Exhibit
https://cdn.kscope.io/5299818738f2e00b2f895f9911331462-capitalbancorplogoa30.jpg


Capital Bancorp Reports Record Quarter and Year to Date Earnings
Record earnings of $8.4 million, or $0.61 per diluted share for the third quarter of 2020 and $16.1 million, or $1.17 per diluted share for the nine months ended September 30, 2020
Third quarter earnings supported by all three business lines which provide resilience, diversification and risk mitigation in a range of economic conditions while returning 1.89% on assets, 23.28% on equity and providing pre-tax pre-provision net revenue of $15.1 million
Proactive credit management decreased loans in deferral status to 2.0% of loans outstanding as of September 30, 2020 which is a reduction of 79% from June 30, 2020
Increased provisions of $3.5 million to respond to economic conditions, increasing the ratio of the allowance for loan losses ("ALLL") to total loans to 1.49%, or 1.77% excluding Small Business Administration Payroll Protection Program ("SBA-PPP") loans
OpenSky® Credit Card account growth of 32% drove a $44.9 million increase in noninterest bearing secured credit card deposits, while cardholder behavior that showed signs of returning to pre-COVID patterns resulted in record credit card revenue of $5.8 million for the third quarter
Record mortgage loan originations of $431.1 million and mortgage banking revenue of $14.4 million during the quarter
Rockville, Maryland, October 26, 2020 (GLOBE NEWSWIRE) – Capital Bancorp, Inc. (the "Company") (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $8.4 million, or $0.61 per diluted share, for the third quarter of 2020. By comparison, net income was $4.5 million, or $0.32 per diluted share, for the third quarter of 2019. Return on average assets was 1.89% for the third quarter of 2020, compared to 1.42% for the same period in 2019. Similarly, return on average equity was 23.3% for the third quarter of 2020, compared to 14.0% for the same period in 2019. Included in net income, in the current quarter, was a provision for loan losses of $3.5 million, compared to $1.1 million for the same period in 2019, attributable to the uncertain economic environment related to COVID-19.

"Our diversified business model has demonstrated resiliency in a difficult economic environment and continues to perform well as shown by our record earnings in the third quarter," said Ed Barry, CEO of Capital Bancorp.  "We look to maintain momentum by focusing on expense control, increasing core deposits and expanding relationships with PPP borrowers in the quarters to come.  Our consumer strategy is scaling more quickly than expected as we saw another quarter of robust growth in OpenSky® accounts, secured deposits, and related revenues as customer behavior began to normalize. Asset quality remains strong, with loans in deferral status decreasing 79% percent over the quarter to 2 percent of loans outstanding.  Given the remaining uncertain economic outlook due to COVID-19, we recorded a provision of $3.5 million for the quarter bringing the total to $9.2 million for the year."


1



Third Quarter 2020 Highlights
Diversified Businesses Drive Record Net Income - In the third quarter of 2020, net income increased 88.2 percent to a record $8.4 million from $4.5 million in the third quarter of 2019. Our continued strong operating results demonstrate the advantages of the Bank's uncorrelated diversified business lines that are complimentary across economic cycles.
Net Interest Margin Improvement - Net interest margin ("NIM") increased by 29 basis points to 5.01% from the last quarter but decreased 82 basis points from 5.83% for the three months ended September 30, 2019. The year over year decline in NIM was driven by an overall decline in the interest rate environment, lower earning SBA-PPP loans and excess liquidity. Excluding credit card and SBA-PPP loans, third quarter 2020 NIM was 3.84%, down 12 basis points from the prior quarter and 53 basis points from 4.37% in the same period last year.
Growth in Core Deposits and Reduced Cost of Interest Bearing Liabilities - Noninterest bearing deposits increased by $32.2 million, or 5.7 percent, during the quarter ended September 30, 2020 and now represent 35.9% of total deposits. The growth in credit card-related deposits was partially offset by anticipated declines in SBA-PPP-related deposit balances. Overall, during the quarter, the cost of interest bearing liabilities was reduced from 1.38% at June 30, 2020 to 1.18% at September 30, 2020 as rates decreased in line with the market. The Bank continues to execute on its ongoing strategic initiative to improve the deposit portfolio mix by decreasing reliance on wholesale, internet and other non-core time deposits.
Cost Management Initiatives Improving Operating Leverage - Focused investments in technology, combined with process improvements and workforce rationalizations, continue to increase the Bank's operating leverage. Higher mortgage originations and credit card volumes increased noninterest expenses by $9.9 million, or 54.3 percent from the same quarter last year. These higher levels of activity drove a $13.9 million, or 192.9 percent increase in related noninterest income.
Balance Sheet Supported By Robust Capital Ratios, Elevated Reserves, and Excess Liquidity - As of September 30, 2020, the Company reported a common equity tier 1 capital ratio of 12.75% and ALLL to total loans of 1.49%, or 1.77% excluding SBA-PPP loans. The Bank is well-capitalized and has taken measures to navigate COVID-19 related disruptions by taking additional loan loss provisions and maintaining higher than normal levels of liquidity on the balance sheet.
Proactive Management Leads to Early Recognition of Problem Assets - Non-performing assets increased to $14.8 million at September 30, 2020 compared to $9.2 million at June 30, 2020. The increase was largely attributable to two past-due construction loans related to a single relationship and totaling $4.7 million. Both loans are well secured and we do not anticipate any losses with these credits. Non-performing assets as a percentage of total assets increased to 0.79%, 0.90% excluding SBA-PPP loans, at September 30, 2020 compared to 0.50% at June 30, 2020.
Continued Portfolio Loan Growth - For the quarter ended September 30, 2020, portfolio loans increased by $33.1 million, or 2.7 percent, to $1.24 billion compared to $1.21 billion at June 30, 2020. Commercial real estate loans increased by $8.9 million, or 2.4 percent, construction real estate loans increased by $14.7 million, or 6.9 percent and secured credit cards balances increased by $30.2 million, or 55.2 percent, while residential real estate decreased by $14.7 million, or 3.4 percent, and commercial and industrial loans decreased by $7.8 million, or 5.5 percent.
COVID-19 Related Deferrals - Outstanding loans deferred due to COVID-19 decreased by 79% from June 30, 2020 to September 30, 2020 as shown in the table below.

