FVCBankcorp, Inc. (NASDAQ:FVCB) (the “Company”) today reported
fourth quarter 2018 net income of $1.4 million, or $0.10 diluted
earnings per share, compared to $1.0 million, or $0.08 diluted
earnings per share, for the quarterly period ended December 31,
2017. For the year ended December 31, 2018, net income was $10.9
million, or $0.85 per diluted share, compared to $7.7 million, or
$0.67 per diluted share, for 2017.
On October 12, 2018, the Company completed its acquisition of
Colombo Bank (“Colombo”), and incurred merger-related expenses of
$2.7 million and $3.3 million, respectively, for the three and
twelve months ended December 31, 2018, respectively. In addition,
the Company sold $10.9 million in securities available-for-sale at
a loss of $462 thousand and a book yield of approximately 1.50%,
and reinvested those proceeds into higher yielding securities at
approximately 3.20%. Excluding merger-related expenses and loss on
sales of securities available-for-sale, net of tax, earnings for
the three and twelve months ended December 31, 2018 were $3.9
million and $13.9 million, respectively. Excluding the effect of
$2.0 million in write-downs of deferred tax assets due to enactment
of the Tax Cut and Jobs Act (“TCJA”) and $704 thousand in gain on
foreclosure of other real estate owned (“OREO”), net of tax, during
the fourth quarter of 2017, earnings for the three and twelve
months ended December 31, 2017 were $2.3 million and $9.0 million,
respectively.
Diluted earnings per share excluding the above adjustments for
the three and twelve months ended December 31, 2018 was $0.26 and
$1.08, respectively, compared with $0.19 and $0.78, respectively,
for the three and twelve months ended December 31, 2017. The
Company believes the reporting of non-GAAP earnings to exclude
merger-related expenses, losses on sales of securities, gain on
foreclosure of OREO, and the tax impacts from the TCJA, are more
reflective of the Company’s operating performance and future
performance (“Operating Earnings”). On a GAAP basis, return on
average assets was 0.42% and return on average equity was 3.65% for
the fourth quarter of 2018. For the comparable December 31, 2017
period, return on average assets was 0.40% and return on average
equity was 4.06%. On an Operating Earnings basis, return on average
assets and return on average equity for the three months ended
December 31, 2018 was 1.16% and 10.07%, respectively. On an
Operating Earnings basis, return on average assets and return on
average equity for the year ended December 31, 2018 was 1.20% and
11.87%, respectively.
Selected Highlights
- Strategic Bank Acquisition. On
October 12, 2018, the Company completed its acquisition of Colombo
and completed the systems conversions process. Quarterly income and
expenses include the former Colombo operations since the October
12, 2018 combination.
- Record Operating Earnings.
Operating Earnings increased $1.6 million, or 69%, to $3.9 million
for the fourth quarter of 2018 as compared to the same 2017 period.
For the year ended December 31, 2018, Operating Earnings increased
$4.9 million, or 54%, compared to 2017.
- Improved Tangible Book Value.
Tangible book value per share at December 31, 2018 was $10.93, a
21% increase from $9.03 at December 31, 2017.
- Continued Loan Growth. Total
loans, net of deferred fees, totaled $1.14 billion at December 31,
2018, an increase of $248.1 million, or 28%, from December 31,
2017. Excluding loans acquired from Colombo Bank, net loans
increased $115.8, or 13%. Excluding acquired loans, average loan
growth year-to-date 2018 was $134.8 million, or 17% of average
loans receivable for 2018, enhancing the Company’s loan yield by 30
basis points for the year.
- Sound Asset Quality. Asset
quality remains strong with nonperforming loans and loans past due
90 days or more as a percentage of total assets being 0.28% at
December 31, 2018, compared to 0.07% at December 31, 2017.
Nonperforming loans and loans past due 90 days or more totaled $3.9
million at December 31, 2018, of which $870,000 were related to the
acquisition.
- Strong Core Deposit Growth.
Total deposits increased $234.3 million, or 25%, from December 31,
2017 to December 31, 2018. Total deposits, excluding acquired
deposits and wholesale deposits, increased $127.1 million
year-over-year, or 16%.
- Improved Efficiency Ratio.
Efficiency ratio for the three months ended December 31, 2018 was
75.7%, and excluding merger-related expenses and losses on
securities, the efficiency ratio improved to 54.3% for the quarter
and 55.1% for 2018 year.
