FVCBankcorp Inc. Announces Record First Quarter 2018 Earnings

FAIRFAX, Va.--()--FVCBankcorp Inc. (OTCQX:FVCB) (the “Company”) today reported first quarter 2018 earnings increased 29% from a year ago to $3.0 million, or $0.25 diluted earnings per share, compared to $2.3 million, or $0.22 diluted earnings per share, for the quarterly period ended March 31, 2017. On a linked quarter basis, net income increased $2.0 million from December 31, 2017. Results for March 31, 2018 are reported using the new lower federal statutory tax rate and results for December 31, 2017 were impacted by a write down in the Company’s deferred tax asset as a result of the change to enactment of tax legislation during December 2017.

Return on average assets was 1.13% and return on average equity was 12.03% for the first quarter of 2018. For the comparable March 31, 2017 period, return on average assets was 1.03% and return on average equity was 11.42%.

Selected Highlights

  • Total loans, net of deferred fees, increased $150 million, or 20%, from March 31, 2017 to March 31, 2018. Asset quality remains strong with nonperforming loans and loans past due 90 days or more as a percentage of total assets being 0.08% at March 31, 2018, compared to 0.05% at March 31, 2017.
  • Total deposits increased $125 million, or 15%, from March 31, 2017 to March 31, 2018. The Company’s increase in deposits is a result of several targeted promotions in addition to continued growth in core deposits.
  • Tangible book value per share at March 31, 2018 was $9.15, an increase from $8.08 at March 31, 2017.

“The Company saw stellar growth during the first quarter of 2018. Strong growth of our loan portfolio contributed to strong core earnings of $3.0 million for the quarter,” stated David W. Pijor, Chairman and CEO. “We have a robust loan pipeline going into the second quarter and a number of deposit initiatives to support our growth in core deposits.”

Balance Sheet

Total assets increased to $1.08 billion compared to $922.3 million as of March 31, 2018 and 2017, respectively, an increase of $156 million, or 17%. Loans receivable, net of deferred fees, totaled $921.2 million as of March 31, 2018, compared to $770.8 million as of March 31, 2017, a year over year increase of $150 million, or 20%. For the first quarter of 2018, loans receivable, net of deferred fees, increased $33 million, or 15% on an annualized basis.

Total deposits increased to $938.7 million as of March 31, 2018 compared to $813.5 million as of March 31, 2017, an increase of $125 million, or 15%. Noninterest-bearing deposits increased 4% to $179.4 million at March 31, 2018, or 19% of total deposits, compared to $172.5 million at March 31, 2017. Core deposits, which include total deposits less wholesale deposits, increased $97 million or 13% year over year. Wholesale deposits totaled $104.8 million, or 11% of total deposits at March 31, 2018, a decrease of $10.7 million from December 31, 2017 and an increase of $28.5 million from March 31, 2017.

Income Statement

Net interest income totaled $8.8 million, an increase of $1.2 million, or 15%, for the quarter ended March 31, 2018, compared to the year ago quarter. The Company’s net interest margin was 3.43% and 3.42% for the quarters ended March 31, 2018 and 2017, respectively. On a linked quarter basis, the margin remained at 3.43%, a result of increases in earning assets being offset proportionately by increases in funding costs.

Noninterest income totaled $385,000 and $792,000 for the quarters ended March 31, 2018 and 2017, respectively. During the first quarter of 2017, the Company recorded noninterest income of $443,000 from a claim on the bank owned life insurance (“BOLI”) policies. Recurring fee income from fees on loans, service charges on deposits, and other fee income was $275,000, an increase of 51% for the quarter ended March 31, 2018 compared to 2017. This increase in recurring fee income is primarily due to initiatives the Company began during 2017 to enhance fee income through ancillary services designed to assist its clients’ financial needs.

Noninterest expense totaled $5.3 million for the quarter ended March 31, 2018, compared to $4.7 million for the same three-month period of 2017. The increase in noninterest expense is primarily attributable to the Company strategically hiring business development officers and back office staff during 2017 to support the Company’s growth plans in addition to annual compensation-related increases and associated taxes for 2018. As a result, salary and compensation related expenses increased $344 thousand, or 12%, for the quarter ended March 31, 2018, compared to the same three-month period of 2017. Increases in data processing and network administration, franchise taxes and other operating expenses for the quarter ended March 31, 2018 compared to the same three-month period of 2017 is primarily growth related. The efficiency ratio for the quarter ended March 31, 2018 was 57.5%, an increase from 56.9% from the year ago quarter.

