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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

%

 

Contacts

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