Capital Bancorp Reports Record Quarter and Year to Date Earnings

Nachrichtenquelle: globenewswire
27.10.2020, 02:00  |  130   |   |   
  • Record earnings of $8.4 million, or $0.61 per diluted share for the third quarter of 2020 and $16.1 million, or $1.17 per diluted share for the nine months ended September 30, 2020
  • Third quarter earnings supported by all three business lines which provide resilience, diversification and risk mitigation in a range of economic conditions while returning 1.89% on assets, 23.28% on equity and providing pre-tax pre-provision net revenue of $15.1 million
  • Proactive credit management decreased loans in deferral status to 2.0% of loans outstanding as of September 30, 2020 which is a reduction of 79% from June 30, 2020
  • Increased provisions of $3.5 million to respond to economic conditions, increasing the ratio of the allowance for loan losses ("ALLL") to total loans to 1.49%, or 1.77% excluding Small Business Administration Payroll Protection Program ("SBA-PPP") loans
  • OpenSky Credit Card account growth of 32% drove a $44.9 million increase in noninterest bearing secured credit card deposits, while cardholder behavior that showed signs of returning to pre-COVID patterns resulted in record credit card revenue of $5.8 million for the third quarter
  • Record mortgage loan originations of $431.1 million and mortgage banking revenue of $14.4 million during the quarter

ROCKVILLE, Md., Oct. 26, 2020 (GLOBE NEWSWIRE) -- Capital Bancorp, Inc. (the "Company") (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the "Bank"), today reported net income of $8.4 million, or $0.61 per diluted share, for the third quarter of 2020. By comparison, net income was $4.5 million, or $0.32 per diluted share, for the third quarter of 2019. Return on average assets was 1.89% for the third quarter of 2020, compared to 1.42% for the same period in 2019. Similarly, return on average equity was 23.3% for the third quarter of 2020, compared to 14.0% for the same period in 2019. Included in net income, in the current quarter, was a provision for loan losses of $3.5 million, compared to $1.1 million for the same period in 2019, attributable to the uncertain economic environment related to COVID-19.

"Our diversified business model has demonstrated resiliency in a difficult economic environment and continues to perform well as shown by our record earnings in the third quarter," said Ed Barry, CEO of Capital Bancorp.  "We look to maintain momentum by focusing on expense control, increasing core deposits and expanding relationships with PPP borrowers in the quarters to come.  Our consumer strategy is scaling more quickly than expected as we saw another quarter of robust growth in OpenSky accounts, secured deposits, and related revenues as customer behavior began to normalize. Asset quality remains strong, with loans in deferral status decreasing 79% percent over the quarter to 2 percent of loans outstanding.  Given the remaining uncertain economic outlook due to COVID-19, we recorded a provision of $3.5 million for the quarter bringing the total to $9.2 million for the year."

Third Quarter 2020 Highlights

  • Diversified Businesses Drive Record Net Income - In the third quarter of 2020, net income increased 88.2 percent to a record $8.4 million from $4.5 million in the third quarter of 2019. Our continued strong operating results demonstrate the advantages of the Bank's uncorrelated diversified business lines that are complimentary across economic cycles.
  • Net Interest Margin Improvement - Net interest margin ("NIM") increased by 29 basis points to 5.01% from the last quarter but decreased 82 basis points from 5.83% for the three months ended September 30, 2019. The year over year decline in NIM was driven by an overall decline in the interest rate environment, lower earning SBA-PPP loans and excess liquidity. Excluding credit card and SBA-PPP loans, third quarter 2020 NIM was 3.84%, down 12 basis points from the prior quarter and 53 basis points from 4.37% in the same period last year.
  • Growth in Core Deposits and Reduced Cost of Interest Bearing Liabilities - Noninterest bearing deposits increased by $32.2 million, or 5.7 percent, during the quarter ended September 30, 2020 and now represent 35.9% of total deposits. The growth in credit card-related deposits was partially offset by anticipated declines in SBA-PPP-related deposit balances. Overall, during the quarter, the cost of interest bearing liabilities was reduced from 1.38% at June 30, 2020 to 1.18% at September 30, 2020 as rates decreased in line with the market. The Bank continues to execute on its ongoing strategic initiative to improve the deposit portfolio mix by decreasing reliance on wholesale, internet and other non-core time deposits.
  • Cost Management Initiatives Improving Operating Leverage - Focused investments in technology, combined with process improvements and workforce rationalizations, continue to increase the Bank's operating leverage. Higher mortgage originations and credit card volumes increased noninterest expenses by $9.9 million, or 54.3 percent from the same quarter last year. These higher levels of activity drove a $13.9 million, or 192.9 percent increase in related noninterest income.
  • Balance Sheet Supported By Robust Capital Ratios, Elevated Reserves, and Excess Liquidity - As of September 30, 2020, the Company reported a common equity tier 1 capital ratio of 12.75% and ALLL to total loans of 1.49%, or 1.77% excluding SBA-PPP loans. The Bank is well-capitalized and has taken measures to navigate COVID-19 related disruptions by taking additional loan loss provisions and maintaining higher than normal levels of liquidity on the balance sheet.
  • Proactive Management Leads to Early Recognition of Problem Assets - Non-performing assets increased to $14.8 million at September 30, 2020 compared to $9.2 million at June 30, 2020. The increase was largely attributable to two past-due construction loans related to a single relationship and totaling $4.7 million. Both loans are well secured and we do not anticipate any losses with these credits. Non-performing assets as a percentage of total assets increased to 0.79%, 0.90% excluding SBA-PPP loans, at September 30, 2020 compared to 0.50% at June 30, 2020.
  • Continued Portfolio Loan Growth - For the quarter ended September 30, 2020, portfolio loans increased by $33.1 million, or 2.7 percent, to $1.24 billion compared to $1.21 billion at June 30, 2020. Commercial real estate loans increased by $8.9 million, or 2.4 percent, construction real estate loans increased by $14.7 million, or 6.9 percent and secured credit cards balances increased by $30.2 million, or 55.2 percent, while residential real estate decreased by $14.7 million, or 3.4 percent, and commercial and industrial loans decreased by $7.8 million, or 5.5 percent.
  • COVID-19 Related Deferrals - Outstanding loans deferred due to COVID-19 decreased by 79% from June 30, 2020 to September 30, 2020 as shown in the table below.
Loan Modifications (1)              
(dollars in thousands)            
  September 30, 2020   June 30, 2020
    Deferred Loans     Deferred Loans
Sector Total Loans Outstanding Balance # of Loans Deferred   Total Loans Outstanding Balance # of Loans Deferred
Accommodation & Food Services $ 86.4 $ 11.2 14   $ 83.9 $ 42.6 36
Real Estate and Rental Leasing 503.1 9.3 16   527.9 45.6 67
Other Services Including Private Households 273.9 5.6 11   193.8 17.3 36
Educational Services 20.5   20.4 9.8 6
Construction 246.0 0.3 1   220.4 4.2 6
Professional, Scientific, and Technical Services 87.3 1.1 2   88.4 5.0 11
Arts, Entertainment & Recreation 30.4 1.4 2   14.9 5.0 9
Retail Trade 24.5   25.5 3.0 8
Healthcare & Social Assistance 78.0 0.9 1   77.2 4.7 11
Wholesale Trade 2.6   13.0 0.9 1
All other (1) 125.3 0.5 2   175.7 5.9 13
Total $ 1,478.0 $ 30.3 49   $ 1,441.1 $ 144.0 204

_______________
(1) Excludes modifications and deferrals made for OpenSky secured card customers.

  • Record Mortgage Originations and Revenues - In the third quarter of 2020, the Capital Bank Home Loans originated a record $431.1 million of mortgage loans for sale, compared to $197.8 million in the third quarter of 2019. Capital Bank Home Loans achieved record revenue of $14.4 million for the third quarter of 2020 compared to $4.9 million for the same period in 2019. Efforts to optimize product pricing and mix elevated the average gain on sale to 3.13%.
  • Continued Strong Growth in OpenSky Credit Card Accounts - During the quarter, OpenSky originated 148 thousand new credit cards, increasing the number of open credit card accounts to 529 thousand at September 30, 2020. Quarterly growth resulted in a $44.9 million increase in noninterest bearing secured credit card deposits which totaled $176.7 million at quarter end. Card balances, which typically lag new card production, increased in the third quarter of 2020 to $85.0 million from $54.7 million. Credit card fees were a record $5.8 million as consumer behavior shows signs of returning to pre-COVID patterns, resulting in a 98.2% increase in credit card revenue.
COMPARATIVE FINANCIAL HIGHLIGHTS - Unaudited            
                   
  Quarter Ended       Nine Months Ended    
  September 30,       September 30,    
(dollars in thousands except per share data) 2020   2019   % Change   2020   2019   % Change
Earnings Summary                      
Interest income $ 25,189     $ 22,354     12.7 %   $ 68,933     $ 60,961     13.1 %
Interest expense 3,150     4,170     (24.5 )%   10,583     11,502     (8.0 )%
Net interest income 22,039     18,184     21.2 %   58,350     49,459     18.0 %
Provision for loan losses 3,500     1,071     226.8 %   9,209     1,869     392.7 %
Noninterest income 21,146     7,221     192.8 %   41,626     17,240     141.5 %
Noninterest expense 28,119     18,228     54.3 %   68,665     48,768     40.8 %
Income before income taxes 11,566     6,106     89.4 %   22,102     16,062     37.6 %
Income tax expense 3,128     1,625     92.5 %   5,968     4,239     40.8 %
Net income $ 8,438     $ 4,481     88.3 %   $ 16,134     $ 11,823     36.5 %
                       
Weighted average common shares - Basic 13,795     13,728     0.5 %   13,795     13,714     0.6 %
Weighted average common shares - Diluted 13,832     13,986     (1.1 )%   13,832     13,922     (0.6 )%
Earnings per share - Basic $ 0.61     $ 0.33     87.4 %   $ 1.17     $ 0.86     36.0 %
Earnings per share - Diluted $ 0.61     $ 0.32     90.4 %   $ 1.17     $ 0.85     37.6 %
Return on average assets (1) 1.89 %   1.42 %   33.1 %   1.35 %   1.35 %   %
Return on average assets, excluding impact of SBA PPP loans(1) (2) 1.80 %   1.42 %   26.8 %   1.25 %   1.35 %   (7.4 )%
Return on average equity 23.28 %   14.04 %   65.8 %   15.35 %   12.93 %   18.7 %