2



Loan Modifications (1)
 
 
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
 
September 30, 2020
 
June 30, 2020
 
 
Deferred Loans
 
 
Deferred Loans
Sector
Total Loans Outstanding
Balance
# of Loans Deferred
 
Total Loans Outstanding
Balance
# of Loans Deferred
Accommodation & Food Services
$
86.4

$
11.2

14

 
$
83.9

$
42.6

36

Real Estate and Rental Leasing
503.1
9.3
16

 
527.9

45.6

67

Other Services Including Private Households
273.9
5.6
11

 
193.8

17.3

36

Educational Services
20.5


 
20.4

9.8

6

Construction
246.0

0.3

1

 
220.4

4.2

6

Professional, Scientific, and Technical Services
87.3
1.1
2

 
88.4

5.0

11

Arts, Entertainment & Recreation
30.4
1.4
2

 
14.9

5.0

9

Retail Trade
24.5


 
25.5

3.0

8

Healthcare & Social Assistance
78.0

0.9
1

 
77.2

4.7

11

Wholesale Trade
2.6


 
13.0

0.9

1

All other (1)
125.3
0.5
2

 
175.7

5.9

13

  Total
$
1,478.0

$
30.3

49

 
$
1,441.1

$
144.0

204

_______________
(1)Excludes modifications and deferrals made for OpenSky secured card customers.

Record Mortgage Originations and Revenues - In the third quarter of 2020, the Capital Bank Home Loans originated a record $431.1 million of mortgage loans for sale, compared to $197.8 million in the third quarter of 2019. Capital Bank Home Loans achieved record revenue of $14.4 million for the third quarter of 2020 compared to $4.9 million for the same period in 2019. Efforts to optimize product pricing and mix elevated the average gain on sale to 3.13%.
Continued Strong Growth in OpenSky® Credit Card Accounts - During the quarter, OpenSky® originated 148 thousand new credit cards, increasing the number of open credit card accounts to 529 thousand at September 30, 2020. Quarterly growth resulted in a $44.9 million increase in noninterest bearing secured credit card deposits which totaled $176.7 million at quarter end. Card balances, which typically lag new card production, increased in the third quarter of 2020 to $85.0 million from $54.7 million. Credit card fees were a record $5.8 million as consumer behavior shows signs of returning to pre-COVID patterns, resulting in a 98.2% increase in credit card revenue.



3



COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
Nine Months Ended
 
 
 
September 30,
 

 
September 30,
 

(dollars in thousands except per share data)
2020
 
2019
 
% Change
 
2020
 
2019
 
% Change
Earnings Summary
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
25,189

 
$
22,354

 
12.7
 %
 
$
68,933

 
$
60,961

 
13.1
 %
Interest expense
3,150

 
4,170

 
(24.5
)%
 
10,583

 
11,502

 
(8.0
)%
Net interest income
22,039

 
18,184

 
21.2
 %
 
58,350

 
49,459

 
18.0
 %
Provision for loan losses
3,500

 
1,071

 
226.8
 %
 
9,209

 
1,869

 
392.7
 %
Noninterest income
21,146

 
7,221

 
192.8
 %
 
41,626

 
17,240

 
141.5
 %
Noninterest expense
28,119

 
18,228

 
54.3
 %
 
68,665

 
48,768

 
40.8
 %
Income before income taxes
11,566

 
6,106

 
89.4
 %
 
22,102

 
16,062

 
37.6
 %
Income tax expense
3,128

 
1,625

 
92.5
 %
 
5,968

 
4,239

 
40.8
 %
Net income
$
8,438

 
$
4,481

 
88.3
 %
 
$
16,134

 
$
11,823

 
36.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares - Basic
13,795

 
13,728

 
0.5
 %
 
13,795

 
13,714

 
0.6
 %
Weighted average common shares - Diluted
13,832

 
13,986

 
(1.1
)%
 
13,832

 
13,922

 
(0.6
)%
Earnings per share - Basic
$
0.61

 
$
0.33

 
87.4
 %
 
$
1.17

 
$
0.86

 
36.0
 %
Earnings per share - Diluted
$
0.61

 
$
0.32

 
90.4
 %
 
$
1.17

 
$
0.85

 
37.6
 %
Return on average assets (1)
1.89
%
 
1.42
%
 
33.1
 %
 
1.35
%
 
1.35
%
 
 %
Return on average assets, excluding impact of SBA PPP loans(1) (2)
1.80
%
 
1.42
%
 
26.8
 %
 
1.25
%
 
1.35
%
 
(7.4
)%
Return on average equity
23.28
%
 
14.04
%
 
65.8
 %
 
15.35
%
 
12.93
%
 
18.7
 %

 
Quarter Ended
 
3Q20 vs. 3Q19
 
Quarter Ended
 
September 30,
 
 
June 30,
 
March 31,
 
December 31,
(in thousands except per share data)
2020
 
2019
 
% Change
 
2020
 
2020
 
2019
Balance Sheet Highlights
 
 
 
 
 
 
 
 
 
 
 
Assets
$
1,879,029

 
$
1,311,406

 
43.3
 %
 
$
1,822,365

 
$
1,507,847

 
$
1,428,495

Investment securities available for sale
53,992

 
37,073

 
45.6
 %
 
56,796

 
59,524

 
60,828

Mortgage loans held for sale
137,717

 
68,982

 
99.6
 %
 
116,969

 
73,955

 
71,030

SBA-PPP loans, net of fees (3)
233,349

 

 
100.0
 %
 
229,646

 

 

