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Capital Bancorp : Q3 2021 Earnings Presentation

11/19/2021 EST

3Q 2021

Investor Presentation

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") including, without limitation, plans, strategies and goals, and statements about the Company's expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, and shareholder value creation. These statements are often, but not always, made through the use of words or phrases such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "could," "should," "seeks," "projects", "can", "ongoing", "approximately," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of those words or other comparable words. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. The inclusion of or reference to forward-looking information in this presentation should not be regarded as a representation by Capital or any other person that the future plans, estimates or expectations contemplated by the Company will be achieved. Any or all of the forward-looking statements in (or conveyed orally regarding) this presentation may turn out to be inaccurate. Accordingly, you are cautioned not to place undue reliance on forward-looking statements and that any such forward- looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the expected results expressed or implied by such forward-looking statements. Further, given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and how the economy may be fully reopened. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy is unable to substantially reopen as planned, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for loan losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; as the result of the decline in the Federal Reserve Board's target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; our cyber security risks are increased as the result of an increase in the number of employees working remotely; and Federal Deposit Insurance Corporation premiums may increase if the agency experience additional resolution costs. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's 2020 Annual Report on Form 10-K and other periodic and current reports filed with the Securities and Exchange Commission ("SEC") and available at the SEC's Internet site (http://www.sec.gov). Unless otherwise required by law, Capital also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made in this presentation.

Except as otherwise indicated, this presentation speaks as of the date hereof. The delivery of this presentation shall not, under any circumstances, create any implication that there has been no change in the affairs of Capital after the date hereof.

Certain of the information contained herein may be derived from information provided by industry sources. The Company believes that such information is accurate and that the sources from which it has been obtained are reliable. Capital cannot guarantee the accuracy of such information, however, and has not independently verified such information. While Capital is not aware of any misstatements regarding the industry data presented in this presentation, Capital's estimates involve risks and uncertainties and are subject to change based on various factors. Similarly, Capital believes that its internal research is reliable, even though such research has not been verified by independent sources.

This presentation may include certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. These non-GAAP financial measures should not be considered in isolation, and should be considered as additions to, and not substitutes for or superior to, measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the Company's non-GAAP financial measures as tools for comparison. If included in this presentation, see the Appendix to this presentation for a reconciliation of the non-GAAP financial measures used in (or conveyed orally during) this presentation to their most directly comparable GAAP financial measures.

Capital Bancorp, Inc. (NASDAQ-CBNK)

Financial Highlights

Corporate Headquarters - Rockville, MD

Balance Sheet




($M, except per share amounts)

September 30, 2021

Result 1





0.8 %

15.5 %

Portfolio Loans


9.9 %

5.1 %



0.2 %

15.6 %

Quarterly Financial Performance

Earnings per Share, Diluted



15.4 %

28.4 %


2.13 %

23 bps

24 bps


23.87 %

151 bps

59 bps

Tangible Book Value per Share



6.5 %

25.5 %

Efficiency Ratio

64.10 %

-227 bps

-107 bps

Net Interest Margin

6.27 %

80 bps

126 bps

Corporate Timeline














Founded as

Recapitalized by

Acquired 3 failed


Assets exceed

Successful IPO and

Originated $236

Originated $135

$0.05 quarterly

Harbor Capital

investor group led

institutions including

Barry joined

$1 billion

inclusion in R2000

million SBA-PPP

million SBA-PPP

dividend initiated

National Bank

by Stephen Ashman



OpenSky® accounts



OpenSky® accounts

exceed 168,000

Assets exceed

exceed 700,000

$2 billion


  • Results comparing current quarter with immediately prior quarter

Digital Challenger Bank with Diversified Lines of Business


Differentiated Go-to-Market Strategy

OpenSky® Digital Bank

• Initial lead product - nationwide, secured credit card to

Summary of Card Portfolios



help under-banked customers (re)establish their credit


• Building capabilities to cross-sell products and services as




card-holders progress on their customer journeys


Data and analytics







• Proprietary platforms for web/mobile originations, credit




monitoring and scoring analytics



Capital Bank Home Loans

3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21

# Cards (000s)

Loans ($M)

Deposits ($M)

Nationwide, digitally-enabled,consumer-direct product drives

Mortgage Volume and Gain on Sale Margin

Digital-lead generations

~40% of origination volume





2.94% 2.76%



• 2/3 of mortgages originated in dynamic MD/DC/VA area








• New hires focused on purchase (~50% of volume) and niche



3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21

Customer experience

Capital Bank - Commercial Lending

Re-finance ($M) Purchase($M)

Gain on Sale Margin (%)

• Commercial branch-lite model focused on attractive

Portfolio Loans, excl. OpenSky and SBA-PPP(1)

Maryland, D.C. and Northern Virginia markets





5.76% 5.73%


$1.23 5.12%


• High value-added services generate above-average risk-



adjusted loan yields


Back office automation

• Improving deposit portfolio mix: 43% non-interest DDA

3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21

& Fraud Prevention

Portfolio Loans, ex OpenSky and SBA-PPP ($B)


(1) Portfolio loans include loans held by Church Street Capital and Capital Bancorp.


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 acquisitions to bolster innovation capabilities

Growth and Diversified Revenue Generation Drive Superior Profitability

  • Organic growth has consistently exceeded community banking peers
  • OpenSky® and mortgage drive high non-interest income and provide resiliency during economically stressed periods
  • Asset growth and differentiated businesses drive margins, profitability and book value

Experienced Entrepreneurial Management Team

  • Experts in their fields combining large bank and community bank skills to scale the business
  • Capabilities in data, analytics, marketing and technology
  • Significant (>40%) board and management ownership

Operate in Exceptional Market

  • The D.C. and Baltimore MSAs comprise one of the largest and wealthiest regions in the U.S
  • Opportunities for customer and talent acquisition created by consolidation
  • Market historically insulated from economic downturns by federal government presence and provides core profitability to invest in Digital Challenger Bank expansion

Strong Balance Sheet and Robust Capital Positions

  • Superior credit performance and track record
  • Well-reservedportfolio and robust capital to provide support in economic downturn and finance continued growth



Capital Bancorp Inc. published this content on 19 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 November 2021 08:53:03 UTC.

© Publicnow 2021
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Financials (USD)
Sales 2021 167 M - -
Net income 2021 39,5 M - -
Net Debt 2021 - - -
P/E ratio 2021 9,50x
Yield 2021 0,39%
Capitalization 356 M 356 M -
Capi. / Sales 2021 2,13x
Capi. / Sales 2022 2,07x
Nbr of Employees 243
Free-Float 59,4%
Duration : Period :
Capital Bancorp, Inc. Technical Analysis Chart | CBNK | US1397371006 | MarketScreener
Technical analysis trends CAPITAL BANCORP, INC.
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus BUY
Number of Analysts 4
Last Close Price 25,49 $
Average target price 30,75 $
Spread / Average Target 20,6%
EPS Revisions
Managers and Directors
Edward F. Barry Chief Executive Officer & Director
Alan W. Jackson CFO, Chief Accounting Officer & Executive VP
Steven J. Schwartz Chairman
Karl Dicker Chief Operating Officer
James F. Whalen Independent Director
Sector and Competitors