CBNK - Capital Bancorp Reports Results for 2018
ROCKVILLE, Md., Feb. 08, 2019 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the “Company”) (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the “Bank”), today reported net income of $3.5 million, or $0.25 per diluted share, for the fourth quarter of 2018. In comparison, for the fourth quarter of 2017, we reported a net loss of $0.6 million, or $(0.06) per diluted share, as we incurred one-time expenses and lost revenue related to our credit card system conversion of $4.6 million. For the twelve months ended December 31, 2018, net income grew 79.6% year over year to $12.8 million, or $1.02 per diluted share. In comparison, net income for the twelve months ended December 31, 2017 was $7.1 million, or $0.62 per diluted share after giving effect to the one time items in the fourth quarter of 2017. Return on average assets was 1.27% and return on average equity was 12.26% for the fourth quarter of 2018. For the comparable period in 2017, the return on average assets was (0.25)% and the return on average equity was (3.11)%.
2018 Highlights
- During the fourth quarter of 2018, the underwriters of the Company’s initial public offering that closed on September 28, 2018, purchased an additional 334,310 shares of the Company’s common stock for approximately $3.9 million in connection with the exercise in full of their option to purchase additional shares. The Company issued and sold an aggregate of 1,834,310 shares of its common stock in the offering, raising approximately $21.4 million of primary capital to support growth.
- Net income increased to $3.5 million for fourth quarter of 2018 compared to a net loss of $644 thousand for the fourth quarter of 2017.
- Book value per share increased 20.7% to $8.38 at December 31, 2018 from $6.94 at December 31, 2017, driven by earnings growth of the Company and the impact of the initial public offering of common stock.
- In the fourth quarter, total loans increased $44.9 million or 4.7% to $1.0 billion at December 31, 2018, compared to $955.4 million at September 30, 2018. Total loans increased $112.8 million or 12.7% from $887.4 million at December 31, 2017.
- In the fourth quarter, total deposits increased 4.8% to $955.2 million at December 31, 2018, compared to $911.1 million at September 30, 2018, and increased by $50.3 million from $904.9 million at December 31, 2017.
- For the twelve months ended December 31, 2018, average noninterest bearing deposits increased 22.8% to $215.8 million, compared to $175.7 million for the twelve months ended December 31, 2017.
- Net interest margin, for the three months ended December 31, 2018, increased 52 basis points to 5.46% compared to 4.94% for the three months ended December 31, 2017, primarily due to non-recurring foregone interest and fees on our credit card portfolio in the fourth quarter of 2017. Net interest margin decreased 10 basis points compared to the quarter ended September 30, 2018.
- Asset quality remained steady during 2018, as non-performing assets as a percentage of total assets totaled 0.44% at December 31, 2018 compared to 0.54% at December 31, 2017. For the quarter, net chargeoffs to average loans were 0.09%, down 2 bps from September 30, 2018.
- OpenSky®, the Bank's secured, digitally driven nationwide credit card platform, realized benefits of cost initiatives and scale to meaningfully lower its operating costs on a per open accounts basis.
- Church Street Mortgage, the Bank's residential mortgage banking arm, remained profitable for the quarter even as volumes fell from previous levels. During the quarter, the fintech digital mortgage platform was successfully launched.
“We continued to execute our strategy in the fourth quarter, posting net income of $3.5 million,” stated Ed Barry, the Company’s Chief Executive Officer. “Our disciplined approach to client selection contributed to the expansion of core net interest margin excluding credit card. Loan and deposits growth accelerated during the quarter, and we were also able to capitalize on market disruption and hire some great talent on the sales front.”
