cbnk-20240422
April 22, 2024false000141953600014195362024-04-222024-04-22



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): April 22, 2024

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 April 22, 2024, Capital Bancorp, Inc. (the “Company”) issued a press release announcing the Company’s unaudited financial results for the three months ended March 31, 2024. 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 April 19, 2024, the Company's Board of Directors declared a $0.08 per share dividend, payable on May 22, 2024 to stockholders of record on May 6, 2024.

Item 9.01. Financial Statements and Exhibits
(d) Exhibits
99.1
104Cover 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.                             
 
 
Date: April 22, 2024
By: /s/ Jay Walker
Name: Jay Walker
Title: Chief Financial Officer





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Capital Bancorp, Inc. Reports First Quarter 2024 Results
Net Income of $6.6 million, or $0.47 per share. Net Income, as adjusted(1) of $7.1 million, or $0.51 per share
ROAA of 1.15% and ROAE of 10.19% for 1Q 2024
Adjusted Metrics(1) excluding Merger-Related Expenses:
ROAA of 1.24% and ROAE of 11.03% for 1Q 2024
Loan Growth of $61.2 million, or 12.9% annualized for 1Q 2024
Deposit Growth of $109.7 million; Noninterest bearing deposits increased $48.4 million, or 7.8% from 4Q 2023
Cash dividend of $0.08 per share declared
Rockville, Maryland, April 22, 2024 (GLOBE NEWSWIRE) – Capital Bancorp, Inc. (the "Company") (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $6.6 million, or $0.47 per diluted share, for the first quarter 2024, compared to net income of $9.0 million, or $0.65 per diluted share, for the fourth quarter 2023, and $9.7 million, or $0.68 per diluted share, for the first quarter 2023. Net income, as adjusted(1) to exclude the impact of merger-related expenses was $7.1 million, or $0.51 per diluted share for the first quarter 2024.

The Company also declared a cash dividend on its common stock of $0.08 per share. The dividend is payable on May 22, 2024 to shareholders of record on May 6, 2024.

“We had another strong quarter of performance with robust strong loan and deposit growth, increasing credit card accounts and continued credit stability,” said Ed Barry, Chief Executive Officer of the Company and the Bank. “The announced acquisition of Integrated Financial Holdings, Inc. ("IFHI") diversifies our business while prudently deploying capital. IFHI's expertise in niche C&I lending complements our strategy and extends our capabilities. At the same time, CBNK continues to make the investments in people and technology that will enable us to elevate our franchise while maintaining a strong growth and profitability profile.”

"Notwithstanding the significant headwinds currently facing many community and regional banks, we continue to be well positioned for continued value creation,” said Steven J Schwartz, Chairman of the Company. “Our net cardholder growth for the quarter plus strong loan and deposit growth and a resilient core net interest margin are all positive signs for the future. Moreover, we anticipate that the acquisition of Integrated Financial Holdings, Inc., if approved by the regulators, will set us on a path of additional strategic acquisitions that, together with organic growth, will assure we can continue to deliver top tier performance. The Board reiterates its thanks and appreciation to our extremely hard working and dedicated employees.”

(1) Reconciliations of the non–U.S. generally accepted accounting principles ("GAAP") measures are set forth in the Appendix at the end of this press release.
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Pending Acquisition of Integrated Financial Holdings, Inc.
On March 28, 2024, the Company and Integrated Financial Holdings, Inc. (“IFHI”) issued a joint press release announcing the execution of an Agreement and Plan of Merger and Reorganization, dated as of March 27, 2024, by and between the Company and IFHI, pursuant to which, upon the terms and subject to the conditions set forth therein, the Company and IFHI will merge, with the Company continuing as the surviving entity.
The Company incurred pre-tax merger-related expenses related to the IFHI transaction of $0.7 million for the first quarter 2024. The merger is expected to close in the fourth quarter 2024 subject to regulatory approval.
The following table provides a reconciliation of the Company's net income under GAAP to non-GAAP results excluding merger-related expenses.
First Quarter 2024
(in thousands except per share data)Income Before Income TaxesIncome Tax ExpenseNet IncomeDiluted Earnings per Share
GAAP Earnings$8,624 $2,062 $6,562 $0.47 
Add: Merger-Related Expenses712 174 538 
Non-GAAP Earnings$9,336 $2,236 $7,100 $0.51 
Note: The tax benefit associated with merger-related expenses has been adjusted to reflect the estimated nondeductible portion of the expenses.
First Quarter 2024 Highlights
Capital Bancorp, Inc.
Earnings Summary - Net income of $6.6 million, or $0.47 per diluted share, decreased $2.5 million compared to $9.0 million, or $0.65 per diluted share, for the fourth quarter 2023. Net income, as adjusted(1), was $7.1 million, or $0.51 per diluted share for the first quarter 2024.
Net interest income of $35.0 million increased $0.1 million compared to $34.9 million for the fourth quarter 2023. Interest income of $48.4 million increased $1.4 million compared to $47.0 million for the fourth quarter 2023 as interest income from portfolio loans increased $0.9 million and interest income from interest-bearing deposits held at other financial institutions increased $0.4 million. Interest expense of $13.4 million increased $1.3 million compared to $12.1 million for the fourth quarter 2023 as interest expense from time deposits increased $1.1 million and the average rate of time deposits increased 27 basis points to 4.99% as growth in average time deposits totaled $69.2 million for the first quarter 2024.
The provision for credit losses was $2.7 million, a decrease of $0.1 million from the fourth quarter 2023. Net charge-offs totaled $2.0 million in the first quarter first including $1.7 million from credit card related loans and $0.3 million from commercial loans. Net charge-offs totaled $2.5 million in the fourth quarter 2023 including $1.9 million from credit card related loans and $0.6 million from commercial loans. A charge-off of $0.7 million was recorded in the fourth quarter 2023 on a single multi-unit residential real estate loan.
Noninterest income of $6.0 million increased $0.1 million compared to $5.9 million for the fourth quarter 2023. Mortgage banking revenue increased $0.3 million primarily due to increased mortgage loans sold while credit card fees decreased $0.1 million and other income decreased $0.1 million.
Noninterest expense of $29.5 million increased $2.6 million compared to $26.9 million for the fourth quarter 2023. Within this category, significant variances included the following:
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Salaries and employee benefits of $12.9 million increased $1.3 million due to an increase in incentive based compensation expense of $1.0 million, annual merit-based increases of $0.3 million and a seasonal increase in payroll taxes of $0.3 million partially offset by an increase in deferred salary expense (a reduction in expense) of $0.3 million. In the fourth quarter 2023 the Company adjusted annual performance based incentive compensation.
Merger-related expenses of $0.7 million in the first quarter 2024 were related to professional fees including legal fees, third party consulting fees and other outside service provider expenses, with no comparable expense in the fourth quarter 2023.
Data processing expense of $6.8 million increased $0.6 million as the fourth quarter 2023 had lower expense primarily from processor rebates.
Advertising expense of $2.0 million increased $0.6 million related primarily to seasonal increases in OpenSkyTM card acquisition strategies.
Loan processing expense of $0.4 million increased $0.2 million in line with the growth in the loan portfolio.
Other operating expenses of $3.1 million decreased $0.9 million as operational losses were higher in the fourth quarter 2023.
Income tax expense of $2.1 million, or 23.9% of pre-tax income for the first quarter 2024, decreased $0.1 million from $2.2 million, or 19.5% of pre-tax income for the fourth quarter 2023, reflective of a decrease in pre-tax income of $2.6 million. The lower effective tax rate for the fourth quarter 2023 was primarily driven by the tax benefit recognized on the exercise of non-qualified stock options. There was no comparable activity in the first quarter 2024.
Performance and Efficiency Ratios – Annualized return on average assets ("ROAA") and annualized return on average equity ("ROAE") were 1.15% and 10.19%, respectively, for the three months ended March 31, 2024, compared to 1.63% and 14.44%, respectively, for the three months ended December 31, 2023.
Annualized ROAA and annualized ROAE, as adjusted(1) to exclude the impact of merger-related expenses, were 1.24% and 11.03%, respectively, for the three months ended March 31, 2024.
The efficiency ratio was 71.95% for the three months ended March 31, 2024, compared to 65.91% for the three months ended December 31, 2023. The efficiency ratio, as adjusted(1) to exclude the impact of merger-related expenses, was 70.22% for the three months ended March 31, 2024.

