WASHINGTON--(BUSINESS WIRE)--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 $949,000, or $3.30 per common share, for the three months ended March 31, 2023, compared to net income of $837,000 or $2.92 per common share, for the quarter ended March 31, 2022. The earnings improvement was primarily attributable to increased net interest margin compared to the same period in 2022.
Total assets decreased year-over-year to $661,365,000 on March 31, 2023 compared to $668,586,000 on March 31, 2022. Total loans of $438,413,000 on March 31, 2023 increased by $13.3 million during the quarter and have increased from $406,497,000 the year before. Total deposits decreased during the quarter by $7.2 million to $564,558,000 on March 31, 2023 and have decreased from $591,947,000 the year before. With the well-publicized failures of Silicon Valley Bank and Signature Bank, the Company has worked diligently with clients to provide information regarding the safety and soundness of the Bank as well as provide available options to enhance FDIC coverage according to client risk tolerance levels. The Bank has 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 3.45% during the first quarter of 2023 was stable compared with 3.51% in the fourth quarter of 2022 and improved from 2.83% in the first quarter of 2022. The most recent two quarters have benefited from the favorable impact of interest rate increases on variable-rate loans, interest-bearing cash balances and on newly originated loans. Due to recent increased competition for deposits along with some utilization of wholesale funding sources to enhance our liquidity position, we expect that our net interest margin will be negatively impacted as increases in the Company’s cost of funds will likely exceed the favorable impact of increases in yields on our earning assets.
Total shareholders’ equity increased slightly to $49,725,000 on March 31, 2023 from $49,642,000 a year ago due to the retained earnings for the past twelve months substantially offset by the negative impact of the change in market valuation of the investment portfolio in a rising rate environment. For the quarter ended March 31, 2023 the return on average assets and return on average equity was 0.59% and 7.83%, respectively.
“We began the quarter with strong loan growth however with the recent bank failures impact on confidence in the banking industry our focus quickly shifted to protecting our client’s deposits and maintaining a strong balance sheet,” said Jimmy Olevson, President and Chief Executive Officer of the Bank. Olevson continued: “A large majority of our deposits are FDIC insured and we continue to offer increased FDIC insurance using the IntraFi Network. Our deposit base is stable and the Bank continues to operate in a safe and sound manner, just as we have for 134 years.”
The Company also announced today that its Board of Directors has declared a dividend of $0.60 per share for shareholders of record as of May 16, 2023. The dividend payout of $172,650.00 on 287,750 shares is payable May 30, 2022.
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: | 2023 |
|
2022 |
|
|||||
| Interest income | $6,513 |
|
$4,889 |
|
|||||
| Interest expense | 1,214 |
|
283 |
|
|||||
| Net interest income | 5,299 |
|
4,606 |
|
|||||
| Provision for (recovery of) credit losses | 0 |
|
(158 |
) |
|||||
| Net interest income after provision | 5,299 |
|
4,764 |
|
|||||
| Non-interest income | 679 |
|
663 |
|
|||||
| Non-interest expense | 4,722 |
|
4,341 |
|
|||||
| Income before taxes | 1,256 |
|
1,086 |
|
|||||
| Income tax provision | 307 |
|
249 |
|
|||||
| Net income | $949 |
|
$837 |
|
|||||
| Share Data: | |||||||||
| Weighted avg no. of shares outstanding | 287,310 |
|
286,495 |
|
|||||
| Period end shares outstanding | 287,750 |
|
286,832 |
|
|||||
| Per Common Share Data: | |||||||||
| Net income | $3.30 |
|
$2.92 |
|
|||||
| Closing Stock Price | $164.00 |
|
$170.00 |
|
|||||
| Book Value | $172.81 |
|
$173.07 |
|
|||||
| Profitability Ratios, Annualized: | |||||||||
| Return on average shareholders' equity | 7.83 |
% |
6.31 |
% |
|||||
| Return on average total assets | 0.59 |
% |
0.49 |
% |
|||||
| Average equity to average total assets | 7.55 |
% |
7.75 |
% |
|||||
| Condensed Balance Sheets: | March 31 |
|
December 31 |
|
March 31 |
||||
2023 |
|
|
2022 |
|
|
2022 |
|
||
| Assets | |||||||||
| Cash and equivalents | $40,831 |
|
$36,954 |
|
$53,118 |
|
|||
| Securities, available for sale | 83,861 |
|
84,714 |
|
106,795 |
|
|||
| Securities, held to maturity | 71,240 |
|
72,344 |
|
79,777 |
|
|||
| Loans, held for sale | 0 |
|
0 |
|
0 |
|
|||
| Loans, held in portfolio | 438,413 |
|
425,149 |
|
406,497 |
|
|||
| Allowance for credit losses | (5,170 |
) |
(5,069 |
) |
(5,802 |
) |
|||
| Premises and equipment, net | 7,485 |
|
7,547 |
|
8,053 |
|
|||
| Bank owned life insurance | 14,176 |
|
12,610 |
|
12,448 |
|
|||
| Other assets | 10,529 |
|
9,907 |
|
7,700 |
|
|||
| Total assets | $661,365 |
|
$644,156 |
|
$668,586 |
|
|||
| Liabilities and shareholders' equity | |||||||||
| Deposits | $564,558 |
|
$571,751 |
|
$591,947 |
|
|||
| Securities sold under agreement to repurchase | 10,100 |
|
7,274 |
|
10,997 |
|
|||
| FHLB advances | 20,000 |
|
0 |
|
0 |
|
|||
| Subordinated notes, net of issuance cost | 13,693 |
|
13,679 |
|
13,638 |
|
|||
| Other liabilities | 3,289 |
|
3,124 |
|
2,362 |
|
|||
| Shareholders' equity | 49,725 |
|
48,328 |
|
49,642 |
|
|||
| Total liabilities and shareholders' equity | $661,365 |
|
$644,156 |
|
$668,586 |
|
|||
| Other Data: | |||||||||
| Non-performing loans to total loans | 0.01 |
% |
0.05 |
% |
0.06 |
% |
|||
| Allowance to total loans | 1.18 |
% |
1.19 |
% |
1.43 |
% |
|||
| Net charge-offs (recoveries) to average loans | 0.00 |
% |
0.00 |
% |
0.00 |
% |
|||
| Loan-to-deposit ratio | 77.66 |
% |
74.36 |
% |
68.67 |
% |
|||
| Net interest margin for the quarter | 3.45 |
% |
3.51 |
% |
2.83 |
% |
|||
| Net interest margin for the year | 3.45 |
% |
3.12 |
% |
2.83 |
% |
|||