Capital Bancorp, Inc. (CBNK) | Investment Case

1. Company Snapshot

1.a. Company Description

Capital Bancorp, Inc.operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in the United States.It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments.

The company offers a range of deposit products and services, including checking and savings, time, interest bearing demand, and money market accounts, as well as certificates of deposit; and credit cards.It originates residential mortgages and offers residential and commercial real estate, construction, and commercial business loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals.It operates through four commercial bank branches, four mortgage offices, and one loan production office.

The company was founded in 1974 and is headquartered in Rockville, Maryland.

Show Full description

1.b. Last Insights on CBNK

Capital Bancorp's recent performance was negatively impacted by the operational conversion of Integrated Financial Holdings, Inc. into its operations and systems. This integration, completed on February 24, 2025, likely caused temporary disruptions and may have affected customer services and business continuity. Additionally, the integration process may have required significant investments, which could have weighed on the company's short-term profitability. The company's growth outlook, however, remains bright following the recent M&A activity, as stated in their January 3, 2025 announcement.

1.c. Company Highlights

Last Price	28.49
Change Percentage	0.14%
Open	28.65
Previous Close	28.45
Market Cap ( Millions)	473
Volume	60787
Year High	36.4
Year Low	24.69
M A 50	28.85
M A 200	30.87

FCF Yield	15.88%
Dividend Yield	1.54%
ROE	13.25%
Debt / Equity	8.63%
Net Debt / EBIDTA	12.46%
Price To Book	1.2
Price Earnings Ratio	9.51
Price To FCF	6.3
Price To sales	2.08
EV / EBITDA	7.19

2. Transcript Summary

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3. NewsRoom

Capital Bank Accelerates SBA Growth with a Strategic Expansion of its SBA Team

Dec -04

Source: globenewswire.com

Affiliates of Castle Creek Capital Acquire $40 Million Equity Position From Legacy Stockholders in FirstSun Capital Bancorp

Dec -04

Source: businesswire.com

Capital Bancorp, Inc. (NASDAQ:CBNK) Given Consensus Rating of “Hold” by Brokerages

Nov -29

Source: defenseworld.net

Connor Clark & Lunn Investment Management Ltd. Increases Position in Capital Bancorp, Inc. $CBNK

Nov -17

Source: defenseworld.net

Capital Bancorp Appoints Jacob Dalaya as Chief Financial Officer

Nov -14

Source: globenewswire.com

Capital Bancorp (CBNK) Q3 Earnings Miss Estimates

Oct -27

Source: zacks.com

CBNK Reports 3Q EPS of $0.89; 3Q ROA of 1.77% and ROE of 15.57%; Continued Strong Growth in Loans and Book Value

Oct -27

Source: globenewswire.com

CBNK Reports 3Q EPS of $0.89; 3Q ROA of 1.77% and ROE of 15.57%; Continued Strong Growth in Loans and Book Value

Oct -27

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.71%)

6. Segments

Open Sky

Expected Growth: 10.27%

Open Sky's 10.27% growth is driven by increasing demand for digital banking services, strategic partnerships, and expansion into new markets. Additionally, the company's focus on customer experience, innovative product offerings, and efficient cost management have contributed to its growth momentum.

Commercial Bank

Expected Growth: 7.35%

Strong loan growth driven by commercial and industrial lending, robust deposit growth, and expansion into new markets. Effective cost management and improved operating efficiency also contributed to the 7.35% growth. Additionally, strategic investments in digital banking and customer experience initiatives have enhanced revenue generation capabilities.

Capital Bank Home Loans

Expected Growth: 7.43%

Capital Bank Home Loans' 7.43% growth is driven by increasing demand for mortgage refinancing, low interest rates, and strategic expansion into new markets. Additionally, the bank's digital transformation efforts, improved customer experience, and competitive pricing have contributed to its growth. Furthermore, the bank's strong balance sheet and capital position have enabled it to take advantage of market opportunities.

Corporate Office

Expected Growth: 4.77%

Capital Bancorp's Corporate Office segment growth of 4.77% is driven by strategic expansion into new markets, increased commercial lending, and effective cost management. Additionally, the segment benefits from a strong brand reputation, diversified revenue streams, and a solid balance sheet. These factors contribute to the segment's robust growth, positioning it for continued success.

7. Detailed Products

Capital One 360 Checking

A 360-degree view of your finances, with no fees, no minimums, and no overdraft fees.

Capital One Credit Cards

A range of credit cards with rewards, cashback, and travel benefits.

Capital One 360 Savings

A high-yield savings account with no fees, no minimums, and easy online banking access.

Capital One Auto Finance

Auto financing options for new and used cars, with competitive rates and flexible terms.

Capital One Home Loans

Home loan options for purchasing or refinancing a home, with competitive rates and flexible terms.

Capital One Investing

A self-directed investment platform with low fees and a range of investment options.

Capital One Small Business Banking

Business banking solutions for small businesses, including checking, savings, and credit cards.

8. Capital Bancorp, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Capital Bancorp, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's strong brand recognition and customer loyalty.

Bargaining Power Of Customers

Capital Bancorp, Inc. has a large customer base, but the bargaining power of customers is high due to the availability of alternative banking services.

Bargaining Power Of Suppliers

Capital Bancorp, Inc. has a diverse supplier base, which reduces the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants in the banking industry is moderate, as it requires significant capital and regulatory approvals to establish a new bank.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share, which increases the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	16.46%
Debt Cost	5.01%
Equity Weight	83.54%
Equity Cost	6.16%
WACC	5.97%
Leverage	19.71%

11. Quality Control: Capital Bancorp, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

HBT Financial

A-Score: 6.7/10

Value: 6.4

Growth: 4.2

Quality: 7.6

Yield: 7.0

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

Capital Bancorp

A-Score: 6.5/10

Value: 6.8

Growth: 6.3

Quality: 7.0

Yield: 3.0

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

TowneBank

A-Score: 6.1/10

Value: 5.2

Growth: 5.2

Quality: 7.0

Yield: 6.0

Momentum: 5.0

Volatility: 8.3

1-Year Total Return ->

Amalgamated Financial

A-Score: 6.0/10

Value: 7.6

Growth: 7.2

Quality: 8.2

Yield: 4.0

Momentum: 2.0

Volatility: 6.7

1-Year Total Return ->

Financial Institutions

A-Score: 5.9/10

Value: 6.4

Growth: 3.6

Quality: 3.8

Yield: 9.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

RBB Bank

A-Score: 5.5/10

Value: 8.4

Growth: 5.0

Quality: 5.6

Yield: 6.0

Momentum: 2.0

Volatility: 6.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-7.99%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.97%

Capital Bancorp, Inc. - US1397371006

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CBNK

1.c. Company Highlights

Better Quality

Higher Growth

Average Yield

Earnings Miss

Revenues Beats

Lower Yield

Fairly Valued

Earnings Beats

Strong Momentum

Expensive

Revenues Miss

Average Quality

Average Growth

Stable Momentum

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.71%)

6. Segments

Open Sky

Expected Growth: 10.27%

Commercial Bank

Expected Growth: 7.35%

Capital Bank Home Loans

Expected Growth: 7.43%

Corporate Office

Expected Growth: 4.77%

7. Detailed Products

Capital One 360 Checking

Capital One Credit Cards

Capital One 360 Savings

Capital One Auto Finance

Capital One Home Loans

Capital One Investing

Capital One Small Business Banking

8. Capital Bancorp, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Capital Bancorp, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

28.49$

Current Price

28.49$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA