Le Lézard
Classified in: Business
Subject: EARNINGS

FVCBankcorp, Inc. Announces Record Earnings for Third Quarter 2019


FVCBankcorp, Inc. (NASDAQ:FVCB) (the "Company") today reported third quarter 2019 net income of $4.1 million, or $0.28 diluted earnings per share, compared to $3.4 million, or $0.27 diluted earnings per share, for the quarterly period ended September 30, 2018. Weighted-average common shares outstanding for the diluted earnings per share calculations were 14.9 million and 12.5 million for the three months ended September 30, 2019 and 2018, respectively, reflecting the increase from shares issued in 2018 for the initial public offering, completed in September 2018, and acquisition of Colombo Bank ("Colombo"), completed in October 2018.

For the nine month period ended September 30, 2019, net income was $12.1 million, or $0.82 per diluted earnings per share, compared to $9.5 million, or $0.78 diluted earnings per share, for the nine month period ended September 30, 2018. Before merger-related expenses net of taxes, net income for the nine months ended September 30, 2019 was $12.2 million, or $0.82 per diluted share and for the prior year net income for the nine month period was $10.0 million, or $0.82 diluted earnings per share.

Return on average assets was 1.10% and return on average equity was 9.46% for the third quarter of 2019. For the comparable quarterly September 30, 2018 period, return on average assets was 1.18% and return on average equity was 12.23%. For the nine months ended September 30, 2019 and 2018, return on average assets was 1.13% and 1.15%, respectively. Return on average equity for the nine months ended September 30, 2019 and 2018 was 9.65% and 12.09%, respectively.

Selected Highlights

"Growth in core relationships continues to be a driver of our quarterly earnings. Loan growth was less than prior quarters as we purposefully were more selective of originations in our construction and commercial real estate portfolios. However, our loan pipeline continues to be strong as we focus our efforts to growing our commercial & industrial portfolio," stated David W. Pijor, Chairman and CEO.

Balance Sheet

Total assets increased to $1.57 billion at September 30, 2019 compared to $1.18 billion at September 30, 2018, an increase of $389.8 million, or 33%. Loans receivable, net of deferred fees, totaled $1.24 billion at September 30, 2019, compared to $978.3 million at September 30, 2018, an increase of $265.1 million, or 27%. Excluding the $104 million of loans associated with the Colombo acquisition, organic growth was $161 million, or 16%. During the third quarter of 2019, average loans grew $33.4 million, or 11% annualized. During the quarter, loan originations totaled approximately $79.2 million, of which $37.3 million funded during the quarter, reflecting slower loan growth.

Investment securities increased $23.4 million to $136.5 million at September 30, 2019, compared to $113.1 million at September 30, 2018.

Total deposits increased to $1.32 billion at September 30, 2019 compared to $994.0 million at September 30, 2018, an increase of $323.7 million, or 33%. Core deposits, which represent total deposits less wholesale deposits, increased $301.3 million or 32% to $1.24 billion at September 30, 2019 compared to $943.4 million at September 30, 2018. Wholesale deposits totaled $73.0 million, or 6% of total deposits at September 30, 2019, a decrease of $9.2 million from June 30, 2019. Noninterest-bearing deposits increased $24.1 million to $294.8 million at September 30, 2019 from $270.7 million at June 30, 2019, and represented 22% of total deposits at September 30, 2019.

Income Statement

Net interest income totaled $12.1 million, an increase of $2.2 million, or 22%, for the quarter ended September 30, 2019, compared to the year ago quarter, and decreased slightly by $279 thousand, or 2% compared to the second quarter of 2019, a result of increased deposit costs. The Company's net interest margin decreased 13 basis points to 3.41% for the quarter ended September 30, 2019 compared to 3.54% for the quarter ended September 30, 2018. On a linked quarter basis, net interest margin decreased 18 basis points from 3.59% for the three months ended June 30, 2019. During the third quarter of 2019, in addition to the repricing of the loan portfolio as a result of two 25 basis point rate cuts, several acquired loans with premium loan marks paid off during the quarter, which decreased loan interest income by $310 thousand as compared to the prior quarter, decreasing net interest margin by 9 basis points. Acquired loan accretion included in loan interest income was $43 thousand and $353 thousand for the three months ended September 30, 2019 and June 30, 2019, respectively. The average yield for the loan portfolio for the third quarter of 2019 was 5.13% compared to 4.99% for the year ago quarter, and 5.24% for the quarter ended June 30, 2019.

