Document

The Company’s Board of Directors has determined that each of the proposals that will be presented to the stockholders for their consideration at the Annual Meeting are in the best interests of the Company and its stockholders, and unanimously recommends and urges you to vote “FOR” each of the director nominees, “FOR” approval of an advisory, non-binding resolution approving the compensation of the Company's Named Executive Officers, “FOR” the every "1 YEAR" option regarding the frequency of stockholder advisory votes on the compensation of the Company’s Named Executive Officers, and “FOR” ratification of Elliott Davis, PLLC as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024. If any other business is properly presented at the Annual Meeting, the proxies will be voted in accordance with the recommendations of the Company’s Board of Directors.


TABLE OF CONTENTS

Proxy Statement - General Information			2
Proposal 1 - Election of Directors			7
Corporate Governance			15
Committees of the Board of Directors			20
Beneficial Ownership of Common Stock			25
Executive Officers			28
Compensation of Non-Employee Directors			30
Executive Compensation			32
Pay Versus Performance			35
Certain Relationships and Related Party Transactions			44
Proposal 2 - Non-Binding Advisory Vote to Approve Named Executive Officer Compensation			46
Proposal 3 - Non-Binding Advisory Vote on the Frequency of Future Stockholder Advisory Votes to Approve Named Executive Officer Compensation			47
Proposal 4 - Ratification of the Appointment of Elliott Davis, PLLC as the Company's Independent Registered Public Accounting Firm for Fiscal Year 2024			48
Report of the Audit Committee			49
Annual Report to Stockholders			50
Stockholder Proposals for the 2025 Annual Meeting of Stockholders			50
Other Business			51
Stockholders Sharing the Same Address			52

•Non-Binding Advisory Vote to Approve Named Executive Officer Compensation. As required by Section 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we are seeking a non-binding advisory vote from our stockholders to approve the compensation of our named executive officers as described in the “Executive Compensation” section. Because your vote is advisory, it will not be binding upon our Board or Compensation Committee. However, our Board values stockholders’ opinions and our Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions. Approval of the advisory vote to approve executive compensation requires the affirmative vote of a majority of all the votes cast, in person or by proxy, at the Annual Meeting. Abstentions and broker non-votes will have no effect on the outcome of this proposal because neither abstentions nor broker non-votes count as a vote cast.

•Non-Binding Advisory Vote on the Frequency of Future Stockholder Advisory Votes to Approve Named Executive Officer Compensation. As required by Section 14A of the Exchange Act, we are including a proposal for our stockholders to indicate, on a nonbinding, advisory basis, the frequency with which they wish to have a non-binding, advisory vote on the compensation paid to our named executive officers; in other words, how often a proposal similar to this year’s Say-on Pay vote will be included in the matters to be voted on at our annual meetings of stockholders. The choices available under Section 14A are every year, every other year or every three years. After careful consideration, our Board recommends that you select every year as the desired frequency for a non-binding, advisory vote of stockholders on named executive officer compensation. We believe this frequency is appropriate because it encourages our stockholders to evaluate our executive compensation arrangements and to review the compensation of our named executive officers each year as reported in the Summary Compensation Table. The choice which receives the highest number of votes will be considered the frequency recommended by the stockholders. While this advisory vote is required, as provided in Section 14A of the Exchange Act, it is not binding on our Board and may not be construed as overruling any decision by the Board. However, the Board will take into account the outcome of the vote when determining the frequency of future Say-on-Pay votes. Abstentions and broker non-votes have no effect on the outcome of this proposal because neither abstentions nor broker non-votes count as a vote cast.

If a broker indicates on its proxy that it submits to the Company that it does not have authority to vote certain shares held in “street name,” the shares not voted are referred to as “broker non-votes.” Broker non-votes occur when brokers do not have discretionary voting authority to vote certain shares held in “street name” on particular proposals under the rules of the New York Stock Exchange, and the “beneficial owner” of those shares has not instructed the broker how to vote on those proposals. If you are a beneficial owner and you do not provide instructions to your broker, bank or other nominee, your broker, bank or other nominee is permitted to vote your shares for or against “routine” matters such as Proposal 4, the ratification of the appointment of our independent registered public accounting firm. Brokers are not permitted to exercise discretionary voting authority to vote your shares for or against “non-routine” matters. We expect that brokers will be allowed to exercise discretionary authority for beneficial owners who have not provided voting instructions ONLY with respect to Proposal 4, but not with respect to any of the other proposals to be voted on at the Annual Meeting.


Class I Director Nominees:

Joshua B. Bernstein Age:	61	Mr. Bernstein has served on the Board of Directors of the Company since 2012 and served on the Board of Directors of the Bank from 2007 to 2012. Since 2005, he has been the Chief Executive Officer of Bernstein Management Corporation and the Managing Principal of that company’s investment and development affiliates. The Bernstein entities own and manage 90 properties encompassing 5,500 apartments and over 4 million square feet of commercial space in the Washington, D.C. metropolitan area. Mr. Bernstein serves as a director on the Washington Board of Truist Bank and he is a member of the Executive Committee of the Federal City Council. Mr. Bernstein is a past Board Chair of the Meyer Foundation and the Sidwell Friends School, and is President of the Diane and Norman Bernstein Charitable Family Foundation. Mr. Bernstein received a Bachelor of Arts in Economics from Tufts University, magna cum laude, a general course degree from the London School of Economics and Political Science, and a Master of Business Administration from Harvard Business School. Mr. Bernstein's qualifications to serve on our Board include his experience in real estate development and operating businesses similar to our typical customers, and his familiarity with and involvement in our key market areas.
Director Since:	2012
Committees: Nominating and Corporate Governance; Compensation (Chair); Executive; Environmental, Social & Governance (Chair)

Scot R. Browning Age:	62	Mr. Browning has served as President of the Bank, and as a director of the Company and the Bank, since its recapitalization by the current ownership group in 2002. In 2023, Mr. Browning's role changed to President of CRE and Specialty Lending. He is also Vice President and Assistant Secretary of the Company. He has over 30 years of banking experience, with a concentration in commercial lending. He currently oversees the commercial real estate and specialty lending department. In addition, he manages the deposit business development teams. From 1997 to 2002, prior to joining the Bank, he was Senior Vice President, Corporate Lending at United Bank in Bethesda, Maryland and at Century National Bank prior to its acquisition by United Bank. Mr. Browning received a Bachelor of Business Administration in Finance from Stetson University. Mr. Browning also serves on the board of directors of the Business Finance Group, Inc., a Virginia based CDC that originates SBA 504 mortgage loans, and formerly served on the board of directors of Rockville Economic Development, Inc., a partnership formed in 1997 by the City of Rockville to strengthen and broaden the City's economic base through business entrepreneurship. Mr. Browning's qualifications to serve on our Board include his extensive financial knowledge and operational experience, as well as his familiarity and experience with the Bank.
Director Since:	2002
Committee: Environmental, Social & Governance


Fred J. Lewis Age:	58	Mr. Lewis has served on the Board of Directors of the Company since February 2023 and on the Board of Directors of the Bank since 2018. Mr. Lewis is the founder and managing partner of Dominion Financial Services as well as the affiliated Dominion Group of companies. Mr. Lewis provides daily strategic oversight in all of The Dominion Group companies with a special focus on operations and fundraising. The Dominion Group companies include Dominion Properties, a "fix and flip" renovation company that operates throughout Maryland; Dominion Financial Services, a private lender of single family fix and flip and small commercial loans in 49 states; Dominion Management, a specialized property manager that manages single family houses throughout Maryland; and Dominion is Insurance, a captive insurance company that insures the business risks associated with all the Dominion Group of Companies. Mr. Lewis is a graduate of the George Washington University. Mr. Lewis's qualifications to serve on our Board include his extensive experience in real estate, commerce and financing, as well as his familiarity and experience with the Bank.
Director Since:	2023
Committees: Environmental, Social & Governance