3



Balance Sheet – Total assets of $2.3 billion at March 31, 2024 increased $98.1 million, or 4.4%, from December 31, 2023.
Cash and cash equivalents of $85.2 million at March 31, 2024 increased $31.2 million, or 57.9%, from December 31, 2023, as total deposits increased $109.7 million, partially offset by an increase in total portfolio loans of $61.2 million and a decrease in other borrowed funds of $15.0 million.
Total portfolio loans of $2.0 billion at March 31, 2024 increased $61.2 million, representing 12.9% annualized growth from December 31, 2023. Growth in the loan portfolio included $46.7 million within the commercial real estate loan category. Total average loans increased $64.1 million quarter over quarter.
Total deposits of $2.0 billion at March 31, 2024 increased $109.7 million, or 5.8%, from December 31, 2023, while total average deposits increased $72.5 million quarter over quarter. The increase in deposits, when comparing March 31, 2024 to December 31, 2023, includes $48.4 million of noninterest-bearing deposits. Average portfolio loans-to-deposit ratio of 98.4% for the three months ended March 31, 2024 decreased from 98.8% for the three months ended December 31, 2023.
The investment securities portfolio continues to be classified as available for sale and had a fair market value of $202.3 million, or 8.7% of total assets, at March 31, 2024 down from $208.3 million at December 31, 2023. The amortized cost of the investment securities portfolio was $218.4 million, with an effective duration of 3.14 years. U.S. Treasury securities represented 64.2% of the overall investment portfolio at March 31, 2024. The accumulated other comprehensive loss on the investment securities portfolio increased $0.5 million during the quarter to $13.6 million as of March 31, 2024, which represents 5.3% of total stockholders' equity. The Company does not have a held to maturity ("HTM") investment securities portfolio.
Net Interest Margin - Net interest margin decreased to 6.24% for the three months ended March 31, 2024, compared to 6.40% for the three months ended December 31, 2023. Adjusted net interest margin(1) (excluding credit card loans) decreased to 3.85% compared to 3.92% for the three months ended December 31, 2023.
The average yield on interest earning assets of 8.63% increased 1 basis point compared to the fourth quarter 2023. The yield on portfolio loans, as adjusted(1) (excluding credit card loans) of 6.96% for the first quarter 2024 increased 7 basis points from 6.89% for the fourth quarter 2023. New portfolio loans (excluding credit card loans) originated in the first quarter 2024 totaled $122.7 million with a weighted average yield of 8.24% as compared to $91.1 million with a weighted average yield of 8.46% in the fourth quarter 2023.
The average rate on interest-bearing liabilities increased 22 basis points compared to the fourth quarter 2023. The average rate for time deposits increased 27 basis points to 4.99% and average balances increased $69.2 million, compared to the fourth quarter 2023. Further, the average rate on money market accounts increased 5 basis points to 4.21% and the average rate on interest-bearing demand accounts increased 6 basis points to 0.24%.
4



