Capital Bancorp Reports 20% Growth in Earnings for the Second Quarter of 2019


ROCKVILLE, Md., July 24, 2019 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") (NASDAQ: CBNK), holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $4.0 million, or $0.29 per diluted share, for the second quarter of 2019. By comparison, net income was $3.3 million, or $0.24 per diluted share, for the first quarter of 2019 and net income was $3.1 million, or $0.26 per diluted share, for the second quarter of 2018.  Return on average assets was 1.39% and return on average equity was 13.23% for the second quarter of 2019.  For the three months ended March 31, 2019, the return on average assets was 1.22% and return on average equity was 11.39%.  For the three months ended June 30, 2018, the return on average assets was 1.22% and the return on average equity was 14.77%.  For the six months ended June 30, 2019, net income grew 20% from $6.1 million, or $0.51 per diluted share during 2018 to $7.3 million, or $0.53 per diluted share.

2019 Second Quarter Highlights

  • Strong Quality Earnings - Net income for the second quarter of 2019 increased 21% to $4.0 million compared to $3.3 million for the first quarter of 2019. Diluted earnings per share for the three months ended June 30, 2019 was $0.29, compared to $0.24 per share for the three months ended March 31, 2019.   Return on average assets was 1.39%, an increase of 17 basis points compared to the first quarter of 2019.  Return on average equity was 13.23% for the second quarter of 2019, compared to 11.39% for the previous quarter.

  • Robust Asset Growth - Total assets increased $110.4 million, or 10%, to $1.2 billion during the second quarter 2019, and grew 12% for the six months ended June 30, 2019.  The increase was fueled by loan growth and funded by deposit growth.  For the quarter ending June 30, 2019, total loans increased $48.4 million, or 5% to $1.06 billion compared to $1.01 billion at March 31, 2019.  Total deposits increased $69.3 million, or 7%, to $1.0 billion at June 30, 2019, compared to $967.7 million at March 31, 2019.

  • Continued Loan Growth -  Loans improved year over year with growth of $135.5 million, or 15% compared to $920.8 million at June 30, 2018.  Average loan balances have increased 13% year over year, with the largest growth from residential real estate and commercial loans.

  • Strong Core Deposit Growth and Deposit Mix - The Company continues to execute on its strategic initiative to improve the deposit portfolio mix from wholesale time deposits to noninterest bearing deposits.  Accordingly, at June 30, 2019, noninterest bearing deposits increased by $37.2 million, or 31% annualized, compared to December 31, 2018.  The growth was partially driven by an increase in OpenSky® deposits of $13.7 million, or 23% for the six months ended June 30, 2019.  Noninterest bearing deposits increased 18% to $279.5 million for the six months ended June 30, 2019, compared to $237.4 million for the six months ended June 30, 2018.

  • Improving Net Interest Margin Excluding Credit Cards - Excluding credit card loans, the net interest margin increased for the three months ended June 30, 2019 to 4.37% from 4.30% in the prior quarter, and also increased from 4.29% in the same quarter in the prior year.  Overall, the net interest margin improved 33 basis points to 5.79% for the second quarter of 2019 compared to the prior quarter, and increased 26 basis points from 5.53% in the same quarter of the previous year. The quarter over quarter increase this year was due to the increase in loan volume, yields and late fees on the credit card portfolio. The cost of deposits declined 2 basis points to 1.36% compared to the first quarter of 2019 due to the change in mix from time deposits to noninterest bearing accounts.

  • Record Credit Card Issuances - OpenSky® credit card issuances exceeded our expectations and set a quarterly high for the second consecutive time this year.  During the quarter, new originations totaled 36.7 thousand compared to 35.1 thousand in the prior quarter, and 21.5 thousand in the second quarter of 2018.  By taking advantage of our enhanced customer application and improved mobile servicing functionality, total open customer accounts increased by approximately 45,000, or 27%, from June 30, 2018, and exceeded 210,000 at June 30, 2019.

  • Profitable Mortgage Business - Capital Bank Home Loans ("CBHL"), formerly Church Street Mortgage, the Bank's residential mortgage banking division, increased the number of loans originated by 67% compared to the previous quarter, and continued to contribute to the Company's results of operations for the quarter with higher margins from the previous quarter.

