Our Company
Chain Bridge Bancorp, Inc. is a Delaware-chartered bank holding company and the parent of its wholly-owned subsidiary, Chain Bridge Bank, N.A., a nationally chartered commercial bank with fiduciary powers granted by the OCC. The Company was incorporated on May 26, 2006, and the Bank opened on August 6, 2007. The Company conducts substantially all of its operations through the Bank and has no other subsidiaries.
We offer a range of commercial and personal banking services, including deposits, treasury management, payments, loans, commercial lending, residential mortgage financing, consumer loans, trusts and estate administration, wealth management, and asset custody.
Our mission is to deliver exceptional banking and trust services nationwide, blending financial strength, personalized service, and advanced technology to offer tailored solutions to businesses, non-profit organizations, political organizations, individuals, and families. Our vision is to grow responsibly by adapting our personalized service and advanced technology solutions to our clients’ evolving needs while emphasizing liquidity, asset quality, and financial strength. We aim to be recognized for our “Strength, Service, Solutions: Your Bridge to Better Banking Nationwide.”
As of December 31, 2024, we held total assets of $1.4 billion, including $410.7 million in cash and cash equivalents, of which $406.7 million were interest-bearing reserves held at the Federal Reserve. Our portfolio included $659.0 million in securities, with $321.0 million or 48.7% of that in U.S. Treasury securities. Net loans held for investment, after accounting for deferred fees and costs and allowances, totaled $308.8 million. Our total deposits stood at $1.2 billion, with stockholders’ equity at $144.2 million. Approximately 93.3% of these deposits were held in transaction accounts (as such term is defined in the instructions for the Call Report, which the Bank files with the FFIEC on a quarterly basis). Our loan-to-deposit ratio was 25.1%.
Additionally, we hold excess deposits sold one-way to other participating banks through the IntraFi Cash Service® (ICS®). For our clients that opt into the ICS® network, this service allows us to place their deposits in increments up to the FDIC insurance limits at other banks within the ICS® network. In exchange, we may elect to either receive reciprocal deposits from other banks within the ICS® network or place the deposits at other banks as “One-Way Sell®” deposits and receive a deposit placement fee. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Deposits” for more information on ICS® deposits.
Initial Public Offering
On October 4, 2024, the Company’s Class A Common Stock began trading on the NYSE under the symbol “CBNA”. We issued and sold an aggregate of 1,992,897 shares of our Class A Common Stock including 142,897 shares of Class A Common Stock sold pursuant to the underwriters’ partial exercise of their option to purchase additional shares, in our initial public offering, at a public offering price of $22.00 per share for aggregate net proceeds of $36.5 million after deducting underwriting discounts and offering expenses. The initial closing of our initial public offering occurred on October 7, 2024, and the closing for the shares issued pursuant to the underwriters’ option occurred on November 1, 2024. On October 10, 2024, the Company used a portion of the net proceeds to fully repay $10.0 million in short-term borrowings. The IPO had a positive impact on our capital position, and contributed to Tier 1 leverage, Tier 1 risk-based, and total risk-based capital ratios of 11.48%, 38.12% and 39.30%, respectively as of December 31, 2024. The Company intends to use the remainder of net proceeds for general corporate purposes, which may include supporting continued organic deposit growth and funding potential strategic expansion.
Reclassification
In connection with the IPO, on October 3, 2024, the Company filed an Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, which established two new classes of common stock, the Class A Common Stock and Class B Common Stock, and reclassified and converted each outstanding share of the Company’s existing common stock, par value $1.00 per share, into 170 shares of Class B Common Stock. The Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware also changed the number of authorized shares of Preferred Stock from 100,000 to 10,000,000.
Our Regulatory Framework and Banking Philosophy
Chain Bridge Bank, N.A. operates under a national charter with full fiduciary powers granted by the OCC. Our national charter allows us to offer banking services across state lines without additional state banking licenses. The OCC
serves as our primary federal regulator, overseeing our operations and compliance with applicable federal banking laws and regulations. Our national bank fiduciary powers enable us to offer trust services broadly.
Our operations under this regulatory framework reflect a banking philosophy that emphasizes liquidity, asset quality, and financial strength. This approach guides our asset allocation strategy, risk management practices, and deposit gathering efforts.
Balance Sheet Strategy and Composition
Our balance sheet composition reflects our banking philosophy of emphasizing liquidity, asset quality, and financial strength. We aim to allocate a high proportion of our assets to interest-bearing reserves at the Federal Reserve and to securities that we believe qualify as investment grade.
Our asset allocation strategy is designed to balance liquidity maintenance with income generation. We prioritize investments in securities that we believe qualify as investment grade, with a significant portion allocated to U.S. Treasury securities. This approach reflects our focus on managing credit risk while maintaining liquidity. We strive to maintain a low proportion of assets that we consider to be illiquid.
Lending Approach and Credit Risk Management
Our lending policies are designed to manage credit risk. Our approach has historically resulted in what we consider to be low levels of non-performing loans and loan charge-offs. As of December 31, 2024, we have reported no non-performing assets since June 30, 2012. The Company has not reported any loan charge-offs since the third quarter of 2017 and has incurred a cumulative net loan charge-offs of $265 thousand since inception.
Deposit Composition and Strategy
We aim to attract transaction account deposits, particularly from commercial clients. Our investment approach for these funds is intended to be conservative, based on our interpretation of prudent banking practices and current regulatory guidelines.
