CBNK Reports 2Q ROA of 1.60% and EPS of $0.78 Growth across Loans, Deposits, and Cards accompanied by Improving Credit Delivers Strong Profitability
Second Quarter 2025 Highlights
GAAP Net Income of $13.1 million, or $0.78 per share, and return on average assets ("ROA") of 1.60%
Core net income(1) of $14.2 million, or $0.85 per share, and core ROA(1) of 1.73%
Book value per common share of $22.92 at June 30, 2025, increased $0.73 compared to 1Q 2025, and increased $3.66 when compared to 2Q 2024
Tangible book value per share(1) of $20.64, increased 4.2% (not annualized), or $0.83 as compared to 1Q 2025, and increased 7.2%, or $1.38 compared to 2Q 2024
Return on average equity ("ROE") of 14.17%, and return on average tangible common equity ("ROTCE")(1) of 16.10%
Core ROE(1) of 15.33%, and core ROTCE(1) of 17.39%
Gross Loans(2) grew $61.4 million, or 9.2% (annualized), during 2Q 2025, and growth of $718.2 million year-over-year including $344.7 million from organic growth and $373.5 million from the IFH acquisition
Total deposits grew $49.4 million, or 6.9% (annualized), from 1Q 2025. Year-over-year growth of $840.3 million includes $381.3 million from organic growth, and $459.0 million from the acquisition of IFH, or 44.2% from 2Q 2024
Customer Deposit3 growth of $87.1 million, or 13.5% (annualized) from 1Q 2025, and $725.3 million year-over-year, or 37.3% from 2Q 2024, including $431.8 million of organic growth, and $293.5 million from the acquisition of IFH
Net Interest Income increased $1.6 million, or 3.5% (not annualized), from 1Q 2025 due to strong balance sheet growth from the Commercial Bank , and increased $10.6 million, or 28.6%, year-over-year, primarily driven by strong organic growth and the acquisition of IFH
Net Interest Margin ("NIM") of 6.04% decreased 1 bps compared to 1Q 2025 and decreased 42 bps compared to 2Q 2024 due to the acquisition of commercial loans from IFH, diluting the impact from OpenSky™
Commercial Bank NIM(1) of 4.36% increased by 4 bps, or 7 bps when excluding purchase accounting accretion ("PAA"), when compared to 1Q 2025, and 46 bps,or 30 bps excluding PAA, compared to 2Q 2024
2Q 2025 net PAA of $1.3 million, or 16 bps of NIM and Commercial Bank NIM(1), decreased $0.2 million, or 3 bps, compared to 1Q 2025
The allowance for credit losses to total loans ("ACL Coverage Ratio") equaled 1.73% at June 30, 2025 down 8 bps from March 31, 2025 and up 20 bps from June 30, 2024, primarily due to the acquisition of IFH loans. The Commercial Bank ACL Coverage Ratio(1) equaled 1.56% at June 30, 2025, compared to 1.67% at March 31, 2025
Fee Revenue (noninterest income) totaled $13.1 million, or 21.6% of total revenue for 2Q 2025, an increase of $0.6 million, from 1Q 2025 and an increase of $6.2 million, from 2Q 2024
Cash Dividend of $0.12 per share declared by the Board of Directors, an increase of 20% from 1Q 2025
Shares repurchased and retired during the three months ended June 30, 2025, as part of the Company's stock repurchase program, totaled 93,170 shares at an average price of $26.66, for a total cost of $2.5 million including commissions
____________________________________________(1) As used in this press release, core net income, core ROA, core ROE, ROTCE, core ROTCE, Commercial Bank NIM, Commercial Bank ACL Coverage Ratio, and Tangible Book Value are non–U.S. generally accepted accounting principles ("GAAP") financial measures. These non-GAAP financial metrics exclude merger-related expenses and other certain one-time non-recurring pre-tax adjustments and tax impacts of such adjustments. Reconciliations of these and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.(2) Gross loans represent portfolio loans receivable, net of deferred fees and costs (3) Customer Deposits represents total deposits excluding brokered deposits
ROCKVILLE, Md., July 28, 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 $13.1 million, or $0.78 per diluted share, for 2Q 2025, compared to net income of $13.9 million, or $0.82 per diluted share, for 1Q 2025, and $8.2 million, or $0.59 per diluted share, for 2Q 2024. Core net income(4) for 2Q 2025 of $14.2 million, or $0.85 per diluted share, compared to $14.9 million, or $0.88 per diluted share in 1Q 2025.
The Company also declared a cash dividend on its common stock of $0.12 per share, a 20% increase from the prior quarterly dividend. The dividend is payable on August 27, 2025 to shareholders of record on August 11, 2025.
