FVCBankcorp, Inc. (NASDAQ:FVCB) (the “Company”) today reported
fourth quarter 2019 net income of $3.7 million, or $0.25 diluted
earnings per share, compared to $1.4 million, or $0.10 diluted
earnings per share, for the quarterly period ended December 31,
2018. Weighted-average common shares outstanding for the diluted
earnings per share calculations were 14.8 million and 14.7 million
for the three months ended December 31, 2019 and 2018,
respectively.
For the year ended December 31, 2019, net income was $15.8
million, or $1.07 per diluted earnings per share, compared to $10.9
million, or $0.85 diluted earnings per share, for the year ended
December 31, 2018.
The Company believes the reporting of non-GAAP earnings which
excludes merger-related expenses, losses on sales of securities,
and losses on loans held for sale, are more reflective of the
Company’s operating performance and future performance (“Operating
Earnings”). The Company incurred merger-related expenses associated
with its acquisition of Colombo Bank (“Colombo”) totaling $133
thousand for the year ended December 31, 2019, and $2.7 million and
$3.3 million for the three and twelve months ended December 31,
2018, respectively. During the fourth quarter of 2019, the Company
reclassed a portion of its consumer unsecured loan portfolio as
held for sale, and recorded a loss on the market value adjustment
totaling $145 thousand. This portfolio was purchased by the Company
within the last two years and is not performing as expected, with
recorded net charge-offs totaling $647 thousand for the year ended
December 31, 2019. Lastly, during the fourth quarter of 2018, the
Company sold $10.9 million in securities available-for-sale at a
loss of $462 thousand to reinvest those funds in higher yielding
securities. Excluding the above items, net of tax, Operating
Earnings for the three months ended December 31, 2019 and 2018 were
$3.8 million and $3.9 million, respectively, or $0.26 per diluted
share for each of the quarters ended December 31, 2019 and 2018, as
earnings were impacted by a flat yield curve and three rate cuts by
the Federal Open Market Committee of the Federal Reserve during
2019. For the years ended December 31, 2019 and 2018, Operating
Earnings were $16.0 million and $13.9 million, respectively, or
$1.08 per diluted share for each of the years ended December 31,
2019 and 2018. See the reconciliation of net income (GAAP) to
Operating Earnings (non-GAAP) in the Company’s “Summary
Consolidated Income Statements” below.
Return on average assets was 0.98% and return on average equity
was 8.39% for the fourth quarter of 2019. For the comparable
quarterly December 31, 2018 period, return on average assets was
0.42% and return on average equity was 3.65%. For the years ended
December 31, 2019 and 2018, return on average assets was 1.09% and
0.94%, respectively. Return on average equity for the years ended
December 31, 2019 and 2018 was 9.32% and 9.29%, respectively. On an
Operating Earnings basis, annualized return on average assets and
return on average equity for the three months ended December 31,
2019 were 1.01% and 8.64% and were 1.16% and 10.07% for the same
period in 2018. On an Operating Earnings basis, return on average
assets and return on average equity for the year ended December 31,
2019 were 1.11% and 9.45% and were 1.20% and 11.87% for the year
ended December 31, 2018.
Selected Highlights
- Strong Loan Growth. Year-over-year loan growth was
$133.8 million, or 12% from December 31, 2018 to December 31, 2019.
The Company had loans held for sale totaling $11.2 million at
December 31, 2019 compared to none for 2018.
- Strong Year-Over-Year Deposit Growth. Year-over-year,
deposit growth was $123.3 million, or 11% from December 31, 2018 to
December 31, 2019. Noninterest-bearing deposits increased $72.9
million, or 31% during 2019 and represent 24% of the total deposit
base at December 31, 2019. Total deposits decreased $32.0 million,
to $1.29 billion at December 31, 2019, from September 30, 2019, a
result of customer funds being withdrawn as anticipated.
- Continued Earnings Growth. Net income increased $2.3
million to $3.7 million for the fourth quarter of 2019 as compared
to the same 2018 period. Net income for the year ended December 31,
2019 was $15.8 million, an increase of $5.0 million, or 46%, as
compared to $10.9 million for the year ended December 31, 2018. Net
interest income increased $8.2 million, or 21% to $48.1 million for
the year ended December 31, 2019 as compared to 2018. See below
under “Income Statement” for information on changes to the
Company’s net interest margin.