  Quarter Ended       Quarter Ended
  September 30,   3Q20 vs. 3Q19   June 30,   March 31,   December 31,
(in thousands except per share data) 2020   2019   % Change   2020   2020   2019
Balance Sheet Highlights                      
Assets $ 1,879,029     $ 1,311,406     43.3 %   $ 1,822,365     $ 1,507,847     $ 1,428,495
Investment securities available for sale 53,992     37,073     45.6 %   56,796     59,524     60,828
Mortgage loans held for sale 137,717     68,982     99.6 %   116,969     73,955     71,030
SBA-PPP loans, net of fees (3) 233,349         100.0 %   229,646        
Portfolio loans receivable (3) 1,244,613     1,140,310     9.1 %   1,211,477     1,187,798     1,171,121
Allowance for loan losses 22,016     12,808     71.9 %   18,680     15,513     13,301
Deposits 1,662,211     1,112,444     49.4 %   1,608,726     1,302,913     1,225,421
Borrowings and repurchase agreements 22,222     35,556     (37.5 )%   25,556     28,889     32,222
Other borrowed funds 17,516     15,416     13.6 %   17,392     15,430     15,423
Total stockholders' equity 149,377     127,829     16.9 %   142,108     136,080     133,331
Tangible common equity(2) 149,377     127,829     16.9 %   142,108     136,080     133,331
                       
Common shares outstanding 13,682     13,783     (0.7 )%   13,818     13,817     13,895
Tangible book value per share $ 10.92     $ 9.27     17.7 %   $ 10.28     $ 9.85     $ 9.60

______________
(1) Annualized.
(2) Refer to Appendix for reconciliation of non-GAAP measures.
(3) Loans are reflected net of deferred fees and costs.

Operating Results - Three Months Ended September 30, 2020 compared to Three Months Ended September 30, 2019

For the three months ended September 30, 2020, net interest income increased $3.9 million, or 21.2 percent, to $22.0 million from the same period in 2019, primarily due to a $512.3 million, or 41.4 percent, increase in average interest-earning assets. The net interest margin decreased 82 basis points to 5.01% for the three months ended September 30, 2020 from the same period in 2019 due to lower yields on loans which was partially offset by a decrease in interest expense due to a reduction in interest rates. Net interest margin, excluding credit card and SBA PPP loans, was 3.84% for the third quarter of 2020 compared to 4.37% for the same period in 2019. For the three months ended September 30, 2020, average interest earning assets increased $512.3 million, or 41.4 percent, to $1.7 billion as compared to the same period in 2019, and the average yield on interest earning assets decreased 144 basis points. Period over period, average interest-bearing liabilities increased $228.7 million, or 27.3 percent, while the average cost decreased 80 basis points to 1.18% from 1.98%.

The provision for loan losses of $3.5 million for the three months ended September 30, 2020 reflects the prevailing uncertainty in the economy as a result of COVID-19. Net charge-offs for the third quarter of 2020 were $163 thousand, or 0.06% of average loans on an annualized basis, compared to $111 thousand, or 0.04% of average loans on an annualized basis, for the third quarter of 2019.

For the quarter ended September 30, 2020, noninterest income was $21.1 million, an increase of $13.9 million, or 192.9 percent from $7.2 million in the prior year quarter. The increase was primarily driven by significant growth in mortgage banking revenues of $9.5 million and credit card fees of $3.7 million resulting from the higher level of credit card accounts.

For the three months ended September 30, 2020, the Bank originated 148 thousand new OpenSky secured credit card accounts, increasing the total number of open accounts to 529 thousand. This compares to 31 thousand new originations for the same period last year, which increased total open accounts to 222 thousand. Since September 30, 2019, credit card loan balances increased to $85.0 million from $44.1 million, while the related deposit account balances increased 127 percent to $176.7 million. The record growth in open accounts was primarily driven by enhanced marketing and economic conditions that led consumers to recognize the value and convenience of the Bank's secured credit card product.

The efficiency ratio for the three months ended September 30, 2020 decreased to 65.11% compared to 71.75% for the three months ended September 30, 2019, resulting from increased revenue in addition to management's efforts to control expenses.

Noninterest expense was $28.1 million for the three months ended September 30, 2020, as compared to $18.2 million for the three months ended September 30, 2019, an increase of $9.9 million, or 54.3 percent. The increase was primarily driven by a $3.4 million, or 36.5 percent, increase in salaries and benefits, a $3.7 million, or 88.0 percent increase in data processing, and an increase in operating expenses of $1.4 million, or 77.8 percent period over period. Included in salaries and benefits are commissions paid on mortgage originations, which increased from $1.9 million to $3.7 million, primarily due to an increase in the number of mortgage originations. In the three month period ended September 30, 2020, $431.1 million of mortgage loans were originated for sale compared to $197.8 million in the three months ended September 30, 2019. The Company's organic growth was supported by a 5.6 percent increase in employees to 244 at September 30, 2020, up from 231 at September 30, 2019. The increase was included the addition of 13 new employees in the revenue producing teams of the commercial banking and mortgage banking divisions. The increase of $3.7 million in data processing expenses is largely attributable to the higher volume of open credit cards, and increased mortgage loan processing volumes during the third quarter. Additionally, operating expenses increased $1.4 million due to increases in marketing and advertising, credit expenses, professional fees and FDIC insurance.

Operating Results - Nine Months Ended September 30, 2020 compared to Nine Months Ended September 30, 2019

For the nine months ended September 30, 2020, net interest income increased $8.9 million, or 18.0 percent, to $58.4 million from the same period in 2019, primarily due to a $413 million, or 35.6 percent, increase in average interest-earning assets. As a result of the declining interest rate environment, which began in the third quarter of 2019, and the rapid increase in SBA PPP loans, net interest margin decreased 74 basis points to 4.96% for the nine months ended September 30, 2020 from the same period in 2019. Net interest margin, excluding credit cards and SBA PPP loans, was 3.92% for the nine months ended September 30, 2020 compared to 4.35% for the same period in 2019. For the nine months ended September 30, 2020, average interest earning assets increased $413 million, or 35.6 percent, to $1.6 billion as compared to the same period in 2019, and the average yield on interest earning assets decreased 118 basis points. Period over period, average interest-bearing liabilities increased $213.8 million, or 27.2 percent, while the average cost decreased 55 basis points to 1.41 percent from 1.96 percent.

For the nine months ended September 30, 2020, the provision for loan losses was $9.2 million, an increase of $7.3 million, or 392.7 percent, primarily due the impacts of COVID-19. Net charge-offs for the nine months ended September 30, 2020 were $494 thousand, or 0.07% of average loans, annualized, compared to $192 thousand, or 0.04% of average loans, annualized, for the same period in 2019.

For the nine months ended September 30, 2020, noninterest income was $41.6 million, an increase of $24.4 million, or 141.5 percent, from the same period in 2019. The increase was primarily driven by significant growth in mortgage banking revenues, which were up $17.5 million, and credit card fees, which increased by $5.2 million.

For the nine months ended September 30, 2020, the Bank originated 320 thousand new OpenSky secured credit card accounts, increasing the total number of open accounts to 529 thousand. This compares to 72 thousand new originations for the same period last year, which increased total open accounts to 222 thousand. The record growth in open accounts was primarily driven by enhanced marketing and economic conditions that led consumers to recognize the value and convenience of the Bank's secured credit card product.

The efficiency ratio for the nine months ended September 30, 2020 decreased to 68.7% compared to 73.1% for the nine months ended September 30, 2019, primarily resulting from increased revenue in addition to management's efforts to control expenses.

Noninterest expense was $68.7 million for the nine months ended September 30, 2020, as compared to $48.8 million for the nine months ended September 30, 2019, an increase of $19.9 million, or 40.8 percent. The increase was primarily driven by an $8.2 million, or 34.1 percent, increase in salaries and benefits, a $6.4 million, or 57.4 percent increase in data processing, an increase in loan processing of $1.2 million and a $2.3 million, or 43.6 percent increase in other operating expenses period over period. Included in salaries and benefits are commissions paid on mortgage originations, which increased from $4.0 million to $7.5 million primarily due to an increase in the number of mortgage originations. In the nine months ended September 30, 2020, $920.2 million of mortgage loans were originated for sale compared to $208.5 million in the nine months ended September 30, 2019. The increase of $6.4 million in data processing expenses was due to the higher volume of open credit cards and increased mortgage loan processing volumes during the year. Additionally, operating expenses increased $2.3 million due to increases in marketing and advertising, credit expenses, professional fees and FDIC insurance.

During the nine months ended September 30, 2020, results of operations were impacted by the COVID-19 pandemic and include the deferral of $6.5 million of loan origination fees, net of costs, and the amortization of net fees of $1.1 million. There were no significant COVID-19 related noninterest expenses recorded during the nine months ended September 30, 2020.

Financial Condition

Total assets at September 30, 2020 were $1.88 billion, an increase of 43.3 percent as compared to $1.31 billion at September 30, 2019. Loans, excluding mortgage loans held for sale and PPP loans, totaled $1.24 billion as of September 30, 2020, an increase of 9.1 percent as compared to $1.14 billion at September 30, 2019.

Deposits at September 30, 2020 were $1.66 billion, an increase of 49.4 percent as compared to $1.11 billion at September 30, 2019. Noninterest bearing deposits increased by $303 million. These deposits include fiduciary accounts of title companies and property management accounts, as well as SBA PPP loans and the secured card deposits highlighted above. Interest bearing accounts increased by $246.9 million, mainly driven by a 46.7% increase in fiduciary accounts.

