CBNK Reports 4Q EPS of $0.91; 4Q ROA of 1.71% and ROE of 15.23%; FY 2025: Record Earnings, Double-Digit Balance Sheet Growth and a 1.71% ROA
Fourth Quarter 2025 Highlights
GAAP Net Income of $15.0 million was flat compared to 3Q 2025. Earnings per share of $0.91 increased $0.02 per share, compared to 3Q 2025 and return on average assets ("ROA") of 1.71% decreased 6 basis points compared to 3Q 2025
Core net income(1) of $15.0 million, or $0.91 per share increased $0.19 per share compared to 3Q 2025 and Core ROA(1) of 1.71% increased 28 basis points compared to 3Q 2025
Book value per common share of $24.54 at December 31, 2025, increased $0.74 compared to 3Q 2025, and increased $3.23 when compared to 4Q 2024
Tangible book value per share(1) of $22.05, increased 3.4% (not annualized), or $0.72 as compared to 3Q 2025, and increased 15.5%, or $2.96 compared to 4Q 2024
Return on average equity ("ROE") of 15.23% decreased 34 basis points compared to 3Q 2025, and return on average tangible common equity ("ROTCE")(1) of 17.23% decreased 26 basis points compared to 3Q 2025
Core ROE(1) of 15.23% increased 267 basis points compared to 3Q 2025 and Core ROTCE(1) of 17.23% increased 308 basis points compared to 3Q 2025
Gross Loans(2) grew $137.5 million, or 19.3% (annualized), during 4Q 2025, and grew $329.3 million, or 12.5% from 4Q 2024
Total deposits grew $180.9 million, or 24.6% (annualized), from 3Q 2025 and grew $331.0 million, or 12.0% from 4Q 2024
Customer Deposit3 growth of $41.8 million, or 6.2% (annualized) from 3Q 2025, and $287.4 million, or 11.8% from 4Q 2024
Net interest income decreased $1.7 million, or 3.3% (not annualized) from 3Q 2025, mainly due to the $4.6 million of accretion during 3Q 2025 from refinancing callable brokered time deposits acquired in the IFH transaction, and increased $6.0 million, or 13.4% from 4Q 2024, primarily driven by growth from the Commercial Bank.
Net Interest Margin ("NIM") of 5.94% decreased 42 bps compared to 3Q 2025 and increased 7 bps compared to 4Q 2024
Commercial Bank NIM(1) of 4.18% decreased by 46 bps (but increased 21 bps when excluding purchase accounting accretion ("PAA")), compared to 3Q 2025, and increased 19 bps, compared to 4Q 2024
4Q 2025 net PAA of $0.2 million, or 3 bps of NIM and 3 bps of Commercial Bank NIM(1), decreased $5.3 million, or 61 bps, compared to 3Q 2025.
The allowance for credit losses to total loans ("ACL Coverage Ratio") equaled 1.85% at December 31, 2025, which represented a 3 bps decrease from September 30, 2025, and remained flat year-over-year.
The Commercial Bank ACL Coverage Ratio(1) equaled 1.65% at December 31, 2025, which represented a 5 bps decrease from 1.70% at both September 30, 2025 and December 31, 2024
Fee Revenue (noninterest income) totaled $12.5 million, or 19.9% of total revenue for 4Q 2025, an increase of $1.4 million from 3Q 2025 primarily due to SBIC income, and increased $0.6 million from 4Q 2024
Cash Dividend of $0.12 per share declared by the Board of Directors
Shares repurchased and retired during the three months ended December 31, 2025, as part of the Company's stock repurchase program, totaled 304,288 shares at an average price of $28.12, for a total cost of $8.6 million
(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 excludes the impact of income from the call of brokered time deposits, merger-related expenses and other pre-tax adjustments which are not indicative of operating performance 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., Jan. 26, 2026 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") (NASDAQ:CBNK), the holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $15.0 million, or $0.91 per diluted share, for 4Q 2025, compared to net income of $15.1 million, or $0.89 per diluted share, for 3Q 2025, and $7.5 million, or $0.45 per diluted share, for 4Q 2024. Core net income(1) for 4Q 2025 of $15.0 million, or $0.91 per diluted share, compared to $12.2 million, or $0.72 per diluted share in 3Q 2025, and $15.5 million, or $0.92 per diluted share, for 4Q 2024.
The Company also declared a cash dividend on its common stock of $0.12 per share. The dividend is payable on February 28, 2026 to shareholders of record on February 9, 2026.
"Our diversified business model continues to be a source of consistency and strength enabling us to perform at a high level in different market conditions," said Ed Barry, CEO of the Company. With the IFH integration behind us, our focus on executing our strategic plan remains our top priority. Our growth levers offer us a wide range of options on which we are capitalizing."
"We continue to demonstrate our ability to deliver meaningful growth in tangible book value per share and loans outstanding, and we are pleased that net interest margin has proven durable," said Steven J Schwartz, Chairman of the Company. "Our ongoing and planned investments in technology and human capital give me confidence that we are well-positioned to carry forward our strategy for profitable organic growth and to capitalize on opportunities that may arise for bolt-on and other acquisitions. Further, I expect our ongoing, opportunistic stock buyback program will, over time, prove to have been a wise use of our capital."
