FVCBankcorp, Inc. (NASDAQ:FVCB) (the “Company”) today reported
fourth quarter 2020 net income of $5.0 million, or $0.36 diluted
earnings per share, compared to $3.7 million, or $0.25 diluted
earnings per share, for the quarter ended December 31, 2019. Net
revenues, which include net interest income plus noninterest
income, for the three months ended December 31, 2020 were $14.9
million, an increase of $2.5 million, from $12.4 million for the
year ago quarter ended December 31, 2019.
For the year ended December 31, 2020, the Company reported net
income of $15.5 million, or $1.10 diluted earnings per share,
compared to $15.8 million, or $1.07 diluted earnings per share, for
the same period of 2019. Net revenues for the year ended December
31, 2020 were $55.5 million, an increase of $4.9 million, from
$50.6 million for the year ended December 31, 2019.
The Company believes the reporting of earnings to exclude branch
closing impairment charges, gains on sales of securities, and
merger and acquisition expenses are more reflective of the
Company’s operating performance (“Operating Earnings”). Operating
Earnings is not a measurement that is in accordance with generally
accepted accounting principles in the United States (“GAAP”).
Operating Earnings for the three months ended December 31, 2020 was
$5.0 million, or $0.36 diluted earnings per share, compared to $3.7
million, or $0.25 diluted earnings per share, for the three months
ended December 31, 2019. Operating Earnings for the year ended
December 31, 2020 was $15.9 million, or $1.13 diluted earnings per
share, compared to $15.9 million, or $1.07 diluted earnings per
share, for the year ended December 31, 2019. A reconciliation of
Operating Earnings can be found in the tables below.
Both the three and twelve month periods ended December 31, 2020
have been impacted by elevated provision for loan losses. In
addition, during the second quarter of 2020, the Company announced
the closure of two branch locations, which resulted in one-time
branch closure costs of $676 thousand ($534 thousand after tax).
The Company began to realize the benefits of annualized cost
savings of approximately $350 thousand related to occupancy expense
beginning in the fourth quarter of 2020. Other annual savings of
approximately $250 thousand include salaries and benefits expense
as the employees for each of these locations have filled current
vacant positions within the Company, reducing the need to hire
additional personnel.
Annualized return on average assets was 1.11% and annualized
return on average equity was 10.68% for the fourth quarter of 2020.
For the comparable quarterly period ended December 31, 2019,
annualized return on average assets was 0.98% and annualized return
on average equity was 8.39%. For the years ended December 31, 2020
and 2019, return on average assets was 0.91% and 1.09%,
respectively. Return on average equity for the years ended December
31, 2020 and 2019 were 8.48% and 9.32%, respectively. On an
Operating Earnings basis, annualized return on average assets and
annualized return on average equity for the three months ended
December 31, 2020 were 1.11% and 10.68%, respectively, and were
0.98% and 8.39%, respectively, for the same period in 2019. On an
Operating Earnings basis, return on average assets and return on
average equity for the year ended December 31, 2020 were 0.93% and
8.71%, respectively, and were 1.10% and 9.38%, respectively, for
the year ended December 31, 2019.
Fourth Quarter Selected Highlights
- Increased Pre-Tax Pre-Provision Income. For the three
months ended December 31, 2020 and 2019, pre-tax pre-provision
income (which also excludes branch closure costs and gains on sales
of securities) was $7.0 million and $5.1 million, respectively, an
increase of $1.9 million or 37.0%. On a linked quarter basis,
pre-tax pre-provision income was $6.6 million for the three months
ended September 30, 2020. Pre-tax pre-provision annualized return
on average assets for the three months ended December 31, 2020 and
2019 were 1.54% and 1.34%, respectively. For the years ended
December 31, 2020 and 2019, pre-tax pre-provision income were $25.2
million and $21.7 million, respectively, an increase of $3.5
million. A reconciliation of pre-tax pre-provision income, a
non-GAAP financial measure, can be found in the tables below.
- Strong Core Deposit Growth. Core deposits, which exclude
wholesale deposits, increased $296.8 million to $1.48 billion at
December 31, 2020, an increase of 25.0%, from December 31, 2019.
Noninterest-bearing deposits represent 26.9% of core deposits at
December 31, 2020.
- Stable Net Interest Margin. Net interest margin for the
quarter ended December 31, 2020 was 3.28% compared to 3.30% for the
quarter ended September 30, 2020, and 3.28% for the year ago
quarter of 2019. Excluding the impact of Paycheck Protection
Program (“PPP”) loans and excess liquidity during the fourth
quarter of 2020, net interest margin for the three months ended
December 31, 2020 would have been 3.49%. Cost of deposits, which
includes noninterest-bearing deposits, for the fourth quarter of
2020 was 0.60%, compared to 1.40% for the fourth quarter of 2019, a
decrease of 80 basis points, or 57.1%.
- Significant Decrease in Payment Deferred Loans. As of
January 15, 2021, approximately 0.86% of the total loan portfolio,
or $12.6 million, continue under COVID-19 deferrals. This compares
to modified loans of $360.2 million, or 24.4% of the total loan
portfolio, reported at June 30, 2020.
