Capital Bancorp, Inc. · NASDAQ:CBNK
Capital Bancorp — Q4 2023 Earnings Presentation
26 slides from Capital Bancorp's earnings presentation, Jan 30, 2024
Slide 1: 4Q 2023 Investor Overview
© CAPITAL BANCORP, INC. 4Q 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 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: 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 custo
Slide 5: Organic growth has consistently exceeded community banking peers
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 technology, data
Slide 6: Technology, data and analytics investments
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 Back O
Slide 7: Fourth Quarter 2023 Highlights
Fourth 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 $9.0 million Diluted EPS of $0.65 Return on Average Assets of 1.63% Return on Average Equity of 14.44% Tangible Book Val
Slide 8: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin $18,399 $17,561 $19,205 $19,673 $19,073 $16,035 $16,130 $15,168 $16,143 $15,035 $35,199 $34,487 $35,340 $36,810 $34,889 6.64% 6.65% 6.63% 6.71% 6.40% 3.91% 3.81% 4.06% 4.05% 3.92% 4Q22 1Q23 2Q23 3Q23 4Q23 Commercial Bank OpenSky® Other Net Interest Margin
Slide 9: Noninterest Income Quarter to Date
Noninterest Income Quarter to Date $4,314 $4,210 $4,706 $4,387 $3,970 $554 $1,155 $1,332 $1,243 $1,166 $222 $229 $245 $250 $240 $471 $432 $404 $446 $560 $5,561 $6,026 $6,687 $6,326 $5,936 4Q22 1Q23 2Q23 3Q23 4Q23 Credit Card fees Mortgage banking revenue Service charges on deposits Other income $ in
Slide 10: Noninterest Expense Quarter to Date
Noninterest Expense Quarter to Date $11,769 $12,554 $12,143 $12,419 $11,638 $6,697 $6,530 $6,559 $6,469 $6,128 $2,426 $2,374 $2,608 $2,358 $1,930 $726 $517 $2,646 $1,565 $1,433 $1,388 $1,213 $1,536 $1,351 $1,573 $3,728 $3,034 $4,100 $3,884 $4,205 $26,734 $26,222 $29,592 $28,046 $26,907 4Q22 1Q23 2Q2
Slide 11: Profitability
Profitability 1.67% 1.84% 1.34% 1.75% 1.63% 4Q22 1Q23 2Q23 3Q23 4Q23 Return on Average Assets 11 16.18% 16.98% 12.30% 16.00% 14.44% 4Q22 1Q23 2Q23 3Q23 4Q23 Return on Average Equity 65.59% 64.73% 70.41% 65.02% 65.91% 4Q22 1Q23 2Q23 3Q23 4Q23 Efficiency Ratio $0.62 $0.68 $0.52 $0.70 $0.65 4Q22 1Q23 2
Slide 12: Balance Sheet Composition
Balance Sheet Composition Cash & Cash Equivalents 2% Portfolio Loans 86% AFS Securities Portfolio 9% Other Assets 3% Asset Composition Owner Occupied Commercial Real Estate 16% Non Owner- Occupied Commercial Real Estate 18% Residential Real Estate 30% Construction Real Estate 15%Other(1) <1% Credit
Slide 13: Non-Owner Occupied CRE Loan Portfolio
(in thousands) As of December 31, 2023 Loan Type Amount % of Total Portfolio Loans, Gross Weighted Average LTV Multi-family $ 157,257 8.2% 49.8% Retail $ 103,508 5.4% 54.0% Mixed Use 75,780 4.0% 48.8% Industrial 63,015 3.3% 47.1% Hotel 60,307 3.2% 44.8% Office 13,416 0.7% 54.2% Other 35,090 1.8% 49.