  • Strong Asset Quality - Asset quality measures remain sound.  Non-performing assets as a percentage of total assets decreased to 0.57% at June 30, 2019, compared to 0.63% at March 31, 2019, and increased 22 basis points from 0.35% at June 30, 2018.  The increase from the previous year is attributable to a single borrower relationship totaling $2.1 million that is well secured, on which no impairment is expected.  As such, there have been no losses related to the increase in non-performing assets.  Net charge-offs for the six months ended June 30, 2019 were $192 thousand, a decrease from $731 thousand for the same period last year.

"During the second quarter, we showed continued progress on our solutions and technology enabled strategy.  Strong growth of commercial loans and deposits emerged as our new sales teams began to deliver results.  The bank was also able to capitalize on a strong housing market and to utilize our direct marketing efforts to post good mortgage and card volume.  We see continued opportunity to capitalize on market disruption and to recruit talent while keeping a close eye on credit risk and risk adjusted returns," said Ed Barry, CEO of Capital Bancorp.

            
COMPARATIVE FINANCIAL
HIGHLIGHTS - Unaudited
           
 Quarter Ended 2nd Quarter Six Months Ended YTD
 June 30, 2019 - 2018 June 30, 2019 - 2018
(in thousands except per share data)2019 2018 % Change 2019 2018 % Change
Earnings Summary           
Interest income$20,289  $16,767  21.0% $38,607  $33,431  15.5%
Interest expense3,758  2,645  42.1% 7,332  4,924  48.9%
Net interest income16,531  14,122  17.1% 31,275  28,507  9.7%
Provision for loan losses677  630  7.5% 798  1,145  (30.3)%
Noninterest income5,927  4,339  36.6% 10,019  8,417  19.0%
Noninterest expense16,210  13,528  19.8% 30,540  27,128  12.6%
Income before income taxes5,571  4,303  29.5% 9,956  8,651  15.1%
Income tax expense1,548  1,158  33.7% 2,614  2,516  3.9%
Net income$4,023  $3,145  27.9% $7,342  $6,135  19.7%
            
Weighted average common shares - Basic(1)13,719  11,611  18.2% 13,708  11,587  18.3%
Weighted average common shares - Diluted(1)13,914  11,995  16.0% 13,888  11,986  15.9%
Earnings - Basic(1)$0.30  $0.27  11.1% $0.54  $0.53  1.9%
Earnings - Diluted(1)$0.29  $0.26  11.5% $0.53  $0.51  3.9%
Return on average assets1.39% 1.22% 13.9% 1.30% 1.20% 8.3%
Return on average equity13.23% 14.77% (10.4)% 12.33% 14.92% (17.4)%

_______________
(1)  Gives effect to a four-for-one common stock split completed effective August 15, 2018.

 Quarter Ended 2nd Quarter Quarter Ended
 June 30, 2019
vs. 2018
 March 31, December 31, September 30,
(in thousands except per share data)2019 2018 % Change 2019 2018 2018
Balance Sheet Highlights           
Assets$1,234,157  $1,067,786  15.6% $1,123,752  $1,105,058  $1,072,905 
Investment securities39,157  49,799  (21.4)% 46,080  46,932  48,067 
Mortgage loans held for sale47,744  21,370  123.4% 21,630  18,526  21,373 
Loans(1)1,056,290  920,783  14.7% 1,007,928  1,000,268  955,412 
Allowance for loan losses11,913  10,447  14.0% 11,347  11,308  10,892 
Deposits1,037,004  938,364  10.5% 967,722  955,240  911,116 
Borrowings and repurchase agreements38,889  14,445  169.2% 3,010  7,332  28,239 
Subordinated debentures15,409  15,378  0.2% 15,401  15,393  15,386 
Total stockholders' equity123,118  86,994  41.5% 118,550  114,564  106,657 
Tangible common equity123,118  86,994  41.5% 118,550  114,564  106,657 
            
Common shares outstanding13,719  11,661  17.6% 13,713  13,672  13,191 
Tangible book value per share$8.97  $7.46  20.2% $8.65  $8.38  $8.09 

_______________
(1)  Loans are reflected net of deferred fees and costs.

Operating Results - three months ended June 30, 2019 compared to three months ended June 30, 2018

Net interest income increased $2.4 million, or 17%, to $16.5 million for the three months ended June 30, 2019 compared to the same period in 2018.  Net interest margin increased 26 basis points to 5.79% for the three months ended June 30, 2019 from 5.53% for the three months ended June 30, 2018. For the three months ended June 30, 2019, our average interest-earning assets increased by $121.3 million, or 12%, compared to the three months ended June 30, 2018, and the average yield on our interest-earning assets increased by 54 basis points. In comparison, our average interest-bearing liabilities increased $53.8 million, or 7%, from the second quarter of 2018 to the second quarter of 2019, with the respective average rate increasing by 48 basis points.