Mary Ann Scully Age:	72	Ms.Scully has served on the Board of Directors of the Company since July 2023. Ms. Scully is the Dean of the Joseph A. Sellinger, S.J. School of Business and Management at Loyola University of Maryland. Previously, she was the co-founder of Howard Bank (formerly NASDAQ: HBMD) where she served as the Chief Executive Officer and Chairperson of its Board of Directors from 2004 until its merger with First National Bank of Pennsylvania in 2022. A lifelong banker with more than 40 years of varied executive experiences in the Maryland marketplace, Ms. Scully led teams responsible for both Howard Bank's organic growth and repeated strategic acquisitions that created the Greater Baltimore region's largest locally headquartered banking company and Maryland's third largest locally headquartered bank with more than $2 billion in assets. Mary Ann is a vice chair, director and member of the Executive Committee of the Enoch Pratt Library, vice chair of the board of Mount St Joseph College high school and served until 2022 as Vice Chair of the Greater Baltimore Committee leading their new CEO search committee. She is also a trustee for Mercy High School, the Community Foundation of Howard County Real Estate board, and the Inner Arbor Trust. She also serves on a Maryland State Comptroller work group and advisory council. Ms. Scully has been recognized publicly for her achievements in business and for her works in the community. She was given a lifetime achievement award as the CEO of the year by the Baltimore Business Journal in 2022. Also in 2022, Ms. Scully was inducted into the Business Hall of Fame by the Maryland Chamber of Commerce. In 2021, she was ranked as #14 in the Daily Record Power 100 listing, in 2020, Ms. Scully was inducted into the Business and Civic Hall of fame by the Baltimore Sun, and in 2018, she received the Industrialist of the Year award from the Baltimore Museum of Industry. Ms. Scully was named one of the Top 25 Women to Watch in Banking by American Banker newspaper in 2016 and 2017. She received her Master of Business Administration from Loyola University of Maryland and her Bachelor of Arts from Seton Hill University. She is a Loyola University of Maryland alumni laureate and a Seton Hill University Distinguished Alumna. Her executive experiences combined with her deep business connections inject a new perspective to the Board and qualify her to serve on our Board.
Director Since:	2023
Committees: Audit


Continuing Class III Directors:

Jerome R. Bailey Age:	47	Mr. Bailey has served on the Board of Directors of the Bank since 2013 and serves as Vice-Chairman of the Board of the Bank, a position he has held since 2016. Since 2004, Mr. Bailey has been the Managing Member of Bailey Real Estate Holdings, LLC, a residential real estate development and full service asset-management company located in Washington, D.C. Mr. Bailey has acquired and developed close to 1,000,000 square feet of multi-family projects in Washington, D.C. Mr. Bailey is Chair of the Bank’s Loan Committee and is a member of the Bank's Asset/Liability, Strategic Innovation, Finance and Risk Committees. Mr. Bailey received a Bachelor of Business Administration in Actuarial Science from the Howard University. Mr. Bailey's qualifications to serve on our Board include his experience in real estate development and operating businesses similar to our typical customer, and his familiarity with and involvement in our key market areas, as well as his banking experience.
Director Since:	2021
Committees: Nominating & Corporate Governance; Audit

Steven J. Schwartz Age:	69	Mr. Schwartz was elected by the Board of Directors to serve as Chairman of the Board effective as of January 1, 2020. He has served on the Boards of Directors of the Company and the Bank since 2002. He is an attorney and certified public accountant involved in investment in, and management of, companies in a variety of industries. Mr. Schwartz has been chief financial officer and general counsel to a group of companies involved in construction, real estate development, property management, broadcasting, telecommunications, software development and wholesale distribution for over 40 years. He also manages various marketable securities portfolios for a private foundation and high net worth individuals. In 1999, Mr. Schwartz founded Prudent Capital, which manages funds that lend to and invest in profitable, later-stage operating businesses. He continues to serve as the Portfolio Manager of such funds. He has served as an adjunct professor at Georgetown University’s master’s programs and taught corporate finance and real estate tax. He served as a director of a community bank in Rockville, Maryland, from 1995 until its sale in 1998. Mr. Schwartz is a member of the Bank’s Board and is a member of its Executive, Risk Strategic Innovations and Loan Committees. Mr. Schwartz received a Bachelor of Arts in Economics from the University of Maryland and a Juris Doctor, with honors, from the University of Maryland School of Law. Mr. Schwartz's qualifications to serve on our Board include his qualifications as both an attorney and a certified public accountant, his extensive banking experience and financial knowledge, his operational experience with the Company and his years of knowledge of our constituents.
Director Since:	2002
Committees: Audit; Compensation; Executive (Chair); Nominating and Corporate Governance


James F. Whalen Age:	62	Mr. Whalen has served on the Boards of Directors of the Company and the Bank since 2001 and serves as Chairman of the Board of Directors of the Bank, a position he has held since January 2015. Since 1994, Mr. Whalen has been the Chief Executive Officer and owner of Investment Properties, Inc., a commercial real estate development and full service asset-management company located in Rockville, Maryland. Mr. Whalen has developed over 1,000,000 square feet of Class A office, industrial and multi-family projects in the Washington metropolitan area and his company continues to provide a full spectrum of asset management services for projects developed by the firm and third parties. Mr. Whalen is a member of the Bank's Loan, Asset/Liability, Finance and Executive Committees. Mr. Whalen received a Bachelor of Science in Finance from the University of South Carolina. Mr. Whalen's qualifications to serve on our Board include his experience in real estate development and operating businesses similar to our typical customers, and his familiarity with and involvement in our key market areas, as well as his extensive banking experience and his financial knowledge and operational experience with the Company.
Director Since:	2001
Committees: Compensation; Nominating and Corporate Governance; Executive
Class II Continuing Directors:

Edward F. Barry Age:	54	Mr. Barry is the Chief Executive Officer of the Company and the Bank and has been since September 2012. Mr. Barry has served as a director of the Company since 2015 and as a director of the Bank since September 2012. Since that time, the Bank has rapidly expanded throughout the Washington, D.C. and Baltimore metropolitan areas. Under Mr. Barry’s leadership, the Bank has consistently been recognized as one of the top performing banks in the U.S. In 2017, he was named an Ernst & Young Entrepreneur of the Year for the Mid-Atlantic region. Prior to joining the Bank, Mr. Barry was Senior Vice President, Marketing and Analytics at Capital One Bank where he led the product, analytics and marketing teams for the Small Business and Business Banking divisions. Prior to that he was with Bank of America as a Senior Vice President, Strategic Marketing serving in roles across the Commercial, Consumer and Corporate Strategy groups. He also worked as a consultant at Ernst & Young/Cap Gemini in their Strategy and Transformation practice, responsible for creating and implementing initiatives to drive clients’ e-business sales and marketing strategies. Mr. Barry received a Bachelor of Science in Industrial Relations from Cornell University and a Master of Business Administration from the Darden Graduate School of Business at the University of Virginia. He serves on the board of directors of the Mid-Atlantic Chapter of The Make-A-Wish Foundation. Mr. Barry is a member of the Bank's Loan, Executive, Asset/Liability, Divisions and Human Resources Committees. Mr. Barry's qualifications to serve on our Board include his extensive banking experience and his financial knowledge and operations experience with the Company.
Director Since:	2015
Committee: Executive


C. Scott Brannan Age:	65	Mr. Brannan has served on the Board of Directors of the Company since December 2018. Mr. Brannan is Managing Director of the Mitchell & Emily Rales Family Office. Prior to joining the family office, he served as Chief Financial Officer and, prior to that, as Chairman of the Audit Committee of the board of directors of Colfax Corporation, a publicly traded industrial manufacturing company that operated in over 70 countries. At Colfax, Brannan oversaw the financing of the company’s growth, from less than $1 billion in annual revenue to over $4 billion. He also led financial reporting, treasury, taxation, risk management, investor relations and pensions. Mr. Brannan’s corporate experience also includes over a decade at Danaher Corporation (NYSE: DHR), where he held various positions in finance, including Vice President-Administration & Controller and Chief Accounting Officer. In total, Mr. Brannan has participated in over 50 acquisitions, including the strategic analysis, diligence and integration phases. His experience also includes public accountancy, where he most recently served as partner in charge of professional standards for a large regional firm. His career began at Arthur Andersen & Co., with client engagements principally in manufacturing, technology and life sciences, with significant international exposure. He received both Bachelor of Arts and Master’s degrees in Accountancy from Loyola University-Maryland, and has been an active certified public accountant in Maryland since graduating from Loyola. Mr. Brannan's qualifications to serve on our Board include his business and financial expertise.
Director Since:	2018
Committee: Audit (Chair)

Randall J. Levitt Age:	70	Mr. Levitt has served on the Company's Board of Directors since 2012 and the Bank's Board of Directors since 2004. Since 1996, he has been the President of Nellis Corporation, a Potomac, Maryland based, private capital management firm that manages a national portfolio of commercial real estate and provides wealth advisory services. In addition, he serves as a trustee of the United Jewish Endowment Fund of Greater Washington, DC and a member of the organization's Investment Committee. He also co-chairs the Washington, D.C. metropolitan area real estate division of the American Israel Public Affairs Committee. Mr. Levitt received a Bachelor of Arts from Brandeis University, summa cum laude, and a Juris Doctor from Yale Law School. Mr. Levitt is a member of the Bank's Loan and Asset/Liability Committees and is the Chair of the Bank’s Special Asset Committee. Mr. Levitt's qualifications to serve on our Board include his experience leading a capital management firm, his real estate expertise in the Bank's key market areas and his familiarity with our constituents.
Director Since:	2012
Committees: Audit; Executive