"We are pleased with the significant progress we are making on our Strategic Plan, demonstrated by our record results for the first half of 2025," said Ed Barry, CEO of the Company and the Bank. "Our teams continue to unlock the value of our acquisition of IFH, grow the franchise, and strengthen our diversified business model."
"Although earnings did not advance quarter over quarter, our continued focus on growing commercial and industrial loans, our success at building core deposits, and our strong net interest margin have the Commercial Bank well-positioned for profitable growth," said Steven J. Schwartz, Chairman of the Company. "As the integration of the IFH transaction progresses, we are pleased that we have been able to maintain our fee revenue above 20% of total revenue. And, in the absence of any unexpected headwinds, which do not appear to be materializing at present, our multiple growth levers provide the means to achieve robust EPS and TBV growth. This marks the 4th consecutive year that we have increased our dividend payout. Our consistent dividend payments and continued stock buybacks evidence our sustained commitment to reward our shareholders."
Reconciliation of GAAP Net Income to Core (Non-GAAP) Net Income
The following table provides a reconciliation of the Company's net income under GAAP to Core net income (non-GAAP) results excluding merger-related expenses and other one-time non-recurring transactions.
Second Quarter 2025
First Quarter 2025
(in thousands, except per share data)
IncomeBeforeIncomeTaxes
IncomeTaxExpense
NetIncome
DilutedEarningsperShare
IncomeBeforeIncomeTaxes
IncomeTaxExpense
NetIncome
DilutedEarningsperShare
GAAP Net Income
$
17,099
$
3,963
$
13,136
$
0.78
$
18,297
$
4,365
$
13,932
$
0.82
Add: Merger-Related Expenses
1,398
328
1,070
1,266
302
964
Core Net Income(1)
$
18,497
$
4,291
$
14,206
$
0.85
$
19,563
$
4,667
$
14,896
$
0.88
Six Months Ended June 30, 2025
(in thousands except per share data)
IncomeBeforeIncomeTaxes
IncomeTaxExpense
Net Income
Diluted Earningsper Share
GAAP Earnings
$
35,396
$
8,328
$
27,068
$
1.60
Add: Merger-Related Expenses
2,664
630
2,034
Core Net Income(1)
$
38,060
$
8,958
$
29,102
$
1.72
Note: The income tax expense reflects the non-deductibility of certain merger-related expenses.
____________________________________________1 As used in this press release, core net income is a non-GAAP financial measure. This non-GAAP financial metric excludes merger-related expenses and other certain one-time non-recurring pre-tax adjustments and tax impacts of such adjustments. Reconciliations of this and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Second Quarter 2025 Results
Earnings Summary
Net income of $13.1 million, or $0.78 per diluted share, compared to net income of $13.9 million, or $0.82 per diluted share, for 1Q 2025, and $8.2 million or $0.59 per diluted share, for 2Q 2024. 2Q 2025 core net income(5) of $14.2 million, or $0.85 per diluted share, compared to 1Q 2025 of $14.9 million, or $0.88 per diluted share.
Net interest income of $47.6 million increased $1.6 million, or 3.5% (not annualized), compared to 1Q 2025, and increased $10.6 million, or 28.6%, year-over-year.
Interest income of $64.6 million increased $1.8 million, or 2.9% (not annualized), over 1Q 2025, and increased $14.0 million, or 27.6%, year-over-year. The increase quarter-over-quarter was driven by an increase from Commercial Bank loan interest income due to portfolio growth, while the increase year-over-year was primarily driven by organic growth and the acquisition of IFH.
Interest income included $0.4 million from net purchase accounting accretion in 2Q 2025, flat compared to 1Q 2025. There was no impact related to purchase accounting during 2Q 2024.
Interest expense of $16.9 million increased $0.2 million, or 1.4% (not annualized) compared to 1Q 2025, and increased $3.4 million, or 24.9%, year-over-year. The increase quarter-over-quarter was mainly due to a lower benefit from net purchase accounting accretion, as higher deposit volumes were offset by lower deposit rates. The increase year-over-year was driven by organic growth and the acquisition of IFH.
Interest expense included a $0.9 million benefit from net purchase accounting accretion in 2Q 2025 compared to a $1.1 million benefit in 1Q 2025. There was no impact related to purchase accounting during 2Q 2024.
The 2Q 2025 provision for credit losses was $4.1 million, an increase of $1.8 million from 1Q 2025. The increase over the prior quarter was primarily driven by $1.1 million from OpenSky™ due to higher volumes in both the secured and unsecured portfolio, and $0.7 million from the Commercial Bank due to higher charge-offs not previously provided for. Net charge-offs totaled $5.1 million, or 0.75% of portfolio loans (annualized), including $3.0 million from the Commercial Bank and $2.1 million from OpenSky™ loans. The Commercial Bank charge-offs were driven by $2.1 million from balances charged off from the acquired IFH portfolio, including a loan sale resulting in a charge-off of $1.5 million. Net charge-offs for 1Q 2025 totaled $2.4 million, or 0.38% of portfolio loans (annualized), mainly driven by $2.3 million from OpenSky™ loans.
