FVCBankcorp, Inc. (NASDAQ: FVCB) (the “Company”) today reported
its financial results for the first quarter of 2024.
First Quarter Selected Financial Highlights
- Increase in Net Interest Income and Margin. Net interest
margin increased 10 basis points, or 4%, to 2.47% for the first
quarter of 2024, compared to 2.37% for the fourth quarter of 2023.
Net interest income increased $133 thousand to $12.8 million, or
1%, compared to $12.7 million for the fourth quarter of 2023.
Interest income increased $176 thousand quarter-over-quarter while
interest expense only increased $43 thousand for the same
period.
- Strong Credit Quality. Nonperforming loans totaled $3.0
million at March 31, 2024, or 0.14% of total assets, a decrease of
$1.5 million, or 33%, from the year ago quarter ended March 31,
2023. Compared to December 31, 2023, nonperforming loans increased
$1.2 million at March 31, 2024. The Company recorded net recoveries
of $30 thousand during the first quarter of 2024, or 0.01% of
average total loans.
- Prudent Balance Sheet Repositioning. During the first
quarter of 2024, the Company surrendered $48.0 million of its
bank-owned life insurance (“BOLI”). These policies yielded 2.74%
(3.34% on a tax-equivalent basis). This transaction resulted in a
nonrecurring increase of $2.4 million to the Company’s tax
provisioning related to the gain associated with the cash payout,
which is included in the Company’s first quarter earnings. The
projected earn-back period is approximately one year. The Company
used the proceeds to pay down high cost funding and fund new loan
growth. The full impact of the surrender to net interest income
will be realized during the second quarter of 2024.
- Strong, Well Capitalized Balance Sheet. All of FVCbank’s
(the “Bank”) regulatory capital components and ratios were well in
excess of thresholds required to be considered "well capitalized",
with total risk-based capital to risk-weighted assets of 14.23% at
March 31, 2024, compared to 13.83% at December 31, 2023. The
tangible common equity ("TCE") to total assets ("TA") ratio for the
Bank increased to 10.30% at March 31, 2024, from 8.92% at March 31,
2023. The Bank’s investment securities are classified as
available-for-sale, and therefore the decrease in market value of
these securities is fully reflected in the TCE/TA ratio.
For the three months ended March 31, 2024, the Company recorded
net income of $1.3 million, or $0.07 diluted earnings per share,
compared to net income of $621 thousand, or $0.03 diluted earnings
per share for the quarter ended March 31, 2023. As a result of the
above mentioned repositioning, the quarter ended March 31, 2024
results include additional provision for income taxes totaling $2.4
million related to the cumulative increases in BOLI policy cash
values that were taxable upon the policies’ surrender. The results
for the three months ended March 31, 2023 included losses from the
sale of available-for-sale investment securities totaling $4.6
million ($3.6 million after-tax).
Commercial bank operating earnings (non-GAAP), which exclude the
nonrecurring taxes on the surrender of the Company’s BOLI policies,
the after-tax losses on the sale of investment securities, office
space reduction costs, severance costs and the nonrecurring
valuation adjustment of a minority investment, for the three months
ended March 31, 2024 and December 31, 2023 were $3.7 million and
$2.8 million, respectively, an increase of $948 thousand. Diluted
commercial bank operating earnings per share (non-GAAP) for the
three months ended March 31, 2024 and December 31, 2023 were $0.20
and $0.15, respectively.
For the three months ended March 31, 2024 and December 31, 2023,
pre-tax pre-provision operating income (non-GAAP), which also
excludes the nonrecurring taxes on the BOLI surrender, losses on
securities sales, office space reduction costs, severance costs and
a nonrecurring valuation adjustment for a minority investment was
$4.6 million and $3.5 million, respectively, an increase of $1.1
million.
The Company considers commercial bank operating earnings and
pre-tax pre-provision operating income useful comparative financial
measures of the Company’s operating performance over multiple
periods. Both commercial bank operating earnings and pre-tax
pre-provision operating income are determined by methods other than
in accordance with U.S. generally accepted accounting principles
(“GAAP”). A reconciliation of non-GAAP financial measures to their
most comparable financial measure in accordance with GAAP can be
found in the tables below.
Management Comments
David W. Pijor, Esq., Chairman and Chief Executive Officer of
the Company, said:
“We are pleased that our continued efforts to improve our net
interest margin and to decrease noninterest expense are
demonstrated in our results for the first quarter of 2024. The
surrender of $48.0 million in BOLI, which was only paying the Bank
3.34% on a tax-equivalent basis, will further improve our net
interest income and margin going forward. We continue to increase
core relationships in our market area, through both the origination
of over $42 million in new loans this quarter and $113 million in
new non-time deposit accounts. We remain committed to providing
personalized client service coupled, with innovative technology
which continues to drive new customer relationships through the
efforts of our dedicated team of bankers who exemplify our Bank’s
core values each day.
Statement of Condition
Total assets were $2.18 billion at March 31, 2024 and $2.19
billion at December 31, 2023, a decrease of $7.9 million.
Loans receivable, net of deferred fees, were $1.85 billion at
March 31, 2024 and $1.83 billion at December 31, 2023, an increase
of $24.2 million, or 1%. During the first quarter of 2024, loan
originations totaled $41.5 million with a weighted average rate of
8.76% and loan renewals totaled $19.3 million with a weighted
average rate of 8.25%. Loans that paid off during the first quarter
of 2024 totaled $18.6 million and had a weighted average rate of
7.97%. The Company’s warehouse line with Atlantic Coast Mortgage,
LLC (“ACM”) increased $1.3 million during the first quarter of
2024.
Investment securities were $167.1 million at March 31, 2024 and
$171.9 million at December 31, 2023, a decrease of $4.8 million, or
3%. The decrease in investment securities during the quarter ended
March 31, 2024 was primarily a result of $2.8 million in principal
repayments and a decrease in the market value of the investment
securities portfolio totaling $2.0 million.