Deposits - Total deposits at March 31, 2024 increased by $109.7 million, or 5.8%, compared to December 31, 2023.
Noninterest-bearing deposits of $665.8 million increased $48.4 million, or 7.8%, compared to December 31, 2023, primarily due to increases in title account balances. Interest-bearing deposits of $1.3 billion increased $61.3 million, or 4.8%, compared to December 31, 2023 including an increase in money market accounts of $15.3 million and other time deposits of $33.7 million partially offset by a reduction in interest-bearing demand accounts of $5.3 million and savings of $0.7 million. Brokered time deposits totaled $160.6 million at March 31, 2024, an increase of $18.3 million from December 31, 2023.
Cost of Interest-Bearing Liabilities - The elevated interest rate environment, combined with an increase in time deposits, resulted in the average cost of interest-bearing liabilities increasing to 3.90% for the quarter ended March 31, 2024, compared to 3.68% for the fourth quarter 2023.
Average time deposits of $450.0 million increased $69.2 million, or 18.2%, compared to December 31, 2023.
Average noninterest-bearing deposits of $637.1 million increased $14.2 million, or 2.3%, compared to December 31, 2023, and represented 32.5% of total average deposits at March 31, 2024.
Average borrowed funds of $59.0 million increased $17.1 million, or 41.0%, compared to December 31, 2023.
Robust Capital Positions - As of March 31, 2024, the Company reported a common equity tier 1 capital ratio of 14.92%, compared to 15.43% at December 31, 2023, and an allowance for credit losses to total loans ratio of 1.49%, compared to an allowance for credit losses to total loans ratio of 1.50% at December 31, 2023. Shares repurchased and retired during the three months ended March 31, 2024, as part of the Company's stock repurchase program, totaled 67,869 shares at an average price of $20.62, for a total cost of $1.4 million including commissions. Tangible book value per common share(1) grew 2.0% to $18.68 at March 31, 2024 when compared to December 31, 2023. The Company did not have goodwill or other intangible assets during any of the periods presented and therefore, tangible book value per share(1) is equal to book value per share.
Liquidity - Total sources of available borrowings at March 31, 2024 totaled $743.9 million, including available collateralized lines of credit of $465.6 million, unsecured lines of credit with other banks of $76.0 million and unpledged investment securities available as collateral for potential additional borrowings of $202.3 million.

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Commercial Bank
Continued Portfolio Loan Growth - Portfolio loans, excluding credit cards, increased by $71.2 million, to $1.9 billion, gross, at March 31, 2024 compared to December 31, 2023.
Net Interest Income - Interest income of $32.5 million increased $1.5 million compared to $31.0 million for the fourth quarter 2024, driven primarily by loan growth. Interest expense of $13.2 million increased $1.3 million, driven by an increase in average balances and average cost of interest-bearing liabilities in the first quarter 2024.
Credit Metrics - Nonperforming assets decreased 10 basis points to 0.62% of total assets at March 31, 2024 compared to 0.72% at December 31, 2023 as a result of a decrease in nonaccrual loans at March 31, 2024 to $14.4 million compared to $16.0 million at December 31, 2023. The near complete resolution of a single nonperforming asset from $7.6 million to $0.6 million was offset by a $5.4 million increase in nonperforming assets comprised of $2.4 million of residential real estate secured loans and $3.0 million of non owner-occupied commercial real estate loans to various borrowers that the Company is proactively managing toward resolution.
At March 31, 2024 commercial real estate loans with office space exposure totaled $55.0 million, or 2.8% of total portfolio loans, with a weighted average loan-to-value ("LTV") of 48.1%. Included in the total are owner-occupied commercial real estate loans with office exposure totaling $43.2 million with a weighted average LTV of 47.0% and non owner-occupied commercial real estate loans with office exposure totaling $11.8 million with a weighted average LTV of 52.9%. At March 31, 2024 multi-family loans totaled $153.4 million, or 7.8% of total portfolio loans, with a weighted average LTV of 47.3%.
OpenSky
Revenues - Total revenue of $18.8 million decreased $0.2 million from the fourth quarter 2023. Interest income of $14.9 million decreased $0.1 million from the fourth quarter 2023. Average OpenSky loan balances, net of reserves and deferred fees of $110.5 million for the first quarter 2024, decreased $4.1 million, or 3.6%, compared to $114.6 million for the fourth quarter 2023. Noninterest income of $3.9 million decreased $0.1 million from the fourth quarter 2023.
Noninterest Expense - Total noninterest expense of $13.6 million increased $0.9 million from the fourth quarter 2023. Data processing expense was lower in the fourth quarter 2023, attributable primarily to processor rebates. During the first quarter 2024, the number of OpenSkycredit card accounts increased by 1,636 to 526,950.
Loan and Deposit Balances - OpenSkyloan balances, net of reserves, of $111.9 million at March 31, 2024 decreased by $11.4 million, or 9.3%, compared to $123.3 million at December 31, 2023. Corresponding deposit balances of $171.8 million at March 31, 2024 decreased $2.1 million, or 1.2%, compared to $173.9 million at December 31, 2023. Gross unsecured loan balances of $28.5 million at March 31, 2024 decreased $2.3 million, or 7.5%, compared to $30.8 million at December 31, 2023.
OpenSkyCredit - Card delinquencies remained stable in the first quarter 2024 when compared to the fourth quarter 2023. The provision for credit losses decreased $0.6 million compared to the fourth quarter 2023 as card balances, net of reserves, decreased $11.4 million during the first quarter 2024 as compared to an increase of $0.8 million during the fourth quarter 2023.
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COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited
Quarter Ended1Q24 vs 4Q231Q24 vs 1Q23
(in thousands except per share data)March 31, 2024December 31, 2023March 31, 2023$ Change% Change$ Change% Change
Earnings Summary
Interest income$48,369 $46,969 $43,416 $1,400 3.0 %$4,953 11.4 %
Interest expense13,361 12,080 8,929 1,281 10.6 %4,432 49.6 %
Net interest income35,008 34,889 34,487 119 0.3 %521 1.5 %
Provision for credit losses2,727 2,808 1,660 (81)(2.9)%1,067 64.3 %
Provision for (release of) credit losses on unfunded commitments142 (106)(19)248 (234.0)%161 (847.4)%
Noninterest income5,972 5,936 6,026 36 0.6 %(54)(0.9)%
Noninterest expense29,487 26,907 26,222 2,580 9.6 %3,265 12.5 %
Income before income taxes8,624 11,216 12,650 (2,592)(23.1)%(4,026)(31.8)%
Income tax expense2,062 2,186 2,915 (124)(5.7)%(853)(29.3)%
Net income$6,562 $9,030 $9,735 $(2,468)(27.3)%$(3,173)(32.6)%
Pre-tax pre-provision net revenue ("PPNR") (1)
$11,493 $13,918 $14,291 $(2,425)(17.4)%$(2,798)(19.6)%
PPNR, as adjusted(1)
$12,205 $13,918 $14,291 $(1,713)(12.3)%$(2,086)(14.6)%
Common Share Data
Earnings per share - Basic$0.47 $0.65 $0.69 $(0.18)(27.7)%$(0.22)(31.9)%
Earnings per share - Diluted$0.47 $0.65 $0.68 $(0.18)(27.7)%$(0.21)(30.9)%
Earnings per share - Diluted, as adjusted(1)
$0.51 $0.65 $0.68 $(0.14)(21.5)%$(0.17)(25.0)%
Weighted average common shares - Basic13,919 13,897 14,159 
Weighted average common shares - Diluted13,919 13,989 14,272 
Return Ratios
Return on average assets (annualized)1.15 %1.63 %1.84 %
Return on average assets, as adjusted (annualized)(1)
1.24 %1.63 %1.84 %
Return on average equity (annualized)10.19 %14.44 %16.98 %
Return on average equity, as adjusted (annualized)(1)
11.03 %14.44 %16.98 %
______________
(1) Refer to Appendix for reconciliation of non-GAAP measures.


