FVCBankcorp, Inc. Announces Second Quarter 2021 Earnings and Record Quarterly Loan Growth

FAIRFAX, Va.–()–FVCBankcorp, Inc. (NASDAQ: FVCB) (the “Company”) today reported second quarter 2021 net income of $5.2 million, or $0.36 diluted earnings per share, compared to $2.9 million, or $0.21 diluted earnings per share, for the quarterly period ended June 30, 2020, an increase of 79%. Net revenues, which include net interest income plus noninterest income, for the three months ended June 30, 2021 were $14.9 million, an increase of $1.5 million, from $13.4 million for the year ago quarter ended June 30, 2020.

For the six months ended June 30, 2021, the Company reported net income of $10.7 million, or $0.74 diluted earnings per share, compared to $6.6 million or $0.46 diluted earnings per share, for the same period of 2020, a year-over-year increase of $4.1 million, or 62%. Net income for the six months ended June 30, 2020 included elevated loan loss provisioning of $2.8 million and $676 thousand in one-time branch closure costs. Net revenues for the six months ended June 30, 2021 were $29.7 million, an increase of $3.4 million, from $26.3 million for the six months ended June 30, 2020.

For the three months ended June 30, 2021 and 2020, pre-tax pre-provision income (which excludes branch closure costs recorded during 2020) was $6.6 million and $6.1 million, respectively, an increase of $583 thousand or 10%. On a linked quarter basis, pre-tax pre-provision income was $7.0 million for the three months ended March 31, 2021. The decrease on a linked quarter basis was a result of an increase in noninterest expense during the second quarter of 2021, which is more fully discussed below. Pre-tax pre-provision annualized return on average assets for the three months ended June 30, 2021 and 2020 was 1.36% and 1.41%, respectively. For the six months ended June 30, 2021 and 2020, pre-tax pre-provision income (which excludes branch closure costs recorded during 2020) was $13.6 million and $11.8 million, respectively, an increase of $1.8 million, or 16%. Pre-tax pre-provision annualized return on average assets for the six months ended June 30, 2021 and 2020 was 1.43% and 1.44%, respectively. The Company believes the reporting of non-generally accepted accounting principles (“non-GAAP”) pre-tax pre-provision earnings to exclude branch closing impairment charges taken during 2020 are more reflective of the Company’s operating performance. A reconciliation of pre-tax pre-provision income can be found in the tables below.

Annualized return on average assets was 1.06% and annualized return on average equity was 10.41% for the second quarter of 2021. For the comparable quarterly June 30, 2020 period, annualized return on average assets was 0.67% and annualized return on average equity was 6.41%. For the year-to-date June 30, 2021 period, annualized return on average assets was 1.13% and annualized return on average equity was 10.96% compared to annualized return on average assets of 0.81% and annualized return on average equity of 7.35% for the six months ended June 30, 2020.

On July 14, 2021, the Company announced the signing of a definitive merger agreement with Blue Ridge Bankshares, Inc. (“Blue Ridge” NYSE: BRBS) (the “Merger”), pursuant to which the companies will combine in an all-stock merger of equals, subject to customary closing conditions including shareholder and regulatory approvals. In connection with the Merger, FVCbank, the Company’s wholly-owned commercial banking subsidiary, will be merged with and into Blue Ridge Bank, National Association (“Blue Ridge Bank”), the wholly-owned commercial banking subsidiary of Blue Ridge, with Blue Ridge Bank as the surviving bank.

Second Quarter Selected Highlights

  • Record Quarterly Loan Growth. Loans receivable, net of deferred fees and excluding loans made under the U.S. Small Business Administration’s Paycheck Protection Program (“PPP”), totaled $1.37 billion at June 30, 2021, compared to $1.28 billion at March 31, 2021, an increase of $91.4 million, or 28% annualized. During the second quarter of 2021, the Company began originating loans under a warehouse lending facility, which contributed $58.0 million to quarterly loan growth.
  • Improved on Credit Quality Metrics. During the second quarter of 2021, past due loans 30 days or more decreased to $2.2 million from $5.5 million at March 31, 2021. Nonperforming loans and loans past due 90 days or more and still accruing were 0.21% of total assets at June 30, 2021, compared to 0.31% at December 31, 2020, and decreasing $954 thousand from March 31, 2021.
  • Strong Core Deposit Growth. Core deposits, which exclude wholesale deposits, increased $85.6 million, to $1.65 billion at June 30, 2021, or 22% annualized, from March 31, 2021. Noninterest-bearing deposits were $500.7 million at June 30, 2021, representing 30% of total deposits at June 30, 2021.
  • Increased Net Interest Income. Net interest income increased $1.5 million to $14.2 million for the second quarter of 2021, compared to $12.7 million for the same 2020 period. Net interest margin was 3.07% for the quarter ended June 30, 2021, compared to 3.16% for the year ago quarter of 2020 and 3.22% for the first quarter of 2021, as increased excess liquidity continues to impact net interest margin for the second quarter of 2021.

“Record loan growth during the second quarter is not only attributable to the improvement in our local economy, but also a result of the efforts of our experienced business development team. While a portion of this loan growth was a result of our new warehouse lending facility, we also approved loan originations of close to $100 million this quarter, of which, $75 million funded. Our commitment to the markets we serve continues to drive over 10% deposit growth during 2021. With our robust pipeline of loan originations, we anticipate sustained double-digit loan growth for the remainder of 2021. We are also excited about our planned transformational merger with Blue Ridge Bankshares and look forward to realizing the promise of creating the fourth largest Virginia-based community bank,” stated David W. Pijor, Chairman and CEO.