Slide 14: High Quality, Low Risk Investment Portfolio
High Quality, Low Risk Investment Portfolio U.S. Treasuries 72% Municipal 5% Corporate 2% Asset-backed 3% Mortgage-backed 18% 4Q23 Investment Securities: $208MM Investment Securities Portfolio Classified as available for sale with a fair market value of $208 million, or 9.4% of total assets. The amo
Slide 15: Sources of Liquidity
$463.7 $76.0 $37.2 $54.0 $630.9 4Q23 Cash and Cash Equivalents Unpledged Investment Securities Unsecured LOC with Other Banks Collateralized LOC Liquidity $ in m ill io ns 15 Sources of Liquidity: As of December 31, 2023, sources of available borrowings totaled $576.9 million. $463.7 million of coll
Slide 16: Composition of Deposits
Composition of Deposits Noninterest-bearing 33% Money Markets 35% Other Time Deposits 14%Brokered Time Deposits 7% Interest-bearing Demand 11% Savings <1% 4Q23 Total Deposits: $1.90B Deposit Composition and Costs Total Deposits decreased $72.0 million, or 3.7%, from the third quarter 2023. Average d
Slide 17: Loan Yield and Deposit Rate Trends
Loan Yield and Deposit Rate Trends 9.15% 9.54% 9.55% 9.72% 9.59% 5.86% 6.30% 6.66% 6.76% 6.89% 1.82% 2.82% 3.13% 3.39% 3.70% 4Q22 1Q23 2Q23 3Q23 4Q23 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) 34% 52% 55% 58% 63% 19% 33% 36% 38% 43% 4.50% 5.00% 5.25% 5.50% 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% 4Q22 1Q23 2Q23 3Q23 4Q23 F e d e ra l F u n d s T a rg e t R a te D ep o si t B et a Interest-bearing Deposit Beta Total Deposit Bet
Slide 19: Credit Metrics
Credit Metrics 0.46% 0.73% 0.71% 0.67% 0.72% 4Q22 1Q23 2Q23 3Q23 4Q23 Non-performing Assets / Total Assets 19 0.49% 0.61% 0.35% 0.38% 0.53% 4Q22 1Q23 2Q23 3Q23 4Q23 Annualized Net Charge-Offs / Average Portfolio Loans(1) 0.56% 0.91% 0.86% 0.82% 0.84% 4Q22 1Q23 2Q23 3Q23 4Q23 Non-performing Loans / T
Slide 20: Robust Capital Ratios
Robust Capital Ratios 12.95% 12.84% 12.82% 13.25% 13.56% 4Q22 1Q23 2Q23 3Q23 4Q23 Tier 1 Risk Based Capital Ratio Tier 1 Risk Based Capital Ratio 8.0% Well Capitalized Threshold 20 10.55% 10.44% 10.66% 10.69% 11.71% 8.85% 8.79% 8.93% 9.08% 9.91% 4Q22 1Q23 2Q23 3Q23 4Q23 Tangible Common Equity Holdin
Slide 21: Tangible Book Value Per Share
(1) $18.31 $15.84 $14.17 $11.58 $9.60 $8.38 $7.06 17.80%16.43%14.60%14.66%0.00% 12/31/2312/31/2212/31/2112/31/2012/31/1912/31/189/30/17 TBVPS 21 (1) Refer to Appendix for reconciliation of non-GAAP measures.
Slide 22: Share Appreciation Outperforms Industry
Share Appreciation Outperforms Industry 82.42% (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 an 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 a
Slide 23: Contact
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: Tangible Book Value Per Share and Adjusted Net Interest Margin
Tangible Book Value Per Share Quarters Ended (in thousands, except per share amount) December 31, 2023 September 30, 2023 December 31, 2022 Total Stockholders' Equity $ 254,860 $ 242,878 $ 224,015 Less: Preferred equity - - - Less: Intangible assets - - - Tangible Common Equity $ 254,860 $ 242,878 $
Slide 26: Net Charge-offs and Nonperforming Loans Reconciliation
Net Charge-offs to Average Portfolio Loans(1) Quarters Ended (in thousands) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Total Net Charge-offs $ 2,477 $ 1,780 $ 1,583 $ 2,633 $ 2,090 Total Average Loans 1,863,298 1,847,772 1,802,608 1,752,638 1,677,869 Less: Av