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COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited (Continued)
Quarter EndedQuarter Ended
March 31,December 31,September 30,June 30,
(in thousands except per share data)20242023% Change202320232023
Balance Sheet Highlights
Assets$2,324,238 $2,245,286 3.5 %$2,226,176 $2,272,484 $2,227,866 
Investment securities available for sale202,254 255,762 (20.9)%208,329 206,055 208,464 
Mortgage loans held for sale10,303 9,620 7.1 %7,481 4,843 10,146 
Portfolio loans receivable (2)
1,964,525 1,788,146 9.9 %1,903,288 1,862,679 1,838,131 
Allowance for credit losses29,350 26,216 12.0 %28,610 28,279 27,495 
Deposits2,005,695 1,944,374 3.2 %1,895,996 1,967,988 1,934,361 
FHLB borrowings 22,000 32,000 (31.3)%22,000 22,000 22,000 
Other borrowed funds12,062 12,062 — %27,062 12,062 12,062 
Total stockholders' equity259,465 234,517 10.6 %254,860 242,878 237,435 
Tangible common equity (1)
259,465 234,517 10.6 %254,860 242,878 237,435 
Common shares outstanding13,890 14,083 (1.4)%13,923 13,893 13,981 
Book value per share$18.68 $16.65 12.2 %$18.31 $17.48 $16.98 
Tangible book value per share (1)
$18.68 $16.65 12.2 %$18.31 $17.48 $16.98 
Dividends per share
$0.08 $0.06 33.3 %$0.08 $0.08 $0.06 
______________
(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 March 31, 2024 and 2023
For the three months ended March 31, 2024, net interest income of $35.0 million increased slightly from $34.5 million in the same period in 2023. The net interest margin decreased 41 basis points to 6.24% for the three months ended March 31, 2024 from the same period in 2023 as interest income on credit card decreased $1.4 million. Net interest margin, excluding credit card loans, increased to 3.85% for the three months ended March 31, 2024, compared to 3.81% for the same period in 2023 as yields on interest-bearing deposits and portfolio loans generally kept pace with the rising costs of deposits, including money market accounts and time deposits.
For the three months ended March 31, 2024, average interest earning assets increased $150.7 million, or 7.2%, to $2.3 billion as compared to the same period in 2023, and the average yield on interest earning assets increased 26 basis points. Compared to the same period in the prior year, average interest-bearing liabilities increased $144.0 million, or 11.7%, and the average cost of interest-bearing liabilities increased to 3.90%, a 97 basis point increase from 2.93%.
For the three months ended March 31, 2024, the provision for credit losses was $2.7 million, an increase of $1.1 million from the same period in 2023, primarily driven by loan growth. Net charge-offs for the three months ended March 31, 2024 were $2.0 million, or 0.41% on an annualized basis of average portfolio loans, compared to $2.6 million, or 0.61% on an annualized basis of average loans for the same period in 2023. Of the $2.0 million in net charge-offs during the first quarter 2024, $1.2 million related to secured and partially secured cards in the credit card portfolio and $0.5 million related to unsecured cards.
For the three months ended March 31, 2024, noninterest income of $6.0 million decreased $0.1 million, or 0.9%, from the same period in 2023. Mortgage banking revenue of $1.5 million increased $0.3 million due to an increase in home loan sales. Credit card fees of $3.9 million decreased $0.3 million primarily related to lower interchange and other fee income.
Credit card loan balances, net of reserves, decreased by $1.0 million to $111.9 million as of March 31, 2024, from $112.9 million at March 31, 2023. The related deposit account balances decreased 7.1% to $171.8 million at March 31, 2024 when compared to $184.8 million at March 31, 2023, reflective of the reduction in the number of open secured card customer accounts year over year.
The efficiency ratio for the three months ended March 31, 2024 was 71.95% compared to 64.72% for the three months ended March 31, 2023.
For the three months ended March 31, 2024, noninterest expense of $29.5 million increased $3.3 million, or 12.5%, from $26.2 million for the same period in 2023. The change includes increases in advertising expense of $1.5 million, merger-related expenses of $0.7 million, other operating expense of $0.5 million, occupancy and equipment expenses of $0.4 million, salaries and employee benefits expenses of $0.4 million and data processing expense of $0.2 million, partially offset by a decrease professional fees of $0.4 million.

