The National Capital Bank of Washington Reports First Quarter Earnings

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.

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