At June 30, 2025, the ACL Coverage Ratio was 1.73%, down 8 bps from the ratio of 1.81% at March 31, 2025, primarily due to the sale during the quarter of a purchase credit deteriorated ("PCD") loan acquired from IFH .
____________________________________________1As used in this press release, core net income is a non-GAAP financial measure. This non-GAAP financial metric excludes merger-related expenses and other certain one-time non-recurring pre-tax adjustments and tax impacts of such adjustments. Reconciliations of this and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Earnings Summary (Continued)
Fee Revenue of $13.1 million increased $0.6 million, compared to 1Q 2025 and increased $6.2 million year-over-year primarily due to the contributions made by the businesses IFH brought to the merged entity. During 2Q 2025, core fee revenue(6) of $13.1 million increased $0.6 million as a result of $2.0 million higher government lending revenue (net gain on sale), $0.6 million higher credit card fees from OpenSky™, and $0.1 million higher government loan servicing revenue (Windsor Advantage™), offset by a $1.1 million negative impact from the fair value adjustment related to the loan servicing portfolio, and $1.0 million lower other income. Core fee revenue mix was 21.6% of total revenue for 2Q 2025, compared to 21.4% during 1Q 2025, and 15.7% during 2Q 2024.
Noninterest expense of $39.6 million increased $1.5 million compared to 1Q 2025 and $10.1 million compared to 2Q 2024. Core noninterest expense(1) of $38.2 million increased $1.4 million compared to 1Q 2025 and $8.8 million compared to 2Q 2024. Core comparisons include:
The increase of $1.4 million quarter-over-quarter was driven by an increase from personnel expenses, growth from business related activities including costs associated with servicing the USDA portfolio, and continued investments in technology including the implementation of a new digital banking solution.
Year-over-year expense growth of $8.8 million was primarily due to the acquisition of IFH.
Income tax expense of $4.0 million, or 23.2% of pre-tax income for 2Q 2025, decreased $0.4 million from $4.4 million, or 23.9% of pre-tax income for 1Q 2025. The core effective income tax rate(1) for 2Q 2025 and 1Q 2025 would have been 23.2% and 23.7%, respectively.
____________________________________________1As used in this press release, core fee revenue, core noninterest expense, and core effective income tax rate are non-GAAP financial measures. These non-GAAP financial metrics exclude merger-related expenses and other certain one-time non-recurring pre-tax adjustments and tax impacts of such adjustments. Reconciliations of these and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Balance Sheet
Total assets of $3.4 billion at June 30, 2025 increased $38.9 million, or 4.7% (annualized), from March 31, 2025. Total assets growth year-over-year of $1.0 billion, or 39.0%, included $559.4 million acquired with the IFH acquisition, net of purchase accounting, and $440.6 million of organic growth.
The $38.9 million growth in total assets quarter-over-quarter is primarily driven by Gross Loan growth of $61.4 million, Investment portfolio growth of $15.5 million, partially offset by decreases in total Cash of $19.4 million and Loans Held for Sale of $13.7 million.
Gross Loans of $2.74 billion at June 30, 2025 increased $61.4 million, or 9.2% (annualized), from March 31, 2025 and increased $718.2 million year-over-year including $373.5 million from the acquisition of IFH and $344.7 million of organic growth.
Compared to March 31, 2025, the growth of $61.4 million was primarily driven by $26.7 million from commercial real estate, $17.1 million from residential real estate, $12.3 million from OpenSky™, and $9.3 million from lender finance.
Commercial and industrial loans, plus owner-occupied commercial real estate loans totaled 37.6% of total portfolio loans at June 30, 2025, consistent with the prior quarter, and 28.4% at June 30, 2024.
Total deposits of $2.94 billion at June 30, 2025 increased $49.4 million, or 6.9% (annualized), from March 31, 2025, and increased $840.3 million, or 40.0% (annualized) from June 30, 2024. The increase quarter-over-quarter includes $47.8 million of growth in customer money market deposits, $24.8 million of noninterest-bearing deposits, and $23.0 million from interest-bearing demand accounts, partially offset by a decrease in brokered time deposits of $37.7 million and $8.6 million of customer time deposits. The increase of $840.3 million year-over-year is driven by $459.0 million from the acquisition of IFH and $381.3 million from organic growth.
Insured and protected7 deposits were approximately $2.1 billion as of June 30, 2025 representing 69.9% of the Company's deposit portfolio.
Low-and-no interest-bearing DDA deposits of $1.2 billion, or 39.8% of deposits, increased $47.8 million, or 17.1% (annualized) from 1Q 2025, and increased $214.4 million, or 22.4% year-over-year, including $122.9 million of organic growth, and $91.5 million from the acquisition of IFH.
The average rate on the low-and-no interest-bearing deposits was 0.14% for 2Q 2025, a decrease of 1 bps from 1Q 2025 and an increase of 8 bps year-over-year.
The average portfolio loans-to-deposit ratio was 96.2% for 2Q 2025, compared to 95.2% for 1Q 2025, and 99.1% for 2Q 2024.
The investment securities portfolio continues to be classified as available-for-sale and had a fair market value of $228.9 million, or 6.8% of total assets, an effective duration of 2.7 years, with U.S. Treasury Securities representing 60% of the overall investment portfolio at June 30, 2025. The accumulated other comprehensive income (loss) on the investment securities portfolio improved $1.1 million during the quarter to negative $8.1 million after-tax as of June 30, 2025, which represents 2.1% 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 June 30, 2025 totaled $834.8 million, compared to $820.9 from 1Q 2025. During 2Q 2025, available collateralized lines of credit totaled $750.6 million, unsecured lines of credit with other banks totaled $76.0 million and unpledged investment securities available as collateral for potential additional borrowings of $8.2 million.
Capital Positions, As of June 30, 2025, the Company reported a Common Equity Tier-1 capital ratio of 13.58%, compared to 13.24% at March 31, 2025. At June 30, 2025, the Company and the Bank maintained regulatory capital ratios that exceed all capital adequacy requirements.
Shares repurchased and retired during the three months ended June 30, 2025, as part of the Company's stock repurchase program, totaled 93,170 shares at an average price of $26.66, for a total cost of $2.5 million including commissions. There is $11.9 million remaining to be repurchased under the authorized and approved stock repurchase plan. The stock repurchase program will expire on February 28, 2026.
____________________________________________1Protected deposits includes deposits that are indirectly protected under the product terms
Financial Metrics
Net Interest Margin, NIM of 6.04% for 2Q 2025, decreased 1 bps compared to the prior quarter, and decreased 42 bps year-over-year. Commercial Bank NIM(1), of 4.36% increased 4 bps, compared to the prior quarter, and increased 46 bps year-over-year. Net purchase accounting accretion for 2Q 2025 was 16 bps for NIM and Commercial Bank NIM(1).
The average yield on interest earning assets of 8.19% decreased 5 bps compared to the prior quarter, due to minor changes in portfolio mix, and decreased 63 bps year-over-year primarily due to the acquisition of commercial loans diluting the positive impact from OpenSky™. The Commercial Bank Loan Yield(1) of 7.14% for 2Q 2025 was flat compared to 1Q 2025, and increased 10 bps year-over-year.
The total cost of deposits of 2.36% for 2Q 2025 decreased 6 bps compared to the prior quarter due to lower rates on most products and mix shift and decreased 25 bps year-over-year. The total cost of interest-bearing deposits decreased 8 bps quarter-over-quarter, and 57 bps year-over-year, to 3.29% for 2Q 2025 primarily due to changes in product mix.
Net purchase accounting accretion of $1.3 million during 2Q 2025, decreased $0.2 million from 1Q 2025. There was no impact from purchase accounting during 2Q 2024.
Fee Revenue Mix, The fee revenue mix was 21.6% of total revenue for 2Q 2025, compared to 21.4% during 1Q 2025, and 15.7% during 2Q 2024. The core fee revenue mix(8) was consistent with fee revenue mix for these periods.
Credit Metrics and Asset Quality, The ACL Coverage Ratio equaled 1.73% at June 30, 2025, a decrease of 8 bps from March 31, 2025, and an increase of 20 bps year-over-year driven by the acquisition of IFH.
Nonperforming assets decreased 17 bps to 1.11% of total assets at June 30, 2025 compared to March 31, 2025, primarily due to the sale of a PCD loan acquired from IFH during the quarter, and increased 53 bps year-over-year. Total nonaccrual loans at June 30, 2025 decreased $5.4 million to $37.5 million compared to March 31, 2025, and increased $23.5 million year-over-year, mainly due to the acquisition of IFH. At June 30, 2025, special mention loans totaled $54.2 million, or 2.0% of total portfolio loans, compared to $63.0 million, or 2.4% of total portfolio loans, at March 31, 2025, and $23.3 million, or 1.2% of total portfolio loans, at June 30, 2024. At June 30, 2025, substandard loans totaled $44.6 million, or 1.7% of total portfolio loans, compared to $48.4 million, or 1.8% of total portfolio loans, at March 31, 2025 and $22.1 million, or 1.2% of total portfolio loans, at June 30, 2024.
Efficiency Ratios, The efficiency ratio was 65.1% for 2Q 2025, compared to 64.9% for 1Q 2025 and 67.1% for 2Q 2024. The core efficiency ratio(1) was 62.8%, for 2Q 2025, which was flat compared to the prior quarter, and 66.9% for 2Q 2024.