| COMPARATIVE FINANCIAL HIGHLIGHTS (unaudited) |
| Quarter Ended |
| 4th Quarter |
| Twelve Months Ended |
| December 31, |
| 2018 - 2017 |
| December 31, |
| 2018 - 2017 |
| (in thousands except per share data) |
| 2018 |
| 2017 |
| % Change |
| 2018 |
| 2017 |
| % Change |
| Earnings Summary |
| Interest income |
| $ |
| 18,238 |
| $ |
| 14,681 |
| 24.2 |
| % |
| $ |
| 69,127 |
| $ |
| 56,666 |
| 22.0 |
| % |
| Interest expense |
| 3,348 |
| 2,120 |
| 57.9 |
| % |
| 11,239 |
| 7,755 |
| 44.9 |
| % |
| Net interest income |
| 14,890 |
| 12,561 |
| 18.5 |
| % |
| 57,888 |
| 48,911 |
| 18.4 |
| % |
| Provision for loan losses |
| 500 |
| 785 |
| (36.3 |
| )% |
| 2,140 |
| 2,655 |
| (19.4 |
| )% |
| Noninterest income |
| 3,466 |
| 2,968 |
| 16.8 |
| % |
| 16,124 |
| 15,149 |
| 6.4 |
| % |
| Noninterest expense |
| 13,094 |
| 13,327 |
| (1.7 |
| )% |
| 54,123 |
| 47,306 |
| 14.4 |
| % |
| Income before income taxes |
| 4,762 |
| 1,417 |
| 236.1 |
| % |
| 17,749 |
| 14,099 |
| 25.9 |
| % |
| Income tax expense |
| 1,276 |
| 2,061 |
| (38.1 |
| )% |
| 4,982 |
| 6,990 |
| (28.7 |
| )% |
| Net income (loss) |
| $ |
| 3,486 |
| $ |
| (644 |
| ) |
| (641.3 |
| )% |
| $ |
| 12,767 |
| $ |
| 7,109 |
| 79.6 |
| % |
| Weighted average common shares - Basic(1) |
| 13,554 |
| 11,270 |
| 20.3 |
| % |
| 12,116 |
| 11,261 |
| 7.6 |
| % |
| Weighted average common shares - Diluted(1) |
| 13,866 |
| 11,626 |
| 19.3 |
| % |
| 12,462 |
| 11,428 |
| 9.0 |
| % |
| Earnings per common share - Basic(1) |
| $ |
| 0.26 |
| $ |
| (0.06 |
| ) |
| (533.3 |
| )% |
| $ |
| 1.05 |
| $ |
| 0.63 |
| 66.7 |
| % |
| Earnings per common share - Diluted(1) |
| $ |
| 0.25 |
| $ |
| (0.06 |
| ) |
| (516.7 |
| )% |
| $ |
| 1.02 |
| $ |
| 0.62 |
| 64.5 |
| % |
| Return on average assets |
| 1.27 |
| % |
| (0.25 |
| )% |
| (608.0 |
| )% |
| 1.22 |
| % |
| 1.17 |
| % |
| 4.3 |
| % |
| Return on average equity |
| 12.26 |
| % |
| (3.11 |
| )% |
| (494.2 |
| )% |
| 13.94 |
| % |
| 14.75 |
| % |
| (5.5 |
| )% |
| (1) Gives effect to a four-for-one common stock split completed effective August 15, 2018. |
| Quarter Ended |
| 4th Quarter |
| Quarter Ended |
| December 31, |
| 2018 - 2017 |
| September 30, |
| June 30, |
| March 31, |
| (in thousands except per share data) |
| 2018 |
| 2017 |
| % Change |
| 2018 |
| 2018 |
| 2018 |
| Balance Sheet Highlights |
| Assets |
| $ |
| 1,105,058 |
| $ |
| 1,026,009 |
| 7.7 |
| % |
| $ |
| 1,072,905 |
| $ |
| 1,067,786 |
| $ |
| 1,017,613 |
| Investment securities |
| 46,932 |
| 54,029 |
| (13.1 |
| )% |
| 48,067 |
| 49,799 |
| 51,706 |
| Mortgage loans held for sale |
| 18,526 |
| 26,344 |
| (29.7 |
| )% |
| 21,373 |
| 21,370 |
| 17,353 |
| Loans |
| 1,000,268 |
| 887,420 |
| 12.7 |
| % |
| 955,412 |
| 920,783 |
| 900,033 |
| Allowance for loan losses |
| 11,308 |
| 10,033 |
| 12.7 |
| % |
| 10,892 |
| 10,447 |
| 10,157 |
| Deposits |
| 955,240 |
| 904,899 |
| 5.6 |
| % |
| 911,116 |
| 938,364 |
| 897,153 |
| Borrowings and repurchase agreements |
| 7,332 |
| 13,260 |
| (44.7 |
| )% |
| 28,239 |
| 14,445 |
| 12,071 |
| Senior promissory note |
| – |
| 2,000 |
| (100.0 |
| )% |
| – |
| – |
| – |
| Subordinated debentures |
| 15,393 |
| 15,361 |
| 0.2 |
| % |
| 15,386 |
| 15,378 |
| 15,369 |
| Total stockholders' equity |
| 114,564 |
| 80,119 |
| 43.0 |
| % |
| 106,657 |
| 86,994 |
| 83,453 |
| Tangible common equity |
| 114,564 |
| 80,119 |
| 43.0 |
| % |
| 106,657 |
| 86,994 |
| 83,453 |
| Common shares outstanding |
| 13,672 |
| 11,537 |
| 18.5 |
| % |
| 13,191 |
| 11,661 |
| 11,595 |
| Tangible book value per share |
| $ |
| 8.38 |
| $ |
| 6.94 |
| 20.7 |
| % |
| $ |
| 8.09 |
| $ |
| 7.46 |
| $ |
| 7.19 |
Operating Results