Deborah Ratner- Salzberg Age:	70	Ms. Ratner-Salzberg, an attorney, has served on the Company's Board of Directors since 2016. Ms. Ratner-Salzberg retired as Chair, Brookfield Properties DC Region in January 2020, a position she held since December 2018. Prior to that, she was President of Forest City Washington, Inc., a division of Forest City Realty, Inc., a Cleveland, Ohio based real estate firm specializing in the development, construction, ownership and management of mixed-use, commercial, and residential developments, and served in various capacities with Forest City since 1985. Ms. Ratner-Salzberg has been a board member of CubeSmart (formerly known as U-Store-It Trust) (NYSE: CUBE) since 2013, a publicly-traded real estate investment trust focused on self-storage facilities. Ms. Ratner-Salzberg is active with numerous District of Columbia community, charitable and professional organizations, including membership on the board of the Federal City Council, the New York Common Real Estate Advisory Committee, the Foundation for the National Archives, the Jewish Federation of Greater Washington, the United Jewish Endowment Fund, the board of trustees of Kenyon College, and the Board of Plant Word. Ms. Ratner-Salzberg's qualifications to serve on our Board include her experience in corporate governance matters gained through her experience serving on boards of directors and her knowledge and experience in the planning, development, construction and management of new construction, adaptive re-use and redeveloped real estate projects through her prior roles.
Director Since:	2016
Committees: Nominating and Corporate Governance (Chair); Environmental, Social and Governance

We are committed to sound corporate governance principles, which are essential to running our business efficiently and maintaining our integrity in the marketplace. We have adopted Corporate Governance Guidelines, which set forth the framework within which our Board of Directors, assisted by the committees of our Board of Directors, directs the affairs of our organization. The Corporate Governance Guidelines address, among other things, the composition and functions of our Board of Directors, director independence, compensation of directors, management succession and review, committees of our Board of Directors and selection of new directors. Our Corporate Governance Guidelines are available on our website at www.capitalbankmd.com under the “Investor Relations” tab.

We believe that our directors should have the highest professional and personal ethics and values. They should have broad experience at the policy-making level in business, real estate or banking. They should be committed to enhancing stockholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. Their service on boards of other companies should be limited to a number that permits them, given their individual circumstances, to perform responsibly all director duties. Each director must represent the interests of all stockholders. When considering potential director candidates, our Board of Directors also considers the candidate’s character, judgment, diversity, skill set, specific business background and global or international experience in the context of our needs and those of the Board of Directors.

Pursuant to Rule 5605(b)(1) of the Nasdaq Rules, a majority of the members of the Board of Directors must be “independent directors” as that term is defined by Nasdaq Rule 5605(a)(2). A director will only qualify as an “independent director” if, in the opinion of that company’s Board of Directors, that person does not have a relationship that would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our Board of Directors has evaluated the independence of its members based upon the rules of the Nasdaq Stock Market and the SEC. Applying these standards, our Board of Directors has affirmatively determined that Messrs. Whalen, Bernstein, Levitt, Brannan, Schwartz, Lewis, and Bailey and Mss. Ratner-Salzberg and Scully are “independent directors” under the applicable rules. Our Board of Directors has determined that Messrs. Barry and Browning are not “independent directors” under the applicable rules because Mr. Barry is an executive officer of both the Company and the Bank and Mr. Browning is an executive officer of the Bank.

Currently, Mr. Schwartz serves as Chairman of the Company's Board of Directors and Mr. Whalen serves as Chairman of the Bank's Board of Directors, while Mr. Barry is the Chief Executive Officer of both the Company and the Bank. We believe at this time this structure (as opposed to combining the positions of Chairman and Chief Executive Officer) is appropriate for us for two primary reasons. First, having separate board Chairmen allows Mr. Barry to completely focus on his primary responsibilities, that is, implementing our strategic plans and managing the day-to-day operations of the Company and the Bank, while Messrs. Schwartz and Whalen focus on leading their respective board in its consideration of strategic issues and monitoring corporate governance, social responsibility, community relations and stockholder issues. Second, we believe that having the Chair positions separate from the Chief Executive Officer position allows the boards of directors to more effectively fulfill their obligation to oversee the management of the Company and the Bank.

principal business risks and ensuring that our risk management framework is commensurate with its structure, risk profile, complexity, activities and size. Our Board of Directors monitors capital adequacy in relation to risk. Pursuant to our Board of Directors’ instruction, management regularly reports on applicable risks to the relevant committee or the full Board, as appropriate, with additional review or reporting on risks conducted as needed or as requested by our Board of Directors and its committees. Our enterprise risk management program currently reviews risk in numerous areas within the Company, including market, liquidity, reputation, operations and technology, cybersecurity, compliance and legal, and strategic. Our Board of Directors reviews management reports regarding specifically identified risks. With regard to compliance and regulatory risk, our Board of Directors is responsible for reviewing, on an annual basis, our compliance with applicable laws and regulatory requirements and any legal or regulatory matters that could have a material impact on our financial statements, our compliance policies and any material reports or inquiries received from regulators or governmental agencies.

While our full Board of Directors maintains the ultimate oversight responsibility for the risk management process, its committees oversee risk within their particular area of concern. The full Board of Directors receives reports from management, the Audit Committee, the Compensation Committee, and the Environmental, Social and Governance ("ESG") Committee. It reviews certain committee actions and focuses on the most significant risks we face and our general risk management strategy and also ensures that risks we undertake are consistent with board policy. While the Board of Directors oversees our risk management, management is generally responsible for the day-to-day risk management processes. We believe this division of responsibility is the most effective approach for addressing the risks we face and that our board leadership structure supports this approach.

Our Audit Committee is responsible for overseeing our risk management processes relating to: (1) financial reporting risk and internal controls; (2) oversight of the internal audit process; (3) regulatory compliance; (4) SOX reporting; and (5) policies and procedures as they relate to complaints regarding accounting, internal accounting controls and audit matters. The Audit Committee receives reports from management at least quarterly regarding our assessment of risks in its areas of review and the adequacy and effectiveness of internal control systems and operational risk (including compliance risk). Our Director of Internal Audit meets with the Audit Committee on a quarterly basis in executive sessions to discuss any potential risk or control issues involving management. The Audit Committee reports regularly to the full Board, which also considers our entire risk profile.

With respect to cybersecurity, on a periodic basis, both our bank-level Information Technology Steering and Enterprise Risk Management Committees receive reports on cybersecurity risks and preparedness. Our Board of Directors then receives a more-streamlined report from the bank-level committees regarding cybersecurity risks and preparedness. While the Bank-level Information Technology Steering and Enterprise Risk Management Committees and our Bank-level Risk Committee, to which they report, oversee our cybersecurity risk management program, our Information Technology department is responsible for the day-to-day cybersecurity risk management processes. Cybersecurity threats can be significant and remain a high risk as cyber attacks are sophisticated and increasing in volume, and attackers respond rapidly to changes in defensive measures. Our systems and those of our customers and third-party service providers are under constant threat and it is possible that we could be materially affected by a cybersecurity incident in the future. We actively monitor the cybersecurity threat landscape with a focus on the financial services sector for trends and new threats. Our Information

Generally, each non-employee director is expected to acquire, and hold during their service as Board members, shares of our common stock equal in value to at least $100,000. However, excluded from these guidelines is the Audit Committee Chair and employees or representatives of investment firms or significant stockholders that are prohibited by internal employment policies from personal stock ownership. Further, under the stock ownership and retention guidelines, our chief executive officer must acquire and hold shares of our common stock equal in value to at least five times his or her annual base salary, each of our president and chief financial officer must acquire and hold shares of our common stock equal in value to at least three times his or her annual base salary, and our executive vice presidents and other Section 16 reporting executive officers must acquire and hold shares of our common stock equal in value to at least one times his or her annual base salary.

Audit Committee. The members of our Audit Committee are Messrs. Brannan (Chair), Schwartz, Levitt, Bailey and Ms. Scully. Our Board of Directors has evaluated the independence of each of the members of our Audit Committee and has affirmatively determined that (1) each of the members of our Audit Committee is an “independent director” under Nasdaq Stock Market rules, (2) each of the members satisfies the additional independence standards under applicable SEC rules for audit committee service, and (3) each of the members has the ability to read and understand fundamental financial statements. In addition, our Board of Directors has determined that each of Messrs. Schwartz and Brannan are financial experts and have the financial sophistication required by the rules of the Nasdaq Stock Market due to their experience and background. Our Board of Directors has also determined that each of Messrs. Schwartz and Brannan qualify as “audit committee financial experts” under the rules and regulations of the SEC.

The following table sets forth information as of the Record Date relating to the beneficial ownership of common stock by (i) each of our directors and executive officers named in the Summary Compensation Table (such executive officers are referred to herein as the “Named Executive Officers”); and (ii) all of our directors and executive officers as a group; and includes all shares of common stock that may be acquired within 60 days of the Record Date. As of the Record Date, no person or group is known by us to own beneficially more than five percent (5%) of the outstanding shares of common stock other than the directors named below. The address of each of the persons named below is the address of the Company except as otherwise indicated.

(7) Includes 264,471 shares held by the Randall James Levitt Revocable Trust (“RJRT”), a trust that benefits Mr. Levitt and for which he acts as sole trustee. Includes 4,017 shares of our common stock underlying options that are currently exercisable or are exercisable within 60 days of March 25, 2024. Includes 392,000 shares held by BTC Trust Company of South Dakota (“BTC”), FBO the RSL Family Trust (formerly known as the Richard S. Levitt Fifth Trust), whose business affairs are managed by Nellis Corporation (“Nellis”), a company that employs Mr. Levitt and at which he serves as President. Includes 114,500 shares held by Montrose Lending Group, LLC, a company that is (i) owned by (y) NC Associates Corporation (“NC”), a company 50 percent owned by RJRT, and (z) BTC, FBO the RSL Family 2011 Dynasty Trust and the JSL Family 2011 Dynasty Trust whose business affairs, respectively, are managed by Nellis and (ii) managed by NC. Includes 30,000 shares held by BTC, FBO the Brian Z. Tross 2012 B Trust, a trust that benefits one of Mr. Levitt's nephews and whose business affairs are managed by Nellis. Includes 30,000 shares held by BTC, FBO the Adam J. Tross 2012 B Trust, a trust that benefits one of Mr. Levitt's nephews and whose business affairs are managed by Nellis. Includes 30,700 shares held by RJL Investment Company, LLC, a company that is (i) owned by BTC, in its capacity as the trustee of the Randall James Levitt 1968 B Trust, a trust that benefits Mr. Levitt and (ii) managed by an entity that is owned by RJRT. Includes 154,056 shares held by Maud Associates, LLC, a company that is 50 percent owned by a trust that benefits one of Mr. Levitt’s daughters and for which Mr. Levitt acts as sole trustee. Excludes the following as to which Mr. Levitt has disclaimed beneficial ownership: 16,800 shares owned by Needle Leaf Associates, LLC, a company owned by one of Mr. Levitt's daughters and her husband; 15,000 shares held by MAL Investment Company, LLC, which is owned by BTC, in its capacity as trustee of the Mark Alan Levitt 1966 B Trust, a trust that benefits Mr. Levitt's brother; 73,500 shares held by MAL Revocable Trust, a trust that benefits Mr. Levitt's brother; 13,500 shares held by Beth L. Tross Revocable Trust, a trust that benefits Mr. Levitt's sister; 500 shares held by the Beth L. Tross IRA, an account that benefits Mr. Levitt's sister; 20,000 shares held by BTC, FBO the Beth L. Tross Legacy Trust, a trust that benefits Mr. Levitt's sister and the descendants of Mr. Levitt's brother-in-law; 3,000 shares held in a joint account by Mr. Levitt's sister and brother-in-law; 4,000 shares held by the Nathan R. Tross IRA, an account that benefits Mr. Levitt's brother-in-law; 300 shares held by Adam J. Tross, one of Mr. Levitt's nephews; and 2,000 shares held by Brian Z. Tross, one of Mr. Levitt's nephews. Also excludes 6,858 shares of our common stock underlying options that are subject to vesting.

Jacob Dalaya. Mr. Dalaya joined the Bank in October 2023 as Chief Strategy Officer. Mr. Dalaya is an experienced financial services professional with expertise in mergers and acquisitions, capital markets, corporate finance and bank strategic planning. Mr. Dalaya joined from Webster Financial Corporation (previously Sterling Bancorp) where he worked on various transformative and strategic initiatives for the bank. Prior to joining Webster, Mr. Dalaya served in the investment banking division at Keefe, Bruyette & Woods as Vice President. Earlier in his career he held various positions in the investment banking division at J.P. Morgan Securities within the Financial Institutions Group. He has significant experience advising banks, specialty finance and financial technology companies on mergers and acquisitions, capital raising and strategic alternatives. Mr. Dalaya received a bachelor's degree in Economics from New York University.

Karl Dicker. Mr. Dicker joined the Bank in 2018 as Chief Operating Officer and in October 2022, he transitioned to President of OpenSky™ & Fintech. He currently has accountability for the OpenSky™ division of the Bank as well as marketing and fintech strategy across the entire Bank. Prior to joining the Bank, Mr. Dicker was Senior Vice President at Capital One Bank where he led Treasury Management Strategy, Marketing & Analytics and served as Head of Enterprise Payments. Mr. Dicker spent more than 16 years at Capital One in various positions across consumer, business and commercial business lines in functional roles ranging from corporate strategy to operations to sales enablement to business transformation and analysis. Mr. Dicker received a Bachelor of Science in Civil Engineering from Worcester Polytechnic Institute, and a Master of Business Administration from the Fuqua School of Business at Duke University. From 2012 to 2022, he served as a Trustee on the Shaare Torah Board and served terms as VP of Finance and as an Executive Committee member. Since 2019, he has served on the Executive Committee of the National Capital Area Leukemia and Lymphoma Society Light the Night campaign and served a term as co-chair.

that, since June 2011, Mr. Kausmeyer previously served in several senior risk management roles at community banks across the country, including as SVP, Deputy Chief Risk Officer for Banc of California, NA and as EVP, Chief Risk Officer for both Los Alamos National Bank and First Place Bank. Prior to his banking career, he worked in Assurance Services in the public accounting sector. Mr. Kausmeyer attended the ABA Stonier Graduate School of Banking at the University of Pennsylvania and earned both his Stonier Diploma and Wharton Leadership Certificate. Mr. Kausmeyer earned a Master of Accountancy from the Jack C. Massey Graduate School of Business at Belmont University and a Bachelor of Business Administration in Accounting and Legal Studies from the University of Miami (FL). Mr. Kausmeyer is a Certified Public Accountant, Certified Anti-Money Laundering Specialist, Certified in Risk and Information Systems Control, and a Certified Sarbanes-Oxley Expert.

Anguel Lindarev. Mr. Lindarev joined the Bank in March 2024 and serves as Executive Vice President, Chief Information Officer with over 25 years of experience leading strategy, architecture, technology operations, infrastructure, data and cyber security. Prior to joining the Bank, since 2020, he served as Executive Vice President, Chief Information Officer of American National Bank, leading the development of a digital bank, Banking-as-a-Service line of business and a core conversion. Prior to this role, he served as Domain CIO for Comerica Bank responsible for Wealth Management, Cards, Treasury and Payments and as Vice President Technology for American Express leading consumer and small business web and mobile development and Corporate Payments. Currently, he is responsible for developing the strategic roadmap for the overall technology landscape, driving digital transformation powering the customer experience and the growth agenda of the Bank. Mr. Lindarev graduated from Arizona State University with a Master of Business Administration, Financial Management and Markets degree.

Steven M. Poynot. Mr. Poynot joined the Bank in October 2022 and serves as President and Chief Operating Officer and has over 25 years of experience in business development, data and financial analysis, risk management, strategic planning, operations and information management, and technology delivery. Mr. Poynot previously served as Executive Vice President and Chief Operating Officer of F&M Trust from February 2022 to September 2022. In this role he had the management responsibility for Commercial & Retail Banking, Information Technology, Deposit & Loan Operations, Project Management, and Facilities. Prior to this role, Mr. Poynot served as Executive Vice President and Chief Information Officer at Howard Bank. Mr. Poynot served Howard Bank in various roles for over 17 years, including serving as Chief Credit Officer for the bank and spent a period of time building out the commercial banking infrastructure for Howard Bank with the creation of the Credit department as well as the Client Services Support Team. Currently, he is responsible for managing day to day operations of the company, directly managing the divisional leaders for sales, credit, branch, product, and operations. Mr. Poynot earned a Master of Business Administration from Loyola University and is a graduate of the University of Baltimore with a Bachelor of Business Administration in Finance.

Kathy Yamada. Ms. Yamada has served as our Chief Credit Officer since December 2010 and has over 25 years of banking experience. She is responsible for the Bank’s credit administration function including credit policy, loan approval process, loan quality, portfolio risk management and special assets. Ms. Yamada is also a member of the Bank’s Management Loan Committee, Credit Loan Committee and Special Assets Committee. Since joining the Bank, Ms. Yamada has successfully managed the reduction in the Bank’s criticized, classified and overall non-performing asset levels. Ms. Yamada’s prior banking experience includes a 20 year career with Equitable Bank, headquartered in Wheaton, Maryland, as Senior Vice President, where she was responsible for managing that bank’s loan origination and credit administration functions and the residential mortgage loan origination division. As a member of Equitable Bank’s senior management team, Ms. Yamada played a key role in Equitable Bank’s conversion from a mutual savings and loan association to a publicly traded bank. Following the sale of Equitable Bank in 2003, she continued her community banking career in various consulting and loan origination positions. Ms. Yamada joined Fannie Mae’s multi-family legal team in 2007 as a paralegal in the Housing and Community Development division providing support in the revision and re-launch of the Delegated Underwriting and Servicing Guide. Ms. Yamada received a Bachelor of Arts in Finance from the University of Maryland.

For 2023, the Compensation Committee utilized a performance-based approach for determining incentives for our NEOs. Mr. Barry had a maximum opportunity of 120 percent of salary; Mr. Poynot had a maximum opportunity of 45 percent of salary; and Mr. Dicker had a maximum opportunity of 90 percent of salary. Every year the Compensation Committee communicates both quantitative and qualitative performance factors to the Chief Executive Officer. Mr. Barry's goals for 2023 included metrics related to return on equity, core deposit growth, net loan growth, Capital Bank Home Loans (CBHL) profitability, and OpenSky™ net card growth, weighted at 60 percent, and several strategic objectives, weighted at 40 percent. Performance goals for Messrs. Poynot and Dicker were set by the Chief Executive Officer and included metrics related to net income, return on equity, loan and deposit growth, OpenSky profitability, and other strategic objectives.

At the end of the year, the Compensation Committee assessed the Company's and Mr. Barry's performance including return on equity, core deposit growth, net loan growth, CBHL profitability, and OpenSky™ net card growth and scored the Chief Executive Officer at 24 percent on his qualitative goals (which were weighted 40 percent of his total award opportunity). The Company achieved its return on equity target and loan growth remained strong in a difficult market. This resulted in a bonus payout of $350,000 for Mr. Barry, which is reflected in the Summary Compensation Table above (paid 50 percent in cash and 50 percent in restricted stock which vests in equal annual installments over a three year period). The Compensation Committee scored Messrs.

In December 2021, the Board of Directors of the Bank approved and adopted a Nonqualified Deferred Compensation Plan (the "NQDCP"). The NQDCP constitutes an unfunded, nonqualified deferred compensation plan that provides deferred compensation benefits for a select group of management and highly compensated employees. Pursuant to the terms of the NQDCP, the Bank will make discretionary credits to participants' accounts for any year. The credits will vest in full upon completion of ten years of service by the participant. Participants' accounts will bear interest from the annual deemed contribution date of December 31 each year based on the rate of the ten year treasury rate as of December 31 for each following year. Participants are entitled to receive a distribution of their vested accounts generally upon a termination of employment (including by reason of disability or death), which will be distributed in ten equal annual installments. Any amounts credited to a participant's account that are not vested at the time of a distribution event shall be forfeited. For 2023, Mr. Barry, Mr. Poynot, and Mr. Dicker were credited $120,750, $52,500, and $56,240, respectively, as part of the NQDCP.

The Compensation Committee believes it is appropriate to adjust or recover incentive awards or payments in the event the financial reporting measures upon which they are based are restated or otherwise adjusted in a manner that would reduce the size of an award or payment. As required under SEC and Nasdaq Stock Market rules, the Board approved the Incentive Compensation Recovery Policy (the "Clawback Policy") effective November 17, 2023. The Clawback Policy applies in the event that the Company is required to prepare an accounting restatement. In such event, the Company shall recover any awarded incentive compensation received by an executive officer during the three completed fiscal years immediately preceding the date of such restatement that exceeds the amount that would have been received if based on the restated amounts, without regard to taxes paid by the executive officer of the Company. The Company will not indemnify any executive officer against the loss of any incorrectly awarded or otherwise recouped incentive compensation. The obligation to recover such erroneously awarded compensation is not dependent on if or when the Company files restated financial statements with the SEC and does not require any finding of misconduct by an executive officer or such officer being found responsible for the accounting error leading to the accounting restatement.


	2023		2022
	PEO	Average Non-PEO NEOs	PEO	Average Non-PEO NEOs
Total Compensation from Summary Compensation Table ($)	1,118,793	592,250	1,103,095	681,812
Less: Stock Awards from Summary Compensation Table ($)	(175,000)	—	(164,000)	—
Less: Option Awards from Summary Compensation Table ($)	(126,059)	(56,738)	(175,000)	(60,705)
Add: Fair Value at Year-End of Stock and Option Awards Granted During the Year that are Outstanding and Unvested at the End of the Year ($)	318,708	28,518	223,512	—
Add: Change in Fair Value of Stock and Option Awards Granted in any Prior Year that are Outstanding and Unvested at the End of the Year ($)	(79,972)	(14,091)	(113,392)	(36,753)
Add: Change in Fair Value of Stock and Option Awards that Vested as of the Vesting Date as Compared to the End of the Prior Year ($)	(55,183)	(15,391)	(39,729)	(25,302)
Total Compensation Actually Paid ($)	1,001,287	534,548	834,486	559,052

On June 29, 2022, the Company and the Bank entered into a new employment agreement with Mr. Barry (the "Barry Employment Agreement"). The Barry Employment Agreement provides for an initial term of three years ending on June 30, 2025, subject to automatic renewals for an additional year each year thereafter, unless any party provides written notice of non-renewal at least six months in advance of the anniversary date (June 30th of each year beginning in 2025). Pursuant to the Barry Employment Agreement, Mr. Barry is entitled to an annual base salary of $575,000 in calendar year 2022. Beginning in 2023, Mr. Barry’s base salary will be subject to an annual review by the Compensation Committee for a possible increase, but not a decrease. The Barry Employment Agreement further provides that Mr. Barry is eligible to receive (i) annual incentive compensation up to an additional 120% of his base salary, which incentive compensation shall be paid one-half in common stock

and one-half in cash, subject to annual review by the Company's Board, and (ii) an incentive stock option award, as determined by the Compensation Committee, of the Company’s common stock on each of January 1, 2023 and January 1, 2024. The stock option awards shall vest ratably in four equal annual installments on January 1st each year after the grant date (provided 100% shall vest upon a change in control, as defined in the Barry Employment Agreement). Mr. Barry is also eligible to receive benefits under any employee benefit plans made available by the Company or the Bank to senior executives including, but not limited to, retirement plans, supplemental retirement plans, medical, disability, life insurance plans, and any other employee benefit plan or arrangement made available by the Company or the Bank in the future to senior executives. Mr. Barry also received a $1,500,000 term life insurance policy payable to his designated beneficiaries on death and a $500 per month car allowance.

Mr. Barry is entitled to certain severance benefits upon the occurrence of an event of termination without cause or if Mr. Barry resigns for good reason at least a year prior to a change in control, in each case as outlined and defined in the Barry Employment Agreement. Following an event of termination without cause or a resignation for good reason at least a year prior to a change in control, the Bank shall pay Mr. Barry as severance for 18 months (i) Mr. Barry’s monthly base salary in effect on the date of termination and (ii) an amount equal to 50% of the target annual incentive payment, which target shall be 100% of Mr. Barry’s base salary in effect on the date of termination, in equal monthly installments. Additionally, the Bank will continue to cover Mr. Barry under its medical coverage, or under appropriate substitute individual coverages, which shall cease upon the earlier of 18 months or the date on which he becomes a full-time employee of another employer that provides substantially similar medical coverage. If the Bank cannot continue to cover Mr. Barry under its existing medical plan, the Bank will pay him cash during the 18 month period equal to the annual premium amount.

Upon an event of termination without cause or if Mr. Barry resigns for good reason within one year of a change in control of the Company during the term of the Barry Employment Agreement, the arrangements described above will apply, except that the (i) continuation of Mr. Barry’s base salary, at the rate in effect on the effective date of termination and (ii) the payment of an amount equal to 50% of the target annual incentive payment, which target shall be 100% of Mr. Barry’s base salary in effect on the date of termination in equal monthly installments, shall each be for a period of 30 months. Mr. Barry's contract prohibits any excess parachute payments pursuant to Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"). The payment of all such severance amounts and benefits is contingent upon Mr. Barry’s timely execution, and non-revocation of, a severance and release agreement and the continued observance of all post-termination obligations for the periods described in the Barry Employment Agreement.

