Capital Bancorp, Inc. · NASDAQ:CBNK
Capital Bancorp — Investor Presentation (January 2019)
35 slides from Capital Bancorp's investor presentation, Jan 29, 2019
Slide 1: Investor Presentation January 2019
Exhibit 99.1 Investor Presentation January 2019 0
Slide 2: Forward Looking Statements
Forward Looking Statements The statements contained in this presentation that are not historical facts are forward-looking statement based on management’s current expectations and beliefs concerning future developments and their potential effects on Capital Bancorp, Inc. (the “Company” or “Capital”)
Slide 3: Exceptional Management Team
Exceptional Management Team • Joined Capital Bank as Chief Executive Officer in 2012 • Prior to joining Capital Bank, Mr. Barry held senior positions at Capital One Bank, Bank of Edward F. Barry America, and E&Y/Capgemini where he held a variety of roles primarily focusing on Chief Executive Officer
Slide 4: Exceptional Management Team
Exceptional Management Team • Joined Capital Bank in 2013 Nick Bryan • Mr. Bryan leads the OpenSky® credit card business line for Capital Bank and manages Chief Marketing Officer the Bank’s data analytics platforms GM – OpenSky® • Prior to Capital Bank, Mr. Bryan spent eight years with Capital One B
Slide 5: Fourth Quarter 2018 Highlights
Fourth Quarter 2018 Highlights • Underwriters exercised their full over-allotment option of $3.9mm • CBNK added to the Russell 2000 Index • Net interest margin, excluding the credit card portfolio increased slightly from the third to the fourth quarter • Asset quality remained stable during the four
Slide 6: Overview of Capital Bancorp, Inc.
Overview of Capital Bancorp, Inc. Franchise Highlights Footprint Corporate Headquarters - Rockville, MD • Branch Balance Sheet – 12/31/18 ($mm) Unaudited ® Assets $1,105 • OpenSky Loans (Held for Investment) 1,000 • LPO Deposits 955 • Mortgage 2018 Financial Performance ROAA 1.22% ROATCE 13.94% Loan
Slide 7: Diversified Lines of Business
Diversified Lines of Business Commercial OpenSky® Secured Residential Mortgage Banking Credit Card Origination . Over $1 billion of assets . $34.7 million portfolio . 2.49% YTD GOS margin . Provide sophisticated advice . Credit related consumer . 79% purchase volume YTD and exceptional client servic
Slide 8: Investment Highlights
Investment Highlights • The Washington, D.C. and Baltimore, MD MSAs make up one of the largest Operate in and wealthiest regions in the U.S. Premier Markets • Consolidation creates new opportunities for customer and talent acquisition • Market insulated from economic downturns by federal government
Slide 9: Exceptional Markets
Exceptional Markets Median Household Income by County ($000) Washington, D.C. – Baltimore, MD Market . $117 $120 Total population of more than 9.0 million $104 . Includes the four wealthiest counties in $82 the U.S. (as measured by median HH $61 income) . Combined GDP of $696 billion (would rank 3rd
Slide 10: Consistently Superior Profitability
Consistently Superior Profitability ROAA (%) ROATCE (%) 15.76% 1.23% 1.25% 1.22% 14.90% 14.41% 14.75% 1.17% 13.94% 13.94% 1.10% 1.13% 1.02% 10.97% 0.83% 0.80% 8.78% 0.70% 0.74% 8.54% 8.78% 8.72% 0.65% 7.13% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y ROAA ROAA, as Adjuste
Slide 11: Embracing the Power of Technology
Embracing the Power of Technology . In-house team of 9 individuals . Apollo customer acquisition system developed for OpenSky® provides automated work flows Internally for digital account applications processes Developed . In-house staff participates in business development calls and designs bespoke
Slide 12: Strategic Approach Drives Track Record of Strong Growth
Strategic Approach Drives Track Record of Strong Growth Disciplined Business Strategy Total Assets ($MM) . Deliver premium, advice-based solutions to our customers $1,105 $1,026 $906 . Leverage technology to differentiate products and $743 services $619 $489 . Instill a sales-focused, entrepreneuria