Net interest margin increased 52 basis points to 5.46% for the three months ended December 31, 2018 as compared to 4.94% for the three months ended December 31, 2017, largely due to non-recurring foregone interest and fees on our credit card portfolio during our system conversion in the fourth quarter of 2017. For the three months ended December 31, 2018, our average interest-earning assets increased by $73.8 million, compared to the three months ended December 31, 2017, while the average yield on our interest-earning assets increased by 91 basis points. In addition, our average interest-bearing liabilities increased by $2.5 million from the fourth quarter of 2017 to the fourth quarter of 2018, with the respective average rate increasing by 66 basis points. As a result, net interest income increased $2.3 million, or 18.5%, to $14.9 million for the three months ended December 31, 2018 compared to the same period in 2017.
For the twelve months ended December 31, 2018, net interest margin was 5.59%, an increase of 47 basis points over the same period in 2017. This increase included an average interest-earning assets increase of $80.3 million and an average interest-bearing liabilities increase of $23.9 million compared to the same twelve month period in 2017. In addition, the average yields on interest-earning assets and interest-bearing liabilities increased 74 basis points and 44 basis points , respectively. Net interest income increased $9.0 million , or 18.4% for the twelve months ended December 31, 2018 compared to the same period in 2017.
During the three months ended December 31, 2018, we recorded a provision for loan losses of $500 thousand on net chargeoffs for the fourth quarter of 2018 of $83 thousand, or 0.01% of average loans, annualized. During the three months ended December 31, 2017, our provision for loan losses was $785 thousand, as net chargeoffs for the fourth quarter of 2017 were $444 thousand, or 0.05% of average loans, annualized. For the twelve months ended December 31, 2018 and 2017, our provision for loan losses was $2.1 million and $2.7 million, respectively. Our allowance for loan losses was $11.3 million, or 1.13% of loans, at December 31, 2018, which provided approximately 242% coverage of nonperforming assets at such date, compared to $10.0 million, or 1.13% of loans, and approximately 186% coverage of nonperforming assets at December 31, 2017.
Noninterest income was $3.5 million and $3.0 million for the three months ended December 31, 2018 and 2017, respectively. For the twelve months ended December 31, 2018 and 2017, noninterest income was $16.1 million and $15.1 million, respectively. The increase in noninterest income during the twelve months ended December 31, 2018 was driven by increases in credit card fees partially offset by lower mortgage banking revenue. Noninterest income decreased $774 thousand during the three months ended December 31, 2018 related primarily to decreases in credit card fees and mortgage banking revenue.
Noninterest expense was $13.1 million and $13.3 million for the three months ended December 31, 2018 and 2017, respectively, and $54.1 million and $47.3 million for the twelve months ended December 31, 2018 and 2017, respectively. The increase in noninterest expense during the twelve-month period ended December 31, 2018 was driven primarily by increases in data processing costs, salaries and benefits, occupancy, and other expenses. During the fourth quarter of 2017, we converted our credit card processing system to a new vendor to further scale the business. Due to projected growth of our credit card, mortgage and commercial banking businesses, data processing costs will continue to be a significant expense.
Income tax expense was $5.0 million for the twelve months ended December 31, 2018, as compared to $7.0 million for the same period in 2017, a decrease of 28.7% as a result of the Tax Cuts and Jobs Act of 2017 which reduced the corporate tax rate to 21% beginning in 2018.
Financial Condition
Total assets at December 31, 2018 were $1.1 billion, up 7.7% as compared to $1.0 billion at December 31, 2017. Gross loans were $1.0 billion, excluding mortgage loans held for sale, as of December 31, 2018, compared to $887.4 million at December 31, 2017, an increase of 12.7%. Deposits were $955.2 million at December 31, 2018, an increase of 5.6%, as compared to $904.9 million at December 31, 2017.
