FVCBankcorp, Inc. (NASDAQ: FVCB) (the “Company”) today reported
its financial results for the first quarter of 2023.
First Quarter Selected Highlights
- Fortified and Well Capitalized Balance Sheet. FVCBank
(the “Bank”) has a resilient balance sheet with Tangible Common
Equity ("TCE") to Total Assets ("TA") ratio of 8.92% at March 31,
2023. The Company’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. All of the
Company’s regulatory capital components and ratios are well in
excess of thresholds required to be considered "well capitalized"
with total risk based capital to risk-weighted assets of 13.48% at
March 31, 2023.
- Quarter-Over-Quarter and Year-Over-Year Deposit Growth.
Total deposits increased $80.2 million, or 4%, to $1.91 billion at
March 31, 2023 from $1.83 billion at December 31, 2022 and
increased $91.0 million, or 5%, from March 31, 2022. Deposits,
excluding wholesale deposits, increased $14.9 million during the
quarter ended March 31, 2023.
- Low Uninsured Deposit Metrics Compared to Peers. As of
March 31, 2023, estimated uninsured deposits improved to 32.5% of
total deposits from 39.7% at December 31, 2022. The Company has
sufficient capital and liquidity resources to satisfy these
obligations.
- Diverse Sources of Available Liquidity. At March 31,
2023, the Company’s liquidity position, which includes cash
totaling $144.9 million, unencumbered investment securities
totaling $95.6 million, and available unsecured and secured
borrowing capacity totaling $524.9 million, was significantly in
excess of its estimated uninsured deposits totaling $621.8 million,
or 123% of uninsured deposits. The Company has the ability to
access the Federal Reserve’s new Bank Term Funding Program
(“BTFP”), which would increase borrowing capacity by $15.6 million.
The Company did not access the BTFP facility during the first
quarter of 2023.
- Adoption of Current Expected Credit Losses Model. The
Company adopted Accounting Standards Update 2016-13 (“CECL”) on
January 1, 2023. As a result, the Company’s allowance for credit
losses (“ACL”) to loans, net of fees, increased from 0.87% at
December 31, 2022 to 1.07% on January 1, 2023, the date of
adoption. At March 31, 2023, the allowance for credit losses to
total loans when excluding its mortgage company warehouse lines was
1.11%.
- Continued Solid Credit Quality. Nonperforming loans to
total assets remained at 0.19% for December 31, 2022 and March 31,
2023. The Company recorded net recoveries of $23 thousand, or
(0.01)% of average loans in the first quarter of 2023.
Net income for the first quarter of 2023 was $621 thousand, or
$0.03 diluted earnings per share, compared to $6.6 million, or
$0.36 diluted earnings per share, for the quarterly period ended
March 31, 2022. As previously disclosed in the Company’s Form 10-K
filed on March 24, 2023, net income for the quarter ended March 31,
2023 includes an after-tax loss totaling $3.6 million from the
February sale of $40.3 million in available-for-sale investment
securities which was part of a balance sheet repositioning. The
proceeds from the securities sale were deployed in part to repay
high-cost short-term borrowings totaling $20 million from the
Federal Home Loan Bank of Atlanta (“FHLB”) and to fund higher
yielding newly originated commercial loans. Further information on
this balance sheet restructuring can be found below. Additionally,
net income for the first quarter of 2023 includes the Company’s
portion of losses from its membership interest in Atlantic Coast
Mortgage, LLC (“ACM”), which was $625 thousand, net of tax,
compared to income of $707 thousand, net of tax, for the quarter
ended March 31, 2022.
Commercial bank operating earnings, which exclude the losses on
the above-noted securities sales, income or loss from the minority
membership interest in ACM, and 2022 merger-related expenses, all
net of tax, for the three months ended March 31, 2023 and December
31, 2022 were $4.8 million and $5.5 million, respectively, a
decrease of $689 thousand. Commercial bank operating earnings are
expected to improve as a result of salary expense reductions, net
interest margin improvement from the Company’s balance sheet
repositioning and reduction of wholesale funding costs, and
increased net interest income on newly originated commercial loans.
Diluted commercial bank operating earnings per share for the three
months ended March 31, 2023 and December 31, 2022 were $0.26 and
$0.30, respectively. The Company considers commercial bank
operating earnings a more reflective financial measure of the
Company’s operating performance than net income. Commercial bank
operating earnings is 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.
On December 15, 2022, the Company announced that the Board of
Directors approved a five-for-four split of the Company’s common
stock in the form of a 25% stock dividend for shareholders of
record on January 9, 2023, payable on January 31, 2023. Earnings
per share and all other per share information reflected herein have
been adjusted for the five-for-four split of the Company’s common
stock for comparative purposes.
Management Comments
David W. Pijor, Chairman and Chief Executive Officer of the
Company, said:
“Our March customer communications reinforced the Bank’s
longstanding trust-based relationships with our valued customers,
illustrated by an increase in non-wholesale deposits of nearly $15
million during the quarter. As part of our ongoing strategic
initiatives completed before the recent bank failures, we executed
the securities sales to improve our margin by selling low yielding
securities to reduce higher cost borrowings and deploy proceeds
into higher yielding loans. In January, we executed interest rate
swaps to add lower rate fixed funding to enhance liquidity and
protect against rising interest rates. As an added precaution
following the announcement of the bank failures, we increased
wholesale funding to provide additional liquidity and increased
borrowing capacity, while continuing to grow core deposits.
During the first quarter of 2023, we continued to add new
customers and work with existing relationships as we enhanced their
banking experience with an innovative digital banking platform.
We continue to be thankful for our ability to grow our customer
base and further diversify our loans and deposits. While we are
mindful of the economic uncertainty in the current rate
environment, we will continue to support our communities with
measured loan growth that meets our risk-adjusted return
requirements.
We are acutely alert to the challenges facing the community
banking industry and the economy as a whole. FVCbank’s team remains
committed to a thoughtful, conservative, strategic approach to
meeting the needs of our customers and community, balanced by
managing the risks we face, and by constantly seeking to improve,
with technology if possible, every aspect of our operations.”
