | $ | - | $ | 11,216 | |||||||||||||
| Total assets | $ | 2,051,945 | $ | 8,589 | $ | 117,477 | $ | - | $ | 277,565 | $ | (229,400 | ) | $ | 2,226,176 | |||||||||||||
________________________
(1) Noninterest expense includes $6.3 million, $6.2 million, and $5.7 million in data processing expense in OpenSky's segment for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, 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 year ended December 31, 2024 | ||||||||||||||||||||||||||||
| (in thousands) | Commercial Bank | CBHL | OpenSky | Windsor Advantage | Corporate(2) | Eliminations | Consolidated | |||||||||||||||||||||
| Interest income | $ | 147,464 | $ | 568 | $ | 61,785 | $ | - | $ | 3,646 | $ | (162 | ) | $ | 213,301 | |||||||||||||
| Interest expense | 57,536 | 363 | - | - | 818 | (162 | ) | 58,555 | ||||||||||||||||||||
| Net interest income | 89,928 | 205 | 61,785 | - | 2,828 | - | 154,746 | |||||||||||||||||||||
| Provision for credit losses | 10,331 | - | 7,329 | - | 60 | - | 17,720 | |||||||||||||||||||||
| Provision for credit losses on unfunded commitments | 385 | - | - | - | - | - | 385 | |||||||||||||||||||||
| Net interest income after provision | 79,212 | 205 | 54,456 | - | 2,768 | - | 136,641 | |||||||||||||||||||||
| Noninterest income (loss) | 6,654 | 6,684 | 16,122 | 4,566 | (2,616 | ) | - | 31,410 | ||||||||||||||||||||
| Noninterest expense(1) | 53,429 | 9,377 | 53,245 | 2,670 | 7,498 | - | 126,219 | |||||||||||||||||||||
| Net income (loss) before taxes | $ | 32,437 | $ | (2,488 | ) | $ | 17,333 | $ | 1,896 | $ | (7,346 | ) | $ | - | $ | 41,832 | ||||||||||||
| Total assets | $ | 2,994,356 | $ | 21,691 | $ | 125,913 | $ | 7,922 | $ | 376,930 | $ | (319,901 | ) | $ | 3,206,911 | |||||||||||||
| For the year ended December 31, 2023 | ||||||||||||||||||||||||||||
| (in thousands) | Commercial Bank | CBHL | OpenSky | Windsor Advantage | Corporate(2) | Eliminations | Consolidated | |||||||||||||||||||||
| Interest income | $ | 116,408 | $ | 382 | $ | 62,476 | $ | - | $ | 4,238 | $ | (298 | ) | $ | 183,206 | |||||||||||||
| Interest expense | 40,896 | 135 | - | - | 947 | (298 | ) | 41,680 | ||||||||||||||||||||
| Net interest income | 75,512 | 247 | 62,476 | - | 3,291 | - | 141,526 | |||||||||||||||||||||
| Provision for credit losses | 1,540 | - | 7,948 | - | 122 | - | 9,610 | |||||||||||||||||||||
| Release of credit losses on unfunded commitments | (101 | ) | - | - | - | - | - | (101 | ) | |||||||||||||||||||
| Net interest income after provision | 74,073 | 247 | 54,528 | - | 3,169 | - | 132,017 | |||||||||||||||||||||
| Noninterest income | 2,737 | 4,909 | 17,325 | - | 4 | - | 24,975 | |||||||||||||||||||||
| Noninterest expense(1) | 48,347 | 8,155 | 52,752 | - | 1,513 | - | 110,767 | |||||||||||||||||||||
| Net income (loss) before taxes | $ | 28,463 | $ | (2,999 | ) | $ | 19,101 | $ | - | $ | 1,660 | $ | - | $ | 46,225 | |||||||||||||
| Total assets | $ | 2,051,945 | $ | 8,589 | $ | 117,477 | $ | - | $ | 277,565 | $ | (229,400 | ) | $ | 2,226,176 | |||||||||||||
(1) Noninterest expense includes $24.9 million and $23.7 million in data processing expense in OpenSky's segment for the years ended December 31, 2024 and 2023, 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) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||
| Earnings: | ||||||||||||||||||||
| Net income | $ | 7,533 | $ | 8,672 | $ | 8,205 | $ | 6,562 | $ | 9,030 | ||||||||||