Nonperforming assets were $4.8 million, or 0.44% of total assets, as of December 31, 2018. Comparatively, nonperforming assets were $5.5 million, or 0.54% of total assets, at December 31, 2017. Of the $4.8 million in total nonperforming assets as of December 31, 2018, nonperforming loans represented $4.7 million, of which troubled debt restructurings amounted to $284 thousand. Also included in nonperforming assets at such date was other real estate owned which represented $142 thousand.
Stockholders’ equity totaled $114.6 million as of December 31, 2018, compared to $80.1 million at December 31, 2017. The increase was due to increased earnings and the initial public offering, including the exercise in full by the underwriters of their option to purchase additional shares, of approximately $21.4 million. As of December 31, 2018, the Bank's capital ratios continue to exceed the regulatory requirements for a “well-capitalized” institution.
| Consolidated Statements of Income (unaudited) |
| Three Months Ended December 31, |
| Twelve Months Ended December 31, |
| (in thousands except per share data) |
| 2018 |
| 2017 |
| 2018 |
| 2017 |
| Interest income |
| Loans, including fees |
| $ |
| 17,774 |
| $ |
| 14,214 |
| $ |
| 67,229 |
| $ |
| 54,996 |
| Investment securities available for sale |
| 255 |
| 284 |
| 1,041 |
| 1,067 |
| Federal funds sold and other |
| 209 |
| 183 |
| 857 |
| 602 |
| Total interest income |
| 18,238 |
| 14,681 |
| 69,127 |
| 56,665 |
| Interest expense |
| Deposits |
| 2,916 |
| 1,802 |
| 9,792 |
| 6,434 |
| Borrowed funds |
| 432 |
| 318 |
| 1,447 |
| 1,321 |
| Total interest expense |
| 3,348 |
| 2,120 |
| 11,239 |
| 7,755 |
| Net interest income |
| 14,890 |
| 12,561 |
| 57,888 |
| 48,910 |
| Provision for loan losses |
| 500 |
| 785 |
| 2,140 |
| 2,655 |
| Net interest income after provision for loan losses |
| 14,390 |
| 11,776 |
| 55,748 |
| 46,255 |
| Noninterest income |
| Service charges on deposits |
| 119 |
| 125 |
| 484 |
| 460 |
| Credit card fees |
| 1,439 |
| (15 |
| ) |
| 6,048 |
| 4,014 |
| Mortgage banking revenue |
| 2,097 |
| 2,799 |
| 9,477 |
| 10,377 |
| Loss on sale of investment securities available for sale |
| – |
| – |
| (2 |
| ) |
| – |
| Loss on sale of foreclosed real estate |
| (21 |
| ) |
| (52 |
| ) |
| (21 |
| ) |
| (52 |
| ) |
| Loss on disposal of premises and equipment |
| (276 |
| ) |
| (77 |
| ) |
| (276 |
| ) |
| (77 |
| ) |
| Other fees and charges |
| 108 |
| 187 |
| 414 |
| 427 |
| Total noninterest income |
| 3,466 |
| 2,967 |
| 16,124 |
| 15,149 |
| Noninterest expenses |
| Salaries and employee benefits |
| 6,081 |
| 5,551 |
| 25,164 |
| 23,819 |
| Occupancy and equipment |
| 1,078 |
| 1,052 |
| 4,319 |
| 3,829 |
| Professional fees |
| 759 |
| 484 |
| 2,124 |
| 1,875 |
| Data processing |
| 3,618 |
| 5,127 |
| 15,439 |
| 10,621 |
| Advertising |
| 347 |
| 470 |
| 1,460 |
| 1,922 |
| Loan processing |
| 266 |
| 285 |
| 1,077 |
| 1,409 |
| Other real estate expenses, net |
| (10 |
| ) |
| (82 |
| ) |
| 28 |
| 19 |
| Other operating |