____________________________________________1As used in this press release, Commercial Bank NIM, Commercial Bank Loan Yield, core fee revenue mix and core efficiency ratio are non-GAAP financial measures. These non-GAAP financial metrics exclude merger-related expenses and other certain one-time non-recurring pre-tax adjustments and tax impacts of such adjustments. Reconciliations of these and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Financial Metrics (Continued)
Performance Ratios, ROA was 1.60% for 2Q 2025, compared to 1.75% for 1Q 2025, and 1.40% for 2Q 2024. As of June 30, 2024, the Company did not have goodwill or other intangible assets. Core ROA(9) for 2Q 2025 was 1.73%, compared to 1.87% for 1Q 2025, and 1.41% for 2Q 2024.
ROE was 14.17% for 2Q 2025, compared to 15.56% for 1Q 2025, and 12.53% for 2Q 2024. As of June 30, 2024, the Company did not have goodwill or other intangible assets. Core ROE(1) was 15.33% for 2Q 2025, compared to 16.64% for 1Q 2025, and 12.62% for 2Q 2024.
ROTCE was 16.10% for 2Q 2025, compared to 17.57% for 1Q 2025, and 12.53% for 2Q 2024. As of June 30, 2024, the Company did not have goodwill or other intangible assets. Core ROTCE(1) for 2Q 2025 was 17.39%, compared to 18.77% for 1Q 2025, and 12.62% for 2Q 2024.
Book Value and Tangible Book Value, Book value per common share of $22.92 at June 30, 2025, increased $0.73 when compared to March 31, 2025, and increased $3.66 when compared to June 30, 2024. Tangible book value per common share(1) increased $0.83, or 4.2%, to $20.64 at June 30, 2025 when compared to March 31, 2025, and increased $1.39, or 7.2%, when compared to June 30, 2024. Tangible book value was impacted by the purchase accounting adjustments required as part of the IFH acquisition. Tangible book value per share(1) was equal to book value per share for periods prior to 4Q 2024.
____________________________________________1As used in this press release, core ROA, core ROE, ROTCE, core ROTCE, and Tangible Book Value are non-GAAP financial measures. These non-GAAP financial metrics exclude merger-related expenses and other certain one-time non-recurring pre-tax adjustments and tax impacts of such adjustments. Reconciliations of these and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Commercial Bank
Loan Growth, Portfolio loans(10) increased $52.0 million at June 30, 2025 compared to March 31, 2025, driven by $10.9 million from CRE owner and non-owner occupied, $17.1 million from residential real estate, and $9.3 million from lender finance loans. Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.
Net Interest Income, Interest income of $49.9 million increased $1.8 million from the prior quarter, primarily driven by loan growth and slightly higher loan yields. Interest expense of $16.9 million increased $0.2 million, primarily due to lower benefit from purchase accounting adjustments in 2Q 2025.
Credit Metrics, Nonperforming assets, comprised solely of nonaccrual loans, decreased 17 bps to 1.11% of total assets at June 30, 2025 compared to March 31, 2025. Total nonaccrual loans at June 30, 2025 decreased to $37.5 million compared to $42.9 million at March 31, 2025.
Classified and Criticized Loans, At June 30, 2025, special mention loans totaled $54.2 million, or 2.0% of total portfolio loans, compared to $63.0 million, or 2.4% of total portfolio loans, at March 31, 2025. At June 30, 2025, substandard loans totaled $44.6 million, or 1.7% of total portfolio loans, compared to $45.7 million, or 1.7% of total portfolio loans, at March 31, 2025.
OpenSky™
Accounts, During 2Q 2025, credit card accounts of 585.4 thousand increased by 21.7 thousand, or 3.8% (not annualized) from March 31, 2025, and increased 47.6 thousand, or 8.9% year-over-year.
Loan and Deposit Balances, Secured and unsecured loan balances, net of reserves, of $131.0 million at June 30, 2025 increased by $12.3 million, or 10.4% (not annualized), compared to March 31, 2025. Deposit balances of $168.9 million for 2Q 2025 remained flat compared to 1Q 2025. Gross unsecured loan balances of $46.4 million at June 30, 2025 increased $7.4 million, or 18.9% (not annualized), compared to $39.0 million at March 31, 2025, and increased $12.8 million year-over-year. Gross secured loan balances of $86.4 million at June 30, 2025 increased $5.1 million, or 6.3% (not annualized), compared to $81.3 million at March 31, 2025, and decreased $4.6 million, or 5.0% (not annualized) year-over-year.
Net Interest Income, Interest income of $14.5 million was in-line with the prior quarter. Average OpenSky credit card loan balances, net of reserves and deferred fees of $121.4 million for 2Q 2025, increased $2.7 million, or 2.3% (not annualized), compared to 1Q 2025.