First Quarter Balance Sheet Repositioning
The Company reviews its balance sheet and interest rate
sensitivity on an ongoing basis as part of its asset/liability risk
management process. During February 2023, with the expectation of
continued increases in short-term interest rates during 2023, the
Company modeled various scenarios to improve balance sheet
efficiency, reduce cost of funds, and improve margin and capital
ratios. Because of the long-term value of this analysis, the
Company executed a repositioning strategy through the sale of a
portion of U.S. government agency low-yielding mortgage-backed
investment securities available-for-sale at a one-time loss. The
proceeds of this strategy were used to repay high cost short-term
FHLB advances and to fund higher yielding newly originated
commercial loans. During late February, the Company sold $40.3
million in investment securities available-for-sale, or 12% of the
portfolio, for an after-tax loss of $3.6 million. This transaction
was neutral to shareholders’ equity and tangible book value, as the
loss recorded was already reflected in accumulated other
comprehensive loss. The balance sheet repositioning is accretive to
net interest income, net interest margin and return on average
assets in future periods. For the quarter ended March 31, 2023, net
interest margin improved 5 basis points as a result of this
repositioning.
Additionally, during the first quarter, the Company fixed $150
million of wholesale funding through the execution of
pay-fixed/receive-floating interest rate swaps. The interest rate
swaps have a weighted average rate of 3.50%, have a maturity of
five years, and are designated against a mix of FHLB advances and
brokered certificates of deposits. Classified as cash flow hedges,
the market value fluctuations will not impact future earnings, but
will impact accumulated other comprehensive loss. For the quarter
ended March 31, 2023, net interest margin improved 5 basis points
as a result of the reduction in wholesale funding costs.
Management will continue to evaluate other balance sheet
opportunities that would improve operating efficiency, cost of
funds, and net interest margin as conditions warrant.
Minority Investment in Mortgage Banking Operation
In August 2021, the Company acquired a membership interest in
ACM for $20.4 million, or 0.01% of total assets, to diversify its
loan portfolio while providing competitive residential mortgage
products to its customers as well as 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 2023, the Company reported a pre-tax loss of $801
thousand compared to a pre-tax loss of $1.4 million during the
quarter ended December 31, 2022 related to its investment in ACM.
ACM has benefited from its disciplined expense reduction
initiatives coupled with its strategic investments in recruiting
and new branch acquisition, which has resulted in a decrease in
ACM’s operating losses by 30% for the first quarter of 2023 when
compared to the fourth quarter of 2022.
During the first quarter, ACM implemented additional expense
reductions of operations and corporate support staff resulting in
reductions of total fixed expenses of 22% year-over-year as of
March 31, 2023. ACM has experienced significant increases in new
business activity and volume due to a 27% increase in mortgage
originators year-over-year as of March 31, 2023. New funded volume
for the first quarter of 2023 totaled $358 million, an increase of
13% from the previous quarter, and reflects substantial increases
month over month within the first quarter of 2023, with March
posting the highest monthly funding volume since July 2022.
ACM experienced increases in prequalification applications of
79% during the first quarter of 2023 compared with the fourth
quarter of 2022, and an 18% increase from the same prior year
quarter, despite the overall mortgage industry decline in existing
home sales and mortgage origination market volumes. New
applications and rate locks during the first quarter of 2023
increased 51%, and ACM’s locked pipeline increased 74% when
comparing the first quarter of 2023 to the fourth quarter of
2022.
ACM’s growth strategy includes continued growth in markets
outside of the Washington, D.C. metropolitan area. Applications in
areas outside of the Washington, D.C. metropolitan area are up 50%
for the first quarter of 2023 compared to the year ago quarter and
prequalification applications more than doubled over that same time
period.
While headwinds from higher interest rates and lack of housing
inventory are expected to weigh on the mortgage industry through
2023, the Company believes ACM is well positioned to weather this
market downturn and to generate future growth and earnings.
Statement of Condition
Total assets were $2.35 billion at March 31, 2023, an increase
of $4.7 million, or 0.2%, compared to $2.34 billion at December 31,
2022, and an increase of $258.9 million, or 12%, compared to $2.09
billion at March 31, 2022.
Loans receivable, net of deferred fees, were $1.83 billion at
March 31, 2023 and $1.84 billion at December 31, 2022, a decrease
of $12.3 million, or 0.7%. Compared to March 31, 2022, loans
receivable, net of deferred fees, increased $315.6 million, or 21%,
from $1.51 billion, year-over-year. During the first quarter of
2023, new loan originations totaled $61.0 million and repayments of
loans and lines of credit totaled $73.3 million. As of the date of
this press release, commercial loans originated during 2023 totaled
$60.1 million and had a weighted average yield of 7.10%.
Investment securities were $239.7 million at March 31, 2023,
$278.3 million at December 31, 2022, and $330.6 million at March
31, 2022. Investment securities decreased $38.6 million during the
quarter ended March 31, 2023, primarily as a result of the $40.3
million of available-for-sale securities sale in February 2023,
principal paydowns of $5.9 million, and a $7.6 million decrease in
the portfolio’s unrealized losses. The investment securities
portfolio consists of primarily mortgage-backed securities which
are guaranteed by the Federal National Mortgage Association, the
Federal Home Loan Mortgage Corporation or the Government National
Mortgage association. The effective duration of the investment
securities portfolio continues to be slightly over 5 years, which
is within the industry average. As of March 31, 2023, all but $264
thousand of the Company's investment securities were classified as
available-for-sale. The decrease in the market value of the
investment securities portfolio was driven by the increasing rate
environment that began in 2022 and there was no
other-than-temporary impairment at March 31, 2023.
Total deposits increased $80.2 million, or 4%, to $1.91 billion
at March 31, 2023 from $1.83 billion at December 31, 2022, and
increased $91.0 million, or 5%, from March 31, 2022.
Noninterest-bearing deposits were $425.8 million at March 31, 2023,
or 22% of total deposits. At March 31, 2023, core deposits, which
exclude wholesale deposits, increased $14.9 million from the
previous quarter end. Uninsured deposits to total deposits were
32.5% at March 31, 2023, an improvement from 39.7% at December 31,
2022. 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, 2023, December 31, 2022, and
March 31, 2022, reciprocal deposits totaled $189.9 million, $117.6
million, and $181.2 million, respectively, and are considered part
of the Company’s core deposit base. Time deposits (which exclude
wholesale deposits) increased $103.8 million, or 40%, to $364.3
million at March 31, 2023 from December 31, 2022, and were 23% of
core deposits, representing new and existing customer deposits as
customers were looking to fix interest rates on their deposit
balances.
The Company has had consistent deposit inflows over the last
several quarters, including the current quarter, with new non-time
deposit inflows totaling $118 million and $116 million for the
first quarter of 2023 and the fourth quarter of 2022, respectively.
Most deposit outflows are attributable to typical transactional
activity associated with the Company’s title company, 1031
exchange, and homeowner association deposit base. Outflows from
these deposit customers slowed down during the first quarter of
2023. Title and 1031 exchange company deposits decreased $82.6
million from December 31, 2022 to March 31, 2023. Deposits from
municipalities increased $59.1 million during the first quarter of
2023, which are collateralized by a portion of the Company’s
investment securities portfolio. The Company maintains a growing
deposit pipeline headed into the second quarter of 2023.
Wholesale deposits increased $65.4 million to $313.4 million
during the first quarter of 2023 and increased $278.4 million from
March 31, 2022. Wholesale deposits were used to pay off FHLB
advances at maturity freeing up collateral for future use as
needed. In late March 2023, the Company increased its wholesale
deposits by $100 million with a weighted average cost of 5.06% in
response to the liquidity concerns in the banking sector as a
result of bank failures that occurred. These wholesale deposits are
considered temporary as the Bank replaces these funds with core
deposit growth. Other borrowed funds decreased $76 million, or 29%,
to $189.0 million at March 31, 2023 from $265.0 million at December
31, 2022. Wholesale deposits and other borrowings are partially
fixed at a weighted average rate of 2.95% as the Company has
executed $250 million in pay-fixed/receive-floating interest rate
swaps to reduce these funding costs.
Shareholders’ equity at March 31, 2023 was $204.2 million, an
increase of $1.8 million, or 1%, from December 31, 2022 and an
increase of $3.3 million, or 2%, from March 31, 2022. During the
first quarter of 2023, retained earnings decreased $2.8 million as
a result of the adoption of CECL. In addition, the Company
repurchased 90,952 of its common shares at an average price of
$13.42 (including commissions) in accordance with its approved
share repurchase program, which was extended on March 16, 2023.
Accumulated other comprehensive loss decreased $3.7 million, which
was related to the improvement in market value of the Company’s
available-for-sale investment securities portfolio.
Book value per share at March 31, 2023, December 31, 2022, and
March 31, 2022 was $11.53, $11.58, and $11.51, respectively.
Tangible book value per share (a non-GAAP financial measure which
is defined in the tables below) at March 31, 2023, December 31,
2022, and March 31, 2022 was $11.09, $11.14, and $11.05,
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, 2023, December 31, 2022,
and March 31, 2022 was $12.95, $13.23 and $12.15, respectively.
The Company’s bank subsidiary, FVCbank, remains well-capitalized
at March 31, 2023, with total risk-based capital of 13.48%, common
equity tier 1 risk-based capital of 12.48%, and tier 1 leverage
ratio of 10.38%.
Asset Quality
The Company adopted CECL as of January 1, 2023 in accordance
with the required implementation date and recorded the impact of
the adoption to retained earnings, net of deferred income taxes, as
required by the standard. Note that prior to the adoption of CECL,
the Company utilized an incurred loss model to derive its best
estimate of the allowance for loan losses. Reserves for credit
losses increased $3.7 million and consisted of increases to the
allowance for credit losses as well as the Company's reserve for
unfunded commitments (referred to in combination herein as ACL).
For the most recent quarter, subsequent to the aforementioned
adoption, the Company recorded a provision for credit losses of
$242 thousand compared to a provision of $729 thousand for the
three months ended December 31, 2022 and a $350 thousand provision
for the three months ended March 31, 2022. The Company continues to
lend to well-established and relationship-driven borrowers and has
a proven track record of low historical credit losses.
The Company continues to maintain disciplined credit guidelines
during the current rising interest rate environment. The Company
proactively monitors the impact of rising interest rates on its
adjustable loans as the industry navigates through this economic
cycle of increased inflation and higher interest rates. Credit
quality metrics remain strong for the first quarter of 2023 with a
marginal increase in specific reserves to $107 thousand. The
Company recorded net loan recoveries of $23 thousand during the
first quarter of 2023 compared to net loan charge-offs of $2
thousand during the quarter ended December 31, 2022 and net loan
charge-offs of $415 thousand during the quarter ended March 31,
2022, consistent with the Company’s track record of low
charge-offs. The ACL at March 31, 2023 and December 31, 2022, was
$20.0 million and $16.0 million, respectively. ACL coverage to
nonperforming loans increased to 449.4% at March 31, 2023, compared
to 357.0% as of December 31, 2022 as a result of the adoption of
CECL.
The ACL to total loans, net of fees, was 1.09% at March 31,
2023, compared to 0.87% at December 31, 2022 and 0.92% at March 31,
2022. The Company does not record a reserve on ACM’s warehouse
lines due to the repurchase agreement in place with ACM, and as
such, the allowance for credit losses to total loans when excluding
the warehouse lines was 1.11% at March 31, 2023.
Nonperforming loans and loans 90 days or more past due at March
31, 2023 totaled $4.4 million, or 0.19% of total assets, composed
of three commercial relationships and two consumer relationships.
This compares to $4.5 million and $3.5 million in nonperforming
loans and loans 90 days or more past due at December 31, 2022 and
March 31, 2022, respectively. The Company had no other real estate
owned and there were no modifications for borrowers who were
experiencing financial difficulty for the quarters ended March 31,
2023 and March 31, 2022.
Commercial real estate loans totaled $1.10 billion, or 60% of
total loans, net of fees, at each of March 31, 2023 and December
31, 2022. 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. Included in commercial real estate are
loans secured by office buildings totaling $101.6 million, or 6% of
total loans, and retail shopping centers totaling $264.9 million,
or 15% of total loans, at March 31, 2023. Multi-family commercial
properties totaled $188.2 million, or 10% of total loans, at March
31, 2023. The following table provides further stratification of
these asset classes as of March 31, 2023 (dollars in
thousands).
Owner Occupied Commercial Real Estate
Non-Owner Occupied Commercial
Real Estate
Construction Asset Class AverageLoan-to-Value
(1) Number ofTotal Loans Bank OwnedPrincipal (2)
Average Loan-to- Value
(1)
Numberof Total Loans Bank OwnedPrincipal (2) Top 3
GeographicConcentration Number ofTotalLoans Bank
OwnedPrincipal (2) Total BankOwnedPrincipal (2) % of
TotalLoans Office, Class A
69%
5
$
6,579
50%
5
$
4,204
Counties of Fairfax andLoudoun, Virginia andMontgomery County,
Maryland
1
$
2,836
$
13,619
Office, Class B
49%
38
16,365
48%
31
62,518
-
-
78,883
Office, Class C
45%
8
3,567
44%
10
4,703
1
806
9,076
Subtotal
51
$
26,511
46
$
71,425
2
$
3,642
$
101,578
5.56%
Retail- Neighorhood/Community Shop
-
$
-
44%
32
$
87,630
Prince George's County,Maryland, Fairfax County,Virginia and
Washington, D.C.