9



Financial Condition
Total assets at March 31, 2024 were $2.3 billion, an increase of $98.1 million, or 4.4%, from the balance at December 31, 2023 and an increase of $79.0 million, or 3.5%, from the balance at March 31, 2023.
Net portfolio loans, which exclude mortgage loans held for sale, totaled $2.0 billion at March 31, 2024, an increase of $61.2 million, up 3.2% or 12.9% annualized, compared to December 31, 2023, and an increase of $176.4 million, or 9.9%, compared to $1.8 billion at March 31, 2023.
The Company recorded a provision for credit losses of $2.7 million during the three months ended March 31, 2024, which increased the allowance for credit losses to $29.4 million, or 1.49% of total loans at March 31, 2024, representing an increase of $0.7 million over the balance at December 31, 2023.
Nonperforming assets, which were comprised solely of nonperforming loans as of March 31, 2024, were $14.4 million, or 0.62% of total assets, down from $16.0 million, or 0.72% of total assets at December 31, 2023, and down from $16.3 million, or 0.73% of total assets at March 31, 2023. The near complete resolution of a single nonperforming asset from $7.6 million to $0.6 million was offset by a $5.8 million increase in nonperforming assets comprised of $2.4 million of residential real estate secured loans and $3.0 million of non owner-occupied commercial real estate loans to various borrowers that the Company is proactively managing toward resolution.
Deposits were $2.0 billion at March 31, 2024, an increase of $109.7 million, or 5.8%, from the balance at December 31, 2023 and an increase of $61.3 million, or 3.2%, from the balance at March 31, 2023. Average deposits of $2.0 billion for the three months ended March 31, 2024 increased $72.5 million, or 3.8%, as compared to the three months ended December 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 $16.9 million to $637.1 million as of March 31, 2024, as compared to March 31, 2023.
Noninterest-bearing deposits represented 33.2% of total deposits at March 31, 2024 compared to 36.3% at March 31, 2023. Uninsured deposits were approximately $855.7 million as of March 31, 2024, representing 42.7% of the Company's deposit portfolio, compared to $789.4 million, or 41.6%, at December 31, 2023, and $888.9 million, or 45.7%, at March 31, 2023.
Stockholders’ equity increased to $259.5 million as of March 31, 2024, compared to $254.9 million at December 31, 2023 and $234.5 million at March 31, 2023. Shares repurchased and retired for the three months ended March 31, 2024 as part of the Company's stock repurchase program totaled 67,869 shares at an average price of $20.62, for a total cost of $1.4 million including commissions. As of March 31, 2024, the Bank's capital ratios continued to exceed the regulatory requirements for a “well-capitalized” institution.


10



Consolidated Statements of Income (Unaudited)
Three Months Ended
(in thousands)March 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Interest income
Loans, including fees$45,991 $45,109 $45,385 $42,991 $41,275 
Investment securities available for sale1,251 1,083 1,089 1,266 1,377 
Federal funds sold and other1,127 777 1,267 823 764 
Total interest income48,369 46,969 47,741 45,080 43,416 
Interest expense
Deposits12,833 11,759 10,703 9,409 7,754 
Borrowed funds528 321 228 331 1,175 
Total interest expense13,361 12,080 10,931 9,740 8,929 
Net interest income35,008 34,889 36,810 35,340 34,487 
Provision for credit losses2,727 2,808 2,280 2,862 1,660 
Provision for (release of) credit losses on unfunded commitments142 (106)24 — (19)
Net interest income after provision for credit losses32,139 32,187 34,506 32,478 32,846 
Noninterest income
Service charges on deposits207 240 250 245 229 
Credit card fees3,881 3,970 4,387 4,706 4,210 
Mortgage banking revenue1,453 1,166 1,243 1,332 1,155 
Other income431 560 446 404 432 
Total noninterest income5,972 5,936 6,326 6,687 6,026 
Noninterest expenses
Salaries and employee benefits12,907 11,638 12,419 12,143 12,554 
Occupancy and equipment1,613 1,573 1,351 1,536 1,213 
Professional fees1,947 1,930 2,358 2,608 2,374 
Data processing6,761 6,128 6,469 6,559 6,530 
Advertising2,032 1,433 1,565 2,646 517 
Loan processing371 198 426 660 349 
Foreclosed real estate expenses, net1 — — 
Merger-related expenses712 — — — — 
Other operating3,143 4,007 3,457 3,440 2,679 
Total noninterest expenses29,487 26,907 28,046 29,592 26,222 
Income before income taxes8,624 11,216 12,786 9,573 12,650 
Income tax expense2,062 2,186 2,998 2,255 2,915 
Net income$6,562 $9,030 $9,788 $7,318 $9,735 
11




