Washington, DC, National Capital Bancorp, Inc. (the “Company”) (OTCID: NACB), the holding company for The National Capital Bank of Washington (“NCB” or the “Bank”), reported net income of $1,053,000, or $0.92 per common share, for the three months ended March 31, 2026, compared to net income of $1,673,000, or $1.46 per common share, for the three months ended March 31, 2025. While strong revenue growth, $384,000 of which came from a one-time bank owned life insurance payout, and effective expense management aided financial performance for the first quarter of 2026, the quarter was negatively affected by an increase in provision for credit losses due to an increase in specific reserves and charge-offs on new and existing non-performing loans.
Total assets ended the quarter at $735,346,000 on March 31, 2026. Total loans of $530,197,000 on March 31, 2026, reflected a decrease of $11.7 million (-2.2%) during the quarter and an increase of $9.1 million (1.7%) over the past twelve months. Total deposits decreased $27.5 million (-4.1%) during the quarter to $650,663,000 on March 31, 2026, and have increased $31.1 million (5.0%) over the past twelve months. The Company has focused on balanced growth over the past year, with deposit growth providing funding for new loan opportunities. As a result, the Company continues to experience a relatively low reliance on wholesale funding sources and maintains strong levels of cash and available secured borrowing capacity to meet the financing and cash flow needs of our client base as well as to pursue desirable new relationship opportunities.
The Company’s net interest margin of 3.51% during the first quarter of 2026 was down slightly compared with 3.55% in the fourth quarter of 2025 as well as when compared with 3.65% in the first quarter of 2025. The decrease quarter over quarter and year over year primarily reflects lower interest income associated with an increase in non‑accrual loans. Margin performance remains supported by a favorable asset mix and a strong core deposit franchise.
Total shareholders’ equity increased to $68,534,000 as of March 31, 2026, from $61,287,000 a year ago due primarily to the retained earnings for the past twelve months. For the quarter ended March 31, 2026, the return on average assets and return on average equity were 0.57% and 6.19%, respectively.
The Company experienced a decrease in the level of non-performing loans to 2.24% of total loans on March 31, 2026, compared to 2.55% on December 31, 2025, which consists primarily of five non accrual loans with two separate borrowers. Four of the loans are CRA-eligible multi family loans, which participate in the DC Housing Voucher Program, while the fifth loan is a DC multifamily construction and development loan. All five loans have been individually evaluated for specific reserves using recent appraisals. The Company has recorded partial charge-offs on these loans of $3.6 million, including $2,249,000 in the first quarter of 2026. The allowance for credit losses to total loans was 1.16% on March 31, 2026, compared with 1.19% on March 31, 2025, while the annualized net charge-off ratio was 1.68% for the first quarter 2026. The Bank is continuing to work multiple paths to cost-effectively resolve these problem loans.
“While the credit environment remains challenging, particularly within the multi family housing sector of the DC market, we are actively addressing asset quality issues and working towards resolutions with our borrowers,” said Jimmy Olevson, President and Chief Executive Officer of the Bank. “We remain focused on balanced growth across loans and deposits while maintaining a conservative underwriting approach and low reliance on wholesale funding as we continue to support our clients and community.”
The Company also announced today that its Board of Directors has declared a dividend of $0.26 per share for shareholders of record as of May 15, 2026. The aggregate dividend payout of $299,621 on 1,152,388 shares is payable May 29, 2026.
In February 2026, the Board of Directors approved a share repurchase program of up to $900,000 of the Company’s common stock, allowing for purchases from time to time in open market or private transactions with an expiration date of February 28, 2027. This program replaced the $600,000 share repurchase program approved in 2025. There were no share repurchases during the quarter ended March 31, 2026.
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 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 by use of words such as “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence. 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. These factors include, among others, the concentration of our business in the Washington, D.C. metropolitan area and the effect of changes in the economic, political and environmental conditions on this market; the adequacy of our allowance for credit losses; liquidity, interest rate and operational risks associated with our business; inflation and changes in interest rates that may reduce our margins or reduce the fair value of financial instruments; changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; geopolitical conditions, including trade restrictions and tariffs, and acts or threats of terrorism and/or military conflicts, or actions taken by the U.S. or other governments in response to trade restrictions and tariffs, and acts or threats of terrorism and/or military conflicts; technological risks and developments, and cyber threats, attacks, or events; our ability to effectively manage growth; and results of examination of us by our regulators, including the possibility that our regulators may require us to increase our allowance for credit losses or to write-down assets or take similar actions. The foregoing list of important factors is not exclusive. Accordingly, readers should not place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