2
$
9,455
$
97,085
Retail- Restaurant
59%
9
8,367
46%
17
36,352
-
-
44,719
Retail- Single Tenant
61%
5
2,049
42%
22
38,326
-
-
40,375
Retail- Anchored,Other
72%
2
2,091
52%
11
37,122
1
1,559
40,772
Retail- Grocery-anchored
-
-
43%
7
41,310
1
654
41,964
Subtotal
16
$
12,507
89
$
240,740
4
$
11,668
$
264,915
14.5%
Multi-family, Class A (Market)
-
$
-
28%
1
$
-
Washington, D.C., BaltimoreCity, Maryland and ArlingtonCounty,
Virginia
1
$
737
$
737
Multi-family, Class B (Market)
-
-
63%
21
78,813
-
-
78,813
Multi-family, Class C (Market)
-
-
58%
58
72,097
2
4,855
76,952
Multi-Family-Affordable Housing
-
-
54%
23
27,536
1
4,116
31,652
Subtotal
-
$
-
103
$
178,446
4
$
9,708
$
188,154
10.29%
Information as of March 31, 2023
$
554,647
30.35%
1) Loan-to-value is determined at origination date against
current bank owned principal. 2) Bank owned principal not adjusted
for deferred fees or costs. 3) Debt service coverage policy is
1.20x or greater required at origination date.
The loans shown in the above table exhibit strong credit quality
with only one loan that was classified at March 31, 2023, totaling
$1.7 million, out of $554.6 million in these loan categories.
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, the Company has
appropriately reserved for possible credit concerns in the event of
a downturn in economic activity.
Income Statement
Net income for the three months ended March 31, 2023 was $621
thousand, a decrease of $6.0 million, compared to $6.6 million for
the same period of 2022. On a linked quarter basis, net income
decreased $4.3 million, from $4.9 million for the quarter ended
December 31, 2022. As mentioned above, net income for the quarter
ended March 31, 2023 includes an after-tax loss totaling $3.6
million from the February sale of $40.3 million in
available-for-sale investment securities which was part of a
balance sheet repositioning. The proceeds from the securities sale
were deployed in part to pay off high-cost short-term borrowings
totaling $20 million from the FHLB and fund higher yielding newly
originated commercial loans. Additionally, net income for the first
quarter of 2023 includes the Company’s portion of losses from its
membership interest in ACM, which was $801 thousand, compared to
income of $912 thousand for the quarter ended March 31, 2022.
Net interest income totaled $14.0 million, a decrease of $1.1
million, or 7%, for the quarter ended March 31, 2023, compared to
the year ago quarter, and a decrease of $1.9 million, or 12%,
compared to the fourth quarter of 2022. The decrease in net
interest income for the three months ended March 31, 2023 compared
to the linked quarter ended December 31, 2022 and the quarter ended
March 31, 2022 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.
Interest income on loans increased $7.8 million, or 50%, for the
three months ended March 31, 2023, compared to the same period of
2022. Compared to the linked quarter, interest income on loans
increased $2.0 million, or 9%, for the three months ended March 31,
2023. The increase in interest income for the three months ended
March 31, 2023, compared to the year ago quarter was primarily
related to an increase in both loan yields, which increased 88
basis points, and the volume of average loans, which increased
$356.6 million. On a linked quarter basis, the increase in interest
income is due to the increased yield on loans receivable by 20
basis points along with the increase in average loan volume of
$85.7 million during the quarter.
Interest expense on deposits increased $7.0 million for the
three months ended March 31, 2023, compared to the same period of
2022, and increased $2.9 million compared to the three months ended
December 31, 2022, all a result of the unprecedented quantitative
tightening and the change in deposit mix to 16% wholesale deposits.
As a preemptive defensive measure, management increased liquidity
through additional wholesale funding given the uncertainty
surrounding the isolated bank failures announced in March. The
increase in wholesale deposits provided enhanced liquidity on the
Company’s balance sheet while freeing up collateral from other
funding sources such as the FHLB and reduced net interest margin
for the first quarter of 2023 by 2 basis points.
The Company's net interest margin decreased to 2.60% for the
quarter ended March 31, 2023 compared to 3.15% for the quarter
ended March 31, 2022. Margin compression slowed and began to
improve intra-quarter primarily because of the securities sales and
through the Company’s execution of $150 million in additional
pay-fixed/receive-floating interest rate swaps.
On a linked quarter basis, net interest margin decreased 36
basis points from 2.96% for the quarter ended December 31, 2022.
The decrease in net interest margin is primarily due to the rising
rate environment and associated rapid increase to the cost of
funds. The average yield on total loans for the first quarter of
2023 increased 20 basis points to 5.11% compared to 4.91% for the
linked quarter ended December 31, 2022, and increased 88 basis
points from 4.23% for the year ago quarter as a result of loans
originated at higher rates in addition to repricing of variable
rate loans.
The cost of funds, which includes non-interest bearing deposits,
increased 68 basis points to 1.97% for the first quarter of 2023 as
compared to 1.29% for the linked quarter ended December 31, 2022
and increased 155 basis points as compared to 0.42% for the quarter
ended March 31, 2022. The cost of interest-bearing deposits for the
first quarter of 2023 was 2.61% compared to 1.72% for the fourth
quarter of 2022, an increase of 89 basis points, and an increase
from 0.60% for the year-ago quarter.
The Company’s cumulative deposit beta (which is calculated
comparing the change in deposit interest rates from March 31, 2022
to March 31, 2023 excluding wholesale deposits) is less than 33%
over the past year as the Federal Reserve began increasing
short-term interest rates. Based on the Company’s most recent
asset/liability model, the Company’s interest rate sensitivity
position was neutral, positioning the Company’s balance sheet for
an improvement in net interest income when the Federal Reserve
pivots to an accommodative monetary policy.
