National Capital Bancorp, Inc. Reports Second Quarter Earnings

Rhea-AI Summary

National Capital Bancorp, Inc. (OTC Pink: NACB) reported net income of $1,520,000, or $5.28 per share, for Q2 2024, up from $1,190,000 in Q2 2023. For H1 2024, net income was $2,690,000, or $9.35 per share, compared to $2,139,000 in H1 2023. The improvement was attributed to productivity initiatives and a rebounding net interest margin. Total assets reached $715,959,000, with loans at $504,385,000 and deposits at $607,632,000. The company's net interest margin improved to 3.27% in Q2 2024. A dividend of $0.66 per share was declared, payable August 29, 2024. The company also repurchased 300 shares at an average price of $175.55 during Q2 2024.

Positive

• Net income increased to $1,520,000 in Q2 2024, up 27.7% from Q2 2023
• H1 2024 net income grew to $2,690,000, a 25.8% increase year-over-year
• Total deposits increased by $25.9 million during the quarter, reaching $607,632,000
• Net interest margin improved to 3.27% in Q2 2024 from 3.20% in Q1 2024
• Total shareholders' equity increased to $55,179,000 from $50,422,000 a year ago

Negative

• Total loans decreased by $4.8 million during the quarter
• Net interest margin slightly down compared to 3.30% in Q2 2023
• Potential headwinds related to commercial real estate loans noted by CEO

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 $1,520,000, 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	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240724411109/en/

Randal J. Rabe, EVP, Chief Financial Officer

Phone: 202-546-8000

Email: rrabe@nationalcapitalbank.bank

Source: National Capital Bancorp, Inc.

FAQ

What was National Capital Bancorp's (NACB) net income for Q2 2024?

National Capital Bancorp (NACB) reported a net income of $1,520,000, or $5.28 per share, for the second quarter of 2024.

How did NACB's H1 2024 performance compare to H1 2023?

For the first half of 2024, NACB reported net income of $2,690,000 ($9.35 per share), compared to $2,139,000 ($7.44 per share) for the same period in 2023, showing significant improvement.

What was National Capital Bancorp's (NACB) net interest margin in Q2 2024?

NACB's net interest margin was 3.27% during the second quarter of 2024, showing an improvement from 3.20% in the first quarter of 2024.

What dividend did National Capital Bancorp (NACB) declare for Q2 2024?

National Capital Bancorp declared a dividend of $0.66 per share for shareholders of record as of August 15, 2024, payable on August 29, 2024.

How many shares did National Capital Bancorp (NACB) repurchase in Q2 2024?

During the quarter ended June 30, 2024, National Capital Bancorp repurchased 300 shares at an average share price of $175.55.