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CAPITAL BANK CBNK Robust Loan Growth Drives Record Profits and Returns October 25 , 2021 Diluted EPS of $ 0.79 , ROAA of 2.13 % , and ROAE of 23.87 % for 3Q 2021 ROCKVILLE , Md . , Oct. 25 , 2021 ( GLOBE NEWSWIRE ) -- Capital Bancorp , Inc. ( the " Company " ) ( NASDAQ : CBNK ) , the holding company for Capital Bank , N.A. ( the " Bank " ) , today reported net income of $ 11.2 million , or $ 0.79 per diluted share , for the third quarter of 2021. By comparison , net income was $ 8.4 million , or $ 0.61 per diluted share , for the third quarter of 2020. Return on average assets ( " ROAA " ) was 2.13 % for the third quarter of 2021 , compared to 1.89 % for the same period in 2020. Return on average equity ( " ROAE " ) was 23.87 % for the third quarter of 2021 , compared to 23.28 % for the same period in 2020 . " Capital Bancorp's diversified business model continued to outperform in the third quarter , " said Steven Schwartz , Chairman of the Board of the Company . " The Bank's results highlight the success of ongoing strategic investments in technology and people that have positioned the Bank for continued profitable growth . " " The third quarter's record results were driven by strong growth in the Commercial Bank and OpenSkyⓇ which more than made up for the anticipated slowdown of our mortgage business , " said Ed Barry , CEO of the Company . " Regional economic activity and strategic hires contributed to 15.8 percent annualized portfolio loan growth quarter over linked - quarter on a consolidated basis . OpenSkyⓇ remains an engine of growth as we engage with customers to provide additional value - added services . OpenSkyⓇ annualized quarterly loan growth of 44.3 percent marked a return to historical trends . Customer attrition , which resulted in a modest decline in open accounts for the quarter , remains well - below historical levels . " Third Quarter 2021 Highlights Capital Bancorp , Inc. • Record Earnings - Continued strong performance by the Commercial Bank and OpenSkyⓇ contributed to the third quarter's record results . Quarterly net income increased to $ 11.2 million from $ 8.4 million in the third quarter of 2020 . Earnings were $ 0.79 per diluted share for the three months ended September 30 , 2021 compared to $ 0.61 per diluted share for the same period last year . • Industry - Leading Performance Ratios - Return on average assets ( " ROAA " ) and return on average equity ( " ROAE " ) were 2.13 % and 23.87 % , respectively , for the three months ended September 30 , 2021 compared to 1.89 % and 23.28 % , respectively , for the three months ended September 30 , 2020 . • Expanded Net Interest Margin - The net interest margin was 6.27 % for the three months ended September 30 , 2021 , which is an increase of 126 basis points compared to 5.01 % for the same three month period last year and an increase quarter over quarter of 80 basis points , from 5.47 % , for the three months ended June 30 , 2021. The margin improvement quarter over quarter was driven by an increase in average loans outstanding , improving loan yields , and management's concentrated effort to lower funding costs . • Robust Capital Positions - As of September 30 , 2021 , the Company reported a common equity tier 1 capital ratio of 14.34 % and an allowance for loan losses to total loans ratio of 1.56 % , or 1.71 % excluding Small Business Administration Payroll Protection Program ( " SBA - PPP " ) loans . During the preceding twelve months , tangible book value per common share grew 25.5 percent to $ 13.70 at September 30 , 2021 . Commercial Bank • Accelerating Portfolio Loan Growth - Portfolio loans , excluding credit cards , increased by $ 156.2 million to $ 1.3 billion at September 30 , 2021 compared to September 30 , 2020 , and by $ 41.6 million , or 13.0 percent annualized , compared to June 30 , 2021. The year over year growth was mainly due to a 34.7 percent increase in commercial real estate loans of $ 129.6 million , a 6.2 percent increase in commercial and industrial loans of $ 8.4 million , and a 10.4 percent increase in construction real estate loans of $ 23.6 million . • Growth in Core Deposits and Reduced Cost of Funds - Noninterest bearing deposits increased 39.7 percent compared to September 30 , 2020. The $ 236.9 million year over year increase was primarily due to an increase in commercial demand deposits reflecting management's ongoing strategic initiative to improve the deposit franchise . At September 30 , 2021 , noninterest bearing deposits represented 43.4 % of total deposits compared to 43.2 % at June 30 , 2021 and 35.9 % at September 30 , 2020. Overall , the cost of interest bearing liabilities was reduced 65 basis points , from 1.18 % for the quarter