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National Capital Bancorp, Inc. Reports Fourth 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 $1,088,000, or $3.78 per common share, for the three months ended December 31, 2023, compared to net income of $1,355,000 or $4.71 per common share, for the quarter ended December 31, 2022. For the year ended December 31, 2023, the Company reported net income of $4,363,000, or $15.17 per share, compared to $4,588,000, or $15.98 for the year ended December 31, 2022. A recovery of provision for credit losses in the fourth quarter of the prior year along with a stronger net interest margin in the prior year period were the leading factors in the decrease in Company profitability in the fourth quarter of 2023. Prior year non-interest income included a $393,000 loss on the sale of securities which occurred in the fourth quarter of 2022. The Company has implemented cost reduction initiatives during the most recent quarter to help offset the pressure from increased funding costs. Loan quality remains pristine with no non-performing loans as of December 31, 2023.

Total assets increased during the quarter to $703,051,000 on December 31, 2023. Total loans of $496,982,000 on December 31, 2023, increased by $19.9 million during the quarter and have increased $71.8 million on a year-to-date basis. Total deposits of $580,649,000 on December 31, 2023, increased $19.7 million during the quarter to provided funding for our loan growth and have increased $8.9 million on a year-to-date basis. While the Company has begun to utilize borrowings from the FHLB and the Federal Reserve in 2023 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 3.21% during the fourth quarter of 2023 was down slightly compared with 3.23% in the third quarter of 2023 and down compared with 3.51% in the fourth quarter of 2022. While the past several quarters have benefited from the favorable impact of interest rate increases on variable-rate loans, interest-bearing cash balances and on newly originated loans, we did see compression of our net interest margin again in the most recent quarter 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 $53,370,000 on December 31, 2023, from $48,328,000 a year ago due primarily to the retained earnings for the past twelve months. For the year ended December 31, 2023, the return on average assets and return on average equity was 0.66% and 8.68%, respectively.

“We were pleased to see strong core deposit growth occur in the fourth quarter. Those results are a reflection of both our commercial and retail team members who continue to bring new relationships to the Bank,” said Jimmy Olevson, President and Chief Executive Officer of the Bank. Olevson continued, “Additionally in the fourth quarter, we executed a right sizing and restructuring with our staff. The moves made have positioned National Capital Bank to continually improve our efficiency while increasing shareholder return in the long run."

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 February 14, 2024. The dividend payout of $189,817.32 on 287,602 shares is payable February 28, 2024, and represents a $0.06 per share, or 10.0% increase, over the prior quarterly dividend.

National Capital Bancorp, Inc. is the holding company for The National Capital Bank of Washington (NCB) 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 online and mobile banking services and sophisticated treasury management solutions– 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

 

Twelve Months Ended

(Unaudited)

December 31

 

December 31

 

 

 

 

 

 

 

Condensed Statement of Income:

2023

 

2022

 

2023

 

2022

Interest income

$

7,694

 

$

6,482

 

$

28,521

 

$

22,447

 

Interest expense

 

2,489

 

 

844

 

 

7,680

 

 

2,026

 

Net interest income

 

5,205

 

 

5,638

 

 

20,841

 

 

20,421

 

Provision for (recovery of) credit losses

 

210

 

 

(241

)

 

210

 

 

(891

)

Net interest income after provision

 

4,995

 

 

5,879

 

 

20,631

 

 

21,312

 

Non-interest income

 

723

 

 

190

 

 

2,923

 

 

2,096

 

Non-interest expense

 

4,299

 

 

4,315

 

 

17,782

 

 

17,410

 

Income before taxes

 

1,419

 

 

1,754

 

 

5,772

 

 

5,998

 

Income tax provision

 

331

 

 

399

 

 

1,409

 

 

1,410

 

Net income

$

1,088

 

$

1,355

 

$

4,363

 

$

4,588

 

 
Share Data:
Weighted avg no. of shares outstanding

 

287,672

 

 

287,334

 

 

287,622

 

 

287,115

 

Period end shares outstanding

 

287,602

 

 

287,300

 

 

287,602

 

 

287,300

 

 
Per Common Share Data:
Net income

$

3.78

 

$

4.71

 

$

15.17

 

$

15.98

 

Closing Stock Price

$

172.75

 

$

165.00

 

Book Value

$

185.57

 

$

168.21

 

 
Profitability Ratios, Annualized:
Return on average shareholders' equity

 

8.64

%

 

11.57

%

 

8.68

%

 

9.29

%

Return on average total assets

 

0.65

%

 

0.82

%

 

0.66

%

 

0.67

%

Average equity to average total assets

 

7.49

%

 

7.05

%

 

7.61

%

 

7.26

%

 
 
Condensed Balance Sheets:

December 30

 

December 31

2023

 

2022

Assets
Cash and equivalents

$

43,732

 

$

36,954

 

Securities, available for sale

 

67,039

 

 

84,714

 

Securities, held to maturity

 

67,110

 

 

72,344

 

Loans, held for sale

 

786

 

 

0

 

Loans, held in portfolio

 

496,982

 

 

425,149

 

Allowance for credit losses

 

(5,450

)

 

(5,069

)

Premises and equipment, net

 

6,939

 

 

7,547

 

Bank owned life insurance

 

14,402

 

 

12,610

 

Other assets

 

11,511

 

 

9,907

 

Total assets

$

703,051

 

$

644,156

 

 
Liabilities and shareholders' equity
Deposits

$

580,649

 

$

571,751

 

Securities sold under agreement to repurchase

 

0

 

 

7,274

 

FHLB advances and other borrowings

 

52,000

 

 

0

 

Subordinated notes, net of issuance cost

 

13,734

 

 

13,679

 

Other liabilities

 

3,298

 

 

3,124

 

Shareholders' equity

 

53,370

 

 

48,328

 

Total liabilities and shareholders' equity

$

703,051

 

$

644,156

 

 
Other Data:
Non-performing loans to total loans

 

0.00

%

 

0.05

%

Allowance to total loans

 

1.10

%

 

1.19

%

Net charge-offs (recoveries) to average loans

 

0.00

%

 

0.00

%

Loan-to-deposit ratio

 

85.59

%

 

74.36

%

Net interest margin for the quarter

 

3.21

%

 

3.51

%

Net interest margin for the year

 

3.30

%

 

3.12

%

 

Contacts

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