Capital Bancorp, Inc. · NASDAQ:CBNK
Capital Bancorp — Investor Presentation (November 2024)
30 slides from Capital Bancorp's investor presentation, Nov 12, 2024
Slide 1: 3Q 2024 Investor Overview
© CAPITAL BANCORP, INC. 3Q 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 current expectations and beliefs concerning future developments and their potential effects on Capital Bancorp, Inc. (the or including, without limitation, p
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: Business Model Remains Uniquely Diversified
Business Model Remains Uniquely Diversified Source: Company Documents. Note: CBNK financial metrics as of 9/30/2024 unless otherwise stated. 1 Volume in FY 2021 was approximately $1.0 billion and volume in FY 2022 was approximately $300 million. 2 Credit card loans are presented net of reserve for i
Slide 5: Third Quarter 2024 Highlights
Third Quarter 2024 Highlights 5 (1) Refer to Appendix for reconciliation of non-GAAP measures. (2) Excluding credit card loans Earnings and Profitability Net Income of $8.7 million; as adjusted(1) of $9.2 million Diluted EPS of $0.62; as adjusted(1) of $0.66 Return on Average Assets of 1.42%; as adj
Slide 6: Recently Completed Strategic Acquisition of IFHI
Recently Completed Strategic Acquisition of IFHI
Slide 7: 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 8: Merger Update
Merger Update Merger completed on October 1, 2024 On track to achieve the full run-rate level of ~$7mm in annual cost savings Validated view on revenue synergies and pro forma USDA volumes utilizing our larger balance sheet Conducted CBNK cultural immersion sessions at all IFH locations, each attend
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 $19,673 $19,073 $19,375 $20,623 $21,821 $16,143 $15,035 $14,921 $15,785 $15,625 $36,810 $34,889 $35,008 $37,057 $38,354 6.71% 6.40% 6.24% 6.46% 6.41% 4.05% 3.92% 3.85% 4.00% 4.08% 3Q23 4Q23 1Q24 2Q24 3Q24 Commercial Bank OpenSky Other Net Interest Margin N
Slide 12: Noninterest Income
Noninterest Income Quarter to Date $4,405 $3,996 $3,915 $4,368 $4,096 $1,255 $1,166 $1,352 $1,845 $1,811 $665 $773 $704 $677 $726 $6,326 $5,936 $5,972 $6,890 $6,635 14.7% 14.5% 14.6% 15.7% 14.7% 3Q23 4Q23 1Q24 2Q24 3Q24 OpenSky Capital Bank Home Loans Commercial Bank Corporate Fee Income as a Percen
Slide 13: Noninterest Expense
Noninterest Expense Quarter to Date $12,419 $11,638 $12,907 $13,272 $13,345 $1,351 $1,573 $1,613 $1,864 $1,791 $2,358 $1,930 $1,947 $1,769 $1,980 $6,469 $6,128 $6,761 $6,788 $6,930 $1,565 $1,433 $2,032 $2,072 $1,223 $3,884 $4,205 $3,515 $3,645 $3,936 $712 $83 $520 $28,046 $26,907 $29,487 $29,493 $29
Slide 14: Profitability
Profitability 1.75% 1.63% 1.15% 1.40% 1.42% 1.24% 1.41% 1.51% 3Q23 4Q23 1Q24 2Q24 3Q24 Return on Average Assets ROAA ROAA, as Adjusted 14 16.00% 14.44% 10.19% 12.53% 12.59% 11.03% 12.62% 13.40% 3Q23 4Q23 1Q24 2Q24 3Q24 Return on Average Equity ROAE ROAE, as Adjusted 65.02% 65.91% 71.95% 67.11% 66.07
Slide 15: Balance Sheet Composition
Balance Sheet Composition Cash & Cash Equivalents 6% Portfolio Loans 82% AFS Securities Portfolio 8% Other Assets 4% Asset Composition Owner Occupied Commercial Real Estate 17% Non Owner- Occupied Commercial Real Estate 19% Residential Real Estate 30% Construction Real Estate 14% Other(1) 1% Credit
Slide 16: Non-Owner-Occupied CRE Loans
(in thousands) As of September 30, 2024 Loan Type Amount % of Total Portfolio Loans, Gross Weighted Average LTV Multi-family $ 170,513 8.1% 58.1% Retail $ 116,324 5.5% 56.6% Mixed Use 96,337 4.6% 52.8% Hotel 74,343 3.5% 52.4% Industrial 63,109 3.0% 54.2% Office 13,356 0.6% 63.2% Other 40,018 1.9% 55
Slide 17: Owner-Occupied CRE Loans
Owner- - Non-Office OO-CRE 17% Office 2% 3Q24 Total Loans: $2.1B Loan-to- Weighted average LTV is calculated by reference to the most recent available appraisal of the property securing each loan. Other owner-occupied commercial real estate loans include special purpose loans of $57.9 million, skill
