Capital Bancorp, Inc. · NASDAQ:CBNK
Capital Bancorp — Investor Presentation (November 2023)
26 slides from Capital Bancorp's investor presentation, Nov 15, 2023
Slide 1: 3Q 2023 Investor Overview
© CAPITAL BANCORP, INC. 3Q 2023 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
Capital Bancorp, Inc. (NASDAQ-CBNK) Financial Highlights Corporate Timeline Founded as Harbor Capital National Bank Recapitalized by investor group led by Stephen Ashman Acquired three failed institutions including OpenSky® CEO Ed Barry joined Capital Bank Assets exceed $1 billion Successful IPO and
Slide 4: Diversified Lines of Business
Diversified Lines of Business • Initial lead product - nationwide, secured credit card to help under-banked customers (re)establish their credit • Secured and unsecured credit card availability to customers • Building capabilities to cross-sell products and services as card-holders progress on their
Slide 5: Investment highlights
5 • Organic growth has consistently exceeded community banking peers • OpenSky® drives high non-interest income and provides resiliency during economically stressed periods • Asset growth and differentiated businesses drive margins, profitability and book value • Investments in proprietary technolog
Slide 6: Technology facilitates growth and profitability
• OpenSky® mobile app enabling cost- effective customer acquisition and servicing • Proprietary data, credit scoring (B- Score), and algorithms improving customer retention with unsecured credit initiative • NPV models driving product and marketing decisions 6 Data and Analytics Customer Experience
Slide 7: Third Quarter 2023 Highlights
Third Quarter 2023 Highlights 7 (1) Refer to Appendix for reconciliation of non-GAAP measures. (2) Excluding credit cards & SBA-PPP loans Earnings and Profitability • Net Income of $9.8 million expands 33.8% from 2Q 2023 • Diluted EPS of $0.70 • Return on Average Assets of 1.75% • Return on Average
Slide 8: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin $18,933 $18,399 $17,561 $19,205 $19,673 $17,103 $16,035 $16,130 $15,168 $16,143 $36,677 $35,199 $34,487 $35,340 $36,810 7.24% 6.64% 6.65% 6.63% 6.71% 4.16% 3.91% 3.81% 4.06% 4.05% 3Q22 4Q22 1Q23 2Q23 3Q23 Commercial Bank OpenSky® Other Net Interest Margin
Slide 9: Noninterest Income – Quarter to Date
Noninterest Income – Quarter to Date $5,524 $4,314 $4,210 $4,706 $4,387 $969 $554 $1,155 $1,332 $1,243 $199 $222 $229 $245 $250 $416 $471 $432 $404 $446 $7,108 $5,561 $6,026 $6,687 $6,326 3Q22 4Q22 1Q23 2Q23 3Q23 Credit Card fees Mortgage banking revenue Service charges on deposits Other income $ i
Slide 10: Noninterest Expense – Quarter to Date
Noninterest Expense – Quarter to Date $10,747 $11,769 $12,554 $12,143 $12,419 $7,178 $6,697 $6,530 $6,559 $6,469 $3,848 $2,426 $2,374 $2,608 $2,358 $1,632 $726 $517 $2,646 $1,565 $1,138 $1,388 $1,213 $1,536 $1,351 $3,551 $3,728 $3,034 $4,100 $3,884 $28,094 $26,734 $26,222 $29,592 $28,046 3Q22 4Q22 1
Slide 11: Profitability
Profitability 2.15% 1.67% 1.84% 1.34% 1.75% 3Q22 4Q22 1Q23 2Q23 3Q23 Return on Average Assets 11 20.32% 16.18% 16.98% 12.30% 16.00% 3Q22 4Q22 1Q23 2Q23 3Q23 Return on Average Equity 64.16% 65.59% 64.73% 70.41% 65.02% 3Q22 4Q22 1Q23 2Q23 3Q23 Efficiency Ratio $0.77 $0.62 $0.68 $0.52 $0.70 3Q22 4Q22 1
Slide 12: Balance Sheet Composition
Balance Sheet Composition Cash & Cash Equivalents 6% Portfolio Loans 82% AFS Securities Portfolio 9% Other Assets 3% Asset Composition Owner Occupied Commercial Real Estate 16% Non Owner- Occupied Commercial Real Estate 19% Residential Real Estate 30% Construction Real Estate 15%Other(1) <1% Credit
Slide 13: Non Owner-Occupied Commercial Real Estate
Non Owner-Occupied Commercial Real Estate (“NOO-CRE”), incl. Multi-Family Non-Office NOO-CRE 18% Office 1% Multi-Family 8% 3Q23 Total Loans: $1.9B Loan-to-Value (“LTV”) • Weighted average LTV is calculated by reference to the most recent available appraisal of the property securing each loan. • Comm
