v3.26.3
Segments
 9 Months Ended
Sep. 30, 2026
Segment Reporting [Abstract]  
Segments
Note 11 - Segments
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™ (the Company’s SBA/USDA loan servicing provider) and CBHL (the Company’s residential mortgage loan division).
The Company’s Commercial Banking division operates primarily in the Washington, D.C. and Baltimore metropolitan areas and focuses on providing personalized service to commercial clients throughout our area of operations, supplemented by lending outside of our primary market as well as engaging in government guaranteed lending on a nation-wide basis. Additionally, the Commercial Bank engages in deposit verticals on a nationwide scale providing services to HOAs, mortgage companies and other customers.
The Company issues credit cards through OpenSky™, a digitally-driven, nationwide credit card platform providing secured, partially secured, and unsecured credit solutions, and originates residential mortgages for sale in the secondary market through CBHL, the Bank’s residential mortgage banking arm. Additionally, Windsor Advantage™, a wholly owned subsidiary of the Company, is a loan service provider that offers community banks and credit unions a comprehensive SBA 7(a) and USDA lending platform.
The Company’s reportable segments are determined by the Company’s designated chief operating decision maker, which is comprised of the Company’s Chief Executive Officer (“CEO”) and the Bank’s CEO, based upon organizational design, leadership structure and the Company’s products and services offered. The Company’s reportable segments are also distinguished by the level of information provided to the chief operating decision maker, which is used to review performance of various components of the business, which are then aggregated if operating performance, products/services, and customers are similar.
The chief operating decision maker evaluates the financial performance of the Company’s business components by evaluating revenue streams, significant expenses, and variance to the annual financial plan to assess the performance of the Company’s segments and in the determination of allocating resources and investments.
The chief operating decision maker uses revenue streams and other relevant market data to evaluate product pricing and significant expenses to assess segment performance. Segment pretax income or loss, return on assets and the efficiency ratio is used to assess the performance of the Commercial Bank segment by monitoring the margin between interest income and interest expense. Segment pretax income or loss is used to assess the performance of the CBHL segment by monitoring the mortgage banking revenue from loan originations and sales. Segment pretax income or loss is used to assess the performance of the OpenSky™ segment by monitoring credit card interest income, interchange fees, and other fees. Segment pretax income or loss is used to assess the performance of the Windsor Advantage™ segment by monitoring the service charge revenues from Windsor Advantage™ customers.
Loans, investments, and deposits and fees provide the revenues in the Commercial Bank; loan sales provide the revenues in CBHL; credit card loan interest and fees provide the revenues in OpenSky™; and service charges and ancillary fees provide the revenues in Windsor Advantage™. Interest expense, provisions for credit losses and personnel provide the significant expenses in the Commercial Bank; cost of loan sales and personnel comprise the significant expenses in CBHL; data processing and personnel comprise the significant expenses in OpenSky™; and personnel comprise the significant expenses in Windsor Advantage™.
The Company formed Church Street Capital, LLC (“Church Street Capital” or “CSC”) in 2014 to provide short-term real estate financing to Washington, D.C. area investors and developers that may not meet all Bank credit criteria. CSC operates as a wholly owned subsidiary of Capital Bancorp, Inc. CSC originates and services a portfolio of primarily mezzanine loans with certain characteristics that do not meet Capital Bank’s general underwriting standards but command a higher rate of return. At September 30, 2026, CSC had loans totaling $5.7 million with a collectively assessed ACL of $315 thousand. Refer to
Note 6 - ''Portfolio Loans Receivable and Allowance for Credit Losses'' to the “Notes to Unaudited Consolidated Financial Statements” for further discussion of the consolidated ACL. The operations of CSC are included within the Commercial Bank segment performance.
Accounting policies for segments are discussed in detail in Note 1 - ''Nature of Business and Basis of Presentation'' in the “Notes to the Consolidated Financial Statements” contained in Item 8 “Financial Statements and Supplementary Data” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Segment performance is evaluated using income (loss) before taxes. Indirect expenses are allocated on revenue. Transactions among segments are made at fair value.
The following schedules reported internally for performance assessment by the chief operating decision maker present financial information for each reportable segment at and for the three and nine months ended September 30, 2026 and 2025.