| 955 |
| 439 |
| 4,512 |
| 3,814 |
| Total noninterest expenses |
| 13,094 |
| 13,326 |
| 54,123 |
| 47,308 |
| Income before income taxes |
| 4,762 |
| 1,417 |
| 17,749 |
| 14,096 |
| Income tax expense |
| 1,276 |
| 2,061 |
| 4,982 |
| 6,990 |
| Net income |
| $ |
| 3,486 |
| $ |
| (644 |
| ) |
| $ |
| 12,767 |
| $ |
| 7,106 |
| Consolidated Balance Sheets (unaudited) |
| (in thousands except per share data) |
| December 31, 2018 |
| December 31, 2017 |
| Assets |
| Cash and due from banks |
| $ |
| 10,431 |
| $ |
| 8,189 |
| Interest bearing deposits at other financial institutions |
| 22,007 |
| 40,356 |
| Federal funds sold |
| 2,285 |
| 3,766 |
| Total cash and cash equivalents |
| 34,723 |
| 52,311 |
| Investment securities available for sale |
| 46,932 |
| 54,029 |
| Restricted investments |
| 2,503 |
| 2,369 |
| Loans held for sale |
| 18,526 |
| 26,344 |
| Loans receivable, net of allowance for loan losses |
| 988,960 |
| 877,387 |
| Premises and equipment, net |
| 2,975 |
| 2,601 |
| Accrued interest receivable |
| 4,462 |
| 3,867 |
| Deferred income taxes |
| 3,654 |
| 3,382 |
| Foreclosed real estate |
| 142 |
| 93 |
| Prepaid income taxes |
| 90 |
| 1,532 |
| Other assets |
| 2,091 |
| 2,094 |
| Total assets |
| $ |
| 1,105,058 |
| $ |
| 1,026,009 |
| Liabilities |
| Deposits |
| Noninterest bearing |
| $ |
| 242,259 |
| $ |
| 196,635 |
| Interest bearing |
| 712,981 |
| 708,264 |
| Total deposits |
| 955,240 |
| 904,899 |
| Securities sold under agreements to repurchase |
| 3,332 |
| 11,260 |
| Federal Home Loan Bank advances |
| 2,000 |
| 2,000 |
| Other borrowed funds |
| 17,393 |
| 17,361 |
| Accrued interest payable |
| 1,565 |
| 1,084 |
| Other liabilities |
| 10,964 |
| 9,286 |
| Total liabilities |
| 990,494 |
| 945,890 |
| Stockholders' equity |
| Preferred stock, $.01 par value; 1,000,000 shares authorized; no shares issued or outstanding at December 31, 2018 and 2017 |
| – |
| – |
| Common stock, $.01 par value; 49,000,000 shares authorized; 13,672,479 and 11,537,196 issued and outstanding at December 31, 2018 and 2017, respectively(1) |
| 137 |
| 115 |
| Additional paid-in capital(1) |
| 49,321 |
| 27,051 |
| Retained earnings |
| 65,701 |
| 53,200 |
| Accumulated other comprehensive loss |
| (595 |
| ) |
| (247 |
| ) |
| Total stockholders' equity |
| 114,564 |
| 80,119 |
| Total liabilities and stockholders' equity |
| $ |
| 1,105,058 |
| $ |
| 1,026,009 |
| (1) Shares of common stock authorized, issued and outstanding and additional paid-in capital totals have been adjusted to reflect the four-for-one stock split completed effective August 15, 2018. |
The following tables show the average outstanding balance of each principal category of our assets, liabilities and stockholders’ equity, together with the average yields on our assets and the average costs of our liabilities for the periods indicated. Such yields and costs are calculated by dividing the annualized income or expense by the average daily balances of the corresponding assets or liabilities for the same period.