The cost of deposits, which includes noninterest-bearing deposits, increased 6 basis points to 1.42% for the third quarter of 2019 as compared to 1.36% for the second quarter of 2019, and 1.03% for the third quarter of 2018, reflecting the increased rate environment from a year ago. The Company had several large customer transactions that occurred at the end of the second quarter, prior to the Federal Reserve rate cuts, which impacted the yields on interest checking and time deposits for the third quarter of 2019.

For the nine months ended September 30, 2019, net interest income was $36.2 million compared to $28.0 million for the year to date period ended September 30, 2018, an increase of $8.2 million, or 29%.

Noninterest income totaled $680 thousand and $748 thousand for the quarters ended September 30, 2019 and 2018, respectively. Fee income from loans was $101 thousand, a decrease of $310 thousand for the quarter ended September 30, 2019 compared to 2018, primarily a result of a decrease in loan swap fee income. Service charges on deposit accounts and other fee income totaled $378 thousand for the third quarter of 2019, an increase of 67% or $151 thousand from the year ago quarter. This increase in deposit fee income resulted from the increase in core deposit relationships, both organic and acquired, year-over-year. Noninterest income for the year to date period ended September 30, 2019 was $2.0 million, compared to $1.5 million for the 2018 year to date period, an increase of $461 thousand, or 31%, which was primarily driven by loan swap fee income and service charges on deposit accounts.

Noninterest expense totaled $7.4 million for the quarter ended September 30, 2019, compared to $5.9 million for the same three-month period of 2018. Approximately $812 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 $51 thousand for the three months ended September 30, 2019. Salary and compensation related expenses increased $858 thousand, or 25%, for the quarter ended September 30, 2019, compared to the same three-month period of 2018, resulting from the increase in staffing from the acquisition and increases in back-office support staff. Occupancy and equipment expense increased $291 thousand year-over-year primarily as a result of the branch locations acquired from Colombo. Increases in data processing and network administration, franchise taxes and other operating expenses for the quarter ended September 30, 2019 compared to the same three-month period of 2018 is primarily growth related. On a linked quarter basis, noninterest expense increased $87 thousand from the three months ended June 30, 2019. For the nine months ended September 30, 2019 and 2018, noninterest expense was $21.5 million and $17.0 million, respectively, the increase of which relates directly to the addition of Colombo to the Company's expense structure.

The efficiency ratio for the quarter ended September 30, 2019 was 57.7%, an increase from 56.0% from the year ago quarter. The efficiency ratios for the nine months ended September 30, 2019 and 2018, excluding merger-related expenses and gain on securities were 56.1% and 55.5%, respectively.

Asset Quality

The Company recorded provision for loan losses of $235 thousand for the three months ended September 30, 2019, compared to $351 thousand for the year ago quarter. Year to date provision expense for 2019 was $1.3 million compared to $990 thousand for the 2018 year to date period. Nonperforming loans and loans ninety days or more past due at September 30, 2019 totaled $10.4 million, or 0.67% of total assets, of which $1.2 million related to acquired loans. This compares to $10.0 million in nonperforming loans and loans ninety days or more past due at June 30, 2019, or 0.67% of total assets. All of the Company's nonperforming loans are secured and have specific reserves totaling $392 thousand, representing the expected losses associated with those loans. Included in nonperforming loans is one loan totaling $3.9 million which is collateralized by property that is under a purchase and sales agreement that the Company expects will close during the fourth quarter of 2019, and for which the Company expects to receive full repayment. There were no troubled debt restructurings ("TDR") at September 30, 2019. Nonperforming assets (including other real estate owned, or OREO) to total assets was 0.91% at September 30, 2019 compared to 0.93% for June 30, 2019. The property that is recorded as OREO is also under a purchase and sales agreement which is expected to close during 2020. No loss is expected on the sale of OREO.

The allowance for loan losses to total loans was 0.81% for each of the periods ended September 30, 2019 and December 31, 2018. The allowance for loan losses on the Company's originated loan portfolio, excluding the credit mark on acquired loans, was 0.89% of loans outstanding at September 30, 2019. Net charge-offs of $163 thousand were recorded during the third quarter of 2019 which were primarily related to the Company's purchased consumer installment loan portfolio.

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 $1.57 billion Virginia-chartered community bank serving the banking needs of commercial businesses, nonprofit organizations, professional service entities, their owners and employees located in the greater Baltimore and Washington D.C., metropolitan areas. Locally owned and managed, FVCbank is based in Fairfax, Virginia, and has 11 full-service offices in Arlington, Ashburn, Fairfax, Manassas, Reston and Springfield, Virginia, Washington D.C., and Baltimore, Bethesda, Rockville and Silver Spring, Maryland.