- Reduced Levels of Past Due and Nonperforming loans.
Loans past due 90 days or more and still accruing totaled $272
thousand at December 31, 2020, compared to $1.0 million at December
31, 2019. Nonperforming loans and loans past due 90 days or more
and still accruing were $5.6 million, or 0.31% of total assets, at
December 31, 2020, compared to $10.7 million, or 0.70% of total
assets, at December 31, 2019.
- Improved Efficiency Ratio. Efficiency ratio for the
three months ended December 31, 2020 was 53.1%, an improvement from
58.4% for the year ago quarter ended December 31, 2019. For the
year ended December 31, 2020, the Company’s efficiency ratio
improved to 55.6% from 56.9% for the year ended December 31,
2019.
“2020 was a challenging year, but despite this, we achieved
record quarterly earnings for the fourth quarter and we are pleased
with ultimately matching operating earnings in 2020 as compared to
2019. We continue to monitor the credit quality of those loans that
were previously part of our loan deferral program as all but a few
have returned to making their contractual payments. As the second
round of PPP loans begin to ramp up, we will continue to work with
our customers to help gain funding and assist the needs of our
community as we persist through this pandemic and challenging
economy,” stated David W. Pijor, Chairman and CEO.
COVID-19 Pandemic Impact to Loan Portfolio
As a result of the COVID-19 pandemic, the Company implemented
loan payment deferral programs to allow customers who were required
to close or reduce business operations to defer loan principal and
interest payments primarily for 90 days. During the second quarter
of 2020, the Company modified 277 loans for a total outstanding
principal balance of $360.2 million, or 24.4% of the total loan
portfolio. At January 15, 2021, remaining payment deferred loans
totaled $12.6 million, or 0.86% of the total loan portfolio,
comprising eight loans. One loan is a hotel participation loan
totaling $9.7 million, one loan is mixed use commercial real estate
totaling $1.2 million, one loan is SBA guaranteed totaling $334
thousand, four loans are unsecured totaling $149 thousand, and
three mortgage loans which total $1.3 million. For those real
estate loans with approved payment deferrals, these loans are
collateralized and are appropriately reserved for in the allowance
for loan losses.
The Company is closely and proactively monitoring the effects of
the pandemic on its loan and deposit customers and is focused on
assessing risks within the loan portfolio and working with
customers to minimize losses. The Company considers pandemic
impacted loans to include commercial real estate loans to hotels,
churches, and certain retail and special purpose asset classes.
During its assessment of the allowance for loan losses, the Company
addressed the credit risks associated with these pandemic impacted
segments and those loan customers that have requested payment
deferrals.
Balance Sheet
Total assets increased to $1.82 billion at December 31, 2020
compared to $1.54 billion at December 31, 2019, an increase of
$284.2 million, or 18.5%.
Loans receivable, net of deferred fees, totaled $1.47 billion at
December 31, 2020, compared to $1.27 billion at December 31, 2019,
an increase of $195.6 million, or 15.4%. PPP loans originated and
funded, net of fees, totaled $153.0 million, a decrease from $170.3
million at September 30, 2020, as the Company is starting to record
loan forgiveness. During the fourth quarter of 2020, loan
originations, excluding PPP loans, totaled approximately $81.7
million, of which $50.0 million funded during the quarter. For the
full year 2020, net loan growth, excluding PPP loans, is $42.6
million, or 3.4%.
Investment securities decreased $15.2 million to $126.4 million
at December 31, 2020, compared to $141.6 million at December 31,
2019.
Total deposits increased to $1.53 billion at December 31, 2020
compared to $1.29 billion at December 31, 2019, an increase of
$246.8 million, or 19.2%. Core deposits, which represent total
deposits less wholesale deposits, increased $296.8 million, or
25.0%, to $1.48 billion at December 31, 2020 compared to $1.19
billion at December 31, 2019. The increase in core deposits
reflects new customer relationships as well as growth in existing
customer accounts and, to a lesser extent, deposits remaining from
PPP funds. Wholesale deposits totaled $50.0 million, or 3.3% of
total deposits at December 31, 2020, a decrease of $50.0 million
from December 31, 2019. Noninterest-bearing deposits increased
$92.8 million, or 30.3%, to $399.1 million at December 31, 2020
from $306.2 million at December 31, 2019, and represented 26.0% of
total deposits, or 26.9% of core deposits, at December 31,
2020.
The Company’s bank subsidiary, FVCbank, remains well-capitalized
at December 31, 2020 with a community bank leverage ratio of
11.62%.
Income Statement
Net income for the three months ended December 31, 2020 was $5.0
million, compared to $3.7 million for the same period of 2019, and
$3.9 million for the quarter ended September 30, 2020. For the year
ended December 31, 2020, net income was $15.5 million, compared to
$15.8 million for the same period of 2019. Both the three and
twelve month periods of 2020 were impacted by increased provision
for loan losses.