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 income from the call of brokered time deposits, merger-related expenses and other one-time non-recurring transactions.
Fourth Quarter 2025
Third Quarter 2025
(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 Net Income
$
19,681
$
4,644
$
15,037
$
0.91
$
19,867
$
4,802
$
15,065
$
0.89
Deduct: Income from the Call of Brokered Time Deposits
—
—
—
(4,618
)
(1,129
)
(3,489
)
Add: Merger-Related Expenses
—
—
—
697
122
575
Core Net Income(1)
$
19,681
$
4,644
$
15,037
$
0.91
$
15,946
$
3,795
$
12,151
$
0.72
Year Ended December 31, 2025
Year Ended December 31, 2024
(in thousands except per share data)
Income Before Income Taxes
Income Tax Expense (Benefit)
Net Income
Diluted Earnings per Share
Income Before Income Taxes
Income Tax Expense (Benefit)
Net Income
Diluted Earnings per Share
GAAP Net Income
$
74,944
$
17,774
$
57,170
$
3.41
$
41,832
$
10,860
$
30,972
$
2.12
Deduct: Income from the Call of Brokered Time Deposits
(4,618
)
(1,129
)
(3,489
)
—
—
—
Add: Merger-Related Expenses
3,361
752
2,609
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
Core Net Income(1)
$
73,687
$
17,397
$
56,290
$
3.36
$
52,576
$
12,507
$
40,069
$
2.74
[1] As used in this press release, Core net income is a non-GAAP financial measure. This non-GAAP financial metric excludes the impact of income from the call of brokered time deposits, merger-related expenses and other certain pre-tax adjustments which are not indicative of operating performance 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.
Note: The income tax expense reflects the non-deductibility of certain merger-related expenses.
Fourth Quarter 2025 Results
Earnings Summary
Net income of $15.0 million was flat compared to 3Q 2025, and earnings per share of $0.91 increased $0.02 per share from 3Q 2025. Net income increased $7.5 million, or 99.6%, from $7.5 million, or $0.45 per diluted share, for 4Q 2024. 4Q 2025 core net income(1) of $15.0 million, or $0.91 per diluted share, increased $2.9 million, or 18.1%, from 3Q 2025 core net income of $12.2 million, or $0.72 per diluted share. 4Q 2025 core net income decreased $0.4 million, or 2.8%, from 4Q 2024 core net income of $15.5 million, or $0.92 per diluted share.
[1] As used in this press release, Core net income is a non-GAAP financial measure. This non-GAAP financial metric excludes the impact of income from the call of brokered time deposits, merger-related expenses and other certain pre-tax adjustments which are not indicative of operating performance 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.
Net interest income of $50.3 million decreased $1.7 million, or 3.3% (not annualized), compared to 3Q 2025, and increased $6.0 million, or 13.4%, year-over-year.
During 3Q 2025 there were two non-recurring events that impacted net interest income.
The Bank identified Fee Revenue that was also previously recognized as Interest Income in the first and second quarter. As a result, the Bank recorded a one-time adjustment of $1.3 million of interest income ("Interest Income Adjustment"). There was no corresponding adjustment needed to Fee Revenue as the fee income was correctly recognized during those periods.
Also, the Bank issued a call of brokered time deposits acquired from the IFH transaction, resulting in the accelerated accretion of $4.6 million ("Call of Brokered Time Deposits").
When excluding the Call of Brokered Time Deposits and Interest Income Adjustment in 3Q 2025, net interest income increased $1.6 million, or 3.2%, from 3Q 2025.
Interest income of $68.6 million increased $3.7 million, or 5.8% (not annualized), over 3Q 2025, and increased $6.9 million, or 11.2%, year-over-year. When excluding the Interest Income Adjustment, interest income increased $2.4 million from 3Q 2025, driven by $0.8 million of growth from OpenSky™ and $1.6 million from the Commercial Bank, while the increase year-over-year was primarily driven by strong balance sheet growth and higher net PAA.
Interest income included $0.1 million from net PAA in 4Q 2025, compared to $0.2 million in 3Q 2025 and $0.7 million in net PAA in 4Q 2024.
Interest expense of $18.4 million increased $5.5 million, or 42.6% (not annualized), compared to 3Q 2025, and increased $1.0 million, or 5.6%, year-over-year. When excluding the Call of Brokered Time Deposits, interest expense increased $0.9 million, or 5.1%, compared to 3Q 2025, primarily driven by $0.5 million lower PAA and a $0.4 million increase from borrowings costs. The increase of $1.0 million year-over-year was primarily driven by $1.3 million of lower PAA offset by a $0.3 million shift in portfolio mix.
Interest expense included a $0.2 million benefit from net PAA in 4Q 2025, compared to a $5.3 million benefit in 3Q 2025, which included $4.6 million from the Call of Brokered Time Deposits. There was $1.4 million from net PAA in 4Q 2024.
