FVCBankcorp, Inc. (NASDAQ: FVCB) (the “Company”) today reported
record annual 2022 net income of $25.0 million, or $1.35 diluted
earnings per share, compared to $21.9 million, or $1.20 diluted
earnings per share, for 2021, a year-over-year increase of $3.1
million, or 14%. Net income for the year ended December 31, 2022
includes the Company’s portion of losses from its membership
interest in Atlantic Coast Mortgage, LLC (“ACM”), which was $659
thousand, compared to income of $1.5 million for the year ended
December 31, 2021. On December 15, 2022, the Company announced that
the Board of Directors approved a five-for-four split of the
Company’s common stock in the form of a 25% stock dividend for
shareholders of record on January 9, 2023, payable on January 31,
2023. Earnings per share and all other per share information
reflected herein have been adjusted for the five-for-four split of
the Company’s common stock for comparative purposes.
For the quarter ended December 31, 2022, the Company reported
net income of $4.9 million, or $0.27 diluted earnings per share,
compared to $6.5 million, or $0.36 diluted earnings per share, for
the quarter ended December 31, 2021, a decrease of $1.6 million.
For the quarter ended December 31, 2022, the loss associated with
its membership interest in ACM was $1.4 million, compared to income
of $1.1 million for same period of 2021.
“Our record 2022 annual earnings and strong double-digit loan
growth are a result of our commitment to our relationship banking
model despite the economic headwinds that emerged in the last half
of the year. We executed on market opportunities to add solid loan
relationships, which positions us well for 2023 allowing us the
ability to further manage our balance sheet. We continue to
maintain our strong credit discipline, but also remain vigilant
through this market volatility. We are enhancing our client
relationships through the deployment of best-in-class technology
during the first quarter of 2023. These technology initiatives will
further support our business development teams’ ability to provide
exceptional personal service to our expanding client base,” said
David W. Pijor, Chairman and CEO.
Statement of Condition
Total assets were $2.34 billion at December 31, 2022 and $2.20
billion at December 31, 2021, an increase of $141.4 million, or 6%.
For the fourth quarter of 2022, total assets increased $139.3
million, or 6%.
Loans receivable, net of deferred fees, were $1.84 billion at
December 31, 2022 and $1.50 billion at December 31, 2021, an
increase of $336.6 million, or 22%, year-over-year. Excluding loans
made under the U.S. Small Business Administration’s Paycheck
Protection Program (“PPP”), net of fees, net loan growth was $362.8
million, or 25% year-over-year. For the quarter, loans receivable,
net of deferred fees, increased $126.0 million, or 7%. During the
fourth quarter of 2022, the Company funded $111.8 million, had loan
prepayments of $20.1 million, purchased $39.4 million in
residential mortgage loans through ACM and experienced a reduction
in warehouse line activity of $5.1 million. At December 31, 2022,
loans outstanding under the warehouse lending facility to ACM
totaled $42.7 million, a decrease of $29.3 million, or 41%, from
$72.0 million at December 31, 2021. This decrease in warehouse line
volume is consistent with the slowdown of residential mortgage loan
demand in the Company’s market.
PPP loans, net of fees, totaled $2.0 million at December 31,
2022, a decrease from $28.1 million at December 31, 2021 as loans
continue to be forgiven by the U.S. Small Business
Administration.
Investment securities were $278.3 million at December 31, 2022
and $358.0 million at December 31, 2021. Investment securities
decreased $79.7 million during the year ended December 31, 2022,
primarily as a result of principal paydowns of $37.1 million and a
$49.0 million decrease in the market value of the
available-for-sale portfolio during 2022. The investment securities
portfolio consists of primarily mortgage-backed securities which
are guaranteed by either the Federal National Mortgage Association,
the Federal Home Loan Mortgage Corporation or the Government
National Mortgage association. The decrease in the market value of
the investment securities portfolio was driven by the current
increasing rate environment and there was no other-than-temporary
impairment at December 31, 2022.
Total deposits and other borrowed funds increased $186.4
million, or 10%, to $2.10 billion at December 31, 2022 from $1.91
billion at December 31, 2021. Total deposits decreased $53.6
million, or 3%, during 2022. Noninterest-bearing deposits were
$438.3 million at December 31, 2022, or 24% of total deposits.
Wholesale deposits increased $173.0 million to $248.0 million
during the most recent quarter and increased $213.0 million for the
year ended December 31, 2022. The increase in wholesale deposits
for both the quarter and year ended December 31, 2022 was a result
of funding the Company’s record loan growth in addition to
replacing excess liquidity used by customers to fund their business
activity. Other borrowed funds were $265.0 million, $75.0 million
and $25.0 million at December 31, 2022, September 30, 2022, and
December 31, 2021, respectively.
Shareholders’ equity at December 31, 2022 was $202.4 million, a
decrease of $7.4 million, compared to $209.8 million at December
31, 2021. The decrease in shareholders’ equity was attributable to
a decrease in accumulated other comprehensive income of $34.5
million, which was related to the aforementioned decrease in the
market value of the Company’s available-for-sale investment
securities portfolio, offset by net income recorded for the year
ended December 31, 2022 totaling $25.0 million.