Total deposits were $1.86 billion at March 31, 2024 and $1.85
billion at December 31, 2023, an increase of $12.0 million, or 1%.
Noninterest-bearing deposits were $394.1 million at March 31, 2024,
or 21.2% of total deposits. At March 31, 2024, core deposits, which
exclude wholesale deposits, decreased $2.6 million from December
31, 2023, or less than 1%. As a member of the IntraFi Network, the
Bank offers products to its customers who seek to maximize FDIC
insurance protection (“reciprocal deposits”). At March 31, 2024 and
December 31, 2023, reciprocal deposits totaled $234.8 million and
$254.1 million, respectively, and are considered part of the
Company’s core deposit base. Time deposits (which exclude wholesale
deposits) increased $38.0 million, or 12%, to $344.4 million at
March 31, 2024 from December 31, 2023, and were 22% of core
deposits at March 31, 2024, representing new and existing customer
deposits as customers were looking to fix higher interest rates on
their deposit balances.
The Company continues to have consistent core deposit inflows
each quarter, including the first quarter of 2024, with new
non-time deposit accounts totaling $112.6 million (which includes
$21.0 million in new noninterest-bearing deposits) compared to
$116.5 million (which includes $8.3 million in noninterest-bearing
deposits) for the fourth quarter of 2023. Title and escrow-related
deposits decreased $24.8 million from December 31, 2023 to March
31, 2024, which was primarily attributable to lower title and
escrow related activity during the first quarter of 2024. The
Company continues to see growth in its new and existing deposit
relationships going into the second quarter of 2024.
Total wholesale funding decreased $13.4 million, or 4%, during
the first quarter of 2024. Wholesale funding includes wholesale
deposits totaling $259.8 million and other borrowed funds totaling
$57.0 million at March 31, 2024. Average wholesale funding totaled
$413.2 million for the quarter ended March 31, 2024 and had a
weighted average rate of 4.01%, compared to $331.1 million with a
weighted average rate of 3.75% for the quarter ended December 31,
2023. The Bank used higher-cost short-term wholesale funding
sources during the first quarter of 2024 to supplement deposit
activity. At March 31, 2024, wholesale funding totaled $316.8
million and had a weighted average rate of 3.54% (including $250
million in pay-fixed/receive-floating interest rate swaps at an
average rate of 3.25%).
Shareholders’ equity at March 31, 2024 was $220.7 million, an
increase of $3.5 million, or 2%, from December 31, 2023. Earnings
for the quarter ended March 31, 2024 contributed $1.3 million to
the increase in shareholders’ equity. Accumulated other
comprehensive loss decreased $1.7 million, which was primarily
related to the change in the Company’s other comprehensive income
associated with its interest rate swaps at March 31, 2024.
Book value per share at March 31, 2024 and December 31, 2023 was
$12.32 and $12.19, respectively. Tangible book value per share (a
non-GAAP financial measure which is defined in the tables below) at
March 31, 2024 and December 31, 2023 was $11.90 and $11.77,
respectively. Tangible book value per share, excluding accumulated
other comprehensive loss (a non-GAAP financial measure which is
defined in the tables below), at March 31, 2024 and December 31,
2023 was $13.16 and $13.12, respectively.
The Bank is well-capitalized at March 31, 2024, with total
risk-based capital of 14.23%, common equity tier 1 risk-based
capital of 13.18%, and tier 1 leverage ratio of 11.18%.
Asset Quality
For each of the first quarter of 2024 and fourth quarter of
2023, the Company recorded no provision for credit losses, compared
to a provision of $242 thousand for the three months ended March
31, 2023. The allowance for credit losses (“ACL”) to total loans,
net of fees, was 1.02% at March 31, 2024, compared to 1.03% at
December 31, 2023.
The Company has maintained disciplined credit guidelines during
the 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. Nonaccrual loans and
loans 90 days or more past due at March 31, 2024 totaled $3.0
million, or 0.14% of total assets, compared to $1.8 million, or
0.08% of total assets, at December 31, 2023. The increase is
nonperforming loans for the quarter ended March 31, 2024 is
primarily a result of one commercial & industrial loan
relationship that was placed on nonaccrual. Watchlist credits
decreased to $28.0 million at March 31, 2024, a decrease of $800
thousand from December 31, 2023, as the Company proactivity manages
the credit quality of its loan portfolio, including reducing its
commercial real estate concentrations, which has resulted in
limited credit losses over its history. The Company had no other
real estate owned at March 31, 2024.
The Company recorded net recoveries of $30 thousand during the
first quarter of 2024. For each of March 31, 2024 and December 31,
2023, the ACL was $18.9 million. ACL coverage to nonperforming
loans decreased to 651% at March 31, 2024, compared to 1065% at
December 31, 2023 as a result of the $1.2 million increase in
nonperforming loans during the first quarter of 2024.
At March 31, 2024, commercial real estate totaled $1.09 billion,
or 59% of total loans, net of fees, and construction loans totaled
$155 million, or 8% of total loans, net of fees. Included in
commercial real estate are loans secured by office buildings
totaling $121.3 million, or 7% of total loans, and retail shopping
centers totaling $266.1 million, or 14% of total loans, at March
31, 2024. Multi-family housing totaled $178.2 million, or 10% of
total loans, at March 31, 2024. The commercial real estate
portfolio, including construction loans, is diversified by asset
type and geographic concentration. The Company manages this portion
of the portfolio in a disciplined manner, and has comprehensive
policies to monitor, measure and mitigate its loan concentrations
within this portfolio segment, including rigorous credit approval,
monitoring and administrative practices. The following table
provides further stratification of these and additional classes of
real estate loans at March 31, 2024 (dollars in thousands).
Owner Occupied Commercial Real
Estate
Non-Owner Occupied Commercial
Real Estate
Construction
Asset Class
Average Loan-to-Value
(1)
Number of Total Loans
Bank Owned Principal
(2)
Average Loan-to-Value
(1)
Number of Total Loans
Bank Owned Principal
(2)
Top 3 Geographic
Concentration
Number of Total Loans
Bank Owned Principal
(2)
Total Bank Owned Principal
(2)
% of Total Loans
Office, Class A
71%
7
$
8,966
47%
4
$
3,746
Counties of Fairfax and Loudoun,
Virginia and Montgomery County, Maryland
—
$
—
$
12,712
Office, Class B
46%
36
13,986
46%
31
60,909
—
—
74,895
Office, Class C
51%
7
3,747
40%
8
1,931
1
881
6,559
Office, Medical
40%
7
1,192
50%
6
25,933
1
—
27,125
Subtotal
57
$
27,891
49
$
92,519
2
$
881
$
121,291
7%
Retail- Neighborhood/Community Shop
—
$
—
43%
31
$
84,178
Prince George's County, Maryland,
Fairfax County, Virginia and Washington, D.C.
2
$
11,370
$
95,548
Retail- Restaurant
57%
9
8,134
45%
16
26,705
—
—
34,839
Retail- Single Tenant
59%
5
1,983
42%
20
35,975
—
—
37,958
Retail- Anchored,Other
70%
1
2,032
52%
13
43,164
—
—
45,196
Retail- Grocery-anchored
—
—
46%
8
51,266
1
1,255
52,521
Subtotal
15
$
12,149
88
$
241,288
3
$
12,625
$
266,062
14%
Multi-family, Class A (Market)
—
$
—
—%
1
$
—
Washington, D.C., Baltimore City,
Maryland and Arlington County, Virginia
1
$
729
$
729
Multi-family, Class B (Market)
—
—
62%
21
78,463
—
—
78,463
Multi-family, Class C (Market)
—
—
56%
57
71,473
2
7,047
78,520
Multi-Family-Affordable Housing
—
—
52%
10
16,446
1
4,054
20,500
Subtotal
—
$
—
89
$
166,382
4
$
11,830
$
178,212
10%
Industrial
52%
42
$
69,422
50%
38
$
127,881
Prince William County, Virginia,
Fairfax County, Virginia and Howard County, Maryland
1
$
626
$
197,929
Warehouse
52%
14
18,611
33%
10
11,484
—
—
30,095
Flex
50%
15
18,577
54%
14
56,391
1
—
74,968
Subtotal
71
$
106,610
62
$
195,756
2
$
626
$
302,992
16%
Hotels
—
$
—
43%
9
$
52,229
1
$
6,481
$
58,710
3%
Mixed Use
46%
10
$
6,048
60%
37
$
68,109
—
$
—
$
74,157
4%
Other (including net deferred fees)
$
58,146
$
62,235
$
123,008
$
243,389
13%
Total commercial real estate and
construction loans, net of fees, at December 31, 2023
$
210,844
$
878,518
$
155,451
$
1,244,813
67%
$
212,889
$
878,744
$
147,998
$
1,239,631
68%
(1) Loan-to-value is determined at
origination date against current bank owned principal.
(2) Bank-owned principal is not adjusted
for deferred fees and costs.
(3) Minimum debt service coverage policy
is 1.30x for owner occupied and 1.25x for Non-Owner Occupied at
origination.
The loans shown in the above table exhibit strong credit
quality, reflecting only one classified delinquency at March 31,
2024 totaling $851 thousand. During its assessment of the allowance
for credit losses, the Company addressed the credit risks
associated with these portfolio segments and believes that as a
result of its conservative underwriting discipline at loan
origination and its ongoing loan monitoring procedures, the Company
has appropriately reserved for possible credit concerns in the
event of a downturn in economic activity.
Minority Investment in Mortgage Banking Operation
In August 2021, the Company acquired a membership interest in
ACM to diversify its loan portfolio while providing competitive
residential mortgage products to its customers and to generate
additional revenue. The Company’s investment in ACM is reflected as
a nonconsolidated minority investment, and as such, the Company’s
income generated from the investment is included in non-interest
income. For the first quarter of 2024, the Company reported a
pre-tax loss of $226 thousand compared to a pre-tax loss of $1.3
million for the quarter ended December 31, 2023 related to its
investment in ACM. ACM management is continuing to evaluate
opportunities to further reduce expenses and increase revenues.
Income Statement
The Company recorded net income of $1.3 million for the three
months ended March 31, 2024, compared to net income of $621
thousand for the same period of 2023. Both first quarter periods
were impacted by balance sheet repositioning transactions. Net
income for the first quarter of 2024 was impacted by the additional
taxes recorded for the surrender of the Company’s BOLI. Excluding
this nonrecurring tax assessment, Bank operating earnings
(non-GAAP) totaled $3.7 million for the first quarter of 2024. For
the first quarter of 2023, net income was impacted by pre-tax
losses recorded on the sale of investment securities
available-for-sale totaling $4.6 million. Excluding these losses,
Bank operating earnings (non-GAAP) totaled $4.2 million for the
first quarter of 2023.
Net interest income increased $133 thousand to $12.8 million for
the quarter ended March 31, 2024, compared to the fourth quarter of
2023, and decreased of $1.2 million, or 9%, compared to the year
ago quarter. Compared to the year ago quarter ended March 31, 2023,
the decrease in net interest income for the first quarter of 2024
is primarily due to an increase in funding costs, which have
increased precipitously as a result of Federal Reserve monetary
policy coupled with the need to meet intense competition from
market area banks, brokerages and the U.S. Treasury.
The Company's net interest margin increased 10 basis points to
2.47% for the quarter ended March 31, 2024 compared to 2.37% for
the linked quarter ended December 31, 2023 and decreased 13 basis
points from 2.60% for the year ago quarter ended March 31, 2023.
During the first quarter of 2024, the Company surrendered $48.0
million in BOLI, the net proceeds of which was used to replace high
cost fundings and fund new loan growth. The full impact of the net
proceeds of the BOLI surrender will be realized during the second
quarter of 2024 as the Company will have use of the net proceeds
for a complete quarter.
Total interest income increased $1.5 million, or 6%, for the
first quarter of 2024 compared to the same quarter of 2023. On a
linked quarter basis, interest income increased $176 thousand for
the first quarter of 2024 compared to the quarter ended December
31, 2023. Interest income on loans increased $1.9 million, or 8%,
for the three months ended March 31, 2024, compared to the same
period of 2023. Compared to the linked quarter, interest income on
loans increased $566 thousand, or 2%, for the three months ended
March 31, 2024, primarily as a result of an increase in average
loans and an increase in loan yields. Loan yields increased 8 basis
points to 5.50% for the three months ended March 31, 2024 compared
to the three months ended December 31, 2023, and increased 39 basis
points compared to the year ago quarter. Yield on earning assets
increased 51 basis points to 5.15% for the three months ended March
31, 2024 compared to the same period of 2023, partially as a result
of the balance sheet repositionings completed during 2023 along
with the repricing of the Company’s variable rate loan portfolio
and new loan originations.
At March 31, 2024, approximately $353 million, or 24%, of the
Company’s commercial loan portfolio is expected to reprice in the
next 12 months, an additional 20% will reprice within the following
24-36 months, and 31% will reprice within the next three to five
years. In the near term, the Company’s efforts to attain
appropriate yields on new originations and the repricing of the
commercial loan portfolio are expected to provide improvement in
loan yields.
Total interest expense for each of the three months ended March
31, 2024 and December 31, 2023 was $14.0 million, compared to $11.3
million for the year ago quarter ended March 31, 2023. Interest
expense on deposits decreased $212 thousand for the three months
ended March 31, 2024 compared to the three months ended December
31, 2023, reflecting the Company’s continued focus on maintaining
core deposit pricing. Compared to the year ago quarter ended March
31, 2023, interest expense on deposits increased $3.8 million for
the three months ended March 31, 2024. The cost of deposits for the
first quarter of 2024 was 2.81% compared to 2.78% for the fourth
quarter of 2023, an increase of 3 basis points compared to an
increase of 84 basis points from 1.97% for the year-ago fourth
quarter.
The Company’s cumulative deposit beta (calculated comparing the
change in deposit interest rates from March 31, 2022 to March 31,
2024 including noninterest-bearing deposits and excluding wholesale
deposits) remained at approximately 42% for both March 31, 2024 and
December 31, 2023, since the Federal Reserve began increasing
short-term interest rates.
Noninterest income for the three months ended March 31, 2024
totaled $395 thousand compared to a loss of $4.6 million for the
three months ended March 31, 2023 and a loss of $9.9 million for
the three months ended December 31, 2023. The losses recorded
during the first quarter of 2023 and fourth quarter of 2023 were a
result of two balance sheet repositionings whereby the Company sold
investment securities available-for-sale for pretax losses of $4.6
million and $11.0 million, respectively. In addition, included in
noninterest income for the three months ended December 31, 2023 was
a fair value adjustment to a minority investment which increased
noninterest income by $1.6 million. The three months ended March
31, 2024 does not have a similar fair value adjustment.
Fee income from loans was $49 thousand for the quarter ended
March 31, 2024, compared to $77 thousand for the first quarter of
2023. Service charges on deposit accounts totaled $261 thousand for
the first quarter of 2024, compared to $215 thousand for the year
ago quarter. Income from bank-owned life insurance decreased $142
thousand to $190 thousand for the three months ended March 31,
2024, compared to $332 thousand for the same period of 2023, a
direct result of the surrendered BOLI that occurred during the
first quarter of 2024.
Noninterest expense totaled $8.6 million for the quarter ended
March 31, 2024, a decrease of $777 thousand, or 8%, compared to
$9.4 million for the three months ended December 31, 2023, and
decreased $385 thousand, or 4%, compared to the year ago quarter.
Included in noninterest expense for the fourth quarter of 2023 is
$336 thousand related to office space reductions and severance
costs. Excluding the office space reductions and severance costs,
noninterest expense for the three months ended March 31, 2024 and
December 31, 2023 was $8.6 million and $9.1 million, respectively,
a decrease of $441 thousand, or 5%.
The decrease for the first quarter of 2024 was primarily related
to salaries and benefits expense which decreased $738 thousand when
compared to the fourth quarter of 2023, and decreased $484 thousand
when compared to the year ago quarter. Salary expense was the main
driver for these decreases, a result of reduced staffing and
process improvement through the use of technology. Full-time
equivalent employees have decreased from 134 at March 31, 2023, and
from 118 at December 31, 2023 to 111 at March 31, 2024.
Occupancy expense decreased $105 thousand to $522 thousand for
the three months ended March 31, 2024 compared to the year ago
quarter ended March 31, 2023, primarily as a result of the office
space reduction efforts completed during 2023. Internet banking and
software expense increased $133 thousand to $694 thousand for the
first quarter of 2024 compared to the quarter ended March 31, 2023,
primarily as a result of the implementation of enhanced customer
software solutions. Other operating expenses totaled $1.4 million
for each of the first quarters of 2024 and 2023 compared to $1.2
million for the fourth quarter of 2023. The Company continues to
identify and assess opportunities to reduce operating expenses.
The Company recorded a provision for income taxes of $3.2
million for the three months ended March 31, 2024, compared to an
income tax benefit of $486 thousand for the same period in 2023.
The provision for income taxes for the first quarter of 2024
includes an additional $2.4 million which is associated with the
Company’s surrendering of its BOLI policies.
About FVCBankcorp, Inc.
FVCBankcorp, Inc. is the holding company for FVCbank, a
wholly-owned subsidiary that commenced operations in November 2007.
FVCbank is a $2.18 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
8 full-service offices in Arlington, Fairfax, Manassas, Reston and
Springfield, Virginia, Washington, D.C., and Baltimore, and
Bethesda, Maryland.
For more information about the Company, please visit the
Investor Relations page of FVCBankcorp, Inc.’s website,
www.fvcbank.com.
Cautionary Note About Forward-Looking Statements
This press release may contain statements relating to future
events or future results of the Company that are considered
“forward-looking statements” under the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
represent plans, estimates, objectives, goals, guidelines,
expectations, intentions, projections and statements of our beliefs
concerning future events, business plans, objectives, expected
operating results and the assumptions upon which those statements
are based. Forward-looking statements include without limitation,
any statement that may predict, forecast, indicate or imply future
results, performance or achievements, and are typically identified
with words such as “may,” “could,” “should,” “will,” “would,”
“believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,”
“plan,” or words or phases of similar meaning. We caution that the
forward-looking statements are based largely on our expectations
and are subject to a number of known and unknown risks and
uncertainties that are subject to change based on factors which
are, in many instances, beyond our control. Actual results,
performance or achievements could differ materially from those
contemplated, expressed or implied by the forward-looking
statements. The following factors, among others, could cause our
financial performance to differ materially from that expressed in
such forward-looking statements: general business and economic
conditions, including higher inflation and its impacts, nationally
or in the markets that the Company serves could adversely affect,
among other things, real estate valuations, unemployment levels,
the ability of businesses to remain viable, consumer and business
confidence, and consumer or business spending, which could lead to
decreases in demand for loans, deposits, and other financial
services that the Company provides and increases in loan
delinquencies and defaults; the impact of the interest rate
environment on our business, financial condition and results of
operation, and its impact on the composition and costs of deposits,
loan demand, and the values and liquidity of loan collateral,
securities, and interest sensitive assets and liabilities; changes
in the Company’s liquidity requirements could be adversely affected
by changes in its assets and liabilities; changes in the
assumptions underlying the establishment of reserves for possible
credit losses and the possibility that future credit losses may be
higher than currently expected; changes in market conditions,
specifically declines in the commercial and residential real estate
market, volatility and disruption of the capital and credit
markets, and soundness of other financial institutions the Company
does business with; 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 Company’s
investment securities portfolio is subject to credit risk, market
risk, and liquidity risk as well as changes in the estimates used
to value the securities in the portfolio; declines in the Company’s
common stock price or the occurrence of what management would deem
to be a triggering event that could, under certain circumstances,
cause us to record a noncash impairment charge to earnings in
future periods; 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 occurrence of
significant natural disasters, including severe weather conditions,
floods, health related issues or emergencies, and other
catastrophic events; the management of risks inherent in the
Company’s real estate loan portfolio, and the risk of a prolonged
downturn in the real estate market, which could impair the value of
loan collateral and the ability to sell collateral upon any
foreclosure; the impact of changes in bank regulatory conditions,
including laws, regulations and policies concerning capital
requirements, deposit insurance premiums, taxes, securities, and
the application thereof by regulatory bodies; the effect of changes
in accounting policies and practices, as may be adopted from time
to time by bank regulatory agencies, the Securities and Exchange
Commission (the “SEC”), the Public Company Accounting Oversight
Board, the Financial Accounting Standards Board or other accounting
standards setting bodies; competitive pressures among financial
services companies, including the timely development of competitive
new products and services and the acceptance of these products and
services by new and existing customers; the effect of acquisitions
and partnerships the Company may make, including, without
limitation, the failure to achieve the expected revenue growth
and/or expense savings from such acquisitions; the Company’s
involvement, from time to time, in legal proceedings and
examination and remedial actions by regulators; and potential
exposure to fraud, negligence, computer theft and cyber-crime, and
the Company’s ability to maintain the security of its data
processing and information technology systems. The foregoing
factors should not be considered exhaustive and should be read
together with other cautionary statements that are included in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2023, including those discussed in the section entitled “Risk
Factors,” and in the Company’s other periodic and current reports
filed with the SEC. If one or more of the factors affecting our
forward-looking information and statements proves incorrect, then
our actual results, performance or achievements could differ
materially from those expressed in, or implied by, forward-looking
information and statements contained in this press release.
Therefore, the Company cautions you not to place undue reliance on
our forward-looking information and statements. We will not update
the forward-looking statements to reflect actual results or changes
in the factors affecting the forward-looking statements. New risks
and uncertainties may emerge from time to time, and it is not
possible to predict their occurrence or how they will affect the
Company’s operations, financial condition or results of
operations.
FVCBankcorp, Inc.