The 4Q 2025 provision for credit losses was $4.0 million, a decrease of $0.7 million from 3Q 2025. During the quarter, a $2.0 million credit to the allowance for credit losses was made to reflect recoveries resulting from the sale of $69.5 million charged-off OpenSky™ credit card receivables. Net charge-offs totaled $2.4 million, or 0.32% of portfolio loans (annualized), down from $2.5 million or 0.35% of portfolio loans (annualized), in 3Q 2025. Net charge-offs in the quarter include $1.9 million from the Commercial Bank and $0.5 million from OpenSky™ loans. Net charge-offs for the Commercial Bank increased $1.6 million from 3Q 2025 primarily driven by legacy Commercial Bank loans not previously provided for, and OpenSky™ net-charge-offs decreased $1.7 million from 3Q 2025 primarily driven by the sale of OpenSky™ credit card debt.
At December 31, 2025, the ACL Coverage Ratio was 1.85%, down 3 bps from September 30, 2025, and flat year-over-year.
Fee Revenue of $12.5 million increased $1.4 million, compared to 3Q 2025 and increased $0.6 million year-over-year. During 4Q 2025, Core fee revenue(1) of $12.5 million increased $1.4 million as a result of a $1.2 million higher SBIC investment income and a $0.3 million increase in credit card fees from OpenSky™, offset by a $0.1 million decrease in loan servicing rights income. Year-over-year core fee revenue(1) decreased $2.1 million primarily due to a decrease in government lending revenue of $2.3 million offset by a $0.1 million increase from mortgage banking revenue and an increase of $0.1 million from service charges on deposits. Core fee revenue mix was 19.9% of total revenue for 4Q 2025, compared to 17.5% during 3Q 2025, and 24.7% during 4Q 2024.
Noninterest expense of $39.1 million increased $0.7 million compared to 3Q 2025 and increased $1.6 million compared to 4Q 2024. Core noninterest expense(1) of $39.1 million increased $1.4 million compared to 3Q 2025 and increased $4.2 million compared to 4Q 2024. Core comparisons include:
The increase of $1.4 million quarter-over-quarter was primarily driven by professional fees including costs for investment in OpenSky™ initiatives and other investments in technology, offset by decreases from OpenSky™ marketing, occupancy & equipment from leases and software contracts, and data processing from Windsor™ and OpenSky™.
Year-over-year expense growth of $4.2 million was driven by professional fees associated with investments in shared services areas, personnel expense due to headcount growth, marketing expense from OpenSky™, and regulatory fees driven by the acquisition of IFH.
Income tax expense of $4.6 million, or 23.6% of pre-tax income for 4Q 2025, decreased $0.2 million from $4.8 million, or 24.2% of pre-tax income for 3Q 2025. The effective income tax rate change quarter-over-quarter was primarily due to the $1.1 million utilization of a deferred tax asset related to the Call of Brokered Time Deposits during 3Q 2025.
The Core effective income tax rate(1) for 4Q 2025 and 3Q 2025 would have been 23.6% and 23.8%, respectively.
[1] As 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 the impact of income from the call of brokered time deposits, merger-related expenses and other certain pre-tax adjustments which are not indicative of operating performance 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 $3.6 billion at December 31, 2025 increased $216.8 million from September 30, 2025. Total assets growth year-over-year was $399.3 million, or 12.5%.
Gross Loans of $2.96 billion at December 31, 2025 increased $137.5 million, or 19.3% (annualized), from September 30, 2025 and increased $329.3 million, or 12.5%, year-over-year.
Compared to September 30, 2025, growth was primarily driven by $79.1 million from commercial and industrial ("C&I"), $25.7 million from residential real estate, $15.3 million from construction real estate, $9.5 million from lender finance, and $5.9 million from OpenSky™.
Compared to December 31, 2024, growth was primarily driven by $143.7 million from C&I, $77.3 million from residential real estate, $40.5 million from commercial real estate ("CRE"), $38.3 million from construction real estate, $14.6 million from OpenSky™, and $12.8 million from lender finance.
C&l loans, plus owner-occupied CRE loans totaled 37.7% of total portfolio loans at December 31, 2025, consistent with the prior quarter, and 37.8% at December 31, 2024.
Total deposits of $3.09 billion at December 31, 2025 increased $180.9 million, or 24.6% (annualized), from September 30, 2025, and increased $331.0 million, or 12.0% (annualized) from December 31, 2024.
When excluding the increase in brokered time deposits of $139.1 million, customer deposits increased $41.8 million or 5.7% (annualized), including $116.0 million of growth in customer money market deposits, offset by a decrease of $49.5 million in customer time deposits, an $18.5 million decrease from interest-bearing demand accounts, a $5.0 million decrease from noninterest-bearing deposits, and a $1.2 million decrease from savings accounts.
The increase in total deposits of $331.0 million year-over-year was driven by $288.5 million in growth from customer money market deposits, $43.6 million from brokered time deposits, $41.6 million from noninterest-bearing deposits, $18.4 million from interest-bearing demand accounts, offset by a decrease of $59.2 million from customer time deposits, and $1.8 million from savings accounts.
