cbnk-20230727
false000141953600014195362023-07-272023-07-27



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): July 27, 2023

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
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.
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value $0.01 per shareCBNKNASDAQ Stock Market




Item 2.02 Results of Operations and Financial Disclosure
On July 27, 2023, Capital Bancorp, Inc. (the “Company”) issued a press release announcing the Company’s unaudited financial results for the three and six months ended June 30, 2023. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K 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 Exhibit 99.1 to this Current Report on Form 8-K, 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 8.01. Other Events
On July 21, 2023, the Company's Board of Directors declared a $0.08 per share dividend, payable on August 23, 2023 to stockholders of record on August 7, 2023.

Item 9.01. Financial Statements and Exhibits
(d) Exhibits
99.1
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)



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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.                             
 
 
By: /s/ Jay Walker
Name: Jay Walker
Title: Chief Financial Officer
July 27, 2023



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https://cdn.kscope.io/dedf1574d982300cb07201c4d501823f-capitalbancorplogoa21a.jpg
Continued Deposit and Loan Growth Leads to Strong Net Interest Margin
Declares Quarterly Dividend of $0.08
Diluted EPS of $0.52, ROAA of 1.34%, and ROAE of 12.30% for 2Q 2023
Rockville, Maryland, July 27, 2023 (GLOBE NEWSWIRE) – Capital Bancorp, Inc. (the "Company") (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $7.3 million, or $0.52 per diluted share, for the second quarter 2023, compared to net income of $9.7 million, or $0.68 per diluted share, for the first quarter 2023 and $11.5 million, or $0.80 per diluted share, for the second quarter 2022. Total average deposits increased $110.4 million, or 25.0% annualized, the average loan portfolio grew $50.3 million and the net interest margin of 6.63% for the second quarter 2023 remained stable when compared to 6.65% for the first quarter 2023. Adjusted net interest margin (excluding credit card and SBA-PPP loans) of 4.06% for the second quarter 2023 grew on the back of steady loan and deposit growth, excluding brokered time deposits, when compared to adjusted net interest margin of 3.81% for the first quarter 2023.

The Company also declared a cash dividend on its common stock of $0.08 per share. The dividend is payable on August 23, 2023 to shareholders of record on August 7, 2023. The dividend declared of $0.08 is $0.02, or 33.3% higher than the prior quarter dividend.

"We saw a significant number of positive signs in our performance this quarter and are making investments in our future,” said Ed Barry, Chief Executive Officer of the Company and the Bank. “Core deposit growth remains a priority and we continue to see traction on building our franchise and in particular our noninterest-bearing deposits. Net interest margin was stable with adjusted net interest margin increasing as we continued to price loans based on the marginal cost of deposits to generate attractive spreads. OpenSky® open customer accounts increased, with growth in corresponding loan and deposit balances, as initiatives began to deliver. Credit remained stable and we maintain a well positioned balance sheet with a strong capital base in the current environment."

“Despite some of the year-over-year declines, the Board is pleased with Capital Bank’s performance during the quarter.” said Steven J. Schwartz, Chairman of the Company. “Our continued solid increases in tangible book value, average non-interest-bearing deposits, loans, and cardholders are a direct result of the Bank’s smart growth strategy. We are also pleased with the results of our continuing focus on maintaining outstanding capital and liquidity metrics, as reflected in our quarter-end numbers. Declines in EPS and ROE resulted primarily from a decision to invest more heavily in our credit card franchise, loan and deposit growth personnel and branding, as well as the industry-wide migration of our deposit book to more expensive products. We are gratified nonetheless that our net interest margin remains largely unaffected, and we believe the Bank continues to be well positioned for any macroeconomic challenges that may lie ahead.”