| Three Months Ended December 31, |
| 2018 |
| 2017 |
| Average Outstanding Balance |
| Interest Income/ Expense |
| Average Yield/ Rate(1) |
| Average Outstanding Balance |
| Interest Income/ Expense |
| Average Yield/ Rate(1) |
| (Dollars in thousands) |
| Assets |
| Interest earning assets: |
| Interest bearing deposits |
| $ |
| 35,797 |
| $ |
| 161 |
| 1.78 |
| % |
| $ |
| 48,263 |
| $ |
| 168 |
| 1.38 |
| % |
| Federal funds sold |
| 1,509 |
| 9 |
| 2.39 |
| % |
| 2,184 |
| 6 |
| 1.10 |
| % |
| Restricted stock |
| 3,229 |
| 39 |
| 4.75 |
| % |
| 2,411 |
| 9 |
| 1.50 |
| % |
| Investment securities |
| 47,365 |
| 255 |
| 2.14 |
| % |
| 55,290 |
| 284 |
| 2.04 |
| % |
| Loans(2)(3)(4) |
| 994,110 |
| 17,774 |
| 7.09 |
| % |
| 900,095 |
| 14,214 |
| 6.27 |
| % |
| Total interest earning assets |
| 1,082,010 |
| 18,238 |
| 6.69 |
| % |
| 1,008,243 |
| 14,681 |
| 5.78 |
| % |
| Noninterest earning assets |
| 8,557 |
| 9,844 |
| Total assets |
| $ |
| 1,090,567 |
| $ |
| 1,018,087 |
| Liabilities and Stockholders’ Equity |
| Interest bearing liabilities: |
| Interest bearing deposits |
| $ |
| 683,389 |
| 2,916 |
| 1.69 |
| % |
| $ |
| 698,866 |
| 1,802 |
| 1.02 |
| % |
| Borrowed funds |
| 49,998 |
| 432 |
| 3.43 |
| % |
| 32,023 |
| 318 |
| 3.94 |
| % |
| Total interest bearing liabilities |
| 733,387 |
| 3,348 |
| 1.81 |
| % |
| 730,889 |
| 2,120 |
| 1.15 |
| % |
| Noninterest bearing liabilities: |
| Noninterest bearing liabilities |
| 10,022 |
| 9,560 |
| Noninterest bearing deposits |
| 234,357 |
| 195,607 |
| Stockholders’ equity |
| 112,801 |
| 82,031 |
| Total liabilities and stockholders’ equity |
| $ |
| 1,090,567 |
| $ |
| 1,018,087 |
| Net interest spread(5) |
| 4.88 |
| % |
| 4.63 |
| % |
| Net interest income |
| $ |
| 14,890 |
| $ |
| 12,561 |
| Net interest margin(6) |
| 5.46 |
| % |
| 4.94 |
| % |
| Net interest margin excluding credit card portfolio |
| 4.28 |
| % |
| 4.27 |
| % |
_______________
(1) Annualized.
(2) Includes loans held for sale.
(3) Includes nonaccrual loans.
(4) Interest income includes amortization of deferred loan fees, net of deferred loan costs.
(5) Net interest spread is the difference between interest rates earned on interest earning assets and interest rates paid on interest bearing liabilities.
(6) Net interest margin is a ratio calculated as annualized net interest income divided by average interest earning assets for the same period.
| Twelve Months Ended December 31, |
| 2018 |
| 2017 |
| Average Outstanding Balance |
| Interest Income/ Expense |
| Average Yield/ Rate |
| Average Outstanding Balance |
| Interest Income/ Expense |
| Average Yield/ Rate |
| (Dollars in thousands) |
| Assets |
| Interest earning assets: |
| Interest bearing deposits |
| $ |
| 41,858 |
| $ |
| 687 |
| 1.64 |
| % |
| $ |
| 45,385 |
| $ |
| 481 |
| 1.06 |
| % |
| Federal funds sold |
| 1,537 |
| 27 |
| 1.79 |
| % |
| 1,451 |
| 14 |
| 0.96 |
| % |
| Restricted stock |
| 2,724 |
| 143 |
| 5.26 |
| % |
| 2,521 |
| 108 |
| 4.27 |
| % |
| Investment securities |
| 50,074 |
| 1,041 |
| 2.08 |
| % |
| 52,419 |
| 1,067 |
| 2.04 |
| % |
| Loans(1)(2)(3) |
| 939,538 |
| 67,229 |
| 7.16 |
| % |
| 853,703 |
| 54,996 |
| 6.44 |
| % |
| Total interest earning assets |
| 1,035,731 |
| 69,127 |
| 6.67 |
| % |
| 955,479 |
| 56,666 |
| 5.93 |
| % |
| Noninterest earning assets |
| 10,001 |
| 9,467 |
| Total assets |
| $ |
| 1,045,732 |
| $ |
| 964,946 |
| Liabilities and Stockholders’ Equity |
| Interest bearing liabilities: |
| Interest bearing deposits |
| $ |
| 689,311 |
| 9,792 |
| 1.42 |
| % |
| $ |
| 671,639 |
| 6,434 |
| 0.96 |
| % |
| Borrowed funds |
| 39,170 |
| 1,447 |
| 3.70 |
| % |
| 32,893 |
| 1,321 |
| 4.02 |
| % |
| Total interest bearing liabilities |
| 728,481 |
| 11,239 |
| 1.54 |
| % |
| 704,532 |
| 7,755 |
| 1.10 |
| % |
| Noninterest bearing liabilities: |
| Noninterest bearing liabilities |
| 9,828 |
| 8,164 |
| Noninterest bearing deposits |
| 215,833 |
| 175,707 |
| Stockholders’ equity |
| 91,590 |
| 76,543 |
| Total liabilities and stockholders’ equity |
| $ |
| 1,045,732 |
| $ |
| 964,946 |
| Net interest spread(4) |
| 5.13 |
| % |
| 4.83 |
| % |
| Net interest income |
| $ |
| 57,888 |
| $ |
| 48,911 |
| Net interest margin(5) |
| 5.59 |
| % |
| 5.12 |
| % |
| Net interest margin excluding credit card portfolio |
| 4.28 |
| % |
| 4.31 |
| % |
_______________
(1) Includes loans held for sale.
