Capital Bancorp Inc (CBNK) SEC Filings & Earnings Calls

Transaction subject to regulatory approvals; potential for non-completion.

“Consummation subject to customary closing conditions, including regulatory approvals.”

Merger subject to regulatory approvals and shareholder votes; closing conditions include HSR and other antitrust laws.

“Closing subject to customary closing conditions, including expiration or termination of applicable waiting periods under HSR Act and other antitrust laws.”

Prior material weakness in internal control over financial reporting disclosed in 2025 10-K

“a material weakness in the Company's internal control over financial reporting disclosed by the Company in its Annual Report on Form 10-K for the fiscal year ended December 31, 2025” · word for word

Credit card credit losses

“Credit card net charge-offs increased to 8.53% annualized from 6.82% YoY, driven by unsecured portfolio growth.”

Government lending revenue decline

“Government lending revenue decreased $1.9M YoY due to USDA budget cuts and solar tax credit changes.”

Material weakness in internal controls

“Management identified a material weakness in the Company’s internal control over financial reporting.” · word for word

Concentration in commercial real estate

“The capital levels required to be maintained by the Company and Bank may be impacted as a result of the Bank’s concentrations in commercial real estate loans.” · word for word

Nonperforming loan increase

“Nonperforming loans were $57.0 million, an increase of $2.6 million from December 31, 2025.” · word for word

Net interest margin compression

“Core Net Interest Margin 4.15% vs 4.36%”

Efficiency ratio deterioration

“Efficiency Ratio 69.59% vs 64.94%”

Credit quality weakening

“Net Charge-Offs to Average Portfolio Loans, Annualized 0.40% vs 0.38%” · word for word

Net interest margin compression due to rate environment and deposit mix shift.

“NIM decreased 23 bps QoQ and 34 bps YoY; core NIM ex-card down 4 bps QoQ and 21 bps YoY.”

Earnings decline: net income down 20% QoQ and 13.7% YoY.

“Net income $12.0M vs $15.0M QoQ and $13.9M YoY.”

Concentration risk from single customer deposit relationship ($107.8M).

“Excluding $107.8 million of deposit growth tied to a single customer relationship, total deposits grew 11.9% annualized.” · word for word

Cybersecurity threat remains high

“Cybersecurity threats can be significant and remain a high risk as cyber-attacks are sophisticated and increasing in volume... it is possible that we could be materially affected by a cybersecurity incident in the future.” · word for word

Concentration of insider ownership and classified board structure may limit shareholder influence

“approximately 34% of our outstanding common stock is held or controlled by members of the Board and management.” · word for word

Significant increase in audit fees

“Audit Fees $ 809,791 (2025) vs 546,743 (2024)”

Material Weakness in Internal Control

“Management has identified a material weakness resulting from a combination of (i) lack of a dedicated control designed to clear items on loan clearing accounts dating back to the IFH transaction and (ii) turnover within the operations department” · word for word

Credit Quality Deterioration in Unsecured Cards

“Net charge-offs for the year ended December 31, 2025 were $12.4 million, or 0.45% of average portfolio loans, compared to $9.0 million, or 0.42% of average portfolio loans” · word for word

NIM Compression from Acquisition Mix

“The net interest margin decreased 12 basis points to 6.10% for the year ended December 31, 2025 compared to 6.22% for the prior year.” · word for word

Sequential NIM decline of 42 bps due to lower purchase accounting accretion; core NIM excluding PAA improved 21 bps.

“Net Interest Margin of 5.94% decreased 42 bps compared to 3Q 2025...4Q 2025 net PAA of $0.2 million...decreased $5.3 million, or 61 bps, compared to 3Q 2025”

ACL coverage ratio decreased 3 bps sequentially and remained flat YoY; Commercial Bank ACL decreased 5 bps.

“The allowance for credit losses to total loans equaled 1.85% at December 31, 2025, which represented a 3 bps decrease from September 30, 2025”

Credit quality deterioration from acquired loans

“At September 30, 2025, the nonperforming assets were $52.2 million, an increase of $22.0 million from December 31, 2024. Credit metrics were impacted by the two loan relationships previously mentioned, both of which were acquired as part of the IFH transactions.” · word for word

Concentration in commercial real estate loans

“Commercial real estate loans represent 35% of the loan portfolio, and the company notes that 'the capital levels required to be maintained by the Company and Bank may be impacted as a result of the Bank’s concentrations in commercial real estate loans.'”

Integration risk from IFH acquisition

“Merger-related expenses of $3.4 million were incurred in the nine months ended September 30, 2025, and the company identified a $1.3 million interest income reversal due to incorrect classification of servicing income from legacy IFH loans.”

Exposure to federal government shutdown

“The company added a risk factor stating: 'The continuation of the U.S. federal government shutdown could adversely affect the U.S. and global economy and our business, financial condition and results of operations.'”

Deposit decline of $28.7M QoQ; customer deposits only grew $3.9M, indicating potential funding pressure.

“Total deposits decreased $28.7 million, or (3.9)% (annualized), from 2Q 2025. Customer Deposit growth of $3.9 million, or 0.6% (annualized).”

ACL coverage ratio increased due to acquired loans; credit quality of acquired portfolio may be weaker.

“ACL Coverage Ratio equaled 1.88% at September 30, 2025, up 15 bps from June 30, 2025, primarily due to the acquisition of IFH loans.”