The balance sheets as of December 31, 2018 and 2017 and statements of income and cash flows for the years then ended, for Capital Bancorp, Inc. (Parent only) are presented below. All share and per common share amounts have been adjusted to reflect the Stock Split. Refer to Note 1 for additional information.



Parent Company Only Balance Sheets

(in thousands)	2018			2017
Assets
Cash and cash equivalents	$	3,768		$	798
Investment in Bank	95,524			85,898
Investment in Church Street Capital	3,284			3,092
Investment in Trust	62			62
Loans receivable, net of allowance for loan losses of $208 and $44 at December 31, 2018 and 2017, respectively	27,032			7,208
Accrued interest receivable	106			83
Due from subsidiaries	54			—
Prepaid income taxes	90			135
Deferred income taxes	18			18
Other assets	134			537
	$	130,072		$	97,831

Liabilities and Stockholders’ Equity
Borrowed funds	$	15,393		$	17,361
Accrued interest payable	81			82
Due to subsidiaries	—			94
Other liabilities	34			175
	15,508			17,712
Stockholders’ equity
Common stock	137			115
Additional paid-in capital	49,321			27,051
Retained earnings	65,701			53,200
Accumulated other comprehensive loss	(595		)	(247		)
Total stockholders’ equity	114,564			80,119
	$	130,072		$	97,831



Parent Company Only Statements of Income

(in thousands)	2018			2017
Interest and dividend revenue	$	577		$	342
Dividend from Bank	4,250			2,450
Total interest and dividend revenue	4,827			2,792
Interest expense	1,071			1,148
Net interest income	3,756			1,644
Provision for loan losses	164			—
Net interest income after provision for loan losses	3,592			1,644
Noninterest income	8			3
Noninterest expenses	(248		)	(137		)
Income before income taxes	3,352			1,510
Income tax benefit	188			308
Income before undistributed net income of subsidiaries	3,540			1,818
Equity in undistributed net income of subsidiaries	9,227			5,291
Net income	$	12,767		$	7,109



Parent Company Only Statements of Cash Flows
(in thousands)	2018			2017
Cash flows from operating activities
Net Income	12,767			7,109
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	164			—
Equity in undistributed income-subsidiary	(9,227		)	(6,380		)
(Increase) decrease in receivable from subsidiary bank	(148		)	144
Stock-based compensation expense	570			506
Director and employee compensation paid in Company stock	496			776
Deferred income tax benefit	(141		)	(239		)
Amortization of debt issuance costs	32			34
Changes in assets and liabilities:
Accrued interest receivable	(23		)	(26		)
Prepaid income taxes and taxes payable	45			69
Other assets	(169		)	(443		)
Accrued interest payable	(1		)	—
Other liabilities	—			18
Net cash provided by operating activities	4,365			1,568

Cash flows from investing activities
Net increase in loans receivable	(19,988		)	(3,558		)
Capital injections to subsidiaries	(367		)	80
Net cash provided by investing activities	(20,355		)	(3,478		)

Cash flows from financing activities
Repayment of debt	(2,000		)	—
Repurchase of common stock	(45		)	(512		)
Proceeds from exercise of stock options	1,043			1,668
Proceeds from shares sold	198			—
Proceeds from initial public offering, net	19,764			—
Net cash provided by financing activities	18,960			1,156

Net increase (decrease) in cash and cash equivalents	2,970			(754		)

Cash and cash equivalents, beginning of year	798			1,552

Cash and cash equivalents, end of year	$	3,768		$	798