Selected Financial
Data
(Dollars in thousands, except
share data and per share data)
(Unaudited)
At or For the Three Months
Ended,
3/31/2024
12/31/2023
3/31/2023
Selected Balances
Total assets
$
2,182,662
$
2,190,558
$
2,348,995
Total investment securities
174,778
181,347
253,403
Total loans, net of fees
1,852,746
1,828,564
1,828,123
Allowance for credit losses on loans
(18,918
)
(18,871
)
(19,058
)
Total deposits
1,857,265
1,845,292
1,910,386
Subordinated debt
19,633
19,620
19,579
Other borrowings
57,000
85,000
189,000
Reserve for unfunded commitments
586
602
922
Total shareholders’ equity
220,661
217,117
204,156
Summary Results of Operations
Interest income
$
26,827
$
26,651
$
25,334
Interest expense
14,035
13,992
11,320
Net interest income
12,792
12,659
14,014
Provision for credit losses
—
—
242
Net interest income after provision for
credit losses
12,792
12,659
13,772
Noninterest income on loan fees, service
charges and other
408
420
434
Noninterest income on bank owned life
insurance
190
385
332
Noninterest income (loss) on minority
membership interest
(203
)
321
(801
)
Noninterest loss on sale of
available-for-sale investment securities
—
(10,985
)
(4,592
)
Noninterest expense
8,625
9,402
9,010
Income (loss) before taxes
4,562
(6,602
)
135
Income tax expense (benefit)
3,222
(1,531
)
(486
)
Net income (loss)
1,340
(5,071
)
621
Per Share Data
Earnings (loss) per share, basic
$
0.08
$
(0.28
)
$
0.04
Earnings (loss) per share, diluted
$
0.07
$
(0.28
)
$
0.03
Book value
$
12.32
$
12.19
$
11.53
Tangible book value (1)
$
11.90
$
11.77
$
11.09
Tangible book value, excluding accumulated
other comprehensive losses (1)
$
13.16
$
13.12
$
12.95
Shares outstanding
17,904,445
17,806,995
17,705,455
Selected Ratios
Net interest margin (2)
2.47
%
2.37
%
2.60
%
Return Income (loss) on average assets
(2)
0.25
%
(0.92
)%
0.11
%
Return Income (loss) on average equity
(2)
2.44
%
(9.51
)%
1.21
%
Efficiency (3)
65.41
%
NM
95.98
%
Loans, net of fees to total deposits
99.76
%
99.09
%
95.69
%
Noninterest-bearing deposits to total
deposits
21.22
%
21.50
%
22.29
%
Reconciliation of Net Income (GAAP) to
Commercial Bank Operating Earnings (Non-GAAP)(4)
GAAP net income (loss) reported above
$
1,340
$
(5,071
)
$
621
Add: Loss on sale of available-for-sale
investment securities
—
10,985
4,592
Add: Non-recurring tax and 10% modified
endowment contract penalty on early surrender of BOLI policies
2,386
—
—
Add: Office space reduction and severance
costs
—
336
—
Subtract: Non-recurring valuation
adjustment of minority investment
—
(1,258
)
—
Subtract: provision for income taxes
associated with non-GAAP adjustments
—
(2,214
)
(1,010
)
Adjusted Net Income, core bank operating
earnings (non-GAAP)
$
3,726
$
2,778
$
4,203
Adjusted Earnings per share - basic
(non-GAAP core bank operating earnings)
$
0.21
$
0.16
$
0.24
Adjusted Earnings per share - diluted
(non-GAAP core bank operating earnings)
$
0.20
$
0.15
$
0.23
Adjusted Return on average assets
(non-GAAP core bank operating earnings)
0.69
%
0.50
%
0.74
%
Adjusted Return on average equity
(non-GAAP core bank operating earnings)
6.77
%
5.21
%
8.18
%
Adjusted Efficiency ratio (non-GAAP core
bank operating earnings)(3)
65.41
%
72.38
%
64.45
%
Capital Ratios - Bank
Tangible common equity (to tangible
assets)
10.30
%
10.12
%
8.92
%
Total risk-based capital (to risk weighted
assets)
14.23
%
13.83
%
13.48
%
Common equity tier 1 capital (to risk
weighted assets)
13.18
%
12.80
%
12.48
%
Tier 1 leverage (to average assets)
11.18
%
10.77
%
10.38
%
Asset Quality
Nonperforming loans and loans 90+ past
due
$
2,996
$
1,829
$
4,446
Nonperforming loans and loans 90+ past due
to total assets
0.14
%
0.08
%
0.19
%
Nonperforming assets to total assets
0.14
%
0.08
%
0.19
%
Allowance for credit losses to loans
(5)
1.05
%
1.06
%
1.09
%
Allowance for credit losses to
nonperforming loans (5)
650.98
%
1064.70
%
449.41
%
Net charge-offs (recoveries)
$
(30
)
$
49
$
(23
)
Net charge-offs (recoveries) to average
loans (2)
(0.01
)%
0.01
%
(0.01
)%
Selected Average Balances
Total assets
$
2,159,463
$
2,210,366
$
2,268,193
Total earning assets
2,083,440
2,123,455
2,184,546
Total loans, net of deferred fees
1,840,887
1,825,472
1,829,775
Total deposits
1,786,677
1,836,826
1,785,442
Other Data
Noninterest-bearing deposits
$
394,143
$
396,724
$
425,838
Interest-bearing checking, savings and
money market
858,913
896,969
806,934
Time deposits
344,360
306,349
364,265
Wholesale deposits
259,849
245,250
313,350
(1)
Non-GAAP Reconciliation
At or For the Three Months
Ended,
(Dollars in thousands, except per share
data)
3/31/2024
12/31/2023
3/31/2023
Total shareholders’ equity (GAAP)
$
220,661
$
217,117
$
204,156
Less: goodwill and intangibles, net
(7,540
)
(7,585
)
(7,735
)
Tangible Common Equity
(non-GAAP)
$
213,121
$
209,532
$
196,421
Less: Accumulated Other Comprehensive
Income (Loss) ("AOCI")
(22,473
)
(24,160
)
(32,863
)
Tangible Common Equity excluding AOCI
(non-GAAP)
$
235,594
$
233,692
$
229,284
Book value per common share
$
12.32
$
12.19
$
11.53
Less: intangible book value per common
share
(0.42
)
(0.42
)
(0.44
)
Tangible book value per common share
(non-GAAP)
$
11.90
$
11.77
$
11.09
Add: AOCI (loss) per common share
(1.26
)
(1.35
)
(1.86
)
Tangible book value per common share,
excluding AOCI (non-GAAP)
$
13.16
$
13.12
$
12.95
(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, condition, or statements
of cash flows.
(5)
Allowance for credit losses includes
allowance for credit losses on loans and reserve for unfunded loan
commitments
FVCBankcorp, Inc.
Summary Consolidated
Statements of Condition
(Dollars in thousands)
(Unaudited)
3/31/2024
12/31/2023
% Change
Current
Quarter
3/31/2023
% Change
From
Year Ago
Cash and due from banks
$
6,936
$
8,042
(13.7
)%
$
13,300
(47.8
)%
Interest-bearing deposits at other
financial institutions
73,598
52,480
40.2
%
131,643
(44.1
)%
Investment securities
167,061
171,859
(2.8
)%
239,698
(30.3
)%
Restricted stock, at cost
7,717
9,488
(18.7
)%
13,705
(43.7
)%
Loans, net of fees:
Commercial real estate
1,089,362
1,091,633
(0.2
)%
1,096,633
(0.7
)%
Commercial and industrial
241,752
216,367
11.7
%
187,842
28.7
%
Commercial construction
155,451
147,998
5.0
%
156,026
(0.4
)%
Consumer real estate
355,750
363,317
(2.1
)%
352,413
0.9
%
Warehouse facilities
4,812
3,506
37.3
%
29,045
(83.4
)%
Consumer nonresidential
5,619
5,743
(2.2
)%
6,164
(8.8
)%
Total loans, net of fees
1,852,746
1,828,564
1.3
%
1,828,123
1.3
%
Allowance for credit losses on loans
(18,918
)
(18,871
)
0.2
%
(19,058
)
(0.7
)%
Loans, net
1,833,828
1,809,693
1.3
%
1,809,065
1.4
%
Premises and equipment, net
934
997
(6.3
)%
1,174
(20.4
)%
Goodwill and intangibles, net
7,540
7,585
(0.6
)%
7,735
(2.5
)%
Bank owned life insurance (BOLI)
9,011
56,823
(84.1
)%
55,704
(83.8
)%
Other assets
76,037
73,591
3.3
%
76,971
(1.2
)%
Total Assets
$
2,182,662
$
2,190,558
(0.4
)%
$
2,348,995
(7.1
)%
Deposits:
Noninterest-bearing
$
394,143
$
396,724
(0.7
)%
$
425,838
(7.4
)%
Interest checking
506,168
576,471
(12.2
)%
498,242
1.6
%
Savings and money market
352,745
320,498
10.1
%
308,691
14.3
%
Time deposits
344,360
306,349
12.4
%
364,265
(5.5
)%
Wholesale deposits
259,849
245,250
6.0
%
313,350
(17.1
)%
Total deposits
1,857,265
1,845,292
0.6
%
1,910,386
(2.8
)%
Other borrowed funds
57,000
85,000
(32.9
)%
189,000
(69.8
)%
Subordinated notes, net of issuance
costs
19,633
19,620
0.1
%
19,579
0.3
%
Reserve for unfunded commitments
586
602
(2.7
)%
922
(36.5
)%
Other liabilities
27,517
22,927
20.0
%
24,952
10.3
%
Shareholders’ equity
220,661
217,117
1.6
%
204,156
8.1
%
Total Liabilities & Shareholders'
Equity
$
2,182,662
$
2,190,558
(0.4
)%
$
2,348,995
(7.1
)%
FVCBankcorp, Inc.
Summary Consolidated
Statements of Income (Loss)
(Dollars in thousands, except
per share data)(Unaudited)
For the Three Months
Ended
3/31/2024
12/31/2023
% Change
Current
Quarter
3/31/2023
% Change
From
Year Ago
Net interest income
$
12,792
$
12,659
1.0
%
$
14,014
(8.7
)%
Provision for credit losses
—
—
—
%
242
(100.0
)%
Net interest income after provision for
credit losses
12,792
12,659
1.0
%
13,772
(7.1
)%
Noninterest income (loss):
Fees on loans
49
35
38.9
%
77
(36.1
)%
Service charges on deposit accounts
261
296
(11.9
)%
215
21.4
%
BOLI income
190
385
(50.7
)%
332
(42.9
)%
Loss (Income) from minority membership
interest
(203
)
321
(163.1
)%
(801
)
(74.7
)%
Loss on sale of available-for-sale
investment securities
—
(10,985
)
(100.0
)%
(4,592
)
(100.0
)%
Other fee income
98
89
9.9
%
142
(31.0
)%
Total noninterest income (loss)
395
(9,859
)
(104.0
)%
(4,627
)
(108.5
)%
Noninterest expense:
Salaries and employee benefits
4,531
5,269
(14.0
)%
5,015
(9.6
)%
Occupancy expense
522
572
(8.9
)%
627
(16.9
)%
Internet banking and software expense
694
701
(1.1
)%
561
23.5
%
Data processing and network
administration
635
634
0.1
%
622
2.1
%
State franchise taxes
589
584
0.9
%
584
0.9
%
Professional fees
243
213
13.6
%
184
31.6
%
Office space reduction costs
—
273
(100.0
)%
—
—
%
Other operating expense
1,411
1,156
22.0
%
1,417
(0.4
)%
Total noninterest expense
8,625
9,402
(8.3
)%
9,010
(4.3
)%
Net income (loss) before income taxes
4,562
(6,602
)
(169.1
)%
135
3269.8
%
Income tax expense (benefit)
3,222
(1,531
)
(310.4
)%
(486
)
(762.6
)%
Net Income (loss)
$
1,340
$
(5,071
)
(126.4
)%
$
621
115.8
%
Earnings (loss) per share - basic
$
0.08
$
(0.28
)
(126.4
)%
$
0.04
112.8
%
Earnings (loss) per share - diluted
$
0.07
$
(0.28
)
(126.4
)%
$
0.03
115.6
%
Weighted-average common shares outstanding
- basic
17,828,759
17,802,810
17,577,659
Weighted-average common shares outstanding
- diluted
18,317,483
18,295,894
18,296,448
Reconciliation of
Net Income (GAAP) to Commercial Bank Operating Earnings
(Non-GAAP):
GAAP net income (loss) reported above
$
1,340
$
(5,071
)
$
621
Add: Loss on sale of available-for-sale
investment securities
—
10,985
4,592
Add: office space reduction and severance
costs
—
336
—
Add: Non-recurring tax and 10% modified
endowment contract penalty on early surrender of BOLI policies
2,386
—
—
Subtract: Non-recurring valuation
adjustment of minority investment
—
(1,258
)
—
Subtract: provision for income taxes
associated with non-GAAP adjustments
—
(2,214
)
(1,010
)
Adjusted Net Income, core bank operating
earnings (non-GAAP)
$
3,726
$
2,778
$
4,203
Adjusted Earnings per share - basic
(non-GAAP core bank operating earnings)
$
0.21
$
0.16
$
0.24
Adjusted Earnings per share - diluted
(non-GAAP core bank operating earnings)
$
0.20
$
0.15
$
0.23
Adjusted Return on average assets
(non-GAAP core bank operating earnings)
0.69
%
0.50
%
0.74
%
Adjusted Return on average equity
(non-GAAP core bank operating earnings)
6.77
%
5.21
%
8.18
%
Adjusted Efficiency ratio (non-GAAP core
bank operating earnings)
65.41
%
72.38
%
64.45
%
Reconciliation of
Net Income (GAAP) to Pre-Tax Pre-Provision Income
(Non-GAAP):
GAAP net income (loss) reported above
$
1,340
$
(5,071
)
$
621
Add: Provision for credit losses
—
—
242
Add: Loss on sale of investment
securities
—
10,985
4,592
Add: Office space reduction and severance
costs
—
336
—
Add: Non-recurring tax and 10% modified
endowment contract penalty on early surrender of BOLI policies
2,386
—
—
Subtract: Non-recurring valuation
adjustment of minority investment
—
(1,258
)
—
(Subtract) Add: Income tax (benefit)
expense
836
(1,531
)
(486
)
Pre-tax pre-provision income
(non-GAAP)
$
4,562
$
3,460
$
4,969
Adjusted Earnings per share - basic
(non-GAAP pre-tax pre-provision)
$
0.26
$
0.19
$
0.28
Adjusted Earnings per share - diluted
(non-GAAP pre-tax pre-provision)
$
0.25
$
0.19
$
0.27
Adjusted Return on average assets
(non-GAAP pre-tax pre-provision)
0.85
%
0.63
%
0.88
%
Adjusted Return on average equity
(non-GAAP pre-tax pre-provision)
8.29
%
6.49
%
9.67
%
FVCBankcorp, Inc.
Average Statements of
Condition and Yields on Earning Assets and Interest-Bearing
Liabilities
(Dollars in thousands)
(Unaudited)
For the Three Months
Ended
3/31/2024
12/31/2023
3/31/2023
Average
Balance
Interest
Income/
Expense
Average
Yield
Average
Balance
Interest
Income/
Expense
Average
Yield
Average
Balance
Interest
Income/
Expense
Average
Yield
Interest-earning assets:
Loans receivable, net of fees (1)
Commercial real estate
$
1,091,088
$
13,561
4.97
%
$
1,089,549
$
13,549
4.97
%
$
1,098,243
$
12,680
4.62
%
Commercial and industrial
228,147
4,361
7.65
%
206,350
3,916
7.59
%
203,223
3,445
6.78
%
Commercial construction
152,535
2,752
7.22
%
154,049
2,684
6.97
%
153,534
2,639
6.87
%
Consumer real estate
358,886
4,439
4.95
%
365,582
4,391
4.80
%
345,213
4,048
4.69
%
Warehouse facilities
4,531
88
7.77
%
3,903
78
8.00
%
24,005
424
7.06
%
Consumer nonresidential
5,700
113
7.96
%
6,039
130
8.62
%
6,752
160
9.45
%
Total loans
1,840,887
25,314
5.50
%
1,825,472
24,748
5.42
%
1,830,970
23,396
5.11
%
Investment securities (2)(3)
215,020
1,143
2.12
%
252,958
1,285
2.03
%
327,370
1,638
2.00
%
Interest-bearing deposits at other
financial institutions
27,533
372
5.44
%
45,025
619
5.45
%
26,206
302
4.68
%
Total interest-earning assets
2,083,440
$
26,829
5.15
%
2,123,455
$
26,652
5.02
%
2,184,546
$
25,336
4.64
%
Non-interest earning assets:
Cash and due from banks
5,946
6,195
4,805
Premises and equipment, net
976
1,041
1,208
Accrued interest and other assets
87,983
98,509
94,678
Allowance for credit losses
(18,882
)
(18,834
)
(17,044
)
Total Assets
$
2,159,463
$
2,210,366
$
2,268,193
Interest-bearing liabilities:
Interest checking
$
499,923
$
3,942
3.17
%
$
631,775
$
5,308
3.33
%
$
519,770
$
2,915
2.27
%
Savings and money market
300,371
2,507
3.36
%
310,199
1,715
2.82
%
295,192
1,503
2.06
%
Time deposits
300,873
3,208
4.29
%
272,784
3,579
4.15
%
299,054
2,152
2.92
%
Wholesale deposits
305,392
2,884
3.80
%
218,176
2,151
3.91
%
251,593
2,211
3.56
%
Total interest-bearing deposits
1,406,559
12,541
3.59
%
1,432,934
12,753
3.53
%
1,365,609
8,781
2.61
%
Other borrowed funds
107,830
1,237
4.61
%
112,935
982
3.45
%
231,257
2,281
4.01
%
Subordinated notes, net of issuance
costs
19,624
257
5.28
%
19,611
257
5.21
%
19,570
258
5.34
%
Total interest-bearing liabilities
1,534,013
14,035
3.68
%
1,565,480
13,992
3.55
%
1,616,436
11,320
2.84
%
Noninterest-bearing
liabilities:
Noninterest-bearing deposits
380,119
403,892
419,833
Other liabilities
25,288
27,804
26,408
Shareholders’ equity
220,043
213,190
205,516
Total Liabilities and Shareholders'
Equity
$
2,159,463
$
2,210,366
$
2,268,193
Net Interest Margin
$
12,794
2.47
%
$
12,660
2.37
%
$
14,016
2.60
%
(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% for the three
months ended March 31, 2024, December 31,
2023 and March 31, 2023. The taxable equivalent adjustment to
interest income
was $2 for the three months ended March
31, 2024 and March 31, 2023. For the three months ended December
31, 2023 the
taxable equivalent adjustment to interest
income was $1.
(3)
The average balances for investment
securities includes restricted stock.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240423351097/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)
過去 株価チャート
から 5 2024 まで 6 2024
FVCBankcorp (NASDAQ:FVCB)
過去 株価チャート
から 6 2023 まで 6 2024