Balance Sheet

Total assets increased to $1.98 billion at June 30, 2021 compared to $1.82 billion at December 31, 2020, an increase of $153.8 million, or 8%. Loans receivable, net of deferred fees and excluding PPP loans, totaled $1.37 billion at June 30, 2021 and $1.31 billion at December 31, 2020, an increase of $61.7 million, or 5%. Loans receivable, net of deferred fees, and excluding PPP loans, increased $91.4 million during the three months ended June 30, 2021. During the second quarter of 2021, the Company began originating loans under a warehouse lending facility, which contributed $58.0 million to quarterly loan growth. During the second quarter of 2021, loan originations, excluding PPP loans and warehouse lending originations, totaled approximately $95.3 million, of which $74.9 million funded during the quarter.

PPP loans, net of fees, totaled $99.5 million at June 30, 2021, a decrease from $163.5 million at March 31, 2021 and $153.0 million at December 31, 2020. Loans forgiven during the second quarter of 2021 totaled $70.9 million, and totaled $120.1 million year-to-date 2021. Remaining PPP loans originated during 2020 totaled $37.2 million at June 30, 2021. Net deferred fees associated with PPP loans totaled $2.4 million at June 30, 2021.

Investment securities increased $74.3 million to $200.7 million at June 30, 2021, compared to $126.4 million at December 31, 2020. During the three months ended June 30, 2021, the Company purchased $75.7 million in mortgage-backed securities to invest excess liquidity and improve net interest margin.

Total deposits increased to $1.68 billion at June 30, 2021 compared to $1.53 billion at December 31, 2020, an increase of $147.7 million, or 10%. Core deposits, which represent total deposits less wholesale deposits, increased $162.7 million, or 11%, to $1.65 billion at June 30, 2021 compared to $1.48 billion at December 31, 2020. Wholesale deposits totaled $35.0 million, or 2% of total deposits at June 30, 2021, a decrease of $15.0 million from December 31, 2020. Noninterest-bearing deposits increased $101.6 million to $500.7 million at June 30, 2021 from $399.1 million at December 31, 2020, and represented 30% of total deposits at June 30, 2021.

The Company’s bank subsidiary, FVCbank, remains well-capitalized at June 30, 2021 with a community bank leverage ratio of 11.48%.

Income Statement

Net income for the three months ended June 30, 2021 was $5.2 million, an increase of $2.3 million, or 79%, compared to $2.9 million for the same period of 2020. For the six months ended June 30, 2021, net income was $10.7 million, compared to $6.6 million for the same period of 2020. Both the three and six months’ periods of 2020 were impacted by increased provision for loan losses and impairment on branch closures totaling $676 thousand.

Net interest income totaled $14.2 million, an increase of $1.5 million, for the quarter ended June 30, 2021, compared to the year ago quarter, and increased by $143 thousand, compared to the first quarter of 2021. Interest expense on deposits decreased $1.3 million for the three months ended June 30, 2021 compared to the same period of 2020, and decreased $147 thousand compared to the three months ended March 31, 2021. All decreases were a result of continued targeted rate reductions and the repricing of the Company’s time deposits to lower interest rates upon renewal. Interest income includes loan mark accretion on acquired loans totaling $146 thousand, $132 thousand, and $126 thousand for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively. Lastly, net interest income for the three months ended June 30, 2021 benefited from PPP loan income, which contributed $1.5 million to interest income, of which $811 thousand was related to recognition of net deferred fees on forgiven loans. This compares to interest income from PPP loans of $1.8 million for the first quarter of 2021, which included recognition of net deferred fees of $927 thousand on forgiven loans. Remaining net deferred fees related to PPP loan originations totaled $2.4 million at June 30, 2021 and are being recognized in interest income over the remaining lives of the PPP loans, or sooner upon PPP loan forgiveness or repayment. For the six months ended June 30, 2021 and 2020, net interest income was $28.2 million and $24.9 million, respectively, an increase of $3.3 million, year-over-year.

The Company’s net interest margin decreased 9 basis points to 3.07% for the quarter ended June 30, 2021 compared to 3.16% for the quarter ended June 30, 2020. On a linked quarter basis, net interest margin decreased 15 basis points from 3.22% for the three months ended March 31, 2021. Excess liquidity continues to compress net interest margin, decreasing margin by 27 basis points during the second quarter of 2021. Despite the growth in both the Company’s loan and investment securities portfolios to deploy excess liquidity, the Company’s continued strong deposit growth offset this asset growth during the second quarter of 2021. The average yield on total loans for the second quarter of 2021 was 4.36%, compared to 4.38% for the linked quarter ended March 31, 2021, and 4.36% for the year ago quarter. Net deferred fees recognized from PPP loan forgiveness has contributed to the average yield of the loan portfolio, as the yield on PPP loans increased to 4.26% for the second quarter of 2021, compared to 2.63% for the year ago quarter ended June 30, 2020.

