CBNK Delivers Strong Revenue Growth and Positive Operating Leverage
ROCKVILLE, Md., Oct. 26, 2026 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the "Bank"), today reported:
“This was indeed a very busy quarter with the announcements of the merger with Peoples Bank and the sale of our Chicago branch,” said Steven J. Schwartz, Chairman of the Company. “However, it is also important to note our continued steady net interest margin and tangible net book value ( 3 ) growth, along with sustained double-digit loan growth and the quarter-over-quarter increase in core earnings per share. The Board is excited about both the synergistic opportunities the merger provides as well as our independent organic growth and performance prospects.”
(1 ) Gross loans represent portfolio loans receivable, net of deferred fees and costs.
(2) Customer deposits represent total deposits excluding brokered deposits.
(3) As used in this press release, Core net income, Core earnings per share - diluted, Core ROA, Core ROTCE, Tangible Book Value per share are non-GAAP financial metrics. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of this and other non-GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Third Quarter 2026 Highlights
“We are excited about our combination with Peoples Bank and what it will bring to our franchises," said Ed Barry, CEO of the Company. "Our current quarter results reflect work on the merger and continued progress on our strategic plan. Prudent and disciplined financial management is demonstrated in our ability to deliver strong profitability in a volatile operating environment."
(4 ) As used in this press release, Core noninterest expense, Core net income, Core earnings per share - diluted, Core ROA, Core ROTCE, Tangible Book Value per share are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of this and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Reconciliation of GAAP Net Income to Core (Non-GAAP) Net Income
The following table provides a reconciliation of the Company's net income under GAAP to Core net income (non-GAAP) results excluding brokered time deposit call, merger-related expenses and other one-time non-recurring transactions.
Note: The income tax expense reflects the non-deductibility of certain merger-related expenses.
Net income of $13.1 million decreased $1.1 million compared to 2Q 2026, and earnings per share - diluted of $0.80 decreased $0.07 per share from 2Q 2026. Net income decreased $1.9 million, or 12.9%, compared to $15.1 million, or $0.89 per diluted share, for 3Q 2025. 3Q 2026 Core net income ( 5 ) of $14.7 million, or $0.89 per diluted share, increased $0.4 million, or 3.2%, compared to 2Q 2026 Core net income ( 5) of $14.3 million, or $0.87 per diluted share. 3Q 2026 Core net income ( 5) increased $2.5 million from 3Q 2025 Core net income ( 5) of $12.2 million. 3Q 2026 Core net income ( 5) excluding purchase accounting accretion ("PAA") was $14.4 million, an increase of $2.9 million, or 25.2%, from 3Q 2025 Core net income ( 5) of $11.5 million excluding PAA.
(5 ) As used in this press release, Core net income and Core noninterest expense are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of this and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Consolidated Financial Performance
Quarterly net interest income:
Quarterly provision:
Quarterly fee revenue:
Quarterly noninterest expense:
(6 ) Fee revenue mix equals fee revenue divided by the sum of fee revenue and net interest income before provision for credit losses.
(7 ) As used in this press release, Core noninterest expense, Core net income, Core earnings per share - diluted, Core ROA, Core ROTCE, Tangible Book Value per share are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of this and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Quarterly income taxes:
Total assets:
Total assets of $3.8 billion at September 30, 2026 decreased $87.4 million, or 8.9% (annualized) from June 30, 2026. The $87.4 million decrease was primarily driven by $156.2 million of decreased cash and cash equivalents, offset by total loan growth of $80.2 million (inclusive of portfolio loans receivable and loans held for sale). Total assets growth year-over-year was $413.1 million, or 12.2%. The growth year-over-year was primarily driven by increases in portfolio loans and cash balances.
Gross Loans:
Deposits:
(8 ) Protected deposits include deposits that are indirectly protected under the product terms.
( 9 ) Low interest deposits include interest-bearing demand and savings accounts.
Investment securities:
Liquidity:
Capital:
Financial Metrics
Net Interest Margin:
NIM of 5.81% for 3Q 2026, increased 17 bps compared to the prior quarter, but decreased 55 bps year-over-year. Core NIM ( 10) of 4.18% increased 14 bps (but increased 12 bps when excluding PAA) compared to the prior quarter, and decreased 48 bps year-over-year. Net PAA for 3Q 2026 was 4 bps for NIM and 5 bps for Core NIM ( 10 ). The increase quarter-over-quarter in Core NIM includes 11 bps from organic growth from Commercial Bank portfolio, 2 bps from one non-performing loan relationship in 2Q 2026, and 1 bp from higher net PAA compared to 2Q 2026. There was $4.6 million of PAA from the Call of Brokered Time Deposits during 3Q 2025, or 56 bps of NIM and 59 of Core NIM. Excluding the impact from the Call of Brokered Time Deposits, NIM increased 1 bp and Core NIM increased 11 bps year-over-year.
