The National Capital Bank of Washington (NCB) reported net income of $238,000, or $0.83 per common share, for the three months ended March 31, 2020, compared to net income of $676,000 or $2.37 per share for the quarter ended March 31, 2019.  This 65% decrease in net income is due primarily to the Bank's aggressive response to the COVID-19 pandemic which included a significant increase in the Bank's allowance for loan loss.  While non-performing loans to total loans remains very low at 0.04% and the annual charge-off rate for loans during the first quarter of 2020 was also low at 0.07% of average loans, the Bank has prudently built up its allowance for loan losses by $584,000 during the first quarter. This adjustment was determined by performing an industry sector analysis of the Bank's loan portfolio and providing additional reserve on those sectors most at risk.

Total assets increased year-over-year to $532,285,000 at March 31, 2020 compared to $480,708,000 at March 31, 2019.  Total loans of $385,032,000 at March 31, 2020 remained relatively flat during the quarter but have increased from $340,745,000 the year before.  Total deposits increased during the quarter by $4.9 million to $452,405,000 at March 31, 2020 compared to $406,665,000 the year before.  The Bank's net interest margin remained under pressure during the quarter as a result of the steadily declining rates in the last half of 2019 along with the dramatic rate decreases in interest rates during March of 2020. Net interest margin decreased to 3.35% during the first quarter of 2020 compared to 3.40% in the fourth quarter of 2019 and 3.62% in first quarter of 2019. 

Total shareholders' equity increased to $50,597,000 at March 31, 2020 from $45,412,000 a year ago.  The increase resulted from retained earnings for the past twelve months along with an increase in the market value of the Bank's investment portfolio due to recent declines in longer-term interest rates.  For the quarter ended March 31, 2020 the return on average assets and return on average equity was 0.18% and 1.90%, respectively. 

Richard B. (Randy) Anderson, Jr. President and Chief Executive Officer said, "The economic impact of the COVID-19 pandemic on the DC Metro area became evident starting in March.  Although not yet impacting the Bank's loan portfolio, Management feels an aggressive approach is in order to prepare for a likely deterioration in the second quarter.  In addition to the increased reserve allocation a heightened attention and proactive risk-based approach will be focused on those business sectors most likely affected.  The goal will be to minimize the impact of this worldwide disruption on future operations and profitability."  Anderson continued "Another goal is to support our small business and non-profit customers to the best of our ability.  Towards this end the Bank has devoted maximum resources in support of the SBA Payroll Protection Program with over $50 million in loans processed since the program was launched on April 3, 2020."   

NCB also announced today that its Board of Directors has declared a dividend of $0.55 per share for shareholders of record as of May 15, 2020. The dividend payout of $157,331.35 on 286,057 shares is payable May 29, 2020.

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 most recently in 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, 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.