Cost of interest-bearing deposits for the second quarter of 2021 was 0.66%, compared to 1.20% for the second quarter of 2020, a decrease of 54 basis points, or 45%, primarily as a result of the Company having aggressively decreased its deposit rates during 2020 to offset the repricing of its variable rate loan portfolio. The cost of deposits, which includes noninterest-bearing deposits, decreased 6 basis points to 0.45% for the second quarter of 2021 as compared to 0.51% for the first quarter of 2021, and decreased 41 basis points from 0.86% for the year ago quarter of 2020.

Noninterest income totaled $685 thousand and $687 thousand for the quarters ended June 30, 2021 and 2020, respectively. Fee income from loans was $27 thousand, a decrease of $19 thousand, for the quarter ended June 30, 2021 compared to the second quarter of 2020. Service charges on deposit accounts and other fee income totaled $408 thousand for the second quarter of 2021, an increase of 14%, or $49 thousand, from the year ago quarter, primarily resulting from an increase in analysis fees. Income from bank-owned life insurance decreased $32 thousand to $250 thousand for the three months ended June 30, 2021 compared to $282 thousand for the same period of 2020. Noninterest income for the year-to-date period ended June 30, 2021 was $1.5 million, compared to $1.4 million for the 2020 year-to-date period, an increase of $95 thousand, or 7%, which was primarily driven by an increase in service charges on deposit accounts and other fee income, and offset by fair value losses on loans held for sale of $451 thousand recorded during the first quarter of 2020.

Noninterest expense totaled $8.2 million for the quarter ended June 30, 2021, compared to $8.0 million for the same three-month period of 2020, an increase of $230 thousand, or 3%. On a linked quarter basis, noninterest expense was $7.9 million for the quarter ended March 31, 2021, an increase of $346 thousand, or 4%. The increase in noninterest expense compared to the year ago quarter was primarily related to an increase in salaries and benefits expense of $476 thousand, which is primarily related to additions to business development staff and associated accruals for incentive compensation during the second quarter of 2021. In addition, professional fees increased $296 thousand to $503 thousand for the three months ended June 30, 2021 compared to $207 thousand for the year ago quarter as the Company recognized expenses related to its announced merger with Blue Ridge. These increases in noninterest expense during the quarter ended June 30, 2021 as compared to the same period of 2020 were partially offset by the branch impairment charges totaling $676 thousand that were recorded during the second quarter of 2020. Loan legal expenses of $193 thousand were recognized during the second quarter of 2021, which contributed to the increase in noninterest expense on a linked quarter basis. For the six months ended June 30, 2021 and 2020, noninterest expense, was $16.1 million and $15.2 million, respectively, an increase of $903 thousand, or 6%, primarily as a result of the aforementioned additions to business development staffing and associated increases in incentive accruals and the increase in professional fees associated with merger and acquisition costs.

The efficiency ratio for the quarter ended June 30, 2021 was 55.3%, an increase from 54.7% for the quarter ended June 30, 2020 (excluding branch closure costs), primarily as a result of increased professional fees recorded for the proposed merger with Blue Ridge. The efficiency ratios for the six months ended June 30, 2021 and 2020, excluding branch closure costs recorded during 2020 were 54.2% and 55.3%, respectively.

The Company recorded a provision for income taxes of $1.5 million for the three months ended June 30, 2021, compared to $754 thousand for the same period of 2020. The effective tax rates for the three months ended June 30, 2021 and 2020 were 22.2% and 20.7%, respectively. The effective tax rates for each of the three months ended June 30, 2021 and 2020 are 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 2021 and 2020. For the six months ended June 30, 2021 and 2020, provision for income taxes was $2.9 million and $1.7 million, respectively.

Asset Quality

The Company recorded no provision for loan losses for the three months ended June 30, 2021, compared to $1.8 million for the year ago quarter. The Company is not required to implement the provisions of the current expected credit losses accounting standard until January 1, 2023, and is continuing to account for the allowance for loans losses under the incurred loss model. The decrease in the provision for loan losses for the three months ended June 30, 2021 is primarily related to the improvement in certain credit quality metrics during the second quarter of 2021, specifically, a reduction in the Company’s past due loans and specific reserves for certain watchlist loans which saw improvements in credit quality during the quarter. No provision for loan losses was recorded for the six months ended June 30, 2021 compared to $2.8 million for the six months ended June 30, 2020.

The allowance for loan losses to total loans, excluding PPP loans, was 1.04% at June 30, 2021, compared to 1.14% at December 31, 2020. 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 1.22% at June 30, 2021 compared to 1.27% at December 31, 2020. Net charge-offs of $62 thousand recorded during the second quarter of 2021 were related to purchased unsecured consumer loans.

Nonperforming loans and loans 90 days or more past due at June 30, 2021 totaled $4.1 million, or 0.21% of total assets. This compares to $5.6 million in nonperforming loans and loans 90 days or more past due at December 31, 2020, or 0.31% of total assets. All of the Company’s nonperforming loans are secured and have specific reserves totaling $1.1 million, representing the expected losses associated with those loans. The Company has one troubled debt restructuring at June 30, 2021 totaling $95 thousand which is a consumer residential loan. Nonperforming assets (including other real estate owned) to total assets was 0.40% at June 30, 2021 compared to 0.52% for December 31, 2020.

About FVCBankcorp, Inc.

FVCBankcorp, Inc. is the holding company for FVCbank, a wholly-owned subsidiary that commenced operations in November 2007. FVCbank is a $1.98 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 on the Company’s selected financial information, please visit the Investor Relations page of FVCBankcorp, Inc.’s website, www.fvcbank.com.