The Poynot Employment Agreement provides for an initial term of three years and two months ending on December 31, 2025, subject to automatic renewals for an additional year each year thereafter, unless any party provides written notice of non-renewal at least six months in advance of the anniversary date (December 31st of each year beginning in 2025). Pursuant to the Poynot Employment Agreement, Mr. Poynot is entitled to an annual base salary of $350,000. Mr. Poynot’s base salary will be subject to an annual review by the Compensation Committee of the Company’s Board for a possible increase, but not a decrease. The Poynot Employment Agreement further provides that Mr. Poynot is eligible to receive (i) annual incentive compensation up to an additional 45% of his base salary, which incentive compensation shall be paid in cash, subject to annual review by the Board, and (ii) an incentive stock award of 2,000 stock options as well as 2,000 restricted stock units. Future stock options shall be granted to Mr. Poynot at the discretion of the Compensation Committee. Mr. Poynot is also eligible to receive benefits under any employee benefit plans made available by the Bank to senior executives including, but not limited to, retirement plans, supplemental retirement plans, medical, disability, life insurance

Under the Poynot Employment Agreement, he is entitled to certain severance benefits upon the occurrence of an event of termination without cause or if Mr. Poynot resigns for good reason, in each case as outlined and defined in the Poynot Employment Agreement. Following an event of termination without cause or a resignation for good reason, the Bank shall pay Mr. Poynot as severance for 18 months Mr. Poynot’s monthly base salary in effect on the date of termination, in equal monthly installments. Additionally, the Bank will continue to cover Mr. Poynot under its medical coverage, or under appropriate substitute individual coverages, for 18 months. If the Bank cannot continue to cover Mr. Poynot under its existing medical plan, the Bank will pay him cash during the 18 month period equal to the annual premium amount.

On April 30, 2018, the Bank entered into an employment contract with Mr. Dicker pursuant to which he served as the Executive Vice President and Chief Operating Officer of the Bank and in October 2022, Mr. Dicker transitioned to President of OpenSky™ & Fintech, a division of the Bank. Mr. Dicker is entitled to an annual base salary of $285,000 (which has since increased to $374,930 for 2023) and is eligible to receive an annual incentive bonus of up to an additional 60% of his annualized salary. Under the employment contract, Mr. Dicker was granted: (1) 12,000 shares of the Company's restricted stock which shall vest ratably over four (4) years, after the first year; and, (2) 12,000 stock options to purchase the Company's stock which vest ratably over four (4) years, after the first year. Mr. Dicker was also given the option to purchase 20,000 of the Company shares at a stated price of $12.38. Pursuant to the employment contract, Mr. Dicker is eligible to receive benefits under any employee benefit plans made available by the Bank to senior executives including but not limited to, retirement plans, medical, disability, life insurance plans and any other employee benefit plan or arrangement made available by the Bank in the future to the senior executives.

Mr. Dicker's employment contract provides that if, following a change of control of the Bank, his employment is terminated or his compensation is reduced, his role, responsibilities and title are dramatically reduced, or he is asked to relocate outside of the Washington, D.C. metropolitan area, the Bank shall pay Mr. Dicker his salary and fringe benefits for twelve (12) months, providing that such payments will be discontinued if Mr. Dicker is employed as an officer or consultant of another financial institution located in the Washington, D.C. metropolitan area at any time during this twelve (12) month period. In the event of a change of control, all of Mr. Dicker's unvested restricted stock and/or stock options will vest immediately. If Mr. Dicker's employment is terminated voluntarily or for theft, willful violation of the law, failure to perform his material duties, for cause or due to death or disability that render him unable to perform his job, then, in any such case, his salary, bonus and fringe benefit will cease upon termination of his employment.

General. The 2017 Plan was adopted by our Board of Directors on August 3, 2017 and approved by our stockholders on August 29, 2017. The 2017 Plan was subsequently amended in 2021 to increase the number of shares available for grant under the 2017 Plan and amended and restated in 2023 to clarify the permissible types of awards under the 2017 Plan and to make other technical changes. The 2017 Plan will terminate on August 29, 2027. The 2017 Plan was designed to ensure continued availability of equity awards that will assist the Company in attracting, retaining and rewarding directors and key employees. The purpose of the 2017 Plan is to promote the growth and profitability of the Company by providing directors and key employees with incentive compensation opportunities in the form of stock options, SARs, restricted stock, restricted stock units, and other stock-based awards thereby aligning their interests with those of the Company’s stockholders.

Shares Available for Awards. At plan inception, up to 1,120,000 shares of common stock (which includes the 946,480 shares that were available for issuance under the HCNB Bancorp, Inc. 2002 Stock Option Plan (the "2002 Plan") as of August 29, 2017, plus that number of shares covered by awards under the 2002 Plan, that expire or are otherwise terminated or forfeited at any time after August 29, 2017), were available for issuance under the 2017 Plan. In 2021, an additional 900,000 shares were authorized for a total of 2,020,000. As of December 31, 2023, there were 550,718 shares subject to outstanding options or other awards and 792,846 shares available for issuance under the 2017 Plan. Shares of common stock related to any unexercised or unvested award granted under the 2017 Plan that terminate or expire, or are subsequently forfeited or cancelled for any reason, will also become available for re-grant under the 2017 Plan.

Stock Appreciation Rights. The Compensation Committee determines the period when SARs vest and become exercisable, as well as the fair market value of the shares of common stock underlying the SARs on the date of grant and the date of exercise. The exercise price of any SAR that is intended to be an exempt stock right under Section 409A of the Code can never be less than the fair market value of the underlying share of common stock on the date of grant. A SAR may only be exercised when the fair market value of the underlying share of common stock exceeds the fair market value of the share on the grant date. Upon exercise of a SAR, the participant will receive an amount equal to the excess of the fair market value of the underlying share on the date of exercise over the fair market value on the date of grant.

Restricted Stock Units. An award of a restricted stock unit is similar to a restricted stock award, except that no shares are issued at the time of the grant. In addition, holders of restricted stock units will have no voting rights, but they may be entitled, if so determined by the Compensation Committee, to receive dividend equivalents. Upon the lapse of the restrictions related to a restricted stock unit, the participant is entitled to receive, without any payment to the Company, an amount equal to the fair market value of the shares of common stock represented by the restricted stock unit on the date of exercise. Except as otherwise provided in an award agreement, if a participant’s employment with the Company or its subsidiaries terminates for any reason at any time during which any portion of an award of a restricted stock unit remains subject to restrictions, that portion will automatically be forfeited and returned to the Company.

Repricings and Substitutions of Awards. Without the prior consent of our stockholders, outstanding stock options and SARs cannot be repriced, directly or indirectly. Subject to applicable law and the terms of the 2017 Plan, the Compensation Committee may: (i) modify, extend and renew awards to modify the terms of an award agreement, provided that no modification, extension or renewal may have the effect of lowering the exercise price of any award except in connection with adjustments related to capitalization and other corporate changes; and/or (ii) accept the surrender of awards granted under the 2017 Plan or under any other equity compensation plan of the Company and replace them with new awards pursuant to the 2017 Plan, so long as the substituted awards do not specify a lower exercise price than the surrendered awards. However, substituted awards may be of a different type than the surrendered awards, may specify a longer term than the surrendered awards and may contain other terms authorized by the 2017 Plan.

Amendment and Termination. Our Board of Directors may, at any time and from time to time and in any respect, terminate, amend or modify the 2017 Plan, including to ensure that the 2017 Plan and each award granted under the 2017 Plan comply with applicable law, regulations and stock exchange rules provided that no amendment (other than a capital adjustment) may adversely affect any outstanding award, without the written consent of the participant holding such outstanding award. Such termination, amendment or modification may be without stockholder approval except to the extent that such approval is required by the Code, pursuant to the rules under Section 16 of the Exchange Act or under any other applicable laws, rules or regulations.

Change in Control. Unless the Compensation Committee determines otherwise, if a change in control (as defined in the 2017 Plan) occurs in which the Company is not the surviving corporation (or the Company survives only as a subsidiary of another corporation), all outstanding awards that are not exercised or paid at the time of the change in control will be assumed by, or replaced with awards that have comparable terms by, the surviving corporation (or a parent or subsidiary of the surviving corporation). The Compensation Committee will have the discretion to provide for full or partial vesting of awards upon a participant’s involuntary termination of employment or service that occurs in connection with a change in control, subject to the terms and conditions of a participant’s employment agreement, or if none, the award agreement. If the vesting of any such awards is based, in whole or in part, on the attainment of certain performance goals, the vesting of such awards may accelerate pro rata based on the portion of performance period completed as of the date of the termination or based on our actual performance in the course of a shortened performance period which extends through the end of the fiscal quarter immediately preceding the termination of employment or service.