Insured and protected1 deposits were approximately $2.1 billion as of December 31, 2025 representing 68.4% of the Company's deposit portfolio.
Low interest and noninterest-bearing DDA deposits of $1.1 billion, or 36.3% of deposits, decreased $24.7 million, or 8.6% (annualized) from 3Q 2025, but increased $58.1 million, or 5.5% year-over-year.
The average rate on the low interest and noninterest-bearing deposits was 0.14% for 4Q 2025, which remained flat compared to 3Q 2025 and year-over-year.
The average portfolio loans-to-deposit ratio was 97.0% for 4Q 2025, compared to 95.6% for 3Q 2025, and 99.3% for 4Q 2024.
The investment securities portfolio continues to be classified as available-for-sale and had a fair market value of $230.1 million, or 6.4% of total assets, an effective duration of 2.5 years, with U.S. Treasury Securities representing 60% of the overall investment portfolio at December 31, 2025. The accumulated other comprehensive income (loss) on the investment securities portfolio improved $1.0 million during the quarter to negative $5.8 million after-tax as of December 31, 2025, which represents 1.4% 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, 2025 totaled $817.9 million, compared to $858.4 from 3Q 2025. During 4Q 2025, available collateralized lines of credit totaled $731.6 million, unsecured lines of credit with other banks totaled $76.0 million and unpledged investment securities available as collateral for potential additional borrowings totaled $9.3 million.
Capital Positions, As of December 31, 2025, the Company reported a Common Equity Tier-1 capital ratio of 12.98%, compared to 13.54% at September 30, 2025. At December 31, 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 December 31, 2025, as part of the Company's stock repurchase program, totaled 304,288 shares at an average price of $28.12, for a total cost of $8.6 million. As of December 31, 2025, there was $3.3 million remaining to be repurchased under the current $15.0 million authorization repurchase program, which will expire on February 28, 2026.
[1] Protected deposits includes deposits that are indirectly protected under the product terms.
Financial Metrics
Net Interest Margin, NIM of 5.94% for 4Q 2025, decreased 42 bps compared to the prior quarter, and increased 7 bps year-over-year. Commercial Bank NIM(1) of 4.18% decreased 46 bps (but increased 21 bps when excluding PAA) compared to the prior quarter, and increased 19 bps year-over-year. Net PAA for 4Q 2025 was 3 bps for NIM and 3 bps for Commercial Bank NIM(1).
3Q 2025 includes the previously mentioned $4.6 million Call of Brokered Time Deposits and $1.3 million Interest Income Adjustment. Excluding the Interest Income Adjustment and Call of Brokered Time Deposits in 3Q 2025, Commercial Bank NIM(1) declined to 4.18%, or 3 bps, in 4Q 2025.
The average yield on interest earning assets of 8.10% increased 17 bps compared to the prior quarter and decreased 7 bps year-over-year. During 3Q 2025 there was a 16 bps impact from the Interest Income Adjustment. Excluding this item, the average yield in 3Q 2025 would have been 8.09%, which results in a increase of 1 bps compared to 3Q 2025. The decrease quarter-over-quarter was primarily a result of changes in the overall rate environment. The average yield decreased 7 bps year-over-year primarily due to changes in the overall rate environment.
The Commercial Bank Loan Yield(1) of 6.95% for 4Q 2025 increased 21 bps compared to 3Q 2025, and decreased 3 bps year-over-year. Excluding the Interest Income Adjustment impact, the average yield in 3Q 2025 would have been 6.94%, which remained flat compared to 3Q 2025.
The total cost of deposits of 2.36% for 4Q 2025 increased 63 bps compared to the prior quarter and decreased 14 bps year-over-year. During 3Q 2025 there was a 63 bps impact from the Call of Brokered Time Deposits. Excluding this item, the cost of deposits for the quarter would have been 2.36%, and 4Q 2025 would have been consistent with 3Q 2025.
The total cost of interest-bearing deposits increased 87 bps quarter-over-quarter, and decreased 19 bps year-over-year, to 3.28% for 4Q 2025. Excluding the Call of Brokered Time Deposits, the 3Q 2025 cost of interest-bearing deposits would have been 3.28%, and 4Q 2025 would have been consistent with 3Q 2025. The decrease year-over-year was due to a shift in product mix as well as a change in the rate environment.
Net PAA of $0.2 million, or 3 bps of NIM and 3 bps of Commercial Bank NIM(1), during 4Q 2025, decreased $5.3 million from 3Q 2025 mainly due to the Call of Brokered Time Deposits. There was $0.7 million from net PAA during 4Q 2024.
NIM for 2025 was 6.10%, a year-over-year decrease of 15 bps from 6.22% for 2024. The decrease was primarily driven by the acquisition of commercial loans from IFH, which diluted the impact from OpenSky™.
Commercial Bank NIM(1) for 2025 was 4.38%, a year-over-year increase of 45 bps from 3.93% for 2024 that was primarily driven by the acquisition of commercial loans from IFH and balance sheet growth from the Commercial Bank during 2025. Excluding the Call of Brokered Time Deposits and Interest Income Adjustment, Commercial Bank NIM(1) for 2025 would have been 4.27%, an increase of 34 bps year-over-year.