Book value per share at December 31, 2022 and December 31, 2021
was $11.58 and $12.23, respectively, reflecting the decrease in
accumulated other comprehensive income on the available-for-sale
investment securities portfolio. Tangible book value per share (a
non-GAAP financial measure which is defined in the tables below) at
December 31, 2022 and December 31, 2021 was $11.14 and $11.76,
respectively. Compared to the linked quarter, tangible book value
increased 4% from $10.68 at September 30, 2022. Tangible book value
per share, excluding accumulated other comprehensive income (a
non-GAAP financial measure which is defined in the tables below),
at December 31, 2022 and December 31, 2021 was $13.23 and $11.88,
respectively. The Company has a share repurchase program under
which the Company may purchase up to 1,351,075 shares of the
Company’s issued and outstanding shares of common stock, par value
$0.01 per share, or approximately 8% of its outstanding common
stock at December 31, 2021. During the fourth quarter of 2022, the
Company acquired 37,454 shares at an average price of $19.50
(including commissions) in accordance with the approved share
repurchase program.
The Company’s bank subsidiary, FVCbank, remains well-capitalized
at December 31, 2022, with total risk-based capital of 13.28%,
common equity tier 1 risk-based capital of 12.45%, and tier 1
leverage ratio of 10.75%.
Asset Quality
The Company recorded provision for loan losses of $729 thousand
for the three months ended December 31, 2022, compared to a $500
thousand release of provision for loan losses for the year ago
quarter, and a $365 thousand provision for the third quarter of
2022. For the year ended December 31, 2022, the Company recorded
provision for loan losses of $2.6 million compared to a release of
provision of $500 thousand for the year ended December 31, 2021.
The increase in the allowance for loan losses for the three months
ended December 31, 2022 was primarily related to supporting the
growth recorded in the loan portfolio during the fourth quarter.
The Company continues to lend to well-established and
relationship-driven borrowers and has a proven track record of low
historical credit losses.
The Company continues to maintain its disciplined credit
guidelines adding support during the current rising interest rate
environment. The Company proactively monitors the impact of rising
interest rates on its adjustable loans as the industry navigates
through this economic cycle of increased inflation and higher
interest rates. Credit quality metrics remain strong for the fourth
quarter of 2022 with a marginal decrease in specific reserves to
$86 thousand. The Company recorded net loan charge-offs of $2
thousand during the fourth quarter of 2022 from its purchased
consumer unsecured loan portfolio, compared to net loan charge-offs
of $35 thousand during the comparable 2021 period. Net charge-offs
for the year ended December 31, 2022 were $417 thousand compared to
$629 thousand for the year ended December 31, 2021, consistent with
the Company’s track record of low historical charge-offs. The
allowance for loan losses at December 31, 2022 and December 31,
2021 was $16.0 million and $13.8 million, respectively. Allowance
coverage to nonperforming loans decreased to 357.0% at December 31,
2022, compared to 394.2% for the year ended December 31, 2021.
The allowance for loan losses to total loans, net of fees and
excluding PPP loans, was 0.87% at December 31, 2022, compared to
0.94% at December 31, 2021. The Company does not record a reserve
on ACM’s warehouse lines due to the repurchase agreement in place
with ACM, and as such, the allowance for loan losses to total loans
when excluding the warehouse lines was 0.89% at December 31, 2022.
The effective reserve coverage, which includes both the allowance
for loan losses and the remaining unaccreted fair value discount on
acquired loans, to total loans, excluding PPP loans, was 0.90% at
December 31, 2022, compared to 0.99% at December 31, 2021. As of
December 31, 2022, the Company accounted for its allowance under
the incurred loss model. Beginning January 1, 2023, the Company
will implement the provisions of the current expected credit losses
accounting standard.
Nonperforming loans and loans 90 days or more past due at
December 31, 2022 totaled $4.5 million, or 0.19% of total assets,
composed of three commercial relationships and two consumer
relationships. This compares to $3.5 million in nonperforming loans
and loans 90 days or more past due at December 31, 2021, or 0.16%
of total assets. The Company had no other real estate owned and has
two residential mortgage loans totaling $829 thousand that qualify
as troubled debt restructurings at December 31, 2022.
Income Statement
For the year ended December 31, 2022, net income was $25.0
million, an increase of $3.1 million, or 14%, compared to $21.9
million for 2021. Net income for the three months ended December
31, 2022 was $4.9 million, a decrease of $1.6 million, compared to
$6.5 million for the same period of 2021. As previously mentioned,
net income for the fourth quarter of 2022 includes the Company’s
portion of losses from it membership interest in ACM, which totaled
$1.4 million for the quarter ended December 31, 2022, compared to
income of $1.1 million for same period of 2021. For the year ended
December 31, 2022, the loss associated with its membership interest
in ACM was $659 thousand, compared to income from ACM of $1.5
million for the year ended December 31, 2021.
For the years ended December 31, 2022 and 2021, net interest
income was $65.2 million and $57.9 million, respectively, an
increase of $7.3 million, or 13%. Interest income increased $12.3
million, or 18%, to $80.7 million for the year ended December 31,
2022, as compared to $68.4 million for the comparable 2021 period.
PPP loan income contributed $592 thousand to interest income for
the year ended December 31, 2022, compared to $5.4 million for the
year ended December 31, 2021, a decrease of $4.8 million, or 89%.
Interest expense totaled $15.4 million for the year ended December
31, 2022, an increase of $5.0 million, compared to $10.5 million
for the comparable 2021 period, primarily a result of the rising
interest rate environment.
