For Immediate Release — February 09, 2018
For further information, contact:
David W. Pijor, 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
FOR IMMEDIATE RELEASE – January 25, 2018—>
Fairfax, VA-FVCBankcorp Inc. (OTCQX:FVCB) (the “Company”) today reported fourth quarter 2017 operating earnings of $3.0 million, or $0.25 diluted earnings per share, compared to $1.7 million, or $0.16 diluted earnings per share, for the quarterly period ended December 31, 2016. The Company’s fourth quarter 2017 operating earnings exclude the impact of a $2.0 million write down in its deferred tax asset as a result of the enactment of the Tax Cuts and Jobs Act (“TCJA”) in December 2017. Including the write down, net income per generally accepted accounting principles (“GAAP”) for the quarter ended December 31, 2017 is $1.0 million, or $0.08 per diluted share. For the year ended December 31, 2017, GAAP net income increased 10.9% to $7.7 million, or $0.67 per diluted earnings per share, compared to $6.9 million, or $0.63 per diluted earnings per share, for the year ended December 31, 2016. Operating earnings for the year ended December 31, 2017 was $9.7 million, excluding the TCJA impact, compared to $6.9 million for 2016.
On an operating basis, excluding the impact of the TCJA, return on average assets was 1.19% and return on average equity was 12.14% for the fourth quarter of 2017. For the year ended December 31, 2017, return on average assets and equity for the year ended December 31, 2017 was 1.01% and 10.88%, respectively, each excluding the impact of the TCJA. On a GAAP basis, the Company reported return on average assets of 0.40% and return on average equity of 4.06% for the fourth quarter of 2017 compared to a return on average assets of 0.81% and a return on average equity of 8.66% for the comparable 2016 quarterly period. For the year ended December 31, 2017 period on a GAAP basis, the Company reported return on average assets of 0.80% and return on average equity of 8.64% compared to a return on average assets of 0.88% and return on average equity of 8.91% for 2016.
Selected Highlights
• Operating earnings for the fourth quarter of 2017 was $3.0 million, an increase of 73% from the year ago quarter. For the year ended December 31, 2017, operating earnings was $9.7 million, an increase of 40% compared to the full year December 31, 2016.
• Total loans, net of deferred fees, increased $121 million, or 16%, from December 31, 2016 to December 31, 2017. Asset quality remains strong with nonperforming loans and loans past due 90 days or more as a percentage of total assets being 0.07% at December 31, 2017, compared to 0.03% at December 31, 2016.
• Total deposits increased $152 million, or 20%, from December 31, 2016 to December 31, 2017. The Company’s increase in deposits is a result of several successful targeted promotions to continue its growth in core deposits.
• Tangible book value per share at December 31, 2017 was $9.03, an increase from $7.83 at December 31, 2016.
“2017 was a year of great accomplishment for our Company. We celebrated our 10 year anniversary in November, achieved total assets of over $1.0 billion, and had record earnings growth,” stated David W. Pijor, Chairman and CEO. “Our results are indicative of our accomplishment in acquiring new customers who have experienced several bank consolidations this past year. We expect this momentum to carry into 2018 as we continue to focus on our market share and franchise value.”
Balance Sheet
Total assets increased to $1.05 billion compared to $909.3 million as of December 31, 2017 and 2016, respectively, an increase of $144 million, or 16%. The Company’s focus on its relationship banking strategy has resulted in increases in its loans receivable portfolio and total deposits.
Loans receivable, net of deferred fees, totaled $888.7 million as of December 31, 2017, compared to $768.1 million as of December 31, 2016, a year over year increase of $121 million, or 16%. For the fourth quarter of 2017, loans receivable, net of deferred fees, increased $62 million, or 32% on an annualized basis.
Total deposits increased to $928.2 million as of December 31, 2017 compared to $776.0 million as of December 31, 2016, an increase of $152 million, or 20%. Noninterest-bearing deposits increased 6% to $175.4 million at December 31, 2017, or 19% of total deposits, compared to $165.7 million at December 31, 2016. Core deposits, which include total deposits less wholesale deposits, increased $99 million or 14% year over year. Wholesale deposits totaled $115.5 million, or 12% of total deposits at December 31, 2017.
