WASHINGTON, Jan. 29, 2020 /PRNewswire/ -- The National Capital Bank of Washington (NCB) reported net income of $495,000 or $1.73 per common share, for the three months ended December 31, 2019, compared to net income of $814,000 or $2.86 per share for the quarter ended December 31, 2018. The quarterly results were negatively impacted by $287,000 of deconversion costs incurred in connection with the planned conversion of the Bank's core processing system, scheduled for the second quarter of 2020. These deconversion costs, which had an impact on quarterly net income of $214,000, or $0.75 per share, will be substantially offset by vendor credits to be received from the Bank's new core processing vendor in 2020. For the year ended December 31, 2019, NCB reported net income of $2,552,000 or $8.94 per share, compared to $2,647,000 or $9.23 for the year ended December 31, 2018. Credit quality continued to be strong as non-performing loans to total loans decreased from 0.16% to 0.06% over the last year.
The Bank achieved a growth milestone during 2019 as total assets increased to $523,312,000 at December 31, 2019 compared to $466,589,000 at December 31, 2018. Total loans of $383,508,000 at December 31, 2019 increased 15.9% compared to $330,851,000 the year before. Total deposits of $447,470,000 at December 31, 2019 were up 13.0% compared to $396,144,000 the year before. The increase is partially due to the successful launch of the Bank's new Fox Hill branch opened in June in Bethesda, Maryland. The Bank's net interest margin remained under pressure during the quarter as a result of the recent decreases in interest rates. Net interest margin decreased from 3.64% in the first half of 2019 to 3.42% in the third quarter and 3.40% in the fourth quarter of 2019. The Bank's net interest margin for the full year of 2019 of 3.52% was comparable to full-year 2018 net interest margin of 3.55%.
Total shareholders' equity increased to $48,873,000 at December 31, 2019 from $43,738,000 at year-end 2018. The year-over-year increase resulted from retained earnings along with an increase in the market value of the Bank's investment portfolio due to declines in longer-term interest rates. For the year ended December 31, 2019 the return on average assets and return on average equity was 0.52% and 5.44%, respectively.
Richard B. (Randy) Anderson, Jr. President and Chief Executive Officer said, "During the fourth quarter Bank management made the decision to begin implementation of a core processing system conversion to the FIS Horizon platform. Additionally, related decisions were made to add Salesforce, a sales and relationship management tool and to convert to Verafin, a cloud-based financial crime management solution supporting the Bank's BSA program administration. As a result, deconversion costs relating to the current core processor along with consulting and other implementation fees were recognized impacting fourth quarter net income. The conversion is scheduled to be completed early in the second quarter of 2020 enabling the Bank to recover the deconversion costs from vendor credits and offer a number of new products and services in addition to improving operating efficiencies. We are excited about the potential for future growth the Horizon platform and other system enhancements will create." Anderson continued, "Of note was a pickup in growth during the fourth quarter with total loans increasing $25.6 million and total deposits continuing a banner year increasing an additional $10.6 million."
NCB also announced today that its Board of Directors has declared a dividend of $.55 per share for shareholders of record as of February 14, 2020. The dividend payout of $157,125.10 on 285,682 shares is payable February 28, 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 by the use of 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.