| Earnings per common share, diluted | 0.45 | 0.62 | 0.59 | 0.47 | 0.65 | |||||||||||||||
| Net interest margin | 5.87 | % | 6.41 | % | 6.46 | % | 6.24 | % | 6.40 | % | ||||||||||
| Net interest margin, excluding credit card loans (1) | 4.05 | % | 4.08 | % | 4.00 | % | 3.85 | % | 3.92 | % | ||||||||||
| Return on average assets(2) | 0.96 | % | 1.42 | % | 1.40 | % | 1.15 | % | 1.63 | % | ||||||||||
| Return on average equity(2) | 8.50 | % | 12.59 | % | 12.53 | % | 10.19 | % | 14.44 | % | ||||||||||
| Efficiency ratio | 66.70 | % | 66.07 | % | 67.11 | % | 71.95 | % | 65.91 | % | ||||||||||
| Balance Sheet: | ||||||||||||||||||||
| Total portfolio loans receivable, net deferred fees | $ | 2,630,163 | $ | 2,107,522 | $ | 2,021,588 | $ | 1,964,525 | $ | 1,902,643 | ||||||||||
| Total deposits | 2,761,939 | 2,186,224 | 2,100,428 | 2,005,695 | 1,895,996 | |||||||||||||||
| Total assets | 3,206,911 | 2,560,788 | 2,438,583 | 2,324,238 | 2,226,176 | |||||||||||||||
| Total stockholders' equity | 355,139 | 280,111 | 267,854 | 259,465 | 254,860 | |||||||||||||||
| Total average portfolio loans receivable, net deferred fees | 2,592,960 | 2,053,619 | 1,992,630 | 1,927,372 | 1,863,298 | |||||||||||||||
| Total average deposits | 2,611,994 | 2,091,294 | 2,010,736 | 1,957,559 | 1,885,092 | |||||||||||||||
| Portfolio loans-to-deposit ratio (period-end balances) | 95.23 | % | 96.40 | % | 96.25 | % | 97.95 | % | 100.35 | % | ||||||||||
| Portfolio loans-to-deposit ratio (average balances) | 99.27 | % | 98.20 | % | 99.10 | % | 98.46 | % | 98.84 | % | ||||||||||
| Asset Quality Ratios: | ||||||||||||||||||||
| Nonperforming assets to total assets | 0.94 | % | 0.60 | % | 0.58 | % | 0.62 | % | 0.72 | % | ||||||||||
| Nonperforming loans to total loans | 1.15 | % | 0.73 | % | 0.70 | % | 0.73 | % | 0.84 | % | ||||||||||
| Net charge-offs to average portfolio loans (2) | 0.37 | % | 0.51 | % | 0.39 | % | 0.41 | % | 0.53 | % | ||||||||||
| Allowance for credit losses to total loans | 1.85 | % | 1.51 | % | 1.53 | % | 1.49 | % | 1.50 | % | ||||||||||
| Allowance for credit losses to non-performing loans | 160.88 | % | 206.50 | % | 219.40 | % | 204.37 | % | 178.34 | % | ||||||||||
| Bank Capital Ratios: | ||||||||||||||||||||
| Total risk based capital ratio | 12.82 | % | 13.76 | % | 14.51 | % | 14.36 | % | 14.81 | % | ||||||||||
| Tier 1 risk based capital ratio | 11.56 | % | 12.50 | % | 13.25 | % | 13.10 | % | 13.56 | % | ||||||||||
| Leverage ratio | 9.12 | % | 9.84 | % | 10.36 | % | 10.29 | % | 10.51 | % | ||||||||||
| Common equity Tier 1 capital ratio | 11.56 | % | 12.50 | % | 13.25 | % | 13.10 | % | 13.56 | % | ||||||||||
| Tangible common equity | 9.31 | % | 9.12 | % | 9.53 | % | 9.66 | % | 9.91 | % | ||||||||||
| Holding Company Capital Ratios: | ||||||||||||||||||||
| Total risk based capital ratio | 15.48 | % | 16.65 | % | 16.98 | % | 16.83 | % | 17.38 | % | ||||||||||
| Tier 1 risk based capital ratio | 13.83 | % | 14.88 | % | 15.19 | % | 15.03 | % | 15.55 | % | ||||||||||
| Leverage ratio | 11.07 | % | 11.85 | % | 11.93 | % | 11.87 | % | 12.14 | % | ||||||||||
| Common equity Tier 1 capital ratio | 13.74 | % | 14.78 | % | 15.08 | % | 14.92 | % | 15.43 | % | ||||||||||
| Tangible common equity | 11.07 | % | 10.94 | % | 10.98 | % | 11.16 | % | 11.45 | % | ||||||||||
_______________
(1) Refer to Appendix for reconciliation of non-GAAP measures.
