National Capital Bancorp, Inc. Reports Second Quarter Earnings

Rhea-AI Summary

National Capital Bancorp, Inc. (NACB) reported a net income of $1.164 million, or $4.06 per share, for Q2 2021, up from $357,000 or $1.25 per share in Q2 2020. The six-month net income rose to $2.119 million, compared to $594,000 in the prior year. Total assets increased to $652.729 million, and total deposits grew by $20 million to $571.755 million. The Bank reported $45 million in new PPP loans for 2021, contributing to a decline in total loans due to loan forgiveness. A dividend of $0.55 per share was declared for shareholders of record as of August 13, 2021.

Positive

• Net income increased significantly to $1.164 million in Q2 2021 from $357,000 in Q2 2020.
• Total assets rose to $652.729 million, marking a year-over-year increase.
• Total deposits grew by $20 million to $571.755 million compared to the previous quarter.
• Successful $14 million issuance of sub-debt at favorable rates to support growth.

Negative

• Total loans decreased by $13.8 million during Q2 2021, primarily due to loan forgiveness.
• PPP loan forgiveness resulted in a decline in total loan balances.

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 $1,164,000, or $4.06 per common share, for the three months ended June 30, 2021, compared to net income of $357,000 or $1.25 per common share, for the quarter ended June 30, 2020. For the six months ended June 30, 2021, the Company reported net income of $2,119,000, or $7.40 per share, compared to $594,000, or $2.08 for the six months ended June 30, 2020. The prior year-to-date results included a $1.2 million build-up in the Bank’s allowance for loan losses in an aggressive response to the uncertain economic and other factors relating to the COVID-19 pandemic. In addition, the Bank has been an active lender in support of the SBA-guaranteed Paycheck Protection Program (PPP) which has resulted in strong balance sheet growth and improved operating leverage.

Total assets increased year-over-year to $652,729,000 on June 30, 2021 compared to $590,137,000 on June 30, 2020. Total loans of $465,630,000 on June 30, 2021 decreased by $13.8 million during the quarter but, have increased from $445,090,000 the year before. Total deposits increased during the quarter by $20.0 million to $571,755,000 on June 30, 2021 and have increased from $512,354,000 the year before. As noted earlier, the Company has been an active participant in PPP lending which resulted in new loans exceeding $45 million under the 2021 program and totaling over $108 million overall when combined with the 2020 program. The remaining combined balance was $65 million on June 30, 2021, compared with a balance of $83 million and $60 million on March 31, 2021 and June 30, 2020, respectively. PPP loan forgiveness received during the second quarter of 2021 accounted for the overall decline in loans for the quarter. The Company has collected $3.9 million of processing fees on the PPP loans, which were deferred and are being recognized in income over the life of the loans. Of these fees $623,000 was recognized in interest income during the second quarter of 2021 and $1,054,000 for the first six months of 2021 leaving remaining deferred fees of $1.9 million on June 30, 2021. The Company’s net interest margin remained stable at 3.33% during the second quarter of 2021 compared to 3.33% in the first quarter of 2021 and 3.19% in second quarter of 2020.

Total shareholders’ equity increased to $54,256,000 on June 30, 2021 from $51,844,000 a year ago. The increase resulted primarily from retained earnings for the past twelve months. For the six-month period ended June 30, 2021 the return on average assets and return on average equity was 0.67% and 7.91%, respectively.

Richard B. (Randy) Anderson, Jr. President and Chief Executive Officer said, “The most noteworthy activity in the second quarter was the Company’s successful May issuance of $14 million in sub-debt at a very favorable rate and terms. These funds will be down streamed to the Bank as needed to support growth and for other corporate purposes.” Anderson continued “It was also gratifying to see normal business activity continue to pick up as our non-PPP lending activities gained momentum and the business community return to health as loans under payment deferrals continued to decline falling to $1.7 million as of quarter end.”

The Company also announced today that its Board of Directors has declared a dividend of $0.55 per share for shareholders of record as of August 13, 2021. The dividend payout of $157,551.35 on 286,457 shares is payable August 31, 2021.

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.com. The Bank trades under the symbol NACB.

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:		2021		2020		2021		2020
Interest income		$5,421		$4,988		$10,558		$9,918
Interest expense		249		427		450		1,078
Net interest income		5,172		4,561		10,108		8,840
Provision for loan losses		52		658		197		1,312
Net interest income after provision		5,120		3,903		9,911		7,528
Non-interest income		626		483		1,324		985
Non-interest expense		4,203		3,933		8,433		7,759
Income before taxes		1,544		453		2,802		754
Income tax provision		380		96		683		159
Net income		$1,164		$357		$2,119		$594
Share Data:
Weighted avg no. of shares outstanding		286,334		286,057		286,196		285,940
Period end shares outstanding		286,457		286,057		286,457		286,057
Per Common Share Data:
Net income		$4.06		$1.25		$7.40		$2.08
Closing Stock Price						$189.40		$173.75
Book Value						$189.40		$181.24
Profitability Ratios, Annualized:
Return on average stockholders' equity		8.68%		2.77%		7.91%		2.34%
Return on average total assets		0.72%		0.24%		0.67%		0.21%
Average equity to average total assets		8.31%		8.68%		8.45%		9.03%

Condensed Balance Sheets:		June 30		December 31		June 30
		2021		2020		2020
Assets
Cash and equivalents		$41,823		$31,009		$23,652
Securities, available for sale		123,389		122,130		104,333
Loans, held for sale		2,067		1,444		0
Loans, held in portfolio		465,630		440,819		445,090
Allowance for loan losses		(6,251)		(6,111)		(5,340)
Premises and equipment, net		8,375		8,558		6,125
Bank owned life insurance		12,286		12,174		12,051
Other assets		5,410		5,271		4,226
Total assets		$652,729		$615,294		$590,137
Liabilities and stockholders' equity
Deposits		$571,755		$532,444		$512,354
Securities sold under agreement to repurchase		10,423		4,782		13,302
FHLB advances		0		0		10,000
Paycheck Protection Program Liquidity Facility		0		20,795		0
Subordinated notes, net of issuance cost		13,597		0		0
Other liabilities		2,698		3,825		2,637
Stockholders' equity		54,256		53,449		51,844
Total liabilities and stockholders' equity		$652,729		$615,294		$590,137
Other Data:
Non-performing loans to total loans (1)		0.28%		0.32%		0.03%
Allowance to total loans		1.34%		1.39%		1.20%
Net charge-offs (recoveries) to average loans		0.02%		0.02%		0.03%
Net interest margin for the quarter		3.33%		3.26%		3.19%
Net interest margin for the year		3.33%		3.29%		3.28%
(1) NPL's exclude accruing TDR's

 

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FAQ

What was National Capital Bancorp's net income for Q2 2021?

National Capital Bancorp reported a net income of $1.164 million, or $4.06 per share, for Q2 2021.

How much did total assets of NACB increase year-over-year?

Total assets increased to $652.729 million on June 30, 2021, from $590.137 million the previous year.

What is the dividend declared by NACB for August 2021?

NACB declared a dividend of $0.55 per share for shareholders of record as of August 13, 2021.

What was the total deposit amount for National Capital Bancorp at the end of Q2 2021?

Total deposits reached $571.755 million on June 30, 2021.

How much new PPP loans did NACB report in 2021?

NACB reported over $45 million in new PPP loans for 2021.