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Item 9A. Controls and Procedures

2026-03-16 compared with 2025-03-17 · 54 added, 26 removed, 125 unchanged (39% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

The Company’s management, including our Principal Executive Officer and Principal Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report.

This evaluation did not include an assessment of those disclosure controls and procedures that are involved in, and did not include an assessment of, internal control over financial reporting as it relates to IFH.

Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is (i) recorded, processed, summarized and reported as and when required and (ii) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

Except as described in the following paragraph, there were no significant changes in the Company’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or that are reasonably likely to affect, our internal control over financial reporting.

The Company’s management, including our Principal Executive Officer and Principal Financial Officer, is responsible for maintaining disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is (i) recorded, processed, summarized and reported as and when required and (ii) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

In connection with preparing this report, the Company’s management, including our Principal Executive Officer and Principal Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report.

Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective because of a material weakness in internal control over financial reporting.

Notwithstanding the material weakness, based on additional analyses and other procedures performed, management believes the consolidated financial statements included in this report fairly present, in all material respects, the Company’s financial position, results of operations and cash flows, as of the periods presented, in accordance with GAAP.

Report by Management on Internal Control over Financial Reporting

6 unchanged sentences

This assessment was based on criteria for effective internal control over financial reporting described in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management believes that, as of December 31, 2024, the Company maintained effective internal control over financial reporting based on those criteria.

Under guidelines established by the SEC, companies are allowed to exclude an acquired business from management's report on internal control over financial reporting for the first year subsequent to the acquisition while integrating the acquired operations.

However, business combination and entity level controls are not covered by the exemption.

The Company acquired IFH effective October 1, 2024.

Accordingly, management excluded IFH from its assessment of the Company's internal control over financial reporting.

Business combination and entity level controls were assessed.

Total assets and net interest income and noninterest income of IFH represent approximately 14.6% and 6.8%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.

Based on this assessment, management believes that, as of December 31, 2025, the Company did not maintain effective internal control over financial reporting based on those criteria due to the presence of a material weakness as described below.

A material weakness (as defined in Rule 12b-2 under the Exchange Act) exists when there is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement in the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In connection with management’s assessment of the Company’s internal control over financial reporting described above, management identified a material weakness in the Company’s internal control over financial reporting.

This material weakness resulted 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 that impacted the execution of controls over transactions related to government-guaranteed loan sales and participations.

The operational processes and systems used to book, sell and participate these loans were inherited from the IFH transaction.

Specifically, the controls relate to two clearing accounts that support transactional activity related to the sale and participation of these loans.

Management concluded that these control deficiencies neither resulted in any material misstatements, nor did they require revisions to the Company’s previously issued consolidated financial statements.

Elliott Davis, PLLC, the independent registered public accounting firm that audited the Company’s consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the Company’s internal control over financial reporting as of December 31, 2025.

1 unchanged sentence

Financial Statements and Supplementary Data under the heading “Report of Independent Registered Public Accounting Firm.”

Remediation Plan and Status

The material weakness cannot be considered remediated until applicable controls have been designed, implemented, have operated for a sufficient period of time, and management has concluded, through testing, that these controls are operating effectively.

Management and the Board of Directors are committed to maintaining an effective system of internal control over financial reporting.

In response to the control deficiency that resulted in the material weakness described above, management has developed and has been executing on the following remediation plan:

• Added loan operations personnel to support monitoring of these accounts and to address turnover within the loan operations function.

• Continue to perform a daily reconciliation of items in both accounts.

Revised procedures will require that aged items be escalated to the Chief Operating Officer, the Chief Financial Officer, Head of Operations and the Head of Loan Operations.

• Continue to complete a monthly reconciliation between the Bank’s core system and the Government Guaranteed Lending loan system.

Reconciliation differences will be escalated to the Chief Operating Officer and the Chief Financial Officer, who, together, will determine how to appropriately disposition these differences.

• Establish, on a temporary basis, a sub-working group that meets bi-weekly to review the closing, amendment, sale, or participation of government guaranteed loans and all loans involving a participant.

The sub-working group will confirm that these transactions are processed through the appropriate accounts and will review related entries.

The sub-working group will include, at a minimum, the Chief Operating Officer, the Head of Loan Operations, and other key operations personnel.

During each quarterly closing cycle, the sub-working group will also review all remaining entries in both suspense accounts and determine the appropriate disposition of any items not cleared.

The sub-working group will report to Management’s Executive Sarbanes-Oxley Steering Committee.

Management has made substantial progress remediating the underlying causes, though, as of the date of this filing, the matter has not yet been fully resolved.

We believe that the actions outlined above will remediate the material weakness once a sufficient period of time has passed for management to conclude, through testing, that these controls are operating effectively.

We will continue to assess the

effectiveness of our internal control over financial reporting and have taken steps to remediate the material weakness as expeditiously as possible.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fourth quarter of 2024 to which this report relates that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting other than the IFH acquisition effective October 1, 2024 that has been previously described.

During the first quarter of 2025, management put into place or enhanced to improve the effectiveness of the Company’s internal controls over the evidence of review of Day 1 accounting for acquisitions.