Consolidated Balance Sheets
(unaudited)(audited)(unaudited)(unaudited)(unaudited)
(in thousands except share data)March 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Assets
Cash and due from banks$12,361 $14,513 $13,767 $18,619 $14,477 
Interest-bearing deposits at other financial institutions72,787 39,044 130,428 100,343 125,448 
Federal funds sold56 407 1,957 376 462 
Total cash and cash equivalents85,204 53,964 146,152 119,338 140,387 
Investment securities available for sale202,254 208,329 206,055 208,464 255,762 
Restricted investments4,441 4,353 4,340 3,803 4,215 
Loans held for sale10,303 7,481 4,843 10,146 9,620 
Portfolio loans receivable, net of deferred fees and costs1,964,525 1,903,288 1,862,679 1,838,131 1,788,146 
   Less allowance for credit losses(29,350)(28,610)(28,279)(27,495)(26,216)
Total portfolio loans held for investment, net1,935,175 1,874,678 1,834,400 1,810,636 1,761,930 
Premises and equipment, net4,500 5,069 5,297 5,494 5,367 
Accrued interest receivable12,258 11,494 11,231 10,155 9,985 
Deferred tax asset12,311 12,252 13,644 13,616 12,898 
Bank owned life insurance38,062 37,711 37,315 37,041 36,781 
Accounts receivable11,637 1,055 696 450 551 
Other assets8,093 9,790 8,511 8,723 7,790 
Total assets$2,324,238 $2,226,176 $2,272,484 $2,227,866 $2,245,286 
Liabilities
Deposits
Noninterest-bearing$665,812 $617,373 $680,803 $693,129 $705,801 
Interest-bearing1,339,883 1,278,623 1,287,185 1,241,232 1,238,573 
Total deposits2,005,695 1,895,996 1,967,988 1,934,361 1,944,374 
Federal Home Loan Bank advances22,000 22,000 22,000 22,000 32,000 
Other borrowed funds12,062 27,062 12,062 12,062 12,062 
Accrued interest payable6,009 5,583 5,204 3,029 1,977 
Other liabilities19,007 20,675 22,352 18,979 20,356 
Total liabilities2,064,773 1,971,316 2,029,606 1,990,431 2,010,769 
Stockholders' equity
Common stock139 139 139 140 141 
Additional paid-in capital54,229 54,473 54,549 55,856 57,277 
Retained earnings218,731 213,345 206,033 197,490 191,058 
Accumulated other comprehensive loss(13,634)(13,097)(17,843)(16,051)(13,959)
Total stockholders' equity259,465 254,860 242,878 237,435 234,517 
Total liabilities and stockholders' equity$2,324,238 $2,226,176 $2,272,484 $2,227,866 $2,245,286 
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
March 31, 2024
Three Months Ended
December 31, 2023
Three Months Ended
March 31, 2023
Average
Outstanding
Balance
Interest Income/
Expense
Average
Yield/
Rate
(1)
Average
Outstanding
Balance
Interest Income/
Expense
Average
Yield/
Rate
(1)
Average
Outstanding
Balance
Interest Income/
Expense
Average
Yield/
Rate
(1)
(in thousands)
Assets
Interest earning assets:
Interest-bearing deposits$84,531 $1,049 4.99 %$65,336 $680 4.13 %$62,566 $615 3.99 %
Federal funds sold56 1 7.18 1,574 21 5.29 2,054 18 3.62 
Investment securities available for sale233,231 1,251 2.16 223,132 1,083 1.93 274,685 1,377 2.03 
Restricted investments4,601 77 6.73 4,518 76 6.67 7,346 130 7.17 
Loans held for sale 4,872 83 6.85 4,601 83 7.16 4,695 77 6.65 
Portfolio loans receivable(2)(3)
1,927,372 45,908 9.58 1,863,298 45,026 9.59 1,752,638 41,199 9.53 
Total interest earning assets2,254,663 48,369 8.63 2,162,459 46,969 8.62 2,103,984 43,416 8.37 
Noninterest earning assets44,571 40,020 40,265 
Total assets
$2,299,234 $2,202,479 $2,144,249 
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts$183,217 110 0.24 $195,539 90 0.18 $186,184 70 0.15 
Savings4,841 1 0.08 5,184 0.15 6,502 0.05 
Money market accounts682,414 7,136 4.21 680,697 7,139 4.16 604,864 4,587 3.08 
Time deposits449,963 5,586 4.99 380,731 4,528 4.72 319,449 3,096 3.93 
Borrowed funds58,963 528 3.60 41,823 321 3.05 118,379 1,175 4.02 
Total interest-bearing liabilities1,379,398 13,361 3.90 1,303,974 12,080 3.68 1,235,378 8,929 2.93 
Noninterest-bearing liabilities:
Noninterest-bearing liabilities23,820 27,529 22,355 
Noninterest-bearing deposits637,124 622,941 654,025 
Stockholders’ equity
258,892 248,035 232,491 
Total liabilities and stockholders’ equity$2,299,234 $2,202,479 $2,144,249 
Net interest spread4.73 %4.94 %5.44 %
Net interest income$35,008 $34,889 $34,487 
Net interest margin(4)
6.24 %6.40 %6.65 %
_______________
(1)Annualized.
(2)Includes nonaccrual loans.
(3)For the three months ended March 31, 2024, December 31, 2023, and March 31, 2023, collectively, portfolio loans yield excluding credit card loans was 6.96%, 6.89% and 6.30%, respectively.
(4)For the three months ended March 31, 2024, December 31, 2023, and March 31, 2023, collectively, credit card loans accounted for 239, 248 and 284 basis points of the reported net interest margin, respectively.

13



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.

Effective January 1, 2024, the Company allocated certain expenses previously recorded directly to the Commercial Bank segment to the other segments. These expenses are for shared services also consumed by OpenSkyTM, CBHL, and Corporate. The Company performs an allocation process based on several metrics the Company believes more accurately ascribe shared service overhead to each segment. The Company believes this reflects the cost of support for each segment that should be considered in assessing segment performance. Historical information has been recast to reflect financial information consistently with the 2024 presentation.

The following schedule presents financial information for the periods indicated. Total assets are presented as of March 31, 2024, December 31, 2023, and March 31, 2023.

14



Segments
For the three months ended March 31, 2024
(in thousands)Commercial BankCBHL
OpenSky
Corporate(2)
EliminationsConsolidated
Interest income$32,529 $83 $14,921 $899 $(63)$48,369 
Interest expense13,154 41  229 (63)13,361 
Net interest income19,375 42 14,921 670  35,008 
Provision for credit losses1,109  1,559 59  2,727 
Provision for credit losses on unfunded commitments142     142 
Net interest income after provision18,124 42 13,362 611  32,139 
Noninterest income704 1,352 3,915 1  5,972 
Noninterest expense(1)
12,259 2,105 13,599 1,524  29,487 
Net income (loss) before taxes$6,569 $(711)$3,678 $(912)$ $8,624 
Total assets$2,160,051 $10,785 $105,318 $281,766 $(233,682)$2,324,238 
For the three months ended December 31, 2023
(in thousands)Commercial BankCBHL
OpenSky
Corporate(2)
EliminationsConsolidated
Interest income$30,957 $83 $15,035 $964 $(70)$46,969 
Interest expense11,884 31  235 (70)12,080 
Net interest income19,073 52 15,035 729  34,889 
Provision for (release of) credit losses691  2,125 (8) 2,808 
Release of credit losses on unfunded commitments(106)    (106)
Net interest income after provision18,488 52 12,910 737  32,187 
Noninterest income773 1,166 3,996 1  5,936 
Noninterest expense(1)
12,303 1,617 12,669 318  26,907 
Net income (loss) before taxes$6,958 $(399)$4,237 $420 $ $11,216 
Total assets$2,051,945 $8,589 $117,477 $277,565 $(229,400)$2,226,176 
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 
(Release of) provision for credit losses(161) 1,821   1,660 
Release of credit losses on unfunded commitments(19)    (19)
Net interest income after provision17,741 47 14,309 749  32,846 
Noninterest income489 1,327 4,210   6,026 
Noninterest expense(1)
11,759 2,336 11,738 389  26,222 
Net income (loss) before taxes$6,471 $(962)$6,781 $360 $ $12,650 
Total assets$2,074,634 $10,193 $106,761 $257,048 $(203,350)$2,245,286 
________________________
(1)     Noninterest expense includes $6.1 million, $5.7 million, and $5.9 million in data processing expense in OpenSky’s segment for the three months ended March 31, 2024, December 31, 2023, and March 31, 2023, respectively.
(2)    The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.