Caution about Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited, statements of goals, intentions, and expectations as to future trends, plans, events or results of the Company’s operations and policies and regarding general economic conditions. In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market, interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast and are subject to significant uncertainty. Because of these uncertainties and the assumptions on which this discussion and the forward-looking statements are based, actual future operations and results in the future may differ materially from those indicated herein. These forward-looking statements are based on current beliefs that involve significant risks, uncertainties, and assumptions. Factors that could cause the Company’s actual results to differ materially from those indicated in these forward-looking statements, include, but are not limited to, the ability to close the Merger on the expected terms and schedule; difficulties, delays and unforeseen costs in completing the Merger and in integrating the company’s and Blue Ridge’s businesses; the ability to realize cost savings and other benefits of the Merger; business disruption during the pendency of or following the Merger, 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, 2020 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 June 30, At or For the Six Months Ended June 30, At or For the Three Months Ended
6/30/2021 6/30/2020 6/30/2021 6/30/2020 3/31/2021 12/31/2020
Selected Balances
Total assets

$

1,975,251

 

$

1,781,149

 

$

1,884,517

 

$

1,821,481

 

Total investment securities

 

207,044

 

 

128,690

 

 

141,745

 

 

132,978

 

Total loans, net of deferred fees

 

1,474,278

 

 

1,478,120

 

 

1,446,912

 

 

1,466,083

 

Allowance for loan losses

 

(14,359

)

 

(12,894

)

 

(14,421

)

 

(14,958

)

Total deposits

 

1,680,209

 

 

1,519,036

 

 

1,594,639

 

 

1,532,493

 

Subordinated debt

 

44,146

 

 

24,527

 

 

44,116

 

 

44,085

 

Other borrowings

 

25,000

 

 

25,000

 

 

25,000

 

 

25,000

 

Total stockholders’ equity

 

200,687

 

 

180,652

 

 

194,929

 

 

189,500

 

Summary Results of Operations
Interest income

$

16,776

 

$

16,281

 

$

33,554

$

33,212

 

$

16,778

 

$

17,129

 

Interest expense

 

2,590

 

 

3,586

 

 

5,325

 

8,306

 

 

2,735

 

 

3,010

 

Net interest income

 

14,186

 

 

12,695

 

 

28,229

 

24,906

 

 

14,043

 

 

14,119

 

Provision for loan losses

 

– –

 

 

1,750

 

 

 

2,816

 

 

 

 

500

 

Net interest income after provision for loan losses

 

14,186

 

 

10,945

 

 

28,229

 

22,090

 

 

14,043

 

 

13,619

 

Noninterest income – loan fees, service charges and other

 

435

 

 

405

 

 

978

 

1,170

 

 

543

 

 

476

 

Noninterest income – bank owned life insurance

 

250

 

 

282

 

 

498

 

565

 

 

248

 

 

264

 

Noninterest income – gain on sales of securities available-for-sale

 

– –

 

 

– –

 

 

– –

 

97

 

 

– –

 

 

– –

 

Noninterest income – loss on loans held for sale

 

– –

 

 

– –

 

 

– –

 

(451

)

 

– –

 

 

– –

 

Noninterest expense

 

8,228

 

 

7,998

 

 

16,110

 

15,207

 

 

7,882

 

 

7,885

 

Income before taxes

 

6,643

 

 

3,634

 

 

13,595

 

8,264

 

 

6,952

 

 

6,474

 

Income tax expense

 

1,478

 

 

754

 

 

2,861

 

1,651

 

 

1,383

 

 

1,460

 

Net income

 

5,165

 

 

2,880

 

 

10,734

 

6,613

 

 

5,569

 

 

5,014

 

Per Share Data
Net income, basic

$

0.38

 

$

0.21

 

$

0.79

$

0.49

 

$

0.41

 

$

0.37

 

Net income, diluted

$

0.36

 

$

0.21

 

$

0.74

$

0.46

 

$

0.38

 

$

0.36

 

Book value

$

14.70

 

$

13.42

 

$

14.29

 

$

14.03

 

Tangible book value (1)

$

14.10

 

$

12.79

 

$

13.69

 

$

13.41

 

Shares outstanding

 

13,647,600

 

 

13,459,317

 

 

13,638,934

 

 

13,510,760

 

Selected Ratios
Net interest margin (2)

 

3.07

 

%

 

3.16

 

%

 

3.15

%

 

3.26

 

%

 

3.22

 

%

 

3.28

 

%

Return on average assets (2)

 

1.06

 

%

 

0.67

 

%

 

1.13

%

 

0.81

 

%

 

1.19

 

%

 

1.11

 

%

Return on average equity (2)

 

10.41

 

%

 

6.41

 

%

 

10.96

%

 

7.35

 

%

 

11.53

 

%

 

10.68

 

%

Efficiency (3)

 

55.33

 

%

 

59.77

 

%

 

54.23

%

 

57.85

 

%

 

53.13

 

%

 

53.07

 

%

Loans, net of deferred fees to total deposits

 

87.74

 

%

 

97.31

 

%

 

90.74

 

%

 

95.67

 

%

Noninterest-bearing deposits to total deposits

 

29.80

 

%

 

29.13

 

%

 

31.47

 

%

 

26.04

 

%

Reconciliation of Net Income (GAAP) to Operating Earnings
(Non-GAAP) (4)
Net income (from above)

$

5,165

 

$

2,880

 