Net interest income totaled $14.1 million, an increase of $2.3
million, or 19.3%, for the quarter ended December 31, 2020,
compared to the year ago quarter, and increased by $524 thousand,
or 3.9%, compared to the third quarter of 2020, a result of
significant decreases in the cost of deposits. Interest expense on
deposits decreased $2.2 million for the three months ended December
31, 2020 compared to the same period of 2019, and decreased $383
thousand compared to the three months ended September 30, 2020. The
impact to interest income from the accretion of loan marks on
acquired loans was $335 thousand and $156 thousand for the three
months ended December 31, 2020 and 2019, respectively. The increase
in income related to loan mark accretion was a result of improved
cash flows for acquired loans during the three months ended
December 31, 2020. In addition, net interest income for the three
months ended December 31, 2020 benefited from PPP loan origination,
which contributed $1.2 million to interest income, of which $330
thousand was related to accelerated accretion from forgiven loans.
Remaining net deferred fees related to PPP originations totaled
$2.8 million at December 31, 2020 and are being recognized in
interest income over the remaining lives of the PPP loans, or
sooner upon PPP loan forgiveness or payment. For the year ended
December 31, 2020 and 2019, net interest income was $52.6 million
and $48.1 million, respectively, an increase of $4.6 million,
year-over-year.
The Company’s net interest margin for each of the three months
ended December 31, 2020 and 2019 was 3.28%, unchanged despite the
decreases in the targeted fed funds rate of 150 basis points during
March 2020. On a linked quarter basis, net interest margin
decreased 2 basis points from 3.30% for the three months ended
September 30, 2020. Excluding the impact of PPP loans (a decrease
of 4 basis points) and excess liquidity (a decrease of 17 basis
points) during the fourth quarter of 2020, net interest margin for
the three months ended December 31, 2020 would have been 3.49%. The
average yield for the loan portfolio for the fourth quarter of 2020
was 4.54% (excluding PPP loans) compared to 5.05% for the year ago
quarter, and 4.76% (excluding PPP loans) for the quarter ended
September 30, 2020. Cost of interest-bearing deposits for the
fourth quarter of 2020 was 0.84%, compared to 1.84% for the fourth
quarter of 2019, a decrease of 100 basis points, or 54.4%,
primarily as a result of the Company having aggressively decreased
its deposit rates during 2020 in order to offset the repricing of
the variable rate loan portfolio.
Noninterest income totaled $740 thousand and $589 thousand for
the quarters ended December 31, 2020 and 2019, respectively. Fee
income from loans was $34 thousand for the quarter ended December
31, 2020, compared to $81 thousand for the same period of 2019.
Service charges on deposit accounts and other fee income totaled
$442 thousand for the fourth quarter of 2020, compared to $404
thousand for the year ago quarter. Income from bank-owned life
insurance increased $15 thousand to $264 thousand for the three
months ended December 31, 2020, compared to $249 thousand for the
same period of 2019, primarily as a result of purchasing additional
policies during 2019. Noninterest income for the year ended
December 31, 2020 was $2.9 million, compared to $2.5 million for
the year ended December 31, 2019, an increase of $345 thousand, or
13.6%, which was primarily driven by an increase in service charges
on deposit accounts and other fee income, and income from
bank-owned life insurance, and offset by fair value losses on loans
held for sale of $451 thousand recorded during the first quarter of
2020 before these loans were transferred to the held for investment
portfolio.
Noninterest expense totaled $7.9 million for the quarter ended
December 31, 2020, compared to $7.3 million for the same
three-month period of 2019, an increase of $551 thousand, or 7.5%.
The increase in noninterest expense compared to the year ago
quarter was primarily related to an increase in data processing and
network administration expense of $120 thousand, which is related
to planned network infrastructure upgrades for 2020, an increase of
$140 thousand for loan related expenses, and an increase in FDIC
insurance of $188 thousand (which was a result of assessment
credits expiring in 2019). The Company has invested in technology
in its efforts to reduce certain expenses where possible. For the
year ended December 31, 2020 and 2019, noninterest expense,
excluding branch closure charges, was $30.2 million and $28.9
million, respectively, an increase of $1.3 million, or 4.5%, which
was less than the Company’s targeted expense growth for 2020.
The efficiency ratio for the quarter ended December 31, 2020 was
53.1%, a decrease from 58.4% for the year ago quarter. The
efficiency ratios for year ended December 31, 2020 and 2019,
excluding branch closure costs and merger expense from 2019, were
54.3% and 56.8%, respectively.
The Company recorded a provision for income taxes of $1.5
million for the three months ended December 31, 2020, compared to
$902 thousand for the same period of 2019. The effective tax rates
for the three months ended December 31, 2020 and 2019 were 22.6%
and 19.5%, respectively. The effective tax rate for the 2019 period
is less than the Company’s combined federal and state statutory
rate of 21.5% primarily because of discrete tax benefits recorded
as a result of exercises of nonqualified stock options.