Net interest income totaled $15.9 million, an increase of $641
thousand, or 4%, for the quarter ended December 31, 2022, compared
to the year ago quarter. Interest income on loans increased $5.4
million, or 33%, for the three months ended December 31, 2022,
compared to the same period of 2021. The increase in interest
income for the three months ended December 31, 2022, compared to
the year ago quarter was related to an increase in both loan
yields, which increased 58 basis points, and the volume of average
loans, which increased $300.5 million (excluding PPP loans). Loan
interest income (excluding PPP interest income) increased $6.2
million, or 41%, for the three months ended December 31, 2022, as
compared to the same period of 2021. PPP loan income was $37
thousand for the three months ended December 31, 2022, compared to
$899 thousand for the three months ended December 31, 2021, a
decrease of $862 thousand, or 96%.
The Company’s net interest margin decreased 17 basis points to
2.96% for the quarter ended December 31, 2022, compared to 3.13%
for the quarter ended December 31, 2021. The decrease is primarily
due to the rising rate environment and associated rising costs of
funding. Net interest margin for the years ended December 31, 2022
and 2021 was 3.19% and 3.09%, respectively, an increase of 10 basis
points. The increase in net interest margin during 2022 was due to
the repricing of the variable rate loan portfolio earlier in the
year ahead of increases in funding costs, in addition to increased
loan origination volume at higher interest rates. The average yield
on total loans for the fourth quarter of 2022 was 4.91%, compared
to 4.64% for the linked quarter ended September 30, 2022, and 4.33%
for the year ago quarter. The cost of funds, which includes
noninterest-bearing deposits, increased 101 basis points to 1.50%
for the fourth quarter of 2022 as compared to 0.49% for the fourth
quarter of 2021. Cost of interest-bearing deposits for the fourth
quarter of 2022 was 1.72%, compared to 0.63% for the fourth quarter
of 2021, an increase of 109 basis points, a result of rising
interest rates due to contractionary monetary policy being enacted
by the Federal Reserve.
Noninterest income for the year ended December 31, 2022 was $2.8
million, compared to $4.3 million for 2021, a decrease of $1.5
million, which was primarily driven by the loss recorded from the
Company’s membership interest in ACM of $659 thousand for the year
ended December 31, 2022, compared to income from its membership
interest in ACM of $1.5 million for the year ended December 31,
2021.
During the last several months of 2022, ACM made strategic
investments through hiring top tier mortgage originators and
additional support infrastructure including new branches, to
position itself for the current and future mortgage environment.
This investment, which has significantly increased ACM’s overhead
expenses ahead of future earnings, coupled with historically low
origination volumes and tighter margins, have caused short-term
losses that were not previously forecast or budgeted. However, ACM
has significant cash reserves to draw from and it is expected that
these strategic investments will buoy ACM as a top mortgage
originator in the Company’s region within the next several years.
The Company continues to benefit from synergies created by its ACM
investment, including warehouse line activity, loan purchases and
customer referrals.
Noninterest income reported for the quarter ended December 31,
2022 was a loss of $10 thousand while noninterest income for the
quarter ended December 31, 2021 totaled $1.8 million. The Company
recorded a loss of $787 thousand on its minority membership
interests for the three months ended December 31, 2022 compared to
income of $1.1 million for the year ago quarter. The Company
recorded a loss on its membership interest with ACM of $1.4
million, offset by fair value gains for other equity investments
made by the Company. Fee income from loans was $74 thousand for the
quarter ended December 31, 2022, compared to $36 thousand for the
fourth quarter of 2021. Service charges on deposit accounts and
other fee income totaled $347 thousand for the fourth quarter of
2022, a decrease of $35 thousand from the year ago quarter. Income
from bank-owned life insurance (“BOLI”) increased $108 thousand to
$356 thousand for the three months ended December 31, 2022,
compared to $248 thousand for the same period of 2021, as the
Company purchased additional BOLI totaling $15 million during the
second quarter of 2022.
For each of the years ended December 31, 2022 and 2021,
noninterest expense was $34.5 million. For the years ended December
31, 2022 and 2021, noninterest expense included merger-related
expenses totaling $125 thousand and $1.4 million, respectively,
associated with the Company’s proposed merger with Blue Ridge
Bankshares, Inc., which was mutually terminated by both companies
on January 20, 2022. When excluding merger-related expenses,
noninterest expense for the years ended December 31, 2022 and 2021
was $34.3 million and $33.1 million, respectively, an increase of
$1.2 million, or 4%, which was primarily a result increases in
salaries and benefits expenses, offset by a year-over-year decrease
in professional fees of $279 thousand, which were attributable to
the Company’s membership interest purchase in ACM during 2021.
Noninterest expense was $9.2 million and $9.0 million for the
quarters ended December 31, 2022 and 2021, respectively, an
increase of $198 thousand, or 2%. Occupancy and equipment expense
increased $72 thousand during the fourth quarter of 2022 when
compared to the year ago quarter. Legal expenses related to loan
workouts (which is included in other operating expense on the
income statement) decreased $96 thousand for the fourth quarter of
2022 when compared to the year ago quarter, primarily as a result
of reduced workout expenses in an continued effort to further
mitigate credit risk and potential loss.
The efficiency ratios, excluding merger-related expenses, for
the years ended December 31, 2022 and 2021, were 50.4% and 53.2%,
respectively, an improvement of 5% year-over-year as the Company
increased revenues and continued to leverage technology. A
reconciliation of the efficiency ratio, a non-GAAP financial
measure, can be found in the tables below.