(10 ) As used in this press release, Core NIM, Core Loan Yield, and Core efficiency ratio are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of these and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Credit Metrics and Asset Quality:
Nonperforming assets were $60.5 million, or 1.59% of total assets, at September 30, 2026, a decrease of $0.3 million but an increase of 3 bps from June 30, 2026. The decrease of $0.3 million was primarily driven by the acquired IFH portfolio. Nonperforming assets increased $8.3 million or 5 bps year-over-year, mainly due to the $9.7 million increase during 2Q 2026 related to the legacy bank loan relationship noted during 2Q 2026. At September 30, 2026, substandard loans totaled $71.4 million, or 2.3% of total portfolio loans, compared to $70.6 million, or 2.3% of total portfolio loans, at June 30, 2026 and $56.8 million, or 2.0% of total portfolio loans, at September 30, 2025. The $14.6 million year-over-year increase in substandard loans was primarily driven by the $9.7 million legacy bank relationship that is referenced above. At September 30, 2026, special mention loans totaled $67.8 million, or 2.2%, of total portfolio loans, compared to $61.5 million, or 2.0% of total portfolio loans, at June 30, 2026, and $71.5 million, or 2.5% of total portfolio loans, at September 30, 2025.
Efficiency Ratio:
The efficiency ratio was 67.1% for 3Q 2026, compared to 66.1% for 2Q 2026 and 60.8% for 3Q 2025. The Core efficiency ratio ( 11) was 64.8% for 3Q 2026, which decreased from 66.1% compared to the prior quarter, and increased from 64.4% for 3Q 2025.
Returns:
ROA was 1.38% for 3Q 2026, compared to 1.52% for 2Q 2026, and 1.77% for 3Q 2025. Core ROA (1 1 ) for 3Q 2026 was 1.55%, compared to 1.52% for 2Q 2026, and 1.43% for 3Q 2025.
(11 ) As used in this press release, Core ROA, Core ROE, ROTCE, Core ROTCE, Core Efficiency Ratio and Tangible Book Value are non-GAAP financial measures. These non-GAAP financial metrics exclude the impact of merger-related expenses and certain other pre-tax adjustments which are not indicative of operating performance and the tax impacts of such adjustments. Reconciliations of these and other non–GAAP measures to their comparable GAAP measures are set forth in the Appendix at the end of this press release.
Book Value:
Book value per common share of $26.42 at September 30, 2026, increased $0.50 when compared to June 30, 2026, and increased $2.62 when compared to September 30, 2025. Tangible book value per share ( 12) increased $0.53, or 2.3% (not annualized), to $23.98 at September 30, 2026 when compared to June 30, 2026, and increased $2.65, or 12.4%, when compared to September 30, 2025.
Reportable Segments
Commercial Bank
Loan Growth – Portfolio loans ( 12 ) increased $24.8 million at September 30, 2026 compared to June 30, 2026, primarily driven by increases of $42.7 million from C&I, $10.0 million from construction real estate, and $5.6 million from lender finance, offset by decreases of $21.1 million from CRE and $13.5 million from residential real estate. Excluding the impact of $60.2 million of loans reclassified to held for sale, gross loans held for investment increased $88.5 million, or 11.4% (annualized) from June 30, 2026. Portfolio loans increased $276.5 million at September 30, 2026 compared to September 30, 2025, driven by $155.1 million from C&I, $44.2 million from residential real estate, $36.4 million from construction real estate, and $12.1 million from CRE. Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.
(12 ) Portfolio loans represents portfolio loans receivable excluding deferred origination fees, net.
Net Interest Income – Interest income of $55.6 million increased $1.9 million from the prior quarter, driven by $2.4 million from loan growth, slightly offset by a $0.5 million decrease from interest bearing cash income. Interest expense of $19.1 million increased $0.2 million, driven by growth and a mix shift in the deposit portfolio.
Credit Metrics – Nonperforming assets increased 3 bps to 1.68% of total assets at September 30, 2026, compared to June 30, 2026. Total nonaccrual loans at September 30, 2026, were $56.7 million, a decrease of $0.3 million or 0.6% compared to $57.0 million at June 30, 2026.
Classified and Criticized Loans – At September 30, 2026, special mention loans totaled $67.8 million, or 2.2% of total portfolio loans, compared to $61.5 million, or 2.0% of total portfolio loans, at June 30, 2026. At September 30, 2026, substandard loans totaled $71.4 million, or 2.3% of total portfolio loans, compared to $70.6 million, or 2.3% of total portfolio loans, at June 30, 2026.
OpenSky™
OpenSky™ results reflected continued loan balance growth, lower operating expenses and credit performance consistent with management expectations.