Asset Quality
The Company recorded a provision for loan losses of $500
thousand for the three months ended December 31, 2020, compared to
$465 thousand for the year ago quarter. The Company is not required
to implement the provisions of the current expected credit losses
(“CECL”) accounting standard until January 1, 2023, and is
continuing to account for the allowance for loans losses under the
incurred loss model. Provision for loan losses for the year ended
December 31, 2020 and 2019 were $5.0 million and $1.7 million,
respectively. The increase in the provision for loan losses for the
year ended December 31, 2020 is primarily related to growth in the
loan portfolio and increases in qualitative factors related to the
economic uncertainties caused by the COVID-19 pandemic, including
an increase in specific reserves.
The allowance for loan losses to total loans, excluding PPP
loans, was 1.14% at December 31, 2020, compared to 0.81% at
December 31, 2019. The effective reserve coverage, which includes
both the allowance for loan losses and the remaining unaccreted
fair value discount on acquired loans, to total loans, excluding
PPP loans, was 1.27% at December 31, 2020. Net charge-offs of $98
thousand recorded during the fourth quarter of 2020 were primarily
related to purchased consumer unsecured loans.
Nonperforming loans and loans 90 days or more past due at
December 31, 2020 totaled $5.6 million, or 0.31% of total assets.
This compares to $10.7 million in nonperforming loans and loans 90
days or more past due at December 31, 2019, or 0.70% of total
assets. All of the Company’s nonperforming loans are secured and
have specific reserves totaling $2.1 million, representing the
expected losses associated with those loans. The Company has one
troubled debt restructuring at December 31, 2020 totaling $97
thousand which is a consumer residential loan. Nonperforming assets
(including other real estate owned) to total assets was 0.52% at
December 31, 2020 compared to 0.95% for December 31, 2019.
Completion of $20 Million Subordinated Notes Offering
On October 13, 2020, the Company announced the completion of its
private placement of $20 million of its 4.875% Fixed to Floating
Subordinated Notes due 2030 (the “Notes”) to certain qualified
institutional buyers and accredited investors. The Notes have a
maturity date of October 15, 2030 and carry a fixed rate of
interest of 4.875% for the first five years. Thereafter, the Notes
will pay interest at 3-month SOFR plus 471 basis points, resetting
quarterly. The Notes include a right of prepayment without penalty
on or after October 15, 2025. The Notes have been structured to
qualify as Tier 2 capital for regulatory purposes. The Company
plans to use the proceeds from the placement of the Notes for
general corporate purposes, to include supporting capital ratios at
the Company’s subsidiary, FVCbank, and potential repayment of a
portion of the $25.0 million outstanding subordinated debt callable
June 30, 2021.
About FVCBankcorp, Inc.
FVCBankcorp, Inc. is the holding company for FVCbank, a
wholly-owned subsidiary that commenced operations in November 2007.
FVCbank is a $1.82 billion asset-sized 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. FVCbank is based in Fairfax, Virginia, and has
9 full-service offices in Arlington, Fairfax, Manassas, Reston and
Springfield, Virginia, Washington D.C., and Baltimore, Bethesda,
and Rockville, 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, 2019 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,
2020
2019
2020
2019
Selected Balances
Total assets
$
1,821,481
$
1,537,295
Total investment securities
132,978
147,606
Loans held for sale
- -
11,198
Total loans, net of deferred
fees
1,466,083
1,270,526
Allowance for loan losses
(14,958)
(10,231)
Total deposits
1,532,493
1,285,722
Subordinated debt
44,085
24,487
Other borrowings
25,000
25,000
Total stockholders’ equity
189,500
179,078
Summary Results of
Operations
Interest income
$
17,129
$
16,777
$
67,103
$
66,734
Interest expense
3,010
4,941
14,483
18,671
Net interest income
14,119
11,836
52,620
48,063
Provision for loan losses
500
465
5,016
1,720
Net interest income after
provision for loan losses
13,619
11,371
47,604
46,343
Noninterest income - loan fees,
service charges and other
476
485
2,092
2,026
Noninterest income - bank owned
life insurance
264
249
1,109
662
Noninterest income - gains on
calls of securities held-to-maturity
- -
- -
- -
3
Noninterest income - gain (loss)
on sales of securities available-for-sale
- -
- -
141
- -
Noninterest income - gain (loss)
on loans held for sale
- -
(145)
(451)
(145)
Noninterest expense
7,885
7,334
30,838
28,877
Income before taxes
6,474
4,626
19,657
20,012
Income tax expense
1,460
902
4,156
4,184
Net income
5,014
3,724
15,501
15,828
Per Share Data
Net income, basic
$
0.37
$
0.27
$
1.14
$
1.15
Net income, diluted
$
0.36
$
0.25
$
1.10
$
1.07
Book value
$
14.03
$
12.88
Tangible book value (1)
$
13.41
$
12.26
Shares outstanding
13,510,760
13,902,067
Selected Ratios
Net interest margin (2)
3.28
%
3.28
%
3.28
%
3.48
%
Return on average assets (2)
1.11
%
0.98
%
0.91
%
1.09
%
Return on average equity (2)
10.68
%
8.39
%
8.48
%
9.32
%
Efficiency (3)
53.07
%
58.35
%
55.55
%
56.90
%
Loans, net of deferred fees to
total deposits
95.67
%
98.82
%
Noninterest-bearing deposits to
total deposits
26.04
%
23.82
%
Reconciliation of Net Income
(GAAP) to Operating Earnings (Non-GAAP) (4)
Net income (from above)
$
5,014
$
3,724
$
15,501
$
15,828
Add: Merger and acquisition
expense
- -
- -
- -
133
Add: Impairment on branch
closures
- -
- -
676
- -
Subtract: Gains on sales of
securities available-for-sale
- -
- -
(141)
- -
Subtract: Gains on calls of
securities held-to-maturity
- -
- -
- -
(3)
Less: provision for income taxes
associated with non-GAAP adjustments
- -
- -
(112)
(30)
Net income, as adjusted
$
5,014
$
3,724
$
15,924
$
15,928
Net income, diluted, on an
operating basis
$
0.36
$
0.25
$
1.13
$
1.07
Return on average assets
(non-GAAP operating earnings)
1.11
%
0.98
%
0.93
%
1.10
%
Return on average equity
(non-GAAP operating earnings)
10.68
%
8.39
%
8.71
%
9.38
%
Efficiency ratio (non-GAAP
operating earnings) (3)
53.07
%
59.03
%
54.34
%
56.79
%
Capital Ratios - Bank
Tangible common equity (to
tangible assets)
9.99
%
11.15
%
Tier 1 leverage (to average
assets)
11.62
%
12.75
%
Asset Quality
Nonperforming loans and loans 90+
past due
$
5,621
$
10,725
Performing troubled debt
restructurings (TDRs)
97
- -
Other real estate owned
3,866
3,866
Nonperforming loans and loans 90+
past due to total assets (excl. TDRs)
0.31
%
0.70
%
Nonperforming assets to total
assets
0.52
%
0.95
%
Nonperforming assets (including
TDRs) to total assets
0.53
%
0.95
%
Allowance for loan losses to
loans
1.02
%
0.81
%
Allowance for loan losses to
nonperforming loans
266.11
%
95.39
%
Net charge-offs
$
98
$
303
$
290
$
648
Net charge-offs to average loans
(2)
0.03
%
0.10
%
0.02
%
0.05
%
Selected Average
Balances
Total assets
$
1,812,298
$
1,514,124
$
1,708,862
$
1,449,769
Total earning assets
1,710,345
1,430,397
1,606,804
1,382,573
Total loans, net of deferred
fees
1,485,121
1,234,183
1,416,381
1,205,718
Total deposits
1,527,313
1,270,821
1,437,802
1,223,279
Other Data
Noninterest-bearing deposits
$
399,062
$
306,235
Interest-bearing checking,
savings and money market
820,378
525,138
Time deposits
263,053
354,362
Wholesale deposits
50,000
99,987
(1)
Non-GAAP Reconciliation
For the Period Ended December
31,
(Dollars in thousands, except per
share data)
2020
2019
Total stockholders’ equity
$
189,500
$
179,078
Less: goodwill and intangibles,
net
(8,357)
(8,689)
Tangible Common Equity
$
181,143
$
170,389
Book value per common share
$
14.03
$
12.88
Less: intangible book value per
common share
(0.62)
(0.63)
Tangible book value per common
share
$
13.41
$
12.26
(2) Annualized.
(3) Efficiency ratio is
calculated as noninterest expense divided by the sum of net
interest income and noninterest income. On a non-GAAP operating
basis, the Company excludes gains (losses) on sales of investment
securities.
(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
12/31/2020
9/30/2020
Quarter
12/31/2019
Year Ago
Cash and due from banks $
20,835
$
22,121
-5.8
%
$
14,916
39.7
%
Interest-bearing deposits at other financial institutions
120,228
73,774
63.0
%
18,226
559.7
%
Investment securities
126,415
111,183
13.7
%
141,589
-10.7
%
Restricted stock, at cost
6,563
6,563
0.0
%
6,017
9.1
%
Loans held for sale, at fair value
- -
- -
0.0
%
11,198
-100.0
%