(2) Annualized.
| HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited (Continued) | ||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||
| (in thousands, except per share data) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||
| Composition of Loans: | ||||||||||||||||||||
| Commercial real estate, non owner-occupied | $ | 471,329 | $ | 403,487 | $ | 397,080 | $ | 377,224 | $ | 351,116 | ||||||||||
| Commercial real estate, owner-occupied | 440,026 | 351,462 | 319,370 | 330,840 | 307,911 | |||||||||||||||
| Residential real estate | 688,552 | 623,684 | 601,312 | 577,112 | 573,104 | |||||||||||||||
| Construction real estate | 321,252 | 301,909 | 294,489 | 290,016 | 290,108 | |||||||||||||||
| Commercial and industrial | 554,550 | 271,811 | 255,686 | 254,577 | 239,208 | |||||||||||||||
| Lender finance | 28,574 | 29,546 | 33,294 | 13,484 | 11,085 | |||||||||||||||
| Business equity lines of credit | 3,090 | 2,663 | 2,989 | 14,768 | 14,117 | |||||||||||||||
| Credit card, net of reserve(3) | 127,766 | 127,098 | 122,217 | 111,898 | 123,331 | |||||||||||||||
| Other consumer loans | 2,089 | 2,045 | 1,930 | 738 | 950 | |||||||||||||||
| Portfolio loans receivable | $ | 2,637,228 | $ | 2,113,705 | $ | 2,028,367 | $ | 1,970,657 | $ | 1,910,930 | ||||||||||
| Deferred origination fees, net | (7,065 | ) | (6,183 | ) | (6,779 | ) | (6,132 | ) | (7,642 | ) | ||||||||||
| Portfolio loans receivable, net | $ | 2,630,163 | $ | 2,107,522 | $ | 2,021,588 | $ | 1,964,525 | $ | 1,903,288 | ||||||||||
| Composition of Deposits: | ||||||||||||||||||||
| Noninterest-bearing | $ | 810,928 | $ | 718,120 | $ | 684,574 | $ | 665,812 | $ | 617,373 | ||||||||||
| Interest-bearing demand | 238,881 | 266,493 | 266,070 | 193,963 | 199,308 | |||||||||||||||
| Savings | 13,488 | 3,763 | 4,270 | 4,525 | 5,211 | |||||||||||||||
| Money markets | 816,708 | 686,526 | 672,455 | 678,435 | 663,129 | |||||||||||||||
| Customer time deposits | 548,901 | 358,300 | 317,911 | 302,319 | 268,619 | |||||||||||||||
| Brokered time deposits | 333,033 | 153,022 | 155,148 | 160,641 | 142,356 | |||||||||||||||
| Total deposits | $ | 2,761,939 | $ | 2,186,224 | $ | 2,100,428 | $ | 2,005,695 | $ | 1,895,996 | ||||||||||
| Capital Bank Home Loan Metrics: | ||||||||||||||||||||
| Origination of loans held for sale | $ | 89,998 | $ | 74,690 | $ | 82,363 | $ | 52,080 | $ | 45,152 | ||||||||||
| Mortgage loans sold | 77,399 | 67,296 | 66,417 | 40,377 | 34,140 | |||||||||||||||
| Gain on sale of loans | 1,897 | 1,644 | 1,732 | 1,238 | 1,015 | |||||||||||||||
| Purchase volume as a % of originations | 90.42 | % | 90.98 | % | 96.48 | % | 97.83 | % | 89.99 | % | ||||||||||
| Gain on sale as a % of loans sold(4) | 2.45 | % | 2.44 | % | 2.61 | % | 3.07 | % | 2.97 | % | ||||||||||
| Mortgage commissions | $ | 620 | $ | 598 | $ | 582 | $ | 490 | $ | 465 | ||||||||||
| OpenSky Portfolio Metrics: | ||||||||||||||||||||
| Open customer accounts | 552,566 | 548,952 | 537,734 | 526,950 | 525,314 | |||||||||||||||
| Secured credit card loans, gross | $ | 87,226 | $ | 89,641 | $ | 90,961 | $ | 85,663 | $ | 95,300 | ||||||||||
| Unsecured credit card loans, gross | 42,430 | 39,730 | 33,560 | 28,508 | 30,817 | |||||||||||||||
| Noninterest secured credit card deposits | 166,355 | 170,750 | 173,499 | 171,771 | 173,857 | |||||||||||||||
_______________
(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.