Accounts – During 3Q 2026, credit card accounts declined to 575.8 thousand, decreasing 12.8 thousand, or 2.2% (not annualized) from June 30, 2026, and decreasing 11.8 thousand, or 2.0% year-over-year.
Loan and Deposit Balances – Secured and unsecured loan balances, net of reserves for interest and fees, of $149.2 million at September 30, 2026 increased by $3.9 million, or 2.7% (not annualized), compared to June 30, 2026, and increased $12.7 million, or 9.3%, year-over-year. Deposit balances of $162.4 million at September 30, 2026, decreased $3.8 million compared to June 30, 2026 and decreased $4.5 million, or 2.7% year-over-year. Gross unsecured loan balances of $57.6 million at September 30, 2026, increased $6.4 million, or 12.4% (not annualized), compared to $51.2 million at June 30, 2026, and increased $18.0 million, or 45.5% (not annualized), year-over-year. Gross secured loan balances of $93.7 million at September 30, 2026, decreased $2.4 million, or 2.5% (not annualized), compared to $96.0 million at June 30, 2026, and decreased $5.1 million, or 5.2% (not annualized) year-over-year.
Net Interest Income – Interest income of $16.5 million increased $0.5 million compared to 2Q 2026, supported by higher average OpenSky™ credit card loan balances. Average OpenSky™ credit card loan balances, net of reserves and deferred fees of $143.9 million for 3Q 2026, increased $6.8 million, or 5.0% (not annualized), compared to 2Q 2026.
Fee Revenue – Total fee revenue of $4.6 million increased $0.1 million from the prior quarter primarily driven by continued growth in net interest income as loan balances increased.
Noninterest Expense – Total noninterest expense of $15.7 million increased $0.3 million compared to 2Q 2026, driven by increased spending on professional services.
OpenSky™ Credit – Portfolio credit metrics continued to be generally consistent with modeled expectations during 3Q 2026. The provision for credit losses of $4.1 million increased $0.1 million when compared to the prior quarter. Net charge-offs increased $0.3 million to $3.2 million in 3Q 2026 from $2.9 million in 2Q 2026. The $0.3 million increase in charge-offs was primarily driven by the secured product and is consistent with normal seasonality and expectations for the card business. On a year-over-year basis, net charge-offs for the secured product increased only $0.1 million, while net charge-offs for the unsecured product increased $1.0 million, driven by growth in the unsecured portfolio. The majority of OpenSky's™ unsecured loan product is offered to current and former secured card customers, where the Company has historical customer performance data. Unsecured loans have been offered by OpenSky™ since the fourth quarter of 2021 and have generally performed in alignment with management expectations over that time period. OpenSky™ has begun testing limited offers to new customers; this activity remains insignificant to the overall unsecured loan portfolio and total accounts, and balances are expected to remain de minimis through year-end as management monitors performance.
Capital Bank Home Loans
Originations of loans held for sale totaled $75.3 million during 3Q 2026, with $47.9 million of mortgage loans sold resulting in a gain on sale of loans of $1.4 million, representing a 2.93% gain on sale as a percentage of total loans sold. Originations of loans held for sale totaled $106.9 million during 2Q 2026, with $87.1 million of mortgage loans sold resulting in a gain on sale of loans of $2.4 million, representing a 2.71% gain on sale as a percentage of total loans sold.
Windsor Advantage™
Gross government loan servicing revenue totaled $6.7 million, including $1.7 million of Capital Bank related servicing fees, during 3Q 2026. Gross government loan servicing revenue totaled $6.6 million, including $1.3 million of Capital Bank related servicing fees, during 2Q 2026. Windsor's™ total servicing portfolio was $3.5 billion at September 30, 2026, and $3.4 billion at June 30, 2026. In 3Q 2026, Windsor processed the closing of $183.9 million of government guaranteed loans, a 17.8% decrease from $223.6 million in 2Q 2026 and a 35.4% increase from $135.8 million in 3Q 2025.
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(1) Refer to Appendix for reconciliation of non-GAAP measures.
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(1) Refer to Appendix for reconciliation of non-GAAP measures.
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(1) Refer to Appendix for reconciliation of non-GAAP measures.
(2) Loans are reflected net of deferred fees and costs.
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(1) Balances include held for sale transactions in connection with sale of Chicago branch.
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.
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(1) Annualized.
(2) Balances include held for sale transactions in connection with sale of Chicago branch.
(3) Average balances include nonaccrual loans. As of September 30, 2026, nonaccrual loans of $0.3 million were included in Loans held for sale and $56.4 million in Portfolio loans receivable.
(4) For the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, Core Loan Yield was 6.83%, 6.77% and 6.74%, respectively.
(5) For the three months ended September 30, 2026, June 30, 2026, and September 30, 2025, Core Net Interest Margin was 4.18%, 4.04% and 4.66%, respectively.
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(1) Annualized.