For the Three Months Ended September 30, 2026
(in thousands)
Commercial Bank(2)(3)
OpenSky™
Windsor Advantage™
CBHLConsolidated
Interest income$55,580 $16,517 $— $195 $72,292 
Interest expense19,128 — — 86 19,214 
Net interest income36,452 16,517 — 109 53,078 
Provision for credit losses1,316 3,587 — — 4,903 
Release of credit losses on unfunded commitments(54)— — — (54)
Net interest income after provision35,190 12,930 — 109 48,229 
Noninterest income
Service charges on deposits418 — — — 418 
Credit card fees— 4,520 — — 4,520 
Mortgage banking revenue490 — — 1,359 1,849 
Government lending revenue1,474 — — — 1,474 
Government loan servicing revenue(1)
(1,665)— 6,738 — 5,073 
Loan servicing rights (government guaranteed)523 — — — 523 
Other income877 31 5 269 1,182 
Total noninterest income2,117 4,551 6,743 1,628 15,039 
Noninterest expenses
Salaries and employee benefits
11,879 4,319 3,095 1,823 21,116 
Occupancy and equipment2,441 1,064 436 203 4,144 
Professional fees2,469 1,736 287 427 4,919 
Data processing442 7,152 62 52 7,708 
Advertising1,183 143 123 117 1,566 
Loan processing266 5 1 271 543 
Merger-related expenses1,577 — — — 1,577 
Operational and other card fraud related losses73 812 23 22 930 
Regulatory assessment expenses563 232 70 65 930 
Other operating1,332 262 563 132 2,289 
Total noninterest expenses22,225 15,725 4,660 3,112 45,722 
Net income (loss) before taxes$15,082 $1,756 $2,083 $(1,375)$17,546 
Total assets$3,607,589 $144,462 $28,508 $21,994 $3,802,553 
_______________
(1)    Gross government loan servicing revenue totaled $6.7 million, including $1.7 million of servicing fees earned from the Commercial Bank by Windsor Advantage™, for the three months ended September 30, 2026.
(2)    Commercial Bank’s return on assets of 1.66% for the three months ended September 30, 2026 is calculated by dividing net income before taxes by total assets.
(3)    Commercial Bank’s efficiency ratio of 57.6% for the three months ended September 30, 2026 is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
For the Three Months Ended September 30, 2025
(in thousands)
Commercial Bank(2)(3)
OpenSky™
Windsor Advantage™
CBHLConsolidated
Interest income$49,035 $15,628 $— $228 $64,891 
Interest expense12,768 — — 103 12,871 
Net interest income36,267 15,628 — 125 52,020 
Provision for credit losses1,852 2,798 — — 4,650 
Provision for credit losses on unfunded commitments217 — — — 217 
Net interest income after provision34,198 12,830 — 125 47,153 
Noninterest income
Service charges on deposits425 — — — 425 
Credit card fees— 4,509 — — 4,509 
Mortgage banking revenue315 — — 1,612 1,927 
Government lending revenue14 — — — 14 
Government loan servicing revenue(1)
(1,074)— 5,339 — 4,265 
Loan servicing rights (government guaranteed)368 — — — 368 
Other income (loss)(557)(33)— 150 (440)
Total noninterest income(509)4,476 5,339 1,762 11,068 
Noninterest expenses
Salaries and employee benefits
10,559 3,271 2,455 1,443 17,728 
Occupancy and equipment1,635 632 416 166 2,849 
Professional fees1,079 571 198 283 2,131 
Data processing350 7,154 97 53 7,654 
Advertising694 833 76 111 1,714 
Loan processing740 15 67 292 1,114 
Merger-related expenses697 — — — 697 
Operational and other card fraud related losses— 923 — — 923 
Regulatory assessment expenses788 (30)(11)(7)740 
Other operating1,493 587 614 110 2,804 
Total noninterest expenses18,035 13,956 3,912 2,451 38,354 
Net income (loss) before taxes$15,654 $3,350 $1,427 $(564)$19,867 
Total assets$3,213,222 $134,422 $21,743 $20,055 $3,389,442 
_______________
(1)    Gross government loan servicing revenue totaled $5.3 million, including $1.1 million of servicing fees earned from the Commercial Bank by Windsor Advantage™, for the three months ended September 30, 2025.
(2)    Commercial Bank’s return on assets of 1.93% for the three months ended September 30, 2025 is calculated by dividing net income before taxes by total assets.
(3)    Commercial Bank’s efficiency ratio of 50.4% for the three months ended September 30, 2025 is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
For the Nine Months Ended September 30, 2026
(in thousands)Commercial BankOpenSky™
Windsor Advantage™
CBHLConsolidated
Interest income$162,024 $47,573 $— $624 $210,221 
Interest expense56,494 — — 322 56,816 
Net interest income105,530 47,573 — 302 153,405 
Provision for credit losses1,221 10,281 — — 11,502 
Provision for credit losses on unfunded commitments216 — — — 216 
Net interest income after provision104,093 37,292 — 302 141,687 
Noninterest income
Service charges on deposits1,230 — — — 1,230 
Credit card fees— 13,607 — — 13,607 
Mortgage banking revenue1,184 — — 4,181 5,365 
Government lending revenue3,604 — — — 3,604 
Government loan servicing revenue(1)
(4,183)— 18,904 — 14,721 
Loan servicing rights (government guaranteed)1,312 — — — 1,312 
Other income2,202 73 5 654 2,934 
Total noninterest income5,349 13,680 18,909 4,835 42,773 
Noninterest expenses
Salaries and employee benefits
36,017 11,998 8,384 5,101 61,500 
Occupancy and equipment6,626 3,229 1,219 574 11,648 
Professional fees7,170 4,825 836 1,178 14,009 
Data processing1,439 21,242 188 157 23,026 
Advertising2,666 1,333 480 369 4,848 
Loan processing2,269 323 32 777 3,401 
Merger-related expenses1,577 — — — 1,577 
Operational and other card fraud related losses210 2,055 23 22 2,310 
Regulatory assessment expenses1,744 661 200 191 2,796 
Other operating3,749 1,616 1,726 383 7,474 
Total noninterest expenses63,467 47,282 13,088 8,752 132,589 
Net income (loss) before taxes$45,975 $3,690 $5,821 $(3,615)$51,871 
Total assets$3,607,589 $144,462 $28,508 $21,994 $3,802,553 
_______________
(1)    Gross government loan servicing revenue totaled $18.9 million, including $4.2 million of servicing fees earned from the Commercial Bank by Windsor Advantage™, for the nine months ended September 30, 2026.