Portfolio loans receivable (3)
1,244,613

 
1,140,310

 
9.1
 %
 
1,211,477

 
1,187,798

 
1,171,121

Allowance for loan losses
22,016

 
12,808

 
71.9
 %
 
18,680

 
15,513

 
13,301

Deposits
1,662,211

 
1,112,444

 
49.4
 %
 
1,608,726

 
1,302,913

 
1,225,421

Borrowings and repurchase agreements
22,222

 
35,556

 
(37.5
)%
 
25,556

 
28,889

 
32,222

Other borrowed funds
17,516

 
15,416

 
13.6
 %
 
17,392

 
15,430

 
15,423

Total stockholders' equity
149,377

 
127,829

 
16.9
 %
 
142,108

 
136,080

 
133,331

Tangible common equity(2)
149,377

 
127,829

 
16.9
 %
 
142,108

 
136,080

 
133,331

 
 
 
 
 
 
 
 
 
 
 
 
Common shares outstanding
13,682

 
13,783

 
(0.7
)%
 
13,818

 
13,817

 
13,895

Tangible book value per share
$
10.92

 
$
9.27

 
17.7
 %
 
$
10.28

 
$
9.85

 
$
9.60

______________
(1) Annualized.
(2) Refer to Appendix for reconciliation of non-GAAP measures.
(3) Loans are reflected net of deferred fees and costs.




4



Operating Results - Three Months Ended September 30, 2020 compared to Three Months Ended September 30, 2019
For the three months ended September 30, 2020, net interest income increased $3.9 million, or 21.2 percent, to $22.0 million from the same period in 2019, primarily due to a $512.3 million, or 41.4 percent, increase in average interest-earning assets. The net interest margin decreased 82 basis points to 5.01% for the three months ended September 30, 2020 from the same period in 2019 due to lower yields on loans which was partially offset by a decrease in interest expense due to a reduction in interest rates. Net interest margin, excluding credit card and SBA PPP loans, was 3.84% for the third quarter of 2020 compared to 4.37% for the same period in 2019. For the three months ended September 30, 2020, average interest earning assets increased $512.3 million, or 41.4 percent, to $1.7 billion as compared to the same period in 2019, and the average yield on interest earning assets decreased 144 basis points. Period over period, average interest-bearing liabilities increased $228.7 million, or 27.3 percent, while the average cost decreased 80 basis points to 1.18% from 1.98%.
The provision for loan losses of $3.5 million for the three months ended September 30, 2020 reflects the prevailing uncertainty in the economy as a result of COVID-19. Net charge-offs for the third quarter of 2020 were $163 thousand, or 0.06% of average loans on an annualized basis, compared to $111 thousand, or 0.04% of average loans on an annualized basis, for the third quarter of 2019.
For the quarter ended September 30, 2020, noninterest income was $21.1 million, an increase of $13.9 million, or 192.9 percent from $7.2 million in the prior year quarter. The increase was primarily driven by significant growth in mortgage banking revenues of $9.5 million and credit card fees of $3.7 million resulting from the higher level of credit card accounts.
For the three months ended September 30, 2020, the Bank originated 148 thousand new OpenSky® secured credit card accounts, increasing the total number of open accounts to 529 thousand. This compares to 31 thousand new originations for the same period last year, which increased total open accounts to 222 thousand. Since September 30, 2019, credit card loan balances increased to $85.0 million from $44.1 million, while the related deposit account balances increased 127 percent to $176.7 million. The record growth in open accounts was primarily driven by enhanced marketing and economic conditions that led consumers to recognize the value and convenience of the Bank's secured credit card product.
The efficiency ratio for the three months ended September 30, 2020 decreased to 65.11% compared to 71.75% for the three months ended September 30, 2019, resulting from increased revenue in addition to management's efforts to control expenses.
Noninterest expense was $28.1 million for the three months ended September 30, 2020, as compared to $18.2 million for the three months ended September 30, 2019, an increase of $9.9 million, or 54.3 percent. The increase was primarily driven by a $3.4 million, or 36.5 percent, increase in salaries and benefits, a $3.7 million, or 88.0 percent increase in data processing, and an increase in operating expenses of $1.4 million, or 77.8 percent period over period. Included in salaries and benefits are commissions paid on mortgage originations, which increased from $1.9 million to $3.7 million, primarily due to an increase in the number of mortgage originations. In the three month period ended September 30, 2020, $431.1 million of mortgage loans were originated for sale compared to $197.8 million in the three months ended September 30, 2019. The Company's organic growth was supported by a 5.6 percent increase in employees to 244 at September 30, 2020, up from 231 at September 30, 2019. The increase was included the addition of 13 new employees in the revenue producing teams of the commercial banking and mortgage banking divisions. The increase of $3.7 million in data processing expenses is largely attributable to the higher volume of open credit cards, and increased mortgage loan processing volumes during the third quarter. Additionally, operating expenses increased $1.4 million due to increases in marketing and advertising, credit expenses, professional fees and FDIC insurance.