Due primarily to the deterioration in the macro-economic environment as a result of the impact of COVID-19, the Company recorded a provision for loan losses of $9.2 million during the nine months ended September 30, 2020, which increased our allowance for loan losses to $22.0 million, or 1.49% of total loans (1.77%, excluding SBA PPP loans, on a non-GAAP basis) at September 30, 2020. This level of reserve provides approximately 192 percent coverage of nonperforming loans at September 30, 2020, compared to a reserve of $12.8 million, or 1.12 percent, of total loans, and approximately 196% coverage of nonperforming loans at September 30, 2019. Nonperforming assets were $14.8 million, or 0.79% of total assets, as of September 30, 2020, up from $6.7 million, or 0.51% of total assets, at September 30, 2019. Of the $14.8 million in total nonperforming assets as of September 30, 2020, nonperforming loans represented $11.5 million and OREO totaled $3.3 million. The increase is primarily due to two construction loans totaling $4.7 million. Included in nonperforming loans at September 30, 2020 are troubled debt restructurings of $446 thousand.

Stockholders’ equity increased to $149.4 million as of September 30, 2020, compared to $127.8 million at September 30, 2019. This increase was primarily attributable to earnings and net proceeds from the exercise of stock options. Shares repurchased and retired in 2020 as part of the Company's stock repurchase program totaled 254,834 shares at a weighted average price of $10.84, for a total cost of $2.8 million including commissions. As of September 30, 2020, the Bank's capital ratios continue to exceed the regulatory requirements for a “well-capitalized” institution.

Consolidated Statements of Income (Unaudited)            
  Three Months Ended September 30,   Nine Months Ended September 30,
(in thousands) 2020   2019   2020   2019
Interest income              
Loans, including fees $ 24,836     $ 21,900     $ 67,520     $ 59,548  
Investment securities available for sale 273     215     929     707  
Federal funds sold and other 80     239     484     706  
Total interest income 25,189     22,354     68,933     60,961  
               
Interest expense              
Deposits 2,634     3,449     9,201     9,887  
Borrowed funds 516     721     1,382     1,615  
Total interest expense 3,150     4,170     10,583     11,502  
               
Net interest income 22,039     18,184     58,350     49,459  
Provision for loan losses 3,500     1,071     9,209     1,869  
Net interest income after provision for loan losses 18,539     17,113     49,141     47,590  
               
Noninterest income              
Service charges on deposits 119     146     378     382  
Credit card fees 5,773     2,059     10,694     5,521  
Mortgage banking revenue 14,359     4,900     28,496     10,991  
Gain on sale of investment securities available for sale             26  
Other fees and charges 895     116     2,058     320  
Total noninterest income 21,146     7,221     41,626     17,240  
               
Noninterest expenses              
Salaries and employee benefits 12,609     9,238     32,362     24,136  
Occupancy and equipment 1,328     1,111     3,658     3,307  
Professional fees 1,307     724     2,971     1,952  
Data processing 7,880     4,192     17,664     11,222  
Advertising 633     584     1,875     1,557  
Loan processing 1,264     634     2,451     1,279  
Other real estate expenses, net 9     7     137     57  
Other operating 3,089     1,737     7,548     5,258  
Total noninterest expenses 28,119     18,228     68,665     48,768  
Income before income taxes 11,566     6,106     22,102     16,062  
Income tax expense 3,128     1,625     5,968     4,239  
Net income $ 8,438     $ 4,481     $ 16,134     $ 11,823  


Consolidated Balance Sheets      
(in thousands except share data) (unaudited) September 30,
2020
  December 31, 2019
Assets      
Cash and due from banks $ 20,138     $ 10,530  
Interest bearing deposits at other financial institutions 179,789     102,447  
Federal funds sold 5,590     1,847  
Total cash and cash equivalents 205,517     114,824  
Investment securities available for sale 53,992     60,828  
Restricted investments 3,958     3,966  
Loans held for sale 137,717     71,030  
U.S. Small Business Administration Payroll Protection Program ("SBA-PPP") loans receivable, net of fees 233,349      
Portfolio loans receivable, net of deferred fees and costs and net of allowance for loan losses of $22,016 and $13,301 1,222,597     1,157,820  
Premises and equipment, net 5,021     6,092  
Accrued interest receivable 7,678     4,770  
Deferred income taxes, net 3,589     4,263  
Other real estate owned 3,326     2,384  
Other assets 2,285     2,518  
Total assets $ 1,879,029     $ 1,428,495  
       
Liabilities      
Deposits      
Noninterest bearing $ 596,239     $ 291,777  
Interest bearing 1,065,972     933,644  
Total deposits 1,662,211     1,225,421  
Federal Home Loan Bank advances 22,222     32,222  
Other borrowed funds 17,516     15,423  
Accrued interest payable 1,523     1,801  
Other liabilities 26,179     20,297  
Total liabilities 1,729,652     1,295,164  
       
Stockholders' equity      
Preferred stock, $.01 par value; 1,000,000 shares authorized; no shares issued or outstanding      
Common stock, $.01 par value; 49,000,000 shares authorized; 13,682,198 and 13,894,842 issued and outstanding 137     139  
Additional paid-in capital 49,866     51,561  
Retained earnings 97,580     81,618  
Accumulated other comprehensive income 1,794     13  
Total stockholders' equity 149,377     133,331  
Total liabilities and stockholders' equity $ 1,879,029     $ 1,428,495  