Slide 13: Loan Portfolio
Loan Portfolio Total Loans HFI ($MM) Loan Composition Construction 16% $1,000 $887 Non-Owner Residential Occupied $763 R.E. CRE 41% 15% $639 $506 $408 Owner Occupied Credit Card Commercial CRE 3% & Industrial 13% 12% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y . Owner-occupied CRE loans make up approximatel
Slide 14: Commercial Real Estate Concentration Levels
Commercial Real Estate (“CRE”) Concentration Levels CRE / Total Risk Based Capital (“RBC”) Breakdown 328.5% 337.4% 302.5% 194.9% 242.6% 182.3% 142.5% 120.2% 86.0% Peer Average (Banks) Capital Bank Capital Bancorp Construction / RBC Non-Owner Occupied CRE / RBC . Construction lending is a historical
Slide 15: Superior Asset Quality Metrics
Superior Asset Quality Metrics Nonperforming Loans ($MM) Nonperforming Assets / Assets Commercial Credit Card and Industrial $0.0 $0.7 1.58% Residential Real Estate 1.10% $2.2 0.80% 0.51% 0.54% 0.90% 0.44% Commercial 0.68% 0.63% 0.59% 0.44% Real Estate 0.29% $1.5 $0 nonaccrual or 2013Y 2014Y 2015Y 2
Slide 16: Asset Sensitive Balance Sheet
Asset Sensitive Balance Sheet Fixed vs. Variable Rate Loan Mix Yield on Loans 8.50% 7.50% 7.16% 6.45% 6.44% 6.50% 6.18% 5.50% Fixed 5.78% 5.76% 5.57% 5.76% 37% 4.50% 4.79% 4.62% 4.66% 4.86% 3.50% 2.50% 1.50% Variable 63% 0.50% -0.50% 2015Y 2016Y 2017Y 2018Y Loan Yield ex Card Loan Yield Peer Median
Slide 17: Deposit Portfolio Composition
Deposit Portfolio Composition Core deposit momentum: Deposit Portfolio Composition Recruiting deposit sales teams, including fiduciary Time Noninterest Deposits Bearing salespeople, from recently acquired competitors >$100K 25% driving core deposit growth 29% Customizing solutions for clients, i
Slide 18: Delivering Superior Net Interest Margin
Delivering Superior Net Interest Margin Net Interest Margin(2) . Deliver real, advice-based solutions to 5.41% 5.59% 5.37% 5.59% 5.02% 5.18% customers’ complex credit needs vs. acting as the low-cost provider (largely avoid bid situations) 3.93% 3.97% 4.01% 3.73% 3.72% 3.68% . Specifically target cu
Slide 19: Differentiated Revenue Model
Differentiated Revenue Model Net Revenue(1) $74.3 $66.4 $63.2 $48.6 $41.2 $35.5 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y Noninterest Income to Net Revenue(1) OpenSky® & Church Street Mortgage contribute to fee income levels in excess of peer median 32.40% 30.70% 28.70% 27.80% 22.80% 22.10% 11.10% 9.70% 9
Slide 20: Efficiency Ratio
Efficiency Ratio Efficiency Ratio(1)(2) 73.9% 70.0% 70.0% 71.6% 68.6% 73.2% 6.1% 67.8% 66.1% 65.0% 63.6% 62.0% 58.2% 59.3% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y Efficiency Ratio Peer Median (3) . Recent investments should have a positive long-term impact on efficiency: Credit card data processing co
Slide 21: OpenSky Secured Credit Card Division
OpenSky® Secured Credit Card Division . Customer Demographics Number of Outstanding Accounts Underserved by traditional credit 170.0 products 149.2 Poor or nonexistent credit history Nationwide customer base 96.4 Minimum initial deposit of $200 and 63.4 maximum initial deposit of $3,000 per
Slide 22: Church Street Mortgage Division
Church Street Mortgage Division Purchase vs. Re-finance Volume & GOS Margin . Right-sized mortgage division in conjunction with Federal Reserve rate hikes and in anticipation of a reduction in industry-wide re-finance volume $2.9B $0.4B $0.3B . 100.0% 3.0% Production hires since the beginning of 201
Slide 23: Creating Long-Term Shareholder Value
Creating Long-Term Shareholder Value Earnings per Share (EPS) Growth Tangible Book Value per Share (TBV) Growth Capital CAGR: 9.4%(1) Capital CAGR: 13.1%(2) Peer CAGR: 5.5% Peer CAGR: 7.0% $8.38 $8.0 $1.02 $0.99 $6.94 $6.35 $0.84 $5.83 $6.35 $0.74 $0.85 $5.25 $6.02 $0.69 $0.65 $0.80 $5.61 $0.76 $4.5