Asset Quality

Asset quality remains strong as nonperforming loans and loans ninety days or more past due totaled $838,000, or 0.08% of total assets. Troubled debt restructurings (“TDR”) decreased to $1.5 million at March 31, 2018, compared to $5.0 million at March 31, 2017. Nonperforming assets (including TDRs and other real estate owned) to total assets was 0.57% and 0.59% for the periods ended March 31, 2018 and 2017, respectively. The allowance for loan losses to total loans was 0.88% at March 31, 2018 and March 31, 2017, reflecting the Company’s continued low level of problem loans and stable economic environment.

About FVCBankcorp Inc.

Celebrating 10 years of sound financial performance and continued growth, FVCbank commenced operations in November 2007 and is the wholly-owned subsidiary of FVCBankcorp Inc. FVCbank is a $1.08 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 Washington, D.C., metropolitan and Northern Virginia area. Locally owned and managed, it is based in Fairfax, Virginia, and has six full-service offices in Arlington, Ashburn, Fairfax, Manassas, Reston and Springfield, Virginia. Visit www.fvcbank.com for more information.

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, to statements about the Company’s plans, objectives, estimates, intentions and expectations as to future trends, plans, events or results of the Company’s operations and policies and regarding general economic conditions. These forward-looking statements are based on current beliefs that involve significant risks, uncertainties, and assumptions. 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.

 
FVCBankcorp, Inc.
Selected Financial Data
(Dollars in thousands, except share data and per share data)
 
 
  For the Quarters Ended
(Unaudited)
3/31/2018   12/31/2017   3/31/2017
Selected Balances
Total assets $ 1,078,697 $ 1,053,224 $ 922,321
Total investment securities 119,806 117,712 110,173
Total loans, net of deferred fees 921,231 888,677 770,756
Allowance for loan losses (8,102 ) (7,725 ) (6,777 )
Total deposits 938,661 928,163 813,519
Subordinated debt 24,347 24,327 24,267
Other borrowings 12,500 - -
Total stockholders’ equity 100,651 98,283 82,416
Summary Results of Operations
Interest income $ 11,341 $ 10,801 $ 9,388
Interest expense 2,578 2,350 1,791
Net interest income 8,763 8,451 7,597
Provision for loan losses 358 435 350
Net interest income after provision for loan losses 8,405 8,016 7,247
Noninterest income - loan fees, service charges and other 275 252 182
Noninterest income - bank owned life insurance 110 114 514
Noninterest income - gains on securities sold - 30 96

Noninterest income - gains on foreclosure of other real estate owned

- 1,076 -
Noninterest expense 5,260 4,925 4,717
Income before taxes 3,530 4,563 3,322
Income tax expense 533 3,558 993
Net income 2,997 1,005 2,329
Per Share Data (2)
Net income, basic $ 0.27 $ 0.09 $ 0.23
Net income, diluted $ 0.25 $ 0.08 $ 0.22
Book value $ 9.16 $ 9.04 $ 8.09
Tangible Book value $ 9.15 $ 9.03 $ 8.08
Shares outstanding 10,990,572 10,868,984 10,184,553
Selected Ratios

Net interest margin (3)

3.43 % 3.43 % 3.42 %

Return on average assets (3)

1.13 % 0.40 % 1.03 %

Return on average equity (3)

12.03 % 4.06 % 11.42 %
Efficiency (1) 57.50 % 55.86 % 56.88 %
Loans, net of deferred to total deposits 98.14 % 95.75 % 94.74 %
Noninterest-bearing deposits to total deposits 19.11 % 18.90 % 21.20 %
Capital Ratios - Bank
Tangible common equity (to tangible assets) 9.32 % 9.33 % 8.92 %
Total capital (to risk weighted assets) 12.90 % 12.83 % 13.41 %
Common equity tier 1 capital (to risk weighted assets) 12.10 % 12.05 % 12.60 %
Tier 1 capital (to risk weighted assets) 12.10 % 12.05 % 12.60 %
Tier 1 leverage (to average assets) 11.71 % 11.79 % 11.59 %
Asset Quality
Nonperforming loans and loans 90+ past due $ 838 $ 789 $ 450
Troubled debt restructurings (TDRs) $ 1,470 $ 1,657 $ 4,982
Other real estate owned $ 3,866 $ 3,866 $ -
Nonperforming loans and loans 90+ past due to total assets (excl. TDRs) 0.08 % 0.07 % 0.05 %
Nonperforming assets to total assets 0.44 % 0.44 % 0.05 %
Nonperforming assets (including TDRs) to total assets 0.57 % 0.58 % 0.59 %
Allowance for loan losses to loans 0.88 % 0.87 % 0.88 %
Allowance for loan losses to nonperforming assets 966.83 % 979.09 % 1,506.00 %
Net charge-offs (recovery) $ (19 ) $ (19 ) $ 26

Net charge-offs (recovery) to average loans (3)

(0.01 )% (0.01 )% 0.01 %
 
 

(1)

Efficiency ratio is calculated as noninterest expense divided by the sum of net interest income and noninterest income, excluding gains 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.

