National Capital Bancorp, Inc. Releases Third Quarter 2024 Earnings

National Capital Bancorp, Inc. Reports Third Quarter Earnings, Quarterly Cash Dividend and Four-For-One Stock Split

Washington, DC, 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 $1,726,000, or $6.00per common share, for the three months ended September 30, 2024, compared to net income of $1,136,000, or $3.95 per common share, for the quarter ended September30, 2023. For the nine months ended September30, 2024, the Company reported net income of $4,416,000, or $15.35 per common share, compared to $3,275,000, or $11.39 per common share, for the nine months ended September 30, 2023. The earnings improvement was primarily attributable to the results of productivity improvement and cost-reduction initiatives that have taken place since early 2023 along with higher net interest income driven by continued growth in average earning assets.

Total assets ended the quarter at $718,249,000on September 30, 2024. Total loans of $519,315,000on September 30, 2024 reflected an increase of $14.9 million during the quarter and an increase of $42.2 million (8.8%) over the past twelve months. Total deposits decreased $2.3 million during the quarter to $605,345,000 on September 30, 2024 but have increased $44.4million (7.9%) over the past twelve months. The Company has focused on balanced growth over the past year with deposit growth providing the 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 available secured borrowing capacity to meet the financing and cash flow needs of our client base as well as continue to pursue desirable new relationship opportunities.

The Company's net interest margin of 3.27%during the third quarter of 2024 was stable compared with 3.27% in the second quarter of 2024 and was up slightly compared with 3.23% in the third quarter of2023. Our strong mix of core deposits has allowed the Company to maintain a more stable net interest margin during the significant rate increase cycle experienced since early 2022.

Total shareholders' equity increased to $58,606,000on September 30, 2024 from $49,542,000 a year ago due primarily to the retained earnings for the past twelve months along with the change in market valuation of the investment portfolio. For the nine months ended September 30, 2024, the annualized return on average assets and return on average equity was 0.83% and 10.68%,respectively.

"Our strong earnings results this quarter are testament to our balanced approach to loan and deposit growth, complemented by our continued focus on generating non-interest income," said Bank CEO Jimmy Olevson. Olevson continued "While we recognize there are economic challenges ahead, we are pleased to see continued improvement in our efficiency ratio, which reflects the dedication and hard work of our outstanding team. Their commitment to excellence continues to drive our success and deliver increasing value to our shareholders."

The Company also announced today that its Board of Directors has declared a dividend of $0.66 per share for shareholders of record as of November 12, 2024. The dividend payout of $189,932.16 on 287,776 shares is payable November 26,2024.

In addition, the Company also announced that its Board of Directors has declared a four-for-one stock split for shareholders of record as of November 12, 2024 with an effective date of November 26, 2024. The stock split will be distributed in the form of a stock dividend, which will result in the issuance of three new shares for each outstanding share of the Company's common stock. Trading is expected to begin on a post-stock split adjusted basis at market open on November27, 2024. The additional shares will be issued in book-entry form.

"We are excited to announce approval of the four-for-one stock split, which we believe will make investment in our stock more affordable and attractive to a broader group of investors," said Bank CEO Jimmy Olevson.

In April of2024, the Board of Directors approved a share repurchase program of up to$300,000, allowing for purchases from time to time, in open market or private transactions with a program expiration date of February 28, 2025. During the quarter ended September 30, 2024, the Company did not make any share repurchases.

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.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 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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