(2) Balances include held for sale transactions in connection with sale of Chicago branch.
(3) Average balances include nonaccrual loans. As of September 30, 2026, nonaccrual loans of $0.3 million were included in Loans held for sale and $56.4 million in Portfolio loans receivable.
(4) For the nine months ended September 30, 2026 and 2025, collectively. Core Loan Yield was 6.84% and 7.01%, respectively.
(5) For the nine months ended September 30, 2026 and 2025, collectively. Core Net Interest Margin was 4.12% and 4.48%, respectively.
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, OpenSky™ (the Company’s credit card division), Windsor Advantage™ and Capital Bank Home Loans (the Company’s mortgage loan division).
The following schedules reported internally for performance assessment by the chief operating decision maker presents financial information for each reportable segment for the periods indicated. Total assets are presented as of September 30, 2026, June 30, 2026, and September 30, 2025.
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(1) Gross government loan servicing revenue totaled $6.7 million, including $1.7 million of servicing fees earned from the Commercial Bank by Windsor™, for the three months ended September 30, 2026.
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(1 ) Gross government loan servicing revenue totaled $6.6 million, including $1.3 million of servicing fees earned from the Commercial Bank by Windsor™, for the three months ended June 30, 2026.
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(1 ) Gross government loan servicing revenue totaled $5.3 million, including $1.1 million of servicing fees earned from the Commercial Bank by Windsor™, for the three months ended September 30, 2025.
(2) Interest income of $49.0 million for the Commercial Bank includes the $1.3 million Interest Income Adjustment.
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(1 ) Gross government loan servicing revenue totaled $18.9 million, including $4.2 million of servicing fees earned from the Commercial Bank by Windsor™, for the nine months ended September 30, 2026.
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(1 ) Gross government loan servicing revenue totaled $14.6 million, including $3.2 million of servicing fees earned from the Commercial Bank by Windsor™, for the nine months ended September 30, 2025.
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(1) Annualized.
(2) Refer to Appendix for reconciliation of non-GAAP measures.
(3) Estimated ratio at September 30, 2026.
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(4) Credit card loans are presented net of reserve for interest and fees.
(5) Gain on sale percentage is calculated as gain on sale of loans divided by mortgage loans sold.
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.
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(1) Annualized.
(2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
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(1) Annualized.
(2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
ABOUT CAPITAL BANCORP, INC.
Capital Bancorp, Inc., Rockville, Maryland is a registered bank holding company incorporated under the laws of Maryland. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in four locations in the Washington, D.C., and Baltimore, Maryland metropolitan markets, one bank branch in Fort Lauderdale, Florida, one bank branch in Chicago, Illinois and one bank branch in Raleigh, North Carolina. Capital Bancorp had assets of approximately $3.8 billion at September 30, 2026 and its common stock is traded in the NASDAQ Global Market under the symbol “CBNK.” More information can be found at the Company's website www.CapitalBankMD.com under its investor relations page.
FORWARD-LOOKING STATEMENTS
This earnings release contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” "optimistic," “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements. Accordingly, we caution you that any such forward-looking statements are not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors. For details on some of the factors that could affect these expectations, see risk factors and other cautionary language included in the Company's Annual Report on Form 10-K and other periodic and current reports filed with the Securities and Exchange Commission.
While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors that could cause actual results to differ materially from those contained or implied in the forward-looking statements: the strength of the United States (“U.S.”) economy in general and the strength of the local economies in which we conduct operations; geopolitical concerns, including acts or threats of terrorism and the ongoing wars in Iran and Ukraine; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market, and monetary fluctuations; volatility and disruptions in global capital and credit markets; changes in U.S. trade policies, including the implementation of tariffs and other protectionist trade policies; the effects of federal government shutdowns, debt ceiling standoff, or other fiscal policy uncertainty; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; cybersecurity threats and the cost of defending against them; climate change, and other catastrophic disasters; the effectiveness of the Company's internal control over financial reporting and disclosure controls and procedures; the Company’s ability to remediate the material weakness in the Company’s internal control over financial reporting; the effect of the IFH acquisition or any other acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations, including the planned growth of Windsor Advantage™; the possibility that the Company's pending merger with Peoples does not close when expected or at all because required regulatory approvals and other conditions to closing are not received or satisfied on a timely basis or at all; the possibility that the anticipated benefits and cost savings from the merger with Peoples may not be fully realized or may take longer to realize than expected; disruptions to the Company's business as a result of the announcement and pendency of the merger with Peoples; the possibility that the merger with Peoples may be more expensive to complete than anticipated, including as a result of unexpected factors or events; and our ability to manage the risks involved in the foregoing.
These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.
FINANCIAL CONTACT: Jake Dalaya (301) 637-5118
MEDIA CONTACT: Ed Barry (240) 283-1912
WEBSITE: www.CapitalBankMD.com