 
 
FVCBankcorp, Inc.

Summary Consolidated Statements of Condition

(Dollars in thousands)
(Unaudited)
 
 
  % Change     % Change
Current From
3/31/2018 12/31/2017 Quarter 3/31/2017 Year Ago
 
Cash and due from banks $ 8,258 $ 7,428 11.2 % $ 7,545 9.4 %

Interest-bearing deposits at other financial institutions

3,898 15,139 -74.3 % 16,640 -76.6 %
Investment securities 119,806 117,712 1.8 % 110,173 8.7 %
Restricted stock, at cost 4,225 3,438 22.9 % 3,438 22.9 %
 
Loans, net of fees:
Commercial real estate 581,464 525,530 10.6 % 491,293 18.4 %
Commercial and industrial 98,985 98,049 1.0 % 97,721 1.3 %
Commercial construction 100,176 122,730 -18.4 % 58,150 72.3 %
Consumer residential 110,404 109,893 0.5 % 105,439 4.7 %
Consumer nonresidential   30,202   32,475 -7.0 %   18,153   66.4 %
Total loans, net of fees 921,231 888,677 3.7 % 770,756 19.5 %
Allowance for loan losses   (8,102 ) (7,725 ) 4.9 %   (6,777 ) 19.6 %
Loans, net 913,129 880,952 3.7 % 763,979 19.5 %
 
Premises and equipment, net 1,349 1,236 9.1 % 1,470 -8.2 %
Bank owned life insurance (BOLI) 16,079 15,969 0.7 % 10,628 51.3 %
Other real estate owned 3,866 3,866 0.0 % - 100.0 %
Other assets   8,087 7,484 8.1 %   8,448   -4.3 %
 
Total Assets $ 1,078,697 $ 1,053,224 2.4 % $ 922,321   17.0 %
 
Deposits:
Noninterest-bearing $ 179,407 $ 175,446 2.3 % $ 172,481 4.0 %
Interest-bearing checking 201,949 185,528 8.9 % 214,032 -5.6 %
Savings and money market 199,110 193,573 2.9 % 164,208 21.3 %
Time deposits 253,444 258,127 -1.8 % 186,584 35.8 %
Wholesale deposits   104,751 115,489 -9.3 %   76,214   37.4 %
Total deposits 938,661 928,163 1.1 % 813,519 15.4 %
 
Other borrowed funds 12,500 - 100.0 % - 100.0 %

Subordinated notes, net of issuance costs

24,347 24,327 0.1 % 24,267 0.3 %
Other liabilities 2,538 2,451 3.5 % 2,119 19.8 %
 
Stockholders’ equity   100,651 98,283 2.4 %   82,416 22.1 %
 

Total Liabilities & Stockholders' Equity

$ 1,078,697 $ 1,053,224 2.4 % $ 922,321 17.0 %
 
         
FVCBankcorp, Inc.
Summary Consolidated Income Statements
(In thousands, except per share data)
(Unaudited)
 
 
For the Three Months Ended
% Change % Change
Current From
3/31/2018 12/31/2017 Quarter 3/31/2017 Year Ago
 
Net interest income $ 8,763 $ 8,451 3.7 % $ 7,597 15.3 %
Provision for loan losses   358   435 -17.7 %   350 2.3 %
Net interest income after provision for loan losses   8,405   8,016 4.9 %   7,247 16.0 %
 
Noninterest income:
Fees on Loans 58 29 100.0 % 16 262.5 %
Service charges on deposit accounts 141 145 -2.8 % 115 22.6 %
Gains on sale of securities available-for-sale - 30 -100.0 % 96 -100.0 %
Gains on foreclosure of other real estate owned - 1,076 -100.0 % - 0.0 %
BOLI income 110 114 -3.5 % 514 -78.6 %
Other fee income   76   78 -2.6 %   51 49.0 %
Total noninterest income   385   1,472 -73.8 %   792 -51.4 %
 
