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