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Second Quarter 2023 Highlights
Capital Bancorp, Inc.
Earnings Summary - Net income of $7.3 million, or $0.52 per diluted share, decreased $2.4 million compared to $9.7 million, or $0.68 per diluted share, for the first quarter 2023.
Net interest income of $35.3 million increased $0.9 million compared to $34.5 million for the first quarter 2023. Interest income of $45.1 million increased $1.7 million compared to $43.4 million for the first quarter 2023 driven by loan growth, as average portfolio loans increased $50.3 million compared to the first quarter 2023 in tandem with slightly higher rates in the second quarter 2023. Interest expense of $9.7 million increased $0.8 million compared to $8.9 million for the first quarter 2023 driven by an increase in the cost of funds. Interest expense from interest-bearing deposits increased $1.7 million, as average interest-bearing deposits increased $88.0 million while interest expense from borrowed funds decreased $0.8 million, as average borrowed funds decreased $75.2 million from the first quarter 2023.
The provision for credit losses was $2.9 million, an increase of $1.2 million from the first quarter 2023 driven by moderate changes to the economic forecast and loan growth.
Noninterest income of $6.7 million increased $0.7 million compared to $6.0 million for the first quarter of 2023. Credit card fees increased $0.5 million as the number of open customer accounts increased quarter over quarter, which resulted in higher interchange and other income.
Noninterest expense of $29.6 million increased $3.4 million compared to $26.2 million for the first quarter 2023. Within this category, significant variances included the following:
Advertising expense of $2.6 million increased $2.1 million due to marketing efforts related to OpenSky® customer acquisition.
Other operating expenses of $3.4 million increased $0.8 million including $0.2 million related to outside service provider expense, $0.2 million related to FDIC assessment expense, with the remainder among other categories.
Occupancy and equipment expense of $1.5 million increased $0.3 million related to software licensing expenses.
Loan processing expense of $0.7 million increased $0.3 million in line with the growth in the loan portfolio.
Professional fees of $2.6 million increased $0.2 million, attributable primarily to increases in third party consulting and legal fees.
Salaries and employee benefits of $12.1 million decreased $0.4 million reflecting a seasonal increase in payroll taxes and benefit expense in the first quarter 2023.
Balance Sheet – Total assets of $2.2 billion at June 30, 2023 decreased $17.4 million, or 0.8%, from March 31, 2023.
Cash and cash equivalents decreased $21.0 million.
Net portfolio loans of $1.8 billion increased $50.9 million, representing 11.4% annualized growth.
Total deposits of $1.9 billion at June 30, 2023 decreased $10.0 million, or 0.5%, from March 31, 2023, while total average deposits increased $110.4 million, or 25.0% annualized, quarter over quarter. Federal Home Loan Bank advances decreased $10.0 million, or 31.3%, from March 31, 2023.
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The investment securities portfolio continues to be classified as available for sale and had a fair market value of $208.5 million, or 9.4% of total assets, at June 30, 2023. The amortized cost of the investment securities portfolio was $229.9 million, with an effective duration of 3.48 years. U.S. Treasury securities represent 74.6% of the overall investment portfolio. Investment securities available for sale decreased $47.3 million, primarily due to $44.0 million of maturing U.S. Treasuries in the second quarter 2023. The accumulated other comprehensive loss ("AOCI Loss") on the investment securities portfolio increased $2.1 million during the quarter to $16.1 million as of June 30, 2023, which represents 6.8% of total stockholders' equity. The Company does not have a held to maturity ("HTM") investment securities portfolio.
Performance and Efficiency Ratios – Annualized return on average assets ("ROAA") and annualized return on average equity ("ROAE") were 1.34% and 12.30%, respectively, for the three months ended June 30, 2023, compared to 1.84% and 16.98%, respectively, for the three months ended March 31, 2023.
The efficiency ratio was 70.4% for the three months ended June 30, 2023, compared to 64.7% for the three months ended March 31, 2023. The change was primarily attributable to an increase in noninterest expense.
Stable Net Interest Margin - Net interest margin was 6.63% for the three months ended June 30, 2023, compared to 6.65% for the three months ended March 31, 2023. Adjusted net interest margin (excluding credit card and SBA-PPP loans), of 4.06%, increased 25 basis points compared to 3.81% for the three months ended March 31, 2023.
The average yield on interest earning assets increased 9 basis points compared to the first quarter 2023. The average yield on investment securities available for sale decreased 4 basis points to 1.99%, and the average yield on portfolio loans increased 1 basis point.
The average rate on interest-bearing liabilities increased 20 basis points compared to the first quarter 2023. Increases in average rates include money market accounts increasing 39 basis points to 3.47% and time deposits increasing 37 basis points to 4.30%, while average balances increased $20.7 million and $47.0 million, respectively, compared to the first quarter 2023. The average rate on borrowed funds decreased 95 basis points to 3.07%, while average balances decreased $75.2 million compared to the first quarter 2023.
Deposits and Cost of Funds - Total deposits at June 30, 2023 decreased by $10.0 million, or 0.5%, compared to March 31, 2023.
Total brokered time deposits of $128.7 million decreased $53.2 million, or 29.2%, compared to March 31, 2023. Excluding the decline in brokered time deposits during the quarter, total deposits increased $43.1 million, or 9.8% annualized.
Average noninterest-bearing deposits increased 3.4% compared to March 31, 2023, and represented 36.0% of total average deposits at June 30, 2023.
The elevated interest rate environment has driven up the cost of interest-bearing liabilities to 3.13% for the quarter ended June 30, 2023, compared to 2.93% for the first quarter 2023.
Robust Capital Positions - As of June 30, 2023, the Company reported a common equity tier 1 capital ratio of 14.96%, compared to 14.90% at March 31, 2023, and an allowance for credit losses to total loans ratio of 1.50%, compared to an allowance for credit losses to total loans ratio of 1.47% as March 31, 2023. Shares repurchased and retired during the three months ended June 30, 2023, as part of the Company's stock repurchase program totaled 138,407 shares at an average price of $16.72, for a total cost of $2.3 million including commissions. Tangible book value per common share grew 2.0% to $16.98 at June 30, 2023 when compared to March 31, 2023.
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Liquidity - Total sources of available borrowings at June 30, 2023 totaled $665.8 million, including available collateralized lines of credit of $531.4 million, unsecured lines of credit with other banks of $76.0 million and unpledged investment securities available as collateral for potential additional borrowings of $58.5 million.
Commercial Bank
Continued Strong Portfolio Loan Growth - Portfolio loans, excluding credit cards, increased by $41.2 million, or 10.1% annualized, to $1.7 billion, gross, at June 30, 2023 compared to March 31, 2023. The increase in portfolio loans included $13.9 million from commercial real estate, $12.3 million from commercial and industrial, $9.3 million from residential real estate and $6.9 million from construction real estate.
Credit Metrics - Nonperforming assets ("NPAs") decreased 2 basis points to 0.71% of total assets at June 30, 2023 compared to 0.73% at March 31, 2023 as a result of a decrease in nonaccrual loans at June 30, 2023 to $15.7 million compared to $16.3 million at March 31, 2023. Included in nonperforming assets is a single $8.2 million, well-collateralized multi-unit residential real estate loan that was downgraded in the first quarter of 2023. At June 30, 2023 commercial real estate loans with office space exposure totaled $55.8 million, or 3.0% of total portfolio loans.
OpenSky®
Revenues - Total revenue of $19.9 million decreased $0.5 million from the first quarter 2023. Interest income of $15.2 million decreased $1.0 million from the first quarter 2023 as income from late charges decreased $0.7 million. Noninterest income of $4.7 million increased $0.5 million due to credit card fees as compared to the first quarter 2023.
Noninterest Expense - Total noninterest expense of $12.1 million increased $2.6 million from the first quarter 2023 due to marketing expense of $2.3 million related to the Company’s strategy for OpenSky® customer acquisition. During the second quarter 2023, the number of OpenSky® credit card accounts increased by 12,827 to 540,058.
Loan Balances - OpenSky® loan balances, net of reserves, of $122.9 million increased by $10.1 million, or 8.9% compared to the first quarter 2023. Corresponding deposit balances of $186.6 million increased $1.8 million, or 1.0%, compared to the first quarter 2023. Gross unsecured loan balances stood at $25.3 million at June 30, 2023 and $25.8 million at March 31, 2023.
OpenSky® Credit - Card delinquencies and utilization remained stable in the second quarter 2023 when compared to the first quarter 2023. The provision for credit losses increased $0.3 million compared to the first quarter 2023, driven primarily by higher loan balances.
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2023 Highlights
Capital Bancorp
Earnings Summary - Net income of $17.1 million, or $1.20 per diluted share for the six months ended June 30, 2023 decreased $4.7 million compared to $21.7 million, or $1.52 per diluted share for the six months ended June 30, 2022.
Improved interest income was offset by increased deposit costs that were a result of the rising interest rate environment and a shift within the portfolio from noninterest-bearing to interest-bearing deposits and increased time deposits and FHLB balances. Further, SBA-PPP income totaled $3.2 million for the six months ended June 30, 2022 with no comparable amount in 2023. A decline in card fees of $3.2 million resulted in lower total noninterest income of $12.7 million for the six months ended June 30, 2023, as compared to $16.7 million for the same period in 2022.
Balance Sheet Growth - Total assets of $2.2 billion at June 30, 2023 increased $73.0 million, or 3.4%, from June 30, 2022. Net portfolio loans increased $229.4 million, or 14.3% partially offset by a $131.5 million reduction in cash and cash equivalents. Total deposits of $1.9 billion at June 30, 2023 increased $45.4 million, or 2.4%, from June 30, 2022.
Performance and Efficiency Ratios - Annualized ROAA and ROAE were 1.59% and 14.60%, respectively, for the six months ended June 30, 2023 compared to 2.12% and 21.25%, respectively, for the six months ended June 30, 2022.
The efficiency ratio was 67.60% for the six months ended June 30, 2023, compared to 63.52% for the six months ended June 30, 2022.
Net Interest Margin - Net interest margin was 6.64%, or 3.94% excluding credit card and SBA-PPP loans, for the six months ended June 30, 2023, compared to 6.93%, or 3.84% excluding credit card and SBA-PPP loans, for the six months ended June 30, 2022. The lower margin is a result of a 260 basis point increase in the cost of interest-bearing liabilities despite a 127 basis point increase in yield for portfolio loans as the average balances of portfolio loans increased $256.0 million.
Robust Capital Positions - As of June 30, 2023, the Company reported a common equity tier 1 capital ratio of 14.96%, compared to 15.55% at June 30, 2022, and an allowance for loan losses to total loans ratio of 1.50%, compared to 1.64% in 2022. Tangible book value per common share grew 14.7% to $16.98 at June 30, 2023 as compared to $14.80 at June 30, 2022.
Commercial Bank
Strong Portfolio Loan Growth - Portfolio loans, excluding credit cards, increased by $226.2 million, or 15.7% to $1.7 billion, gross, at June 30, 2023 compared to June 30, 2022. The increase in portfolio loans included $123.0 million from residential real estate, $65.3 million from commercial real estate and $40.3 million from commercial and industrial.
OpenSky®
Revenues - Total revenue of $40.2 million for the six months ended June 30, 2023, decreased $3.6 million as compared to the six months ended June 30, 2022. Interest income of $31.3 million in 2023 decreased $0.4 million compared to 2022 while noninterest income of $8.9 million decreased $3.2 million due primarily to a decrease in credit card fees resulting from a lower number of open customer accounts and balances.
Noninterest Expense - Total noninterest expense of $21.5 million for the six months ended June 30, 2023, decreased $3.3 million as compared to the six months ended June 30, 2022 including decreases in data processing expense of $2.4 million and outside service provider expense of $1.0 million.
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COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited
Quarter Ended2Q23 vs 1Q232Q23 vs 2Q22
(in thousands except per share data)June 30, 2023March 31, 2023June 30, 2022$ Change% Change$ Change% Change
Earnings Summary
Interest income$45,080 $43,416 $36,556 $1,664 3.8 %$8,524 23.3 %
Interest expense9,740 8,929 1,156 811 9.1 %8,584 742.6 %
Net interest income35,340 34,487 35,400 853 2.5 %(60)(0.2)%
Provision for credit losses2,862 1,660 2,035 1,202 72.4 %827 40.6 %
Noninterest income6,687 6,026 8,362 661 11.0 %(1,675)(20.0)%
Noninterest expense29,592 26,203 27,130 3,389 12.9 %2,462 9.1 %
Income before income taxes9,573 12,650 14,597 (3,077)(24.3)%(5,024)(34.4)%
Income tax expense2,255 2,915 3,089 (660)(22.6)%(834)(27.0)%
Net income$7,318 $9,735 $11,508 $(2,417)(24.8)%$(4,190)(36.4)%
Pre-tax pre-provision net revenue ("PPNR") (1)
$12,435 $14,310 $16,632 $(1,875)(13.1)%$(4,197)(25.2)%
Weighted average common shares - Basic14,025 14,159 14,007 (134)(0.9)%18 0.1 %
Weighted average common shares - Diluted14,059 14,272 14,313 (213)(1.5)%(254)(1.8)%
Earnings per share - Basic$0.52 $0.69 $0.82 $(0.17)(24.6)%$(0.30)(36.6)%
Earnings per share - Diluted$0.52 $0.68 $0.80 $(0.16)(23.5)%$(0.28)(35.0)%
Return on average assets (annualized)1.34 %1.84 %2.23 %(0.50)%(27.2)%(0.89)%(39.9)%
Return on average assets, excluding impact of SBA-PPP loans (annualized) (1)
1.34 %1.84 %2.04 %(0.50)%(27.2)%(0.70)%(34.3)%
Return on average equity (annualized)12.30 %16.98 %22.16 %(4.68)%(27.6)%(9.86)%(44.5)%