The Company recorded a provision for income taxes of $1.0
million for the three months ended December 31, 2022, compared to
$2.0 million for the same period of 2021. The effective tax rates
for the three months ended December 31, 2022 and 2021 were 17.4%
and 23.3%, respectively. The effective tax rate for the three
months ended December 31, 2022 was less than the Company’s combined
federal and state statutory rate of 22.5% primarily because of
discrete tax benefits recorded as a result of exercises of
nonqualified stock options during the aforementioned period. For
the years ended December 31, 2022 and 2021, provision for income
taxes was $6.0 million and $6.3 million, respectively.
About FVCBankcorp, Inc.
FVCBankcorp, Inc. is the holding company for FVCbank, a
wholly-owned subsidiary that commenced operations in November 2007.
FVCbank is a $2.34 billion asset-sized Virginia-chartered community
bank serving the banking needs of commercial businesses, nonprofit
organizations, professional service entities, their owners and
employees located in the greater Baltimore and Washington, D.C.
metropolitan areas. FVCbank is based in Fairfax, Virginia, and has
9 full-service offices in Arlington, Fairfax, Manassas, Reston and
Springfield, Virginia, Washington D.C., and Baltimore, Bethesda,
and Rockville, Maryland.
For more information about the Company, 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: general business and economic conditions nationally or in the
markets that the Company serves; changes in the level of the
Company’s nonperforming assets and charge-offs; changes in the
assumptions underlying the establishment of reserves for possible
loan losses; the Company’s management of risks inherent in its real
estate loan portfolio, and the risk of a prolonged downturn in the
real estate market, which could impair the value of the Company’s
collateral and the ability to sell collateral upon any foreclosure;
credit risk, market risk, and liquidity risk affecting the
Company’s securities portfolio, as well as changes in the estimates
used to value the securities in the portfolio; geopolitical
conditions, including acts or threats of terrorism, or actions
taken by the United States or other governments in response to acts
or threats of terrorism and/or military conflicts, which could
impact business and economic conditions in the United States and
abroad; the effects of, and changes in, trade, monetary and fiscal
policies and laws, including interest rate policies of the Board of
Governors of the Federal Reserve System, inflation, interest rate,
market and monetary fluctuations; the impact of the COVID-19
pandemic, including the adverse impact on the Company’s business
and operations and on the Company’s customers, which may result in,
among other things, increased delinquencies, defaults, foreclosures
and losses on loans; the impact of changes in financial services
policies, laws and regulations, including laws, regulations and
policies concerning taxes, banking, securities and insurance, and
the application thereof by regulatory bodies; technological
changes, including potential exposure to fraud, negligence,
computer theft and cyber-crime; and the risk factors and other
cautionary language included in the Company’s Annual Report on Form
10-K for the year ended December 31, 2021 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)
At or For the Three Months Ended For the Years
Ended December 31, 12/31/2022 12/31/2021
2022
2021
Selected Balances Total assets
$
2,344,322
$
2,202,924
Total investment securities
293,945
364,410
Loans held for sale
- -
-
Total loans, net of deferred fees
1,840,434
1,503,849
Allowance for loan losses
(16,040
)
(13,829
)
Total deposits
1,830,162
1,883,769
Subordinated debt
19,565
19,510
Other borrowings
265,000
25,000
Total stockholders’ equity
202,382
209,796
Summary Results of Operations Interest income
$
23,341
$
17,487
$
80,682
$
68,428
Interest expense
7,462
2,249
15,438
10,481
Net interest income
15,879
15,238
65,244
57,947
Provision for (reversal of) loan losses
729
(500
)
2,629
(500
)
Net interest income after provision for loan losses
15,150
15,738
62,615
58,447
Noninterest income - loan fees, service charges and other
421
418
1,667
1,844
Noninterest income - bank owned life insurance
356
248
1,200
994
Noninterest income - gains on calls of securities held-to-maturity
- -
- -
- -
-
Noninterest income - minority membership interest
(787
)
1,100
(33
)
1,464
Noninterest income - gain on sales of securities available-for-sale
- -
- -
- -
- -
Noninterest income - loss on loans held for sale
- -
- -
- -
- -
Noninterest expense
9,202
9,004
34,460
34,540
Income before taxes
5,938
8,500
30,989
28,209
Income tax expense
1,035
1,983
6,005
6,276
Net income
4,903
6,517
24,984
21,933
Per Share Data Net income, basic (5)
$
0.28
$
0.38
$
1.43
$
1.29
Net income, diluted (5)
$
0.27
$
0.36
$
1.35
$
1.20
Book value (5)
$
11.58
$
12.23
Tangible book value (1)(5)
$
11.14
$
11.76
Tangible book value, excluding accumulated other comprehensive
losses (1)(5)
$
13.23
$
11.88
Shares outstanding
17,475,668
13,727,045
Selected Ratios Net interest margin (2)
2.96
%
3.13
%
3.19
%
3.09
Return on average assets (2)
0.89
%
1.27
%
1.18
%
1.11
Return on average equity (2)
9.87
%
12.55
%
12.34
%
10.92
Efficiency (3)
57.99
%
52.95
%
50.62
%
55.49
Loans, net of deferred fees to total deposits
100.56
%
79.83
%
Noninterest-bearing deposits to total deposits
23.95
%
30.86
%
Reconciliation of Net Income (GAAP) to OperatingEarnings
(Non-GAAP) (4) Net income (from above)
$
4,903
$
6,517
$
24,984
$
21,933
Add: Accelerated debt issuance costs
- -
- -
- -
- -
Add: Merger and acquisition expense
- -
338
125
1,445
Add: Accelerated debt issuance costs
- -
- -
- -
380
Subtract: Gains on sales of other real estate owned
- -
(236
)
- -
(236
)
Less: provision for income taxes associated with non-GAAP
adjustments
- -
(23
)
(28
)
(358
)
Net income, as adjusted
$
4,903
$
6,596
$
25,081
$
23,164
Net income, diluted, on an operating basis (5)
$
0.27
$
0.36
$
1.36
$
1.27
Return on average assets (non-GAAP operating earnings)
0.89
%
1.29
%
1.18
%
1.17
Return on average equity (non-GAAP operating earnings)
9.87
%
12.71
%
12.39
%
11.53
Efficiency ratio (non-GAAP operating earnings) (3)
57.99
%
52.35
%
50.43
%
53.22
Capital Ratios - Bank Tangible common equity (to tangible
assets)
8.86
%
9.82
%
Tier 1 leverage (to average assets)
10.75
%
10.55
%
Asset Quality Nonperforming loans and loans 90+ past due
$
4,493
$
3,508
Performing troubled debt restructurings (TDRs)
829
92
Other real estate owned
-
- -
Nonperforming loans and loans 90+ past due to total assets (excl.
TDRs)
0.19
%
0.16
%
Nonperforming assets to total assets
0.19
%
0.16
%
Nonperforming assets (including TDRs) to total assets
0.23
%
0.16
%
Allowance for loan losses to loans
0.87
%
0.92
%
Allowance for loan losses to loans, excluding PPP loans
0.87
%
0.94
%
Allowance for loan losses to nonperforming loans
357.00
%
394.21
%
Net charge-offs (recoveries)
$
2
$
35
$
417
$
629
Net charge-offs (recoveries) to average loans (2)
0.00
%
0.01
%
0.03
%
0.04
Selected Average Balances Total assets
$
2,202,407
$
2,047,130
$
2,125,066
$
1,978,220
Total earning assets
2,126,032
1,932,262
2,044,618
1,873,037
Total loans, net of deferred fees, excluding PPP
1,742,734
1,442,284
1,608,965
1,357,849
Total deposits
1,811,098
1,765,496
1,807,693
1,686,468
Other Data Noninterest-bearing deposits
$
438,269
$
581,293
Interest-bearing checking, savings and money market
883,480
1,071,059
Time deposits
260,421
196,417
Wholesale deposits
247,992
35,000
(1) Non-GAAP
Reconciliation For the Period Ended December 31,
2022
2021
Total stockholders’ equity
$
202,382
$
209,796
Less: goodwill and intangibles, net
(7,790
)
(8,052
)
Tangible Common Equity
$
194,592
$
201,744
Less: Accumulated Other Comprehensive Income (Loss) ("AOCI")
(36,568
)
(2,043
)
Tangible Common Equity excluding AOCI
$
231,160
$
203,787
Book value per common share (5)
$
11.58
$
12.23
Less: intangible book value per common share (5)
(0.44
)
(0.47
)
Tangible book value per common share (5)
$
11.14
$
11.76
Add: AOCI (loss) per common share (5)
(2.09
)
(0.12
)
Tangible book value per common share, excluding AOCI (5)
$
13.23
$
11.88
(2) Annualized. (3) Efficiency ratio is calculated as
noninterest expense divided by the sum of net interest income and
noninterest income. (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 consolidated statements of income, balance sheets or
statements of cash flows. (5) Amounts for all periods reflect the
effect of a 25% stock dividend declared on December 15, 2022.
FVCBankcorp, Inc. Summary Consolidated Statements of
Condition (Dollars in thousands) (Unaudited)
% Change % Change Current
From 12/31/2022 9/30/2022 Quarter
12/31/2021 Year Ago Cash and due from banks $
7,253
$
11,820
-38.6
%
$
24,613
-70.5
%
Interest-bearing deposits at other financial institutions
74,300
56,522
31.5
%
216,345
-65.7
%
Investment securities
278,333
282,479
-1.5
%
358,038
-22.3
%
Restricted stock, at cost
15,612
9,061
72.3
%
6,372
145.0
%
Loans, net of fees: Commercial real estate
1,097,302
1,027,562
6.8
%
903,770
21.4
%
Commercial and industrial
242,546
207,569
16.9
%
173,540
39.8
%
Paycheck protection program
1,951
3,134
-37.7
%
28,130
-93.1
%
Commercial construction
147,272
150,729
-2.3
%
186,912
-21.2
%
Consumer real estate
343,710
316,389
8.6
%
201,336
70.7
%
Consumer nonresidential
7,653
9,090
-15.8
%
10,161
-24.7
%
Total loans, net of fees
1,840,434
1,714,473
7.3
%
1,503,849
22.4
%
Allowance for loan losses
(16,040)
(15,313)
4.7
%
(13,829)
16.0
%
Loans, net
1,824,394
1,699,160
7.4
%
1,490,020
22.4
%
Premises and equipment, net
1,220
1,290
-5.4
%
1,584
-23.0
%
Goodwill and intangibles, net
7,790
7,849
-0.8
%
8,052
-3.3
%
Bank owned life insurance (BOLI)
55,371
55,016
0.6
%
39,171
41.4
%
Other assets
80,049
81,787
-2.1
%
58,729
36.3
%
Total Assets $
2,344,322
$
2,204,984
6.3
%
$
2,202,924
6.4
%
Deposits: Noninterest-bearing $
438,269
$
513,711
-14.7
%
$
581,293
-24.6
%
Interest-bearing checking
578,340
710,599
-18.6
%
739,046
-21.7
%
Savings and money market
305,140
361,169
-15.5
%
332,013
-8.1
%
Time deposits
260,421
228,805
13.8
%
196,417
32.6
%
Wholesale deposits
247,992
75,000
230.7
%
35,000
608.5
%
Total deposits
1,830,162
1,889,284
-3.1
%
1,883,769
-2.8
%
Other borrowed funds