For more information on the Company's selected financial information, please visit the Investor Relations page of FVCBankcorp Inc.'s website, www.fvcbank.com.

Caution about Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited, statements of goals, intentions, and expectations as to future trends, plans, events or results of the Company's operations and policies and regarding general economic conditions. In some cases, forward-looking statements can be identified by use of words such as "may," "will," "anticipates," "believes," "expects," "plans," "estimates," "potential," "continue," "should," and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company's market, interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast and are subject to significant uncertainty. Because of these uncertainties and the assumptions on which this discussion and the forward-looking statements are based, actual future operations and results in the future may differ materially from those indicated herein. These forward-looking statements are based on current beliefs that involve significant risks, uncertainties, and assumptions. Factors that could cause the Company's actual results to differ materially from those indicated in these forward-looking statements, include, but are not limited to, the risk factors and other cautionary language included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 and in other periodic and current reports filed with the Securities and Exchange Commission. Because of these uncertainties and the assumptions on which the forward-looking statements are based, actual operations and results in the future may differ materially from those indicated herein. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company's past results are not necessarily indicative of future performance.

 
FVCBankcorp, Inc.
Selected Financial Data
(Dollars in thousands, except share data and per share data)
(Unaudited)
 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

 

For the Three Months Ended

2019

 

2018

 

2019

 

2018

 

6/30/2019

 

12/31/2018

Selected Balances
Total assets

$

1,565,196

 

$

1,175,437

 

$

1,484,600

 

$

1,351,576

 

Total investment securities

 

142,549

 

 

116,931

 

 

141,611

 

 

130,597

 

Total loans, net of deferred fees

 

1,243,405

 

 

978,304

 

 

1,234,372

 

 

1,136,743

 

Allowance for loan losses

 

(10,068

)

 

(8,576

)

 

(9,996

)

 

(9,159

)

Total deposits

 

1,317,720

 

 

993,986

 

 

1,269,374

 

 

1,162,440

 

Subordinated debt

 

24,467

 

 

24,387

 

 

24,447

 

 

24,407

 

Other borrowings

 

15,000

 

 

15,000

 

 

-

 

 

-

 

Total stockholders' equity

 

175,069

 

 

138,776

 

 

170,163

 

 

158,336

 

Summary Results of Operations
Interest income

$

17,006

 

$

12,873

 

$

49,957

 

$

36,284

 

$

16,990

 

$

15,640

 

Interest expense

 

4,914

 

 

2,995

 

 

13,729

 

 

8,287

 

 

4,619

 

 

3,823

 

Net interest income

 

12,092

 

 

9,878

 

 

36,228

 

 

27,997

 

 

12,371

 

 

11,817

 

Provision for loan losses

 

235

 

 

351

 

 

1,255

 

 

990

 

 

505

 

 

930

 

Net interest income after provision for loan losses

 

11,857

 

 

9,527

 

 

34,973

 

 

27,007

 

 

11,866

 

 

10,887

 

Noninterest income - loan fees, service charges and other

 

479

 

 

638

 

 

1,539

 

 

1,166

 

 

429

 

 

519

 

Noninterest income - bank owned life insurance

 

198

 

 

110

 

 

414

 

 

329

 

 

110

 

 

109

 

Noninterest income - gain (loss) on securities sold

 

3

 

 

-

 

 

3

 

 

-

 

 

-

 

 

(462

)

Noninterest expense

 

7,363

 

 

5,948

 

 

21,543

 

 

17,030

 

 

7,276

 

 

9,419

 

Income before taxes

 

5,174

 

 

4,327

 

 

15,386

 

 

11,472

 

 

5,129

 

 

1,634

 

Income tax expense

 

1,081

 

 

942

 

 

3,282

 

 

2,013

 

 

1,044

 

 

224

 

Net income

 

4,093

 

 

3,385

 

 

12,104

 

 

9,459

 

 

4,085

 

 

1,410

 

Per Share Data
Net income, basic

$

0.30

 

$

0.30

 

$

0.88

 

$

0.85

 

$

0.30

 

$

0.10

 

Net income, diluted

$

0.28

 

$

0.27

 

$

0.82

 

$

0.78

 

$

0.28

 

$

0.10

 

Book value

$

12.62

 

$

10.82

 

$

12.30

 

$

11.55

 

Tangible book value

$

12.03

 

$

10.81

 

$

11.70

 