5



Operating Results - Nine Months Ended September 30, 2020 compared to Nine Months Ended September 30, 2019
For the nine months ended September 30, 2020, net interest income increased $8.9 million, or 18.0 percent, to $58.4 million from the same period in 2019, primarily due to a $413 million, or 35.6 percent, increase in average interest-earning assets. As a result of the declining interest rate environment, which began in the third quarter of 2019, and the rapid increase in SBA PPP loans, net interest margin decreased 74 basis points to 4.96% for the nine months ended September 30, 2020 from the same period in 2019. Net interest margin, excluding credit cards and SBA PPP loans, was 3.92% for the nine months ended September 30, 2020 compared to 4.35% for the same period in 2019. For the nine months ended September 30, 2020, average interest earning assets increased $413 million, or 35.6 percent, to $1.6 billion as compared to the same period in 2019, and the average yield on interest earning assets decreased 118 basis points. Period over period, average interest-bearing liabilities increased $213.8 million, or 27.2 percent, while the average cost decreased 55 basis points to 1.41 percent from 1.96 percent.
For the nine months ended September 30, 2020, the provision for loan losses was $9.2 million, an increase of $7.3 million, or 392.7 percent, primarily due the impacts of COVID-19. Net charge-offs for the nine months ended September 30, 2020 were $494 thousand, or 0.07% of average loans, annualized, compared to $192 thousand, or 0.04% of average loans, annualized, for the same period in 2019.
For the nine months ended September 30, 2020, noninterest income was $41.6 million, an increase of $24.4 million, or 141.5 percent, from the same period in 2019. The increase was primarily driven by significant growth in mortgage banking revenues, which were up $17.5 million, and credit card fees, which increased by $5.2 million.
For the nine months ended September 30, 2020, the Bank originated 320 thousand new OpenSky® secured credit card accounts, increasing the total number of open accounts to 529 thousand. This compares to 72 thousand new originations for the same period last year, which increased total open accounts to 222 thousand. The record growth in open accounts was primarily driven by enhanced marketing and economic conditions that led consumers to recognize the value and convenience of the Bank's secured credit card product.
The efficiency ratio for the nine months ended September 30, 2020 decreased to 68.7% compared to 73.1% for the nine months ended September 30, 2019, primarily resulting from increased revenue in addition to management's efforts to control expenses.
Noninterest expense was $68.7 million for the nine months ended September 30, 2020, as compared to $48.8 million for the nine months ended September 30, 2019, an increase of $19.9 million, or 40.8 percent. The increase was primarily driven by an $8.2 million, or 34.1 percent, increase in salaries and benefits, a $6.4 million, or 57.4 percent increase in data processing, an increase in loan processing of $1.2 million and a $2.3 million, or 43.6 percent increase in other operating expenses period over period. Included in salaries and benefits are commissions paid on mortgage originations, which increased from $4.0 million to $7.5 million primarily due to an increase in the number of mortgage originations. In the nine months ended September 30, 2020, $920.2 million of mortgage loans were originated for sale compared to $208.5 million in the nine months ended September 30, 2019. The increase of $6.4 million in data processing expenses was due to the higher volume of open credit cards and and increased mortgage loan processing volumes during the year. Additionally, operating expenses increased $2.3 million due to increases in marketing and advertising, credit expenses, professional fees and FDIC insurance.
During the nine months ended September 30, 2020, results of operations were impacted by the COVID-19 pandemic and include the deferral of $6.5 million of loan origination fees, net of costs, and the amortization of net fees of $1.1 million. There were no significant COVID-19 related noninterest expenses recorded during the nine months ended September 30, 2020.


6



Financial Condition
Total assets at September 30, 2020 were $1.88 billion, an increase of 43.3 percent as compared to $1.31 billion at September 30, 2019. Loans, excluding mortgage loans held for sale and PPP loans, totaled $1.24 billion as of September 30, 2020, an increase of 9.1 percent as compared to $1.14 billion at September 30, 2019.
Deposits at September 30, 2020 were $1.66 billion, an increase of 49.4 percent as compared to $1.11 billion at September 30, 2019. Noninterest bearing deposits increased by $303 million. These deposits include fiduciary accounts of title companies and property management accounts, as well as SBA PPP loans and the secured card deposits highlighted above. Interest bearing accounts increased by $246.9 million, mainly driven by a 46.7% increase in fiduciary accounts.
Due primarily to the deterioration in the macro-economic environment as a result of the impact of COVID-19, the Company recorded a provision for loan losses of $9.2 million during the nine months ended September 30, 2020, which increased our allowance for loan losses to $22.0 million, or 1.49% of total loans (1.77%, excluding SBA PPP loans, on a non-GAAP basis) at September 30, 2020. This level of reserve provides approximately 192 percent coverage of nonperforming loans at September 30, 2020, compared to a reserve of $12.8 million, or 1.12 percent, of total loans, and approximately 196% coverage of nonperforming loans at September 30, 2019. Nonperforming assets were $14.8 million, or 0.79% of total assets, as of September 30, 2020, up from $6.7 million, or 0.51% of total assets, at September 30, 2019. Of the $14.8 million in total nonperforming assets as of September 30, 2020, nonperforming loans represented $11.5 million and OREO totaled $3.3 million. The increase is primarily due to two construction loans totaling $4.7 million. Included in nonperforming loans at September 30, 2020 are troubled debt restructurings of $446 thousand.
Stockholders’ equity increased to $149.4 million as of September 30, 2020, compared to $127.8 million at September 30, 2019. This increase was primarily attributable to earnings and net proceeds from the exercise of stock options. Shares repurchased and retired in 2020 as part of the Company's stock repurchase program totaled 254,834 shares at a weighted average price of $10.84, for a total cost of $2.8 million including commissions. As of September 30, 2020, the Bank's capital ratios continue to exceed the regulatory requirements for a “well-capitalized” institution.


7



Consolidated Statements of Income (Unaudited)
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(in thousands)
2020
 
2019
 
2020
 
2019
Interest income
 
 
 
 
 
 
 
Loans, including fees
$
24,836

 
$
21,900

 
$
67,520

 
$
59,548

Investment securities available for sale
273

 
215

 
929

 
707

Federal funds sold and other
80

 
239

 
484

 
706

Total interest income
25,189

 
22,354

 
68,933

 
60,961

 
 
 
 
 
 
 
 
Interest expense

 

 
 
 
 
Deposits
2,634

 
3,449

 
9,201

 
9,887

Borrowed funds
516

 
721

 
1,382

 
1,615

Total interest expense
3,150

 
4,170

 
10,583

 
11,502

 
 
 
 
 
 
 
 
Net interest income
22,039

 
18,184

 
58,350

 
49,459

Provision for loan losses
3,500

 
1,071

 
9,209

 
1,869

Net interest income after provision for loan losses
18,539

 
17,113

 
49,141

 
47,590

 
 
 
 
 
 
 
 
Noninterest income
 
 
 
 
 
 
 
Service charges on deposits
119

 
146

 
378

 
382

Credit card fees
5,773

 
2,059

 
10,694

 
5,521

Mortgage banking revenue
14,359

 
4,900

 
28,496

 
10,991

Gain on sale of investment securities available for sale

 

 

 
26

Other fees and charges
895

 
116

 
2,058

 
320

Total noninterest income
21,146

 
7,221

 
41,626

 
17,240

 
 
 
 
 
 
 
 
Noninterest expenses
 
 

 
 
 

Salaries and employee benefits
12,609

 
9,238

 
32,362

 
24,136

Occupancy and equipment
1,328

 
1,111

 
3,658

 
3,307

Professional fees
1,307

 
724

 
2,971

 
1,952

Data processing
7,880

 
4,192

 
17,664

 
11,222

Advertising
633

 
584

 
1,875

 
1,557

Loan processing
1,264

 
634

 
2,451

 
1,279

Other real estate expenses, net
9

 
7

 
137

 
57

Other operating
3,089

 
1,737

 
7,548

 
5,258

Total noninterest expenses
28,119

 
18,228

 
68,665

 
48,768

Income before income taxes
11,566

 
6,106

 
22,102

 
16,062

Income tax expense
3,128

 
1,625

 
5,968

 
4,239

Net income
$
8,438

 
$
4,481

 
$
16,134

 
$
11,823



8



Consolidated Balance Sheets
 
 
 
(in thousands except share data)
(unaudited) September 30,
2020
 
December 31, 2019
Assets
 
 
 
Cash and due from banks
$
20,138

 
$
10,530

Interest bearing deposits at other financial institutions
179,789

 
102,447

Federal funds sold
5,590

 
1,847

Total cash and cash equivalents
205,517

 
114,824

Investment securities available for sale
53,992

 
60,828

Restricted investments
3,958

 
3,966

Loans held for sale
137,717

 
71,030

U.S. Small Business Administration Payroll Protection Program ("SBA-PPP") loans receivable, net of fees
233,349

 

Portfolio loans receivable, net of deferred fees and costs and net of allowance for loan losses of $22,016 and $13,301
1,222,597

 
1,157,820

Premises and equipment, net
5,021

 
6,092

Accrued interest receivable
7,678

 
4,770

Deferred income taxes, net
3,589

 
4,263

Other real estate owned
3,326

 
2,384

Other assets
2,285

 
2,518

Total assets
$
1,879,029

 
$
1,428,495

 
 
 
 
Liabilities
 
 
 
Deposits
 
 
 
Noninterest bearing
$
596,239

 
$
291,777

Interest bearing
1,065,972

 
933,644

Total deposits
1,662,211

 
1,225,421

Federal Home Loan Bank advances
22,222

 
32,222

Other borrowed funds
17,516

 
15,423

Accrued interest payable
1,523

 
1,801

Other liabilities
26,179

 
20,297

Total liabilities
1,729,652

 
1,295,164

 
 
 
 
Stockholders' equity
 
 
 
Preferred stock, $.01 par value; 1,000,000 shares authorized; no shares issued or outstanding

 

Common stock, $.01 par value; 49,000,000 shares authorized; 13,682,198 and 13,894,842 issued and outstanding
137

 
139

Additional paid-in capital
49,866

 
51,561

Retained earnings
97,580

 
81,618

Accumulated other comprehensive income
1,794

 
13

Total stockholders' equity
149,377

 
133,331

Total liabilities and stockholders' equity
$
1,879,029

 
$
1,428,495



9




The following table shows the average outstanding balance of each principal category of our assets, liabilities and stockholders’ equity, together with the average yields on our assets and the average costs of our liabilities for the periods indicated. Such yields and costs are calculated by dividing the annualized income or expense by the average daily balances of the corresponding assets or liabilities for the same period.
 
Three Months Ended September 30,
 
2020
 
2019
 
Average
Outstanding
Balance
 
Interest Income/
Expense
 
Average
Yield/
Rate
(1)
 
Average
Outstanding
Balance
 
Interest Income/
Expense
 
Average
Yield/
Rate
(1)
 
(Dollars in thousands)
Assets
 
 
 
 
 
 
 
 
 
 
 
Interest earning assets:
 
 
 
 
 
 
 
 
 
 
 
Interest bearing deposits
$
119,279

 
$
29

 
0.10
%
 
$
35,723

 
$
164

 
1.83
%
Federal funds sold
3,980

 

 
0.01

 
1,325

 
7

 
2.12

Investment securities available for sale
54,989

 
273

 
1.97

 
38,389

 
215

 
2.22

Restricted stock
4,007

 
51

 
5.04

 
5,629

 
68

 
4.77

 Loans held for sale
112,890

 
856

 
3.02

 
56,301

 
896

 
6.31

 Loans receivable under SBA Payroll Protection Program
235,160

 
1,470

 
2.49

 

 

 
0.00

Portfolio loans receivable(2)
1,218,589

 
22,510

 
7.35

 
1,099,191

 
21,004

 
7.58

Total interest earning assets
1,748,894

 
25,189

 
5.73

 
1,236,558

 
22,354

 
7.17

Noninterest earning assets
22,768

 
 
 
 
 
15,908

 
 
 
 
Total assets
$
1,771,662

 
 
 
 
 
$
1,252,466

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
Interest bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Interest bearing demand accounts
$
218,415

 
156

 
0.28

 
$
116,820

 
191

 
0.65

Savings
5,126

 
1

 
0.05

 
3,913

 
3

 
0.35

Money market accounts
532,973

 
1,186

 
0.89

 
339,751

 
1,484

 
1.73

Time deposits
267,970

 
1,291

 
1.92

 
286,605

 
1,771

 
2.45

Borrowed funds
41,069

 
516

 
5.00

 
89,746

 
721

 
3.19

Total interest bearing liabilities
1,065,553

 
3,150

 
1.18

 
836,835

 
4,170

 
1.98

Noninterest bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Noninterest bearing liabilities
22,702

 
 
 
 
 
17,163

 
 
 
 
Noninterest bearing deposits
539,220

 
 
 
 
 
271,851

 
 
 
 
Stockholders’ equity
144,187

 
 
 
 
 
126,617

 
 
 
 
Total liabilities and stockholders’ equity
$
1,771,662

 
 
 
 
 
$
1,252,466

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
 
4.55
%
 
 
 
 
 
5.19
%
Net interest income
 
 
$
22,039

 
 
 
 
 
$
18,184

 
 
Net interest margin(3)
 
 
 
 
5.01
%
 
 
 
 
 
5.83
%
_______________
(1) 
Annualized.
(2) 
Includes nonaccrual loans.
(3) 
For the three months ended September 30, 2020 and 2019, SBA-PPP loans and credit card loans collectively accounted for 117 and 146 basis points of the reported net interest margin, respectively.