Fee Revenue Mix, The fee revenue mix was 19.9% of total revenue for 4Q 2025, compared to 17.5% during 3Q 2025, and 21.2% during 4Q 2024. The core fee revenue mix(1) was 19.9% for 4Q 2025, compared to 17.5% during 3Q 2025, and 24.7% during 4Q 2024.
Credit Metrics and Asset Quality, The ACL Coverage Ratio equaled 1.85% at December 31, 2025, a decrease of 3 bps from September 30, 2025, and remained flat year-over-year.
Nonperforming assets were $58.3 million or 1.62% of total assets at December 31, 2025, an increase of $6.0 million or 7 bps compared to September 30, 2025. The increase in nonperforming assets from 3Q 2025 was primarily driven by $3.9 million from OREO, or 5 bps, and $2.2 million from the acquired IFH portfolio, or 2 bps. Nonperforming assets increased $28.0 million or 67 bps year-over-year, mainly due to the $15.9 million increase during 3Q 2025 from two loan relationships acquired as part of the IFH transaction, described last quarter, $4.4 million from other changes in the acquired IFH portfolio, $3.9 million from OREO, and $3.8 million from the legacy Commercial Bank portfolio. At December 31, 2025, substandard loans totaled $58.5 million, or 2.0% of total portfolio loans, compared to $56.8 million, or 2.0% of total portfolio loans, at September 30, 2025 and $48.4 million, or 1.8% of total portfolio loans, at December 31, 2024. The $10.1 million year-over-year increase in substandard loans was primarily driven by the $15.9 million of loans described above. At December 31, 2025, special mention loans totaled $57.9 million, or 2.0% of total portfolio loans, compared to $71.5 million, or 2.5% of total portfolio loans, at September 30, 2025, and $60.0 million, or 2.3% of total portfolio loans, at December 31, 2024.
Efficiency Ratios, The efficiency ratio was 62.3% for 4Q 2025, compared to 60.8% for 3Q 2025 and 66.7% for 4Q 2024. The core efficiency ratio(1) was 62.3% for 4Q 2025, which decreased from 64.4% compared to the prior quarter, and increased from 59.3% for 4Q 2024.
[1] As 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 the impact of income from the call of brokered time deposits, merger-related expenses and other certain pre-tax adjustments which are not indicative of operating performance 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 1.71% for 4Q 2025, compared to 1.77% for 3Q 2025, and 0.96% for 4Q 2024. Core ROA(9) for 4Q 2025 was 1.71%, compared to 1.43% for 3Q 2025, and 1.97% for 4Q 2024.
ROE was 15.23% for 4Q 2025, compared to 15.57% for 3Q 2025, and 8.50% for 4Q 2024. Core ROE(1) was 15.23% for 4Q 2025, compared to 12.56% for 3Q 2025, and 17.46% for 4Q 2024.
ROTCE(1) was 17.23% for 4Q 2025, compared to 17.49% for 3Q 2025, and 9.33% for 4Q 2024. Core ROTCE(1) for 4Q 2025 was 17.23%, compared to 14.15% for 3Q 2025, and 18.91% for 4Q 2024.
Book Value and Tangible Book Value, Book value per common share of $24.54 at December 31, 2025, increased $0.74 when compared to September 30, 2025, and increased $3.23 when compared to December 31, 2024. Tangible book value per common share(1) increased $0.72, or 3.4% (not annualized), to $22.05 at December 31, 2025 when compared to September 30, 2025, and increased $2.96, or 15.5%, when compared to December 31, 2024. Tangible book value(1) 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.
[1] As 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 the impact of income from the call of brokered time deposits, merger-related expenses and other certain pre-tax adjustments which are not indicative of operating performance 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(1) increased $129.6 million at December 31, 2025 compared to September 30, 2025, driven by $79.1 million from C&I, $25.7 million from residential real estate, and $15.3 million from construction real estate. Portfolio loans increased $327.8 million at December 31, 2025 compared to December 31, 2024, driven by $143.7 million from C&I, $77.3 million from residential real estate, and $40.5 million from CRE. Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.
Net Interest Income, Interest income of $52.0 million increased $3.0 million from the prior quarter, primarily due to 3Q 2025, due to growth in the Commercial Bank loan portfolio during the quarter. Excluding the $1.3 million Interest Income Adjustment in 3Q 2025, interest income grew by $1.6 million from 3Q 2025. Interest expense of $18.2 million increased $5.5 million, primarily due to 3Q 2025 including a $4.6 million benefit from the Call of Brokered Time Deposits. The remaining $0.9 million increase was due to $0.5 million from lower PAA and $0.4 million from short term borrowings during 4Q 2025.
Credit Metrics, Nonperforming assets increased 8 bps to 1.71% of total assets at December 31, 2025 compared to September 30, 2025. Total nonaccrual loans at December 31, 2025 were $54.4 million, an increase of $2.2 million or 4.0% compared to $52.2 million at September 30, 2025.