| Earnings Metrics, as Adjusted | Quarter Ended | ||||||||||||||||||
| (in thousands, except per share data) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Net Income | $ | 7,533 | $ | 8,672 | $ | 8,205 | $ | 6,562 | $ | 9,030 | |||||||||
| Add: Merger-Related Expenses, net of tax | 2,151 | 557 | 62 | 538 | - | ||||||||||||||
| Add: Non-recurring equity and debt investment write-down | 2,620 | - | - | - | - | ||||||||||||||
| Add: IFH ACL Provision, net of tax | 3,169 | - | - | - | - | ||||||||||||||
| Net Income, as Adjusted | $ | 15,473 | $ | 9,229 | $ | 8,267 | $ | 7,100 | $ | 9,030 | |||||||||
| Weighted Average Common Shares - Diluted | 16,729 | 13,951 | 13,895 | 13,919 | 13,989 | ||||||||||||||
| Earnings per Share - Diluted | $ | 0.45 | $ | 0.62 | $ | 0.59 | $ | 0.47 | $ | 0.65 | |||||||||
| Earnings per Share - Diluted, as Adjusted | $ | 0.92 | $ | 0.66 | $ | 0.59 | $ | 0.51 | $ | 0.65 | |||||||||
| Average Assets | $ | 3,120,107 | $ | 2,437,870 | $ | 2,353,868 | $ | 2,299,234 | $ | 2,202,479 | |||||||||
| Return on Average Assets(1) | 0.96 | % | 1.42 | % | 1.40 | % | 1.15 | % | 1.63 | % | |||||||||
| Return on Average Assets, as Adjusted(1) | 1.97 | % | 1.51 | % | 1.41 | % | 1.24 | % | 1.63 | % | |||||||||
| Average Equity | $ | 352,537 | $ | 274,087 | $ | 263,425 | $ | 258,892 | $ | 248,035 | |||||||||
| Return on Average Equity(1) | 8.50 | % | 12.59 | % | 12.53 | % | 10.19 | % | 14.44 | % | |||||||||
| Return on Average Equity, as Adjusted(1) | 17.46 | % | 13.40 | % | 12.62 | % | 11.03 | % | 14.44 | % | |||||||||
| Net Interest Income (a) | $ | 44,327 | $ | 38,354 | $ | 37,057 | $ | 35,008 | $ | 34,889 | |||||||||
| Noninterest Income | 11,913 | 6,635 | 6,890 | 5,972 | 5,936 | ||||||||||||||
| Total Revenue | $ | 56,240 | $ | 44,989 | $ | 43,947 | $ | 40,980 | $ | 40,825 | |||||||||
| Noninterest Expense | $ | 37,514 | $ | 29,725 | $ | 29,493 | $ | 29,487 | $ | 26,907 | |||||||||
| Efficiency Ratio(2) | 66.70 | % | 66.07 | % | 67.11 | % | 71.95 | % | 65.91 | % | |||||||||
| Noninterest Income | $ | 11,913 | $ | 6,635 | $ | 6,890 | $ | 5,972 | $ | 5,936 | |||||||||
| Add: Non-recurring equity and debt investment write-down | 2,620 | - | - | - | - | ||||||||||||||
| Noninterest Income, as Adjusted (b) | $ | 14,533 | $ | 6,635 | $ | 6,890 | $ | 5,972 | $ | 5,936 | |||||||||
| Total Revenue, as Adjusted (a) + (b) | $ | 58,860 | $ | 44,989 | $ | 43,947 | $ | 40,980 | $ | 40,825 | |||||||||
| Noninterest Expense | $ | 37,514 | $ | 29,725 | $ | 29,493 | $ | 29,487 | $ | 26,907 | |||||||||
| Less: Merger-Related Expenses | 2,615 | 520 | 83 | 712 | - | ||||||||||||||
| Noninterest Expense, as Adjusted | $ | 34,899 | $ | 29,205 | $ | 29,410 | $ | 28,775 | $ | 26,907 | |||||||||
| Efficiency Ratio, as Adjusted(2) | 59.29 | % | 64.92 | % | 66.92 | % | 70.22 | % | 65.91 | % | |||||||||
_______________
(1) Annualized.
