The National Capital Bank of Washington Reports First Quarter Earnings

Rhea-AI Summary

The National Capital Bank of Washington (NCB) reported a net income of $955,000, or $3.34 per common share, for Q1 2021, up from $238,000, or $0.83 per share in Q1 2020. This improvement is attributed to active lending in the SBA Paycheck Protection Program (PPP), contributing to total assets of $630 million and loans of $479 million. Deposits rose to $551 million, reflecting strong support for clients following the pandemic. A corporate reorganization on April 23, 2021 aims to enhance operational flexibility for future growth.

Positive

• Net income increased to $955,000 from $238,000 year-over-year.
• Total assets rose to $630 million, up from $532 million in Q1 2020.
• Loans increased by $38.6 million during the quarter, totaling $479 million.
• Deposits grew by $19.3 million during the quarter, reaching $551 million.
• New PPP loans exceeded $40 million in Q1 2021.

Negative

• Net interest margin decreased to 3.33% from 3.35% in Q1 2020.

The National Capital Bank of Washington (NCB) reported net income of $955,000, or $3.34 per common share, for the three months ended March 31, 2021, compared to net income of $238,000 or $0.83 per common share, for the quarter ended March 31, 2020. The prior year quarter included a $584,000 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 $630,187,000 on March 31, 2021 compared to $532,285,000 on March 31, 2020. Total loans of $479,407,000 on March 31, 2021 increased by $38.6 million during the quarter and have increased from $385,032,000 the year before. Total deposits increased during the quarter by $19.3 million to $551,758,000 on March 31, 2021 and have increased from $452,405,000 the year before. The quarterly and year-over-year increases in loans were primarily a result of the Bank’s active participation in the PPP which resulted in new loans exceeding $40 million in the current program and exceeding $104 million when combined with the 2020 program, with a remaining combined balance of $83 million on March 31, 2021. The Bank has collected $3.7 million of processing fees on these loans, which were deferred and are being recognized in income over the life of the loans; the Bank recognized $432,000 in interest income during the first quarter of 2021 and had remaining deferred fees of $2.4 million on March 31, 2021. The Bank’s net interest margin remained under pressure at 3.33% during the first quarter of 2021 compared to 3.26% in the fourth quarter of 2020 and 3.35% in first quarter of 2020.

Total shareholders’ equity increased to $52,758,000 on March 31, 2021 from $50,597,000 a year ago. The increase resulted primarily from retained earnings for the past twelve months. For the quarter ended March 31, 2021 the return on average assets and return on average equity was 0.61% and 7.13%, respectively.

Richard B. (Randy) Anderson, Jr. President and Chief Executive Officer said, “The reopening of PPP in January allowed the Bank to continue its commitment to support our business and non-profit customers operations as they recover from the impacts of the COVID-19 pandemic. These new PPP loans also contributed to good loan growth for the quarter, additional deferred fees to be recognized in future quarters and new opportunities to expand our commercial client base.” Anderson continued, “We are also pleased to report that upon obtaining shareholder and regulatory approvals, a corporate reorganization took place on April 23, 2021 whereby all Bank shareholders exchanged shares on an identical basis for shares in a newly formed bank holding company, National Capital Bancorp, Inc. This new organizational structure will provide more operating and capital flexibility for the Bank to support our continued growth.”

The National Capital Bank of Washington 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 Bank’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 Bank’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 Bank to effectively manage its growth and results of regulatory examinations, among other factors. The foregoing list of important factors is not exclusive.

The National Capital Bank of Washington
Financial Highlights
(In thousands, except share data)		Three Months Ended
(Unaudited)		March 31
Condensed Statement of Income:		2021		2020
Interest income		$5,137		$4,930
Interest expense		201		651
Net interest income		4,936		4,279
Provision (reversal) for loan losses		145		654
Net interest income after provision		4,791		3,625
Non-interest income		698		502
Non-interest expense		4,230		3,826
Income before taxes		1,258		301
Income tax provision		303		63
Net income		$955		$238
Share Data:
Weighted avg no. of shares outstanding		286,057		285,822
Period end shares outstanding		286,057		286,057
Per Common Share Data:
Net income		$3.34		$0.83
Closing Stock Price		$178.85		$193.90
Book Value		$184.43		$176.88
Profitability Ratios, Annualized:
Return on average stockholders' equity		7.13%		1.90%
Return on average total assets		0.61%		0.18%
Average equity to average total assets		8.61%		9.39%
Condensed Balance Sheets:		March 31		December 31		March 31
		2021		2020		2020
Assets
Cash and equivalents		$14,954		$31,009		$19,492
Securities, available for sale		112,774		122,130		109,541
Loans, held for sale		2,194		1,444		834
Loans, held in portfolio		479,407		440,819		385,032
Allowance for loan losses		(6,160)		(6,111)		(4,682)
Premises and equipment, net		8,378		8,558		5,991
Bank owned life insurance		12,230		12,174		11,990
Other assets		6,410		5,271		4,089
Total assets		$630,187		$615,294		$532,285
Liabilities and stockholders' equity
Deposits		$551,758		$532,444		$452,405
Securities sold under agreement to repurchase		5,853		4,782		7,094
FHLB advances		0		0		20,000
Paycheck Protection Program Liquidity Facility		16,522		20,795		0
Other liabilities		3,296		3,825		2,189
Stockholders' equity		52,758		53,449		50,597
Total liabilities and stockholders' equity		$630,187		$615,294		$532,285
Other Data:
Non-performing loans to total loans (1)		0.27%		0.32%		0.04%
Allowance to total loans		1.29%		1.39%		1.22%
Net charge-offs (recoveries) to average loans		0.08%		0.02%		0.07%
Net interest margin for the quarter		3.33%		3.26%		3.35%
Net interest margin for the year		3.33%		3.29%		3.35%
(1) NPL's exclude accruing TDR's

 

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FAQ

What were NACB's earnings for Q1 2021?

NACB reported net income of $955,000, or $3.34 per common share, for Q1 2021.

How did NACB's total assets change year-over-year?

NACB's total assets increased to $630 million as of March 31, 2021, from $532 million a year earlier.

What impact did the PPP have on NACB's loans?

NACB's loans increased by $38.6 million during Q1 2021, significantly driven by its participation in the PPP.

What is the current net interest margin for NACB?

NACB's net interest margin was reported at 3.33% for the first quarter of 2021.

What corporate changes occurred at NACB in April 2021?

NACB underwent a corporate reorganization on April 23, 2021, creating a new holding company, National Capital Bancorp, Inc.