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Section 1: 8-K (8-K)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  January 23, 2019

 

FVCBankcorp, Inc.

(Exact name of registrant as specified in its charter)

 

Virginia

 

001-38647

 

47-5020283

(State or other jurisdiction

 

(Commission file number)

 

(IRS Employer

of incorporation)

 

 

 

Number)

 

11325 Random Hills Road

Fairfax, Virginia 22030

(Address of Principal Executive Offices) (Zip Code)

 

(703) 436-3800

Registrant’s telephone number, including area code:

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

 

 

 


 

Item 2.02              Results of Operations and Financial Condition.

 

On January 23, 2019, FVCBankcorp, Inc. issued a press release reporting its financial results for the period ended December 31, 2018.  A copy of the press release is being furnished as an exhibit to this report and is incorporated by reference into this Item 2.02.

 

Item 9.01              Financial Statements and Exhibits.

 

(d)        Exhibits.

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release dated January 23, 2019.

 

2


 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

FVCBANKCORP, INC.

 

 

 

 

 

 

 

By:

/s/ Jennifer L. Deacon

 

Jennifer L. Deacon, Executive Vice President and Chief Financial Officer

 

 

Dated: January 25, 2019

 

 

3


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Section 2: EX-99.1 (EX-99.1)

Exhibit 99.1

 

PRESS RELEASE

 

For further information, contact:

David W. Pijor, Chairman and Chief Executive Officer

Phone: (703) 436-3802

Email: [email protected]

Patricia A. Ferrick, President

Phone: (703) 436-3822

Email: [email protected]

 

FOR IMMEDIATE RELEASE — January 23, 2019

 

FVCBankcorp, Inc. Announces Record Earnings;

Successful Integration of Colombo Bank

 

Fairfax, VA-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: Gains (losses) on sales of securities available-for-sale

 

(462

)

30

 

(462

)

164

 

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

)

Net income, as adjusted

 

$

2,967

 

$

1,903

 

$

12,958

 

$

8,454

 

Net income, diluted, on an operating basis

 

$

0.26

 

$

0.16

 

$

1.08

 

$

0.73

 

Return on average assets (non-GAAP operating earnings)

 

1.16

%

0.75

%

1.20

%

0.88

%

Return on average equity (non-GAAP operating earnings)

 

10.07

%

7.62

%

11.87

%

9.49

%

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

 

$

4,451

 

$

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)

 

0.33

%

0.07

%

 

 

 

 

Nonperforming assets to total assets

 

0.64

%

0.44

%

 

 

 

 

Nonperforming assets (including TDRs) to total assets

 

0.66

%

0.58

%

 

 

 

 

Allowance for loan losses to loans

 

0.81

%

0.87

%

 

 

 

 

Allowance for loan losses to nonperforming loans

 

205.77

%

979.09

%

 

 

 

 

Net charge-offs (recovery)

 

$

347

 

$

(19

)

$

84

 

$

(73

)

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

 

0.13

%

(0.01

)%

0.01

%

(0.01

)%

Selected Average Balances

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,341,991

 

$

1,013,070

 

$

1,159,249

 

$

955,892

 

Total earning assets

 

1,305,573

 

986,648

 

1,134,797

 

936,356

 

Total loans, net of deferred fees

 

1,101,539

 

851,123

 

971,883

 

805,186

 

Total deposits

 

1,141,500

 

878,481

 

1,006,470

 

823,825

 

Other Data

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

233,318

 

$

175,446

 

 

 

 

 

Interest-bearing checking, savings and money market

 

533,732

 

379,101

 

 

 

 

 

Time deposits

 

310,985

 

258,127

 

 

 

 

 

Wholesale deposits

 

84,405

 

115,489

 

 

 

 

 

 


(1)  Efficiency ratio is calculated as noninterest expense divided by the sum of net interest income and noninterest income, excluding gains (losses) on sales of investment securities and other real estate owned.

(2) All per share data calculations have been retroactively adjusted for the five-for-four stock split declared September 2017.

(3) Annualized.

(4) Some of the financial measures discussed throughout the press release are “non-GAAP financial measures.” In accordance with SEC rules, the Company classifies a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP in our statements of income, balance sheets or statements of cash flows.

 


 

FVCBankcorp, Inc.

Summary Consolidated Statements of Condition

(Dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

% Change

 

 

 

% Change

 

 

 

 

 

 

 

Current

 

 

 

From

 

 

 

12/31/2018

 

9/30/2018

 

Quarter

 

12/31/2017

 

Year Ago

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

9,435

 

$

8,939

 

5.5

%

$

7,428

 

27.0

%

Interest-bearing deposits at other financial institutions

 

34,060

 

46,396

 

-26.6

%

15,139

 

125.0

%

Investment securities

 

125,298

 

113,131

 

10.8

%

117,712

 

6.4

%

Restricted stock, at cost

 

5,299

 

3,800

 

39.4

%

3,438

 

54.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net of fees:

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

682,203

 

592,083

 

15.2

%

526,065

 

29.7

%

Commercial and industrial

 

137,080

 

108,331

 

26.5

%

98,150

 

39.7

%

Commercial construction

 

152,526

 

144,140

 

5.8

%

123,444

 

23.6

%

Consumer residential

 

132,280

 

107,207

 

23.4

%

108,786

 

21.6

%

Consumer nonresidential

 

32,654

 

26,543

 

23.0

%

32,232

 

1.3

%

Total loans, net of fees

 

1,136,743

 

978,304

 

16.2

%

888,677

 

27.9

%

Allowance for loan losses

 

(9,159

)

(8,576

)

6.8

%

(7,725

)

18.6

%

Loans, net

 

1,127,584

 

969,728

 

16.3

%

880,952

 

28.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Premises and equipment, net

 

2,271

 

1,420

 

59.9

%

1,236

 

83.7

%

Bank owned life insurance (BOLI)

 

16,406

 

16,297

 

0.7

%

15,969

 

2.7

%

Other real estate owned

 

4,224

 

3,866

 

9.3

%

3,866

 

9.3

%

Other assets

 

27,384

 

11,860

 

130.9

%

7,484

 

265.9

%

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

1,351,961

 

$

1,175,437

 

15.0

%

$

1,053,224

 

28.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

233,318

 

$

211,808

 

10.2

%

$

175,446

 

33.0

%

Interest-bearing checking

 

312,446

 

276,197

 

13.1

%

185,528

 

68.4

%

Savings and money market

 

221,286

 

209,122

 

5.8

%

193,573

 

14.3

%

Time deposits

 

310,985

 

246,272

 

26.3

%

258,127

 

20.5

%

Wholesale deposits

 

84,405

 

50,587

 

66.9

%

115,489

 

-26.9

%

Total deposits

 

1,162,440

 

993,986

 

16.9

%

928,163

 

25.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Other borrowed funds

 

 

15,000

 

-100.0

%

 

0.0

%

Subordinated notes, net of issuance costs

 

24,407

 

24,387

 

0.1

%

24,327

 

0.3

%

Other liabilities

 

6,393

 

3,288

 

94.4

%

2,451

 

160.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

158,721

 

138,776

 

14.4

%

98,283

 

61.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities & Stockholders’ Equity

 

$

1,351,961

 

$

1,175,437

 

15.0

%

$

1,053,224

 

28.4

%

 


 

FVCBankcorp, Inc.

Summary Consolidated Income Statements

(In thousands, except per share data)

(Unaudited)

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

% Change

 

 

 

% Change

 

 

 

 

 

 

 

Current

 

 

 

From

 

 

 

12/31/2018

 

9/30/2018

 

Quarter

 

12/31/2017

 

Year Ago

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

11,817

 

$

9,878

 

19.6

%

$

8,451

 

39.8

%

Provision for loan losses

 

930

 

351

 

165.0

%

435

 

113.8

%

Net interest income after provision for loan losses

 

10,887

 

9,527

 

14.3

%

8,016

 

35.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

Fees on Loans

 

249

 

411

 

-39.4

%

29

 

758.6

%

Service charges on deposit accounts

 

184

 

158

 

16.5

%

145

 

26.9

%

Gain (loss) on sales of securities available-for-sale

 

(462

)

 

-100.0

%

30

 

-1,640.0

%

Gains on other real estate owned

 