$

10,734

$

6,613

 

$

5,569

 

$

5,014

 

Add: Impairment on branch closures

 

– –

 

 

676

 

 

– –

 

676

 

 

– –

 

 

– –

 

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

 

– –

 

 

(142

)

 

– –

 

(142

)

 

– –

 

 

– –

 

Net income, as adjusted

$

5,165

 

$

3,414

 

$

10,734

$

7,147

 

$

5,569

 

$

5,014

 

Net income, diluted, on an operating basis

$

0.36

 

$

0.25

 

$

0.74

$

0.50

 

$

0.38

 

$

0.36

 

Return on average assets (non-GAAP operating earnings)

 

1.06

 

%

 

0.79

 

%

 

1.13

%

 

0.87

 

%

 

1.19

 

%

 

1.11

 

%

Return on average equity (non-GAAP operating earnings)

 

10.41

 

%

 

7.60

 

%

 

10.96

%

 

7.94

 

%

 

11.53

 

%

 

10.68

 

%

Efficiency ratio (non-GAAP operating earnings) (3)

 

55.33

 

%

 

54.72

 

%

 

54.23

%

 

55.28

 

%

 

53.13

 

%

 

53.07

 

%

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

 

9.79

 

%

 

9.71

 

%

 

9.95

 

%

 

9.99

 

%

Tier 1 leverage (to average assets)

 

11.48

 

%

 

11.05

 

%

 

11.65

 

%

 

11.65

 

%

Asset Quality
Nonperforming loans and loans 90+ past due

$

4,069

 

$

8,493

 

$

5,023

 

$

5,621

 

Performing troubled debt restructurings (TDRs)

 

95

 

 

99

 

 

96

 

 

97

 

Other real estate owned

 

3,866

 

 

3,866

 

 

3,866

 

 

3,866

 

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

 

0.21

 

%

 

0.48

 

%

 

0.27

 

%

 

0.31

 

%

Nonperforming assets to total assets

 

0.40

 

%

 

0.69

 

%

 

0.47

 

%

 

0.52

 

%

Nonperforming assets (including TDRs) to total assets

 

0.41

 

%

 

0.70

 

%

 

0.48

 

%

 

0.53

 

%

Allowance for loan losses to loans

 

0.97

 

%

 

0.87

 

%

 

1.00

 

%

 

1.02

 

%

Allowance for loan losses to nonperforming loans

 

352.89

 

%

 

151.82

 

%

 

287.10

 

%

 

266.11

 

%

Net charge-offs

$

62

 

$

82

 

$

599

$

153

 

$

537

 

$

98

 

Net charge-offs to average loans (2)

 

0.02

 

%

 

0.02

 

%

 

0.08

%

 

0.02

 

%

 

0.15

 

%

 

0.03

 

%

Selected Average Balances
Total assets

$

1,947,983

 

$

1,721,612

 

$

1,907,455

$

1,636,284

 

$

1,866,477

 

$

1,812,298

 

Total earning assets

 

1,852,126

 

 

1,615,125

 

 

1,810,389

 

1,536,659

 

 

1,768,189

 

 

1,710,345

 

Total loans, net of deferred fees

 

1,444,543

 

 

1,415,383

 

 

1,450,394

 

1,347,021

 

 

1,456,310

 

 

1,485,121

 

Total deposits

 

1,654,016

 

 

1,459,834

 

 

1,614,518

 

1,370,263

 

 

1,574,581

 

 

1,527,313

 

Other Data
Noninterest-bearing deposits

$

500,655

 

$

442,443

 

$

501,812

 

$

399,062

 

Interest-bearing checking, savings and money market

 

901,124

 

 

655,959

 

 

822,888

 

 

820,378

 

Time deposits

 

243,430

 

 

320,628

 

 

234,939

 

 

263,053

 

Wholesale deposits

 

35,000

 

 

100,006

 

 

35,000

 

 

50,000

 

 
(1) Non-GAAP Reconciliation At June 30,
(Dollars in thousands, except per share data)

 

2021

 

 

2020

 

 
Total stockholders’ equity

$

200,687

 

$

180,652

 

Less: goodwill and intangibles, net

 

(8,199

)

 

(8,525

)

Tangible Common Equity

$

192,488

 

$

172,127

 

 
Book value per common share

$

14.70

 

$

13.42

 

Less: intangible book value per common share

 

(0.60

)

 

(0.63

)

Tangible book value per common share

$

14.10

 

$

12.79

 

 
(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.
FVCBankcorp, Inc.
Summary Consolidated Statements of Condition
(Dollars in thousands)
(Unaudited)
 
 
% Change % Change
Current From
6/30/2021 3/31/2021 Quarter 12/31/2020 6/30/2020 Year Ago
 
Cash and due from banks $

24,856

$

16,593

49.8

%

$

20,835

$

25,613

-3.0

%

Interest-bearing deposits at
other financial institutions

190,553

203,285

-6.3

%

120,228

64,989

193.2

%

Investment securities

200,672

135,368

48.2

%

126,415

122,082

64.4

%

Restricted stock, at cost

6,372

6,377

-0.1

%

6,563

6,608

-3.6

%

Loans held for sale, at fair value

– –

– –

0.0

%

– –

– –

0.0

%

Loans, net of fees:
Commercial real estate

829,683

782,005

6.1

%

788,218

779,036

6.5

%

Commercial and industrial

140,611

109,737

28.1

%

119,200

105,957

32.7

%

Paycheck protection program

99,455

163,470

-39.2

%

152,978

169,425

-41.3

%

Commercial construction

207,790

218,507

-4.9

%

221,523

227,746

-8.8

%

Consumer real estate

184,560

159,790

15.5

%

168,531

177,366

4.1

%

Consumer nonresidential

12,179

13,403

-9.1

%

15,633

18,590

-34.5

%

Total loans, net of fees

1,474,278

1,446,912

1.9

%

1,466,083

1,478,120

-0.3

%

Allowance for loan losses

(14,359)

