Capital Bancorp, Inc. · NASDAQ:CBNK
Capital Bancorp — Investor Presentation (September 2021)
24 slides from Capital Bancorp's investor presentation, Sep 30, 2021
Slide 1: 3Q 2021 Investor Presentation
3Q 2021 Investor Presentation
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: Capital Bancorp, Inc. (NASDAQ-CBNK)
Capital Bancorp, Inc. (NASDAQ-CBNK) Financial Highlights Footprint Corporate Headquarters - Rockville, MD Balance Sheet Unaudited Quarterly Yearly ($M, except per share amounts) September 30, 2021 Result 1 Result Assets $ 2,170 0.8 % 15.5 % Portfolio Loans 1,308 9.9 % 5.1 % Deposits 1,921 0.2 % 15.6
Slide 4: Digital Challenger Bank with Diversified Lines of Business
Digital Challenger Bank with Diversified Lines of Business Technology-driven Differentiated Go-to-Market Strategy OpenSky® Digital Bank • Initial lead product - nationwide, secured credit card to Summary of Card Portfolios 708 700 help under-banked customers (re)establish their credit 642 • Building
Slide 5: Distinctive Investment Opportunity
Distinctive Investment Opportunity Track Record of Leveraging Technology to Execute Innovation-Focused Business Plan • Investments in proprietary technology, data analytics and digital marketing • Scalable OpenSky® and Capital Bank Home Loans infrastructure • Continued investment and talent acquisit
Slide 6: Track Record of Leveraging Technology to Execute Innovation-Focused Business Plan
Track Record of Leveraging Technology to Execute Innovation-Focused Business Plan Data and Analytics Digital-lead Generation Customer Experience Backoffice Automation & Fraud Prevention Proprietary data and analytics Fintech partnerships driving Investment and partnerships Technology facilitating ga
Slide 7: Growth and Diversified Revenue Generation...
Growth and Diversified Revenue Generation... Growth has Outpaced Peers Strong Organic Loan Growth Asset Growth Loan Growth 120% $1,598 $1,579 $1,580 $1,517 $203 $266 $137 101% 102% $1,479 $1,440 $205 100% 95% $239 $236 $135 $121 80% $102 $84 $1,188 $1,171 179% $1,140 $53 $85 Outperformance $1,056 60
Slide 8: Growth and Diversified Revenue Generation...
Growth and Diversified Revenue Generation... Varied Revenue Generation Capabilities Diversified Approach Consistently Outperforms Peers Revenue by Line of Business ($M) Noninterest Income to Operating Revenue (%) Average CBNK 31% Peer Median 18% $24 50.0% 49.0% $23 $22 $20 $18 $18 40.0% $16 36.3% $1
Slide 9: ...Drive Superior Profitability
...Drive Superior Profitability OpenSky® Drives Consistently High Margins Diversified Business Model Drives Earnings Growth Net Interest Margin Earnings per Share Growth 6.50% 6.27% 204% 200% 6.00% 162% 5.47% 5.50% 5.32% 150% 150% 5.15% 5.00% 304% 100% Outperformance 4.50% 4.38% 50% 40% 4.00% 3.75%
Slide 10: ...Drive Superior Profitability
...Drive Superior Profitability Growth and NIM Result in High ROE Earnings Outperformance Translates to Capital Accumulation Return on Average Tangible Equity Tangible Book Value Growth per Share 25.4% 69% 25.0% 23.9% 22.3% 59% 20.0% 50% 55% 80% Outperformance Outperformance 43% 15.4% 15.0% 13.8% 35
Slide 11: Experienced Entrepreneurial Management Team
Experienced Entrepreneurial Management Team Edward F. Barry • Prior to joining Capital Bank, Mr. Barry held senior positions at Capital One Bank, Bank of America, and E&Y/ Chief Executive Officer Capgemini where he held a variety of roles primarily focusing on marketing, data, analytics and strategy
Slide 12: Operate in Exceptional Markets
Operate in Exceptional Markets Among the Leaders in the DC MSA for Community Banks(1) Ranking in Top 25 Counties in US by Median HHI 2020 NIB / Cost of CRE / Deposits Deposits HHI Deposits Core TRBC Rank County 2021 Median HHI Company ($Bs) (%) ($000s) (%) ROAA (%) 1 Loudoun, VA $ 149,148 Burke & He
Slide 13: Strong Balance Sheet and Robust Capital Positions
Strong Balance Sheet and Robust Capital Positions Reserves Consistently Above Peers Capital Generation Results in Robust Capital Ratios Loan Loss Reserve / Loans Capital Ratios Relative to Peers 16.14% 2.00% 16.00% 14.10% 14.56% 1.77% 1.79% 13.94% 1.73% 1.72% 13.30% 12.68% 1.75% 1.56% 9.84% 1.49% 1.