These include evidence of review controls over management’s Purchase Accounting Workbook, calculation of goodwill, and the Day 1 PCD reserve.

Except as described above, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fourth quarter of 2025 to which this report relates that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

OTHER INFORMATION

38 unchanged sentences

4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Form S-1/A filed on September 17, 2018)

4.2 Description of Registrant’s Securities (incorporated by reference to Exhibit 4.2 to the Company’s Form 10-K filed March 16, 2020)

4.2 Description of Registrant’s Securities (incorporated by reference to Exhibit 4.2 to the Company’s Form 10-K filed on March 16, 2020)

4.3 Long-term borrowing instruments are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K.

9 unchanged sentences

10.5 Form of Amended and Restated 2017 Stock and Incentive Plan Incentive Stock Option Award Agreement for Executive Officers (incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K filed on March 15, 2024)

10.6 Form of Amended and Restated 2017 Stock and Incentive Compensation Plan Restricted Stock Unit Award Agreement for Executive Officer s (incorporated by reference to Exhibit 10.8 to the Company ’ s Annual Report on Form 10-K filed on March 15, 2024)

10.6 Form of Amended and Restated 2017 Stock and Incentive Compensation Plan Restricted Stock Unit Award Agreement for Executive Officers (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K filed on March 15, 2024)

10.7 Employment Agreement dated January 1, 2022 between Capital Bank, N.A.

1 unchanged sentence

10.8 Amendment to Employment Agreement, dated April 13, 2023, between Capital Bank, N.A.

Brownin g (incorporated by reference to Exhibit 10.10 to the Company ’ s Annual Report on Form 10-K filed on March 15, 2024)

Browning (incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K filed on March 15, 2024)

10.9 Employment Contract, dated April 30, 2018, by and among Capital Bank, N.A.

Dicker (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2020, filed on May 11, 2020)

10.10 Nonqualified Deferred Compensation Plan dated January 1, 202 1 (incorporated by reference to Exhibit 10.12 to the Company ’ s Annual Report o n Form 10-K filed on March 15, 2024)

10.10 Nonqualified Deferred Compensation Plan dated January 1, 2021 (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed on March 15, 2024)

10.11 Employment Agreement, effective June 29, 2022 between Capital Bank, N.A.

4 unchanged sentences

10.13 Amendment to Employment Agreement, dated April 13, 2023, between Capital Bank, N.A.

and Steven Poyno t (incorporated by reference to Exhibit 10.15 to the Company ’ s Annual Report on Form 10-K filed on March 15, 2024)

and Steven Poynot (incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed on March 15, 2024)

10.14 Second Amendment to Employment Agreement, dated May 5, 2025, between Capital Bank, N.A.

and Steven Poynot (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on May 9, 2025)

10.15 Employment Agreement, dated July 15, 2024, between Capital Bank, N.A.

and Dominic Canuso (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on July 8, 2024)

10.16 First Amendment to Employment Agreement, dated May 5, 2025, between Capital Bank, N.A.

and Dominic Canuso (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on May 9, 2025)

10.17 Amended and Restated Employment Agreement, dated as of September 17, 2024, by and between Michael Breckheimer and Windsor Advantage, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on October 1, 2024)

19.1 Insider Trading Policy

10.18 Employment Agreement, dated November 1 4 , 202 5 , between Capital Bank, N.A.

and Jacob “ Ja ke ” Dalaya (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on November 14 , 202 5 )

10.19 Employment Agreement, effective January 1, 2026 between Capital Bank, N.A.

and Edward F.

Barry (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on December 31, 2025)

10.20 Employment Agreement, dated February 6, 2026, between Capital Bank, N.A., Capital Bancorp, Inc.

and Steven Poynot (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on February 10, 2026)

19.1 Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the Company’s Annual Report on Form 10-K filed on March 17, 2025)

21.0 Subsidiaries of Capital Bancorp, Inc.

5 unchanged sentences

32.1 Section 1350 Certification of Principal Executive Officer and Principal Financial Officer

97.1 Compensation Recovery Polic y (incorporated by reference to Exhibit 97.1 to the Company ’ s Annual Report on Form 10-K filed on March 15, 2024)

97.1 Compensation Recovery Policy (incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K filed on March 15, 2024)

101 The following materials from the Annual Report on Form 10-K of Capital Bancorp, Inc.

13 unchanged sentences

(Principal Executive Officer) March 16, 2026

/s/ Dominic Canuso

/s/ Jacob Dalaya

Executive Vice President

Chief Financial Officer March 16, 2026

Dominic Canuso

(Principal Financial Officer)

8 unchanged sentences

Director March 16, 2026

/s/ Mark Caplan

Director March 16, 2026

1 unchanged sentence

Director March 16, 2026

/s/ Marc McConnell

1 unchanged sentence

Marc McConnell

/s/ Mary Ann Scully

Director March 17, 2025

Mary Ann Scully

/s/ Deborah Ratner Salzberg

3 unchanged sentences

Chairman of the Board of Directors March 16, 2026

/s/ Mary Ann Scully

Director March 16, 2026

Mary Ann Scully

Director March 16, 2026

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures