National Capital Bank of Washington Named “Strongest” Bank in Washington, DC

The National Capital Bank of Washington (NCB) announced today that Weiss Ratings, the nation�s only independent provider of ratings and analyses covering the financial services industry, awarded them an A+ rating for safety and named the bank among the �20 Strongest Banks and Thrifts� in the nation. NCB stands alone as the only bank in the Washington, DC, metropolitan area to receive this rating.

�We have labored hard over many years to maintain the integrity and superior capital structure of our bank. It�s rewarding to have this kind of acknowledgement of our efforts,� explains James M. Didden, president of National Capital Bank of Washington. �We�ve had 120 years of consecutive positive earnings and dividends to our shareholders. Last year was one of our top performing years, despite the tumultuous banking environment. Unlike many of our competitors, we have money available and ready to lend to applicants with good credit. Our basic loan underwriting standards have not changed in many years and we avoid the trendy types of products that have caused trouble in our industry.�

According to Weiss�s rating definitions, an A rating means, �The institution offers excellent financial security. It has maintained a conservative stance in its business operations and underwriting practices as evidenced by its strong equity base, top-notch asset quality, steady earnings, and high liquidity. While the financial position of any company is subject to change, we believe that this institution has the resources necessary to deal with severe economic conditions.� A plus sign indicates that the institution is at the upper end of the letter grade rating.

Weiss Safety Ratings are assigned based on a complex analysis of hundreds of factors that fall into five indexes: capitalization, asset quality, profitability, liquidity and stability. A good letter grade requires consistency across all areas. A weak score in any index can result in a low rating because insolvency can be caused by weak factors in any of these areas. Weiss defines these indexes as follows:

Capitalization Index gauges capital adequacy in terms of each institution�s cushion to absorb future operating losses under various potential business and economic scenarios, as they may impact the company�s net interest margin, securities� values, and the collectability of its loans.

Asset Quality Index measures the quality of the company�s past underwriting and investment practices based on the estimated liquidation value of the company�s loan and securities portfolios.

Profitability Index measures the soundness of the company�s operations and the contribution of profits to the company�s financial strength. The profitability index is a composite of five sub-factors: 1) gain or loss on operations; 2) rates of return on assets and equity; 3) management of net interest margin; 4) generation of noninterest-based revenues; and 5) overhead expense management.

Liquidity Index values a company�s ability to raise the necessary cash to satisfy creditors and honor depositor withdrawals.

Stability Index integrates a number of sub-factors that affect consistency (or lack thereof) in maintaining financial strength over time. Sub-factors include 1) risk diversification in terms of company size and loan diversification; 2) deterioration of operations as reported in critical asset, liability, income and expense items, such as an increase in loan delinquency rates or a sharp increase in loan originations; 3) years in operation; 4) former problem areas where, despite recent improvement, the company has yet to establish a record of stable performance over a suitable period of time; and 5) relationships with holding companies and affiliates.

�There are other intangible factors besides capitalization and profitability which are not covered in the Weiss Ratings which make our bank a standout,� says Mr. Didden. �We pride ourselves on long-term, person-to-person customer relationships. Our senior officers, from our chairman on down, are all available in person or by telephone to our current banking customers and potential customers as well.�

The National Capital Bank of Washington was founded in 1889 and has been managed by the Didden family for 120 years. NCB has assets of $259 million and is headquartered on Capitol Hill with a second branch located in Friendship Heights. The bank has been recognized over the last decade with numerous accolades for its safety and soundness, exceptional performance, small business loans, and for being named one of the top banks and thrifts, a 100-year old small business of the year, and top commercial lender. NCB trades under the symbol NACB. For more information about NCB, go to www.ncbwash.com.

National Capital Bancorp (PK) (USOTC:NACB)
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