Loans, net of fees: Commercial real estate
788,218
805,946
-2.2
%
747,993
5.4
%
Commercial and industrial
119,200
111,736
6.7
%
114,924
3.7
%
Paycheck protection program
152,978
170,338
-10.2
%
- -
100.0
%
Commercial construction
221,523
214,740
3.2
%
214,949
3.1
%
Consumer real estate
168,531
177,730
-5.2
%
181,369
-7.1
%
Consumer nonresidential
15,633
17,144
-8.8
%
11,291
38.5
%
Total loans, net of fees
1,466,083
1,497,634
-2.1
%
1,270,526
15.4
%
Allowance for loan losses
(14,958)
(14,556)
2.8
%
(10,231)
46.2
%
Loans, net
1,451,125
1,483,078
-2.2
%
1,260,295
15.1
%
Premises and equipment, net
1,654
1,747
-5.3
%
2,084
-20.6
%
Goodwill and intangibles, net
8,357
8,440
-1.0
%
8,689
-3.8
%
Bank owned life insurance (BOLI)
38,178
37,913
0.7
%
37,069
3.0
%
Other real estate owned
3,866
3,866
0.0
%
3,866
0.0
%
Other assets
44,260
45,487
-2.7
%
33,346
32.7
%
Total Assets $
1,821,481
$
1,794,172
1.5
%
$
1,537,295
18.5
%
Deposits: Noninterest-bearing $
399,062
$
431,322
-7.5
%
$
306,235
30.3
%
Interest-bearing checking
537,834
388,531
38.4
%
302,755
77.6
%
Savings and money market
282,544
298,061
-5.2
%
222,383
27.1
%
Time deposits
263,053
301,431
-12.7
%
354,362
-25.8
%
Wholesale deposits
50,000
95,003
-47.4
%
99,987
-50.0
%
Total deposits
1,532,493
1,514,348
1.2
%
1,285,722
19.2
%
Other borrowed funds
25,000
40,000
-37.5
%
25,000
0.0
%
Subordinated notes, net of issuance costs
44,085
24,547
79.6
%
24,487
80.0
%
Other liabilities
30,403
30,787
-1.2
%
23,008
32.1
%
Stockholders’ equity
189,500
184,490
2.7
%
179,078
5.8
%
Total Liabilities & Stockholders' Equity $
1,821,481
$
1,794,172
1.5
%
$
1,537,295
18.5
%
FVCBankcorp, Inc. Summary Consolidated Income
Statements (In thousands, except per share data)
(Unaudited) For the Three Months Ended
% Change
% Change
Current
From
12/31/2020
9/30/2020
Quarter
12/31/2019
Year Ago
Net interest income $
14,119
$
13,595
3.9
%
$
11,836
19.3
%
Provision for loan losses
500
1,700
-70.6
%
465
7.5
%
Net interest income after provision for loan losses
13,619
11,895
14.5
%
11,371
19.8
%
Noninterest income: Fees on loans
34
35
-2.9
%
81
-58.0
%
Service charges on deposit accounts
271
275
-1.5
%
239
13.4
%
Gain on sale of securities available-for-sale
- -
44
-100.0
%
- -
0.0
%
Loss on loans held for sale
- -
- -
0.0
%
(145)
-100.0
%
BOLI income
264
280
-5.7
%
249
6.0
%
Other fee income
171
136
25.7
%
165
3.6
%
Total noninterest income
740
770
-3.9
%
589
25.6
%
Noninterest expense: Salaries and employee benefits
4,461
4,344
2.7
%
4,514
-1.2
%
Occupancy and equipment expense
804
811
-0.9
%
818
-1.7
%
Data processing and network administration
562
538
4.5
%
442
27.1
%
State franchise taxes
466
466
0.0
%
424
9.9
%
Professional fees
251
303
-17.2
%
192
30.7
%
Other operating expense
1,341
1,284
4.4
%
944
42.1
%
Total noninterest expense
7,885
7,746
1.8
%
7,334
7.5
%
Net income before income taxes
6,474
4,919
31.6
%
4,626
39.9
%
Income tax expense
1,460
1,045
39.7
%
902
61.9
%
Net Income $
5,014
$
3,874
29.4
%
$
3,724
34.6
%
Earnings per share - basic $
0.37
$
0.29
29.4
%
$
0.27
38.6
%
Earnings per share - diluted $
0.36
$
0.28
27.3
%
$
0.25
41.4
%
Weighted-average common shares outstanding - basic
13,482,741
13,476,639
13,878,806
Weighted-average common shares outstanding - diluted
14,123,593
13,891,474
14,837,120
Reconciliation of Net Income (GAAP)
to Operating Earnings (Non-GAAP): GAAP net income
reported above $
5,014
$
3,874
$
3,724
Subtract: Gain on sales of securities available-for-sale
- -
(44)
- -
Subtract: provision for income taxes associated with non-GAAP
adjustments
-
9
-
Net Income, Operating earnings (non-GAAP) $
5,014
$
3,839
$
3,724
Earnings per share - basic (non-GAAP operating earnings) $
0.37
$
0.28
$
0.27
Earnings per share - diluted (non-GAAP operating earnings) $
0.36
$
0.28
$
0.25
Return on average assets (non-GAAP operating earnings)
1.11%
0.88%
0.98%
Return on average equity (non-GAAP operating earnings)
10.68%
8.37%
8.39%
Efficiency ratio (non-GAAP operating earnings)
53.07%
53.92%
59.03%
Reconciliation of Net Income (GAAP)
to Pre-Tax Pre-Provision Income (Non-GAAP): GAAP net
income reported above $
5,014
$
3,874
$
3,724
Add: Provision for loan losses
500
1,700
465
Add: Impairment losses
- -
- -
- -
Subtract: Gain on sales of securities available-for-sale
- -
(44)
