When National Capital Bank was founded in 1890 it was the only bank on Capitol Hill.

One hundred years later, many Capitol Hill residents still think of it as the only bank on Capitol Hill -- even though it has no automatic teller machine.

With only one branch and nearly 50 employees, National Capital is a bright spot in Washington's banking industry. It's conservative credit policies have led it through one of the toughest times in recent history for area banking institutions and left it in much the same position it was in at the end of the Great Depression -- with lots of money in the vault.

Compared with other area financial institutions, such as American Security Bank and Riggs National Bank, each with about $6 billion in assets, National Capital is a small bank. At the end of 1990 its assets totaled $88.5 million. But it also had cash reserves at the end of last year of almost $18 million -- roughly four times the government's minimum capital requirement for a bank its size. It lost only $3,000 on a total of $46 million in loans in 1990 while turning a profit of $1.4 million.

"Our last year was one of our best years ... it was no phenomenal growth, but when the other banks were in trouble, we had no trouble at all," said George A. Didden, Jr., the bank's 81-year-old president and chief executive of 48 years. "It was just the time when conservatism pays off. The go-go bankers put themselves in serious trouble."

Didden works with 13 other officers at the bank, all of whom have been with the institution for longer than 20 years. All four of his sons are vice presidents at the bank.

Didden said he operates National Capital on the theory of "a preferred rate to preferred risk." It does not pay the most competitive interest rates on savings accounts and certificates of deposit, but the interest rates it charges on loans and credit cards are substantially lower than the standard market rates.

"We're pretty tight on credit, but I've always believed that people who pay their bills should not have to pay for the people who don't," Didden said. And he seems to remember every bad loan National Capital ever made as well as the story behind it. Didden said he believes the stories behind bad loans are important because sometimes people suffer misfortunes that no banker could predict.

"Once I had a good customer who was a good insurance man with a good income and the loan went bad," he said. "But who could tell? He ran off with a red-head secretary and abandoned his wife and his business and I never could collect the loan. Those things happen sometimes."

Although National Capital's customers generally either work or live on Capitol Hill, it has a core of depositors who travel across town or in from the suburbs to bank there, as well as "customers from all over the world who have passed through Capitol Hill at one point or another and have kept their accounts," said Didden's eldest son, George Didden III.

"A lot of people have asked us to open an office downtown, but I think ... growth inclines to weaken the bank," the older Didden said.

"It would broaden our deposit base, but then it takes a lot of money to open and support a {second branch} -- at least for the first ten years."

Depositors said they like the bank's friendly employees, family-run atmosphere and conservative practices -- pretty much in that order.

And by and large, they don't seem to mind that National Capital does not have an automatic teller machine.

About seven years ago Didden sent questionnaires to depositors asking whether they would like a cash machine or a manned window that was open longer hours on the weekdays and on Saturdays.

The response was clear: no cash machine.

Now that cash machines are so prevalent, though, there are those customers who think National Capital should give in.

"I'd like to see {a cash machine} -- I think it would be a plus," said Betty A. Harris, who works for the Library of Congress and has banked with National Capital for 19 years.

"I would never leave because of it, though," she said. "There's not too much that could turn me off from this bank."