Classified and Criticized Loans, At December 31, 2025, special mention loans totaled $57.9 million, or 2.0% of total portfolio loans, compared to $71.5 million, or 2.5% of total portfolio loans, at September 30, 2025. At December 31, 2025, substandard loans totaled $58.5 million, or 2.0% of total portfolio loans, compared to $56.8 million, or 2.0% of total portfolio loans, at September 30, 2025.
(1) Portfolio loans represents portfolio loans receivable excluding deferred origination fees, net.
OpenSky™
Accounts, During 4Q 2025, credit card accounts of 585.5 thousand declined by 2.1 thousand, or 0.4% (not annualized) from September 30, 2025, and increased 32.9 thousand, or 6.0% year-over-year.
Loan and Deposit Balances, Secured and unsecured loan balances, net of reserves for interest and fees, of $142.4 million at December 31, 2025 increased by $5.9 million, or 4.3% (not annualized), compared to September 30, 2025 and $14.6 million, or 11.5%, year-over-year. Deposit balances of $163.2 million for 4Q 2025 decreased $3.7 million compared to 3Q 2025 and decreased $3.2 million, or 1.9% year-over-year. Gross unsecured loan balances of $61.4 million at December 31, 2025 increased $7.7 million, or 14.4% (not annualized), compared to $53.6 million at September 30, 2025, and increased $18.9 million year-over-year. Gross secured loan balances of $83.1 million at December 31, 2025 decreased $1.7 million, or 2.0% (not annualized), compared to $84.7 million at September 30, 2025, and decreased $4.2 million, or 4.8% (not annualized) year-over-year.
Net Interest Income, Interest income of $16.4 million increased $0.7 million compared to 3Q 2025. Average OpenSky™ credit card loan balances, net of reserves and deferred fees of $133.9 million for 4Q 2025, increased $4.8 million, or 3.7% (not annualized), compared to 3Q 2025.
Fee Revenue, Total fee revenue of $4.8 million increased $0.3 million from the prior quarter primarily driven by other credit-card related fees associated with the legacy product.
Noninterest Expense, Total noninterest expense of $14.6 million increased $0.6 million compared to 3Q 2025, driven primarily by professional fees associated with the legacy and unsecured products.
OpenSky™ Credit, Portfolio credit metrics continued to be consistent with modeled expectations during 4Q 2025. The provision for credit losses of $1.3 million decreased $1.5 million when compared to the prior quarter, primarily due to a $2.0 million credit to the allowance for credit losses was made to reflect the debt sale. OpenSky's™ unsecured loan product is offered exclusively to current and former secured card customers. 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.
Capital Bank Home Loans
Originations of loans held for sale totaled $107.3 million during 4Q 2025, with $83.0 million of mortgage loans sold resulting in a gain on sale of loans of $2.1 million, representing a 2.58% gain on sale as a percentage of total loans sold. Originations of loans held for sale totaled $80.7 million during 3Q 2025, with $66.4 million of mortgage loans sold resulting in a gain on sale of loans of $1.7 million, representing a 2.56% gain on sale as a percentage of total loans sold.
Windsor Advantage™
Gross government loan servicing revenue totaled $5.0 million, including $1.0 million of Capital Bank related servicing fees, during 4Q 2025. Gross government loan servicing revenue totaled $5.3 million, including $1.1 million of Capital Bank related servicing fees, during 3Q 2025. Windsor's™ total servicing portfolio was $3.1 billion at December 31, 2025, and $3.2 billion at September 30, 2025.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited
Quarter Ended
4Q25 vs 3Q25
4Q25 vs 4Q24
(in thousands, except per share data)
December 31, 2025
September 30, 2025
December 31, 2024
$ Change
% Change
$ Change
% Change
Earnings Summary
Interest income
$
68,634
$
64,891
$
61,707
$
3,743
5.8
%
$
6,927
11.2
%
Interest expense
18,355
12,871
17,380
5,484
42.6
%
975
5.6
%
Net interest income
50,279
52,020
44,327
(1,741
)
(3.3
)%
5,952
13.4
%
Provision for credit losses
3,988
4,650
7,828
(662
)
(14.2
)%
(3,840
)
(49.1
)%
(Release of) provision for credit losses on unfunded commitments
(29
)
217
122
(246
)
(113.4
)%
(151
)
(123.8
)%
Noninterest income
12,464