$

10.90

 

Shares outstanding

 

13,874,776

 

 

12,831,040

 

 

13,839,772

 

 

13,712,615

 

Selected Ratios
Net interest margin (2)

 

3.41

%

 

3.54

%

 

3.55

%

 

3.48

%

 

3.59

%

 

3.59

%

Return on average assets (2)

 

1.10

%

 

1.18

%

 

1.13

%

 

1.15

%

 

1.13

%

 

0.42

%

Return on average equity (2)

 

9.46

%

 

12.23

%

 

9.65

%

 

12.09

%

 

9.78

%

 

3.65

%

Efficiency (1)

 

57.65

%

 

55.98

%

 

56.42

%

 

57.74

%

 

56.36

%

 

75.69

%

Loans, net of deferred fees to total deposits

 

94.36

%

 

98.42

%

 

97.24

%

 

97.79

%

Noninterest-bearing deposits to total deposits

 

22.37

%

 

21.31

%

 

21.33

%

 

20.07

%

Reconciliation of Net Income (GAAP) to Operating Earnings (Non-GAAP) (3)
Net income (from above)

$

4,093

 

$

3,385

 

$

12,104

 

$

9,459

 

$

4,085

 

$

1,410

 

Add: Merger and acquisition expense

 

51

 

 

274

 

 

133

 

 

671

 

 

16

 

 

2,668

 

Add (Subtract): Loss (Gain) on sales of securities available-for-sale

 

(3

)

 

-

 

 

(3

)

 

-

 

 

-

 

 

462

 

Less: provision for income taxes associated with non-GAAP adjustments

 

(11

)

 

(24

)

 

(30

)

 

(107

)

 

(4

)

 

(649

)

Net income, as adjusted

$

4,130

 

$

3,635

 

$

12,204

 

$

10,023

 

$

4,097

 

$

3,891

 

Net income, diluted, on an operating basis

$

0.28

 

$

0.29

 

$

0.82

 

$

0.82

 

$

0.28

 

$

0.26

 

Return on average assets (non-GAAP operating earnings)

 

1.11

%

 

1.27

%

 

1.14

%

 

1.22

%

 

1.13

%

 

1.16

%

Return on average equity (non-GAAP operating earnings)

 

9.54

%

 

13.13

%

 

9.73

%

 

12.81

%

 

9.81

%

 

10.07

%

Efficiency ratio (non-GAAP operating earnings)

 

57.26

%

 

53.40

%

 

56.07

%

 

55.47

%

 

56.24

%

 

54.25

%

Capital Ratios - Bank
Tangible common equity (to tangible assets)

 

10.72

%

 

11.80

%

 

10.97

%

 

11.16

%

Total capital (to risk weighted assets)

 

13.40

%

 

13.88

%

 

13.21

%

 

14.02

%

Common equity tier 1 capital (to risk weighted assets)

 

12.68

%

 

13.08

%

 

12.49

%

 

13.27

%

Tier 1 capital (to risk weighted assets)

 

12.68

%

 

13.08

%

 

12.49

%

 

13.27

%

Tier 1 leverage (to average assets)

 

12.11

%

 

12.32

%

 

12.10

%

 

12.41

%

Asset Quality
Nonperforming loans and loans 90+ past due

$

10,444

 

$

2,021

 

$

9,989

 

$

3,211

 

Performing troubled debt restructurings (TDRs)

 

-

 

 

267

 

 

-

 

 

203

 

Other real estate owned

 

3,866

 

 

3,866

 

 

3,866

 

 

4,224

 

Nonperforming loans and loans 90+ past due to total assets (excl. TDRs)

 

0.67

%

 

0.17

%

 

0.67

%

 

0.24

%

Nonperforming assets to total assets

 

0.91

%

 

0.50

%

 

0.93

%

 

0.55

%

Nonperforming assets (including TDRs) to total assets

 

0.91

%

 

0.52

%

 

0.93

%

 

0.57

%

Allowance for loan losses to loans

 

0.81

%

 

0.88

%

 

0.81

%

 

0.81

%

Allowance for loan losses to nonperforming loans

 

96.40

%

 

424.34

%

 

100.07

%

 

285.24

%

Net charge-offs (recovery)

$

163

 

$

73

 

$

345

 

$

139

 

$

20

 

$

347

 

Net charge-offs (recovery) to average loans (2)

 

0.05

%

 

0.03

%

 

0.04

%

 

0.01

%

 

0.01

%

 

0.13

%

Selected Average Balances
Total assets

$

1,483,430

 

$

1,142,642

 

$

1,428,082

 

$

1,097,667

 

$

1,444,588

 

$

1,341,991

 

Total earning assets

 

1,406,485

 

 

1,116,154

 

 

1,366,456

 

 

1,073,175

 

 

1,384,516

 

 

1,305,573

 

Total loans, net of deferred fees

 

1,241,360

 

 

959,992

 

 

1,196,126

 

 

928,190

 

 

1,207,933

 

 

1,101,539

 

Total deposits

 

1,243,490

 

 

1,002,079

 

 

1,207,258

 

 

960,964

 

 

1,228,595

 

 

1,141,500

 

Other Data
Noninterest-bearing deposits

$

294,825

 

$

211,808

 

$

270,711

 

$

233,318

 

Interest-bearing checking, savings and money market

 

622,818

 

 

485,319

 

 

596,701

 

 

533,732

 

Time deposits

 

327,098

 

 

246,272

 

 

319,740

 

 

310,985

 

Wholesale deposits

 

72,979

 

 

50,587

 

 

82,222

 

 

84,405

 

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

 

 

 

 

 

 

 

% Change

 

 

 

 

 

% Change

 

 

 

 

 

Current

 

 

 

 

 

From

 

9/30/2019

 

6/30/2019

 

Quarter

 

12/31/2018

 

9/30/2018

 

Year Ago

 

Cash and due from banks

$

 

19,424

 

$

 

15,201

 

27.8

%

$

 

9,435

 

$

 

8,939

 

117.3

%

Interest-bearing deposits at other financial institutions

92,986

 

29,149

 

219.0

%

34,060

 

46,396

 

100.4

%

Investment securities

136,532

 

136,232

 

0.2

%

125,298

 

113,131

 

20.7

%

Restricted stock, at cost

6,017

 

5,379

 

11.9

%

5,299

 

3,800

 

58.3

%

Loans, net of fees:

Commercial real estate

757,619

 

733,354

 

3.3

%

682,203

 

592,083

 

28.0

%

Commercial and industrial

124,666

 

134,466

 

-7.3

%

137,080

 

108,331

 

15.1

%

Commercial construction

214,816

 

217,105

 

-1.1

%

152,526

 

144,140

 

49.0

%

Consumer residential

121,173

 

124,933

 

-3.0

%

132,280

 

107,207

 

13.0

%

Consumer nonresidential

25,131

 

24,514

 

2.5

%

32,654

 

26,543

 

-5.3

%

Total loans, net of fees

1,243,405

 

1,234,372

 

0.7

%

1,136,743

 

978,304

 

27.1

%

Allowance for loan losses

(10,068

)

(9,996

)

0.7

%

(9,159

)

(8,576

)

17.4

%

Loans, net

1,233,337

 

1,224,376

 

0.7

%

1,127,584

 

969,728

 

27.2

%

 

Premises and equipment, net

2,029

 

2,049

 

-1.0

%

2,271

 

1,420

 

42.9

%

Goodwill and intangibles, net

8,119

 

8,223

 

-1.3

%

8,443

 

83

 

9,681.9

%

Bank owned life insurance (BOLI)

26,820

 

26,621

 

0.7

%

16,406

 

16,297

 

64.6

%

Other real estate owned

3,866

 

3,866

 

0.0

%

4,224

 

3,866

 

0.0

%

Other assets

36,066

 

33,504

 

7.6

%

18,556

 

11,777

 

206.2

%

 

Total Assets

$

 

1,565,196

 

$

 

1,484,600

 

5.4

%

$

 

1,351,576

 

$

 

1,175,437

 

33.2

%

 

Deposits:

Noninterest-bearing

$

 

294,825

 

$

 

270,711

 

8.9

%

$

 

233,318

 

$

 

211,808

 

39.2

%

Interest-bearing checking

349,574

 

301,319

 

16.0

%

312,446

 

276,197

 

26.6

%

Savings and money market

273,244

 

295,382

 

-7.5

%

221,286

 

209,122

 

30.7

%

Time deposits

327,098

 

319,740

 

2.3

%

310,985

 

246,272

 

32.8

%

Wholesale deposits

72,979

 

82,222

 

-11.2

%

84,405

 

50,587

 

44.3

%

Total deposits

1,317,720

 

1,269,374

 

3.8

%

1,162,440

 

993,986

 

32.6

%

 

Other borrowed funds

15,000

 

- -

 

100.0

%

- -

 

15,000

 

0.0

%

Subordinated notes, net of issuance costs

24,467

 

24,447

 

0.1

%

24,407

 

24,387

 

0.3

%

Other liabilities

32,940

 

20,616

 

59.8

%

6,393

 

3,288

 

901.8

%

 

Stockholders' equity

175,069

 

170,163

 

2.9

%

158,336

 

138,776

 

26.2

%

 

Total Liabilities & Stockholders'

Equity

$

 

1,565,196

 

$

 

1,484,600

 

5.4

%

$

 

1,351,576

 

$

 

1,175,437

 

33.2

%

 

 

 
FVCBankcorp, Inc.
Summary Consolidated Income Statements
(In thousands, except per share data)
(Unaudited)
 
 
For the Three Months Ended
% Change % Change
Current From
9/30/2019 6/30/2019 Quarter 9/30/2018 Year Ago
 
Net interest income

$

 

12,092

 

$

 

12,371

 

-2.3

%

$

 

9,878

 

22.4

%

Provision for loan losses

235

 

505

 

-53.5

%

351

 

-33.0

%

Net interest income after provision for loan losses

11,857

 

11,866

 

-0.1

%

9,527

 

24.5

%

 
Noninterest income:
Fees on Loans

101

 

53

 

90.6

%

411

 

-75.4

%

Service charges on deposit accounts

240

 

229

 

4.8

%

158

 

51.9

%

Gains on sale of securities available-for-sale

3

 

- -

 

100.0

%

- -

 

100.0

%

BOLI income

198

 

110

 

80.0

%

110

 

80.0

%

Other fee income

138

 

147

 

-6.1

%

69

 

100.0

%

Total noninterest income

680

 

539

 

26.2

%

748

 

-9.1

%

 
Noninterest expense:
Salaries and employee benefits

4,349

 

4,245

 

2.4

%

3,491

 

24.6

%

Occupancy and equipment expense

882

 

873

 

1.0

%

591

 

49.2

%

Data processing and network administration

414

 

343

 

20.7

%

321

 

29.0

%

State franchise taxes

424

 

426

 

-0.5

%

296

 

43.2

%

Professional fees

230

 

274

 

-16.1

%

147

 

56.5

%

Merger and acquisition expense

51

 

16

 

218.8

%

274

 

-81.4

%

Other operating expense

1,013

 

1,099

 

-7.8

%

828

 

22.3

%

Total noninterest expense

7,363

 

7,276

 

1.2

%

5,948

 

23.8

%

Net income before income taxes

5,174

 

5,129

 

0.9

%

4,327

 

19.6

%

Income tax expense

1,081

 

1,044

 

3.5

%

942

 

14.8

%

Net Income

$

 

4,093

 

$

 

4,085

 

0.2

%

$

 

3,385

 

20.9

%

 
Earnings per share - basic

$

 

0.30

 

$

 

0.30

 

-0.2

%

$

 

0.30

 

-1.2

%

Earnings per share - diluted

$

 

0.28

 

$

 

0.28

 

-0.1

%

$

 

0.27

 

1.4

%

Weighted-average common shares outstanding - basic

13,862,239

 

13,802,712

 

11,324,965

 

Weighted-average common shares outstanding - diluted

14,867,421

 

14,817,462

 

12,470,384

 

 
Reconciliation of Net Income (GAAP) to Operating Earnings (Non-GAAP):
GAAP net income reported above

$

 

4,093

 

$

 

4,085

 

$

 

3,385

 

Add: Merger and acquisition expense above

51

 

16

 

274

 

Subtract: Gain on sales of securities available-for-sale

(3

)

- -

 

- -

 

Subtract: provision for income taxes associated with non-GAAP adjustments

(11

)

(4

)

(24

)

Net Income, excluding above merger and acquisition charges

$

 

4,130

 

$

 

4,097

 

$

 

3,635

 

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

$

 

0.30

 

$

 

0.30

 

$

 

0.32

 

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

$

 

0.28

 

$

 

0.28

 

$

 

0.29

 

 
Return on average assets (non-GAAP operating earnings)

1.11

%

1.13

%

1.27

%

Return on average equity (non-GAAP operating earnings)

9.54

%

9.81

%

13.13

%

Efficiency ratio (non-GAAP operating earnings)

57.26

%

56.24

%

53.40

%

 
 
FVCBankcorp, Inc.
Summary Consolidated Income Statements
(In thousands, except per share data)
(Unaudited)
 
 
For the Nine Months Ended
% Change
From
9/30/2019 9/30/2018 Year Ago
 
Net interest income

$

 

36,228

 

$

 

27,997

 

29.4

%

Provision for loan losses

1,255

 

990

 

26.8

%

Net interest income after provision for loan losses

34,973

 

27,007

 

29.5

%

 
Noninterest income:
Fees on Loans

501

 

473

 

5.9

%

Service charges on deposit accounts

651

 

452

 

44.0

%

Gains on sale of securities available-for-sale

3

 

- -

 

100.0

%

BOLI income

414

 

329

 

25.8

%

Other fee income

387

 

241

 

60.6

%

Total noninterest income

1,956

 

1,495

 

30.8

%

 
Noninterest expense:
Salaries and employee benefits

12,533

 

10,000

 

25.3

%

Occupancy and equipment expense

2,582

 

1,743

 

48.1

%

Data processing and network administration

1,196

 

886

 

35.0

%

State franchise taxes

1,272

 

888

 

43.2

%

Professional fees

634

 

434

 

46.1

%

Merger and acquisition expense

133

 

671

 

-80.2

%

Other operating expense

3,193

 

2,408

 

32.6

%

Total noninterest expense

21,543

 

17,030

 

26.5

%

Net income before income taxes

15,386

 

11,472

 

34.1

%

Income tax expense

3,282

 

2,013

 

63.0

%

Net Income

$

 

12,104

 

$

 

9,459

 

28.0

%

 
Earnings per share - basic

$

 

0.88

 

$

 

0.85

 

2.9

%

Earnings per share - diluted

$

 

0.82

 

$

 

0.78

 

5.3

%

Weighted-average common shares outstanding - basic

13,796,394

 

11,094,353

 

Weighted-average common shares outstanding - diluted

14,821,612

 

12,195,620

 

 
Reconciliation of Net Income (GAAP) to Operating Earnings (Non-GAAP):
GAAP net income reported above

$

 

12,104

 

$

 

9,459

 

Add: Merger and acquisition expense above

133

 

671

 

Subtract: Gain on sales of securities available-for-sale

(3

)

- -

 

Subtract: provision for income taxes associated with non-GAAP adjustments

(30

)

(107

)

Net Income, excluding above merger and acquisition charges

$

 

12,204

 

$

 

10,023

 

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

$

 

0.88

 

$

 

0.90

 

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

$

 

0.82

 

$

 

0.82

 

 
Return on average assets (non-GAAP operating earnings)

1.14

%

1.22

%

Return on average equity (non-GAAP operating earnings)

9.73

%

12.81

%

Efficiency ratio (non-GAAP operating earnings)

56.07

%

55.47

%

 
FVCBankcorp, Inc.
Average Statements of Condition and Yields on Earning Assets and Interest-Bearing Liabilities
(Dollars in thousands)
(Unaudited)
 
 
For the Three Months Ended
9/30/2019 6/30/2019 9/30/2018
Average Average Average Average Average Average
Balance Yield Balance Yield Balance Yield
Interest-earning assets:
Loans receivable, net of fees (1)
Commercial real estate

$

 

770,752

 

4.81

%

$

 

717,248

 

4.86

%

$

 

575,738

 

4.72

%

Commercial and industrial

129,174

 

5.86

%

135,335

 

6.07

%

110,241

 

5.81

%

Commercial construction

194,327

 

5.73

%

198,927

 

5.71

%

140,213

 

5.39

%

Consumer residential

122,958

 

4.98

%

129,605

 

5.25

%

106,922

 

4.72

%

Consumer nonresidential

24,149

 

7.34

%

26,818

 

7.70

%

26,878

 

6.50

%

Total loans

1,241,360

 

5.13

%

1,207,933

 

5.24

%

959,992

 

4.99

%

 
Investment securities (2)(3)

137,153

 

2.71

%

144,056

 

2.73

%

120,174

 

2.45

%

Interest-bearing deposits at other financial institutions

27,972

 

2.40

%

32,527

 

2.39

%

35,988

 

1.82

%

Total interest-earning assets

1,406,485

 

4.84

%

1,384,516

 

4.91

%

1,116,154

 

4.62

%

 
Non-interest earning assets:
Cash and due from banks

10,221

 

7,597

 

2,386

 

Premises and equipment, net

2,073

 

2,152

 

1,416

 

Accrued interest and other assets

74,685

 

60,016

 

31,107

 

Allowance for loan losses

(10,034

)

(9,693

)

(8,421

)

 
Total Assets

$

 

1,483,430

 

$

 

1,444,588

 

$

 

1,142,642

 