(2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
| Earnings Metrics, as Adjusted | Year Ended | ||||||
| (in thousands, except per share data) | December 31, 2024 | December 31, 2023 | |||||
| Net Income | $ | 30,972 | $ | 35,871 | |||
| Add: Merger-Related Expenses, net of tax | 3,308 | - | |||||
| Add: Non-recurring equity and debt investment write-down | 2,620 | - | |||||
| Add: IFH ACL Provision, net of tax | 3,169 | - | |||||
| Net Income, as Adjusted | $ | 40,069 | $ | 35,871 | |||
| Weighted average common shares - Diluted | 14,660 | 14,081 | |||||
| Earnings per share - Diluted | $ | 2.11 | $ | 2.55 | |||
| Earnings per share - Diluted, as Adjusted | $ | 2.73 | $ | 2.55 | |||
| Average Assets | $ | 2,554,049 | $ | 2,188,299 | |||
| Return on Average Assets(1) | 1.21 | % | 1.64 | % | |||
| Return on Average Assets, as Adjusted(1) | 1.57 | % | 1.64 | % | |||
| Average Equity | $ | 287,420 | $ | 240,519 | |||
| Return on Average Equity(1) | 10.78 | % | 14.91 | % | |||
| Return on Average Equity, as Adjusted(1) | 13.94 | % | 14.91 | % | |||
| Net Interest Income (a) | $ | 154,746 | $ | 141,526 | |||
| Noninterest Income | 31,410 | 24,975 | |||||
| Total Revenue | $ | 186,156 | $ | 166,501 | |||
| Noninterest Expense | $ | 126,219 | $ | 110,767 | |||
| Efficiency Ratio(2) | 67.80 | % | 66.53 | % | |||
| Noninterest Income | $ | 31,410 | $ | 24,975 | |||
| Add: Non-recurring equity and debt investment write-down | 2,620 | - | |||||
| Noninterest Income, as Adjusted (b) | $ | 34,030 | $ | 24,975 | |||
| Total Revenue, as Adjusted (a) + (b) | $ | 188,776 | $ | 166,501 | |||
| Noninterest Expense | $ | 126,219 | $ | 110,767 | |||
| Less: Merger-Related Expenses | 3,930 | - | |||||
| Noninterest Expense, as Adjusted | $ | 122,289 | $ | 110,767 | |||
| Efficiency Ratio, as Adjusted(2) | 64.78 | % | 66.53 | % | |||
_______________
(1) Annualized.