10



 
Nine Months Ended September 30,
 
2020
 
2019
 
Average
Outstanding
Balance
 
Interest Income/
Expense
 
Average
Yield/
Rate
(1)
 
Average
Outstanding
Balance
 
Interest Income/
Expense
 
Average
Yield/
Rate
 
(Dollars in thousands)
Assets
 
 
 
 
 
 
 
 
 
 
 
Interest earning assets:
 
 
 
 
 
 
 
 
 
 
 
Interest bearing deposits
$
98,661

 
$
306

 
0.41
%
 
$
35,164

 
$
518

 
1.97
%
Federal funds sold
2,319

 
4

 
0.22

 
1,685

 
28

 
2.23

Investment securities available for sale
58,071

 
929

 
2.14

 
42,281

 
707

 
2.24

Restricted stock
4,025

 
174

 
5.78

 
4,276

 
160

 
4.99

    Loans held for sale
77,878

 
1,909

 
3.27

 
35,229

 
1,928

 
7.32

 Loans receivable under SBA Payroll Protection Program
134,130

 
2,482

 
2.47

 

 

 

Portfolio loans receivable(2)
1,197,719

 
63,129

 
7.04

 
1,041,364

 
57,620

 
7.40

Total interest earning assets
1,572,803

 
68,933

 
5.85

 
1,159,999

 
60,961

 
7.03

Noninterest earning assets
21,779

 
 
 
 
 
15,115

 
 
 
 
Total assets
$
1,594,582

 
 
 
 
 
$
1,175,114

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
Interest bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Interest bearing demand accounts
$
181,597

 
555

 
0.41

 
$
97,325

 
387

 
0.53

Savings
4,686

 
4

 
0.13

 
3,613

 
9

 
0.35

Money market accounts
484,412

 
4,153

 
1.15

 
330,086

 
4,203

 
1.70

Time deposits
284,844

 
4,489

 
2.11

 
294,693

 
5,288

 
2.40

Borrowed funds
43,823

 
1,382

 
4.21

 
59,816

 
1,615

 
3.61

Total interest bearing liabilities
999,362

 
10,583

 
1.41

 
785,533

 
11,502

 
1.96

Noninterest bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Noninterest bearing liabilities
21,401

 
 
 
 
 
14,971

 
 
 
 
Noninterest bearing deposits
433,381

 
 
 
 
 
252,353

 
 
 
 
Stockholders’ equity
140,438

 
 
 
 
 
122,257

 
 
 
 
Total liabilities and stockholders’ equity
$
1,594,582

 
 
 
 
 
$
1,175,114

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread
 
 
 
 
4.44
%
 
 
 
 
 
5.07
%
Net interest income
 
 
$
58,350

 
 
 
 
 
$
49,459

 
 
Net interest margin(3)
 
 
 
 
4.96
%
 
 
 
 
 
5.70
%
_______________
(1) 
Annualized.
(2) 
Includes nonaccrual loans.
(3) 
For the nine months ended September 30, 2020 and 2019, SBA-PPP loans and credit card loans collectively accounted for 104 and 135 basis points of the reported net interest margin, respectively.







11



HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited
 
 
 
 
 
 
Quarter Ended
(Dollars in thousands except per share data)
 
September 30,
2020
 
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
Earnings:
 
 
 
 
 
 
 
 
 
 
Net income
 
$
8,438

 
$
4,761

 
$
2,934

 
$
5,073

 
$
4,480

Earnings per common share, diluted
 
0.61

 
0.34

 
0.21

 
0.36

 
0.32

Net interest margin
 
5.01
%
 
4.72
%
 
5.16
%
 
5.33
%
 
5.83
%
Net interest margin, excluding credit cards & SBA-PPP loans (1)
 
3.84
%
 
3.96
%
 
3.96
%
 
4.02
%
 
4.37
%
Return on average assets(2)
 
1.89
%
 
1.19
%
 
0.84
%
 
1.48
%
 
1.42
%
Return on average assets excluding impact of SBA-PPP loans (1)(2)
 
1.80
%
 
1.04
%
 
0.84
%
 
1.48
%
 
1.42
%
Return on average equity(2)
 
23.28
%
 
13.70
%
 
8.59
%
 
15.32
%
 
14.04
%
Efficiency ratio
 
65.17
%
 
69.74
%
 
73.53
%
 
70.10
%
 
71.75
%
Balance Sheet:
 
 
 
 
 
 
 
 
 
 
Portfolio loans receivable (3)
 
$
1,244,613

 
$
1,211,477

 
$
1,187,798

 
$
1,171,121

 
$
1,140,310

Deposits
 
1,662,211

 
1,608,726

 
1,302,913

 
1,225,421

 
1,112,444

Total assets
 
1,879,029

 
1,822,365

 
1,507,847

 
1,428,495

 
1,311,406

Asset Quality Ratios:
 
 
 
 
 
 
 
 
 
 
Nonperforming assets to total assets
 
0.79
%
 
0.50
%
 
0.61
%
 
0.50
%
 
0.51
%
Nonperforming assets to total assets, excluding SBA-PPP loans (1)
 
0.90
%
 
0.58
%
 
0.61
%
 
0.50
%
 
0.51
%
Nonperforming loans to total loans
 
0.78
%
 
0.41
%
 
0.49
%
 
0.40
%
 
0.57
%
Nonperforming loans to portfolio loans (1)
 
0.92
%
 
0.48
%
 
0.49
%
 
0.40
%
 
0.57
%
Net charge-offs to average portfolio loans (1)(2)
 