As of December 31, 2024, we served deposit clients in 49 states, the District of Columbia, and Puerto Rico. The following chart shows the distribution of the Bank’s total deposits and One-Way Sell® deposits by dollar amount across the United States as of December 31, 2024:
($ in thousands)
To support our strategy of attracting commercial transaction account deposits, we emphasize services designed to attract commercial clients who manage high transaction volumes. These services include digital onboarding solutions, image cash letter (“ICL”) processing and treasury management offerings that accommodate multiple users with customizable approval hierarchies. This focus aligns with our goal of attracting and retaining commercial clients with complex transactional needs.
At December 31, 2024, 93.3% of our total deposits were held in transaction accounts. For the year ended December 31, 2024, our cost of funds was 0.31%.
The composition of our deposit base and the associated cost of funds are consistent with our focus on transaction accounts. Our experience suggests that clients with these types of accounts may interact more frequently with our banking services and relationship officers compared to those with other account types. This interaction may be associated with increased use of our services, which aligns with our approach to client relationships.
Operational Model and Technology Focus
Our model emphasizes attentive, relationship-based service enhanced by technology solutions. This strategy allows the Bank to serve clients efficiently across a wide geographic area while maintaining lower overhead costs compared to some branch-based banking models.
We believe our technology-driven approach allows us to deliver banking services efficiently, with a focus on meeting the needs of commercial clients who manage high transaction volumes and have complex organizational structures. Our treasury management system is designed to handle substantial transaction volumes and accommodate complex organizational structures often found in larger commercial entities. The system features multi-user access with customizable approval hierarchies, allowing clients to tailor the system to their specific operational needs. It also offers integration capabilities with popular accounting software and includes mobile batch check deposit functionality.
Our technology infrastructure is designed to process electronic transactions efficiently, including support for industry-standard formats commonly used for large-scale deposits. This infrastructure is intended to facilitate the handling of significant transaction volumes for our more active commercial clients, including political organizations, in a timely manner. While the technologies we employ are generally available in the banking industry, we believe our approach to implementing and customizing these solutions for specific client needs may distinguish us from many institutions of comparable size. We have developed capabilities in adapting our systems to address the particular requirements of clients with high transaction volumes. This allows us to offer banking solutions that we believe are comparable to those typically associated with larger financial institutions. As payment technologies continue to evolve, we strive to maintain our technological capabilities and adapt our services to meet the changing needs of our diverse commercial client base.
Our business model operates without a traditional branch network. As of December 31, 2024, we provide in-person banking services exclusively from our headquarters and do not operate additional physical banking locations. Based on our experience, we believe many of our clients prefer to conduct their banking transactions electronically through our digital platform, which offers services such as mobile deposit, ACH, wire transfers, and bill payment. This approach allows clients to manage their banking needs from anywhere, reducing the need to visit a physical branch.
We believe our technology-driven approach enables us to provide attentive, personalized service, despite our limited physical footprint. Our relationship officers are required to be directly accessible via phone, email, and video conferencing, which is intended to ensure that we meet the needs of our clients, particularly modern businesses. This service delivery model offers broad geographic reach and the potential for a competitive advantage by combining attentive personal service with the efficiency and convenience of remote access.
By operating without a branch network, we can direct resources toward enhancing our technology infrastructure and expanding our digital services. This approach is intended to provide our clients with secure, efficient, and convenient banking solutions. However, our branch-less business model may limit our ability to expand our retail lending and deposit businesses beyond the Washington, D.C. metropolitan area, where we have a more concentrated presence.
Serving Political Organizations
We focus on clients and business segments where our experience may offer advantages, such as services for political organizations, tailored business, and residential lending and trust and wealth management. Our approach generally favors developing capabilities in less saturated sectors and avoiding highly competitive markets, like commercial real estate or mass-market consumer banking. We have historically grown organically and many of our new business opportunities have come through word-of-mouth referrals. We believe our client-focused approach has contributed to maintaining strong relationships.
We estimate that there are points in time when at least a majority of our deposit balances are sourced from political organizations. This estimate is subject to data limitations and identifying a client as a political organization sometimes requires judgment, and the actual number of our deposits represented by political organizations may differ from this estimate. See “Risk Factors — Operational Risks — Our reliance on estimates and risk management activities may not always prevent or mitigate risks effectively, leading to potential differences between actual results and our forecasts.”
We have experience providing deposit services to several different types of political organizations, including:
•Campaign committees
•Party committees (national, state, and local);
•Corporate and trade association political action committees (“PACs”);
•Super PACs and Hybrid PACs;
•Non-committee 527 organizations;
•Leadership PACs;
•Joint fundraising committees; and
•Presidential inaugural committees.
In addition to political organizations, we also provide deposit accounts to a variety of businesses that support the campaigns and elections industry. These businesses include vendors involved in advertising, television advertisement buying, digital marketing, public opinion polling, opposition research firms, general consulting, fundraising, and services related to treasury, legal, and compliance matters.
Seasonality
Certain aspects of our deposits fluctuate seasonally. Most of this seasonality comes from commercial depositors, primarily political organizations and their vendors that generate and spend funds around federal election cycles. Federal elections in the United States occur every two years in the fourth quarter, on the first Tuesday after the first Monday in November. Primary elections for federal offices, determined by the state and political parties, typically occur in the first, second, or third quarter of the year. Historically, our total deposits have gradually increased in quarters leading up to a federal election, followed by a decline around the election. Deposit growth tends to be stronger leading up to presidential elections, which occur every four years, compared to biennial midterm elections.
Consistent with historical trends, we experienced deposit inflows from political organizations preceding the November 2024 federal election, followed by deposit outflows in the months surrounding the election, reflecting seasonal patterns associated with the election cycle. Election outcomes can also influence the timing and magnitude of deposit movements, including post-election inflows driven by new fundraising or account activities. For further details regarding these seasonal fluctuations and their impact on our financial condition, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”