- Improved Tangible Book Value. Tangible book value per
share at December 31, 2019 was $12.26, a 12% increase from $10.93
at December 31, 2018.
“2019 was a challenging year as a result of the competitive
interest rate environment. We have been successful in adding core
relationships as demonstrated by the growth in loan originations
during the fourth quarter of 2019. We are starting 2020 with strong
loan and deposit pipelines and believe our ability to execute
quickly will drive quality earnings growth as we continue to be
purposefully selective of originations in our construction and
commercial real estate portfolios,” stated David W. Pijor, Chairman
and CEO.
Balance Sheet
Total assets increased to $1.54 billion at December 31, 2019
compared to $1.35 billion at December 31, 2018, an increase of
$185.7 million, or 14%. Loans receivable, net of deferred fees,
totaled $1.27 billion at December 31, 2019, compared to $1.14
billion at December 31, 2018, an increase of $133.8 million, or
12%. During the fourth quarter, loan originations totaled
approximately $121.3 million, of which $87.1 million funded during
the quarter, reflecting strong loan growth. Total loans, net of
deferred fees, totaled $1.27 billion at December 31, 2019, an
increase of $27.1 million, or 9% annualized, from September 30,
2019.
Loans held for sale totaled $11.2 million at December 31, 2019,
and are comprised of the Company’s unsecured consumer loan
portfolio that the Company has purchased during the last two years.
As previously mentioned, the earnings stream provided by this
portfolio was not as expected, as the Company recorded net
charge-offs of $647 thousand during 2019. The Company anticipates
selling these loans before the end of the first quarter of
2020.
Investment securities increased $16.3 million to $141.6 million
at December 31, 2019, compared to $125.3 million at December 31,
2018.
Total deposits increased to $1.29 billion at December 31, 2019
compared to $1.16 billion at December 31, 2018, an increase of
$123.3 million, or 11%. Core deposits, which represent total
deposits less wholesale deposits, increased $107.7 million, or 10%,
to $1.19 billion at December 31, 2019 compared to $1.08 billion at
December 31, 2018. Wholesale deposits totaled $100.0 million, or 8%
of total deposits, at December 31, 2019, an increase of $15.6
million from December 31, 2018. Noninterest-bearing deposits
increased $72.9 million to $306.2 million at December 31, 2019 from
$233.3 million at December 31, 2018, and represented 24% of total
deposits at December 31, 2019.
Income Statement
Net interest income totaled $11.8 million, an increase of $19
thousand, for the quarter ended December 31, 2019, compared to the
year ago quarter, and decreased by $256 thousand, or 2% compared to
the third quarter of 2019, a result of decreased loan yields. The
Company’s net interest margin decreased 31 basis points to 3.28%
for the quarter ended December 31, 2019 compared to 3.59% for the
quarter ended December 31, 2018. On a linked quarter basis, net
interest margin decreased 13 basis points from 3.41% for the three
months ended September 30, 2019. During the fourth quarter of 2019,
the yield on earning assets decreased 15 basis points to 4.69%
compared to the third quarter of 2019. The Company had excess
liquidity which reduced yield on earning assets by 6 basis points,
a result of the lower yields earned on those investments. In
addition, the loan portfolio repriced as a result of one 25 basis
point rate cut, resulting in a decrease in loan yields by 8 basis
points to 5.05% as compared to 5.13% for the third quarter of 2019.
Acquired loan accretion included in loan interest income, which
represents the expected amortization of the acquired loan
portfolio, was $156 thousand for the three months ended December
31, 2019. This compares to $43 thousand in acquired loan accretion
realized for the three months ended September 30, 2019, as several
large acquired loan payoffs occurred during the third quarter of
2019. Acquired loan accretion included in loan interest income from
the fourth quarter of 2018 totaled $169 thousand.
The cost of interest-bearing liabilities increased 2 basis
points to 1.95% for the fourth quarter of 2019, compared to 1.93%
for the third quarter of 2019, and increased 33 basis points from
the year ago quarter. The cost of deposits, which includes
noninterest-bearing deposits, decreased 1 basis point to 1.41% for
the fourth quarter of 2019 as compared to 1.42% for the third
quarter of 2019, and 1.16% for the fourth quarter of 2018,
reflecting the increased rate environment during the first half of
2019. The Company had several large customer transactions that
occurred at the end of the second quarter of 2019, prior to the
Federal Reserve rate cuts, which impacted the cost of interest
checking and time deposits for the third and fourth quarters of
2019.