11,068
11,913
1,396
12.6
%
551
4.6
%
Noninterest expense
39,103
38,354
37,514
749
2.0
%
1,589
4.2
%
Income before income taxes
19,681
19,867
10,776
(186
)
(0.9
)%
8,905
82.6
%
Income tax expense
4,644
4,802
3,243
(158
)
(3.3
)%
1,401
43.2
%
Net income
$
15,037
$
15,065
$
7,533
$
(28
)
(0.2
)%
$
7,504
99.6
%
Pre-tax pre-provision net revenue ("PPNR") (1)
$
23,640
$
24,734
$
18,726
$
(1,094
)
(4.4
)%
$
4,914
26.2
%
Core PPNR(1)
$
23,640
$
20,813
$
23,961
$
2,827
13.6
%
$
(321
)
(1.3
)%
Common Share Data
Earnings per share - Basic
$
0.91
$
0.91
$
0.45
$
—
—
%
$
0.46
102.2
%
Earnings per share - Diluted
$
0.91
$
0.89
$
0.45
$
0.02
2.2
%
$
0.46
102.2
%
Core earnings per share - Diluted(1)
$
0.91
$
0.72
$
0.92
$
0.19
26.4
%
$
(0.01
)
(1.1
)%
Weighted average common shares - Basic
16,493
16,586
16,595
Weighted average common shares - Diluted
16,493
16,844
16,729
Return Ratios
Return on average assets (annualized)
1.71
%
1.77
%
0.96
%
Core return on average assets (annualized)(1)
1.71
%
1.43
%
1.97
%
Return on average equity (annualized)
15.23
%
15.57
%
8.50
%
Core return on average equity (annualized)(1)
15.23
%
12.56
%
17.46
%
Return on average tangible common equity (annualized)(1)
17.23
%
17.49
%
9.33
%
Core return on average tangible common equity (annualized)(1)
17.23
%
14.15
%
18.91
%
______________
(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)
2025
2024
$ Change
% Change
Earnings Summary
Interest income
$
260,871
$
213,301
$
47,570
22.3
%
Interest expense
64,879
58,555
6,324
10.8
%
Net interest income
195,992
154,746
41,246
26.7
%
Provision for credit losses
14,965
17,720
(2,755
)
(15.5
)%
(Release of) provision for credit losses on unfunded commitments
188
385
(197
)
(51.2
)%
Noninterest income
49,187
31,410
17,777
56.6
%
Noninterest expense
155,082
126,219
28,863
22.9
%
Income before income taxes
74,944
41,832
33,112
79.2
%
Income tax expense
17,774
10,860
6,914
63.7
%
Net income
$
57,170
$
30,972
$
26,198
84.6
%
Pre-tax pre-provision net revenue ("PPNR") (1)
$
90,097
$
59,937
$
30,160
50.3
%
Core PPNR(1)
$
88,840
$
66,487
$
22,353
33.6
%
Common Share Data
Earnings per share - Basic
$
3.45
$
2.12
$
1.33
62.7
%
Earnings per share - Diluted
$
3.41
$
2.12
$
1.29
60.8
%
Core earnings per share - Diluted(1)
$
3.36
$
2.74
Weighted average common shares - Basic
16,582
14,584
Weighted average common shares - Diluted
16,768
14,640
Return Ratios
Return on average assets
1.71
%
1.21
%
Core return on average assets(1)
1.68
%
1.57
%
Return on average equity
15.13
%
10.78
%
Core return on average equity(1)
14.90
%
13.94
%
Return on average tangible common equity(1)
17.10
%
11.07
%
Core return on average tangible common equity(1)
16.84
%
14.30
%
______________
(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)
2025
2024
% Change
2025
2025
2025
Balance Sheet Highlights
Assets
$
3,606,207
$
3,206,911
12.5
%
$
3,389,442
$
3,388,662
$
3,349,805
Investment securities available-for-sale
230,083
223,630
2.9
%
232,640
228,923
213,452
Mortgage loans held for sale
25,828
17,063
51.4
%
14,146
15,933
30,005
Portfolio loans receivable (2)
2,959,457
2,630,163
12.5
%
2,821,983
2,739,808
2,678,406
Allowance for credit losses
54,660
48,652
12.3
%
53,045
47,447
48,454
Goodwill
25,969
21,126
22.9
%
25,969
22,478
24,085
Intangible assets
13,246
14,072
(5.9
)%
13,457
13,668
13,861
Core deposit intangibles
1,525
1,745
(12.6
)%
1,576
1,627
1,695
Deposits
3,092,979
2,761,939
12.0
%
2,912,053
2,940,738
2,891,333
FHLB borrowings
50,000
22,000
127.3
%
22,000
22,000
22,000
Other borrowed funds
2,062
12,062
(82.9
)%
12,062
12,062
12,062
Total stockholders' equity
401,978
355,139
13.2
%
394,770
380,035
369,577
Tangible common equity (1)
361,238
318,196
13.5
%
353,768
342,262
329,936
Common shares outstanding
16,381
16,663
(1.7
)%
16,589
16,582
16,657
Book value per share
$
24.54
$
21.31
15.2
%
$
23.80
$
22.92
$
22.19
Tangible book value per share (1)
$
22.05
$
19.10
15.4
%
$
21.33
$
20.64
$
19.81
Dividends per share
$
0.12
$
0.10
20.0
%
$
0.12
$
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
Year Ended
(in thousands)
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
December 31, 2024
December 31, 2025
December 31, 2024
Interest income
Loans, including fees
$
64,933
$
60,838
$
60,810
$
58,691
$
58,602
$
245,272
$
202,915