(2) Includes nonaccrual loans.
(3) Interest income includes amortization of deferred loan fees, net of deferred loan costs.
(4) Net interest spread is the difference between interest rates earned on interest earning assets and interest rates paid on interest bearing liabilities.
(5) Net interest margin is a ratio calculated as annualized net interest income divided by average interest earning assets for the same period.
| HISTORICAL FINANCIAL HIGHLIGHTS (unaudited) |
| Quarter Ended |
| (in thousands except per share data) |
| December 31, 2018 |
| September 30, 2018 |
| June 30, 2018 |
| March 31, 2018 |
| December 31, 2017 |
| Earnings: |
| Net income (loss) |
| $ |
| 3,486 |
| $ |
| 3,146 |
| $ |
| 3,145 |
| $ |
| 2,990 |
| $ |
| (644 |
| ) |
| Earnings per common share, diluted(1) |
| $ |
| 0.25 |
| $ |
| 0.26 |
| $ |
| 0.26 |
| $ |
| 0.25 |
| $ |
| (0.06 |
| ) |
| Net interest margin |
| 5.46 |
| % |
| 5.56 |
| % |
| 5.49 |
| % |
| 5.79 |
| % |
| 4.94 |
| % |
| Net interest margin excluding credit card portfolio |
| 4.28 |
| % |
| 4.26 |
| % |
| 4.25 |
| % |
| 4.25 |
| % |
| 4.27 |
| % |
| Return on average assets |
| 1.27 |
| % |
| 1.19 |
| % |
| 1.22 |
| % |
| 1.19 |
| % |
| (0.25 |
| )% |
| Return on average equity |
| 12.26 |
| % |
| 13.69 |
| % |
| 14.77 |
| % |
| 14.86 |
| % |
| (3.11 |
| )% |
| Efficiency ratio |
| 71.34 |
| % |
| 74.21 |
| % |
| 73.64 |
| % |
| 73.66 |
| % |
| 85.82 |
| % |
| Balance Sheet: |
| Loans |
| $ |
| 1,000,268 |
| $ |
| 955,412 |
| $ |
| 920,783 |
| $ |
| 900,033 |
| $ |
| 887,420 |
| Deposits |
| 955,240 |
| 911,116 |
| 938,364 |
| 897,153 |
| 904,899 |
| Total assets |
| 1,105,058 |
| 1,072,905 |
| 1,067,786 |
| 1,017,613 |
| 1,026,009 |
| Asset Quality Ratios: |
| Nonperforming assets to total assets |
| 0.44 |
| % |
| 0.42 |
| % |
| 0.35 |
| % |
| 0.39 |
| % |
| 0.54 |
| % |
| Nonperforming loans to total loans |
| 0.47 |
| % |
| 0.44 |
| % |
| 0.35 |
| % |
| 0.41 |
| % |
| 0.61 |
| % |
| Net chargeoffs to average loans (YTD annualized) |
| 0.09 |
| % |
| 0.11 |
| % |
| 0.16 |
| % |
| 0.17 |
| % |
| 0.15 |
| % |
| Allowance for loan losses to total loans |
| 1.13 |
| % |
| 1.14 |
| % |
| 1.13 |
| % |
| 1.13 |
| % |
| 1.13 |
| % |
| Allowance for loan losses to non-performing loans |
| 241.68 |
| % |
| 257.83 |
| % |
| 320.78 |
| % |
| 273.66 |
| % |
| 185.57 |
| % |
| Bank Capital Ratios: |
| Total risk based capital ratio |
| 12.25 |
| % |
| 12.36 |
| % |
| 12.34 |
| % |
| 12.30 |
| % |
| 12.03 |
| % |
| Tier 1 risk based capital ratio |
| 11.00 |
| % |
| 11.11 |
| % |
| 11.09 |
| % |
| 11.05 |
| % |
| 10.78 |
| % |
| Leverage ratio |
| 9.06 |
| % |
| 9.03 |
| % |
| 8.91 |
| % |
| 8.83 |
| % |
| 8.55 |
| % |
| Common equity Tier 1 ratio |
| 11.00 |
| % |
| 11.11 |
| % |
| 11.09 |
| % |
| 11.05 |
| % |
| 10.78 |
| % |
| Tangible common equity |
| 8.89 |
| % |
| 8.72 |
| % |
| 8.58 |
| % |
| 8.78 |
| % |