The following table shows 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 September 30,
  2020   2019
  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 $ 119,279     $ 29     0.10 %   $ 35,723     $ 164     1.83 %
Federal funds sold 3,980         0.01     1,325     7     2.12  
Investment securities available for sale 54,989     273     1.97     38,389     215     2.22  
Restricted stock 4,007     51     5.04     5,629     68     4.77  
Loans held for sale 112,890     856     3.02     56,301     896     6.31  
Loans receivable under SBA Payroll Protection Program 235,160     1,470     2.49             0.00  
Portfolio loans receivable(2) 1,218,589     22,510     7.35     1,099,191     21,004     7.58  
Total interest earning assets 1,748,894     25,189     5.73     1,236,558     22,354     7.17  
Noninterest earning assets 22,768             15,908          
Total assets $ 1,771,662             $ 1,252,466          
                       
Liabilities and Stockholders’ Equity                      
Interest bearing liabilities:                      
Interest bearing demand accounts $ 218,415     156     0.28     $ 116,820     191     0.65  
Savings 5,126     1     0.05     3,913     3     0.35  
Money market accounts 532,973     1,186     0.89     339,751     1,484     1.73  
Time deposits 267,970     1,291     1.92     286,605     1,771     2.45  
Borrowed funds 41,069     516     5.00     89,746     721     3.19  
Total interest bearing liabilities 1,065,553     3,150     1.18     836,835     4,170     1.98  
Noninterest bearing liabilities:                      
Noninterest bearing liabilities 22,702             17,163          
Noninterest bearing deposits 539,220             271,851          
Stockholders’ equity 144,187             126,617          
Total liabilities and stockholders’ equity $ 1,771,662             $ 1,252,466          
                       
Net interest spread         4.55 %           5.19 %
Net interest income     $ 22,039             $ 18,184      
Net interest margin(3)         5.01 %           5.83 %

_______________

(1) Annualized.
(2) Includes nonaccrual loans.
(3) For the three months ended September 30, 2020 and 2019, SBA-PPP loans and credit card loans collectively accounted for 117 and 146 basis points of the reported net interest margin, respectively.


  Nine Months Ended September 30,
  2020   2019
  Average
Outstanding
Balance
  Interest Income/
Expense
  Average
Yield/
Rate(1)
  Average
Outstanding
Balance
  Interest Income/
Expense
  Average
Yield/
Rate
  (Dollars in thousands)
Assets                      
Interest earning assets:                      
Interest bearing deposits $ 98,661     $ 306     0.41 %   $ 35,164     $ 518     1.97 %
Federal funds sold 2,319     4     0.22     1,685     28     2.23  
Investment securities available for sale 58,071     929     2.14     42,281     707     2.24  
Restricted stock 4,025     174     5.78     4,276     160     4.99  
Loans held for sale 77,878     1,909     3.27     35,229     1,928     7.32  
Loans receivable under SBA Payroll Protection Program 134,130     2,482     2.47              
Portfolio loans receivable(2) 1,197,719     63,129     7.04     1,041,364     57,620     7.40  
Total interest earning assets 1,572,803     68,933     5.85     1,159,999     60,961     7.03  
Noninterest earning assets 21,779             15,115          
Total assets $ 1,594,582             $ 1,175,114          
                       
Liabilities and Stockholders’ Equity                      
Interest bearing liabilities:                      
Interest bearing demand accounts $ 181,597       555     0.41     $ 97,325       387     0.53  
Savings 4,686     4     0.13     3,613     9     0.35  
Money market accounts 484,412     4,153     1.15     330,086     4,203     1.70  
Time deposits 284,844     4,489     2.11     294,693     5,288     2.40  
Borrowed funds 43,823     1,382     4.21     59,816     1,615     3.61  
Total interest bearing liabilities 999,362     10,583     1.41     785,533     11,502     1.96  
Noninterest bearing liabilities:                      
Noninterest bearing liabilities 21,401             14,971          
Noninterest bearing deposits 433,381             252,353          
Stockholders’ equity 140,438             122,257          
Total liabilities and stockholders’ equity $ 1,594,582             $ 1,175,114          
                       
Net interest spread         4.44 %           5.07 %
Net interest income     $ 58,350             $ 49,459      
Net interest margin(3)         4.96 %           5.70 %

_______________

(1) Annualized.
(2) Includes nonaccrual loans.
(3) For the nine months ended September 30, 2020 and 2019, SBA-PPP loans and credit card loans collectively accounted for 104 and 135 basis points of the reported net interest margin, respectively.