For the year ended December 31, 2019, net interest income was
$48.1 million compared to $39.8 million for the year ended December
31, 2018, an increase of $8.2 million, or 21%. Net interest margin
was 3.48% and 3.51% for the years ended December 31, 2019 and 2018,
respectively.
Noninterest income totaled $589 thousand and $166 thousand for
the quarters ended December 31, 2019 and 2018, respectively. Fee
income from loans was $81 thousand, a decrease of $168 thousand for
the quarter ended December 31, 2019 compared to 2018, primarily a
result of a decrease in loan swap fee income. Service charges on
deposit accounts and other fee income totaled $404 thousand for the
fourth quarter of 2019, an increase of 50%, or $134 thousand, from
the year ago quarter. This increase in deposit fee income resulted
from the increase in core deposit relationships, both organic and
acquired, year over year. In each of the fourth quarters of 2019
and 2018, the Company recorded losses on sales of assets. The loss
on the loans held for sale portfolio recorded during the fourth
quarter of 2019 was $145 thousand. During the fourth quarter of
2018, the Company recorded a loss on the sale of securities
available-for-sale of $462 thousand.
Noninterest income for the year-to-date period ended December
31, 2019 was $2.5 million, compared to $1.7 million for the 2018
year-to-date period, an increase of $885 thousand, or 53%, which
was primarily driven by service charges on deposit accounts, income
related to bank-owned life insurance, and other fee income.
Noninterest expense totaled $7.3 million for the quarter ended
December 31, 2019, compared to $9.4 million for the same
three-month period of 2018. Merger-related expenses of $2.7 million
for the acquisition of Colombo were recorded during the three
months ended December 31, 2018. Salary and compensation related
expenses increased $506 thousand, or 13%, for the quarter ended
December 31, 2019, compared to the same three month period of 2018,
resulting from the increase in staffing (both business development
and back-office support) and the variable component of incentive
compensation. Increases in data processing and network
administration and state franchise taxes for the quarter ended
December 31, 2019 compared to the same three month period of 2018
is primarily growth related. On a linked quarter basis, noninterest
expense decreased $29 thousand from the three months ended
September 30, 2019. For the years ended December 31, 2019 and 2018,
noninterest expense was $28.9 million and $26.4 million,
respectively, the increase of which relates directly to the
addition of Colombo to the Company’s expense structure and
increases in staffing year-over-year.
The efficiency ratio for Operating Earnings, which excludes
merger-related expenses, losses on loans held for sale and
securities sold, for the quarter ended December 31, 2019 was 58.4%,
an increase from 54.3% from the year ago quarter. The efficiency
ratios for Operating Earnings for the years ended December 31, 2019
and 2018, were 56.6% and 55.1%, respectively.
The Company recorded a provision for income taxes of $902
thousand for the three months ended December 31, 2019, compared to
$224 thousand for the same period of 2018. The effective tax rates
for the three months ended December 31, 2019 and 2018 were 19.5%
and 13.7%, respectively. For the year ended December 31, 2019,
provision for income taxes was $4.2 million compared to $2.2
million for the year ended December 31, 2018. The effective tax
rates for the years ended December 31, 2019 and 2018 were 20.9% and
17.1%, respectively. The effective tax rates in each period
presented are less than the Company’s statutory rate of 21%
primarily because of discrete tax benefits recorded as a result of
exercises of nonqualified stock options during 2018 and 2019.
Asset Quality
The Company recorded a provision for loan losses of $465
thousand for the three months ended December 31, 2019, compared to
$930 thousand for the year ago quarter. Year-to-date provision
expense for 2019 was $1.7 million compared to $1.9 million for the
2018 year-to-date period. Nonperforming loans and loans ninety days
or more past due at December 31, 2019 totaled $10.7 million, or
0.70% of total assets, of which $979 thousand related to acquired
loans. This compares to $10.4 million in nonperforming loans and
loans ninety days or more past due at September 30, 2019, or 0.67%
of total assets. All of the Company’s nonperforming loans are
secured and have specific reserves totaling $393 thousand,
representing the expected losses associated with those loans.