Slide 18: High Quality, Low Risk Investment Portfolio
High Quality, Low Risk Investment Portfolio U.S. Treasuries 61% Municipal 5% Corporate 2% Asset-backed 3% Mortgage-backed 29% 3Q24 Investment Securities: $209MM Investment Securities Portfolio Classified as available for sale with a fair market value of $209 million, or 8.1% of total assets, with an
Slide 19: Sources of Liquidity
$500.4 $76.0 $115.4 $156.7 $848.5 September 30, 2024 Cash and Cash Equivalents Unpledged Investment Securities Unsecured LOC with Other Banks Collateralized LOC Liquidity 19 Sources of Liquidity at September 30, 2024: $500.4 million of collateralized lines of credit include: $391.2 million of availa
Slide 20: Composition of Deposits
Composition of Deposits Noninterest-bearing 33% Money Markets 32% Other Time Deposits 16% Brokered Time Deposits 7% Interest-bearing Demand 12%Savings <1% 3Q24 Total Deposits: $2.19B Deposit Composition and Costs Total Deposits increased $85.8 million, or 4.1% (not annualized), from June 30, 2024. A
Slide 21: Loan Yield and Deposit Rate Trends
Loan Yield and Deposit Rate Trends 9.72% 9.59% 9.58% 9.72% 9.66% 6.76% 6.89% 6.96% 7.04% 7.15% 3.39% 3.70% 3.91% 3.87% 3.92% 2.21% 2.47% 2.64% 2.61% 2.64% 3Q23 4Q23 1Q24 2Q24 3Q24 Loan Yield Loan Yield, adjusted(1) Interest Bearing Deposits Rate Total Cost of Deposits 21 (1) Excluding credit card lo
Slide 22: Deposit Betas
Deposit Betas(1) 55% 58% 63% 68% 67% 36% 38% 43% 46% 46% 5.25% 5.50% 5.50% 5.50% 5.50% -1.50% -0.50% 0.50% 1.50% 2.50% 3.50% 4.50% 5.50% 6.50% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2Q23 3Q23 4Q23 1Q24 2Q24 Interest-bearing Deposit Beta Total Deposit Beta(2) Fed Funds Target 22 (1) Deposit beta
Slide 23: Credit Metrics
Credit Metrics 0.67% 0.72% 0.62% 0.58% 0.60% 3Q23 4Q23 1Q24 2Q24 3Q24 Non-performing Assets / Total Assets 23 0.38% 0.53% 0.41% 0.39% 0.51% 3Q23 4Q23 1Q24 2Q24 3Q24 Annualized Net Charge-Offs / Average Portfolio Loans(1) 0.82% 0.84% 0.73% 0.70% 0.73% 3Q23 4Q23 1Q24 2Q24 3Q24 Non-performing Loans / T
Slide 24: Robust Capital Ratios
Robust Capital Ratios 13.25% 13.56% 13.10% 13.25% 12.50% 3Q23 4Q23 1Q24 2Q24 3Q24 Tier 1 Risk Based Capital Ratio Tier 1 Risk Based Capital Ratio 8.0% Well Capitalized Threshold 24 10.69% 11.45% 11.16% 10.98% 10.94% 9.08% 9.91% 9.66% 9.53% 9.12% 3Q23 4Q23 1Q24 2Q24 3Q24 Tangible Common Equity Holdin
Slide 25: Share Appreciation Outperforms Industry
Share Appreciation Outperforms Industry Source: S&P Global Market Intelligence; FactSet. Note: Market data as of 10/30/2024. 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 $5.0 billion in the Mid-Atlantic (North of
Slide 26: Dominic Canuso Chief Financial Officer (301) 468-8848 x1403 Ed Barry Chief Executive Officer (240)
Dominic Canuso Chief Financial Officer (301) 468-8848 x1403 Ed Barry Chief Executive Officer (240) 283-1912 NASDAQ: CBNK
Slide 27: Non-U.S. GAAP Financial Measures
Non-U.S. GAAP Financial Measures
Slide 28: Reconciliation of Non-GAAP Information
Reconciliation of Non-GAAP Information 28 Tangible Book Value Per Share (in thousands, except per share amount) September 30, 2024 June 30, 2024 September 30, 2023 Total Stockholders' Equity 280,111$ 267,854$ 242,878$ Less: Preferred equity - - - Less: Intangible assets - - - Tangible Common Equity
Slide 29: Reconciliation of Non-GAAP Information
Reconciliation of Non-GAAP Information 29 Net Charge-offs to Average Portfolio Loans(1) (in thousands) September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 Total Net Charge-offs 2,655$ 1,935$ 1,987$ 2,477$ 1,780$ Total Average Portfolio Loans 2,053,619 1,992,630 1,927
Slide 30: Reconciliation of Non-GAAP Information
Reconciliation of Non-GAAP Information 30
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