265,000
75,000
253.3
%
25,000
960.0
%
Subordinated notes, net of issuance costs
19,565
19,551
0.1
%
19,510
0.3
%
Other liabilities
27,213
26,514
2.6
%
64,849
-58.0
%
Stockholders’ equity
202,382
194,635
4.0
%
209,796
-3.5
%
Total Liabilities & Stockholders' Equity $
2,344,322
$
2,204,984
6.3
%
$
2,202,924
6.4
%
FVCBankcorp, Inc. Summary Consolidated Income
Statements (Dollars in thousands, except per share data)
(Unaudited) For the Three Months Ended
% Change % Change Current From
12/31/2022 9/30/2022 Quarter 12/31/2021
Year Ago Net interest income $
15,879
$
17,526
-9.4
%
$
15,238
4.2
%
Provision for (reversal of) loan losses
729
365
99.7
%
(500
)
-245.8
%
Net interest income after provision for loan losses
15,150
17,161
-11.7
%
15,738
-3.7
%
Noninterest income: Fees on loans
74
32
131.3
%
36
105.6
%
Service charges on deposit accounts
248
241
2.9
%
261
-5.0
%
BOLI income
356
352
1.1
%
248
43.5
%
(Loss) income from minority membership interests
(787
)
(160
)
391.9
%
1,100
-171.5
%
Other fee income
99
110
-10.0
%
121
-18.2
%
Total noninterest income
(10
)
575
-101.7
%
1,766
-100.6
%
Noninterest expense: Salaries and employee benefits
5,223
5,202
0.4
%
5,257
-0.6
%
Occupancy and equipment expense
924
676
36.7
%
852
8.5
%
Data processing and network administration
615
595
3.4
%
570
7.9
%
State franchise taxes
509
509
0.0
%
496
2.6
%
Professional fees
325
235
38.3
%
276
17.8
%
Merger and acquisition expense
- -
- -
0.0
%
338
-100.0
%
Gain on sale of other real estate owned
- -
- -
0.0
%
(236
)
-100.0
%
Other operating expense
1,606
1,382
16.2
%
1,451
10.7
%
Total noninterest expense
9,202
8,599
7.0
%
9,004
2.2
%
Net income before income taxes
5,938
9,137
-35.0
%
8,500
-30.1
%
Income tax expense
1,035
2,094
-50.6
%
1,983
-47.8
%
Net Income $
4,903
$
7,043
-30.4
%
$
6,517
-24.8
%
Earnings per share - basic (1) $
0.28
$
0.40
-30.4
%
$
0.38
-26.4
%
Earnings per share - diluted (1) $
0.27
$
0.38
-30.5
%
$
0.36
-25.4
%
Weighted-average common shares outstanding - basic (1)
17,485,715
17,484,740
17,113,048
Weighted-average common shares outstanding - diluted (1)
18,489,595
18,465,124
18,325,171
Reconciliation of Net Income (GAAP)
to Operating Earnings (Non-GAAP): GAAP net income
reported above $
4,903
$
7,043
$
6,517
Add: Merger and acquisition expense
- -
- -
338
Subtract: Gain on sale of other real estate owned
- -
- -
(236
)
Subtract: provision for income taxes associated with non-GAAP
adjustments
- -
- -
(23
)
Net Income, Operating earnings (non-GAAP) $
4,903
$
7,043
$
6,596
Earnings per share - basic (non-GAAP operating earnings)(1) $
0.28
$
0.40
$
0.39
Earnings per share - diluted (non-GAAP operating earnings)(1) $
0.27
$
0.38
$
0.36
Return on average assets (non-GAAP operating earnings)
0.89
%
1.32
%
1.29
%
Return on average equity (non-GAAP operating earnings)
9.87
%
13.87
%
12.71
%
Efficiency ratio (non-GAAP operating earnings)
57.99
%
47.51
%
52.35
%
Reconciliation of Net Income (GAAP)
to Pre-Tax Pre-Provision Income (Non-GAAP): GAAP net
income reported above $
4,903
$
7,043
$
6,517
Add: Provision for (reversal of) loan losses
729
365
(500
)
Add: Merger and acquisition expense
- -
- -
338
Add: Income tax expense
1,035
2,094
1,983
Pre-tax pre-provision income (non-GAAP) $
6,667
$
9,502
$
8,338
Earnings per share - basic (non-GAAP pre-tax pre-provision)(1) $
0.38
$
0.54
$
0.49
Earnings per share - diluted (non-GAAP pre-tax pre-provision)(1) $
0.36
$
0.51
$
0.46
Return on average assets (non-GAAP operating earnings)
1.21
%
1.77
%
1.63
%
Return on average equity (non-GAAP operating earnings)
13.42
%
18.71
%
16.06
%
(1) Amounts for all periods reflect the effect of a 25% stock
dividend declared on December 15, 2022.
FVCBankcorp, Inc.