Included in nonperforming loans is one loan totaling $3.9 million
which is collateralized by property that is under a purchase and
sales agreement that the Company expects will close during the
first quarter of 2020, and for which the Company expects to receive
full repayment. There were no new troubled debt restructurings
(“TDR”) at December 31, 2019. Nonperforming assets (including other
real estate owned, or OREO) to total assets was 0.95% at December
31, 2019 compared to 0.91% for September 30, 2019. The property
that is recorded as OREO is also under a purchase and sales
agreement which is expected to close during 2020. No loss is
expected on the sale of OREO.
The allowance for loan losses to total loans was 0.81% for each
of the periods ended December 31, 2019 and December 31, 2018. The
allowance for loan losses on the Company’s originated loan
portfolio, excluding the credit mark on acquired loans, was 0.88%
of loans outstanding at December 31, 2019. Net charge-offs of $303
thousand were recorded during the fourth quarter of 2019 which were
primarily related to the Company’s purchased consumer unsecured
loan portfolio, which the Company intends to sell during the first
quarter of 2020, and recorded the necessary mark to market
adjustment in the fourth quarter of 2019.
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 $1.54 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 and
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 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 and other cautionary language included in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2018 and in other periodic and current reports filed with the
Securities and Exchange Commission. 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)
(Unaudited)
For the Three Months Ended
December 31,
For the Years Ended December
31,
2019
2018
2019
2018
Selected Balances Total assets
$
1,537,295
$
1,351,576
Total investment securities
147,606
130,597
Loans held for sale
11,198
- -
Total loans, net of deferred fees
1,270,526
1,136,743
Allowance for loan losses
(10,231)
(9,159)
Total deposits
1,285,722
1,162,440
Subordinated debt
24,487
24,407
Other borrowings
25,000
- -
Total stockholders’ equity
179,078
158,336
Summary Results of Operations Interest income
$
16,777
$
15,640
$
66,734
$
51,924
Interest expense
4,941
3,823
18,671
12,110
Net interest income
11,836
11,817
48,063
39,814
Provision for loan losses
465
930
1,720
1,920
Net interest income after provision for loan losses
11,371
10,887
46,343
37,894
Noninterest income - loan fees, service charges and other
485
519
2,026
1,685
Noninterest income - bank owned life insurance
249
109
662
438
Noninterest income - gains on calls of securities held-to-maturity
- -
- -
3
- -
Noninterest income - loss on sales of securities available-for-sale
- -
(462)
- -
(462)
Noninterest income - loss on loans held for sale
(145)
- -
(145)
- -
Noninterest expense
7,334
9,419
28,877
26,448
Income before taxes
4,626
1,634
20,012
13,107
Income tax expense
902
224
4,184
2,238
Net income
3,724
1,410
15,828
10,869
Per Share Data Net income, basic
$
0.27
$
0.10
$
1.15
$
0.93
Net income, diluted
$
0.25
$
0.10
$
1.07
$
0.85
Book value
$
12.88
$
11.55
Tangible book value
$
12.26
$
10.93
Shares outstanding
13,902,067
13,712,615
Selected Ratios Net interest margin (2)
3.28
%
3.59
%
3.48
%
3.51
Return on average assets (2)
0.98
%
0.42
%
1.09
%
0.94
Return on average equity (2)
8.39
%
3.65
%
9.32
%
9.29
Efficiency (1)
58.35
%
75.69
%
56.90
%
63.07
Loans, net of deferred fees to total deposits
98.82
%
97.79
%
Noninterest-bearing deposits to total deposits
23.82
%
20.07
%
Reconciliation of Net Income (GAAP) to Operating Earnings
(Non-GAAP) (3)
Net income (from above)
$
3,724
$
1,410
$
15,828
$
10,869
Add: Merger and acquisition expense
- -
2,668
133
3,339
Add: Loss on loans held for sale
145
- -
145
- -
Subtract: (Gains) on calls of securities held-to-maturity
- -
- -
(3)
- -
Add: Loss on sales of securities available-for-sale
- -
462
- -
462
Less: provision for income taxes associated with non-GAAP
adjustments
(33)
(649)
(63)
(788)
Net income, as adjusted
$
3,836
$
3,891
$
16,040
$
13,882
Net income, diluted, on an operating basis
$
0.26
$
0.26
$
1.08
$
1.08
Return on average assets (non-GAAP operating earnings)
1.01
%
1.16
%
1.11
%
1.20
Return on average equity (non-GAAP operating earnings)
8.64
%
10.07
%
9.45
%
11.87
Efficiency ratio (non-GAAP operating earnings)
58.35
%
54.25
%
56.64
%
55.10
Capital Ratios - Bank
Tangible common equity (to tangible assets)
11.15
%
11.16
%
Total capital (to risk weighted assets)
13.43
%
14.16
%
Common equity tier 1 capital (to risk weighted assets)
12.72
%
13.43
%
Tier 1 capital (to risk weighted assets)
12.72
%
13.43
%
Tier 1 leverage (to average assets)
12.15
%
12.64
%
Asset Quality
Nonperforming loans and loans 90+ past due
$
10,725
$
3,211
Performing troubled debt restructurings (TDRs)
- -
203
Other real estate owned
3,866
4,224
Nonperforming loans and loans 90+ past due to total assets (excl.
TDRs)
0.70
%
0.24
%
Nonperforming assets to total assets
0.95
%
0.57
%
Nonperforming assets (including TDRs) to total assets
0.95
%
0.57
%
Allowance for loan losses to loans
0.81
%
0.81
%
Allowance for loan losses to nonperforming loans
95.39
%
285.24
%
Net charge-offs
$
303
$
347
$
648
$
84
Net charge-offs to average loans (2)
0.10
%
0.13
%
0.05
%
0.01
Selected Average Balances Total assets
$
1,514,124
$
1,341,991
$
1,449,769
$
1,159,249
Total earning assets
1,430,397
1,305,573
1,382,573
1,134,797
Total loans, net of deferred fees
1,234,183
1,101,539
1,205,718
971,883
Total deposits
1,270,821
1,141,500
1,223,279
1,006,470
Other Data Noninterest-bearing deposits
$
306,235
$
233,318
Interest-bearing checking, savings and money market
525,138
533,732
Time deposits
354,362
310,985
Wholesale deposits
99,987
84,405
(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, loans held for sale, and other real
estate owned.
(2) Annualized.
(3) 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
12/31/2019
9/30/2019
Quarter
12/31/2018
Year Ago
Cash and due from banks
$
14,916
$
19,424
-23.2
%
$
9,435
58.1
%
Interest-bearing deposits at other financial institutions
18,226
92,986
-80.4
%
34,060
-46.5
%
Investment securities
141,589
136,532
3.7
%
125,298
13.0
%
Restricted stock, at cost
6,017
6,017
0.0
%
5,299
13.5
%
Loans held for sale, at fair value
11,198
- -
100.0
%
- -
100.0
%
Loans, net of fees: Commercial real estate
819,802
757,619
8.2
%
682,203
20.2
%
Commercial and industrial
114,924
124,666
-7.8
%
137,080
-16.2
%
Commercial construction
214,949
214,816
0.1
%
152,526
40.9
%
Consumer residential
109,560
121,173
-9.6
%
132,280
-17.2
%
Consumer nonresidential
11,291
25,131
-55.1
%
32,654
-65.4
%
Total loans, net of fees
1,270,526
1,243,405
2.2
%
1,136,743
11.8
%
Allowance for loan losses
(10,231)
(10,068)
1.6
%
(9,159)
11.7
%
Loans, net
1,260,295
1,233,337
2.2
%
1,127,584
11.8
%
Premises and equipment, net
1,939
2,029
-4.4
%
2,271
-14.6
%
Goodwill and intangibles, net
8,689
8,119
7.0
%
8,443
2.9
%
Bank owned life insurance (BOLI)
37,069
26,820
38.2
%
16,406
125.9
%
Other real estate owned
3,866
3,866
0.0
%
4,224
-8.5
%
Other assets
33,491
36,066
-7.1
%
18,556
80.5
%
Total Assets
$
1,537,295
$
1,565,196
-1.8
%
$
1,351,576
13.7
%
Deposits: Noninterest-bearing
$
306,235
$
294,825
3.9
%
$
233,318
31.3
%
Interest-bearing checking
302,755
349,574
-13.4
%
312,446
-3.1
%
Savings and money market
222,383
273,244
-18.6
%
221,286
0.5
%
Time deposits
354,362
327,098
8.3
%
310,985
13.9
%
Wholesale deposits
99,987
72,979
37.0
%
84,405
18.5
%
Total deposits
1,285,722
1,317,720
-2.4
%
1,162,440
10.6
%
Other borrowed funds
25,000
15,000
66.7
%
- -
100.0
%
Subordinated notes, net of issuance costs
24,487
24,467
0.1
%
24,407
0.3
%
Other liabilities
23,008
32,940
-30.2
%
6,393
259.9
%
Stockholders’ equity
179,078
175,069
2.3
%
158,336
13.1
%
Total Liabilities & Stockholders' Equity
$
1,537,295
$
1,565,196
-1.8
%
$
1,351,576
13.7
%
FVCBankcorp, Inc.