Slide 14: Distinctive Investment Opportunity
Distinctive Investment Opportunity Track Record of Leveraging Technology to Execute Innovation-Focused Business Plan Growth and Diversified Revenue Generation Drive Superior Profitability Experienced Entrepreneurial Management Team Operate in Exceptional Markets Strong Balance Sheet and Robust Capit
Slide 15: Appendix
Appendix
Slide 16: OpenSky Digital Bank
OpenSky® Digital Bank Value Proposition Accelerated Card Growth Customer demographics Credit Cards Outstanding, Loans & Deposits ($M) 708 ∙ Nationwide customer base - underserved by traditional credit products 700 642 ∙ Poor or nonexistent credit history Customer Credit Repair / Establishment ∙ Help
Slide 17: Capital Bank Home Loans
Capital Bank Home Loans Positioning Contributes to Out-performance Originations and Margins Outperforming Peers Mortgage Originations and Gain on Sale Margin $429 ∙ Elevated volumes continue to outpace 3.40% $385 $145 expectations 2.97% 3.13% $116 $361 2.94% 2.76% 2.77% $89 2.79% 2.67% ∙ Production
Slide 18: Commercial Bank
Commercial Bank Value Proposition Consistent Loan Growth Without Sacrificing Yields Loan Portfolio Growth • Branch-lite model in attractive Maryland, D.C. and Northern Virginia markets $266 $204 $137 $205 • High value-added service generates above- $236 $239 average risk-adjusted loan yields $1,274
Slide 19: Diversified Loan Portfolio Capitalizes on Real Estate Expertise
Diversified Loan Portfolio Capitalizes on Real Estate Expertise Balanced Loan Portfolio CRE Concentration Mitigated by Holding Company Capital Loan Composition ($1.6B in millions) (3Q 21) CRE / Total Risk Based Capital ("RBC") Breakdown (3Q 21) Residential Real Other Consumer: $1 Estate: $418 Credit
Slide 20: Stable Loan Portfolio Positioned for Higher Rates
Stable Loan Portfolio Positioned for Higher Rates Portfolio Priced Defensively to Protect Yield Conservative Priced Portfolio Drives Higher Yields Fixed vs. Floating Rate Loans Mix - Portfolio Loans (3Q21) • Effective use of rate floors has mitigated impact of declining rate environment Adjustable n
Slide 21: Asset Quality Metrics
Asset Quality Metrics Nonperforming Loans Largely Real Estate Secured Nonperforming Assets Consistent with Peers Nonperforming Loans ($13.56M) (3Q21) Nonperforming Assets to Assets Residential Real Estate: $5.04 Commercial Real 0.79% 0.77% Estate: 0.67% $0.03 0.63% 0.61% 0.54% 0.54% 0.57% 0.58% 0.51
Slide 22: Improving Deposit Franchise
Improving Deposit Franchise Core Deposit Momentum Focused Efforts Increasing Non-Interest Bearing Deposits • Recruiting deposit sales teams, including fiduciary Deposit Franchise Composition ($1.92B) (3Q21) specialists, from recently acquired competitors Brokered time driving core deposit growth Sav
Slide 23: Delivering Superior Net Interest Margin
Delivering Superior Net Interest Margin Elevated Margin Supported by Card and Fee Discipline Business Model Focused on Adding Value for Customers Net Interest Margin ∙ Deliver real, advice-based solutions to complex 6.27% credit needs rather than acting as the low-cost 5.56% 5.46% 5.46% 5.79% 5.83%
Slide 24: Efficiency Ratio
Efficiency Ratio Improving Efficiency Ratio as Businesses Scale Diversified Businesses with Complimentary Efficiencies Efficiency Ratio Efficiency Improvement Efficiency Ratio by Line of Business CBNK 13.57 % Peer Median 2.03 % 93% 75% 74% 88% 86% 72% 72% 72% 77% 74% 74% 73% 70% 71% 67% 66% 64% 67%
Capital Bancorp — Investor Presentation (September 2021) on 6ix