Summary Consolidated Income Statements (Dollars in
thousands, except per share data) (Unaudited)
For the Years Ended % Change From
12/31/2022 12/31/2021 Year Ago Net
interest income $
65,244
$
57,947
12.6
%
Provision for (reversal of) loan losses
2,629
(500
)
-625.8
%
Net interest income after provision for loan losses
62,615
58,447
7.1
%
Noninterest income: Fees on loans
232
110
110.9
%
Service charges on deposit accounts
954
1,028
-7.2
%
BOLI income
1,200
994
20.7
%
(Loss) income from minority membership interests
(33
)
1,464
-102.3
%
Other fee income
481
706
-31.9
%
Total noninterest income
2,834
4,302
-34.1
%
Noninterest expense: Salaries and employee benefits
20,316
18,980
7.0
%
Occupancy and equipment expense
3,252
3,290
-1.2
%
Data processing and network administration
2,303
2,203
4.5
%
State franchise taxes
2,036
1,983
2.7
%
Professional fees
1,210
1,489
-18.7
%
Merger and acquisition expense
125
1,445
-91.3
%
Gain on sale of other real estate owned
- -
(236
)
-100.0
%
Other operating expense
5,218
5,386
-3.1
%
Total noninterest expense
34,460
34,540
-0.2
%
Net income before income taxes
30,989
28,209
9.9
%
Income tax expense
6,005
6,276
-4.3
%
Net Income $
24,984
$
21,933
13.9
%
Earnings per share - basic (1) $
1.43
$
1.29
11.5
%
Earnings per share - diluted (1) $
1.35
$
1.20
12.3
%
Weighted-average common shares outstanding - basic (1)
17,431,098
17,062,074
Weighted-average common shares outstanding - diluted (1)
18,483,577
18,226,711
Reconciliation of Net Income (GAAP)
to Operating Earnings (Non-GAAP): GAAP net income
reported above $
24,984
$
21,933
Add: Merger and acquisition expense
125
1,445
Add: Accelerated debt issuance costs
- -
380
Subtract: Gain on sale of other real estate owned
- -
(236
)
Subtract: provision for income taxes associated with non-GAAP
adjustments
(28
)
(358
)
Net Income, Operating earnings (non-GAAP) $
25,081
$
23,164
Earnings per share - basic (non-GAAP operating earnings)(1) $
1.44
$
1.36
Earnings per share - diluted (non-GAAP operating earnings)(1) $
1.36
$
1.27
Return on average assets (non-GAAP operating earnings)
1.18
%
1.17
%
Return on average equity (non-GAAP operating earnings)
12.39
%
11.53
%
Efficiency ratio (non-GAAP operating earnings)
50.43
%
53.22
%
Reconciliation of Net Income (GAAP)
to Pre-Tax Pre-Provision Income (Non-GAAP): GAAP net
income reported above $
24,984
$
21,933
Add: Provision for (reversal of) loan losses
2,629
(500
)
Add: Merger and acquisition expense
125
1,445
Add: Accelerated debt issuance costs
- -
380
Add: Income tax expense
6,005
6,276
Pre-tax pre-provision income (non-GAAP) $
33,743
$
29,534
Earnings per share - basic (non-GAAP pre-tax pre-provision)(1) $
1.94
$
1.73
Earnings per share - diluted (non-GAAP pre-tax pre-provision)(1) $
1.83
$
1.62
Return on average assets (non-GAAP operating earnings)
1.59
%
1.49
%
Return on average equity (non-GAAP operating earnings)
16.66
%
14.70
%
(1) Amounts for all periods reflect the effect of a 25%
stock dividend declared on December 15, 2022.
FVCBankcorp,
Inc. Average Statements of Condition and Yields on Earning
Assets and Interest-Bearing Liabilities (Dollars in
thousands) (Unaudited) For the Three
Months Ended 12/31/2022 9/30/2022
12/31/2021 Average Interest Average
Average Interest Average Average
Interest Average Balance Income/Expense
Yield Balance Income/Expense Yield
Balance Income/Expense Yield
Interest-earning assets: Loans receivable, net of fees (1)
Commercial real estate $
1,056,611
$
11,791
4.46
%
$
1,003,052
$
11,195
4.46
%
$
890,046
$
9,191
4.13
%
Commercial and industrial
186,785
3,079
6.59
%
180,111
2,419
5.37
%
137,000
1,543
4.51
%
Paycheck protection program
2,492
37
5.90
%
4,752
102
8.55
%
43,682
899
8.23
%
Commercial construction
149,080
2,382
6.39
%
156,429
2,163
5.53
%
195,593
2,341
4.79
%
Consumer real estate
314,415
3,513
4.47
%
272,849
2,879
4.22
%
155,657
1,556
4.00
%
Warehouse facilities
27,380
445
6.51
%
40,873
407
3.99
%
56,177
380
2.71
%
Consumer nonresidential
8,463
183
8.66
%
9,455
179
7.57
%
7,811
164
8.38
%
Total loans
1,745,226
21,430
4.91
%
1,667,521
19,344
4.64
%
1,485,966
16,074
4.33
%
Investment securities (2)(3)
344,011
1,645
1.91
%
349,407
1,578
1.81
%
309,348
1,360
1.76
%
Interest-bearing deposits at other financial institutions
36,795
269
2.90
%
40,814
171
1.66
%
136,948
56
0.16
%
Total interest-earning assets
2,126,032
23,344
4.39
%
2,057,742
21,093
4.10
%
1,932,262
17,490
3.62
%
Non-interest earning assets: Cash and due from banks