(14,421)

-0.4

%

(14,958)

(12,894)

11.4

%

Loans, net

1,459,919

1,432,491

1.9

%

1,451,125

1,465,226

-0.4

%

 
Premises and equipment, net

1,527

1,520

0.5

%

1,654

1,818

-16.0

%

Goodwill and intangibles, net

8,199

8,277

-0.9

%

8,357

8,525

-3.8

%

Bank owned life insurance (BOLI)

38,675

38,425

0.7

%

38,178

37,633

2.8

%

Other real estate owned

3,866

3,866

0.0

%

3,866

3,866

0.0

%

Other assets

40,612

38,315

6.0

%

44,260

44,789

-9.3

%

 
Total Assets $

1,975,251

$

1,884,517

4.8

%

$

1,821,481

$

1,781,149

10.9

%

 
Deposits:
Noninterest-bearing $

500,655

$

501,812

-0.2

%

$

399,062

$

442,443

13.2

%

Interest-bearing checking

610,823

534,436

14.3

%

537,834

387,683

57.6

%

Savings and money market

290,301

288,452

0.6

%

282,544

268,276

8.2

%

Time deposits

243,430

234,939

3.6

%

263,053

320,628

-24.1

%

Wholesale deposits

35,000

35,000

0.0

%

50,000

100,006

-65.0

%

Total deposits

1,680,209

1,594,639

5.4

%

1,532,493

1,519,036

10.6

%

 
Other borrowed funds

25,000

25,000

0.0

%

25,000

25,000

0.0

%

Subordinated notes, net of
issuance costs

44,146

44,116

0.1

%

44,085

24,527

80.0

%

Other liabilities

25,209

25,833

-2.4

%

30,403

31,934

-21.1

%

 
Stockholders’ equity

200,687

194,929

3.0

%

189,500

180,652

11.1

%

 
Total Liabilities & Stockholders’
Equity $

1,975,251

$

1,884,517

4.8

%

$

1,821,481

$

1,781,149

10.9

%

FVCBankcorp, Inc.
Summary Consolidated Income Statements
(In thousands, except per share data)
(Unaudited)
 
 
For the Three Months Ended
% Change % Change
Current From
6/30/2021 3/31/2021 Quarter 6/30/2020 Year Ago
 
Net interest income $

14,186

$

14,043

1.0

%

$

12,695

11.7

%

Provision for loan losses

– –

– –

0.0

%

1,750

-100.0

%

Net interest income after provision for loan losses

14,186

14,043

1.0

%

10,945

29.6

%

 
Noninterest income:
Fees on loans

27

20

35.0

%

46

-41.3

%

Service charges on deposit accounts

247

243

1.6

%

223

10.8

%

BOLI income

250

248

0.8

%

282

-11.3

%

Other fee income

161

280

-42.5

%

136

18.4

%

Total noninterest income

685

791

-13.4

%

687

-0.3

%

 
Noninterest expense:
Salaries and employee benefits

4,458

4,548

-2.0

%

3,982

12.0

%

Occupancy and equipment expense

820

807

1.6

%

859

-4.5

%

Data processing and network administration

551

563

-2.1

%

494

11.5

%

State franchise taxes

487

504

-3.4

%

466

4.5

%

Professional fees

503

354

42.1

%

207

143.0

%

Impairment on branch closures

– –

– –

0.0

%

676

-100.0

%

Other operating expense

1,409

1,106

27.4

%

1,314

7.2

%

Total noninterest expense

8,228

7,882

4.4

%

7,998

2.9

%

Net income before income taxes

6,643

6,952

-4.4

%

3,634

82.8

%

Income tax expense

1,478

1,383

6.9

%

754

96.0

%

Net Income $

5,165

$

5,569

-7.3

%

$

2,880

79.3

%

 
Earnings per share – basic $

0.38

$

0.41

-7.7

%

$

0.21

76.8

%

Earnings per share – diluted $

0.36

$

0.38

-7.1

%

$

0.21

72.0

%

Weighted-average common shares outstanding – basic

13,647,193

13,578,279

13,455,053

Weighted-average common shares outstanding – diluted

14,517,154

14,536,449

13,924,239

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

5,165

$

5,569

$

2,880

Add: Impairment loss

– –

– –

676

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

(142)

Net Income, Operating earnings (non-GAAP) $

5,165

$

5,569

$

3,414

Earnings per share – basic (non-GAAP operating earnings) $

0.38

$

0.41

$

0.25

Earnings per share – diluted (non-GAAP operating earnings) $

0.36

$

0.38

$

0.25

 
Return on average assets (non-GAAP operating earnings)

1.06%

1.19%

0.79%

Return on average equity (non-GAAP operating earnings)

10.41%

11.53%

7.60%

Efficiency ratio (non-GAAP operating earnings)

