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 $1,520,000, or $5.28 per common share, for the three months ended June 30, 2024, compared to net income of $1,190,000 or $4.13 per common share, for the quarter ended June 30, 2023. For the six months ended June 30, 2024, the Company reported net income of $2,690,000, or $9.35 per share, compared to $2,139,000, or $7.44 for the six months ended June 30, 2023. The earnings improvement was primarily attributable to the results of productivity improvement and cost-reduction initiatives that have taken place since early 2023 along with a rebound in our net interest margin during the second quarter.

Total assets ended the quarter at $715,959,000 on June 30, 2024. Total loans of $504,385,000 on June 30, 2024 decreased $4.8 million during the quarter but have increased $39.2 million (8.4%) over the past twelve months. Total deposits increased $25.9 million during the quarter to $607,632,000 on June 30, 2024 and have increased $43.8 million (7.8%) over the past twelve months. The Company has focused on balanced growth over the past year with deposit growth providing the funding for new loan opportunities. As a result, the Company continues to experience 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 3.27% during the second quarter of 2024 rebounded compared with 3.20% in the first quarter of 2024 and was only down slightly compared with 3.30% in the second quarter of 2023. 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 during each quarter of 2023 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. We are encouraged by the improvement of our net interest margin in the most recent quarter as our strong deposit growth was deployed in higher-yielding assets.

Total shareholders’ equity increased to $55,179,000 on June 30, 2024 from $50,422,000 a year ago due primarily to the retained earnings for the past twelve months. For the six months ended June 30, 2024, the annualized return on average assets and return on average equity was 0.77% and 9.95%, respectively.

"We are pleased to report a strong quarter with significant growth in total deposits, demonstrating our customers' continued trust in our bank," said Bank CEO Jimmy Olevson. "Our efforts to streamline operations have successfully lowered our efficiency ratio, and we are encouraged by our overall results. At the same time, we are mindful of the potential headwinds related to commercial real estate loans, and the possible challenges that may arise in the coming months. We continue to closely monitor the credit profiles within the commercial real estate portfolio as well as changes in our market area that may impact that segment of our business. Our culture of dedicated service to our customers served our bank well during the first half of 2024, and these results reflect our commitment to delivering strong financial performance and creating value for our shareholders."

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 August 15, 2024. The dividend payout of $189,932.16 on 287,776 shares is payable August 29, 2024.

In April of 2024, the Board of Directors approved a share repurchase program of up to $300,000, allowing for purchases from time to time, in open market or private transactions with a program expiration date of February 28, 2025. During the quarter ended June 30, 2024, the Company repurchased 300 shares at an average share price of $175.55.

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 Six Months Ended (Unaudited) June 30 June 30   Condensed Statement of Income:

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Interest income

$

8,508

 

$

7,095

 

$

16,592

 

$

13,608

 

Interest expense

 

2,937

 

 

1,885

 

 

5,709

 

 

3,099

 

Net interest income

 

5,571

 

 

5,210

 

 

10,883

 

 

10,509

 

Provision for (recovery of) credit losses

 

80

 

 

0

 

 

345

 

 

0

 

Net interest income after provision

 

5,491

 

 

5,210

 

 

10,538

 

 

10,509

 

Non-interest income

 

829

 

 

787

 

 

1,615

 

 

1,466

 

Non-interest expense

 

4,271

 

 

4,412

 

 

8,532

 

 

9,134

 

Income before taxes

 

2,049

 

 

1,585

 

 

3,621

 

 

2,841

 

Income tax provision

 

529

 

 

395

 

 

931

 

 

702

 

Net income

$

1,520

 

$

1,190

 

$

2,690

 

$

2,139

 

  Share Data: Weighted avg no. of shares outstanding

 

287,930

 

 

287,750

 

 

287,778

 

 

287,531

 

Period end shares outstanding

 

287,776

 

 

287,750

 

 

287,776

 

 

287,750

 

  Per Common Share Data: Net income

$

5.28

 

$

4.13

 

$

9.35

 

$

7.44

 

Closing Stock Price

$

175.75

 

$

175.00

 

Book Value

$

191.74

 

$

175.23

 

  Profitability Ratios, Annualized: Return on average shareholders' equity

 

11.21

%

 

9.39

%

 

9.95

%

 

8.57

%

Return on average total assets

 

0.86

%

 

0.72

%

 

0.77

%

 

0.65

%

Efficiency ratio

 

66.73

%

 

73.57

%

 

68.27

%

 

76.28

%

    Condensed Balance Sheets: June 30 December 31 June 30

 

2024

 

 

2023

 

 

2023

 

Assets Cash and equivalents

$

57,231

 

$

43,732

 

$

40,215

 

Securities, available for sale

 

63,219

 

 

67,039

 

 

68,972

 

Securities, held to maturity

 

64,795

 

 

67,110

 

 

69,843

 

Loans, held for sale

 

0

 

 

786

 

 

446

 

Loans, held in portfolio

 

504,385

 

 

496,982

 

 

465,151

 

Allowance for credit losses

 

(5,885

)

 

(5,450

)

 

(5,170

)

Premises and equipment, net

 

6,788

 

 

6,939

 

 

7,363

 

Bank owned life insurance

 

14,575

 

 

14,402

 

 

14,249

 

Other assets

 

10,851

 

 

11,511

 

 

12,149

 

Total assets

$

715,959

 

$

703,051

 

$

673,218

 

  Liabilities and shareholders' equity Deposits

$

607,632

 

$

580,649

 

$

563,827

 

Securities sold under agreement to repurchase

 

0

 

 

0

 

 

12,250

 

FHLB advances and other borrowings

 

35,000

 

 

52,000

 

 

30,000

 

Subordinated notes, net of issuance cost

 

13,761

 

 

13,734

 

 

13,707

 

Other liabilities

 

4,387

 

 

3,298

 

 

3,012

 

Shareholders' equity

 

55,179

 

 

53,370

 

 

50,422

 

Total liabilities and shareholders' equity

$

715,959

 

$

703,051

 

$

673,218

 

  Other Data: Non-performing loans to total loans

 

0.00

%

 

0.00

%

 

0.00

%

Allowance to total loans

 

1.17

%

 

1.10

%

 

1.11

%

Net charge-offs (recoveries) to average loans

 

0.00

%

 

0.00

%

 

0.00

%

Loan-to-deposit ratio

 

83.01

%

 

85.59

%

 

82.50

%

Net interest margin for the quarter

 

3.27

%

 

3.21

%

 

3.30

%

Net interest margin for the year

 

3.24

%

 

3.30

%

 

3.37

%

 

Randal J. Rabe, EVP, Chief Financial Officer Phone: 202-546-8000 Email: rrabe@nationalcapitalbank.bank