During the three months ended June 30, 2019, we recorded a provision for loan losses of $677 thousand, compared to $630 thousand during the three months ended June 30, 2018.  Net charge-offs for the second quarter of 2019 were $111 thousand, or 0.04% of average loans, annualized.  Net charge-offs for the second quarter of 2018 were $341 thousand, or 0.16% of average loans, annualized.

Noninterest income increased by $1.6 million, or 37% from $4.3 million for the three months ended June 30, 2018 to $5.9 million for the three months ended June 30, 2019, due largely to mortgage banking revenue. Noninterest expense was $16.2 million and $13.5 million for the three months ended June 30, 2019 and 2018, respectively. The increase in noninterest expense was driven primarily by increases in salaries and benefits, which include commissions paid on mortgage originations, data processing expenses, advertising, and other operating expenses.

Operating Results -  six months ended June 30, 2019 compared to six months ended June 30, 2018

Net interest income increased $2.8 million, or 10%, to $31.3 million for the six months ended June 30, 2019 compared to the same period in 2018.  Net interest margin decreased 3 basis points to 5.63% for the six months ended June 30, 2019 from 5.66% for the six months ended June 30, 2018. For the six months ended June 30, 2019, our average interest-earning assets had increased by $104.6 million, compared to the six months ended June 30, 2018, and the average yield on our interest-earning assets increased by 31 basis points. In comparison, our average interest-bearing liabilities increased $35.3 million from the second quarter of 2018 to the second quarter of 2019, with the respective average rate increasing by 58 basis points.

During the six months ended June 30, 2019, we recorded a provision for loan losses of $798 thousand, compared to $1.1 million during the six months ended June 30, 2018.  Net charge-offs for the six months ended June 30, 2019 were $192 thousand, or 0.04% of average loans, annualized.  Net charge-offs for the same period in 2018 were $731 thousand, or 0.16% of average loans, annualized.

Noninterest income increased by $1.6 million, or 19% from $8.4 million for the six months ended June 30, 2018 to $10.0 million for the six months ended June 30, 2019, due largely to mortgage banking revenue. Noninterest expense was $30.5 million and $27.1 million for the six months ended June 30, 2019 and 2018, respectively. The increase in noninterest expense was driven primarily by increases in salaries and benefits, which include commissions paid on mortgage originations, advertising and other expenses.

Financial Condition

Total assets at June 30, 2019 were $1.2 billion, up 15.6% as compared to $1.1 billion at June 30, 2018. Gross loans, excluding mortgage loans held for sale, were $1.1 billion as of June 30, 2019, compared to $920.8 million at June 30, 2018, an increase of 15%.  Deposits were $1.0 billion at June 30, 2019, an increase of 11%, as compared to $938.4 million at June 30, 2018.

Our allowance for loan losses was $11.9 million, or 1.13% of loans, at June 30, 2019, which provided approximately 174% coverage of nonperforming loans at such date, compared to $10.4 million, or 1.13% of loans, and approximately 321% coverage of nonperforming loans at June 30, 2018.  Nonperforming assets were $7.0 million, or 0.57% of total assets, as of June 30, 2019. Comparatively, nonperforming assets were $3.7 million, or 0.35% of total assets, at June 30, 2018. Of the $7.0 million in total nonperforming assets as of June 30, 2019, nonperforming loans represented $6.8 million and other real estate owned totaled $149 thousand.  Included in nonperforming loans are troubled debt restructurings of $473 thousand, and one borrower relationship totaling $2.1 million that is well secured, on which no impairment is expected.

Stockholders’ equity totaled $123.1 million as of June 30, 2019, compared to $87.0 million at June 30, 2018. The increase was due to increased earnings and net proceeds from the Company's initial public offering on September 28, 2018 of approximately $19.8 million.  As of June 30, 2019, the Bank's capital ratios continue to exceed the regulatory requirements for a “well-capitalized” institution.

