Capital Bancorp, Inc. · NASDAQ:CBNK
Capital Bancorp — Q4 2024 Earnings Presentation
28 slides from Capital Bancorp's earnings presentation, Jan 27, 2025
Slide 1: 4Q 2024 Investor Overview
© CAPITAL BANCORP, INC. 4Q 2024 Investor Overview
Slide 2: Forward Looking Statements
Forward Looking Statements The statements contained in this presentation that are not historical facts are forward-looking statements 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: Financial Highlights and Corporate Timeline
(in millions except per share data) Balance Sheet Dec. 31, 2024 Sep. 30, 2024 Annualized Dec. 31, 2023 YoY Assets $ 3,207 $ 2,561 100.3% $ 2,226 44.1% Portfolio Loans 2,630 2,108 95.5% 1,903 38.2% Deposits 2,762 2,186 104.8% 1,896 45.7% Quarterly Financial Performance Dec. 31, 2024 Sep. 30, 2024 QoQ
Slide 4: Business Model is Uniquely Diversified
$2.5Bn Q4 '24 Servicing Portfolio $4.6mm Q4 '24 Revenue3 • Loan service provider that offers community banks and credit unions with a comprehensive outsourced U.S. Small Business Association (“SBA”) 7(a) and U.S. Department of Agriculture (“USDA”) lending platform • $2.5Bn servicing portfolio comple
Slide 5: Recently Completed Strategic Acquisition of IFHI
Recently Completed Strategic Acquisition of IFHI
Slide 6: Transaction Overview and Strategic Rationale
Source: S&P Global Market Intelligence; FactSet. 1 Based on IFH 2023Y core revenue; excludes one-time, non-recurring items. 2 Based on IFH 2023Y core net income based on reported net income of $11.2 million less $4.7 million in pre-tax adjustments, tax effected at 22.5%. 3 Return on invested capital
Slide 7: Merger Updates
Merger Updates 7 Merger Closed October 1, 2024 ▪ On track to achieve the full run-rate level of ~$7mm in annual cost savings ▪ Executed on Day 1 cost savings and organizational changes ▪ Enacted required policy changes and Government Guaranteed lending committee ▪ Conducted CBNK cultural immersion s
Slide 8: Asset and Liability Pre-tax Marks
8 Asset Pre-tax Marks (Negative Mark is Dilutive to TBV) Liability Pre-Tax Marks (Negative Mark is Accretive to TBV) Announcement Estimate Current Estimate Announcement Estimate Current Estimate Gross Loans – Non-PCD Credit Mark $(2.7) million $(4.1) million Gross Loans – PCD Credit Mark $(6.9) mill
Slide 9: Renewables Business Poised to Grow as Energy Transition Continues
Renewables Business Poised to Grow as Energy Transition Continues to Take Hold OperationsProject AssemblyDevelopment Project Lifecycle LTC Development Loans Formula based on mid and late-stage development assets Rate: Prime + 1.0% to 3.0% Variable, quarterly adjust Term: 24 months Loan to Cost: Up t
Slide 10: Financial Information
© CAPITAL BANCORP, INC. Financial Information
Slide 11: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin $19,073 $19,375 $20,623 $21,821 $27,394 $15,035 $14,921 $15,785 $15,625 $15,454 $715 $34,889 $35,008 $37,057 $38,354 $44,327 6.40% 6.24% 6.46% 6.41% 5.87% 3.92% 3.85% 4.00% 4.08% 4.05% 4Q23 1Q24 2Q24 3Q24 4Q24 Commercial Bank Other OpenSky Net Purchase Acc
Slide 12: Noninterest Income – Quarter to Date
Noninterest Income – Quarter to Date $3,996 $3,915 $4,368 $4,096 $3,743 $1,166 $1,352 $1,845 $1,811 $1,676 $773 $704 $677 $726 $4,547 $4,566 $(2,619) $5,936 $5,972 $6,890 $6,635 $11,913 14.5% 14.6% 15.7% 14.7% 24.7% 4Q23 1Q24 2Q24 3Q24 4Q24 OpenSky CBHL Commercial Bank (incl. GGL) Windsor Advantage
Slide 13: Noninterest Expense – Quarter to Date
Noninterest Expense – Quarter to Date $11,638 $12,907 $13,272 $13,345 $16,513 $1,573 $1,613 $1,864 $1,791 $2,976 $1,930 $1,947 $1,769 $1,980 $2,150 $6,128 $6,761 $6,788 $6,930 $7,210 $1,433 $2,032 $2,072 $1,223 $1,032 $4,205 $3,515 $3,645 $3,936 $5,018 $712 $83 $520 $2,615 $26,907 $29,487 $29,493 $2
Slide 14: Profitability
Profitability 1.63% 1.15% 1.40% 1.42% 0.96% 1.24% 1.41% 1.51% 1.97% 4Q23 1Q24 2Q24 3Q24 4Q24 Return on Average Assets ROAA ROAA, as Adjusted 14 14.44% 10.19% 12.53% 12.59% 8.50% 11.03% 12.62% 13.40% 17.46% 4Q23 1Q24 2Q24 3Q24 4Q24 Return on Average Equity ROAE ROAE, as Adjusted 14.44% 10.19% 12.53%
Slide 15: Balance Sheet Composition