“Fourth quarter 2018 was another milestone for our Company as we
closed our acquisition of Colombo Bank and completed the systems
integration within a five month period of time. As our physical
footprint has expanded into Maryland and the District of Colombia,
we are attracting new clients and expanding existing relationships,
introducing them to our products and technology, which augments the
customer experience. Additionally, during the fourth quarter
following our over-subscribed IPO, we were added to the Russell
2000® Index, which will enhance our trading liquidity and investor
visibility. We are thrilled with the opportunities we see for our
Company as we enter 2019,” stated David W. Pijor, Chairman and
CEO.
Acquisition of Colombo Bank
On October 12, 2018, the Company completed its previously
announced acquisition of Colombo. In connection with the
transaction, 763,051 shares of the Company’s common stock were
issued to Colombo’s shareholders, along with $18.3 million in cash.
The Company added $199.5 million of total assets to its balance
sheet, including $142.6 million of loans, net of negative $3.0
million of fair value adjustments, and $138.3 million of deposits,
including a negative $327 thousand fair value adjustment to the CD
portfolio. Additionally, the Company recorded $6.9 million of
goodwill and $2.0 million of core deposit intangibles. During the
year, the Company incurred legal and accounting costs, contract
termination expenses, system conversion and integration expenses,
plus employee retention and severance payments related to the
acquisition. As of December 31, 2018, all merger-related expenses
have been recognized and the Company has implemented cost savings
in excess of the 35% anticipated for the merger.
Balance Sheet
Total assets increased to $1.35 billion compared to $1.05
billion as of December 31, 2018 and 2017, respectively, an increase
of $298.7 million, or 28%. Loans receivable, net of deferred fees,
totaled $1.14 billion as of December 31, 2018, compared to $888.7
million as of December 31, 2017, a year-over-year increase of
$248.1 million, or 28%. Excluding the loans acquired from Colombo,
loans grew $115.8 million, or 13% year-over-year, and average loans
grew $134.8 million, or 17%. Excluding the loans acquired from
Colombo, loans increased $25.7 for the quarter, or 12% on an
annualized basis, and average loans grew $26.2 million, or 11% on
an annualized basis. Mr. Pijor added, “We consider average loan
growth a better measure of the loan portfolio growth, as it
directly correlates with interest income growth. This becomes
increasingly important as the bank’s portfolio reflects higher
levels of C&I lending, including government contract lending,
in which balances outstanding can fluctuate at period ends.”
During the quarter, loan originations totaled approximately $95
million, of which $36 million funded during the quarter.
Construction loans and C&I loan closings represented a larger
portion of originations during the quarter ended December 31, 2018;
consequently a large amount of loan commitments were not funded by
year end. Further, during the quarter, the Company experienced
large payoffs outside of the expected loan repayments and
curtailments, totaling an additional $22 million, which resulted in
lower than expected net loan growth for the quarter.
Investment securities increased $7.6 million to $125.3 million
at December 31, 2018, compared to $117.7 million at December 31,
2017. During the fourth quarter of 2018, the Company sold $24.4
million in investment securities, including $13.5 million that were
acquired from Colombo, repositioning its securities portfolio to
replace lower yielding securities with market rate securities to
improve future incremental income.
Total deposits increased to $1.16 billion as of December 31,
2018 compared to $928.2 million as of December 31, 2017, an
increase of $234.3 million, or 25%. Total deposits, excluding
acquired deposits and wholesale deposits, increased $127.1 million
year-over-year, or 16%. Core deposits, which represent total
deposits less wholesale deposits, increased $265.4 million or 33%
year-over-year. Wholesale deposits totaled $84.4 million, or 7% of
total deposits at December 31, 2018, a decrease of $31.1 million
from December 31, 2017. Noninterest-bearing deposits increased 33%
to $233.3 million at December 31, 2018, or 20% of total deposits,
compared to $175.4 million at December 31, 2017. Excluding deposits
recorded at acquisition, noninterest bearing deposits increased 18%
year-over-year, or $38.8 million.
The Company has expanded its core deposit growth through the
acquisition of Colombo and five additional branches in Maryland and
the District of Columbia. The Company continues its
relationship-driven business strategy through enhanced cash
management products and a team based approach to building and
maintaining customer relationships.
Income Statement
Net interest income totaled $11.8 million, an increase of $3.4
million, or 40%, for the quarter ended December 31, 2018, compared
to the year ago quarter. The Company’s net interest margin was
3.59% and 3.43% for the quarters ended December 31, 2018 and 2017,
respectively. On a linked quarter basis, net interest income
increased $1.9 million, or 20%, and the margin increased 5 basis
points from 3.54% for the three months ended September 30, 2018, a
result of increases in yields on earning assets and strong growth
in core deposit mix offset by an increase in the cost of funds. The
contribution of the assets and liabilities from Colombo added
approximately $1.3 million to net interest income and 0.02% to the
margin for the fourth quarter.
Cost of deposits for the fourth quarter of 2018 was 1.16%,
compared to 0.87% for the fourth quarter of 2017, a 33%
year-over-year increase, reflecting the Company’s continued
management of its funding costs in a year where the Federal Reserve
hiked its benchmark short-term interest rate a total of 100 basis
points. Loan yields for the fourth quarter of 2018 were 5.22%
compared to 4.63% for the year ago quarter.
Noninterest income totaled $166 thousand and $1.5 million for
the quarters ended December 31, 2018 and 2017, respectively.
Noninterest income excluding loss on sales of securities and gain
on other real estate owned was $628 thousand and $397 thousand for
the respective quarters, an increase of 58%. Fee income from fees
on loans, service charges on deposits, and other fee income was
$519 thousand, an increase of 106% for the quarter ended December
31, 2018 compared to 2017. Included in loan income are fees from
interest rate swaps totaling $229 thousand for the fourth quarter
of 2018. In addition, the Colombo transaction added approximately
$31 thousand to non-interest income for the fourth quarter of 2018.
Losses on sales of securities available-for-sale totaled $462,000
during the fourth quarter of 2018 as a result of the aforementioned
reinvestment strategy. During the fourth quarter of 2017, the
Company recorded $1.1 million related to a gain on other real
estate owned.
Noninterest expense totaled $9.4 million for the quarter ended
December 31, 2018, compared to $4.9 million for the same
three-month period of 2017. Approximately $800 thousand of the
increase in noninterest expense from the year ago quarter is
attributable to expenses associated with Colombo’s former
operations, in addition to merger-related expenses of $2.7 million
for the three months ended December 31, 2018. During the year, the
Company strategically hired business development officers and back
office staff to support the Company’s growth plans, and retained
several employees from Colombo, including lending and branch
personnel. As a result, salary and compensation related expenses
increased $1.1 million, or 40%, for the quarter ended December 31,
2018, compared to the same three-month period of 2017. Occupancy
and equipment expense increased $195 thousand year-over-year
primarily as a result of the branch locations acquired from
Colombo. Professional fees increased slightly year-over-year as a
result of implementation costs related to regulatory compliance
over the Company’s internal control environment. Increases in data
processing and network administration, franchise taxes and other
operating expenses for the quarter ended December 31, 2018 compared
to the same three-month period of 2017 is primarily growth related.
On a linked quarter basis, noninterest expense excluding
non-recurring merger-related expenses and the noninterest expenses
associated with the addition of Colombo, increased 5% from the
three months ended September 30, 2018. The efficiency ratio for the
quarter ended December 31, 2018 was 75.7%, or 54.3% excluding
merger-related expenses and securities losses, a decrease from
55.9% from the year ago quarter.
Asset Quality
Asset quality remains strong as nonperforming loans and loans
ninety days or more past due totaled $3.9 million, or 0.28% of
total assets, of which $870 thousand related to acquired loans.
Performing troubled debt restructurings (“TDR”) decreased to
$203,000 at December 31, 2018, compared to $1.7 million at December
31, 2017. Nonperforming assets (including TDRs and other real
estate owned) to total assets was 0.61% and 0.58% at December 31,
2018 and 2017, respectively. The allowance for loan losses to total
loans was 0.81% at December 31, 2018, a decrease from 0.88% at
September 30, 2018. This ratio decrease was primarily the result of
the addition of $142.6 million of acquired loans. The allowance for
loan losses on the Company’s legacy portfolio was 0.92% of loan
outstanding at December 31, 2018. The increase in the legacy
allowance was primarily attributable to modest charge-offs and
specific reserves added to the allowance during the quarter.
About FVCBankcorp Inc.
FVCBankcorp, Inc. is the holding company for FVCbank, a
wholly-owned subsidiary of FVCB which commenced operations in
November 2007. FVCbank is a $1.35 billion Virginia-chartered
community bank serving the banking needs of commercial businesses,
nonprofit organizations, professional service entities, their
owners and employees located in the greater Baltimore, Washington
D.C., metropolitan areas. Locally owned and managed, FVCbank is
based in Fairfax, Virginia, and has 11 full-service offices in
Arlington, Ashburn, Fairfax, Manassas, Reston and Springfield,
Virginia, Washington D.C., and Baltimore, Bethesda, Rockville and
Silver Spring, Maryland.
For more information on the Company’s 2018 selected financial
information, please visit the Investor Relations page of
FVCBankcorp Inc.’s website, www.fvcbank.com.
Caution about Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements include, but are not limited, statements of
goals, intentions, and expectations as to future trends, plans,
events or results of the Company’s operations and policies and
regarding general economic conditions. In some cases,
forward-looking statements can be identified by use of words such
as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,”
“estimates,” “potential,” “continue,” “should,” and similar words
or phrases. These statements are based upon current and anticipated
economic conditions, nationally and in the Company’s market,
interest rates and interest rate policy, competitive factors, and
other conditions which by their nature, are not susceptible to
accurate forecast and are subject to significant uncertainty.
Because of these uncertainties and the assumptions on which this
discussion and the forward-looking statements are based, actual
future operations and results in the future may differ materially
from those indicated herein. These forward-looking statements are
based on current beliefs that involve significant risks,
uncertainties, and assumptions. Factors that could cause the
Company’s actual results to differ materially from those indicated
in these forward-looking statements, include, but are not limited
to, the risk factors previously disclosed in the “Risk Factors”
section included in the Company’s prospectus filed with the
Securities and Exchange Commission on September 17, 2018 pursuant
to Rule 424(b)(4) under the Securities Act of 1933. Because of
these uncertainties and the assumptions on which the
forward-looking statements are based, actual operations and results
in the future may differ materially from those indicated herein.
Readers are cautioned against placing undue reliance on any such
forward-looking statements. The Company’s past results are not
necessarily indicative of future performance.
FVCBankcorp, Inc. Selected Financial Data (Dollars
in thousands, except share data and per share data)
For the Three Months Ended December 31,
For the Years Ended December 31, (Unaudited) (Unaudited) 2018 2017
2018 2017
Selected Balances Total assets $ 1,351,961 $
1,053,224 Total investment securities 130,597 121,150 Total loans,
net of deferred fees 1,136,743 888,677 Allowance for loan losses
(9,159 ) (7,725 ) Total deposits 1,162,440 928,163 Subordinated
debt 24,407 24,327 Other borrowings - - - - Total stockholders’
equity 158,721 98,283
Summary Results of Operations Interest
income $ 15,640 $ 10,801 $ 51,924 $ 40,302 Interest expense 3,823
2,350 12,110 8,195 Net interest income 11,817 8,451 39,814 32,107
Provision for loan losses 930 435 1,920 1,200 Net interest income
after provision for loan losses 10,887 8,016 37,894 30,907
Noninterest income - loan fees, service charges and other 519 252
1,685 881 Noninterest income - bank owned life insurance 109 115
438 855 Noninterest income - gain (loss) on securities sold (462 )
30 (462 ) 164 Noninterest income - gains on foreclosure of other
real estate owned - - 1,075 - - 1,075 Noninterest expense 9,419
4,925 26,448 19,346 Income before taxes 1,634 4,563 13,107 14,536
Income tax expense 224 3,558 2,238 6,846 Net income 1,410 1,005
10,869 7,690
Per Share Data (2) Net income, basic $
0.10 $ 0.09 $ 0.93 $ 0.74 Net income, diluted $ 0.10 $ 0.08 $ 0.85
$ 0.67 Book value $ 11.57 $ 9.04 Tangible Book value $ 10.93 $ 9.03
Shares outstanding 13,712,615 10,868,984
Selected Ratios Net
interest margin (3) 3.59 % 3.43 % 3.51 % 3.43 % Return on average
assets (3) 0.42 % 0.40 % 0.94 % 0.80 % Return on average equity (3)
3.65 % 4.06 % 9.29 % 8.63 % Efficiency
(1) 75.69 % 55.85 %
63.07 % 57.16 % Loans, net of deferred fees, to total