Six Months Ended
June 30,
(in thousands except per share data)20232022$ Change% Change
Earnings Summary
Interest income$88,496 $70,957 $17,539 24.7 %
Interest expense18,669 2,226 16,443 738.7 %
Net interest income69,827 68,731 1,096 1.6 %
Provision for credit losses4,522 2,987 1,535 51.4 %
Noninterest income12,713 16,650 (3,937)(23.6)%
Noninterest expense55,795 54,232 1,563 2.9 %
Income before income taxes22,223 28,162 (5,939)(21.1)%
Income tax expense5,170 6,443 (1,273)(19.8)%
Net income$17,053 $21,719 $(4,666)(21.5)%
Pre-tax pre-provision net revenue ("PPNR") (1)
$26,745 $31,149 $(4,404)(14.1)%
Weighted average common shares - Basic14,092 13,998 94 0.7 %
Weighted average common shares - Diluted14,210 14,323 (113)(0.8)%
Earnings per share - Basic$1.21 $1.55 $(0.34)(21.9)%
Earnings per share - Diluted$1.20 $1.52 $(0.32)(21.1)%
Return on average assets (annualized)1.59 %2.12 %(0.53)%(25.0)%
Return on average assets, excluding impact of SBA-PPP loans (annualized) (1)
1.59 %1.86 %(0.27)%(14.5)%
Return on average equity (annualized)14.60 %21.25 %(6.65)%(31.3)%
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Quarter EndedQuarter Ended
June 30,March 31,December 31,September 30,
(in thousands except per share data)20232022% Change202320222022
Balance Sheet Highlights
Assets$2,227,866 $2,154,846 3.4 %$2,245,286 $2,123,655 $2,009,358 
Investment securities available for sale208,464 226,509 (8.0)%255,762 252,481 269,620 
Mortgage loans held for sale10,146 11,708 (13.3)%9,620 7,416 6,875 
SBA-PPP loans, net of fees1,090 15,864 (93.1)%2,037 2,163 2,662 
Portfolio loans receivable (2)
1,837,041 1,607,677 14.3 %1,786,109 1,728,592 1,648,001 
Allowance for credit losses27,495 26,419 4.1 %26,216 26,385 26,091 
Deposits1,934,361 1,888,920 2.4 %1,944,374 1,758,072 1,737,591 
FHLB borrowings 22,000 22,000 — %32,000 107,000 22,000 
Other borrowed funds12,062 12,062 — %12,062 12,062 12,062 
Total stockholders' equity237,435 207,316 14.5 %234,517 224,015 214,005 
Tangible common equity (1)
237,435 207,316 14.5 %234,517 224,015 214,005 
Common shares outstanding13,981 14,010 (0.2)%14,083 14,139 14,039 
Tangible book value per share (1)
$16.98 $14.80 14.7 %$16.65 $15.84 $15.24 
______________
(1) Refer to Appendix for reconciliation of non-GAAP measures.
(2) Loans are reflected net of deferred fees and costs.
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Operating Results - Comparison of Three Months Ended June 30, 2023 and 2022
For the three months ended June 30, 2023, net interest income of $35.3 million decreased slightly from $35.4 million in the same period in 2022, primarily due to significant increases in the cost of funding partially offset by increased average balances of $268.1 million in portfolio loans combined with a 64 basis point increase in yield for portfolio loans. The net interest margin decreased 43 basis points to 6.63% for the three months ended June 30, 2023, from the same period in 2022 as the increase in the costs of deposits, including money market accounts and time deposits, outpaced the increase in portfolio loan yields, including credit cards. Further SBA-PPP income totaled $1.1 million for the three months ended June 30, 2022 with no comparable amount in 2023. Net interest margin, excluding credit card and SBA-PPP loans, increased to 4.06% for the three months ended June 30, 2023, compared to 3.86% for the same period in 2022.
For the three months ended June 30, 2023, average interest earning assets increased $125.0 million, or 6.2%, to $2.1 billion as compared to the same period in 2022, and the average yield on interest earning assets increased 117 basis points. Compared to the same period in the prior year, average interest-bearing liabilities increased $218.5 million, or 21.2%, and the average cost of interest-bearing liabilities increased to 3.13%, a 268 basis point increase from 0.45%.
For the three months ended June 30, 2023, the provision for credit losses was $2.9 million, an increase of $0.8 million from the same period in 2022. Contributors to the increase in the provision were loan portfolio growth and change in credit card mix from fully secured to partially or fully unsecured. Net charge-offs for the three months ended June 30, 2023, were $1.6 million, or 0.35% on an annualized basis of average portfolio loans, compared to $0.9 million, or 0.23% on an annualized basis of average loans for the same period in 2022. Of the $1.6 million in net charge-offs during the quarter, $1.5 million related to secured and partially secured cards in the credit card portfolio and $0.1 million related to unsecured cards.
For the three months ended June 30, 2023, noninterest income of $6.7 million decreased $1.7 million, or 20.0%, from the same period in 2022. Credit card fees declined by $1.5 million as the number of open customer accounts declined year over year, which resulted in lower interchange and other fee income compared to the prior year quarter.
Credit card loan balances, net of reserves, decreased by $19.2 million to $122.9 million as of June 30, 2023, from $142.2 million at June 30, 2022. The related deposit account balances decreased 12.9% to $186.6 million at June 30, 2023 when compared to $214.1 million at June 30, 2022 reflecting the reduction in the number of open customer accounts year over year.
The efficiency ratio for the three months ended June 30, 2023, was 70.41% compared to 62.00% for the three months ended June 30, 2022. The change was due primarily to a decline in noninterest income from credit card fees and an increase in noninterest expense from salaries and employee benefits.
For the three months ended June 30, 2023, noninterest expense of $29.6 million increased $2.5 million, or 9.1%, from the same period in 2022. The increase was primarily driven by increased salaries and employee benefits of $2.1 million.
8



Operating Results - Comparison of Six Months Ended June 30, 2023 and 2022
For the six months ended June 30, 2023, net interest income of $69.8 million increased $1.1 million, or 1.6%, from the same period in 2022, primarily due to increased average balances of $256.0 million in portfolio loans combined with the 82 basis point increase in yield for portfolio loans offset by significant increases in the cost of funding. The net interest margin decreased 29 basis points to 6.64% for the six months ended June 30, 2023, from the same period in 2022. Net interest margin, excluding credit card and SBA-PPP loans, was 3.94% for the six months ended June 30, 2023, compared to 3.84% for the same period in 2022.
For the six months ended June 30, 2023, average interest earning assets increased $119.3 million, or 6.0%, to $2.1 billion as compared to the same period in 2022, and the average yield on interest earning assets increased 127 basis points. Compared to the same period in the prior year, average interest-bearing liabilities increased $203.8 million, or 19.6%, while the cost of interest-bearing liabilities increased 260 basis points to 3.03% from 0.43%.
For the six months ended June 30, 2023, the provision for credit losses was $4.5 million, an increase of $1.5 million from the prior year, attributable primarily to the credit card portfolio. Net charge-offs for the six months ended June 30, 2023, were $4.2 million, or 0.48% annualized of average portfolio loans, compared to $1.7 million, or 0.23% annualized of average portfolio loans, for the same period in 2022. The $4.2 million in net charge-offs during the six months ended June 30, 2023, was comprised primarily of credit card portfolio net charge-offs with $2.6 million related to secured and partially secured cards while $0.7 million was related to unsecured cards.
For the six months ended June 30, 2023, noninterest income of $12.7 million decreased $3.9 million, or 23.6%, from the same period in 2022. The decrease was primarily driven by the decline in credit card fees of $3.2 million as the number of open customer accounts declined to 540,058 at June 30, 2023 from 616,435 year over year, which resulted in lower interchange and other fee income recognized compared to the prior year. The elevated interest rate environment continues to put pressure on the mortgage market, resulting in declines in home loan sales and home loan refinances, which has resulted in a $0.8 million decrease in mortgage banking revenue compared to the prior year.
The efficiency ratio for the six months ended June 30, 2023, was 67.60% compared to 63.52% for the six months ended June 30, 2022.
For the six months ended June 30, 2023, noninterest expense of $55.8 million increased $1.6 million, or 2.9%, from the same period in 2022. The increase was primarily driven by a $4.3 million, or 21.2%, increase in salaries and benefits, partially offset by a $2.5 million, or 15.8%, decrease in data processing expense. The decrease of $2.5 million in data processing expense was the result of a contract renegotiation entered into in the first quarter 2022 in the OpenSky® Division as well as fewer average open cards during the period.
9