Income Statement
Net interest income totaled $8.5 million, an increase of $1.3 million, or 19%, for the quarter ended December 31, 2017, compared to the year ago quarter. The Company’s net interest margin was 3.43% and 3.38% for the quarters ended December 31, 2017 and 2016, respectively. For the year ended December 31, 2017, net interest income totaled $32.1 million compared to $27.2 million for 2016, an increase of 18%. Net interest margin was 3.45% and 3.53% for the years ended December 31, 2017 and 2016, respectively.
Noninterest income totaled $1.5 million and $295,000 for the quarters ended December 31, 2017 and 2016, respectively. During the fourth quarter of 2017, the Company recorded gains from other real estate owned of $1.1 million and gains on sales of investment securities of $30,000. The fourth quarter of 2016 did not have similar gains. For the year ended December 31, 2017 and 2016, noninterest income was $3.0 million and $1.2 million, respectively. The Company recorded noninterest income of $443,000 from a claim on the bank owned life insurance (“BOLI”) policies during the first quarter of 2017. Recurring fee income was $1.3 million, an increase of 12% for the year ended December 31, 2017 compared to 2016. The Company continues to enhance its fee income opportunities through ancillary services designed to serve its clients’ financial needs.
Noninterest expense totaled $4.9 million for the quarter ended December 31, 2017, compared to $4.3 million for the same three-month period of 2016. The increase in noninterest expense is primarily a result of the Company taking advantage of the bank consolidation occurring in its market by strategically hiring business development officers and back office staff to support the Company’s growth plans. Salary and compensation related expenses increased $403 thousand, or 16%, for the quarter ended December 31, 2017, compared to the same three-month period of 2016, primarily due to the above mentioned new hires. The efficiency ratio for the quarter ended December 31, 2017 was 55.9%, a decrease from 57.6% from the year ago quarter. For the year ended December 31, 2017 and 2016, noninterest expense was $19.3 million and $16.4 million, respectively. The efficiency ratio decreased to 57.2% from 58.0%, for the years ended December 31, 2017 and 2016, respectively.
Asset Quality
Asset quality remains strong as nonperforming loans and loans ninety days or more past due totaled $789,000, or 0.07% of total assets. Troubled debt restructurings (“TDR”) decreased to $1.5 million at December 31, 2017, compared to $11.5 million at December 31, 2016. During the fourth quarter of 2017, the Company foreclosed upon a property collateralizing a TDR loan which was included in nonperforming assets. As a result, the Company had other real estate owned of $3.9 million at December 31, 2017. Nonperforming assets (including TDRs) to total assets was 0.58% and 1.29% for the years ended December 31, 2017 and 2016, respectively.
The allowance for loan losses to total loans was 0.87% at December 31, 2017, reflecting credit quality improvement in the loan portfolio and refinements to the loan loss allocation as the loan portfolio grows.
The Company maintains all regulatory capital ratios in excess of “well-capitalized” under the Basel III guidelines.
About FVCBankcorp Inc.
Celebrating 10 years of sound financial performance and continued growth, FVCbank commenced operations in November 2007 and is the wholly-owned subsidiary of FVCBankcorp Inc. FVCbank is a $1.05 billion Virginia-chartered community bank serving the banking needs of commercial businesses, nonprofit organizations, professional service entities, their owners and employees located in the greater Washington, D.C., metropolitan and Northern Virginia area. Locally owned and managed, it is based in Fairfax, Virginia, and has six full-service offices in Arlington, Ashburn, Fairfax, Manassas, Reston and Springfield, Virginia. Visit www.fvcbank.com for more information.
For more information on the Company’s 2017 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, to statements about the Company’s plans, objectives, estimates, intentions and expectations as to future trends, plans, events or results of the Company’s operations and policies and regarding general economic conditions. These forward-looking statements are based on current beliefs that involve significant risks, uncertainties, and assumptions. 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.