Slide 14: High Quality, Low Risk Investment Portfolio
High Quality, Low Risk Investment Portfolio U.S. Treasuries 75% Municipal 4% Corporate 2% Asset-backed 4% Mortgage-backed 15% 3Q23 Investment Securities: $206MM Investment Securities Portfolio • Classified as available for sale with a fair market value of $206 million, or 9.1% of total assets. • The
Slide 15: Liquidity
$514.5 $76.0 $56.1 $146.2 $792.8 3Q23 Cash and Cash Equivalents Unpledged Investment Securities Unsecured LOC with Other Banks Collateralized LOC Liquidity $ i n m ill io n s 15 Sources of Liquidity: • As of September 30, 2023, sources of available borrowings totaled $646.6 million. • $514.5 million
Slide 16: Composition of Deposits
Composition of Deposits Noninterest-bearing 35% Money Markets 34% Other Time Deposits 13%Brokered Time Deposits 6% Interest-bearing Demand 12%Savings <1% 3Q23 Total Deposits: $2.0B Deposit Composition and Costs • Total Deposits increased $33.6 million, or 6.9% annualized, from the second quarter 202
Slide 17: Loan Yield and Deposit Rate Trends
Loan Yield and Deposit Rate Trends 8.94% 9.15% 9.54% 9.55% 9.72% 5.22% 5.86% 6.30% 6.66% 6.76% 0.57% 1.82% 2.82% 3.13% 3.39% 3Q22 4Q22 1Q23 2Q23 3Q23 Loan Yield Loan Yield, adjusted(1) Interest Bearing Deposits Rate 17 (1) Excluding credit cards & SBA-PPP loans
Slide 18: Deposit Betas
Deposit Betas(1) 7% 34% 52% 55% 58% 4% 19% 33% 36% 38% 3.25% 4.50% 5.00% 5.25% 5.50% -1.50% -0.50% 0.50% 1.50% 2.50% 3.50% 4.50% 5.50% 6.50% -10% 10% 30% 50% 70% 90% 3Q22 4Q22 1Q23 2Q23 3Q23 F e d e ra l F u n d s T a rg e t R a te D e p o s it B e ta Interest-bearing Deposit Beta Total Deposit Beta
Slide 19: Credit Metrics
Credit Metrics 0.43% 0.46% 0.73% 0.71% 0.67% 3Q22 4Q22 1Q23 2Q23 3Q23 Non-performing Assets / Total Assets 19 0.39% 0.49% 0.61% 0.35% 0.38% 3Q22 4Q22 1Q23 2Q23 3Q23 Annualized Net Charge-Offs / Average Portfolio Loans(1) 0.52% 0.56% 0.91% 0.86% 0.82% 3Q22 4Q22 1Q23 2Q23 3Q23 Non-performing Loans / T
Slide 20: Robust Capital Ratios
Robust Capital Ratios 13.39% 12.95% 12.84% 12.82% 13.25% 3Q22 4Q22 1Q23 2Q23 3Q23 Tier 1 Risk Based Capital Ratio Tier 1 Risk Based Capital Ratio 8.0% Well Capitalized Threshold 20 10.65% 10.55% 10.44% 10.66% 10.69% 9.00% 8.85% 8.79% 8.93% 9.08% 3Q22 4Q22 1Q23 2Q23 3Q23 Tangible Common Equity Holdin
Slide 21: Tangible Book Value Per Share
Tangible Book Value Per Share (“TBVPS”)(1) $17.48 $15.24 $13.70 $10.92 $9.27 $8.09 $7.06 0.00% 9/30/239/30/229/30/219/30/209/30/199/30/189/30/17 TBVPS 21 (1) Refer to Appendix for reconciliation of non-GAAP measures.
Slide 22: Share Appreciation Outperforms Industry
Share Appreciation Outperforms Industry 51.02% (80%) (60%) (40%) (20%) 0% 20% 40% 60% 80% 100% 120% 9/26/18 9/26/19 9/26/20 9/26/21 9/26/22 9/26/23 P ri c e C h a n g e Share Price Change Since Capital Bancorp, Inc. IPO on 9/26/2018 CBNK KBW Nasdaq Bank Index NASDAQ Bank Index 22 Source: S&P Global
Slide 23: Jay Walker Chief Financial Officer (301) 468-8848 x1223 Ed Barry Chief Executive Officer (240)
Jay Walker Chief Financial Officer (301) 468-8848 x1223 Ed Barry Chief Executive Officer (240) 283-1912 NASDAQ: CBNK
Slide 24: Appendix
Appendix
Slide 25: Reconciliation of Non-GAAP Information
Reconciliation of Non-GAAP Information 25 Tangible Book Value Per Share Quarters Ended (in thousands, except per share amount) September 30, 2023 June 30, 2023 September 30, 2022 Total Stockholders' Equity $ 242,878 $ 237,435 $ 214,005 Less: Preferred equity - - - Less: Intangible assets - - - Tangi
Slide 26: Reconciliation of Non-GAAP Information
Reconciliation of Non-GAAP Information 26 Net Charge-offs to Average Portfolio Loans(1) Quarters Ended (in thousands) September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Total Net Charge-offs $ 1,780 $ 1,583 $ 2,633 $ 2,090 $ 1,588 Total Average Loans 1,847,772 1,802
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