deposits 97.79 % 95.75 % Noninterest-bearing deposits to total
deposits 20.07 % 18.90 %
Reconciliation of Net Income (GAAP) to
Operating Earnings (Non-GAAP) (4) Net income (from
above) $ 1,410 $ 1,005 $ 10,869 $ 7,690 Add: Merger and acquisition
expense 2,668 - - 3,339 - - Add: Loss on sales of securities
available-for-sale 462 - - 462 - - Less: provision for income taxes
associated with merger and acquisition expense (649 ) - - (788 ) -
- Add: TCJA revaluation of net deferred tax assets - - 2,003 - -
2,003 Less: Gain on foreclosure of other real estate owned - -
(1,075 ) - - (1,075 ) Add: provision for income taxes associated
with gain on foreclosure of other real estate owned - -
371 - - 371 Net
income, as adjusted $ 3,891 $ 2,304 $ 13,882 $
8,989 Net income, diluted, on an operating basis $ 0.26 $
0.19 $ 1.08 $ 0.78 Return on average assets (non-GAAP operating
earnings) 1.16 % 0.91 % 1.20 % 0.94 % Return on average equity
(non-GAAP operating earnings) 10.07 % 9.30 % 11.87 % 10.09 %
Efficiency ratio (non-GAAP operating earnings) 54.25 % 53.40 %
55.10 % 56.89 %
Capital Ratios - Bank Tangible common equity
(to tangible assets) 11.16 % 9.33 % Total capital (to risk weighted
assets) 14.16 % 12.83 % Common equity tier 1 capital (to risk
weighted assets) 13.43 % 12.05 % Tier 1 capital (to risk weighted
assets) 13.43 % 12.05 % Tier 1 leverage (to average assets) 12.64 %
11.79 %
Asset Quality Nonperforming loans and loans 90+ past
due $ 3,852 $ 789 Performing troubled debt restructurings (TDRs)
203 1,671 Other real estate owned 4,224 3,866 Nonperforming loans
and loans 90+ past due to total assets (excl. TDRs) 0.28 % 0.07 %
Nonperforming assets to total assets 0.60 % 0.44 % Nonperforming
assets (including TDRs) to total assets 0.61 % 0.58 % Allowance for
loan losses to loans 0.81 % 0.87 % Allowance for loan losses to
nonperforming loans 237.77 % 979.09 % Net charge-offs (recovery) $
347 $ (19 ) $ 84 $ (73 ) Net charge-offs (recovery) to average
loans (3) 0.13 % (0.01 ) % 0.01 % (0.01 ) %
Selected Average
Balances Total assets $ 1,341,991 $ 1,013,070 $ 1,159,249 $
955,892 Total earning assets 1,305,573 986,648 1,134,797 936,356
Total loans, net of deferred fees 1,101,539 851,123 971,883 805,186
Total deposits 1,141,500 878,481 1,006,470 823,825
Other
Data Noninterest-bearing deposits $ 233,318 $ 175,446
Interest-bearing checking, savings and money market 533,732 379,101
Time deposits 310,985 258,127 Wholesale deposits 84,405 115,489
(1)
Efficiency ratio is calculated as
noninterest expense divided by the sum of net interest income and
noninterest income, excluding gains (losses) on sales of investment
securities and other real estate owned.
(2)
All per share data calculations have been
retroactively adjusted for the five-for-four stock split declared
September 2017.
(3)
Annualized.
(4)
Some of the financial measures discussed
throughout the press release are "non-GAAP financial measures." In
accordance with SEC rules, the Company classifies a financial
measure as being a non-GAAP financial measure if that financial
measure excludes or includes amounts, or is subject to adjustments
that have the effect of excluding or including amounts, that are
included or excluded, as the case may be, in the most directly
comparable measure calculated and presented in accordance with GAAP
in our statements of income, balance sheets or statements of cash
flows.
FVCBankcorp, Inc. Summary Consolidated
Statements of Condition (Dollars in thousands)
(Unaudited) %
Change % Change Current From
12/31/2018 9/30/2018 Quarter 12/31/2017
Year Ago Cash and due from banks $ 9,435 $ 8,939 5.5
% $ 7,428 27.0 % Interest-bearing deposits at other financial
institutions 34,060 46,396 -26.6 % 15,139 125.0 % Investment
securities 125,298 113,131 10.8 % 117,712 6.4 % Restricted stock,
at cost 5,299 3,800 39.4 % 3,438 54.1 % Loans, net of fees:
Commercial real estate 682,203 592,083 15.2 % 526,065 29.7 %
Commercial and industrial 137,080 108,331 26.5 % 98,150 39.7 %
Commercial construction 152,526 144,140 5.8 % 123,444 23.6 %
Consumer residential 132,280 107,207 23.4 % 108,786 21.6 % Consumer
nonresidential 32,654 26,543 23.0 % 32,232 1.3
% Total loans, net of fees 1,136,743 978,304 16.2 % 888,677 27.9 %
Allowance for loan losses (9,159) (8,576) 6.8 %
(7,725) 18.6 % Loans, net 1,127,584 969,728 16.3 % 880,952
28.0 % Premises and equipment, net 2,271 1,420 59.9 % 1,236
83.7 % Bank owned life insurance (BOLI) 16,406 16,297 0.7 % 15,969
2.7 % Other real estate owned 4,224 3,866 9.3 % 3,866 9.3 % Other
assets 27,384 11,860 130.9 % 7,484 265.9 %
Total Assets $ 1,351,961 $ 1,175,437 15.0 % $ 1,053,224 28.4
% Deposits: Noninterest-bearing $ 233,318 $ 211,808 10.2 % $
175,446 33.0 % Interest-bearing checking 312,446 276,197 13.1 %
185,528 68.4 % Savings and money market 221,286 209,122 5.8 %
193,573 14.3 % Time deposits 310,985 246,272 26.3 % 258,127 20.5 %
Wholesale deposits 84,405 50,587 66.9 %
115,489 -26.9 % Total deposits 1,162,440 993,986 16.9 % 928,163
25.2 % Other borrowed funds - - 15,000 -100.0 % - - 0.0 %
Subordinated notes, net of issuance costs 24,407 24,387 0.1 %
24,327 0.3 % Other liabilities 6,393 3,288 94.4 % 2,451 160.8 %
Stockholders’ equity 158,721 138,776 14.4 %
98,283 61.5 % Total Liabilities & Stockholders’
Equity $ 1,351,961 $ 1,175,437 15.0 % $ 1,053,224 28.4 %
FVCBankcorp, Inc. Summary Consolidated Income
Statements (In thousands, except per share data)
(Unaudited) For the
Three Months Ended % Change % Change
Current From 12/31/2018 9/30/2018
Quarter 12/31/2017 Year Ago Net
interest income $ 11,817 $ 9,878 19.6 % $ 8,451 39.8 % Provision
for loan losses 930 351 165.0 % 435 113.8 %
Net interest income after provision for loan losses 10,887
9,527 14.3 % 8,016 35.8 % Noninterest income:
Fees on Loans 249 411 -39.4 % 29 758.6 % Service charges on deposit
accounts 184 158 16.5 % 145 26.9 % Gain (loss) on sales of
securities available-for-sale (462) - - -100.0 % 30 -1,640.0 %
Gains on other real estate owned - - - - 0.0 % 1,075 -100.0 % BOLI
income 109 110 -0.9 % 115 -5.2 % Other fee income 86
69 24.6 % 78 10.3 % Total noninterest income 166
748 -77.8 % 1,472 -88.7 % Noninterest expense:
Salaries and employee benefits 4,008 3,491 14.8 % 2,861 40.1 %
Occupancy and equipment expense 781 591 32.1 % 586 33.3 % Data
processing and network administration 347 321 8.1 % 285 21.8 %
State franchise taxes 296 296 0.0 % 252 17.5 % Professional fees
214 147 45.6 % 161 32.9 % Merger and acquisition expense 2,668 274
873.7 % - - 100.0 % Other operating expense 1,105 828
33.5 % 780 41.7 % Total non-interest expense 9,419
5,948 58.4 % 4,925 91.2 % Net income before income
taxes 1,634 4,327 -62.2 % 4,563 -64.2 % Income tax expense
224 942 -76.2 % 3,558 -93.7 % Net Income $ 1,410 $
3,385 -58.3 % $ 1,005 40.3 % Earnings per share - basic $
0.10 $ 0.30 -66.7 % $ 0.09 11.1 % Earnings per share - diluted $
0.10 $ 0.27 -63.0 % $ 0.08 25.0 % Weighted-average common shares
outstanding - basic 13,575,616 11,324,965 19.9 %
10,866,639 24.9 % Weighted-average common shares outstanding
- diluted 14,700,167 12,470,384 17.9 %
12,095,023 21.5 %
Reconciliation of
Net Income (GAAP) to Operating Earnings (Non-GAAP):
GAAP net income reported above $ 1,410 $ 3,385 $ 1,005 Add: Merger
and acquisition expense above 2,668 274 - - Add: Loss on sales of
securities available-for-sale 462 - - - - Less: provision for
income taxes associated with merger and acquisition expense and
loss on securities sales (649) (24) - - Add: TCJA revaluation of
net deferred tax assets - - - - 2,003 Less: Gain on foreclosure of
other real estate owned - - - - (1,075) Add: provision for income
taxes associated with gain on foreclosure of other real estate
