Capital Bancorp Reports 9.2% Loan Growth, 26.1% Deposit Surge, Earnings Fall 20%
Capital Bancorp's gross loans rose 9.2% annualized to $3.03 billion and total deposits jumped 26.1% to $3.29 billion in 1Q26, driving tangible book value per share up 10.5% to $22.62. First-quarter net income fell 20% to $12.0 million and diluted EPS declined to $0.73.
1. Balance Sheet Expansion
In 1Q26, gross loans reached $3.026 billion, up 9.2% annualized from the prior quarter, while total deposits surged 26.1% annualized to $3.292 billion. Customer deposits climbed 40.7% annualized to $2.989 billion, reducing reliance on brokered funding. Tangible book value per share rose to $22.62, a 10.5% annualized increase.
2. Earnings Performance
First-quarter net income fell to $12.0 million, a 20% decline from 4Q25, and diluted EPS slid to $0.73, down 19.8%. Core net income also dropped 20.1% sequentially to $12.0 million. Net interest margin narrowed to 5.71%, reflecting rate environment shifts and changes in the OpenSky portfolio.
3. Strategic Investments and Returns
The bank advanced investments in technology, data infrastructure, unsecured card products and back-office efficiency to support long-term growth. Fee revenue jumped 29.6% annualized, representing 21.3% of total revenue, driven by SBA and USDA loan sales. Capital returned to shareholders via $3.5 million in share repurchases and a $0.12 per share cash dividend.