Summary Consolidated Income
Statements
(In thousands, except per
share data)
(Unaudited)
For the Three Months
Ended
% Change
% Change
Current
From
12/31/2019
9/30/2019
Quarter
12/31/2018
Year Ago
Net interest income
$
11,836
$
12,092
-2.1
%
$
11,817
0.2
%
Provision for loan losses
465
235
97.9
%
930
-50.0
%
Net interest income after provision for loan losses
11,371
11,857
-4.1
%
10,887
4.4
%
Noninterest income: Fees on Loans
81
101
-19.8
%
249
-67.5
%
Service charges on deposit accounts
239
240
-0.4
%
184
29.9
%
Gains on calls of securities held-to-maturity
- -
3
-100.0
%
- -
0.0
%
Loss on sale of securities available-for-sale
- -
- -
0.0
%
(462)
100.0
%
Loss on loans held for sale
(145)
- -
-100.0
%
- -
-100.0
%
BOLI income
249
198
25.8
%
109
128.4
%
Other fee income
165
138
19.6
%
86
91.9
%
Total noninterest income
589
680
-13.4
%
166
254.8
%
Noninterest expense: Salaries and employee benefits
4,514
4,349
3.8
%
4,008
12.6
%
Occupancy and equipment expense
818
882
-7.3
%
781
4.7
%
Data processing and network administration
442
414
6.8
%
347
27.4
%
State franchise taxes
424
424
0.0
%
296
43.2
%
Professional fees
192
230
-16.5
%
214
-10.3
%
Merger and acquisition expense
- -
51
-100.0
%
2,668
-100.0
%
Other operating expense
944
1,013
-6.8
%
1,105
-14.6
%
Total noninterest expense
7,334
7,363
-0.4
%
9,419
-22.1
%
Net income before income taxes
4,626
5,174
-10.6
%
1,634
183.1
%
Income tax expense
902
1,081
-16.6
%
224
302.7
%
Net Income
$
3,724
$
4,093
-9.0
%
$
1,410
164.1
%
Earnings per share - basic
$
0.27
$
0.30
-9.1
%
$
0.10
158.3
%
Earnings per share - diluted
$
0.25
$
0.28
-8.8
%
$
0.10
161.7
%
Weighted-average common shares outstanding - basic
13,878,806
13,862,239
13,575,616
Weighted-average common shares outstanding - diluted
14,837,120
14,867,421
14,700,167
Reconciliation of Net Income (GAAP)
to Operating Earnings (Non-GAAP): GAAP net income
reported above
$
3,724
$
4,093
$
1,410
Add: Merger and acquisition expense above
- -
51
2,668
Add: Loss on loans held for sale
145
- -
- -
Subtract: (Gains) on calls of securities held-to-maturity
- -
(3)
- -
Add: Loss on sales of securities available-for-sale
- -
- -
462
Subtract: provision for income taxes associated with non-GAAP
adjustments
(33)
(11)
(649)
Net Income, excluding above merger and acquisition charges
$
3,836
$
4,130
$
3,891
Earnings per share - basic (excluding merger and acquisition
charges)
$
0.28
$
0.30
$
0.29
Earnings per share - diluted (excluding merger and acquisition
charges)
$
0.26
$
0.28
$
0.26
Return on average assets (non-GAAP operating earnings)
1.01%
1.11%
1.16%
Return on average equity (non-GAAP operating earnings)
8.64%
9.54%
10.07%
Efficiency ratio (non-GAAP operating earnings)
58.35%
57.26%
54.25%
FVCBankcorp, Inc.