(2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
| Net Interest Margin, as Adjusted | Quarter Ended | ||||||||||||||||||
| (in thousands) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Net Interest Income | $ | 44,327 | $ | 38,354 | $ | 37,057 | $ | 35,008 | $ | 34,889 | |||||||||
| Less: Credit Card Loan Income | 15,022 | 15,137 | 15,205 | 14,457 | 14,677 | ||||||||||||||
| Net Interest Income, as Adjusted | $ | 29,305 | $ | 23,217 | $ | 21,852 | $ | 20,551 | $ | 20,212 | |||||||||
| Average Interest Earning Assets | 3,003,081 | 2,380,946 | 2,307,070 | 2,254,663 | 2,162,459 | ||||||||||||||
| Less: Average Credit Card Loans | 120,993 | 119,458 | 111,288 | 110,483 | 114,551 | ||||||||||||||
| Total Average Interest Earning Assets, as Adjusted | $ | 2,882,088 | $ | 2,261,488 | $ | 2,195,782 | $ | 2,144,180 | $ | 2,047,908 | |||||||||
| Net Interest Margin, as Adjusted | 4.05 | % | 4.08 | % | 4.00 | % | 3.85 | % | 3.92 | % | |||||||||
| Net Interest Margin, as Adjusted | Year Ended | ||||||
| (in thousands) | December 31, 2024 | December 31, 2023 | |||||
| Net Interest Income | $ | 154,746 | $ | 141,526 | |||
| Less: Credit Card Loan Income | 59,821 | 61,096 | |||||
| Net Interest Income, as Adjusted | $ | 94,925 | $ | 80,430 | |||
| Average Interest Earning Assets | 2,487,607 | 2,145,209 | |||||
| Less: Average Credit Card Loans | 115,581 | 114,450 | |||||
| Total Average Interest Earning Assets, as Adjusted | $ | 2,372,026 | $ | 2,030,759 | |||
| Net Interest Margin, as Adjusted | 4.00 | % | 3.96 | % | |||
| Portfolio Loans Receivable Yield, as Adjusted | Quarter Ended | ||||||||||||||||||
| (in thousands) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Portfolio Loans Receivable Interest Income | $ | 58,409 | $ | 49,886 | $ | 48,143 | $ | 45,908 | $ | 45,026 | |||||||||
| Less: Credit Card Loan Income | 15,022 | 15,137 | 15,205 | 14,457 | 14,677 | ||||||||||||||
| Portfolio Loans Receivable Interest Income, as Adjusted | $ | 43,387 | $ | 34,749 | $ | 32,938 | $ | 31,451 | $ | 30,349 | |||||||||
| Average Portfolio Loans Receivable | 2,592,960 | 2,053,619 | 1,992,630 | 1,927,372 | 1,863,298 | ||||||||||||||
| Less: Average Credit Card Loans | 120,993 | 119,458 | 111,288 | 110,483 | 114,551 | ||||||||||||||
| Total Average Portfolio Loans Receivable, as Adjusted | $ | 2,471,967 | $ | 1,934,161 | $ | 1,881,342 | $ | 1,816,889 | $ | 1,748,747 | |||||||||
| Portfolio Loans Receivable Yield, as Adjusted | 6.98 | % | 7.15 | % | 7.04 | % | 6.96 | % | 6.89 | % | |||||||||
| Portfolio Loans Receivable Yield, as Adjusted | Year Ended | ||||||
| (in thousands) | December 31, 2024 | December 31, 2023 | |||||
| Portfolio Loans Receivable Interest Income | $ | 202,346 | $ | 174,378 | |||
| Less: Credit Card Loan Income | 59,821 | 61,096 | |||||
| Portfolio Loans Receivable Interest Income, as Adjusted | $ | 142,525 | $ | 113,282 | |||
| Average Portfolio Loans Receivable | 2,142,638 | 1,816,968 | |||||
| Less: Average Credit Card Loans | 115,581 | 114,450 | |||||
| Total Average Portfolio Loans Receivable, as Adjusted | $ | 2,027,057 | $ | 1,702,518 | |||
| Portfolio Loans Receivable Yield, as Adjusted | 7.03 | % | 6.65 | % | |||
| Pre-tax, Pre-Provision Net Revenue ("PPNR") | Quarter Ended | ||||||||||||||||||
| (in thousands) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Net Income | $ | 7,533 | $ | 8,672 | $ | 8,205 | $ | 6,562 | $ | 9,030 | |||||||||
| Add: Income Tax Expense | 3,243 | 2,827 | 2,728 | 2,062 | 2,186 | ||||||||||||||
| Add: Provision for Credit Losses | 7,828 | 3,748 | 3,417 | 2,727 | 2,808 | ||||||||||||||
| Add: Provision for (Release of) Credit Losses on Unfunded Commitments | 122 | 17 | 104 | 142 | (106 | ) | |||||||||||||
