National Capital Bancorp, Inc. Reports First Quarter Earnings

National Capital Bancorp, Inc. (the “Company”) (OTC Pink: NACB), the holding company for The National Capital Bank of Washington (“NCB” or the “Bank") reported net income of $1,170,000, or $4.07 per common share, for the three months ended March 31, 2024, compared to net income of $949,000 or $3.30 per common share, for the quarter ended March 31, 2023. The earnings improvement was primarily attributable to the results of productivity improvement and cost-reduction initiatives that took place throughout 2023.

Total assets increased year-over-year to $708,183,000 on March 31, 2024 compared to $661,365,000 on March 31, 2023. Total loans of $509,187,000 on March 31, 2024 increased by $12.2 million during the quarter and have increased by $70.8 million, or 16.1%, from the year before. Total deposits of $581,762,000 on March 31, 2024, increased $1.1 million during the quarter and have increased $17.2 million, or 3.0%, from the year before. While the Company has increased its utilization of borrowings from the FHLB and the Federal Reserve over the past year to help in meeting loan growth opportunities, it has a relatively low reliance on wholesale funding sources and maintains strong levels of available secured borrowing capacity to meet the financing and cash flow needs of our client base as well as continue to pursue desirable new relationship opportunities.

The Company’s net interest margin of 3.20% during the first quarter of 2024 was stable compared with 3.21% in the fourth quarter of 2023 but was down compared with 3.45% in the first quarter of 2023. We are encouraged by the stabilization of our net interest margin in the most recent quarter. While the past several quarters had benefited from the favorable impact of interest rate increases on variable-rate loans, interest-bearing cash balances and on newly originated loans, we had experienced compression of our net interest margin over the past several quarters due to increased competition for deposits along with some utilization of wholesale funding sources to enhance our liquidity position and satisfy client borrowing needs and new loan opportunities.

Total shareholders’ equity increased to $54,053,000 on March 31, 2024 from $49,725,000 a year ago due primarily to the retained earnings for the past twelve months. For the quarter ended March 31, 2024 the return on average assets and return on average equity was 0.68% and 8.69%, respectively.

“We are encouraged by our continually improving efficiency ratio. These results are a direct effort by the entire team to fully utilize the technology we have and embrace change,” said Jimmy Olevson, President and Chief Executive Officer of the Bank. Olevson continued, “We are focused on being the best community bank in the DC metropolitan area for our clients and employees while providing increased shareholder return each year.”

The Company also announced today that its Board of Directors has declared a dividend of $0.66 per share for shareholders of record as of May 16, 2024. The dividend payout of $190,180.32 on 288,152 shares is payable May 30, 2024. The Board of Directors also approved a share repurchase program of up to $300,000, allowing for purchases from time to time, in open market or private transactions with an expiration date of February 28, 2025.

National Capital Bancorp, Inc. is the holding company for The National Capital Bank of Washington which was founded in 1889 and is Washington’s Oldest Bank. NCB is headquartered on Capitol Hill with offices in the Friendship Heights community in Northwest D.C., the Courthouse/Clarendon community in Arlington, Virginia and the Fox Hill senior living community of Bethesda, Maryland. NCB also operates residential mortgage and commercial lending offices and a wealth management services division. NCB product and service offerings include personal and business deposit accounts, robust eBanking, sophisticated treasury management solutions, remote deposit capture and merchant processing – all delivered with top-rated personal service. NCB is well-positioned to serve all the banking needs of those in our communities. For more information about NCB, visit www.nationalcapitalbank.bank.

Forward Looking Statements

This news release may contain certain forward-looking statements, such as statements of the Company’s plans, objectives, expectations, estimates and intentions. Forward-looking statements may be identified using words such as “expects,” “subject,” “will,” “intends,” “will be” or “would,” These statements are subject to change based on various important factors (some of which are beyond the Company’s control) and actual results may differ materially. Accordingly, readers should not place undue reliance on any forward-looking statements (which reflect management’s analysis of factors only as of the date of which they are given). These factors include general economic conditions, trends in interest rates, the ability of the Company to effectively manage its growth and results of regulatory examinations, among other factors. The foregoing list of important factors is not exclusive.

National Capital Bancorp, Inc.
Financial Highlights
(In thousands, except share data)		Three Months Ended
(Unaudited)		March 31
Condensed Statement of Income:		2024				2023
Interest income		$	8,084			$	6,513
Interest expense			2,772				1,214
Net interest income			5,312				5,299
Provision for (recovery of) credit losses			265				0
Net interest income after provision			5,047				5,299
Non-interest income			786				679
Non-interest expense			4,261				4,722
Income before taxes			1,572				1,256
Income tax provision			402				307
Net income		$	1,170			$	949
Share Data:
Weighted avg no. of shares outstanding			287,626				287,310
Period end shares outstanding			288,152				287,750
Per Common Share Data:
Net income		$	4.07			$	3.30
Closing Stock Price		$	169.34			$	164.00
Book Value		$	187.59			$	172.81
Profitability Ratios, Annualized:
Return on average shareholders' equity			8.69	%			7.83	%
Return on average total assets			0.68	%			0.59	%
Efficiency ratio			69.88	%			78.99	%

Condensed Balance Sheets:		March 31				December 31				March 31
		2024				2023				2023
Assets
Cash and equivalents		$	41,286			$	43,732			$	40,831
Securities, available for sale			65,179				67,039				83,861
Securities, held to maturity			66,086				67,110				71,240
Loans, held for sale			0				786				0
Loans, held in portfolio			509,187				496,982				438,413
Allowance for credit losses			(5,750	)			(5,450	)			(5,170	)
Premises and equipment, net			6,865				6,939				7,485
Bank owned life insurance			14,484				14,402				14,176
Other assets			10,846				11,511				10,529
Total assets		$	708,183			$	703,051			$	661,365
Liabilities and shareholders' equity
Deposits		$	581,762			$	580,649			$	564,558
Securities sold under agreement to repurchase			0				0				10,100
FHLB advances and other borrowings			55,000				52,000				20,000
Subordinated notes, net of issuance cost			13,748				13,734				13,693
Other liabilities			3,620				3,298				3,289
Shareholders' equity			54,053				53,370				49,725
Total liabilities and shareholders' equity		$	708,183			$	703,051			$	661,365
Other Data:
Non-performing loans to total loans			0.00	%			0.00	%			0.01	%
Allowance to total loans			1.13	%			1.10	%			1.18	%
Net charge-offs (recoveries) to average loans			0.00	%			0.00	%			0.00	%
Loan-to-deposit ratio			87.52	%			85.59	%			77.66	%
Net interest margin for the quarter			3.20	%			3.21	%			3.45	%
Net interest margin for the year			3.20	%			3.30	%			3.45	%

 

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