In the event of a change in control, if all outstanding awards are not assumed by, or replaced with awards with comparable terms by, the surviving corporation (or a parent or subsidiary of the surviving corporation), the Compensation Committee may take any of the following actions with respect to any or all outstanding awards, without the consent of any participant: (i) the Compensation Committee may determine that outstanding stock options and SARs will automatically accelerate and become fully exercisable, and the restrictions and conditions on outstanding stock awards, stock units, cash awards and dividend equivalents will immediately lapse; (ii) the Compensation Committee may determine that all or a portion of certain outstanding awards will terminate, upon

notice to participants, and participants will receive a payment in settlement of awards in such amount and form as may be determined by the Compensation Committee; (iii) the Compensation Committee may require that participants surrender their outstanding stock options and SARs in exchange for a payment, in cash or stock as determined by the Compensation Committee, equal to the amount (if any) by which the fair market value of the shares of common stock subject to the unexercised stock option and SAR exceed the stock option exercise price or base price; or (iv) the Compensation Committee may terminate outstanding stock options and SARs after giving participants an opportunity to exercise the outstanding stock options and SARs. Such surrender, termination or payment will take place as of the date of the change in control or such other date as the Compensation Committee may specify. If the per share fair market value of our stock does not exceed the per share exercise price or base price, as applicable, we will not be required to make any payment to the participant upon surrender of the stock option or SAR.


		Option Awards				Stock Awards
		Number of Securities Underlying Unexercised Options				Number of shares or units of stock that have not vested	Market value of shares or units of stock that have not vested
Name	Grant Date	Exercisable	Unexercisable	Exercise Price ($)	Expiration Date
Edward F. Barry	01/01/2020	15,000	5,000	14.89	2025
Edward F. Barry	01/01/2021	10,000	10,000	13.93	2026
Edward F. Barry	12/31/2021	6,250	6,250	26.41	2026
Edward F. Barry	01/01/2023	—	15,351	23.54	2028
Edward F. Barry	02/15/2021					6,467	$	100,000
Edward F. Barry	02/15/2022					6,330	157,000
Edward F. Barry	02/15/2023					7,714	164,000






Karl Dicker	12/31/2019	12,500	—	14.54	2024
Karl Dicker	12/31/2020	6,876	2,289	13.89	2025
Karl Dicker	12/31/2021	3,028	3,027	26.41	2026
Karl Dicker	01/01/2023	—	5,325	23.54	2028
Karl Dicker	01/01/2021					1,666	$	23,207

Steven M. Poynot	10/11/2022	500	1,500	24.25	2027
Steven M. Poynot	01/01/2023	—	2,300	23.54	2028
Steven M. Poynot	10/11/2022					1,333	$	32,325

In addition, we have adopted a written policy governing the approval of related party transactions that complies with all applicable requirements of the SEC and the Nasdaq Stock Market concerning related party transactions. A related party transaction is a transaction, arrangement or relationship or a series of similar transactions, arrangements or relationships in which the amount involved exceeds $120,000, in which we or the Bank participate (whether or not we or the Bank are a direct party to the transaction), and in which a related party had, has or will have a direct or indirect material interest. Our related parties include our or any of the Bank’s directors (including nominees for election as directors), executive officers, beneficial owners of 5% or more of our voting securities and immediate family members of any of the foregoing or any entity that any of them controls or in which any of them has a substantial beneficial ownership interest.

Our related party transaction policy is administered by our Audit Committee. This policy requires the Audit Committee to ensure that we maintain an ongoing review process for all related party transactions for potential conflicts of interest and requires that our Audit Committee pre-approve any such transactions or, if for any reason pre-approval is not obtained, to review, ratify and approve or cause the termination of such transactions. Our Audit Committee evaluates each related party transaction for the purpose of determining whether the transaction is fair, reasonable and permitted to occur under our policy, and should be pre-approved or ratified. Relevant factors considered relating to any approval or ratification will include the benefits of the transaction to us, the terms of the transaction and whether the transaction will be or was on an arm’s-length basis and in the ordinary course of our business, the direct or indirect nature of the related party’s interest in the transaction, the size and expected term of the transaction and other facts and circumstances that bear on the materiality of the related party transaction under applicable law and listing standards. At least quarterly, management provides our Audit Committee with information pertaining to related party transactions. Related party transactions entered into, but not approved or ratified as required by our policy concerning related party transactions, are subject to termination by us or the Bank, if so directed by our Audit Committee or our Board of Directors, taking into account factors deemed appropriate and relevant.

Certain of our officers, directors and principal stockholders, as well as their immediate family members and affiliates, are customers of, or have or have entered into transactions with us in the ordinary course of business. These transactions include deposits, loans and other financial services-related transactions. Related party transactions are entered into in the ordinary course of business, on substantially the same terms, including interest rates and collateral (where applicable), as those prevailing at the time for comparable transactions with persons not related to us, and do not involve more than normal risk of collectability or present other features unfavorable to us. Any loans we originate with officers, directors or principal stockholders, as well as their immediate family members and affiliates, are approved by our Board of Directors in accordance with applicable regulatory requirements.

On November 30, 2020, the Company issued $10.0 million of subordinated notes. The notes mature on November 30, 2030 and are redeemable in whole or part on November 30, 2025. The notes bear interest at a fixed annual rate of 5.00% for the first five years, then adjust quarterly to an interest rate per annum equal to a benchmark rate, which is expected to be the three-month SOFR, plus 490 basis points. The Company incurred related debt issuance costs totaling $50 thousand, which were fully expensed at the time of issuance. The Company used the proceeds from the offering to redeem $13.5 million of 6.95% fixed-to-floating rate subordinated notes issued in November 2015 and called on December 1, 2020. As of December 31, 2023, our directors or their related persons held $2.5 million in aggregate principal amount of the currently outstanding 5.00% subordinated notes.

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than 10% of the outstanding shares of common stock to file reports with the SEC disclosing their ownership of common stock at the time they become subject to Section 16(a) and changes in such ownership that occur during the year. Based solely on a review of copies of such reports furnished to us, or on written representations that no reports were required, we believe that all directors, executive officers and holders of more than 10% of the common stock complied in a timely manner with the filing requirements applicable to them with respect to transactions during the year ended December 31, 2023, except for (i) a Form 3 that was not timely filed for each of the following executive officers: Mr. Kaye and Mr. Kausmeyer and (ii) a Form 4 that was not timely filed for each of the following executive officers: Mr. Dalaya, Mr. Dicker, Mr. Suss and Mr. Walker.

The rules adopted by the SEC under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank" Act) enable our stockholders to vote to approve, on a non-binding advisory basis, the compensation of our named executive officers. Accordingly, we are asking you to approve the compensation of our named executive officers as described under “Executive Compensation” and the tabular disclosure regarding named executive officer compensation (together with the accompanying narrative disclosure) in this Proxy Statement. The vote on this resolution is not intended to address any specific element of compensation, but rather relates to the overall compensation of our named executive officers as described in this Proxy Statement in accordance with the applicable SEC compensation disclosure rules.

Audit Fees incurred in fiscal years 2023 and 2022 includes fees related to the Company's annual independent financial statement audit, quarterly reviews, reporting on internal control over financial reporting, and statutory reporting requirements for the United States Department of Housing and Urban Development. Audit-related Fees includes fees for services related to benefit plan audits. Tax Fees includes fees for tax services rendered in preparation of state and federal tax returns for the Company and Bank, as well as for consultations regarding certain tax matters. The Audit Committee has reviewed summaries of the services provided and the related fees and has determined that the provision of non-audit services is compatible with maintaining the independence of Elliott Davis.

The Audit Committee has (i) reviewed and discussed our consolidated audited financial statements for fiscal year ended December 31, 2023 with our management; (ii) discussed with Elliott Davis, our independent registered public accounting firm, all matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC; and (iii) received the written disclosures and the letter from Elliott Davis required by applicable requirements of the Public Company Accounting Oversight Board regarding Elliott Davis’s communications with the Audit Committee concerning independence, and discussed with Elliott Davis its independence. Based on the foregoing review and discussions, the Audit Committee recommended to the Board that our consolidated audited financial statements for the year ended December 31, 2023 be included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Any stockholder desiring to present a proposal pursuant to Rule 14a-8 of the Exchange Act to be included in the definitive proxy statement and voted on by the stockholders at the 2025 annual meeting of stockholders must submit a written proposal, including all supporting information, to the Company at its principal executive offices no later than December 3, 2024, which is 120 days prior to the anniversary date that we released this Proxy Statement to our stockholders for the Annual Meeting, unless the date of the annual meeting of stockholders is changed by more than 30 days from the one-year anniversary of the Annual Meeting, in which case the proposal must be received a reasonable time before the Company begins to print and send its proxy materials. A stockholder must provide its proposal to the Company in writing, and such proposal must comply with the requirements of Rule 14a-8.