owned - - - - 371 NET INCOME, excluding above non-GAAP items $
3,891 $ 3,635 $ 2,304 Earnings per share - basic (excluding merger
and acquisition charges) $ 0.29 $ 0.32 $ 0.21 Earnings per share -
diluted (excluding merger and acquisition charges) $ 0.26 $ 0.29 $
0.19 Return on average assets (non-GAAP operating earnings)
1.16% 1.27% 0.91% Return on average equity (non-GAAP operating
earnings) 10.07% 13.13% 9.30% Efficiency ratio (non-GAAP operating
earnings) 54.25% 53.40% 55.66%
FVCBankcorp,
Inc. Summary Consolidated Income Statements (In
thousands, except per share data) (Unaudited)
For the Years Ended % Change
From 12/31/2018 12/31/2017 Year Ago
Net interest income $ 39,814 $ 32,107 24.0 % Provision for
loan losses 1,920 1,200 60.0 % Net interest income
after provision for loan losses 37,894 30,907 22.6 %
Noninterest income: Fees on Loans 722 76 850.0 % Service
charges on deposit accounts 635 546 16.3 % Gain (loss) on sale of
securities available-for-sale (462) 164 -381.7 % Gains on other
real estate owned - - 1,075 -100.0 % BOLI income 438 855 -48.8 %
Other fee income 328 259 26.6 % Total noninterest
income 1,661 2,975 -44.2 % Noninterest
expense: Salaries and employee benefits 14,008 11,659 20.1 %
Occupancy and equipment expense 2,524 2,259 11.7 % Data processing
and network administration 1,233 1,017 21.2 % State franchise taxes
1,184 1,041 13.7 % Professional fees 649 513 26.5 % Merger and
acquisition expense 3,339 - - 100.0 % Other operating expense
3,511 2,857 22.9 % Total non-interest expense
26,448 19,346 36.7 % Net income before income taxes 13,107
14,536 -9.8 % Income tax expense 2,238 6,846 -67.3 %
Net income $ 10,869 $ 7,690 41.3 % Earnings per share -
basic $ 0.93 $ 0.74 25.7 % Earnings per share - diluted $ 0.85 $
0.67 26.9 % Weighted-average common shares outstanding - basic
11,714,668 10,434,709 12.3 % Weighted-average common
shares outstanding - diluted 12,821,757 11,545,408
11.1 %
Reconciliation of
Net Income (GAAP) to Operating Earnings (Non-GAAP):
GAAP net income reported above $ 10,869 $ 7,690 Add: Merger and
acquisition expense above 3,339 - - Add: Loss on sales of
securities available-for-sale 462 - - Less: provision for income
taxes associated with merger and acquisition expense and loss on
securities sales (788) - - Add: TCJA revaluation of net deferred
tax assets - - 2,003 Less: Gain on foreclosure of other real estate
owned - - (1,075) Add: provision for income taxes associated with
gain on foreclosure of other real estate owned - - 371 NET INCOME,
excluding above non-GAAP items $ 13,882 $ 8,989 Earnings per share
- basic (excluding merger and acquisition charges) $ 1.18 $ 0.86
Earnings per share - diluted (excluding merger and acquisition
charges) $ 1.08 $ 0.78 Return on average assets (non-GAAP
operating earnings) 1.20% 0.94% Return on average equity (non-GAAP
operating earnings) 11.87% 10.09% Efficiency ratio (non-GAAP
operating earnings) 55.10% 56.89%
FVCBankcorp,
Inc. Average Statements of Condition and Yields on Earning
Assets and Interest-Bearing Liabilities (Dollars in
thousands) (Unaudited)
For the Three Months Ended
12/31/2018 9/30/2018 12/31/2017 Average
Average Average Average Average
Average Balance Yield Balance
Yield Balance Yield Interest-earning
assets: Loans receivable, net of fees (1) Commercial real
estate $ 668,609 4.91 % $ 575,738 4.72 % $ 518,345 4.59 %
Commercial and industrial 127,520 5.86 % 110,241 5.81 % 89,031 5.14
% Commercial construction 148,745 5.81 % 140,213 5.39 % 111,555
5.07 % Consumer residential 130,222 5.09 % 106,922 4.72 % 108,204
4.00 % Consumer nonresidential 26,443 7.23 % 26,878
6.50 % 23,988 4.47 % Total loans 1,101,539 5.22 % 959,992
4.99 % 851,123 4.63 % Investment securities (2)(3) 136,099
2.69 % 120,174 2.45 % 122,231 2.28 % Interest-bearing deposits at
other financial institutions 67,935 2.08 % 35,988