55.33%

53.13%

54.72%

 
Reconciliation of Net Income (GAAP) to Pre-Tax Pre-Provision Income (Non-GAAP):
GAAP net income reported above $

5,165

$

5,569

$

2,880

Add: Provision for loan losses

– –

– –

1,750

Add: Impairment losses

– –

– –

676

Add: Income tax expense

1,478

1,383

754

Pre-tax pre-provision income $

6,643

$

6,952

$

6,060

Earnings per share – basic (non-GAAP pre-tax pre-provision) $

0.49

$

0.51

$

0.45

Earnings per share – diluted (non-GAAP pre-tax pre-provision) $

0.46

$

0.48

$

0.44

 
Return on average assets (non-GAAP operating earnings)

1.36%

1.49%

1.41%

Return on average equity (non-GAAP operating earnings)

13.39%

14.40%

13.49%

FVCBankcorp, Inc.
Summary Consolidated Income Statements
(In thousands, except per share data)
(Unaudited)
 
 
For the Six Months Ended
% Change
From
6/30/2021 6/30/2020 Year Ago
 
Net interest income $

28,229

$

24,906

13.3

%

Provision for loan losses

– –

2,816

-100.0

%

Net interest income after provision for loan losses

28,229

22,090

27.8

%

 
Noninterest income:
Fees on loans

47

442

-89.4

%

Service charges on deposit accounts

490

463

5.8

%

Gain on sale of securities available-for-sale

– –

97

-100.0

%

Loss on loans held for sale

– –

(451)

-100.0

%

BOLI income

498

565

-11.9

%

Other fee income

441

265

66.4

%

Total noninterest income

1,476

1,381

6.9

%

 
Noninterest expense:
Salaries and employee benefits

9,006

8,010

12.4

%

Occupancy and equipment expense

1,627

1,715

-5.1

%

Data processing and network administration

1,114

928

20.0

%

State franchise taxes

991

932

6.3

%

Professional fees

857

432

98.4

%

Impairment on branch closures

– –

676

-100.0

%

Other operating expense

2,515

2,514

0.0

%

Total noninterest expense

16,110

15,207

5.9

%

Net income before income taxes

13,595

8,264

64.5

%

Income tax expense

2,861

1,651

73.3

%

Net Income $

10,734

$

6,613

62.3

%

 
Earnings per share – basic $

0.79

$

0.49

62.2

%

Earnings per share – diluted $

0.74

$

0.46

59.3

%

Weighted-average common shares outstanding – basic

13,612,736

13,603,411

Weighted-average common shares outstanding – diluted

14,526,801

14,259,843

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

10,734

$

6,613

Add: Impairment loss

– –

676

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

(142)

Net Income, Operating earnings (non-GAAP) $

10,734

$

7,147

Earnings per share – basic (non-GAAP operating earnings) $

0.79

$

0.53

Earnings per share – diluted (non-GAAP operating earnings) $

0.74

$

0.50

 
Return on average assets (non-GAAP operating earnings)

1.13%

0.87%

Return on average equity (non-GAAP operating earnings)

10.96%

7.94%

Efficiency ratio (non-GAAP operating earnings)

54.23%

55.28%

 
Reconciliation of Net Income (GAAP) to Pre-Tax Pre-Provision Income (Non-GAAP):
GAAP net income reported above $

10,734

$

6,613

Add: Provision for loan losses

– –

2,816

Add: Impairment losses

– –

676

Add: Income tax expense

2,861

1,651

Pre-tax pre-provision income $

13,595

$

11,756

Earnings per share – basic (non-GAAP pre-tax pre-provision) $

1.00

$

0.86

Earnings per share – diluted (non-GAAP pre-tax pre-provision) $

0.94

$

0.82

 
Return on average assets (non-GAAP operating earnings)

1.43%

1.44%

Return on average equity (non-GAAP operating earnings)

13.88%

13.07%

FVCBankcorp, Inc.
Average Statements of Condition and Yields on Earning Assets and Interest-Bearing Liabilities
(Dollars in thousands)
(Unaudited)
 
 
For the Three Months Ended
6/30/2021 3/31/2021 6/30/2020
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 $

796,220

 

$

8,616

4.33

%

$

782,639

 

$

8,396

4.29

%

$

770,326

 

$

8,355

4.34

%

Commercial and industrial

120,021

 

 

1,421

4.74

%

111,360

 

 

1,344

4.83

%

103,226

 

 

1,287

4.99

%

Paycheck protection program

138,550

 

 

1,474

4.26

%

162,066

 

 

1,832

4.52

%

121,843

 

 

801

2.63

%

Commercial construction

212,004

 

 

2,382

4.49

%

220,835

 

 

2,427

4.40

%

222,685

 

 

2,588

4.65

%

Consumer real estate

164,938

 

 

1,633

3.96

%

165,211

 

 

1,676

4.06

%

177,783

 

 

2,023

4.55

%

Consumer nonresidential

12,810

 

 

225

7.04

%

14,199

 

 

258

7.27

%

19,520

 

 

360

7.37

%

Total loans

1,444,543

 

 

15,751

4.36

%

1,456,310

 

 

15,933

4.38

%

1,415,383

 

 

15,414

4.36

%

 
Investment securities (2)(3)

178,875

 

 

956

2.14

%

128,988

 

 

806

2.50

%

128,797

 

 

852

2.65

%

Interest-bearing deposits at
other financial institutions

228,708

 

