National Capital Bancorp, Inc. Reports Second Quarter Earnings

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.

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