Financial Condition
Total assets at June 30, 2023 were $2.2 billion, a decrease of $17.4 million, or 0.8%, from the balance at March 31, 2023 and an increase of $73.0 million, or 3.4%, from the balance at June 30, 2022. Net portfolio loans, which exclude mortgage loans held for sale and SBA-PPP loans, totaled $1.8 billion at June 30, 2023, an increase of $50.9 million, up 2.9% or 11.4% annualized, compared to March 31, 2023, and an increase of $229.4 million, or 14.3%, compared to $1.6 billion at June 30, 2022.
The Company recorded a provision for credit losses of $4.5 million during the six months ended June 30, 2023, which increased the allowance for credit losses to $27.5 million, or 1.5% of total loans at June 30, 2023, representing an increase of $1.3 million or 4.9%, from the balance at March 31, 2023. Nonperforming assets, which were comprised solely of nonperforming loans as of June 30, 2023, were $15.7 million, or 0.71% of total assets, down from $16.3 million, or 0.73% of total assets at March 31, 2023 and up from $7.3 million, or 0.34% of total assets at June 30, 2022.
Deposits were $1.9 billion at June 30, 2023, a slight decrease of $10.0 million, or 0.5%, from the balance at March 31, 2023 and an increase of $45.4 million, or 2.4%, from the balance at June 30, 2022. Average deposits of $1.9 billion for the three months ended June 30, 2023, increased $110.4 million, or 6.2%, as compared to the three months ended March 31, 2023. Rising interest rates have resulted in some customers moving balances from noninterest-bearing deposit accounts to interest-bearing deposit accounts. As a result of the migration, average noninterest-bearing deposit balances decreased $131.2 million to $676.4 million for the three months ended June 30, 2023, as compared to the three months ended June 30, 2022. These deposits represented 35.8% of total deposits at June 30, 2023 compared to 44.6% at June 30, 2022. Uninsured deposits were approximately $860.4 million as of June 30, 2023, representing 44.5% of the Company's deposit portfolio, compared to $888.9 million, or 45.7%, at March 31, 2023, and $915.0 million, or 48.4%, at June 30, 2022.
Stockholders’ equity increased to $237.4 million as of June 30, 2023, compared to $234.5 million at March 31, 2023 and $207.3 million at June 30, 2022. Shares repurchased and retired through June 30, 2023 as part of the Company's stock repurchase program totaled 285,344 shares at an average price of $17.65, for a total cost of $5.0 million including commissions. As of June 30, 2023, the Bank's capital ratios continued to exceed the regulatory requirements for a “well-capitalized” institution.


10



Consolidated Statements of Income (Unaudited)
Three Months EndedSix Months Ended
(in thousands)June 30, 2023March 31, 2023December 31, 2022September 30, 2022June 30, 2022June 30, 2023June 30, 2022
Interest income
Loans, including fees$42,991 $41,275 $38,763 $36,451 $35,304 $84,266 $69,193 
Investment securities available for sale1,266 1,377 1,402 1,362 779 2,643 1,149 
Federal funds sold and other823 764 1,183 527 473 1,587 615 
Total interest income45,080 43,416 41,348 38,340 36,556 88,496 70,957 
Interest expense
Deposits9,409 7,754 4,377 1,386 964 17,163 1,847 
Borrowed funds331 1,175 1,772 277 192 1,506 379 
Total interest expense9,740 8,929 6,149 1,663 1,156 18,669 2,226 
Net interest income35,340 34,487 35,199 36,677 35,400 69,827 68,731 
Provision for credit losses2,862 1,660 2,384 1,260 2,035 4,522 2,987 
Net interest income after provision for credit losses32,478 32,827 32,815 35,417 33,365 65,305 65,744 
Noninterest income
Service charges on deposits245 229 222 199 183 474 346 
Credit card fees4,706 4,210 4,314 5,524 6,210 8,916 12,134 
Mortgage banking revenue1,332 1,155 554 969 1,528 2,487 3,318 
Other income404 432 471 416 441 836 852 
Total noninterest income6,687 6,026 5,561 7,108 8,362 12,713 16,650 
Noninterest expenses
Salaries and employee benefits12,143 12,554 11,769 10,747 10,071 24,697 20,381 
Occupancy and equipment1,536 1,213 1,388 1,138 1,313 2,749 2,339 
Professional fees2,608 2,374 2,426 3,848 2,417 4,982 4,738 
Data processing6,559 6,530 6,697 7,178 7,266 13,089 15,542 
Advertising2,646 517 726 1,632 2,223 3,163 3,862 
Loan processing660 349 350 625 335 1,009 727 
Foreclosed real estate expenses, net — — — 6 — 
Other operating3,440 2,660 3,378 2,926 3,505 6,100 6,643 
Total noninterest expenses29,592 26,203 26,734 28,094 27,130 55,795 54,232 
Income before income taxes9,573 12,650 11,642 14,431 14,597 22,223 28,162 
Income tax expense2,255 2,915 2,651 3,336 3,089 5,170 6,443 
Net income$7,318 $9,735 $8,991 $11,095 $11,508 $17,053 $21,719 