| Pre-tax, Pre-Provision Net Revenue ("PPNR") | $ | 18,726 | $ | 15,264 | $ | 14,454 | $ | 11,493 | $ | 13,918 | |||||||||
| Pre-tax, Pre-Provision Net Revenue ("PPNR") | Year Ended | ||||||
| (in thousands) | December 31, 2024 | December 31, 2023 | |||||
| Net Income | $ | 30,972 | $ | 35,871 | |||
| Add: Income Tax Expense | 10,860 | 10,354 | |||||
| Add: Provision for Credit Losses | 17,720 | 9,610 | |||||
| Add: Provision for (Release of) Credit Losses on Unfunded Commitments | 385 | (101 | ) | ||||
| Pre-tax, Pre-Provision Net Revenue ("PPNR") | $ | 59,937 | $ | 55,734 | |||
| PPNR, as Adjusted | Quarter Ended | ||||||||||||||||||
| (in thousands) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Net Income | $ | 7,533 | $ | 8,672 | $ | 8,205 | $ | 6,562 | $ | 9,030 | |||||||||
| Add: Income Tax Expense | 3,243 | 2,827 | 2,728 | 2,062 | 2,186 | ||||||||||||||
| Add: Provision for Credit Losses | 7,828 | 3,748 | 3,417 | 2,727 | 2,808 | ||||||||||||||
| Add: Provision for (Release of) Credit Losses on Unfunded Commitments | 122 | 17 | 104 | 142 | (106 | ) | |||||||||||||
| Add: Merger-Related Expenses | 2,615 | 520 | 83 | 712 | - | ||||||||||||||
| Add: Non-recurring equity and debt investment write-down | 2,620 | - | - | - | - | ||||||||||||||
| PPNR, as Adjusted | $ | 23,961 | $ | 15,784 | $ | 14,537 | $ | 12,205 | $ | 13,918 | |||||||||
| PPNR, as Adjusted | Year Ended | ||||||
| (in thousands) | December 31, 2024 | December 31, 2023 | |||||
| Net Income | $ | 30,972 | $ | 35,871 | |||
| Add: Income Tax Expense | 10,860 | 10,354 | |||||
| Add: Provision for Credit Losses | 17,720 | 9,610 | |||||
| Add: Provision for (Release of) Credit Losses on Unfunded Commitments | 385 | (101 | ) | ||||
| Add: Merger-Related Expenses | 3,930 | - | |||||
| Add: Non-recurring equity and debt investment write-down | 2,620 | - | |||||
| PPNR, as Adjusted | $ | 66,487 | $ | 55,734 | |||
| Allowance for Credit Losses to Total Portfolio Loans | Quarter Ended | ||||||||||||||||||
| (in thousands) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Allowance for Credit Losses | $ | 48,652 | $ | 31,925 | $ | 30,832 | $ | 29,350 | $ | 28,610 | |||||||||
| Total Portfolio Loans | 2,630,163 | 2,107,522 | 2,021,588 | 1,964,525 | 1,903,288 | ||||||||||||||
| Allowance for Credit Losses to Total Portfolio Loans | 1.85 | % | 1.51 | % | 1.53 | % | 1.49 | % | 1.50 | % | |||||||||
| Nonperforming Assets to Total Assets | Quarter Ended | ||||||||||||||||||
| (in thousands) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Total Nonperforming Assets | $ | 30,241 | $ | 15,460 | $ | 14,053 | $ | 14,361 | $ | 16,042 | |||||||||
| Total Assets | 3,206,911 | 2,560,788 | 2,438,583 | 2,324,238 | 2,226,176 | ||||||||||||||
| Nonperforming Assets to Total Assets | 0.94 | % | 0.60 | % | 0.58 | % | 0.62 | % | 0.72 | % | |||||||||
| Nonperforming Loans to Total Portfolio Loans | Quarter Ended | ||||||||||||||||||
| (in thousands) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Total Nonperforming Loans | $ | 30,241 | $ | 15,460 | $ | 14,053 | $ | 14,361 | $ | 16,042 | |||||||||
| Total Portfolio Loans | 2,630,163 | 2,107,522 | 2,021,588 | 1,964,525 | 1,903,288 | ||||||||||||||
| Nonperforming Loans to Total Portfolio Loans | 1.15 | % | 0.73 | % | 0.70 | % | 0.73 | % | 0.84 | % | |||||||||
| Net Charge-Offs to Average Portfolio Loans | Quarter Ended | ||||||||||||||||||
| (in thousands) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Total Net Charge-Offs | $ | 2,427 | $ | 2,655 | $ | 1,935 | $ | 1,987 | $ | 2,477 | |||||||||
| Total Average Portfolio Loans | 2,592,960 | 2,053,619 | 1,992,630 | 1,927,372 | 1,863,298 | ||||||||||||||
| Net Charge-Offs to Average Portfolio Loans, Annualized | 0.37 | % | 0.51 | % | 0.39 | % | 0.41 | % | 0.53 | % | |||||||||