- -
Add: Income tax expense
1,460
1,045
902
Pre-tax pre-provision income $
6,974
$
6,575
$
5,091
Earnings per share - basic (non-GAAP operating earnings) $
0.52
$
0.49
$
0.37
Earnings per share - diluted (non-GAAP operating earnings) $
0.49
$
0.47
$
0.34
Return on average assets (non-GAAP operating earnings)
1.54%
1.50%
1.34%
Return on average equity (non-GAAP operating earnings)
14.85%
14.33%
11.47%
FVCBankcorp, Inc. Summary Consolidated Income
Statements (In thousands, except per share data)
(Unaudited) For the Years Ended
% Change
From
12/31/2020
12/31/2019
Year Ago
Net interest income $
52,620
$
48,063
9.5
%
Provision for loan losses
5,016
1,720
191.6
%
Net interest income after provision for loan losses
47,604
46,343
2.7
%
Noninterest income: Fees on loans
511
582
-12.2
%
Service charges on deposit accounts
1,008
890
13.3
%
Gains on calls of securities held-to-maturity
- -
3
-100.0
%
Gain on sale of securities available-for-sale
141
- -
100.0
%
Loss on loans held for sale
(451)
(145)
211.0
%
BOLI income
1,109
662
67.5
%
Other fee income
573
554
3.4
%
Total noninterest income
2,891
2,546
13.6
%
Noninterest expense: Salaries and employee benefits
16,745
17,047
-1.8
%
Occupancy and equipment expense
3,329
3,400
-2.1
%
Data processing and network administration
2,028
1,638
23.8
%
State franchise taxes
1,864
1,696
9.9
%
Professional fees
986
826
19.4
%
Merger and acquisition expense
- -
133
-100.0
%
Impairment on branch closures
676
- -
100.0
%
Other operating expense
5,210
4,137
25.9
%
Total noninterest expense
30,838
28,877
6.8
%
Net income before income taxes
19,657
20,012
-1.8
%
Income tax expense
4,156
4,184
-0.7
%
Net Income $
15,501
$
15,828
-2.1
%
Earnings per share - basic $
1.14
$
1.15
-0.1
%
Earnings per share - diluted $
1.10
$
1.07
2.7
%
Weighted-average common shares outstanding - basic
13,541,550
13,816,997
Weighted-average common shares outstanding - diluted
14,133,688
14,825,489
Reconciliation of Net Income (GAAP)
to Operating Earnings (Non-GAAP): GAAP net income
reported above $
15,501
$
15,828
Add: Merger and acquisition expense
- -
133
Add: Impairment loss
676
- -
Subtract: Gain on sales of securities available-for-sale
(141)
- -
Subtract: (Gains) on calls of securities held-to-maturity
- -
(3)
Subtract: provision for income taxes associated with non-GAAP
adjustments
(112)
(30)
Net Income, Operating earnings (non-GAAP) $
15,924
$
15,928
Earnings per share - basic (non-GAAP operating earnings) $
1.18
$
1.15
Earnings per share - diluted (non-GAAP operating earnings) $
1.13
$
1.07
Return on average assets (non-GAAP operating earnings)
0.93%
1.10%
Return on average equity (non-GAAP operating earnings)
8.71%
9.38%
Efficiency ratio (non-GAAP operating earnings)
54.34%
56.79%
Reconciliation of Net Income (GAAP)
to Pre-Tax Pre-Provision Income (Non-GAAP): GAAP net
income reported above $
15,501
$
15,828
Add: Provision for loan losses
5,016
1,720
Add: Impairment losses
676
- -
Subtract: Gain on sales of securities available-for-sale
(141)
- -
Add: Income tax expense
4,156
4,184
Pre-tax pre-provision income $
25,208
$
21,732
Earnings per share - basic (non-GAAP operating earnings) $
1.86
$
1.57
Earnings per share - diluted (non-GAAP operating earnings) $
1.78
$
1.47
Return on average assets (non-GAAP operating earnings)
1.48%
1.50%
Return on average equity (non-GAAP operating earnings)
13.79%
12.80%
FVCBankcorp, Inc. Average Statements of Condition and
Yields on Earning Assets and Interest-Bearing Liabilities
(Dollars in thousands) (Unaudited) For the
Three Months Ended 12/31/2020 9/30/2020
12/31/2019 Average Interest Average
Average Interest Average Average
Interest Average Balance Income/Expense
Yield Balance Income/Expense Yield
Balance Income/Expense Yield
Interest-earning
assets:
Loans receivable, net of fees
(1)
Commercial real estate
$
797,575
$
8,677
4.35
%
$
784,990
$
9,005
4.59
%
$
691,282
$
8,295
4.80
%
Commercial and industrial
110,766
1,677
6.06
%
107,716
1,356
5.04
%
111,753
1,662
5.95
%
Paycheck protection program
164,302
1,211
2.95
%
170,071
981
2.31
%
- -
- -
0.0
%
Commercial construction
222,302
2,533
4.56
%
225,711
2,421
4.29
%
217,318
2,923
5.38
%
Consumer real estate
173,642
1,765
4.07
%
178,531
1,850
4.15
%
189,968
2,265
4.77
%
Consumer nonresidential
