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