Fee Revenue - Total fee revenue of $4.3 million increased $0.6 million from the prior quarter primarily driven by interchange income due to higher volume and other credit-card related fees.
Noninterest Expense, Total noninterest expense of $13.1 million remained generally consistent with the prior quarter.
OpenSky™ Credit, Portfolio credit metrics continued to be consistent with modeled expectations during 2Q 2025. The provision for credit losses of $2.9 million increased $1.1 million when compared to the prior quarter mainly due to growth in the secured and unsecured portfolio. OpenSky's unsecured loan product continues to be offered exclusively to current and former secured card customers to retain customers who have successfully improved their credit profiles. Unsecured loans have been offered by OpenSky since the fourth quarter of 2021 and have generally performed in accordance with management expectations over that time period.
____________________________________________(1)Portfolio loans represents portfolio loans receivable excluding deferred origination fees
Capital Bank Home Loans
Originations of loans held for sale totaled $80.3 million during 2Q 2025, with $59.7 million of mortgage loans sold resulting in a gain on sale of loans of $1.6 million, representing a 2.68% gain on sale as a percentage of total loans sold. Originations of loans held for sale totaled $65.8 million during 1Q 2025, with $54.1 million of mortgage loans sold resulting in a gain on sale of loans of $1.7 million, representing a 3.07% gain on sale as a percentage of total loans sold.
Windsor Advantage™
Gross government loan servicing revenue totaled $4.7 million, including $1.1 million of Capital Bank related servicing fees, during 2Q 2025. Gross government loan servicing revenue totaled $4.6 million, including $1.0 million of Capital Bank related servicing fees, during 1Q 2025. Windsor's™ total servicing portfolio was $2.9 billion at June 30, 2025, and $2.7 billion at March 31, 2025.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited
Quarter Ended
2Q25 vs 1Q25
2Q25 vs 2Q24
(in thousands, except per share data)
June 30,2025
March 31,2025
June 30,2024
$ Change
% Change
$ Change
% Change
Earnings Summary
Interest income
$
64,586
$
62,760
$
50,615
$
1,826
2.9
%
$
13,971
27.6
%
Interest expense
16,940
16,713
13,558
227
1.4
%
3,382
24.9
%
Net interest income
47,646
46,047
37,057
1,599
3.5
%
10,589
28.6
%
Provision for credit losses
4,081
2,246
3,417
1,835
81.7
%
664
19.4
%
Provision for credit losses on unfunded commitments
—
—
104
—
—
%
(104
)
(100.0
)%
Noninterest income
13,106
12,549
6,890
557
4.4
%
6,216
90.2
%
Noninterest expense
39,572
38,053
29,493
1,519
4.0
%
10,079
34.2
%
Income before income taxes
17,099
18,297
10,933
(1,198
)
(6.5
)%
6,166
56.4
%
Income tax expense
3,963
4,365
2,728
(402
)
(9.2
)%
1,235
45.3
%
Net income
$
13,136
$
13,932
$
8,205
$
(796
)
(5.7
)%
$
4,931
60.1
%
Pre-tax pre-provision net revenue ("PPNR")(1)
$
21,180
$
20,543
$
14,454
$
637
3.1
%
$
6,726
46.5
%
Core PPNR(1)
$
22,578
$
21,809
$
14,537
$
769
3.5
%
$
8,041
55.3
%
Common Share Data
Earnings per share - Basic
$
0.79
$
0.84
$
0.59
$
(0.05
)
(6.0
)%
$
0.20
33.9
%
Earnings per share - Diluted
$
0.78
$
0.82
$
0.59
$
(0.04
)
(4.9
)%
$
0.19
32.2
%
Core earnings per share - Diluted(1)
$
0.85
$
0.88
$
0.59
$
(0.03
)
(3.4
)%
$
0.26
44.1
%
Weighted average common shares - Basic
16,584
16,666
13,895
Weighted average common shares - Diluted
16,802
16,925
13,895
Return Ratios
Return on average assets (annualized)
1.60
%
1.75
%
1.40
%
Core return on average assets (annualized)(1)
1.73
%
1.87
%
1.41
%
Return on average equity (annualized)
14.17
%
15.56
%
12.53
%
Core return on average equity (annualized)(1)
15.33
%
16.64
%
12.62
%
Return on average tangible common equity (annualized)(1)
16.10
%
17.57
%
12.53
%
Core return on average tangible common equity (annualized)(1)
17.39
%
18.77
%
12.62
%
____________________________________________(1) Refer to Appendix for reconciliation of non-GAAP measures.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued)
Six Months Ended
June 30,
(in thousands, except per share data)
2025
2024
$ Change
% Change
Earnings Summary
Interest income
$
127,346
$
98,984
$
28,362
28.7
%
Interest expense
33,653
26,919
6,734
25.0
%
Net interest income
93,693
72,065
21,628
30.0
%
Provision for credit losses
6,327
6,144
183
3.0
%
Provision for credit losses on unfunded commitments
—
246
(246
)
(100.0
)%
Noninterest income
25,655
12,862
12,793
99.5
%
Noninterest expense
77,625
58,980
18,645
31.6
%
Income before income taxes
35,396
19,557
15,839
81.0
%
Income tax expense
8,328
4,790
3,538
73.9
%
Net income
$
27,068
$
14,767
$
12,301
83.3
%
Pre-tax pre-provision net revenue ("PPNR")(1)
$
41,723
$
25,947
$
15,776
60.8
%
Core PPNR(1)
$
44,387
$
26,742
$
17,645
66.0
%
Common Share Data
Earnings per share - Basic
$
1.63
$
1.06
$
0.57
53.8
%
Earnings per share - Diluted
$
1.60
$
1.06
$
0.54
50.9
%
Core earnings per share - Diluted(1)
$
1.72
$
1.10
Weighted average common shares - Basic
16,624
13,907
Weighted average common shares - Diluted
16,872
13,907
Return Ratios
Return on average assets (annualized)
1.68
%
1.28
%
Core return on average assets (annualized)(1)
1.80
%
1.33
%
Return on average equity (annualized)
14.85
%
11.37
%
Core return on average equity (annualized)(1)
15.97
%
11.83
%
Return on average tangible common equity (annualized)(1)
16.82
%
11.37
%
Core return on average tangible common equity (annualized)(1)
18.07
%
11.83
%
____________________________________________(1) Refer to Appendix for reconciliation of non-GAAP measures.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued)
Quarter Ended
Quarter Ended
June 30,
March 31,
December 31,
September 30,
(in thousands, except per share data)
2025
2024
% Change
2025
2024
2024
Balance Sheet Highlights
Assets
$
3,388,662
$
2,438,583
39.0
%
$
3,349,805
$
3,206,911
$
2,560,788
Investment securities available-for-sale
228,923
207,917
10.1
%
213,452
223,630
208,700
Mortgage loans held for sale
20,925
19,219
8.9
%
34,656
21,270
19,554
Portfolio loans receivable(2)
2,739,808
2,021,588
35.5
%
2,678,406
2,630,163
2,107,522
Allowance for credit losses
47,447
30,832
53.9
%
48,454
48,652
31,925
Deposits
2,940,738
2,100,428
40.0
%
2,891,333
2,761,939
2,186,224
FHLB borrowings
22,000
32,000
(31.3
)%
22,000
22,000
52,000
Other borrowed funds
12,062
12,062
—
%
12,062
12,062
12,062
Total stockholders' equity
380,035
267,854
41.9
%
369,577
355,139
280,111
Tangible common equity(1)
342,262
267,854
27.8
%
329,936
318,196
280,111
Common shares outstanding
16,582
13,910
19.2
%
16,657
16,663
13,918
Book value per share
$
22.92
$
19.26
19.0
%
$
22.19
$
21.31
$
20.13
Tangible book value per share(1)
$
20.64
$
19.26
7.2
%
$
19.81
$
19.10
$
20.13
Dividends per share
$
0.10
$
0.08
25.0
%
$
0.10
$
0.10
$
0.10
____________________________________________(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
Six Months Ended
(in thousands)
June 30,2025
March 31,2025
December 31,2024
September 30,2024
June 30,2024
June 30,2025
June 30,2024
Interest income
Loans, including fees
$
60,810
$
58,691
$
58,602
$
50,047
$
48,275
$
119,501
$
94,266
Investment securities available-for-sale
1,582
1,861
1,539
1,343
1,308
3,443
2,559
Federal funds sold and other
2,194
2,208
1,566
1,220
1,032
4,402
2,159
Total interest income
64,586
62,760
61,707
52,610
50,615
127,346
98,984
Interest expense
Deposits
16,722
16,512
16,385
13,902
13,050
33,234
25,883
Borrowed funds
218
201
995
354
508
419
1,036
Total interest expense
16,940
16,713
17,380
14,256
13,558
33,653
26,919
Net interest income
47,646
46,047
44,327
38,354
37,057
93,693
72,065
Provision for credit losses
4,081
2,246
7,828
3,748
3,417
6,327
6,144
Provision for credit losses on unfunded commitments
—
—
122
17
104
—
246
Net interest income after provision for credit losses
43,565
43,801
36,377
34,589
33,536