16,534
326
7.88
%
17,834
345
7.72
%
23,862
435
7.29
%
Total loans
1,485,121
16,189
4.36
%
1,484,853
15,958
4.30
%
1,234,183
15,580
5.05
%
Investment securities (2)(3)
113,665
912
3.21
%
119,846
793
2.65
%
145,730
976
2.70
%
Loans held for sale, at fair
value
- -
- -
0.0
%
- -
- -
0.0
%
- -
- -
0.0
%
Interest-bearing deposits at
other financial institutions
111,559
34
0.12
%
37,326
16
0.17
%
50,484
221
1.74
%
Total interest-earning assets
1,710,345
17,135
4.01
%
1,642,025
16,767
4.08
%
1,430,397
16,777
4.69
%
Non-interest earning
assets:
Cash and due from banks
17,147
18,769
10,727
Premises and equipment, net
1,717
1,816
2,022
Accrued interest and other
assets
97,765
99,512
80,989
Allowance for loan losses
(14,676)
(13,117)
(10,011)
Total Assets
$
1,812,298
$
1,749,005
$
1,514,124
Interest-bearing
liabilities:
Interest checking
$
458,142
$
702
0.61
%
$
379,218
$
659
0.69
%
$
317,552
1,191
1.50
%
Savings and money market
283,776
363
0.51
%
284,665
386
0.54
%
241,912
819
1.35
%
Time deposits
284,634
1,185
1.66
%
311,615
1,458
1.86
%
339,054
2,068
2.44
%
Wholesale deposits
67,935
57
0.33
%
83,044
187
0.90
%
68,787
397
2.31
%
Total interest-bearing
deposits
1,094,487
2,307
0.84
%
1,058,542
2,690
1.01
%
967,305
4,475
1.84
%
Other borrowed funds
25,023
86
1.37
%
27,400
81
1.17
%
15,926
71
1.77
%
Subordinated notes, net of
issuance costs
41,526
617
5.91
%
24,534
395
6.40
%
24,474
395
6.40
%
Total interest-bearing
liabilities
1,161,036
3,010
1.03
%
1,110,476
3,166
1.13
%
1,007,705
4,941
1.95
%
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
432,826
423,357
303,516
Other liabilities
30,561
31,673
25,323
Stockholders’ equity
187,875
183,499
177,580
Total Liabilities and
Stockholders' Equity
$
1,812,298
$
1,749,005
$
1,514,124
Net Interest Margin
14,125
3.28
%
13,601
3.30
%
11,836
3.28
%
(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 21% . (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
12/31/2020
12/31/2019
Average
Interest
Average
Average
Interest
Average
Balance
Income/Expense
Yield
Balance
Income/Expense
Yield
Interest-earning assets: Loans receivable, net of
fees (1) Commercial real estate $
777,545
$
35,064
4.51
%
$
660,691
$
31,654
4.79
%
Commercial and industrial
107,980
5,891
5.46
%
127,706
7,844
6.14
%
Paycheck protection program
114,344
2,993
2.62
%
- -
- -
0.0
%
Commercial construction
222,708
10,343
4.64
%
192,528
10,819
5.62
%
Consumer real estate
178,479
7,760
4.35
%
198,347
9,882
4.98
%
Consumer nonresidential
15,325
1,158
7.56
%
26,446
1,983
7.50
%
Total loans
1,416,381
63,209
4.46
%
1,205,718
62,182
5.16
%
Investment securities (2)(3)
126,405
3,527
2.79
%
142,751
3,871
2.71
%
Loans held for sale, at fair value
3,431
236
6.87
%
- -
- -
0.0
%
Interest-bearing deposits at other financial institutions
60,587
153
0.25
%
34,104
705
2.07
%
Total interest-earning assets
1,606,804
67,125
4.18
%
1,382,573
66,758
4.83
%
Non-interest earning assets: Cash and
due from banks
17,252
8,606
Premises and equipment, net
1,880
2,134
Accrued interest and other assets
95,346
66,157
Allowance for loan losses
(12,420)
(9,701)
Total Assets $
1,708,862
$
1,449,769
Interest-bearing liabilities: Interest
checking $
363,408
$
2,839
0.78
%
$
309,938
4,287
1.38
%
Savings and money market
264,987
1,819
0.69
%
252,028
3,644
1.45
%
Time deposits
317,850
6,447
2.03
%
316,201
7,080
2.24
%
Wholesale deposits
100,885
1,228
1.22
%
74,715
1,819
2.43
%
Total interest-bearing deposits
1,047,130
12,333
1.18
%
952,882
16,830
1.77
%
Other borrowed funds
29,125
347
1.19
%
12,235
261
2.13
%
Subordinated notes, net of issuance costs
28,790
1,802
6.26
%
24,445
1,580
6.46
%
Total interest-bearing liabilities
1,105,045
14,482
1.31
%
989,562
18,671
1.89
%
Noninterest-bearing liabilities:
Noninterest-bearing deposits
390,672
270,397
Other liabilities
30,327
19,996
Stockholders’ equity
182,818
169,814
Total Liabilities and
Stockholders' Equity
$
1,708,862
$
1,449,769
Net Interest Margin
52,643
3.28
%
48,087
3.48
%
(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 21%.
(3) The average balances for investment securities includes
restricted stock.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210121005275/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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