National Capital Bancorp, Inc. Reports Third Quarter Earnings

Rhea-AI Summary

National Capital Bancorp, Inc. reports net income of $1,136,000 for Q3 2023, compared to $1,285,000 in Q3 2022. Total assets increased to $682,002,000. Total loans increased by $12.0 million during the quarter and $52.0 million on a year-to-date basis. Total deposits remained stable at $560,930,000. The company's net interest margin was 3.23% in Q3 2023. Total shareholders' equity increased to $49,542,000. The company declared a dividend of $0.60 per share.

Positive

• National Capital Bancorp, Inc. reports net income of $1,136,000 for Q3 2023, an decrease of 11.6% compared to the same quarter last year. Total assets increased to $682,002,000, a positive sign of growth. Total loans increased by $12.0 million during the quarter and $52.0 million on a year-to-date basis, indicating strong loan growth. The company's net interest margin was 3.23% in Q3 2023, an improvement from the previous year. Total shareholders' equity increased to $49,542,000, a positive indicator of financial stability. The company also declared a dividend of $0.60 per share, providing a return to shareholders.

Negative

• None.

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 $1,136,000, or $3.95 per common share, for the three months ended September 30, 2023, compared to net income of $1,285,000 or $4.47 per common share, for the quarter ended September 30, 2022. For the nine months ended September 30, 2023, the Company reported net income of $3,275,000, or $11.39 per share, compared to $3,233,000, or $11.26 for the nine months ended September 30, 2022. A recovery of provision for credit losses in the third quarter of the prior year was the leading factor in the decrease in Company profitability in the third quarter of 2023. Improvement in asset mix through continued loan growth along with enhanced expense control during the quarter helped to offset pressure from increased funding costs. Loan quality remains pristine with no non-performing loans as of September 30, 2023.

Total assets increased during the quarter to $682,002,000 on September 30, 2023. Total loans of $477,119,000 on September 30, 2023, increased by $12.0 million during the quarter and have increased $52.0 million on a year-to-date basis. Total deposits remained fairly stable during the quarter at $560,930,000 on September 30, 2023, and have decreased $10.8 million (1.9%) 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 3.23% during the third quarter of 2023 was down compared with 3.30% in the second quarter of 2023 but did improve from 3.08% in the third 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 $49,542,000 on September 30, 2023, from $45,925,000 a year ago due primarily to the retained earnings for the past twelve months. For the nine months ended September 30, 2023, the return on average assets and return on average equity was 0.67% and 8.70%, respectively.

“We continue to focus on growing core deposits while recognizing the pressure on our net interest margin given the rate environment,” said Jimmy Olevson, President and Chief Executive Officer of the Bank. Olevson continued, “Additionally, our loan operations team successfully launched the new FCM Collaboration Hub, (the hub), an FIS platform with built-in efficiencies to accelerate the loan onboarding process. The hub is a client accessible secure portal that is fully integrated with our core processor that reduces manual work, improves the client experience while also enhancing the Bank’s ability to manage our growing loan portfolio."

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 November 16, 2023. The dividend payout of $172,650.00 on 287,750 shares is payable November 30, 2023.

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								Nine Months Ended
(Unaudited)		September 30								September 30
Condensed Statement of Income:		2023				2022				2023				2022
Interest income		$	7,219			$	5,786			$	20,827			$	15,965
Interest expense			2,092				537				5,191				1,182
Net interest income			5,127				5,249				15,636				14,783
Provision for (recovery of) credit losses			0				(194	)			0				(650	)
Net interest income after provision			5,127				5,443				15,636				15,433
Non-interest income			734				623				2,200				1,906
Non-interest expense			4,349				4,368				13,483				13,095
Income before taxes			1,512				1,698				4,353				4,244
Income tax provision			376				413				1,078				1,011
Net income		$	1,136			$	1,285			$	3,275			$	3,233
Share Data:
Weighted avg no. of shares outstanding			287,750				287,399				287,605				287,041
Period end shares outstanding			287,750				287,399				287,750				287,377
Per Common Share Data:
Net income		$	3.95			$	4.47			$	11.39			$	11.26
Closing Stock Price										$	155.00			$	175.00
Book Value										$	172.17			$	159.80
Profitability Ratios, Annualized:
Return on average stockholders' equity			8.95	%			10.50	%			8.70	%			8.58	%
Return on average total assets			0.69	%			0.73	%			0.67	%			0.63	%
Average equity to average total assets			7.73	%			6.97	%			7.65	%			7.32	%

Condensed Balance Sheets:		September 30				December 31				September 30
		2023				2022				2022
Assets
Cash and equivalents		$	42,317			$	36,954			$	60,125
Securities, available for sale			64,621				84,714				92,704
Securities, held to maturity			68,316				72,344				73,900
Loans, held for sale			638				0				0
Loans, held in portfolio			477,119				425,149				417,719
Allowance for credit losses			(5,170	)			(5,069	)			(5,310	)
Premises and equipment, net			7,227				7,547				7,694
Bank owned life insurance			14,324				12,610				12,555
Other assets			12,610				9,907				10,593
Total assets		$	682,002			$	644,156			$	669,980
Liabilities and stockholders' equity
Deposits		$	560,930			$	571,751			$	597,750
Securities sold under agreement to repurchase			4,281				7,274				9,476
FHLB advances and other borrowings			50,000				0				0
Subordinated notes, net of issuance cost			13,720				13,679				13,665
Other liabilities			3,529				3,124				3,164
Stockholders' equity			49,542				48,328				45,925
Total liabilities and stockholders' equity		$	682,002			$	644,156			$	669,980
Other Data:
Non-performing loans to total loans			0.00	%			0.05	%			0.08	%
Allowance to total loans			1.08	%			1.19	%			1.27	%
Net charge-offs (recoveries) to average loans			0.00	%			0.00	%			0.00	%
Loan-to-deposit ratio			85.06	%			74.36	%			69.88	%
Net interest margin for the quarter			3.23	%			3.51	%			3.08	%
Net interest margin for the year			3.33	%			3.12	%			2.99	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231025220804/en/

Randal J. Rabe, EVP, Chief Financial Officer

Phone: 202-546-8000

Email: rrabe@nationalcapitalbank.bank

Source: National Capital Bancorp, Inc.

FAQ

What was the net income for Q3 2023?

The net income for Q3 2023 was $1,136,000.

How much did total assets increase?

Total assets increased to $682,002,000.

What was the net interest margin in Q3 2023?

The net interest margin in Q3 2023 was 3.23%.

What was the dividend declared by the company?

The company declared a dividend of $0.60 per share.