11



Consolidated Balance Sheets
(unaudited)(unaudited)(audited)(unaudited)(unaudited)
(in thousands except share data)June 30, 2023March 31, 2023December 31, 2022September 30, 2022June 30, 2022
Assets
Cash and due from banks$18,619 $14,477 $19,963 $14,774 $14,776 
Interest-bearing deposits at other financial institutions100,343 125,448 39,764 20,867 234,823 
Federal funds sold376 462 20,688 1,421 1,285 
Total cash and cash equivalents119,338 140,387 80,415 37,062 250,884 
Investment securities available for sale208,464 255,762 252,481 269,620 226,509 
Marketable equity securities — — 232 245 
Restricted investments3,803 4,215 7,362 3,627 3,615 
Loans held for sale10,146 9,620 7,416 6,875 11,708 
U.S. Small Business Administration (“SBA”) Payroll Protection Program (“PPP”) loans receivable, net of fees and costs1,090 2,037 2,163 2,662 15,864 
Portfolio loans receivable, net of deferred fees and costs1,837,041 1,786,109 1,728,592 1,648,001 1,607,677 
   Less allowance for credit losses(27,495)(26,216)(26,385)(26,091)(26,419)
Total portfolio loans held for investment, net1,809,546 1,759,893 1,702,207 1,621,910 1,581,258 
Premises and equipment, net5,494 5,367 3,386 3,212 3,315 
Accrued interest receivable10,155 9,985 9,489 7,890 7,276 
Deferred tax asset13,616 12,898 13,777 14,047 12,929 
Bank owned life insurance37,041 36,781 36,524 36,267 36,011 
Other assets9,173 8,341 8,435 5,954 5,232 
Total assets$2,227,866 $2,245,286 $2,123,655 $2,009,358 $2,154,846 
Liabilities
Deposits
Noninterest-bearing$693,129 $705,801 $674,313 $806,033 $842,363 
Interest-bearing1,241,232 1,238,573 1,083,759 931,558 1,046,557 
Total deposits1,934,361 1,944,374 1,758,072 1,737,591 1,888,920 
Federal Home Loan Bank advances22,000 32,000 107,000 22,000 22,000 
Other borrowed funds12,062 12,062 12,062 12,062 12,062 
Accrued interest payable3,029 1,977 1,031 481 300 
Other liabilities18,979 20,356 21,475 23,219 24,248 
Total liabilities1,990,431 2,010,769 1,899,640 1,795,353 1,947,530 
Stockholders' equity
Common stock140 141 141 140 140 
Additional paid-in capital55,856 57,277 58,190 56,532 55,762 
Retained earnings197,490 191,058 182,435 174,916 164,750 
Accumulated other comprehensive loss(16,051)(13,959)(16,751)(17,583)(13,336)
Total stockholders' equity237,435 234,517 224,015 214,005 207,316 
Total liabilities and stockholders' equity$2,227,866 $2,245,286 $2,123,655 $2,009,358 $2,154,846 
12



The following tables show the average outstanding balance of each principal category of our assets, liabilities and stockholders’ equity, together with the average yields on our assets and the average costs of our liabilities for the periods indicated. Such yields and costs are calculated by dividing the annualized income or expense by the average daily balances of the corresponding assets or liabilities for the same period.
Three Months Ended June 30, 2023Three Months Ended March 31, 2023Three Months Ended June 30, 2022
Average
Outstanding
Balance
Interest Income/
Expense
Average
Yield/
Rate
(1)
Average
Outstanding
Balance
Interest Income/
Expense
Average
Yield/
Rate
(1)
Average
Outstanding
Balance
Interest Income/
Expense
Average
Yield/
Rate
(1)
(in thousands)
Assets
Interest earning assets:
Interest-bearing deposits$66,401 $733 4.43 %$62,566 $615 3.99 %$218,251 $429 0.79 %
Federal funds sold1,638 20 4.90 2,054 18 3.62 1,655 0.48 
Investment securities available for sale255,057 1,266 1.99 274,685 1,377 2.03 215,172 779 1.45 
Restricted investments4,185 71 6.80 7,346 130 7.17 3,854 42 4.37 
Loans held for sale 7,047 111 6.32 4,695 77 6.65 11,447 134 4.70 
SBA-PPP loans receivable1,808 7 1.55 2,099 1.50 28,870 1,120 15.56 
Portfolio loans receivable(2)
1,800,800 42,872 9.55 1,750,539 41,191 9.54 1,532,671 34,050 8.91 
Total interest earning assets2,136,936 45,080 8.46 2,103,984 43,416 8.37 2,011,920 36,556 7.29 
Noninterest earning assets47,415 40,265 56,298 
Total assets
$2,184,351 $2,144,249 $2,068,218 
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts$207,264 67 0.13 $186,184 70 0.15 $259,192 38 0.06 
Savings5,822 2 0.14 6,502 0.05 9,913 0.04 
Money market accounts625,515 5,411 3.47 604,864 4,587 3.08 566,303 396 0.28 
Time deposits366,421 3,929 4.30 319,449 3,096 3.93 160,279 529 1.32 
Borrowed funds43,183 331 3.07 118,379 1,175 4.02 34,062 192 2.27 
Total interest-bearing liabilities1,248,205 9,740 3.13 1,235,378 8,929 2.93 1,029,749 1,156 0.45 
Noninterest-bearing liabilities:
Noninterest-bearing liabilities21,104 22,355 22,647 
Noninterest-bearing deposits676,358 654,025 807,558 
Stockholders’ equity
238,684 232,491 208,264 
Total liabilities and stockholders’ equity$2,184,351 $2,144,249 $2,068,218 
Net interest spread5.33 %5.44 %6.84 %
Net interest income$35,340 $34,487 $35,400 
Net interest margin(3)
6.63 %6.65 %7.06 %
_______________
(1)Annualized.
(2)Includes nonaccrual loans.
(3)For the three months ended June 30, 2023, March 31, 2023, and June 30, 2022, collectively, SBA-PPP loans and credit card loans accounted for 257, 283 and 320 basis points of the reported net interest margin, respectively.