Balance Sheet Composition Cash & Cash Equivalents 6% Portfolio Loans 82% AFS Securities Portfolio 7% Other Assets 5% Asset Composition Owner Occupied Commercial Real Estate 17% Non Owner- Occupied Commercial Real Estate 18% Residential Real Estate 26% Construction Real Estate 12%Other(1) 1% Credit C
Slide 16: Composition of Deposits
Composition of Deposits Noninterest-bearing 29% Money Markets 30% Customer Time Deposits 20% Brokered Time Deposits 12% Interest-bearing Demand 9% Savings <1% 4Q24 Total Deposits: $2.76B Deposit Composition and Costs • Deposits growth of $575.7 million, includes $459.0 million from the acquisition o
Slide 17: High Quality, Low Risk Investment Portfolio
High Quality, Low Risk Investment Portfolio U.S. Treasuries 57% Municipal 4% Corporate 2% Asset-backed 2% Mortgage-backed 35% 4Q24 Investment Securities: $224MM Investment Securities Portfolio • Classified as available for sale with a fair market value of $224 million, or 7% of total assets, with an
Slide 18: Sources of Liquidity
$596 $76 $131 $205 $1,008 December 31, 2024 Cash and Cash Equivalents Unpledged Investment Securities Unsecured LOC with Other Banks Collateralized LOC Liquidity $ i n m ill io n s 18 Sources of Liquidity at December 31, 2024: • $596 million of collateralized lines of credit include: • $486 million
Slide 19: Loan Yield and Deposit Rate Trends
Loan Yield and Deposit Rate Trends (including net purchase accounting adjustments) 9.59% 9.58% 9.72% 9.66% 8.96% 6.89% 6.96% 7.04% 7.15% 6.98% 3.70% 3.91% 3.87% 3.92% 3.46% 2.47% 2.64% 2.61% 2.64% 2.50% 4Q23 1Q24 2Q24 3Q24 4Q24 Loan Yield Loan Yield, adjusted(1) Interest Bearing Deposits Rate Total
Slide 20: Credit Metrics
Credit Metrics 0.72% 0.62% 0.58% 0.60% 0.94% 4Q23 1Q24 2Q24 3Q24 4Q24 Non-performing Assets / Total Assets 20 0.53% 0.41% 0.39% 0.51% 0.37% 4Q23 1Q24 2Q24 3Q24 4Q24 Annualized Net Charge-Offs / Average Portfolio Loans(1) 0.84% 0.73% 0.70% 0.73% 1.15% 4Q23 1Q24 2Q24 3Q24 4Q24 Non-performing Loans / T
Slide 21: Robust Capital Ratios
Robust Capital Ratios 13.56% 13.10% 13.25% 12.50% 11.56% 4Q23 1Q24 2Q24 3Q24 4Q24 Tier 1 Risk Based Capital Ratio Tier 1 Risk Based Capital Ratio 8.0% Well Capitalized Threshold 21 11.45% 11.16% 10.98% 10.94% 11.07% 9.91% 9.66% 9.53% 9.12% 9.31% 4Q23 1Q24 2Q24 3Q24 4Q24 Tangible Common Equity Holdin
Slide 22: Share Appreciation Outperforms Industry
Share Appreciation Outperforms Industry Source: S&P Global Market Intelligence; FactSet. Note: Market data as of 1/23/2025. 1 CBNK IPO price of $12.50 used as starting price for price change calculation. 2 Select banks with assets between $1.5 billion and $5.0 billion in the Mid-Atlantic (North of R
Slide 23: Dominic Canuso Chief Financial Officer (301) 468-8848 x1403 Ed Barry Chief Executive Officer (240)
Dominic Canuso Chief Financial Officer (301) 468-8848 x1403 Ed Barry Chief Executive Officer (240) 283-1912 NASDAQ: CBNK
Slide 24: Non-U.S. GAAP Financial Measures
Non-U.S. GAAP Financial Measures
Slide 25: Tangible Book Value Per Share and Adjusted Net Interest Margin
Tangible Book Value Per Share (in thousands, except per share amount) December 31, 2024 September 30, 2024 December 31, 2023 Total Stockholders' Equity 355,139$ 280,111$ 254,860$ Less: Preferred equity - - - Less: Intangible assets 42,454 - - Tangible Common Equity 312,685$ 280,111$ 254,860$ Period
Slide 26: Credit Ratios Reconciliation
Net Charge-offs to Average Portfolio Loans (1) (in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Total Net Charge-offs 2,427$ 2,655$ 1,935$ 1,987$ 2,477$ Total Average Portfolio Loans 2,592,960 2,053,619 1,992,630 1,927,372 1,863,298 Net Charge-offs t
Slide 27: Reconciliation of Non-GAAP Information: Earnings Metrics
Reconciliation of Non-GAAP Information 27 Earnings Metrics, as Adjusted (in thousands, except per share data) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Net Income 7,533$ 8,672$ 8,205$ 6,562$ 9,030$ Add: Merger-Related Expenses, net of tax 2,151 557 62 538 -
Slide 28: Reconciliation: Return on Average Tangible Common Equity
Reconciliation of Non-GAAP Information 28 Return on Average Tangible Common Equity (in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Net Income 7,533$ 8,672$ 8,205$ 6,562$ 9,030$ Add: Intangible Amortization, net of tax 198 - - - - Net Tangible Income