        
Consolidated Statements of Income
(Unaudited)
       
 Three Months Ended June 30, Six Months Ended June 30,
(in thousands)2019 2018 2019 2018
Interest income       
Loans, including fees$19,804  $16,232  $37,648  $32,500 
Investment securities available for sale234  276  492  515 
Federal funds sold and other251  259  467  416 
Total interest income20,289  16,767  38,607  33,431 
Interest expense       
Deposits3,195  2,309  6,438  4,259 
Borrowed funds563  336  894  665 
Total interest expense3,758  2,645  7,332  4,924 
Net interest income16,531  14,122  31,275  28,507 
Provision for loan losses677  630  798  1,145 
Net interest income after provision for loan losses15,854  13,492  30,477  27,362 
Noninterest income       
Service charges on deposits138  117  236  242 
Credit card fees1,970  1,562  3,462  3,017 
Mortgage banking revenue3,715  2,499  6,091  4,928 
Gain(loss) on sale of investment securities available for sale26  1  26  (2)
Other fees and charges78  160  204  232 
Total noninterest income5,927  4,339  10,019  8,417 
Noninterest expenses       
Salaries and employee benefits8,111  6,211  14,898  12,512 
Occupancy and equipment1,102  1,088  2,196  2,171 
Professional fees609  471  1,228  845 
Data processing3,716  3,540  7,029  7,222 
Advertising531  331  973  755 
Loan processing340  348  645  609 
Other real estate expenses, net28  7  50  31 
Other operating1,773  1,532  3,521  2,983 
Total noninterest expenses16,210  13,528  30,540  27,128 
Income before income taxes5,571  4,303  9,956  8,651 
Income tax expense1,548  1,158  2,614  2,516 
Net income$4,023  $3,145  $7,342  $6,135 


    
Consolidated Balance Sheets(unaudited)  
(in thousands)June 30,
 2019
 December 31,
2018
Assets   
Cash and due from banks$12,253  $10,431 
Interest bearing deposits at other financial institutions65,284  22,007 
Federal funds sold1,991  2,285 
Total cash and cash equivalents79,528  34,723 
Investment securities available for sale39,157  46,932 
Restricted investments4,137  2,503 
Loans held for sale47,744  18,526 
Loans receivable, net of allowance for loan losses of $11,913 and $11,308 at June 30, 2019 and December 31, 2018, respectively1,044,377  988,960 
Premises and equipment, net7,202  2,975 
Accrued interest receivable4,649  4,462 
Deferred income taxes3,504  3,654 
Foreclosed real estate149  142 
Prepaid income taxes268  90 
Other assets3,442  2,091 
Total assets$1,234,157  $1,105,058 
    
Liabilities   
Deposits   
Noninterest bearing$279,484  $242,259 
Interest bearing757,520  712,981 
Total deposits1,037,004  955,240 
Securities sold under agreements to repurchase  3,332 
Federal funds purchased  2,000 
Federal Home Loan Bank advances38,889  2,000 
Other borrowed funds15,409  15,393 
Accrued interest payable2,039  1,565 
Other liabilities17,698  10,964 
Total liabilities1,111,039  990,494 
    
Stockholders' equity   
Preferred stock, $.01 par value; 1,000,000 shares authorized; no shares issued or outstanding at June 30, 2019 and December 31, 2018   
Common stock, $.01 par value; 49,000,000 shares authorized:  13,718,665 and 13,672,479 issued and outstanding at June 30, 2019 and December 31, 2018, respectively137  137 
Additional paid-in capital50,071  49,321 
Retained earnings72,940  65,701 
Accumulated other comprehensive loss(30) (595)
Total stockholders' equity123,118  114,564 
Total liabilities and stockholders' equity$1,234,157  $1,105,058 
        

 

The following table shows the average outstanding balance of each principal category of our assets, liabilities and stockholders’ equity, together with the average yields on our assets and the average costs of our liabilities for the periods indicated.  Such yields and costs are calculated by dividing the annualized income or expense by the average daily balances of the corresponding assets or liabilities for the same period.

 Three Months Ended June 30,
 2019 2018
 Average
Outstanding 
Balance
 Interest
Income/
Expense
 Average 
Yield/ 
Rate(1)
 Average
Outstanding 
Balance
 Interest
Income/
Expense
 Average 
Yield/ 
Rate(1)
  
 (Dollars in thousands)
Assets           
Interest earning assets:           
Interest bearing deposits$38,573  $210  2.19% $48,682  $219  1.80%
Federal funds sold2,111    0.00% 1,483  6  1.62%
Investment securities42,031  234  2.23% 50,739  276  2.18%
Restricted stock4,428  41  3.75% 2,553  35  5.50%
 Loans held for sale34,635  681  7.88% 17,217  397  9.25%
Loans(2)(3)1,024,306  19,123  7.49% 904,149  15,835  7.02%
Total interest earning assets1,146,084  20,289  7.10% 1,024,823  16,768  6.56%
Noninterest earning assets17,233      11,179     
Total assets$1,163,317      $1,036,002     
Liabilities and Stockholders’ Equity           
Interest bearing liabilities:           
Now accounts$96,702  89  0.37% $76,770  53  0.28%
Savings3,577  3  0.35% 3,602  3  0.33%
Money market accounts333,248  1,434  1.73% 286,836  931  1.30%
Time deposits277,402  1,669  2.41% 323,840  1,323  1.64%
Borrowed funds63,083  563  3.58% 29,129  336  4.63%
Total interest bearing liabilities774,012  3,758  1.95% 720,177  2,646  1.47%
Noninterest bearing liabilities:           
Noninterest bearing liabilities15,963      8,499     
Noninterest bearing deposits251,408      221,896     
Stockholders’ equity121,934      85,430     
Total liabilities and stockholders’ equity$1,163,317      $1,036,002     
            
Net interest spread(4)    5.15%     5.09%
Net interest income  $16,531      $14,122   
Net interest margin(5)    5.79%     5.53%
Net interest margin excluding credit cards    4.37%     4.29%

_______________
(1)  Annualized.
(2)  Includes nonaccrual loans.
(3)  Interest income includes amortization of deferred loan fees, net of deferred loan costs.
(4)  Net interest spread is the difference between interest rates earned on interest earning assets and interest rates paid on interest bearing liabilities.
(5)  Net interest margin is a ratio calculated as annualized net interest income divided by average interest earning assets for the same period.

  
 Six Months Ended June 30, 2019
 2019 2018
 Average
Outstanding 
Balance
 Interest
Income/
Expense
 Average 
Yield/ 
Rate(1)
 Average
Outstanding 
Balance
 Interest
Income/
Expense
 Average 
Yield/ 
Rate(1)
  
 (Dollars in thousands)
Assets           
Interest earning assets:           
Interest bearing deposits$34,879  $374  2.16% $45,435  $338  1.50%
Federal funds sold1,869  1  0.06% 1,644  12  1.50%
Investment securities44,259  492  2.24% 51,917  514  2.00%
Restricted stock3,588  92  5.17% 2,528  67  5.35%
Loans held for sale24,519  1,032  8.49% 17,729  771  8.77%
Loans(2)(3)1,011,971  36,616  7.30% 897,193  31,729  7.13%
Total interest earning assets1,121,085  38,607  6.94% 1,016,446  33,431  6.63%
Noninterest earning assets14,712      10,324     
Total assets$1,135,797      $1,026,770     
Liabilities and Stockholders’ Equity           
Interest bearing liabilities:           
Now accounts$87,416  167  0.38% $72,252  99  0.28%
Savings3,460  6  0.35% 3,501  4  0.26%
Money market accounts325,173  2,748  1.70% 294,305  1,706  1.17%
Time deposits298,805  3,517  2.37% 323,124  2,450  1.53%
Borrowed funds44,603  894  4.04% 31,005  665  4.32%
Total interest bearing liabilities759,457  7,332  1.95% 724,187  4,924  1.37%
Noninterest bearing liabilities:           
Noninterest bearing liabilities13,856      9,558     
Noninterest bearing deposits242,443      210,081     
Stockholders’ equity120,041      82,944     
Total liabilities and stockholders’ equity$1,135,797      $1,026,770     
            
Net interest spread(4)    4.99%     5.26%
Net interest income  $31,275      $28,507   
Net interest margin(5)    5.63%     5.66%
Net interest margin excluding credit cards    4.34%     4.27%

_______________
(1)  Annualized.
(2)  Includes nonaccrual loans.
(3)  Interest income includes amortization of deferred loan fees, net of deferred loan costs.
(4)  Net interest spread is the difference between interest rates earned on interest earning assets and interest rates paid on interest bearing liabilities.
(5)  Net interest margin is a ratio calculated as annualized net interest income divided by average interest earning assets for the same period.