0.06
%
 
0.05
%
 
0.07
%
 
0.10
%
 
0.04
%
Net charge-offs to average loans (1)(2)
 
0.06
%
 
0.05
%
 
0.07
%
 
0.10
%
 
0.04
%
Allowance for loan losses to total loans
 
1.49
%
 
1.30
%
 
1.31
%
 
1.14
%
 
1.12
%
Allowance for loan losses to portfolio loans
 
1.77
%
 
1.54
%
 
1.31
%
 
1.14
%
 
1.12
%
Allowance for loan losses to non-performing loans
 
191.78
%
 
318.25
%
 
268.13
%
 
281.80
%
 
195.76
%
Bank Capital Ratios:
 
 
 
 
 
 
 
 
 
 
Total risk based capital ratio
 
12.74
%
 
12.35
%
 
12.18
%
 
11.98
%
 
11.44
%
Tier 1 risk based capital ratio
 
11.48
%
 
11.10
%
 
10.93
%
 
10.73
%
 
10.19
%
Leverage ratio
 
7.44
%
 
7.73
%
 
8.61
%
 
8.65
%
 
8.60
%
Common equity Tier 1 capital ratio
 
11.48
%
 
11.10
%
 
10.93
%
 
10.73
%
 
10.19
%
Tangible common equity
 
7.09
%
 
6.91
%
 
8.03
%
 
8.21
%
 
8.21
%
Holding Company Capital Ratios:
 
 
 
 
 
 
 
 
 
 
Total risk based capital ratio
 
15.35
%
 
15.02
%
 
13.63
%
 
13.56
%
 
13.47
%
Tier 1 risk based capital ratio
 
12.93
%
 
12.58
%
 
12.38
%
 
12.31
%
 
12.21
%
Leverage ratio
 
8.63
%
 
8.85
%
 
9.83
%
 
9.96
%
 
10.37
%
Common equity Tier 1 capital ratio
 
12.75
%
 
12.39
%
 
12.19
%
 
12.12
%
 
12.02
%
Tangible common equity
 
7.95
%
 
7.80
%
 
11.08
%
 
10.71
%
 
10.26
%
Composition of Loans: (3)
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
422,698

 
$
437,429

 
$
430,870

 
$
427,926

 
$
443,961

Commercial real estate
 
372,972

 
364,071

 
360,601

 
348,091

 
339,448

Construction real estate
 
227,661

 
212,957

 
204,047

 
198,702

 
182,224

Commercial and industrial - Other
 
134,889

 
142,673

 
151,551

 
151,109

 
132,935

SBA-PPP loans
 
238,735

 
229,646

 

 

 

Credit card
 
84,964

 
54,732

 
41,881

 
46,412

 
44,058

Other
 
2,268

 
947

 
1,103

 
1,285

 
1,148

Composition of Deposits:
 
 
 
 
 
 
 
 
 
 
Noninterest bearing
 
$
596,239

 
$
563,995

 
$
363,423

 
$
291,777

 
$
293,378

Interest bearing demand
 
247,150

 
268,150

 
175,924

 
174,166

 
186,422

Savings
 
4,941

 
5,087

 
4,290

 
3,675

 
3,994

Money Markets
 
472,447

 
507,432

 
473,958

 
429,078

 
313,131

Time Deposits
 
341,435

 
264,062

 
285,318

 
326,725

 
315,519


12



HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited
 
 
 
 
 
 
Quarter Ended
(Dollars in thousands except per share data)
 
September 30,
2020
 
June 30,
2020
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
Capital Bank Home Loan Metrics:
 
 
 
 
 
 
 
 
Origination of loans held for sale
 
$
431,060

 
$
315,165

 
$
180,421

 
$
185,739

 
$
197,754

Mortgage loans sold
 
410,312

 
272,151

 
177,496

 
183,691

 
171,880

Gain on sale of loans
 
12,837

 
8,088

 
4,580

 
4,587

 
5,088

Purchase volume as a % of originations
 
33.76
%
 
31.16
%
 
32.79
%
 
28.95
%
 
44.02
%
Gain on sale as a % of loans sold(4)
 
3.13
%
 
2.97
%
 
2.52
%
 
2.44
%
 
2.88
%
OpenSky Credit Card Portfolio Metrics:
 
 
 
 
 
 
 
 
Active customer accounts
 
529,114

 
400,530

 
244,024

 
223,379

 
221,913

Credit card loans
 
$
84,964

 
$
54,732

 
$
41,881

 
$
46,412

 
$
44,058

Noninterest secured credit card deposits
 
176,708

 
131,854

 
84,689

 
78,223

 
77,689

_______________
(1) 
Refer to Appendix for reconciliation of non-GAAP measures
(2) 
Annualized.
(3) 
Loans are reflected net of deferred fees and costs.
(4) 
Gain on sale percentage is calculated as gain on sale of loans divided by the sum of gain on sale of loans and proceeds from loans held for sale, net of gains.

13


Appendix
Reconciliation of Non-GAAP Measures

Reconciliation of Non-GAAP Measures

Return on Average Assets, as Adjusted
Dollars in Thousands
Year Ended
Quarter Ended
Year to Date
 
December 31, 2019
September 30, 2020
September 30, 2020
 
 
 
 
Net Income
$
16,895

$
8,438

$
16,134

Less: SBA-PPP loan income

(1,470
)
(2,482
)
Net Income, as Adjusted
$
16,895

$
6,968

$
13,653

Average Total Assets
$
1,219,909

$
1,533,591

$
1,594,582

Less: Average SBA-PPP Loans

(238,071
)
(135,894
)
Average Total Assets, as Adjusted
$
1,219,909

$
1,533,591

$
1,458,687

Return on Average Assets, as Adjusted
1.38
%
1.80
%
1.25
%


Net Interest Margin, as Adjusted
Dollars in Thousands
Year Ended
Quarter Ended
Year to Date
 
December 31, 2019
September 30, 2020
September 30, 2020
 
 
 