Noninterest expense:
Salaries and employee benefits 3,185 2,861 11.3 % 2,841 12.1 %
Occupancy and equipment expense 571 586 -2.6 % 575 -0.7 %
Data processing and network administration 269 285 -5.6 % 224 20.1 %
State franchise taxes 296 252 17.5 % 276 7.2 %
Professional fees 156 161 -3.1 % 118 32.2 %
Other operating expense   783   780 0.4 %   683 14.6 %
Total noninterest expense   5,260   4,925 6.8 %   4,717 11.5 %
Net income before income taxes 3,530 4,563 -22.6 % 3,322 6.3 %
Income tax expense   533   3,558 -85.0 %   993 -46.3 %
Net Income $ 2,997 $ 1,005 198.2 % $ 2,329 28.7 %
 
Earnings per share - basic $ 0.27 $ 0.09 195.1 % $ 0.23 19.3 %
Earnings per share - diluted $ 0.25 $ 0.08 200.9 % $ 0.22 15.7 %
 
           
FVCBankcorp, Inc.
Average Statements of Condition and Yields on Earning Assets and Interest-Bearing Liabilities
(Dollars in thousands)
(Unaudited)
 
 
For the Three Months Ended
3/31/2018 12/31/2017 3/31/2017
Average Average Average Average Average Average
Balance Yield Balance Yield Balance Yield
Interest-earning assets:

Loans receivable, net of fees (3)

Commercial real estate $ 565,614 4.66 % $ 549,731 4.69 % $ 479,353 4.64 %
Commercial and industrial 96,549 5.06 % 90,054 5.06 % 103,740 4.50 %
Commercial construction 92,949 4.87 % 80,242 4.86 % 56,760 5.17 %
Consumer residential 108,815 4.31 % 107,185 4.40 % 106,126 4.00 %
Consumer nonresidential   29,789 6.22 %   23,911 5.45 %   18,986 3.67 %
Total loans 893,716 4.73 % 851,123 4.73 % 764,965 4.55 %
 

Investment securities (1)(2)

122,860 2.37 % 122,231 2.32 % 115,740 2.32 %

Interest-bearing deposits at other financial institutions

  5,805 3.15 %   13,294 1.21 %   6,818 0.83 %
Total interest-earning assets 1,022,381 4.44 % 986,648 4.38 % 887,523 4.23 %
 
Non-interest earning assets:
Cash and due from banks 13,578 7,315 6,574
Premises and equipment, net 1,229 1,228 1,453

Accrued interest and other assets

27,102 25,282 19,244
Allowance for loan losses   (7,827)   (7,403)   (6,548)
 
Total Assets $ 1,056,463 $ 1,013,070 $ 908,246
 
Interest-bearing liabilities:
Interest checking $ 187,251 0.87 % $ 193,897 0.85 % $ 204,721 0.78 %
Savings and money market 188,911 0.96 % 179,495 0.85 % 173,710 0.63 %
Time deposits 263,736 1.40 % 238,331 1.42 % 181,641 1.24 %
Wholesale deposits   107,265 1.47 %   82,094 1.28 %   64,348 0.90 %
Total interest-bearing deposits 747,163 1.17 % 693,817 1.10 % 624,420 0.88 %
 
Other borrowed funds 8,327 1.73 % 9,287 1.59 % 16,615 0.84 %

Subordinated notes, net of issuance costs

  24,334 6.58 %   24,314 6.44 %   24,254 6.60 %
Total interest-bearing liabilities 779,824 1.32 % 727,418 1.28 % 665,289 1.08 %
 
Noninterest-bearing liabilities:
Noninterest-bearing deposits 174,462 184,665 159,367
Other liabilities 2,519 1,903 2,008
 
Stockholders’ equity   99,658   99,084   81,582
 

Total Liabilities and Stockholders' Equity

$ 1,056,463 $ 1,013,070 $ 908,246
 

Net Interest Margin (1)

3.43 % 3.43 % 3.42 %
 

(1)

 

The average yields for investment securities are reported on a fully taxable-equivalent basis at a rate of 21% for 2018 and 34.5% for 2017.

(2)

The average balances for investment securities includes restricted stock.

(3)

Non-accrual loans are included in average balances.

 

Contacts

FVCBankcorp Inc.
David W. Pijor, Chairman and Chief Executive Officer
703-436-3802
dpijor@fvcbank.com
or
Patricia A. Ferrick, President
703-436-3822
pferrick@fvcbank.com

Contacts

FVCBankcorp Inc.
David W. Pijor, Chairman and Chief Executive Officer
703-436-3802
dpijor@fvcbank.com
or
Patricia A. Ferrick, President
703-436-3822
pferrick@fvcbank.com