Capital Bancorp Inc

Evaluation of Disclosure Controls and Procedures

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

Management is responsible for establishing and maintaining an effective system of internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). The Company’s system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. There are inherent limitations in the effectiveness of any system of internal control over financial reporting, including the possibility of human error and circumvention or overriding of controls. Accordingly, even an effective system of internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management has assessed the Company’s internal control over financial reporting as of December 31, 2025. 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, 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. Their report is included in Part II, Item 8. 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 thematerial 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 thematerial weaknessas expeditiously as possible.

Changes in Internal Control Over Financial Reporting

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.