 
Net Interest Income
$
67,509

$
22,039

$
58,350

Less Secured credit card loan income

(6,632
)
(15,225
)
Less SBA-PPP loan income

(1,470
)
(2,482
)
Net Interest Income, as Adjusted
$
67,509

$
13,937

$
40,644

Average Interest Earning Assets
1,204,863

1,748,894

1,572,803

Less Average secured credit card loans

(68,585
)
(51,289
)
Less Average SBA-PPP loans

(235,160
)
(134,130
)
Total Average Interest Earning Assets, as Adjusted
$
1,204,863

$
1,445,148

$
1,387,384

Net Interest Margin, as Adjusted
5.60
%
3.84
%
3.91
%



Tangible Book Value per Share
Dollars in Thousands
 
 
 
December 31, 2019
September 30, 2020
 
 
 
Total Stockholders' Equity
$
133,331

$
149,377

Tangible Common Equity
$
133,331

$
149,377

Period End Shares Outstanding
13,894,842

13,682,198

Tangible Book Value per Share
$
9.60

$
10.92



14


Appendix
Reconciliation of Non-GAAP Measures

Reconciliation of Non-GAAP Measures

Allowance for Loan Losses to Total Portfolio Loans
 
 
Dollars in Thousands
Year Ended
Quarter Ended
 
December 31, 2019
September 30, 2020
 
 
 
Allowance for Loan Losses
$
13,301

$
22,016

Total Loans
1,171,121

1,477,962

Less: SBA-PPP loans

(233,349
)
Total Portfolio Loans
$
1,171,121

$
1,244,613

Allowance for Loan Losses to Total Portfolio Loans
1.14
%
1.77
%
 
 
 
 
 
 
Nonperforming Assets to Total Assets, net SBA-PPP Loans
 
 
Dollars in Thousands
Year Ended
Quarter Ended
 
December 31, 2019
September 30, 2020
 
 
 
Total Nonperforming Assets
$
7,104

$
14,806

Total Assets
1,428,495

1,879,029

Less: SBA-PPP loans

(233,349
)
Total Assets, net SBA-PPP Loans
$
1,428,495

$
1,645,680

Nonperforming Assets to Total Assets, net SBA-PPP Loans
0.50
%
0.90
%
 
 
 
 
 
 
Nonperforming Loans to Total Portfolio Loans
 
 
Dollars in Thousands
Year Ended
Quarter Ended
 
December 31, 2019
September 30, 2020
 
 
 
Total Nonperforming Loans
$
4,720

$
11,480

Total Loans
1,171,121

1,477,962

Less: SBA-PPP loans

(233,349
)
Total Portfolio Loans
$
1,171,121

$
1,244,613

Nonperforming Loans to Total Portfolio Loans
0.40
%
0.92
%
 
 
 
 
 
 
Net Charge-offs to Average Portfolio Loans
 
 
Dollars in Thousands
Year Ended
Quarter Ended
 
December 31, 2019
September 30, 2020
 
 
 
Total Net Charge-offs
$
798

$
(163
)
Total Average Loans
1,064,421

1,453,749

Less: Average SBA-PPP loans

(235,160
)
Total Average Loans, Excluding SBA-PPP Loans
$
1,064,421

$
1,218,589

Net Charge-offs (YTD annualized) to Average Portfolio Loans
0.08
%
0.06
%


15



ABOUT CAPITAL BANCORP, INC.
Capital Bancorp, Inc., Rockville, Maryland is a registered bank holding company incorporated under the laws of Maryland. The Company’s wholly-owned subsidiary, Capital Bank, N.A., is the fifth largest bank headquartered in Maryland at September 30, 2020. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in five locations in the greater Washington, D.C. and Baltimore, Maryland markets. Capital Bancorp had assets of approximately $1.9 billion at September 30, 2020 and its common stock is traded in the NASDAQ Global Market under the symbol “CBNK.” More information can be found at the Company's website www.CapitalBankMD.com under its investor relations page.
FORWARD-LOOKING STATEMENTS
This earnings release contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements.  Accordingly, we caution you that any such forward-looking statements are not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors. For details on 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.

Further, given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and how the economy may be fully reopened. As a result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy is unable to substantially reopen as planned, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for loan losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; our cyber security risks are increased as the result of an increase in the number of employees working remotely; and Federal Deposit Insurance Corporation premiums may increase if the agency experiences additional resolution costs.

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.

16




FINANCIAL CONTACT: Alan Jackson (240) 283-0402
MEDIA CONTACT: Ed Barry (240) 283-1912
WEB SITE: www.CapitalBankMD.com


17

Document




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 26, 2020

CAPITAL BANCORP, INC.
(Exact name of registrant as specified in its charter)
 
Maryland
001-38671
52-2083046
(State or other jurisdiction of incorporation or organization)
(Commission file number)
(IRS Employer Identification No.)
2275 Research Boulevard, Suite 600, Rockville, Maryland 20850
(Address of principal executive offices) (Zip Code)
(301) 468-8848
Registrant’s telephone number, including area code

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class
Trading Symbol
Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share
CBNK
NASDAQ Stock Market




ITEM 2.02. Results of Operations and Financial Condition

On October 26, 2020, Capital Bancorp, Inc. (the “Company”) issued a press release setting forth the Company’s third quarter 2020 unaudited financial results. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.

The information furnished under Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including the exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of the Company under the Securities Act of 1933, as amended, except as shall be set forth by specific reference in such filing.


ITEM 9.01. Financial Statements and Exhibits
(d) Exhibits

Exhibit No.
Description
99.1
Press Release, dated October 26, 2020, with respect to the Company's unaudited financial results for the second quarter ended September 30, 2020.




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EXHIBIT INDEX

Exhibit Number
     
Description
99.1
 
Press Release, dated October 26, 2020, with respect to the Company's unaudited financial results for the second quarter ended September 30, 2020.




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
CAPITAL BANCORP, INC.                             
 
 
 
 
October 26, 2020
By: /s/ Alan W. Jackson
 
Name: Alan W. Jackson
 
Title: Chief Financial Officer



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