| Net Charge-offs to Average Portfolio Loans | Year Ended | ||||||
| (in thousands) | December 31, 2024 | December 31, 2023 | |||||
| Total Net Charge-Offs | $ | 9,004 | $ | 8,473 | |||
| Total Average Portfolio Loans | 2,142,638 | 1,816,968 | |||||
| Net Charge-Offs to Average Portfolio Loans, Annualized | 0.42 | % | 0.47 | % | |||
| Tangible Book Value per Share | Quarter Ended | ||||||||||||||||||
| (in thousands, except share and per share data) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Total Stockholders' Equity | $ | 355,139 | $ | 280,111 | $ | 267,854 | $ | 259,465 | $ | 254,860 | |||||||||
| Less: Preferred Equity | - | - | - | - | - | ||||||||||||||
| Less: Intangible Assets | 42,454 | - | - | - | - | ||||||||||||||
| Tangible Common Equity | $ | 312,685 | $ | 280,111 | $ | 267,854 | $ | 259,465 | $ | 254,860 | |||||||||
| Period End Shares Outstanding | 16,662,405 | 13,917,891 | 13,910,467 | 13,889,563 | 13,922,532 | ||||||||||||||
| Tangible Book Value per Share | $ | 18.77 | $ | 20.13 | $ | 19.26 | $ | 18.68 | $ | 18.31 | |||||||||
| Return on Average Tangible Common Equity | Quarter Ended | ||||||||||||||||||
| (in thousands) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Net Income | $ | 7,533 | $ | 8,672 | $ | 8,205 | $ | 6,562 | $ | 9,030 | |||||||||
| Add: Intangible Amortization, Net of Tax | 198 | - | - | - | - | ||||||||||||||
| Net Tangible Income | $ | 7,731 | $ | 8,672 | $ | 8,205 | $ | 6,562 | $ | 9,030 | |||||||||
| Average Equity | 352,537 | 274,087 | 263,425 | 258,892 | 248,035 | ||||||||||||||
| Less: Average Intangible Assets | 27,653 | - | - | - | - | ||||||||||||||
| Net Average Tangible Common Equity | $ | 324,884 | $ | 274,087 | $ | 263,425 | $ | 258,892 | $ | 248,035 | |||||||||
| Return on Average Equity | 8.50 | % | 12.59 | % | 12.53 | % | 10.19 | % | 14.44 | % | |||||||||
| Return on Average Tangible Common Equity | 9.47 | % | 12.59 | % | 12.53 | % | 10.19 | % | 14.44 | % | |||||||||
| Core Return on Average Tangible Common Equity | Quarter Ended | ||||||||||||||||||
| (in thousands) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
| Net Income, as Adjusted | $ | 15,473 | $ | 9,229 | $ | 8,267 | $ | 7,100 | $ | 9,030 | |||||||||
| Add: Intangible Amortization, Net of Tax | 198 | - | - | - | - | ||||||||||||||
| Net Tangible Income, as Adjusted | $ | 15,671 | $ | 9,229 | $ | 8,267 | $ | 7,100 | $ | 9,030 | |||||||||
| Core Return on Average Equity, as Adjusted | 17.68 | % | 13.40 | % | 12.62 | % | 11.03 | % | 14.44 | % | |||||||||
| Core Return on Average Tangible Common Equity, as Adjusted | 19.19 | % | 13.40 | % | 12.62 | % | 11.03 | % | 14.44 | % | |||||||||
ABOUT CAPITAL BANCORP, INC.
Capital Bancorp, Inc., Rockville, Maryland is a registered bank holding company incorporated under the laws of Maryland. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in six locations in the greater Washington, D.C. and Baltimore, Maryland markets, one bank branch in Fort Lauderdale, Florida and one bank branch in Chicago, Illinois. Capital Bancorp had assets of approximately $3.2 billion at December 31, 2024 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; 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; the expected cost savings, synergies and other financial benefits from the acquisition of IFH or any other acquisition the Company has made or may make might not be realized within the expected time frames or at all; the effect of acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; 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: Dominic Canuso (301) 468-8848 x1403
MEDIA CONTACT: Ed Barry (240) 283-1912
WEB SITE: www.CapitalBankMD.com