HISTORICAL FINANCIAL HIGHLIGHTS - Unaudited        
    Quarter Ended
(Dollars in thousands except per share data)   September 30,
2020
  June 30,
2020
  March 31,
2020
  December 31,
2019
  September 30,
2019
Earnings:                    
Net income   $ 8,438     $ 4,761     $ 2,934     $ 5,073     $ 4,480  
Earnings per common share, diluted   0.61     0.34     0.21     0.36     0.32  
Net interest margin   5.01 %   4.72 %   5.16 %   5.33 %   5.83 %
Net interest margin, excluding credit cards & SBA-PPP loans (1)   3.84 %   3.96 %   3.96 %   4.02 %   4.37 %
Return on average assets(2)   1.89 %   1.19 %   0.84 %   1.48 %   1.42 %
Return on average assets excluding impact of SBA-PPP loans (1)(2)   1.80 %   1.04 %   0.84 %   1.48 %   1.42 %
Return on average equity(2)   23.28 %   13.70 %   8.59 %   15.32 %   14.04 %
Efficiency ratio   65.17 %   69.74 %   73.53 %   70.10 %   71.75 %
Balance Sheet:                    
Portfolio loans receivable (3)   $ 1,244,613     $ 1,211,477     $ 1,187,798     $ 1,171,121     $ 1,140,310  
Deposits   1,662,211     1,608,726     1,302,913     1,225,421     1,112,444  
Total assets   1,879,029     1,822,365     1,507,847     1,428,495     1,311,406  
Asset Quality Ratios:                    
Nonperforming assets to total assets   0.79 %   0.50 %   0.61 %   0.50 %   0.51 %
Nonperforming assets to total assets, excluding SBA-PPP loans (1)   0.90 %   0.58 %   0.61 %   0.50 %   0.51 %
Nonperforming loans to total loans   0.78 %   0.41 %   0.49 %   0.40 %   0.57 %
Nonperforming loans to portfolio loans (1)   0.92 %   0.48 %   0.49 %   0.40 %   0.57 %
Net charge-offs to average portfolio loans (1)(2)   0.06 %   0.05 %   0.07 %   0.10 %   0.04 %
Net charge-offs to average loans (1)(2)   0.06 %   0.05 %   0.07 %   0.10 %   0.04 %
Allowance for loan losses to total loans   1.49 %   1.30 %   1.31 %   1.14 %   1.12 %
Allowance for loan losses to portfolio loans   1.77 %   1.54 %   1.31 %   1.14 %   1.12 %
Allowance for loan losses to non-performing loans   191.78 %   318.25 %   268.13 %   281.80 %   195.76 %
Bank Capital Ratios:                    
Total risk based capital ratio   12.74 %   12.35 %   12.18 %   11.98 %   11.44 %
Tier 1 risk based capital ratio   11.48 %   11.10 %   10.93 %   10.73 %   10.19 %
Leverage ratio   7.44 %   7.73 %   8.61 %   8.65 %   8.60 %
Common equity Tier 1 capital ratio   11.48 %   11.10 %   10.93 %   10.73 %   10.19 %
Tangible common equity   7.09 %   6.91 %   8.03 %   8.21 %   8.21 %
Holding Company Capital Ratios:                    
Total risk based capital ratio   15.35 %   15.02 %   13.63 %   13.56 %   13.47 %
Tier 1 risk based capital ratio   12.93 %   12.58 %   12.38 %   12.31 %   12.21 %
Leverage ratio   8.63 %   8.85 %   9.83 %   9.96 %   10.37 %
Common equity Tier 1 capital ratio   12.75 %   12.39 %   12.19 %   12.12 %   12.02 %
Tangible common equity   7.95 %   7.80 %   11.08 %   10.71 %   10.26 %
Composition of Loans: (3)                    
Residential real estate   $ 422,698     $ 437,429     $ 430,870     $ 427,926     $ 443,961  
Commercial real estate   372,972     364,071     360,601     348,091     339,448  
Construction real estate   227,661     212,957     204,047     198,702     182,224  
Commercial and industrial - Other   134,889     142,673     151,551     151,109     132,935  
SBA-PPP loans   238,735     229,646              
Credit card   84,964     54,732     41,881     46,412     44,058  
Other   2,268     947     1,103     1,285     1,148  
Composition of Deposits:                    
Noninterest bearing   $ 596,239     $ 563,995     $ 363,423     $ 291,777     $ 293,378  
Interest bearing demand   247,150     268,150     175,924     174,166     186,422  
Savings   4,941     5,087     4,290     3,675     3,994  
Money Markets   472,447     507,432     473,958     429,078     313,131  
Time Deposits   341,435     264,062     285,318     326,725     315,519  
Capital Bank Home Loan Metrics:                
Origination of loans held for sale   $ 431,060     $ 315,165     $ 180,421     $ 185,739     $ 197,754  
Mortgage loans sold   410,312     272,151     177,496     183,691     171,880  
Gain on sale of loans   12,837     8,088     4,580     4,587     5,088  
Purchase volume as a % of originations   33.76 %   31.16 %   32.79 %   28.95 %   44.02 %
Gain on sale as a % of loans sold(4)   3.13 %   2.97 %   2.52 %   2.44 %   2.88 %
OpenSky Credit Card Portfolio Metrics:                
Active customer accounts   529,114     400,530     244,024     223,379     221,913  
Credit card loans   $ 84,964     $ 54,732     $ 41,881     $ 46,412     $ 44,058  
Noninterest secured credit card deposits   176,708     131,854     84,689     78,223     77,689  

_______________
(1) Refer to Appendix for reconciliation of non-GAAP measures
(2) Annualized.
(3) Loans are reflected net of deferred fees and costs.
(4) Gain on sale percentage is calculated as gain on sale of loans divided by the sum of gain on sale of loans and proceeds from loans held for sale, net of gains.