87,366
65,675
Noninterest income
Service charges on deposits
262
258
241
235
200
520
407
Credit card fees
4,298
3,722
3,733
4,055
4,330
8,020
8,211
Mortgage banking revenue
1,754
1,831
1,821
1,882
1,990
3,585
3,443
Government lending revenue
3,112
1,096
2,301
—
—
4,208
—
Government loan servicing revenue
3,644
3,568
3,993
—
—
7,212
—
Loan servicing rights (government guaranteed)
(590
)
472
1,013
—
—
(118
)
—
Non-recurring equity and debt investment write-down
—
—
(2,620
)
—
—
—
—
Other income
626
1,602
1,431
463
370
2,228
801
Total noninterest income
13,106
12,549
11,913
6,635
6,890
25,655
12,862
Noninterest expenses
Salaries and employee benefits
18,460
18,067
16,513
13,345
13,272
36,527
26,179
Occupancy and equipment
2,995
2,910
2,976
1,791
1,864
5,905
3,477
Professional fees
2,422
2,112
2,150
1,980
1,769
4,534
3,716
Data processing
7,520
7,112
7,210
6,930
6,788
14,632
13,549
Advertising
1,371
1,779
1,032
1,223
2,072
3,150
4,104
Loan processing
979
743
969
615
476
1,722
847
Foreclosed real estate expenses, net
—
1
—
1
—
1
1
Merger-related expenses
1,398
1,266
2,615
520
83
2,664
795
Operational losses
933
903
993
1,008
782
1,836
1,713
Regulatory assessment expenses
884
889
554
483
427
1,773
900
Other operating
2,610
2,271
2,502
1,829
1,960
4,881
3,699
Total noninterest expenses
39,572
38,053
37,514
29,725
29,493
77,625
58,980
Income before income taxes
17,099
18,297
10,776
11,499
10,933
35,396
19,557
Income tax expense
3,963
4,365
3,243
2,827
2,728
8,328
4,790
Net income
$
13,136
$
13,932
$
7,533
$
8,672
$
8,205
$
27,068
$
14,767
Consolidated Balance Sheets
(unaudited)
(unaudited)
(audited)
(unaudited)
(unaudited)
(in thousands, except share data)
June 30,2025
March 31,2025
December 31,2024
September 30,2024
June 30,2024
Assets
Cash and due from banks
$
26,843
$
27,836
$
25,433
$
23,462
$
19,294
Interest-bearing deposits at other financial institutions
247,704
266,092
179,841
133,180
117,160
Federal funds sold
59
59
58
58
57
Total cash and cash equivalents
274,606
293,987
205,332
156,700
136,511
Investment securities available-for-sale
228,923
213,452
223,630
208,700
207,917
Restricted investments
7,043
7,031
4,479
5,895
4,930
Loans held for sale
20,925
34,656
21,270
19,554
19,219
Portfolio loans receivable, net of deferred fees and costs
2,739,808
2,678,406
2,630,163
2,107,522
2,021,588
Less allowance for credit losses
(47,447
)
(48,454
)
(48,652
)
(31,925
)
(30,832
)
Total portfolio loans held for investment, net
2,692,361
2,629,952
2,581,511
2,075,597
1,990,756
Premises and equipment, net
14,863
15,085
15,525
5,959
5,551
Accrued interest receivable
15,149
19,458
16,664
12,468
12,162
Goodwill
22,478
24,085
21,126
—
—
Intangible assets
13,668
13,861
14,072
—
—
Core deposit intangibles
1,627
1,695
1,745
—
—
Loan servicing assets
2,221
2,244
5,511
—
—
Deferred tax asset
15,667
15,902
16,670
10,748
12,150
Bank owned life insurance
44,721
44,335
43,956
38,779
38,414
Other assets
34,410
34,062
35,420
26,388
10,973
Total assets
$
3,388,662
$
3,349,805
$
3,206,911
$
2,560,788
$
2,438,583
Liabilities
Deposits
Noninterest-bearing
$
836,979
$
812,224
$
810,928
$
718,120
$
684,574
Interest-bearing
2,103,759
2,079,109
1,951,011
1,468,104
1,415,854
Total deposits
2,940,738
2,891,333
2,761,939
2,186,224
2,100,428
Federal Home Loan Bank advances
22,000
22,000
22,000
52,000
32,000
Other borrowed funds
12,062
12,062
12,062
12,062
12,062
Accrued interest payable
8,158
9,995
9,393
8,503
6,573
Other liabilities
25,669
44,838
46,378
21,888
19,666
Total liabilities
3,008,627
2,980,228
2,851,772
2,280,677
2,170,729
Stockholders' equity
Common stock
166
167
167
139
139
Additional paid-in capital
126,888
128,692
128,598
55,585
55,005
Retained earnings
261,093
249,925
237,843
232,995
225,824
Accumulated other comprehensive loss
(8,112
)
(9,207
)
(11,469
)
(8,608
)
(13,114
)
Total stockholders' equity
380,035
369,577
355,139
280,111
267,854
Total liabilities and stockholders' equity
$
3,388,662