15


HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited
Quarter Ended
(in thousands except per share data)March 31, 2024December 31, 2023September 30,
2023
June 30,
2023
March 31,
2023
Earnings:
Net income$6,562 $9,030 $9,788 $7,318 $9,735 
Earnings per common share, diluted0.47 0.65 0.70 0.52 0.68 
Net interest margin6.24 %6.40 %6.71 %6.63 %6.65 %
Net interest margin, excluding credit card loans (1)
3.85 %3.92 %4.05 %4.06 %3.81 %
Return on average assets(2)
1.15 %1.63 %1.75 %1.34 %1.84 %
Return on average equity(2)
10.19 %14.44 %16.00 %12.30 %16.98 %
Efficiency ratio71.95 %65.91 %65.02 %70.41 %64.73 %
Balance Sheet:
Total portfolio loans receivable, net deferred fees$1,964,525 $1,902,643 $1,861,929 $1,837,041 $1,786,109 
Total deposits2,005,695 1,895,996 1,967,988 1,934,361 1,944,374 
Total assets2,324,238 2,226,176 2,272,484 2,227,866 2,245,286 
Total stockholders' equity259,465 254,860 242,878 237,435 234,517 
Total average portfolio loans receivable, net deferred fees1,926,778 1,862,599 1,846,866 1,800,800 1,750,539 
Total average deposits1,957,558 1,885,092 1,918,467 1,881,380 1,771,024 
Portfolio loans-to-deposit ratio (period-end balances)97.95 %100.35 %94.61 %94.97 %91.86 %
Portfolio loans-to-deposit ratio (average balances)98.43 %98.81 %96.27 %95.72 %98.84 %
Asset Quality Ratios:
Nonperforming assets to total assets0.62 %0.72 %0.67 %0.71 %0.73 %
Nonperforming loans to total loans0.73 %0.84 %0.82 %0.85 %0.91 %
Net charge-offs to average portfolio loans (2)
0.41 %0.53 %0.38 %0.35 %0.61 %
Allowance for credit losses to total loans1.49 %1.50 %1.52 %1.50 %1.47 %
Allowance for credit losses to non-performing loans204.37 %178.34 %185.61 %175.03 %160.91 %
Bank Capital Ratios:
Total risk based capital ratio14.36 %14.81 %14.51 %14.08 %14.09 %
Tier 1 risk based capital ratio13.10 %13.56 %13.25 %12.82 %12.84 %
Leverage ratio10.29 %10.51 %10.04 %9.77 %9.78 %
Common equity Tier 1 capital ratio13.10 %13.56 %13.25 %12.82 %12.84 %
Tangible common equity9.66 %9.91 %9.08 %8.93 %8.79 %
Holding Company Capital Ratios:
Total risk based capital ratio16.83 %17.38 %17.11 %16.81 %16.75 %
Tier 1 risk based capital ratio15.03 %15.55 %15.27 %14.96 %14.90 %
Leverage ratio11.87 %12.14 %11.62 %11.50 %11.47 %
Common equity Tier 1 capital ratio14.92 %15.43 %15.27 %14.96 %14.90 %
Tangible common equity11.16 %11.45 %10.69 %10.66 %10.44 %
_______________
(1)Refer to Appendix for reconciliation of non-GAAP measures.
(2)Annualized.

16


HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited (Continued)
Quarter Ended
(in thousands except per share data)March 31, 2024December 31, 2023September 30,
2023
June 30,
2023
March 31,
2023
Composition of Loans:
Commercial real estate, non owner-occupied$377,224 $351,116 $350,637 $348,892 $348,047 
Commercial real estate, owner-occupied328,540 307,911 305,802 311,972 299,966 
Residential real estate577,112 573,104 558,147 555,133 545,899 
Construction real estate292,316 290,108 280,905 258,400 251,494 
Commercial and industrial254,577 239,208 237,549 234,714 223,323 
Lender finance13,484 11,085 — — — 
Business equity lines of credit14,768 14,117 14,155 13,277 12,205 
Credit card, net of reserve(3)
111,898 123,331 122,533 122,925 112,860 
Other consumer loans738 950 948 1,187 1,578 
Portfolio loans receivable$1,970,657 $1,910,930 $1,870,676 $1,846,500 $1,795,372 
Deferred origination fees, net(6,132)(7,642)(7,997)(8,369)(7,226)
Portfolio loans receivable, net$1,964,525 $1,903,288 $1,862,679 $1,838,131 $1,788,146 
Composition of Deposits:
Noninterest-bearing$665,812 $617,373 $680,803 $693,129 $705,801 
Interest-bearing demand193,963 199,308 229,035 243,095 219,685 
Savings4,525 5,211 5,686 5,816 5,835 
Money markets678,435 663,129 668,774 631,148 632,087 
Brokered time deposits160,641 142,356 128,665 128,665 181,820 
Other time deposits302,319 268,619 255,025 232,508 199,146 
Total deposits$2,005,695 $1,895,996 $1,967,988 $1,934,361 $1,944,374 
Capital Bank Home Loan Metrics:
Origination of loans held for sale$52,080 $45,152 $50,023 $61,480 $44,448 
Mortgage loans sold40,377 34,140 39,364 49,231 40,483 
Gain on sale of loans1,238 1,015 1,011 1,262 1,223 
Purchase volume as a % of originations97.83 %89.99 %92.29 %93.12 %90.72 %
Gain on sale as a % of loans sold(4)
3.07 %2.97 %2.57 %2.56 %3.02 %
Mortgage commissions$490 $465 $528 $621 $378 
OpenSky Portfolio Metrics:
Open customer accounts526,950 525,314 529,205 540,058 527,231 
Secured credit card loans, gross$85,663 $95,300 $98,138 $100,218 $89,078 
Unsecured credit card loans, gross28,508 30,817 27,430 25,254 25,782 
Noninterest secured credit card deposits171,771 173,857 181,185 186,566 184,809 
_______________
(3)Credit card loans are presented net of reserve for interest and fees.
(4)Gain on sale percentage is calculated as gain on sale of loans divided by mortgage loans sold.
17