Slide 24: Delivering Long-Term Shareholder Value - Earnings
Delivering Long-Term Shareholder Value - Earnings Net Income Actual Consensus $14.00 $12.76 $12.54 $12.00 $10.00 $9.28 $8.00 $6.00 $4.00 $3.10 $2.00 $3.15 $3.48 $3.26 $3.10 $- 9/30/2018 12/31/2018 12/31/2018 3/31/2019 Consensus Net Income – quarter to date Actual Net Income – quarter to date Consens
Slide 25: Delivering Long-Term Shareholder Value - EPS
Delivering Long-Term Shareholder Value - EPS Earnings per Share - Diluted Actual Consensus $1.20 $1.02 $1.01 $1.00 $0.80 $0.77 $0.60 $0.40 $0.22 $0.26 $0.20 $0.25 $0.24 $0.22 $- 9/30/2018 12/31/2018 12/31/2018 3/31/2019 Consensus EPS – quarter to date Actual EPS – quarter to date Consensus EPS – yea
Slide 26: Conclusions
Conclusions . Operate in Premier Markets . Consistently High Performing Community Bank . Innovation Driven, Fee Based Businesses . Entrepreneurial Management Team . Poised with Earnings Momentum 25
Slide 27: Capital Bancorp, Inc.
g CAPITAL BANCORP, INC. CAPITAL BANK PARTNERS in YOUR VISION
Slide 28: ROATCE Reconciliation
ROATCE Reconciliation “Return on average tangible common equity” is a non-GAAP measure defined as net income, less bargain purchase gain (net of taxes), plus the amortization of intangible assets (net of taxes) divided by average total equity net of average intangible assets. Dollars in Thousands Ye
Slide 29: ROATCE, as Adjusted Reconciliation
ROATCE, as Adjusted Reconciliation “Return on average tangible common equity, as adjusted” is a non-GAAP measure defined as net income, less bargain purchase gain (net of taxes), plus non-recurring foregone interest and fees, plus non-recurring data processing expenses, plus non-recurring deferred t
Slide 30: ROAA, as Adjusted Reconciliation
ROAA, as Adjusted Reconciliation “Return on average assets, as adjusted” is a non-GAAP measure defined as net income, less bargain purchase gain (net of taxes), plus non-recurring foregone interest and fees, plus non- recurring data processing expenses, plus non-recurring deferred tax revaluation, l
Slide 31: Net Interest Margin, as Adjusted Reconciliation
Net Interest Margin, as Adjusted Reconciliation “Net interest margin, as adjusted” is a non-GAAP measure defined as net interest income, plus non- recurring foregone interest and fees, divided by average interest earning assets. Dollars in Thousands Year Ended December 31, 2013 2014 2015 2016 2017 2
Slide 32: Net Revenue & Noninterest Income to Net Revenue Reconciliation
Net Revenue & Noninterest Income to Net Revenue Reconciliation Net revenue for 2017 has been adjusted to exclude the impact of non-recurring foregone interest and fees and as such is considered a non-GAAP measure. Dollars in Thousands Year Ended December 31, 2013 2014 2015 2016 2017 2018 Noninterest
Slide 33: Efficiency Ratio, as Adjusted Reconciliation
Efficiency Ratio, as Adjusted Reconciliation “Efficiency ratio, as adjusted” is a non-GAAP measure defined as total noninterest expense less non-recurring data processing expenses, divided by the sum of net interest income, noninterest income and non-recurring foregone interest and fees. Dollars in
Slide 34: Diluted Earnings Per Share, as Adjusted Reconciliation
Diluted Earnings Per Share, as Adjusted Reconciliation “Diluted earnings per share, as adjusted” is a non-GAAP measure defined as net income, less bargain purchase gain (net of taxes), plus non-recurring foregone interest and fees, plus non- recurring data processing expenses, plus non-recurring def
Slide 35: Tangible Book Value Per Share Reconciliation
Tangible Book Value Per Share Reconciliation “Tangible book value per share” is a non-GAAP measure defined as total stockholders’ equity, less intangible assets, divided by shares of common stock outstanding. Dollars in Thousands Year Ended December 31, 2013 2014 2015 2016 2017 2018 Total Stockholde
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