13



Six Months Ended June 30,
20232022
Average
Outstanding
Balance
Interest Income/
Expense
Average
Yield/
Rate
(1)
Average
Outstanding
Balance
Interest Income/
Expense
Average
Yield/
Rate
(1)
(in thousands)
Assets
Interest earning assets:
Interest-bearing deposits$64,494 $1,348 4.21 %$208,043 $530 0.51 %
Federal funds sold1,845 38 4.15 3,148 0.13 
Investment securities available for sale264,817 2,643 2.01 197,965 1,149 1.17 
Restricted investments5,757 201 7.04 3,810 83 4.39 
Loans held for sale 5,878 188 6.45 12,467 245 3.96 
SBA-PPP loans receivable1,953 15 1.55 55,917 3,186 11.49 
Portfolio loans receivable(2)
1,775,809 84,063 9.55 1,519,857 65,762 8.73 
Total interest earning assets2,120,553 88,496 8.42 2,001,207 70,957 7.15 
Noninterest earning assets43,858 61,533 
Total assets
$2,164,411 $2,062,740 
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts$196,782 137 0.14 $276,490 74 0.05 
Savings6,160 3 0.10 9,098 0.07 
Money market accounts615,247 9,998 3.28 552,858 697 0.25 
Time deposits343,065 7,025 4.13 165,485 1,073 1.31 
Borrowed funds80,573 1,506 3.77 34,062 379 2.24 
Total interest-bearing liabilities1,241,827 18,669 3.03 1,037,993 2,226 0.43 
Noninterest-bearing liabilities:
Noninterest-bearing liabilities21,726 23,397 
Noninterest-bearing deposits665,253 795,221 
Stockholders’ equity
235,605 206,129 
Total liabilities and stockholders’ equity$2,164,411 $2,062,740 
Net interest spread5.39 %6.72 %
Net interest income$69,827 $68,731 
Net interest margin(3)
6.64 %6.93 %
(1)Annualized.
(2)Includes nonaccrual loans.
(3)For the six months ended June 30, 2023 and 2022, collectively, SBA-PPP loans and credit card loans accounted for 270 and 309 basis points of the reported net interest margin, respectively.



14



The Company’s reportable segments represent business units with discrete financial information whose results are regularly reviewed by management. The four segments include Commercial Banking, Capital Bank Home Loans (the Company’s mortgage loan division), OpenSky® (the Company’s credit card division) and the Corporate Office. The following schedule presents financial information for each reportable segment for the three and six months ended June 30, 2023 and June 30, 2022.

Segments
For the three months ended June 30, 2023
(in thousands)Commercial BankCBHL
OpenSky®
Corporate(2)
EliminationsConsolidated
Interest income$28,742 $111 $15,168 $1,134 $(75)$45,080 
Interest expense9,537 42  236 (75)9,740 
Net interest income19,205 69 15,168 898  35,340 
Provision for credit losses735  2,127   2,862 
Net interest income after provision18,470 69 13,041 898  32,478 
Noninterest income810 1,161 4,714 2  6,687 
Noninterest expense(1)
15,918 1,481 12,059 134  29,592 
Net income (loss) before taxes$3,362 $(251)$5,696 $766 $ $9,573 
Total assets$2,047,400 $10,605 $116,123 $260,309 $(206,571)$2,227,866 
For the three months ended March 31, 2023
(in thousands)Commercial BankCBHL
OpenSky®
Corporate(2)
EliminationsConsolidated
Interest income$26,300 $77 $16,130 $978 $(69)$43,416 
Interest expense8,739 30  229 (69)8,929 
Net interest income17,561 47 16,130 749  34,487 
Provision (release of provision) for credit losses(161) 1,821   1,660 
Net interest income after provision17,722 47 14,309 749  32,827 
Noninterest income489 1,327 4,210   6,026 
Noninterest expense(1)
14,980 1,581 9,450 192  26,203 
Net income (loss) before taxes$3,231 $(207)$9,069 $557 $ $12,650 
Total assets$2,074,634 $10,193 $106,761 $257,048 $(203,350)$2,245,286 
For the three months ended June 30, 2022
(in thousands)Commercial BankCBHL
OpenSky®
Corporate(2)
EliminationsConsolidated
Interest income$18,912 $134 $16,780 $758 $(28)$36,556 
Interest expense952 64  168 (28)1,156 
Net interest income17,960 70 16,780 590  35,400 
Provision for loan losses  2,035   2,035 
Net interest income after provision17,960 70 14,745 590  33,365 
Noninterest income526 1,626 6,210   8,362 
Noninterest expense(1)
12,859 2,217 11,940 114  27,130 
Net income (loss) before taxes$5,627 $(521)$9,015 $476 $ $14,597 
Total assets$1,958,893 $12,257 $137,180 $226,950 $(180,434)$2,154,846 
________________________
(1)     Noninterest expense includes $5.9 million, $5.9 million and $6.7 million in data processing expense in OpenSky’s® segment for the three months ended June 30, 2023 March 31, 2023, and June 30, 2022, respectively.
(2)    The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.