 

71

0.12

%

182,891

 

 

45

0.10

%

70,945

 

 

21

0.12

%

Total interest-earning assets

1,852,126

 

 

16,778

3.62

%

1,768,189

 

 

16,784

3.80

%

1,615,125

 

 

16,287

4.03

%

 
Non-interest earning assets:
Cash and due from banks

15,954

 

15,346

 

19,645

 

Premises and equipment, net

1,525

 

1,610

 

2,050

 

Accrued interest and other
assets

92,805

 

96,226

 

96,362

 

Allowance for loan losses

(14,427

)

(14,894

)

(11,570

)

 
Total Assets $

1,947,983

 

$

1,866,477

 

$

1,721,612

 

 
Interest-bearing liabilities:
Interest checking $

565,074

 

$

742

0.53

%

$

523,712

 

$

717

0.56

%

$

341,081

 

 

597

0.70

%

Savings and money market

297,003

 

 

351

0.47

%

278,774

 

 

324

0.47

%

263,588

 

 

435

0.66

%

Time deposits

238,113

 

 

722

1.22

%

246,486

 

 

917

1.51

%

321,775

 

 

1,724

2.15

%

Wholesale deposits

35,000

 

 

39

0.45

%

45,778

 

 

43

0.38

%

132,072

 

 

369

1.13

%

Total interest-bearing deposits

1,135,190

 

 

1,854

0.66

%

1,094,750

 

 

2,001

0.74

%

1,058,516

 

 

3,125

1.19

%

 
Other borrowed funds

25,000

 

 

85

1.36

%

25,000

 

 

83

1.35

%

25,000

 

 

35

0.50

%

Subordinated notes, net of
issuance costs

44,127

 

 

651

5.92

%

44,096

 

 

651

5.99

%

24,514

 

 

426

6.48

%

Total interest-bearing liabilities

1,204,317

 

 

2,590

0.86

%

1,163,846

 

 

2,735

0.95

%

1,108,030

 

 

3,586

1.30

%

 
Noninterest-bearing liabilities:
Noninterest-bearing deposits

518,826

 

479,831

 

401,318

 

Other liabilities

26,374

 

29,625

 

32,585

 

 
Stockholders’ equity

198,466

 

193,175

 

179,679

 

 
Total Liabilities and Stockholders’ Equity $

1,947,983

 

$

1,866,477

 

$

1,721,612

 

 
Net Interest Margin

 

14,188

3.07

%

 

14,049

3.22

%

 

12,701

3.16

%

 
 
(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 June 30, 2021 and 2020 iss $2 and $6, respectively.
For the three months ended March 31, 2021, the taxable equivalent adjustment to interest income is $6.
(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 Six Months Ended
6/30/2021 6/30/2020
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 $

789,467

$

17,011

4.31

%

$

763,658

$

17,382

4.55

%

Commercial and industrial

115,715

2,765

4.78

%

106,705

2,858

5.36

%

Paycheck protection program

150,243

3,307

4.40

%

60,921

801

2.63

%

Commercial construction

216,395

4,808

4.44

%

221,395

5,389

4.87

%

Consumer real estate

165,074

3,308

4.01

%

180,897

4,145

4.58

%

Consumer nonresidential

13,500

484

7.16

%

13,445

488

7.26

%

Total loans

1,450,394

31,683

4.37

%

1,347,021

31,063

4.61

%

 
Investment securities (2)(3)

154,069

1,763

2.29

%

136,160

1,823

2.68

%

Loans held for sale, at fair value

– –

– –

– –

%

6,899

236

6.84

%

Interest-bearing deposits at
other financial institutions

205,926

116

0.11

%

46,579

102

0.44

%

Total interest-earning assets

1,810,389

33,562

3.71

%

1,536,659

33,224

4.32

%

 
Non-interest earning assets:
Cash and due from banks

15,652

16,537

Premises and equipment, net

1,567

1,996

Accrued interest and other
assets

94,506

92,018

Allowance for loan losses

(14,659)

(10,926)

 
Total Assets $

1,907,455

$

1,636,284

 
Interest-bearing liabilities:
Interest checking $

544,507

$

1,459

0.54

%

$

307,528

1,478

0.97

%

Savings and money market

287,939

675

0.47

%

245,542

1,070

0.88

%

Time deposits

242,277

1,640

1.36

%

337,792

3,804

2.27

%

Wholesale deposits

40,359

81

0.41

%

126,560

949

1.52

%

Total interest-bearing deposits

1,115,082

3,855

0.70

%

1,017,422

7,301

1.45

%

 
Other borrowed funds

25,000

168

1.35

%

32,071

215

1.34

%

Subordinated notes, net of
issuance costs

44,111

1,302

5.95

%

24,504

790

6.48

%

Total interest-bearing liabilities

1,184,193

5,325

0.91

%

1,073,997

8,306

1.56

%

 
Noninterest-bearing liabilities:
Noninterest-bearing deposits

499,436

352,841

Other liabilities

27,991

29,529

 
Stockholders’ equity

195,835

179,917

 
Total Liabilities and Stockholders’ Equity $

1,907,455

$

1,636,284

 
Net Interest Margin

28,237

3.15

%

24,918

3.26

%

 
 
(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 $8 and $12 for the six months ended June 30, 2021 and 2020, respectively.
(3) The average balances for investment securities includes restricted stock.

 

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