Appendix

Reconciliation of Non-GAAP Measures




The Company has presented the following non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Company’s results of operations and financial condition. Presentation of these non-GAAP financial measures is consistent with how the Company evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company’s industry. Investors should recognize that the Company’s presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Company strongly encourages a review of its condensed consolidated financial statements in their entirety.
18


Appendix

Reconciliation of Non-GAAP Measures




Earnings Metrics, as AdjustedQuarter Ended
(in thousands except per share data)March 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Net Income$6,562 $9,030 $9,788 $7,318 $9,735 
Add: Merger-Related Expenses, net of tax538 — — — — 
Net Income, as Adjusted$7,100 $9,030 $9,788 $7,318 $9,735 
Weighted average common shares - Diluted13,919 13,989 14,024 14,059 14,272 
Earnings per share - Diluted$0.47 $0.65 $0.70 $0.52 $0.68 
Earnings per share - Diluted, as Adjusted$0.51 $0.65 $0.70 $0.52 $0.68 
Average Assets$2,299,234 $2,202,479 $2,221,117 $2,184,351 $2,144,249 
Return on Average Assets(1)
1.15 %1.63 %1.75 %1.34 %1.84 %
Return on Average Assets, as Adjusted(1)
1.24 %1.63 %1.75 %1.34 %1.84 %
Average Equity$258,892 $248,035 $242,671 $238,684 $232,491 
Return on Average Equity(1)
10.19 %14.44 %16.00 %12.30 %16.98 %
Return on Average Equity, as Adjusted(1)
11.03 %14.44 %16.00 %12.30 %16.98 %
Net Interest Income$35,008 $34,889 $36,810 $35,340 $34,487 
Noninterest Income5,972 5,936 6,326 6,687 6,026 
Total Revenue$40,980 $40,825 $43,136 $42,027 $40,513 
Noninterest Expense$29,487 $26,907 $28,046 $29,592 $26,222 
Efficiency Ratio(2)
71.95 %65.91 %65.02 %70.41 %64.72 %
Noninterest Expense$29,487 $26,907 $28,046 $29,592 $26,222 
Less: Merger-Related Expenses712 — — — — 
Noninterest Expense, as Adjusted$28,775 $26,907 $28,046 $29,592 $26,222 
Efficiency Ratio, as Adjusted(2)
70.22 %65.91 %65.02 %70.41 %64.72 %
_______________
(1)Annualized.
(2)The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).

19


Appendix

Reconciliation of Non-GAAP Measures



Net Interest Margin, as AdjustedQuarter Ended
(in thousands)March 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Net Interest Income$35,008 $34,889 $36,810 $35,340 $34,487 
Less: Credit Card Loan Income
14,457 14,677 15,792 14,818 15,809 
Net Interest Income, as Adjusted$20,551 $20,212 $21,018 $20,522 $18,678 
Average Interest Earning Assets2,254,663 2,162,459 2,176,477 2,136,936 2,103,984 
Less: Average Credit Card Loans
110,483 114,551 116,814 110,574 115,850 
Total Average Interest Earning Assets, as Adjusted$2,144,180 $2,047,908 $2,059,663 $2,026,362 $1,988,134 
Net Interest Margin, as Adjusted3.85%3.92%4.05%4.06%3.81%
Portfolio Loans Receivable Yield, as AdjustedQuarter Ended
(in thousands)March 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Portfolio Loans Receivable Interest Income$45,908 $45,026 $45,274 $42,879 $41,199 
Less: Credit Card Loan Income14,457 14,677 15,792 14,818 15,809 
Portfolio Loans Receivable Interest Income, as Adjusted$31,451 $30,349 $29,482 $28,061 $25,390 
Average Portfolio Loans Receivable1,927,372 1,863,298 1,847,772 1,802,608 1,752,638 
Less: Average Credit Card Loans110,483 114,551 116,814 110,574 115,850 
Total Average Portfolio Loans Receivable, as Adjusted$1,816,889 $1,748,747 $1,730,958 $1,692,034 $1,636,788 
Portfolio Loans Receivable Yield, as Adjusted6.96%6.89%6.76%6.65%6.29%
Pre-tax, Pre-Provision Net Revenue ("PPNR")Quarter Ended
(in thousands)March 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Net Income
$6,562 $9,030 $9,788 $7,318 $9,735 
Add: Income Tax Expense2,062 2,186 2,998 2,255 2,915 
Add: Provision for Credit Losses2,727 2,808 2,280 2,862 1,660 
Add: Provision for (Release of) Credit Losses on Unfunded Commitments142 (106)24 — (19)
Pre-tax, Pre-Provision Net Revenue ("PPNR")$11,493 $13,918 $15,090 $12,435 $14,291 
PPNR, as AdjustedQuarter Ended
(in thousands)March 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Net Income
$6,562 $9,030 $9,788 $7,318 $9,735 
Add: Income Tax Expense2,062 2,186 2,998 2,255 2,915 
Add: Provision for Credit Losses2,727 2,808 2,280 2,862 1,660 
Add: Provision for (Release of) Credit Losses on Unfunded Commitments142 (106)24 — (19)
Add: Merger-Related Expenses712 — — — — 
PPNR, as Adjusted$