15



Segments
For the six months ended June 30, 2023
(in thousands)Commercial BankCBHL
OpenSky®
Corporate(2)
EliminationsConsolidated
Interest income$55,042 $188 $31,298 $2,112 $(144)$88,496 
Interest expense18,276 72  465 (144)18,669 
Net interest income36,766 116 31,298 1,647  69,827 
Provision for credit losses574  3,948   4,522 
Net interest income after provision36,192 116 27,350 1,647  65,305 
Noninterest income1,299 2,488 8,924 2  12,713 
Noninterest expense(1)
30,898 3,062 21,509 326  55,795 
Net income (loss) before taxes$6,593 $(458)$14,765 $1,323 $ $22,223 
Total assets$2,047,400 $10,605 $116,123 $260,309 $(206,571)$2,227,866 
For the six months ended June 30, 2022
(in thousands)Commercial BankCBHL
OpenSky®
Corporate(2)
EliminationsConsolidated
Interest income$37,412 $245 $31,720 $1,645 $(65)$70,957 
Interest expense1,805 145  341 (65)2,226 
Net interest income35,607 100 31,720 1,304  68,731 
Provision for loan losses  2,987   2,987 
Net interest income after provision35,607 100 28,733 1,304  65,744 
Noninterest income1,083 3,433 12,134   16,650 
Noninterest expense(1)
24,922 4,316 24,822 172  54,232 
Net income (loss) before taxes$11,768 $(783)$16,045 $1,132 $ $28,162 
Total assets$1,958,893 $12,257 $137,180 $226,950 $(180,434)$2,154,846 
(1)     Noninterest expense includes $11.9 million and $14.3 million in data processing expense in OpenSky’s® segment for the six months ended June 30, 2023 and 2022, respectively.
(2)    The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.








16


HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited
Quarter Ended
(in thousands except per share data)June 30, 2023March 31, 2023December 31, 2022September 30,
2022
June 30,
2022
Earnings:
Net income$7,318 $9,735 $8,991 $11,095 $11,508 
Earnings per common share, diluted0.52 0.68 0.62 0.77 0.80 
Net interest margin6.63 %6.65 %6.64 %7.24 %7.06 %
Net interest margin, excluding credit cards & SBA-PPP loans (1)
4.06 %3.81 %3.91 %4.16 %3.86 %
Return on average assets(2)
1.34 %1.84 %1.67 %2.15 %2.23 %
Return on average assets, excluding impact of SBA-PPP loans (1)(2)
1.34 %1.84 %1.67 %2.10 %2.04 %
Return on average equity(2)
12.30 %16.98 %16.18 %20.32 %22.16 %
Efficiency ratio70.41 %64.68 %65.59 %64.16 %62.00 %
Balance Sheet:
Total portfolio loans receivable, net deferred fees$1,837,041 $1,786,109 $1,728,592 $1,648,001 $1,607,677 
Total deposits1,934,361 1,944,374 1,758,072 1,737,591 1,888,920 
Total assets2,227,866 2,245,286 2,123,655 2,009,358 2,154,846 
Total stockholders' equity237,435 234,517 224,015 214,005 207,316 
Asset Quality Ratios:
Nonperforming assets to total assets0.71 %0.73 %0.46 %0.43 %0.34 %
Nonperforming assets to total assets, excluding the SBA-PPP loans (1)
0.71 %0.73 %0.46 %0.43 %0.34 %
Nonperforming loans to total loans0.85 %0.91 %0.56 %0.52 %0.45 %
Nonperforming loans to portfolio loans (1)
0.86 %0.91 %0.56 %0.52 %0.46 %
Net charge-offs to average portfolio loans (1)(2)
0.35 %0.61 %0.49 %0.39 %0.23 %
Allowance for credit losses to total loans1.50 %1.47 %1.52 %1.58 %1.64 %
Allowance for credit losses to portfolio loans (1)
1.50 %1.47 %1.53 %1.58 %1.64 %
Allowance for credit losses to non-performing loans175.03 %160.91 %270.46 %303.76 %360.06 %
Bank Capital Ratios:
Total risk based capital ratio14.08 %14.09 %14.21 %14.65 %14.34 %
Tier 1 risk based capital ratio12.82 %12.84 %12.95 %13.39 %13.09 %
Leverage ratio9.77 %9.78 %9.47 %9.60 %9.11 %
Common equity Tier 1 capital ratio12.82 %12.84 %12.95 %13.39 %13.09 %
Tangible common equity8.93 %8.79 %8.85 %9.00 %8.17 %
Holding Company Capital Ratios:
Total risk based capital ratio16.81 %16.75 %16.33 %17.41 %17.66 %
Tier 1 risk based capital ratio14.96 %14.90 %15.13 %15.49 %15.70 %
Leverage ratio11.50 %11.47 %11.24 %11.31 %10.93 %
Common equity Tier 1 capital ratio14.96 %14.90 %15.00 %15.36 %15.55 %
Tangible common equity10.66 %10.44 %10.55 %10.65 %9.62 %
17


HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited
Quarter Ended
(in thousands except per share data)June 30, 2023March 31, 2023December 31, 2022September 30,
2022
June 30,
2022
Composition of Loans:
SBA-PPP loans, net$1,090 $2,037 $2,163 $2,662 $15,864 
Commercial real estate674,141 660,218 664,551 626,030 608,646 
Residential real estate$555,133 $545,899 $484,735 $466,849 $430,244 
Construction real estate258,400 251,494 238,099 235,045 241,249 
Commercial and industrial233,598 221,258 220,221 192,207 193,262 
Credit card, net of reserve(3)
122,925 112,860 128,434 136,658 142,166 
Other consumer loans1,187 1,578 1,179 1,055 856 
Portfolio loans receivable$1,845,384 $1,793,307 $1,737,219 $1,657,844 $1,616,423 
Deferred origination fees, net(8,343)(7,198)(8,627)(9,843)(8,746)
Portfolio loans receivable, net$1,837,041 $1,786,109 $1,728,592 $1,648,001 $1,607,677 
Composition of Deposits:
Noninterest-bearing$693,129 $705,801 $674,313 $806,033 $842,363 
Interest-bearing demand243,095 219,685 207,836 252,135 305,377 
Savings5,816 5,835 7,530 8,861 10,078 
Money markets631,148 632,087 574,978 518,184 570,298 
Brokered time deposits128,665 181,820 131,819 — — 
Other time deposits232,508 199,146 161,596 152,378 160,804 
Total deposits$1,934,361 $1,944,374 $1,758,072 $1,737,591 $1,888,920