Summary Consolidated Income
Statements
(In thousands, except per
share data)
(Unaudited)
For the Years Ended
% Change
From
12/31/2019
12/31/2018
Year Ago
Net interest income
$
48,063
$
39,814
20.7
%
Provision for loan losses
1,720
1,920
-10.4
%
Net interest income after provision for loan losses
46,343
37,894
22.3
%
Noninterest income: Fees on Loans
582
722
-19.4
%
Service charges on deposit accounts
890
635
40.2
%
Gains on calls of securities held-to-maturity
3
- -
100.0
%
Loss on sale of securities available-for-sale
- -
(462)
-100.0
%
Loss on loans held for sale
(145)
- -
100.0
%
BOLI income
662
438
51.1
%
Other fee income
554
328
68.9
%
Total noninterest income
2,546
1,661
53.3
%
Noninterest expense: Salaries and employee benefits
17,047
14,008
21.7
%
Occupancy and equipment expense
3,400
2,524
34.7
%
Data processing and network administration
1,638
1,233
32.8
%
State franchise taxes
1,696
1,184
43.2
%
Professional fees
826
649
27.3
%
Merger and acquisition expense
133
3,339
-96.0
%
Other operating expense
4,137
3,511
17.8
%
Total noninterest expense
28,877
26,448
9.2
%
Net income before income taxes
20,012
13,107
52.7
%
Income tax expense
4,184
2,238
87.0
%
Net Income
$
15,828
$
10,869
45.6
%
Earnings per share - basic
$
1.15
$
0.93
23.7
%
Earnings per share - diluted
$
1.07
$
0.85
25.9
%
Weighted-average common shares outstanding - basic
13,816,997
11,714,668
Weighted-average common shares outstanding - diluted
14,825,489
12,821,757
Reconciliation of Net Income (GAAP)
to Operating Earnings (Non-GAAP): GAAP net income
reported above
$
15,828
$
10,869
Add: Merger and acquisition expense above
133
3,339
Add: Loss on loans held for sale
145
- -
Subtract: (Gains) on calls of securities held-to-maturity
(3)
- -
Add: Loss on sales of securities available-for-sale
- -
462
Subtract: provision for income taxes associated with non-GAAP
adjustments
(63)
(788)
Net Income, excluding above merger and acquisition charges
$
16,040
$
13,882
Earnings per share - basic (excluding merger and acquisition
charges)
$
1.16
$
1.18
Earnings per share - diluted (excluding merger and acquisition
charges)
$
1.08
$
1.08
Return on average assets (non-GAAP operating earnings)
1.11%
1.20%
Return on average equity (non-GAAP operating earnings)
9.45%
11.87%
Efficiency ratio (non-GAAP operating earnings)
56.64%
55.10%
FVCBankcorp, Inc.