Investment securities available-for-sale
1,728
1,805
1,582
1,861
1,539
6,976
5,441
Federal funds sold and other
1,973
2,248
2,194
2,208
1,566
8,623
4,945
Total interest income
68,634
64,891
64,586
62,760
61,707
260,871
213,301
Interest expense
Deposits
17,805
12,732
16,722
16,512
16,385
63,771
56,170
Borrowed funds
550
139
218
201
995
1,108
2,385
Total interest expense
18,355
12,871
16,940
16,713
17,380
64,879
58,555
Net interest income
50,279
52,020
47,646
46,047
44,327
195,992
154,746
Provision for credit losses
3,988
4,650
4,081
2,246
7,828
14,965
17,720
(Release of) provision for credit losses on unfunded commitments
(29
)
217
—
—
122
188
385
Net interest income after provision for credit losses
46,320
47,153
43,565
43,801
36,377
180,839
136,641
Noninterest income
Service charges on deposits
371
425
262
258
241
1,316
883
Credit card fees
4,837
4,509
4,298
3,722
3,733
17,366
15,999
Mortgage banking revenue
1,960
1,927
1,754
1,831
1,821
7,472
7,146
Government lending revenue
—
14
3,112
1,096
2,301
4,222
2,301
Government loan servicing revenue
4,036
4,265
3,644
3,568
3,993
15,513
3,993
Loan servicing rights (government guaranteed)
295
368
(590
)
472
1,013
545
1,013
Non-recurring equity and debt investment write-down
—
—
—
—
(2,620
)
—
(2,620
)
Other income
965
(440
)
626
1,602
1,431
2,753
2,695
Total noninterest income
12,464
11,068
13,106
12,549
11,913
49,187
31,410
Noninterest expenses
Salaries and employee benefits
17,914
17,728
18,460
18,067
16,513
72,169
56,037
Occupancy and equipment
2,638
2,849
2,995
2,910
2,976
11,392
8,244
Professional fees
4,294
2,131
2,422
2,112
2,150
10,959
7,846
Data processing
7,502
7,654
7,520
7,112
7,210
29,788
27,689
Advertising
1,398
1,714
1,371
1,779
1,032
6,262
6,359
Loan processing
1,152
1,114
979
743
969
3,988
2,431
Foreclosed real estate expenses, net
—
—
—
1
—
1
2
Merger-related expenses
—
697
1,398
1,266
2,615
3,361
3,930
Operational and other card fraud related losses
750
923
933
903
993
3,509
3,714
Regulatory assessment expenses
858
740
884
889
554
3,371
1,937
Other operating
2,597
2,804
2,610
2,271
2,502
10,282
8,030
Total noninterest expenses
39,103
38,354
39,572
38,053
37,514
155,082
126,219
Income before income taxes
19,681
19,867
17,099
18,297
10,776
74,944
41,832
Income tax expense
4,644
4,802
3,963
4,365
3,243
17,774
10,860
Net income
$
15,037
$
15,065
$
13,136
$
13,932
$
7,533
$
57,170
$
30,972
Consolidated Balance Sheets
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
(in thousands, except share data)
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
December 31, 2024
Assets
Cash and due from banks
$
30,894
$
25,724
$
26,843
$
27,836
$
25,433
Interest-bearing deposits at other financial institutions
224,611
163,078
247,704
266,092
179,841
Federal funds sold
60
59
59
59
58
Total cash and cash equivalents
255,565
188,861
274,606
293,987
205,332
Investment securities available-for-sale
230,083
232,640
228,923
213,452
223,630
Restricted investments
8,397
7,057
7,043
7,031
4,479
Loans held for sale
25,828
14,146
15,933
30,005
17,063
Portfolio loans receivable, net of deferred fees and costs
2,959,457
2,821,983
2,739,808
2,678,406
2,630,163
Less allowance for credit losses
(54,660
)
(53,045
)
(47,447
)
(48,454
)
(48,652
)
Total portfolio loans held for investment, net
2,904,797
2,768,938
2,692,361
2,629,952
2,581,511
Premises and equipment, net
15,072
15,304
14,863
15,085
15,525
Accrued interest receivable
16,695
19,011
15,149
19,458
16,664
Goodwill
25,969
25,969
22,478
24,085
21,126
Intangible assets
13,246
13,457
13,668
13,861
14,072
Core deposit intangibles
1,525
1,576
1,627
1,695
1,745
Loan servicing assets
1,816
2,070
2,221
2,244
5,511
Deferred tax asset
14,992
14,885
15,667
15,902
16,670
Bank owned life insurance
45,488
45,105
44,721
44,335
43,956
Other assets
46,734
40,423
39,402
38,713
39,627
Total assets
$
3,606,207
$
3,389,442
$
3,388,662
$
3,349,805
$
3,206,911
Liabilities
Deposits
Noninterest-bearing
$
852,520
$
857,543
$
836,979
$
812,224
$
810,928
Interest-bearing
2,240,459
2,054,510
2,103,759
2,079,109
1,951,011
Total deposits
3,092,979
2,912,053
2,940,738
2,891,333
2,761,939
Federal Home Loan Bank advances
50,000
22,000
22,000
22,000
22,000
Other borrowed funds
2,062
12,062
12,062
12,062
12,062
Accrued interest payable
8,745
8,045
8,158