Noninterest income reported for the quarter ended March 31, 2023
was a loss of $4.6 million compared to a loss of $10 thousand for
the linked quarter ended December 31, 2022 and income of $1.6
million for the quarter ended March 31, 2022. The noninterest loss
during the most recent quarter is primarily attributable to the
Company's loss of $4.6 million related to its sale of
available-for-sale investment securities as part of the Company's
balance sheet repositioning strategy and the loss recorded
associated with its investment in ACM, totaling $801 thousand
during the first quarter of 2023.
Fee income from loans was $77 thousand for the quarter ended
March 31, 2023, compared to $84 thousand for the first quarter of
2022. Service charges on deposit accounts and other fee income
totaled $357 thousand for the first quarter of 2023, a decrease of
$33 thousand from the year ago quarter. Income from bank-owned life
insurance (“BOLI”) increased $94 thousand to $332 thousand for the
three months ended March 31, 2023, compared to $238 thousand for
the same period of 2022, as the Company purchased additional BOLI
totaling $15 million during the second quarter of 2022.
Noninterest expense totaled $9.0 million for the quarter ended
March 31, 2023 compared to $8.4 million for the same three-month
period of 2022, an increase of $568 thousand, or 7%. On a linked
quarter basis, noninterest expense decreased $192 thousand, or 2%,
from $9.2 million for the quarter ended December 31, 2022. Salaries
and benefits expense was $5.0 million for each of the first
quarters of 2023 and 2022. Included in salaries and benefits
expense is approximately $100 thousand related to severances paid
to employees during the first quarter of 2023. Staffing changes
made year-to-date are expected to result in annualized savings of
approximately $1.0 million. Compared to the linked quarter,
salaries and benefits expense decreased $208 thousand for the first
quarter of 2023 primarily as a result of a decrease in accruals for
incentive compensation. Occupancy and equipment expense increased
$41 thousand and $125 thousand compared to the quarters ended
December 31, 2022 and March 31, 2022, respectively, primarily as a
result of an increase in amortization of newly implemented business
development solutions. Legal expenses related to loan workouts
(which is included in other operating expense on the income
statement) increased $224 thousand for the first quarter of 2023
when compared to the year ago quarter in a continued effort to
mitigate credit risk and potential loss. The Company expects to
recover these loan legal expenses later in 2023.
The efficiency ratio for core bank operating earnings, excluding
2022 merger-related expenses, losses on the sale of
available-for-sale investment securities, and income from minority
membership interests, for the quarters ended March, 31, 2023,
December 31, 2022, and March 31, 2022, were 61.0%, 55.3%, and
52.8%, respectively. A reconciliation of the aforementioned
efficiency ratio, a non-GAAP financial measure, can be found in the
tables below.
The Company recorded a benefit for income taxes of $486 thousand
for the three months ended March 31, 2023, compared to a provision
for income taxes of $1.3 million for the same period in 2022. The
effective tax rate for each of the three months ended March 31,
2023 and March 31, 2022 was less than the Company's combined
federal and state statutory rate of 22.5% primarily because of
discrete tax benefits recorded as a result of exercises of
nonqualified stock options during 2023 and 2022.
About FVCBankcorp, Inc.
FVCBankcorp, Inc. is the holding company for FVCbank, a
wholly-owned subsidiary that commenced operations in November 2007.
FVCbank is a $2.35 billion asset-sized Virginia-chartered community
bank serving the banking needs of commercial businesses, nonprofit
organizations, professional service entities, their owners and
employees located in the greater Baltimore and Washington, D.C.
metropolitan areas. FVCbank is based in Fairfax, Virginia, and has
9 full-service offices in Arlington, Fairfax, Manassas, Reston and
Springfield, Virginia, Washington, D.C., and Baltimore, Bethesda,
and Rockville, Maryland.
For more information about the Company, please visit the
Investor Relations page of FVCBankcorp, Inc.’s website,
www.fvcbank.com.
Cautionary Note About Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements include, but are not limited, statements of
goals, intentions, and expectations as to future trends, plans,
events or results of the Company’s operations and policies and
regarding general economic conditions. In some cases,
forward-looking statements can be identified by use of words such
as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,”
“estimates,” “potential,” “continue,” “should,” and similar words
or phrases. These statements are based upon current and anticipated
economic conditions, nationally and in the Company’s market,
interest rates and interest rate policy, competitive factors, and
other conditions which by their nature, are not susceptible to
accurate forecast and are subject to significant uncertainty.
Because of these uncertainties and the assumptions on which this
discussion and the forward-looking statements are based, actual
future operations and results in the future may differ materially
from those indicated herein. These forward-looking statements are
based on current beliefs that involve significant risks,
uncertainties, and assumptions. Factors that could cause the
Company’s actual results to differ materially from those indicated
in these forward-looking statements, include, but are not limited
to: general business and economic conditions nationally or in the
markets that the Company serves could adversely affect, among other
things, real estate valuations, unemployment levels, inflation
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 risk of changes in interest rates
on levels, 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; 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 we do 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;
risks inherent in making loans such as repayment risks and
fluctuating collateral values; 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; the strength of the United States economy in general and
the strength of the local economies in which we conduct operations;
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, including the COVID-19 pandemic, and other
catastrophic events; our management of risks inherent in our real
estate loan portfolio, and the risk of a prolonged downturn in the
real estate market, which could impair the value of our collateral
and our ability to sell collateral upon any foreclosure; changes in
consumer spending and savings habits; technological and social
media changes; changing bank regulatory conditions, policies or
programs, whether arising as new legislation or regulatory
initiatives, that could lead to restrictions on activities of banks
generally, or our subsidiary bank in particular, more restrictive
regulatory capital requirements, increased costs, including deposit
insurance premiums, regulation or prohibition of certain income
producing activities or changes in the secondary market for loans
and other products; the impact of changes in financial services