1.82 % 13,294 1.23 % Total interest-earning assets 1,305,573
4.79 % 1,116,154 4.62 % 986,648 4.18 %
Non-interest
earning assets: Cash and due from banks 3,459 2,386 7,315
Premises and equipment, net 2,172 1,416 1,228 Accrued interest and
other assets 39,404 31,107 25,282 Allowance for loan losses
(8,617) (8,421) (7,403) Total Assets $
1,341,991 $ 1,142,642 $ 1,013,070
Interest-bearing
liabilities: Interest checking $ 259,202 1.32 % $ 251,299 1.10
% $ 193,896 0.86 % Savings and money market 303,375 1.18 % 190,176
1.18 % 179,495 0.85 % Time deposits 302,838 1.89 % 249,508 1.62 %
238,331 1.42 % Wholesale deposits 33,557 1.79 %
65,354 1.84 % 82,094 1.29 % Total interest-bearing deposits
898,972 1.47 % 756,337 1.36 % 693,816 1.11 % Other borrowed
funds 15,693 2.35 % 2,799 2.25 % 9,287 1.59 % Subordinated notes,
net of issuance costs 24,394 6.42 % 24,374 6.43 %
24,314 6.45 % Total interest-bearing liabilities 939,059
1.62 % 783,510 1.52 % 727,417 1.29 %
Noninterest-bearing
liabilities: Noninterest-bearing deposits 242,528 245,742
184,665 Other liabilities 5,883 2,662 1,904 Stockholders’
equity 154,521 110,728 99,084 Total
Liabilities and Stockholders' Equity $ 1,341,991 $ 1,142,642 $
1,013,070 Net Interest Margin (2) 3.59 % 3.54 % 3.43 %
(1)
Non-accrual loans are included in average
balances.
(2)
The average yields for investment
securities are reported on a fully taxable-equivalent basis at a
rate of 23% for 2018 and 34.5% for 2017.
(3)
The average balances for investment
securities includes restricted stock.
FVCBankcorp, Inc. Average Statements of Condition
and Yields on Earning Assets and Interest-Bearing Liabilities
(Dollars in thousands) (Unaudited)
For the Years Ended
12/31/2018 12/31/2017 Average Average
Average Average Balance Yield
Balance Yield Interest-earning assets: Loans
receivable, net of fees (1) Commercial real estate $ 587,060 4.72 %
$ 499,776 4.65 % Commercial and industrial 109,475 5.64 % 91,361
4.94 % Commercial construction 133,691 5.36 % 89,156 4.93 %
Consumer residential 113,643 4.68 % 105,715 4.27 % Consumer
nonresidential 28,014 6.58 % 19,178 4.33 % Total
loans 971,883 4.96 % 805,186 4.66 % Investment securities
(2)(3) 128,721 2.44 % 117,770 2.30 % Interest-bearing deposits at
other financial institutions 34,193 1.75 % 13,400
0.68 % Total interest-earning assets 1,134,797 4.58 % 936,356 4.31
%
Non-interest earning assets: Cash and due from
banks 2,683 1,924 Premises and equipment, net 1,555 1,367 Accrued
interest and other assets 28,480 23,232 Allowance for loan losses
(8,266) (6,987) Total Assets $ 1,159,249 $
955,892
Interest-bearing liabilities: Interest
checking $ 182,532 1.18 % $ 204,422 0.81 % Savings and money market
258,462 1.04 % 162,127 0.72 % Time deposits 265,038 1.61 % 210,093
1.32 % Wholesale deposits 77,466 1.63 % 75,534 1.07 %
Total interest-bearing deposits 783,498 1.32 % 652,176 0.98 %
Other borrowed funds 8,366 2.11 % 16,564 1.19 % Subordinated
notes, net of issuance costs 24,364 6.48 % 24,285
6.51 % Total interest-bearing liabilities 816,228 1.48 % 693,025
1.18 %
Noninterest-bearing liabilities:
Noninterest-bearing deposits 222,972 171,649 Other liabilities
3,057 2,162 Stockholders’ equity 116,992
89,056 Total Liabilities and Stockholders' Equity $
1,159,249 $ 955,892 Net Interest Margin (2) 3.51 % 3.43 %
(1)
Non-accrual loans are included in average
balances.
(2)
The average yields for investment
securities are reported on a fully taxable-equivalent basis at a
rate of 23% for 2018 and 34.5% for 2017.
(3)
The average balances for investment
securities includes restricted stock.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190123005661/en/
David W. Pijor, Chairman and Chief Executive OfficerPhone: (703)
436-3802Email: dpijor@fvcbank.com
Patricia A. Ferrick, PresidentPhone: (703) 436-3822Email:
pferrick@fvcbank.com
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