As provided in the Bylaws, if a stockholder intends to present a proposal for new business to be considered at the 2025 annual meeting of stockholders but does not seek inclusion of the proposal in the Company’s proxy statement for that meeting, then such proposal, including all supporting information, must be delivered to and received by the Company’s Secretary at our principal executive offices not more than 90 days nor less than 30 days before the date of any such annual meeting of stockholders; provided, however, that if less than 45 days’ notice of the date of the meeting is given to stockholders, such notice by a stockholder must be received by the Company’s Secretary not later than the close of business on the 15th day following the day on which notice of the date of the meeting was mailed to stockholders or two days before the date of the meeting, whichever is earlier. Nominations for the election of directors may be made by any stockholder of the Company entitled to vote generally in the election of directors that has continuously held at least $2,000 in market value, or 1%, of the Company's capital stock entitled to vote at the meeting for at least one year. If such stockholder intends to present a nomination for director as provided in the Bylaws, then such nomination, including all supporting information, must be made in writing and delivered to the Company’s Secretary no later than January 5, 2025 (not later than 90 days before the first anniversary of the date the prior year’s proxy materials were mailed to stockholders). Each such notice of nomination by a stockholder must set forth (a) the full name, age and date of birth of each nominee proposed in the notice, (b) the business and residence addresses and telephone numbers of each such nominee, (c) the educational background and business experience of each such nominee, including a list of positions held for at least the preceding five years, and (d) a signed representation by each such nominee that the nominee will timely provide any other information reasonably requested by the Company for the purpose of preparing its disclosures in regard to the solicitation of proxies for the election of directors. The name of each such candidate for director must be placed in nomination at the annual meeting by a stockholder present in person and the nominee must be present in person at the meeting for the election of directors.

In addition to the notice and information requirements contained in the Company’s Bylaws, to comply with the SEC universal proxy rules, stockholders who, in connection with the 2025 annual meeting of stockholders, intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice to the Company that sets forth the information required by the SEC’s Rule 14a-19 no later than March 17, 2025, unless the date of the 2025 annual meeting of stockholders has changed by more than thirty (30) calendar days from the one-year anniversary of the Annual Meeting, in which case such notice must be provided by the later of sixty (60) calendar days prior to the date of the 2025 annual meeting of stockholders or the tenth (10th) calendar day following the day on which public announcement of the date of the annual meeting is first made by the Company.

Under applicable law, if you consented or were deemed to have consented, your broker, bank or other intermediary may send only one copy of the Proxy Statement, the 2023 Annual Report, and other proxy materials to your address for all residents that own shares of Company common stock in street name. If you wish to revoke your consent to householding, you must contact your broker, bank or other intermediary. If you are receiving multiple copies of the Proxy Statement, the 2023 Annual Report, and other proxy materials, you may be able to request house holding by contacting your broker, bank or other intermediary. Upon written or oral request, we will promptly deliver a separate set of the Proxy Statement, the 2023 Annual Report or other proxy materials to any beneficial owner at a shared address to which a single copy of any of those documents was delivered. If you wish to request copies free of charge of the Proxy Statement, the 2023 Annual Report or other proxy materials, please send your request to Investor Relations, Capital Bancorp, Inc., 2275 Research Blvd, Rockville, MD 20850, at Capital Bancorp, Inc., 2275 Research Blvd, Suite 600, Rockville, Maryland 20850 or call the Company with your request at (301) 468-8848.



¨			Preliminary Proxy Statement
¨			Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒			Definitive Proxy Statement
¨			Definitive Additional Materials
¨			Soliciting Material Pursuant to §240.14a-12


☒						No fee required.
¨						Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
¨						Fee paid previously with preliminary materials.
¨						Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11.


Board Diversity Matrix
	As of April 2, 2024				As of April 4, 2023
Total Number of Directors	11				10
Part I: Gender Identity	Female	Male	Non- Binary	Did not Disclose Gender	Female	Male	Non- Binary	Did not Disclose Gender
Directors	2	8	0	1	1	8	0	1
Part II: Demographic Background
African American or Black	0	1	0	0	0	1	0	0
Alaska Native or Native American
Asian
Hispanic or Latinx
Native Hawaiian or Pacific Islander
White	2	6	0	0	1	7	0	0
Two or More Races or Ethnicities
LGBTQ+	0				0
Did Not Disclose Demographic Background	2				1



	Number of	Percent of
	Shares	Class
	Beneficially	Beneficially
Name	Owned	Owned
Directors, Nominees and Named Executive Officers
Jerome R. Bailey(1)	139,824	*
Edward F. Barry(2)	391,481	2.78%
Joshua B. Bernstein(3)	410,781	2.91%
C. Scott Brannan(4)	11,668	*
Scot R. Browning(5)	529,029	3.75%
Karl Dicker(6)	73,458	*
Randall J. Levitt(7)	1,019,744	7.23%
Fred J. Lewis(8)	47,420	*
Steven M. Poynot(9)	3,544	*
Deborah Ratner-Salzberg(10)	65,593	*
Steven J. Schwartz(11)	733,185	5.20%
Mary Ann Scully(12)	11,536	*
James F. Whalen(13)	976,147	6.92%
All Directors, Nominees and Executive Officers as a Group (20 Persons)	4,566,558	32.50%


	Fees Earned
	or Paid in	Stock	Option
	Cash	Awards	Awards	Total
Name	($)	($) (1)	($) (1)	($)
Jerome R. Bailey	71,000	40,000	39,555	150,555
Joshua B. Bernstein	23,800	32,000	31,644	87,444
Joseph M. Greene(2)	1,200	10,000	9,886	21,086
Randall J. Levitt	40,000	32,000	31,644	103,644
Fred J. Lewis(3)	54,800	40,000	39,555	134,355
Deborah Ratner-Salzberg	15,400	27,000	26,695	69,095
Steven J. Schwartz	109,400	40,000	39,555	188,955
Mary Ann Scully	16,400	—	—	16,400
James F. Whalen	87,000	40,000	39,555	166,555
C. Scott Brannan	18,000	27,000	26,695	71,695


Filed by the Registrant ☒
Filed by a Party other than the Registrant ¨


				Stock	Option	All other
Name and principal		Salary	Bonus	Awards	Awards	compensation	Total
position	Year	($)	($)	($)(1)	($)(2)	($)(3)	($)
Edward F. Barry Chief Executive Officer	2023	603,750	175,000	175,000	126,059	38,984	1,118,793
	2022	562,500	164,000	164,000	175,000	37,595	1,103,095

Steven M. Poynot President and Chief Operating Officer	2023	350,000	95,000	—	54,799	33,409	533,208

Karl Dicker President of OpenSky™ & Fintech	2023	374,930	205,840	—	58,676	11,846	651,292
	2022	357,075	250,670	—	60,705	13,362	681,812


		401(k)		Auto	Health &
Name and principal		Match	HSA	Allowance	Welfare	Total
position	Year	($)	($)	($)	($)	($)
Edward F. Barry Chief Executive Officer	2023	9,900	3,000	6,000	20,084	38,984
	2022	9,150	3,000	6,000	19,445	37,595

Steven M. Poynot President and Chief Operating Officer	2023	9,900		6,000	17,509	33,409

Karl Dicker President of OpenSky™ & Fintech	2023	9,900			1,946	11,846
	2022	9,150	—	—	4,212	13,362


Year	Summary Compensation Table Total for PEO ($)	Compensation Actually Paid to PEO ($)	Average Summary Compensation Table Total for Non-PEO NEOs ($)	Average Compensation Actually Paid to Non-PEO NEOs ($)	Value of Initial Fixed $100 Investment Based on Total Stockholder Return ($)	Net Income ($)
2023	1,118,793	1,001,287	592,250	534,548	95	35,871,000
2022	1,103,095	834,486	681,812	559,052	91	41,804,000



Elliott Davis, PLLC	2023		2022
Audit Fees	$	425,921	652,632
Audit-related Fees	25,000		18,800
Tax Fees	131,210		111,600

Total	$	582,131	$	783,032



			By:			C. Scott Brannan, Chair Randall J. Levitt Steven J. Schwartz Jerome R. Bailey Mary Ann Scully