policies, laws and regulations, including laws, regulations and
policies concerning taxes, banking, securities and insurance, and
the application thereof by regulatory bodies; the impact of changes
in laws, regulations and policies affecting the real estate
industry; the effect of changes in accounting policies and
practices, as may be adopted from time to time by bank regulatory
agencies, the U.S. Securities and Exchange Commission, the Public
Company Accounting Oversight Board, the Financial Accounting
Standards Board or other accounting standards setting bodies; the
timely development of competitive new products and services and the
acceptance of these products and services by new and existing
customers; the willingness of users to substitute competitors’
products and services for our products and services; the effect of
acquisitions we may make, including, without limitation, the
failure to achieve the expected revenue growth and/or expense
savings from such acquisitions; changes in the level of our
nonperforming assets and charge-offs; our involvement, from time to
time, in legal proceedings and examination and remedial actions by
regulators; potential exposure to fraud, negligence, computer theft
and cyber-crime; and the risk factors and other cautionary language
included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2022 and in other periodic and current reports
filed with the U.S. 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,
3/31/2023 12/31/2022 3/31/2022 Selected
Balances Total assets
$
2,348,995
$
2,344,322
$
2,090,121
Total investment securities
253,403
293,945
336,864
Total loans, net of deferred fees
1,828,123
1,840,434
1,512,475
Allowance for credit losses
(19,058
)
(16,040
)
(13,763
)
Total deposits
1,910,386
1,830,162
1,819,355
Subordinated debt
19,579
19,565
19,524
Other borrowings
189,000
265,000
25,000
Reserve for unfunded commitments
922
-
-
Total stockholders’ equity
204,156
202,382
200,873
Summary Results of Operations Interest income
$
25,334
$
23,341
$
17,223
Interest expense
11,320
7,462
2,172
Net interest income
14,014
15,879
15,051
Provision for credit losses
242
729
350
Net interest income after provision for credit losses
13,772
15,150
14,701
Noninterest income - loan fees, service charges and other
434
421
474
Noninterest income - bank owned life insurance
332
356
238
Noninterest income (loss) - minority membership interest
(801
)
(787
)
912
Noninterest income - loss on sale of available-for-sale investment
securities
(4,592
)
- -
- -
Noninterest expense
9,010
9,202
8,442
Income before taxes
135
5,938
7,883
Income tax expense (benefit)
(486
)
1,035
1,270
Net income
621
4,903
6,613
Per Share Data Net income, basic (5)
$
0.04
$
0.28
$
0.38
Net income, diluted (5)
$
0.03
$
0.27
$
0.36
Book value (5)
$
11.53
$
11.58
$
11.51
Tangible book value (1)(5)
$
11.09
$
11.14
$
11.05
Tangible book value, excluding accumulated other comprehensive
losses (1)(5)
$
12.95
$
13.23
$
12.15
Shares outstanding
17,705,455
17,475,668
13,967,009
Selected Ratios Net interest margin (2)
2.60
%
2.96
%
3.15
%
Return on average assets (2)
0.11
%
0.89
%
1.30
%
Return on average equity (2)
1.21
%
9.87
%
12.63
%
Efficiency (3)
95.98
%
57.99
%
50.63
%
Loans, net of deferred fees to total deposits
95.69
%
100.56
%
83.13
%
Noninterest-bearing deposits to total deposits
22.29
%
23.95
%
30.00
%
Reconciliation of Net Income (GAAP) to Commercial Bank Operating
Earnings (Non-GAAP)(4) GAAP net income reported above
$
621
$
4,903
$
6,613
Add: Merger and acquisition expense
- -
- -
125
Add: Loss on sale of available-for-sale investment securities
4,592
- -
- -
Add (Subtract): Loss (Income) from minority membership interest
801
787
(912
)
Subtract: provision for income taxes associated with non-GAAP
adjustments
(1,186
)
(173
)
177
Net Income, core bank operating earnings (non-GAAP)
$
4,828
$
5,517
$
6,003
Earnings per share - basic (non-GAAP core bank operating
earnings)(5)
$
0.27
$
0.32
$
0.35
Earnings per share - diluted (non-GAAP core bank operating
earnings)(5)
$
0.26
$
0.30
$
0.33
Return on average assets (non-GAAP core bank operating earnings)
0.85
%
1.00
%
1.18
%
Return on average equity (non-GAAP core bank operating earnings)
9.40
%
11.11
%
11.46
%
Efficiency ratio (non-GAAP core bank operating earnings)
60.96
%
55.25
%
52.76
%
Capital Ratios - Bank Tangible common equity (to tangible
assets)
8.92
%
8.86
%
9.26
%
Total risk-based capital (to risk weighted assets)
13.48
%
13.28
%
14.15
%
Common equity tier 1 capital (to risk weighted assets)
12.48
%
12.45
%
13.32
%
Tier 1 leverage (to average assets)
10.38
%
10.75
%
10.96
%
Asset Quality Nonperforming loans and loans 90+ past due
$
4,446
$
4,493
$
3,486
Nonperforming loans and loans 90+ past due to total assets
0.19
%
0.19
%
0.17
%
Nonperforming assets to total assets
0.19
%
0.19
%
0.17
%
Allowance for credit losses to loans
1.09
%
0.87
%
0.91
%
Allowance for credit losses to loans, excluding PPP loans
1.09
%
0.87
%
0.92
%
Allowance for credit losses to nonperforming loans
449.41
%
357.00
%
394.81
%
Net charge-offs (recoveries)
$
(23
)
$
2
$
415
Net charge-offs (recoveries) to average loans (2)
(0.01
)%
-
%
0.11
%
Selected Average Balances Total assets
$
2,268,193
$
2,202,407
$
2,038,094
Total earning assets
2,184,546
2,126,032
1,940,037
Total loans, net of deferred fees, excluding PPP
1,829,775
1,742,734
1,454,917
Total deposits
1,785,442
1,811,098
1,757,999
Other Data Noninterest-bearing deposits
$
425,838
$
438,269
$
545,856
Interest-bearing checking, savings and money market
806,934
883,480
1,061,925
Time deposits
364,265
260,421
176,574
Wholesale deposits
313,350
247,992
35,000
(1) Non-GAAP Reconciliation(4) At or For the Three Months Ended,
(Dollars in thousands, except per share data)
3/31/2023
12/31/2022 3/31/2022 Total stockholders’
equity
$
204,156
$
202,382
$
200,873
Less: goodwill and intangibles, net
(7,735
)
(7,790
)
(7,982
)
Tangible Common Equity
$
196,421
$
194,592
$
192,891
Less: Accumulated Other Comprehensive Income (Loss) ("AOCI")
(32,863
)
(36,568
)
(19,215
)
Tangible Common Equity excluding AOCI
$
229,284
$
231,160
$
212,106
Book value per common share (5)
$
11.53
$
11.58
$
11.51
Less: intangible book value per common share (5)
(0.44
)
0.44
(0.46
)
Tangible book value per common share (5)
$
11.09
$
11.14
$
11.05
Add: AOCI (loss) per common share (5)
(1.86
)
(2.09
)
(1.10
)
Tangible book value per common share, excluding AOCI (5)
$
12.95
$
13.23
$
12.15
(2) Annualized. (3) Efficiency ratio is calculated as
noninterest expense divided by the sum of net interest income and
noninterest income. (4) Some of the financial measures discussed
throughout the press release are "non-GAAP financial measures." In
accordance with SEC rules, the Company classifies a financial
measure as being a non-GAAP financial measure if that financial
measure excludes or includes amounts, or is subject to adjustments
that have the effect of excluding or including amounts, that are
included or excluded, as the case may be, in the most directly
comparable measure calculated and presented in accordance with GAAP
in our consolidated statements of income, balance sheets or
statements of cash flows. (5) Amounts above reflect the effect of a
5-for-4 stock split declared on December 15, 2022 for shareholders
of record on January 9, 2023, paid on January 31, 2023.
FVCBankcorp, Inc.
Summary Consolidated Statements of Condition (Dollars in
thousands) (Unaudited) % Change
% Change Current From 3/31/2023
12/31/2022 Quarter 3/31/2022 Year Ago
Cash and due from banks $
13,300
$
7,253
83.4
%
$
16,869
-21.2
%
Interest-bearing deposits at other financial institutions
131,643
74,300
77.2
%
122,117
7.8
%
Investment securities
239,698
278,333
-13.9
%
330,602
-27.5
%
Restricted stock, at cost
13,705
15,612
-12.2
%
6,262
118.9
%
Loans, net of fees: Commercial real estate
1,096,633
1,097,302
-0.1
%
925,342
18.5
%
Commercial and industrial
187,228
212,922
-12.1
%
155,340
20.5
%
Paycheck protection program
614
1,951
-68.5
%
13,685
-95.5
%
Commercial construction
156,026
147,272
5.9
%
178,857
-12.8
%
Consumer real estate
352,413
330,635
6.6
%
173,251
103.4
%
Warehouse facilities
29,045
42,699
-32.0
%
59,268
-51.0
%
Consumer nonresidential
6,164
7,653
-19.5
%
6,732
-8.4
%
Total loans, net of fees
1,828,123
1,840,434
-0.7
%
1,512,475
20.9
%
Allowance for credit losses
(19,058
)
(16,040
)
18.8
%
(13,763
)
38.5
%
Loans, net
1,809,065
1,824,394
-0.8
%
1,498,712
20.7
%
Premises and equipment, net
1,174
1,220
-3.8
%
1,504
-22.0
%
Goodwill and intangibles, net
7,735
7,790
-0.7
%
7,982
-3.1
%
Bank owned life insurance (BOLI)
55,704
55,371
0.6
%
39,409
41.3
%
Other assets
76,971
80,049
-3.8
%
66,664
15.5
%
Total Assets $
2,348,995
$
2,344,322
0.2
%
$
2,090,121
12.4
%
Deposits: Noninterest-bearing $
425,838
$
438,269
-2.8
%
$
545,856
-22.0
%
Interest checking
498,242
578,340
-13.8
%
727,202
-31.5
%
Savings and money market
308,691
305,140
1.2
%
334,723
-7.8
%
Time deposits
364,265
260,421
39.9
%
176,574
106.3
%
Wholesale deposits
313,350
247,992
26.4
%
35,000
795.3
%
Total deposits
1,910,386
1,830,162
4.4
%
1,819,355
5.0
%
Other borrowed funds
189,000
265,000
-28.7
%
25,000
656.0
%
Subordinated notes, net of issuance costs
19,579
19,565
0.1
%
19,524
0.3
%
Reserve for unfunded commitments
922
-
100.0
%
-
100.0
%
Other liabilities
24,952
27,213
-8.3
%
25,369
-1.6
%
Stockholders’ equity
204,156
202,382
0.9
%
200,873
1.6
%
Total Liabilities & Stockholders' Equity $
2,348,995
$
2,344,322
0.2
%
$
2,090,121
12.4
%
FVCBankcorp, Inc. Summary Consolidated Income
Statements (In thousands, except per share data)
(Unaudited) For the Three Months Ended
% Change % Change Current From
3/31/2023 12/31/2022 Quarter 3/31/2022
Year Ago Net interest income $
14,014
$
15,879
-11.7
%
$
15,051
-6.9
%
Provision for credit losses
242
729
66.8
%
350
-30.9
%
Net interest income after provision for credit losses
13,772
15,150
-9.1
%
14,701
-6.3
%
Noninterest income: Fees on loans
77
74
3.8
%
84
-8.6
%
Service charges on deposit accounts
215
248
-13.2
%
234
-8.0
%
BOLI income
332
356
-6.7
%
238
39.6
%
(Loss) Income from minority membership interest
(801)
(787)
1.8
%
912
-187.8
%
Loss on sale of available-for-sale investment securities
(4,592)
- -
100.0
%
- -
100.0
%
Other fee income
142
99
43.4
%
156
-9.0
%
Total noninterest income
(4,627)
(10)
46,168.4
%
1,624
-384.9
%
Noninterest expense: Salaries and employee benefits
5,015
5,223
-4.0
%
4,978
0.7
%
Occupancy and equipment expense
965
924
4.4
%
840
14.9
%
Data processing and network administration
622
615
1.2
%
542
14.8
%
State franchise taxes
584
509
14.8
%
509
14.8
%
Professional fees
184
325
-43.3
%
361
-48.9
%
Merger and acquisition expense
- -
- -
0.0
%
125
-100.0
%
Other operating expense
1,640
1,606
2.1
%
1,087
50.9
%
Total noninterest expense
9,010
9,202
-2.1
%
8,442
6.7
%
Net income before income taxes
135
5,938
-97.7
%
7,883
-98.3
%
Income tax expense (benefit)
(486)
1,035
-147.0
%
1,270
-138.3
%
Net Income $
621
$
4,903
-87.3
%
$
6,613
-90.6
%
Earnings per share - basic (1) $
0.04
$
0.28
-87.4
%
$
0.38
-90.8
%
Earnings per share - diluted (1) $
0.03
$
0.27
-87.4
%
$
0.36
-90.6
%
Weighted-average common shares outstanding - basic (1)
17,577,659
17,485,715
17,291,516
Weighted-average common shares outstanding - diluted (1)
18,296,448
18,489,595
18,392,434
Reconciliation of Net Income
(GAAP) to Commercial Bank Operating Earnings (Non-GAAP):
GAAP net income reported above $
621
$
4,903
$
6,613
Add: Merger and acquisition expense
- -
- -
125
Add: Loss on sale of available-for-sale investment securities
4,592
- -
- -
Add (Subtract): Loss (Income) from minority membership interest
801
787
(912)
Subtract: provision for income taxes associated with non-GAAP
adjustments
(1,186)
(173)
177
Net Income, core bank operating earnings (non-GAAP) $
4,828
$
5,517
$
6,003
Earnings per share - basic (non-GAAP core bank operating
earnings)(1) $
0.27
$
0.32
$
0.35
Earnings per share - diluted (non-GAAP core bank operating