 
Interest-bearing liabilities:
Interest checking

$

 

324,658

 

1.46

%

$

 

301,132

 

1.28

%

$

 

251,299

 

1.10

%

Savings and money market

255,046

 

1.41

%

275,129

 

1.54

%

190,176

 

1.18

%

Time deposits

318,056

 

2.37

%

299,551

 

2.17

%

249,508

 

1.62

%

Wholesale deposits

67,376

 

2.45

%

88,064

 

2.52

%

65,354

 

1.84

%

Total interest-bearing deposits

965,136

 

1.82

%

963,876

 

1.74

%

756,337

 

1.36

%

 
Other borrowed funds

18,814

 

2.04

%

4,754

 

2.65

%

2,799

 

2.25

%

Subordinated notes, net of issuance costs

24,454

 

6.41

%

24,434

 

6.48

%

24,374

 

6.43

%

Total interest-bearing liabilities

1,008,404

 

1.93

%

993,064

 

1.87

%

783,510

 

1.52

%

 
Noninterest-bearing liabilities:
Noninterest-bearing deposits

278,354

 

264,719

 

245,742

 

Other liabilities

23,523

 

19,776

 

2,662

 

 
Stockholders' equity

173,149

 

167,029

 

110,728

 

 
Total Liabilities and Stockholders' Equity

$

 

1,483,430

 

$

 

1,444,588

 

$

 

1,142,642

 

 
Net Interest Margin (1)

3.41

%

3.59

%

3.54

%

 
 
(1) Non-accrual loans are included in average balances.
(2) The average yields for investment securities are reported on a fully taxable-equivalent basis at a rate of 22.5%.
(3) The average balances for investment securities includes restricted stock.
FVCBankcorp, Inc.
Average Statements of Condition and Yields on Earning Assets and Interest-Bearing Liabilities
(Dollars in thousands)
(Unaudited)
 
 
For the Nine Months Ended
9/30/2019 9/30/2018
Average Average Average Average
Balance Yield Balance Yield
Interest-earning assets:
Loans receivable, net of fees (1)
Commercial real estate

$

 

722,758

 

4.79

%

$

 

559,578

 

4.65

%

Commercial and industrial

133,083

 

6.19

%

103,395

 

5.55

%

Commercial construction

184,175

 

5.72

%

128,618

 

5.19

%

Consumer residential

128,794

 

5.17

%

108,056

 

4.52

%

Consumer nonresidential

27,316

 

7.56

%

28,543

 

6.37

%

Total loans

1,196,126

 

5.19

%

928,190

 

4.86

%

 
Investment securities (2)(3)

141,747

 

2.72

%

122,164

 

2.42

%

Interest-bearing deposits at other financial institutions

28,583

 

2.27

%

22,821

 

1.42

%

Total interest-earning assets

1,366,456

 

4.88

%

1,073,175

 

4.51

%

 
Non-interest earning assets:
Cash and due from banks

7,891

 

2,422

 

Premises and equipment, net

2,172

 

1,347

 

Accrued interest and other assets

61,160

 

28,871

 

Allowance for loan losses

(9,597

)

(8,148

)

 
Total Assets

$

 

1,428,082

 

$

 

1,097,667

 

 
Interest-bearing liabilities:
Interest checking

$

 

307,372

 

1.35

%

$

 

211,461

 

1.00

%

Savings and money market

255,437

 

1.48

%

188,560

 

1.06

%

Time deposits

308,500

 

2.17

%

252,130

 

1.50

%

Wholesale deposits

76,713

 

2.48

%

92,432

 

1.61

%

Total interest-bearing deposits

948,022

 

1.74

%

744,583

 

1.26

%

 
Other borrowed funds

10,991

 

2.31

%

5,897

 

1.91

%

Subordinated notes, net of issuance costs

24,434

 

6.48

%

24,354

 

6.51

%

Total interest-bearing liabilities

983,447

 

1.87

%

774,834

 

1.43

%

 
Noninterest-bearing liabilities:
Noninterest-bearing deposits

259,236

 

216,381

 

Other liabilities

18,202

 

2,105

 

 
Stockholders' equity

167,197

 

104,347

 

 
Total Liabilities and Stockholders' Equity

$

 

1,428,082

 

$

 

1,097,667

 

 
Net Interest Margin (1)

3.55

%

3.48

%

 
 
(1) Non-accrual loans are included in average balances.
(2) The average yields for investment securities are reported on a fully taxable-equivalent basis at a rate of 22.5%.
(3) The average balances for investment securities includes restricted stock.

 


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