| 8.46 |
| % |
| Composition of Loans: |
| Residential real estate |
| $ |
| 407,844 |
| $ |
| 388,141 |
| $ |
| 366,465 |
| $ |
| 354,818 |
| $ |
| 342,684 |
| Commercial real estate |
| 278,691 |
| 276,726 |
| 271,800 |
| 269,357 |
| 259,853 |
| Construction real estate |
| 157,586 |
| 144,012 |
| 149,192 |
| 150,820 |
| 144,932 |
| Commercial and industrial |
| 122,263 |
| 113,473 |
| 101,752 |
| 96,927 |
| 108,982 |
| Credit card |
| 34,673 |
| 33,821 |
| 32,522 |
| 28,757 |
| 31,507 |
| Other |
| 1,202 |
| 1,270 |
| 1,244 |
| 1,149 |
| 1,053 |
| Mortgage Metrics (CSM only): |
| Origination of loans held for sale |
| $ |
| 70,826 |
| $ |
| 81,665 |
| $ |
| 95,570 |
| $ |
| 87,279 |
| $ |
| 109,892 |
| Proceeds from loans held for sale, net of gains |
| 73,883 |
| 80,603 |
| 89,936 |
| 93,955 |
| 111,851 |
| Purchase volume as a % of originations |
| 86.7 |
| % |
| 92.7 |
| % |
| 85.1 |
| % |
| 55.4 |
| % |
| 48.1 |
| % |
| Gain on sale of loans |
| $ |
| 1,920 |
| $ |
| 2,227 |
| $ |
| 2,239 |
| $ |
| 2,092 |
| $ |
| 2,569 |
| Gain on sale as a % of loans sold |
| 2.3 |
| % |
| 2.7 |
| % |
| 2.4 |
| % |
| 2.2 |
| % |
| 2.3 |
| % |
| Credit Card Portfolio Metrics: |
| Total active customer accounts |
| 169,981 |
| 170,160 |
| 166,661 |
| 158,362 |
| 149,226 |
| Total loans |
| $ |
| 34,673 |
| $ |
| 33,821 |
| $ |
| 32,522 |
| $ |
| 28,757 |
| $ |
| 31,506 |
| Total deposits at the Bank |
| $ |
| 59,954 |
| $ |
| 59,978 |
| $ |
| 58,951 |
| $ |
| 56,333 |
| $ |
| 53,625 |
| (1) Gives effect to a four-for-one common stock split completed effective August 15, 2018. |
ABOUT CAPITAL BANCORP, INC.
Capital Bancorp, Inc., Rockville, Maryland is a registered bank holding company incorporated under the laws of Maryland. The Company’s wholly-owned subsidiary, Capital Bank, N.A., is the eighth largest bank headquartered in Maryland. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in five locations in the greater Washington, D.C. and Baltimore, Maryland markets. Capital Bancorp has assets of approximately $1.1 billion at December 31, 2018 and its common stock is traded on the NASDAQ Global Market under the symbol “CBNK.” More information can be found at the Company's website www.CapitalBankMD.com under its investor relations page.
FORWARD-LOOKING STATEMENTS
This earnings release contains forward-looking statements (as defined by the Private Securities Litigation Reform Act of 1995). These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements. Accordingly, we caution you that any such forward-looking statements are not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors. Such factors include, without limitation, those listed from time to time in reports that the Company files with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.
FINANCIAL CONTACT: Alan Jackson (240) 283-0402
MEDIA CONTACT: Ed Barry (240) 283-1912
WEB SITE: www.CapitalBankMD.com