earnings)(1) $
0.26
$
0.30
$
0.33
Return on average assets (non-GAAP core bank operating
earnings)
0.85%
1.00%
1.18%
Return on average equity (non-GAAP core bank operating earnings)
9.40%
11.11%
11.46%
Efficiency ratio (non-GAAP core bank operating earnings)
60.96%
55.25%
52.76%
Reconciliation of Net Income (GAAP)
to Pre-Tax Pre-Provision Income (Non-GAAP): GAAP net
income reported above $
621
$
4,903
$
6,613
Add: Provision for credit losses
242
729
350
Add: Merger and acquisition expense
- -
- -
125
Add: Loss on sale of investment securities
4,592
- -
- -
(Subtract) Add: Income tax (benefit) expense
(486)
1,035
1,270
Pre-tax pre-provision income $
4,969
$
6,667
$
8,358
Earnings per share - basic (non-GAAP pre-tax pre-provision)(1) $
0.28
$
0.38
$
0.48
Earnings per share - diluted (non-GAAP pre-tax pre-provision)(1) $
0.27
$
0.36
$
0.45
Return on average assets (non-GAAP pre-tax pre-provision)
0.88%
1.21%
1.64%
Return on average equity (non-GAAP pre-tax pre-provision)
9.67%
13.42%
15.96%
(1) Amounts above reflect the effect of a 5-for-4 stock
split declared on December 15, 2022 for shareholders of record on
January 9, 2023, paid on January 31, 2023.
FVCBankcorp, Inc.
Average Statements of Condition and Yields on Earning Assets and
Interest-Bearing Liabilities (Dollars in thousands)
(Unaudited) For the Three Months Ended
3/31/2023 12/31/2022 3/31/2022 Average
Interest Average Average Interest
Average Average Interest Average
Balance Income/Expense Yield Balance
Income/Expense Yield Balance
Income/Expense Yield Interest-earning assets:
Loans receivable, net of fees (1) Commercial real estate $
1,098,243
$
12,680
4.62
%
$
1,056,611
$
11,791
4.46
%
$
914,106
$
9,428
4.13
%
Commercial and industrial
202,028
3,423
6.78
%
186,785
3,079
6.59
%
147,607
1,661
4.50
%
Paycheck protection program
1,195
22
7.54
%
2,492
37
5.90
%
19,421
285
5.87
%
Commercial construction
153,534
2,639
6.87
%
149,080
2,382
6.39
%
180,388
2,149
4.76
%
Consumer real estate
345,213
4,048
4.69
%
314,415
3,513
4.47
%
162,857
1,662
4.08
%
Warehouse facilities
24,005
424
7.06
%
27,380
445
6.51
%
40,624
254
2.50
%
Consumer nonresidential
6,752
160
9.45
%
8,463
183
8.66
%
9,335
168
7.18
%
Total loans
1,830,970
23,396
5.11
%
1,745,226
21,430
4.91
%
1,474,338
15,607
4.23
%
Investment securities (2)(3)
327,370
1,638
2.00
%
344,011
1,645
1.91
%
357,475
1,573
1.76
%
Interest-bearing deposits at other financial institutions
26,206
302
4.68
%
36,795
269
2.90
%
108,224
45
0.17
%
Total interest-earning assets
2,184,546
25,336
4.64
%
2,126,032
23,344
4.39
%
1,940,037
17,225
3.55
%
Non-interest earning assets: Cash and due from banks
4,805
807
10,824
Premises and equipment, net
1,208
1,284
1,563
Accrued interest and other assets
94,678
89,616
99,522
Allowance for credit losses
(17,044)
(15,332)
(13,852)
Total Assets $
2,268,193
$
2,202,407
$
2,038,094
Interest-bearing liabilities: Interest checking $
519,770
$
2,915
2.27
%
$
670,540
$
2,634
1.56
%
$
696,460
$
996
0.58
%
Savings and money market
295,192
1,503
2.06
%
303,137
1,150
1.51
%
315,695
348
0.45
%
Time deposits
299,054
2,152
2.92
%
238,795
1,267
2.11
%
184,605
442
0.97
%
Wholesale deposits
251,593
2,211
3.56
%
133,092
798
2.38
%
35,000
43
0.50
%
Total interest-bearing deposits
1,365,609
8,781
2.61
%
1,345,564
5,849
1.72
%
1,231,760
1,829
0.60
%
Other borrowed funds
231,257
2,281
4.01
%
145,424
1,356
3.70
%
25,000
85
1.37
%
Subordinated notes, net of issuance costs
19,570
258
5.34
%
19,556
257
5.23
%
19,515
258
5.35
%
Total interest-bearing liabilities
1,616,436
11,320
2.84
%
1,510,544
7,462
1.96
%
1,276,275
2,172
0.69
%
Noninterest-bearing liabilities: Noninterest-bearing
deposits
419,833
465,534
526,239
Other liabilities
26,408
27,635
26,098
Stockholders’ equity
205,516
198,694
209,482
Total Liabilities and Stockholders' Equity $
2,268,193
$
2,202,407
$
2,038,094
Net Interest Margin
14,016
2.60
%
15,882
2.96
%
15,053
3.15
%
(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, 2023 and 21% for the three months
ended December 31, 2022 and March 31, 2022. The taxable equivalent
adjustment to interest income for the three months ended March 31,
2023, December 31, 2022, and March 31,2022 was $2 for each
aforementioned period. (3) The average balances for investment
securities includes restricted stock.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230419006028/en/
David W. Pijor, Esq., Chairman and Chief Executive Officer
Phone: (703) 436-3802 Email: dpijor@fvcbank.com
Patricia A. Ferrick, President Phone: (703) 436-3822 Email:
pferrick@fvcbank.com
FVCBankcorp (NASDAQ:FVCB)
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