(2)    Commercial Bank’s return on assets of 1.70% for the nine months ended September 30, 2026 is calculated by dividing net income before taxes by total assets.
(3)    Commercial Bank’s efficiency ratio of 57.2% for the nine months ended September 30, 2026 is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
For the Nine Months Ended September 30, 2025
(in thousands)Commercial BankOpenSky™
Windsor Advantage™
CBHLConsolidated
Interest income$147,128 $44,566 $— $543 $192,237 
Interest expense46,273 — — 251 46,524 
Net interest income100,855 44,566 — 292 145,713 
Provision for credit losses3,457 7,520 — — 10,977 
Provision for credit losses on unfunded commitments217 — — — 217 
Net interest income after provision97,181 37,046 — 292 134,519 
Noninterest income
Service charges on deposits945 — — — 945 
Credit card fees— 12,529 — — 12,529 
Mortgage banking revenue1,043 — — 4,469 5,512 
Government lending revenue4,222 — — — 4,222 
Government loan servicing revenue(1)
(3,164)— 14,641 — 11,477 
Loan servicing rights (government guaranteed)250 — — — 250 
Other income1,215 3 — 570 1,788 
Total noninterest income4,511 12,532 14,641 5,039 36,723 
Noninterest expense
Salaries and employee benefits
32,275 10,019 7,370 4,591 54,255 
Occupancy and equipment5,115 1,693 1,495 451 8,754 
Professional fees3,802 1,714 389 760 6,665 
Data processing1,244 20,633 283 126 22,286 
Advertising2,207 2,177 215 265 4,864 
Loan processing1,867 58 128 783 2,836 
Merger-related expenses3,361 — — — 3,361 
Operational and other card fraud related losses131 2,628 — — 2,759 
Regulatory assessment expenses2,513 — — — 2,513 
Other operating4,719 1,441 1,222 304 7,686 
Total noninterest expenses57,234 40,363 11,102 7,280 115,979 
Net income (loss) before taxes$44,458 $9,215 $3,539 $(1,949)$55,263 
Total assets$3,213,222 $134,422 $21,743 $20,055 $3,389,442 
_______________
(1)    Gross government loan servicing revenue totaled $14.6 million, including $3.2 million of servicing fees earned from the Commercial Bank by Windsor Advantage™, for the nine months ended September 30, 2025.
(2)    Commercial Bank’s return on assets of 1.85% for the nine months ended September 30, 2025 is calculated by dividing net income before taxes by total assets.
(3)    Commercial Bank’s efficiency ratio of 54.3% for the nine months ended September 30, 2025 is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).
The following table presents financial information as of September 30, 2026, December 31, 2025 and September 30, 2025.
September 30, 2026
(in thousands)Commercial BankOpenSky™
Windsor Advantage™
CBHLConsolidated
Cash and cash equivalents$247,468 $7,832 $6,732 $— $262,032 
Goodwill22,448 — 3,521 — 25,969 
Intangible assets1,379 — 12,610 — 13,989 
Other segment assets3,336,294 136,630 5,645 21,994 3,500,563 
Total assets$3,607,589 $144,462 $28,508 $21,994 $3,802,553 
December 31, 2025
(in thousands)Commercial BankOpenSky™
Windsor Advantage™
CBHLConsolidated
Cash and cash equivalents$242,149 $8,039 $5,377 $— $255,565 
Goodwill22,448 — 3,521 — 25,969 
Intangible assets1,528 — 13,243 — 14,771 
Other segment assets3,141,201 132,875 3,852 31,974 3,309,902 
Total assets$3,407,326 $140,914 $25,993 $31,974 $3,606,207 
September 30, 2025
(in thousands)Commercial BankOpenSky™
Windsor Advantage™
CBHLConsolidated
Cash and cash equivalents$176,685 $7,701 $4,475 $— $188,861 
Goodwill25,969 — — — 25,969 
Intangible assets1,579 — 13,454 — 15,033 
Other segment assets3,008,989 126,721 3,814 20,055 3,159,579 
Total assets$3,213,222 $134,422 $21,743 $20,055 $3,389,442