Appendix

Reconciliation of Non-GAAP Measures

Return on Average Assets, as Adjusted

Dollars in Thousands Year Ended Quarter Ended Year to Date
  December 31, 2019 September 30, 2020 September 30, 2020
       
Net Income $ 16,895   $ 8,438   $ 16,134  
Less: SBA-PPP loan income   (1,470 ) (2,482 )
Net Income, as Adjusted $ 16,895   $ 6,968   $ 13,653  
Average Total Assets $ 1,219,909   $ 1,533,591   $ 1,594,582  
Less: Average SBA-PPP Loans   (238,071 ) (135,894 )
Average Total Assets, as Adjusted $ 1,219,909   $ 1,533,591   $ 1,458,687  
Return on Average Assets, as Adjusted 1.38 % 1.80 % 1.25 %

Net Interest Margin, as Adjusted

Dollars in Thousands Year Ended Quarter Ended Year to Date
  December 31, 2019 September 30, 2020 September 30, 2020
       
Net Interest Income $ 67,509   $ 22,039   $ 58,350  
Less Secured credit card loan income   (6,632 ) (15,225 )
Less SBA-PPP loan income   (1,470 ) (2,482 )
Net Interest Income, as Adjusted $ 67,509   $ 13,937   $ 40,644  
Average Interest Earning Assets 1,204,863   1,748,894   1,572,803  
Less Average secured credit card loans   (68,585 ) (51,289 )
Less Average SBA-PPP loans   (235,160 ) (134,130 )
Total Average Interest Earning Assets, as Adjusted $ 1,204,863   $ 1,445,148   $ 1,387,384  
Net Interest Margin, as Adjusted 5.60 % 3.84 % 3.91 %

Tangible Book Value per Share

Dollars in Thousands    
  December 31, 2019 September 30, 2020
     
Total Stockholders' Equity $ 133,331   $ 149,377  
Tangible Common Equity $ 133,331   $ 149,377  
Period End Shares Outstanding 13,894,842   13,682,198  
Tangible Book Value per Share $ 9.60   $ 10.92  


Allowance for Loan Losses to Total Portfolio Loans    
Dollars in Thousands Year Ended Quarter Ended
  December 31, 2019 September 30, 2020
     
Allowance for Loan Losses $ 13,301   $ 22,016  
Total Loans 1,171,121   1,477,962  
Less: SBA-PPP loans   (233,349 )
Total Portfolio Loans $ 1,171,121   $ 1,244,613  
Allowance for Loan Losses to Total Portfolio Loans 1.14 % 1.77 %
     
     
Nonperforming Assets to Total Assets, net SBA-PPP Loans    
Dollars in Thousands Year Ended Quarter Ended
  December 31, 2019 September 30, 2020
     
Total Nonperforming Assets $ 7,104   $ 14,806  
Total Assets 1,428,495   1,879,029  
Less: SBA-PPP loans   (233,349 )
Total Assets, net SBA-PPP Loans $ 1,428,495   $ 1,645,680  
Nonperforming Assets to Total Assets, net SBA-PPP Loans 0.50 % 0.90 %
     
     
Nonperforming Loans to Total Portfolio Loans    
Dollars in Thousands Year Ended Quarter Ended
  December 31, 2019 September 30, 2020
     
Total Nonperforming Loans $ 4,720   $ 11,480  
Total Loans 1,171,121   1,477,962  
Less: SBA-PPP loans   (233,349 )
Total Portfolio Loans $ 1,171,121   $ 1,244,613  
Nonperforming Loans to Total Portfolio Loans 0.40 % 0.92 %
     
     
Net Charge-offs to Average Portfolio Loans    
Dollars in Thousands Year Ended Quarter Ended
  December 31, 2019 September 30, 2020
     
Total Net Charge-offs $ 798   $ (163 )
Total Average Loans 1,064,421   1,453,749  
Less: Average SBA-PPP loans   (235,160 )
Total Average Loans, Excluding SBA-PPP Loans $ 1,064,421   $ 1,218,589  
Net Charge-offs (YTD annualized) to Average Portfolio Loans 0.08 % 0.06 %

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 fifth largest bank headquartered in Maryland at September 30, 2020. 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 had assets of approximately $1.9 billion at September 30, 2020 and its common stock is traded in 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. 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. For details on factors that could affect these expectations, see risk factors and other cautionary language included in the Company's Annual Report on Form 10-K and other periodic and current reports filed with the Securities and Exchange Commission.

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 a 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 experiences additional resolution costs.

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 


Capital Bancorp Aktie jetzt über den Testsieger (Finanztest 11/2020) handeln, ab 0 € auf Smartbroker.de



Diesen Artikel teilen

0 Kommentare

Schreibe Deinen Kommentar

Bitte melden Sie sich an, um zu kommentieren. Anmelden | Registrieren

 

Disclaimer

Capital Bancorp Reports Record Quarter and Year to Date Earnings Record earnings of $8.4 million, or $0.61 per diluted share for the third quarter of 2020 and $16.1 million, or $1.17 per diluted share for the nine months ended September 30, 2020Third quarter earnings supported by all three business lines which …

Meistgelesene Nachrichten des Autors

Titel
Titel
Titel
Titel