 

 

0.0

%

1,075

 

-100.0

%

BOLI income

 

109

 

110

 

-0.9

%

115

 

-5.2

%

Other fee income

 

86

 

69

 

24.6

%

78

 

10.3

%

Total noninterest income

 

166

 

748

 

-77.8

%

1,472

 

-88.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

4,008

 

3,491

 

14.8

%

2,861

 

40.1

%

Occupancy and equipment expense

 

781

 

591

 

32.1

%

586

 

33.3

%

Data processing and network administration

 

347

 

321

 

8.1

%

285

 

21.8

%

State franchise taxes

 

296

 

296

 

0.0

%

252

 

17.5

%

Professional fees

 

214

 

147

 

45.6

%

161

 

32.9

%

Merger and acquisition expense

 

2,668

 

274

 

873.7

%

 

100.0

%

Other operating expense

 

1,105

 

828

 

33.5

%

780

 

41.7

%

Total non-interest expense

 

9,419

 

5,948

 

58.4

%

4,925

 

91.2

%

Net income before income taxes

 

1,634

 

4,327

 

-62.2

%

4,563

 

-64.2

%

Income tax expense

 

224

 

942

 

-76.2

%

3,558

 

-93.7

%

Net Income

 

$

1,410

 

$

3,385

 

-58.3

%

$

1,005

 

40.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - basic

 

$

0.10

 

$

0.30

 

-66.7

%

$

0.09

 

11.1

%

Earnings per share - diluted

 

$

0.10

 

$

0.27

 

-63.0

%

$

0.08

 

25.0

%

Weighted-average common shares outstanding - basic

 

13,575,616

 

11,324,965

 

19.9

%

10,866,639

 

24.9

%

Weighted-average common shares outstanding - diluted

 

14,700,167

 

12,470,384

 

17.9

%

12,095,023

 

21.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income (GAAP) to Operating Earnings (Non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income reported above

 

$

1,410

 

$

3,385

 

 

 

$

1,005

 

 

 

Add: Merger and acquisition expense above

 

2,668

 

274

 

 

 

 

 

 

Add: Loss on sales of securities available-for-sale

 

462

 

 

 

 

30

 

 

 

Subtract: provision for income taxes associated with merger and acquisition expense

 

(649

)

(24

)

 

 

 

 

 

Add: TCJA revaluation of net deferred tax assets

 

 

 

 

 

2,003

 

 

 

Less: Gain on foreclosure of other real estate owned

 

 

 

 

 

(1,075

)

 

 

NET INCOME, excluding above merger and acquisition charges

 

$

3,891

 

$

3,635

 

 

 

$

1,903

 

 

 

Earnings per share - basic (excluding merger and acquisition charges)

 

$

0.29

 

$

0.32

 

 

 

$

0.18

 

 

 

Earnings per share - diluted (excluding merger and acquisition charges)

 

$

0.26

 

$

0.29

 

 

 

$

0.16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (non-GAAP operating earnings)

 

1.16

%

1.27

%

 

 

0.75

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (non-GAAP operating earnings)

 

10.07

%

13.13

%

 

 

7.62

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (non-GAAP operating earnings)

 

54.25

%

53.40

%

 

 

49.63

%

 

 

 


 

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

 

(164

)

 

 

Subtract: provision for income taxes associated with merger and acquisition expense

 

(788

)

 

 

 

Add: TCJA revaluation of net deferred tax assets

 

 

2,003

 

 

 

Less: Gain on foreclosure of other real estate owned

 

 

(1,075

)

 

 

NET INCOME, excluding above merger and acquisition charges

 

$

13,882

 

$

8,454

 

 

 

Earnings per share - basic (excluding merger and acquisition charges)

 

$

1.18

 

$

0.81

 

 

 

Earnings per share - diluted (excluding merger and acquisition charges)

 

$

1.08

 

$

0.73

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (non-GAAP operating earnings)

 

1.20

%

0.88

%

 

 

 

 

 

 

 

 

 

 

Return on average equity (non-GAAP operating earnings)

 

11.87

%

9.49

%

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (non-GAAP operating earnings)

 

55.10

%

55.40

%

 

 

 


 

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.

 


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