Average Statements of
Condition and Yields on Earning Assets and Interest-Bearing
Liabilities
(Dollars in thousands)
(Unaudited)
For the Three Months
Ended
12/31/2019
9/30/2019
12/31/2018
Average
Average
Average
Average
Average
Average
Balance
Yield
Balance
Yield
Balance
Yield
Interest-earning assets: Loans receivable, net of fees (1)
Commercial real estate
$
765,237
4.80
%
$
770,752
4.81
%
$
668,609
4.91
%
Commercial and industrial
111,753
5.95
%
129,174
5.86
%
127,520
5.86
%
Commercial construction
217,318
5.38
%
194,327
5.73
%
148,745
5.81
%
Consumer residential
116,013
4.73
%
122,958
4.98
%
130,222
5.09
%
Consumer nonresidential
23,862
7.29
%
24,149
7.34
%
26,443
7.23
%
Total loans
1,234,183
5.05
%
1,241,360
5.13
%
1,101,539
5.22
%
Investment securities (2)(3)
145,730
2.70
%
137,153
2.71
%
136,099
2.69
%
Interest-bearing deposits at other financial institutions
50,484
1.74
%
27,972
2.40
%
67,935
2.08
%
Total interest-earning assets
1,430,397
4.69
%
1,406,485
4.84
%
1,305,573
4.79
%
Non-interest earning assets: Cash and due from banks
10,727
10,221
3,459
Premises and equipment, net
2,022
2,073
2,172
Accrued interest and other assets
80,989
74,685
39,404
Allowance for loan losses
(10,011)
(10,034)
(8,617)
Total Assets
$
1,514,124
$
1,483,430
$
1,341,991
Interest-bearing liabilities: Interest checking
$
317,552
1.50
%
$
324,658
1.46
%
$
259,202
1.32
%
Savings and money market
241,912
1.35
%
255,046
1.41
%
303,375
1.18
%
Time deposits
339,054
2.44
%
318,056
2.37
%
302,838
1.89
%
Wholesale deposits
68,787
2.31
%
67,376
2.45
%
33,557
1.79
%
Total interest-bearing deposits
967,305
1.84
%
965,136
1.82
%
898,972
1.47
%
Other borrowed funds
15,926
1.77
%
18,814
2.04
%
15,693
2.35
%
Subordinated notes, net of issuance costs
24,474
6.40
%
24,454
6.41
%
24,394
6.42
%
Total interest-bearing liabilities
1,007,705
1.95
%
1,008,404
1.93
%
939,059
1.62
%
Noninterest-bearing liabilities: Noninterest-bearing
deposits
303,516
278,354
242,528
Other liabilities
25,323
23,523
5,883
Stockholders’ equity
177,580
173,149
154,521
Total Liabilities and Stockholders' Equity
$
1,514,124
$
1,483,430
$
1,341,991
Net Interest Margin
3.28
%
3.41
%
3.59
%
(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 22.5%.
(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 12/31/2019
12/31/2018 Average Average Average
Average Balance Yield Balance
Yield Interest-earning assets: Loans receivable, net
of fees (1) Commercial real estate
$
733,465
4.80
%
$
587,060
4.72
%
Commercial and industrial
127,706
6.14
%
109,475
5.64
%
Commercial construction
192,528
5.62
%
133,691
5.36
%
Consumer residential
125,573
5.07
%
113,643
4.68
%
Consumer nonresidential
26,446
7.50
%
28,014
6.58
%
Total loans
1,205,718
5.16
%
971,883
4.96
%
Investment securities (2)(3)
142,751
2.71
%
128,721
2.44
%
Interest-bearing deposits at other financial institutions
34,104
2.07
%
34,193
1.75
%
Total interest-earning assets
1,382,573
4.83
%
1,134,797
4.58
%
Non-interest earning assets: Cash and due from banks
8,606
2,683
Premises and equipment, net
2,134
1,555
Accrued interest and other assets
66,157
28,480
Allowance for loan losses
(9,701)
(8,266)
Total Assets
$
1,449,769
$
1,159,249
Interest-bearing liabilities: Interest checking
$
309,938
1.38
%
$
182,532
1.18
%
Savings and money market
252,028
1.45
%
258,462
1.04
%
Time deposits
316,201
2.24
%
265,038
1.61
%
Wholesale deposits
74,715
2.43
%
77,466
1.63
%
Total interest-bearing deposits
952,882
1.77
%
783,498
1.32
%
Other borrowed funds
12,235
2.13
%
8,366
2.11
%
Subordinated notes, net of issuance costs
24,445
6.46
%
24,364
6.48
%
Total interest-bearing liabilities
989,562
1.89
%
816,228
1.48
%
Noninterest-bearing liabilities: Noninterest-bearing
deposits
270,397
222,972
Other liabilities
19,996
3,057
Stockholders’ equity
169,814
116,992
Total Liabilities and Stockholders' Equity
$
1,449,769
$
1,159,249
Net Interest Margin
3.48
%
3.51
%
(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 22.5%. (3) The average
balances for investment securities includes restricted stock.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200123005149/en/
David W. Pijor, Chairman and Chief Executive Officer Phone:
(703) 436-3802 Email: dpijor@fvcbank.com
Patricia A. Ferrick, President Phone: (703) 436-3822 Email:
pferrick@fvcbank.com
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