807
4,958
18,502
Premises and equipment, net
1,284
1,344
1,634
Accrued interest and other assets
89,616
92,985
109,084
Allowance for loan losses
(15,332)
(15,072)
(14,352)
Total Assets $
2,202,407
$
2,141,957
$
2,047,130
Interest-bearing liabilities: Interest checking $
670,540
$
2,634
1.56
%
$
737,907
$
1,320
0.71
%
$
641,776
$
921
0.57
%
Savings and money market
303,137
1,150
1.51
%
314,105
727
0.92
%
328,798
402
0.49
%
Time deposits
238,795
1,267
2.11
%
213,845
752
1.41
%
204,957
525
1.02
%
Wholesale deposits
133,092
798
2.38
%
41,957
93
0.88
%
35,000
50
0.57
%
Total interest-bearing deposits
1,345,564
5,849
1.72
%
1,307,814
2,892
0.88
%
1,210,531
1,898
0.63
%
Other borrowed funds
145,424
1,356
3.70
%
81,902
415
2.01
%
25,088
89
1.41
%
Subordinated notes, net of issuance costs
19,556
257
5.23
%
19,542
258
5.23
%
19,518
262
5.32
%
Total interest-bearing liabilities
1,510,544
7,462
1.96
%
1,409,258
3,565
1.01
%
1,255,137
2,249
0.72
%
Noninterest-bearing liabilities: Noninterest-bearing
deposits
465,534
506,700
554,965
Other liabilities
27,635
22,910
29,383
Stockholders’ equity
198,694
203,089
207,645
Total Liabilities and Stockholders' Equity $
2,202,407
$
2,141,957
$
2,047,130
Net Interest Margin
15,882
2.96
%
17,528
3.38
%
15,241
3.13
%
(1) Non-accrual loans are included in average balances. (2)
The average yields for investment securities are reported on a
fully taxable-equivalent basis at a rate of 21%. The taxable
equivalent adjustment to interest income for the three months ended
December 31, 2022 and 2021 is $2 and $2, respectively. For the
three months ended September 30, 2022, the taxable equivalent
adjustment to interest income is $2. (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 12/31/2022 12/31/2021 Average
Interest Average Average Interest
Average Balance Income/Expense Yield
Balance Income/Expense Yield
Interest-earning assets: Loans receivable, net of fees (1)
Commercial real estate $
978,983
$
42,646
4.36
%
$
832,138
$
35,104
4.22
%
Commercial and industrial
172,428
9,228
5.35
%
118,185
5,668
4.80
%
Paycheck protection program
9,112
592
6.50
%
105,980
5,410
5.11
%
Commercial construction
165,088
8,762
5.31
%
209,957
9,790
4.66
%
Consumer real estate
240,055
10,079
4.20
%
157,845
6,374
4.04
%
Warehouse facilities
43,268
1,612
3.73
%
28,155
770
2.74
%
Consumer nonresidential
9,143
705
7.71
%
11,569
858
7.41
%
Total loans
1,618,077
73,624
4.55
%
1,463,829
63,974
4.37
%
Investment securities (2)(3)
352,064
6,382
1.81
%
211,221
4,206
1.99
%
Interest-bearing deposits at other financial institutions
74,477
685
0.92
%
197,987
260
0.13
%
Total interest-earning assets
2,044,618
80,691
3.95
%
1,873,037
68,440
3.65
%
Non-interest earning assets: Cash and due from banks
873
18,556
Premises and equipment, net
1,410
1,578
Accrued interest and other assets
92,761
99,562
Allowance for loan losses
(14,596
)
(14,513
)
Total Assets $
2,125,066
$
1,978,220
Interest-bearing liabilities: Interest checking $
724,881
$
5,966
0.82
%
$
587,151
$
3,224
0.55
%
Savings and money market
315,653
2,662
0.84
%
303,317
1,421
0.47
%
Time deposits
203,719
2,908
1.43
%
230,668
2,783
1.21
%
Wholesale deposits
61,478
932
1.52
%
37,657
173
0.46
%
Total interest-bearing deposits
1,305,731
12,468
0.95
%
1,158,793
7,601
0.66
%
Other borrowed funds
70,299
1,939
2.76
%
25,022
347
1.39
%
Subordinated notes, net of issuance costs
19,535
1,031
5.28
%
37,856
2,533
6.69
%
Total interest-bearing liabilities
1,395,565
15,438
1.11
%
1,221,671
10,481
0.86
%
Noninterest-bearing liabilities: Noninterest-bearing
deposits
501,962
527,675
Other liabilities
25,059
27,988
Stockholders’ equity
202,480
200,886
Total Liabilities and Stockholders' Equity $
2,125,066
$
1,978,220
Net Interest Margin
65,253
3.19
%
57,959
3.09
%
(1) Non-accrual loans are included in average balances. (2) The
average yields for investment securities are reported on a fully
taxable-equivalent basis at a rate of 21%. The taxable equivalent
adjustment to interest income was $9 and $12 for the years ended
December 31, 2022 and 2021, respectively. (3) The average balances
for investment securities includes restricted stock.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230125005171/en/
David W. Pijor, Esq., Chairman and Chief Executive Officer
Phone: (703) 436-3802 Email: dpijor@fvcbank.com
Patricia A. Ferrick, President Phone: (703) 436-3822 Email:
pferrick@fvcbank.com
FVCBankcorp (NASDAQ:FVCB)
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