     
HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited    
  Quarter Ended
(Dollars in thousands except per share data) June 30,
 2019
 March 31,
2019
 December 31,
2018
 September 30,
2018
 June 30,
2018
Earnings:          
Net income $4,023  $3,319  $3,486  $3,147  $3,145 
Earnings per common share, diluted(1)(2) 0.29  0.24  0.25  0.26  0.26 
Net interest margin 5.79% 5.46% 5.46% 5.56% 5.53%
Net interest margin, excluding credit cards 4.37% 4.30% 4.28% 4.26% 4.29%
Return on average assets(1) 1.39% 1.22% 1.27% 1.19% 1.22%
Return on average equity(1) 13.23% 11.39% 12.26% 13.69% 14.77%
Efficiency ratio 72.18% 76.08% 71.34% 74.20% 73.64%
Balance Sheet:          
Loans(3) $1,056,290  $1,007,928  $1,000,268  $955,412  $920,783 
Deposits 1,037,004  967,722  955,240  911,116  938,364 
Total assets 1,234,157  1,123,752  1,105,058  1,072,905  1,067,786 
Asset Quality Ratios:          
Nonperforming assets to total assets 0.57% 0.63% 0.44% 0.42% 0.35%
Nonperforming loans to total loans 0.65% 0.69% 0.47% 0.44% 0.35%
Net charge-offs to average loans (YTD annualized) 0.04% 0.03% 0.09% 0.11% 0.16%
Allowance for loan losses to total loans 1.13% 1.13% 1.13% 1.14% 1.13%
Allowance for loan losses to non-performing loans 174.05% 162.52% 241.72% 257.83% 320.78%
Bank Capital Ratios:          
Total risk based capital ratio 11.91% 12.23% 12.25% 12.36% 12.34%
Tier 1 risk based capital ratio 10.65% 10.98% 11.00% 11.11% 11.09%
Leverage ratio 8.91% 9.05% 9.06% 9.01% 8.91%
Common equity Tier 1 ratio 10.65% 10.98% 11.00% 11.11% 11.09%
Tangible common equity 8.40% 8.93% 8.89% 8.72% 8.58%
Composition of Loans:          
Residential real estate $426,887  $421,346  $407,844  $388,141  $366,465 
Commercial real estate 297,891  277,905  278,691  276,726  271,800 
Construction real estate 169,225  157,338  157,586  144,012  149,192 
Commercial and industrial 124,436  120,191  122,264  113,473  101,752 
Credit card 40,141  32,359  34,673  33,821  32,522 
Other 1,015  1,195  1,202  1,270  1,244 
Composition of Deposits:          
Non interest bearing $279,484  $262,235  $242,259  $234,094  $237,361 
Interest bearing demand 129,199  85,969  85,747  66,170  88,077 
Savings 3,572  3,595  2,866  4,597  3,902 
Time Deposits 277,048  295,809  335,471  330,423  333,083 
Money Markets 347,701  320,114  288,897  275,832  275,941 
Capital Bank Home Loan Metrics:        
Origination of loans held for sale $134,409  $74,128  $70,826  $81,665  $95,570 
Proceeds from loans held for sale, net of gains 105,418  71,693  73,883  81,029  92,195 
Gain on sale of loans 3,715  2,375  2,097  2,451  2,500 
Purchase volume as a % of originations 79.07% 78.42% 86.72% 92.72% 85.09%
Gain on sale as a % of loans sold(4) 3.40% 3.21% 2.76% 2.94% 2.64%
OpenSky Credit Card Portfolio Metrics:        
Total active customer accounts 211,408  187,423  169,981  170,160  166,661 
Total loans $40,141  $32,359  $34,673  $33,821  $32,522 
Total deposits at the Bank $73,666  $65,808  $59,954  $59,978  $58,951 

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(1)  Annualized.
(2)  Gives effect to a four-for-one common stock split completed effective August 15, 2018.
(3)  Loans are reflected net of deferred fees and costs.
(4)  Gain on sale percentage is calculated as gain on sale of loans divided by the sum of gain on sale of loans and proceeds from loans held for sale, net of gains.

ABOUT CAPITAL BANCORP, INC.

Capital Bancorp, Inc., Rockville, Maryland is a registered bank holding company incorporated under the laws of Maryland. The Company’s wholly-owned subsidiary, Capital Bank, N.A., is the eighth largest bank headquartered in Maryland. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in five locations in the greater Washington, D.C. and Baltimore, Maryland markets.  Capital Bancorp had assets of approximately $1.2 billion at June 30, 2019 and its common stock is traded in the NASDAQ Global Market under the symbol “CBNK.” More information can be found at the Company's website www.CapitalBankMD.com under its investor relations page.

FORWARD-LOOKING STATEMENTS

This earnings release contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements.  Accordingly, we caution you that any such forward-looking statements are not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors. Such factors include, without limitation, those listed from time to time in reports that the Company files with the Securities and Exchange Commission. 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: Alan Jackson (240) 283-0402

MEDIA CONTACT: Ed Barry (240) 283-1912

WEB SITE:  www.CapitalBankMD.com