FVCBankcorp, Inc. (OTCQX:FVCB) (the “Company”) reported consolidated earnings of $1.7 million for the fourth quarter of 2016, or $0.20 diluted earnings per share, an increase of $711 thousand, or 69.1%, compared with the 2015 fourth quarter net income of $1.0 million, or $0.12 diluted earnings per share. Net income was $6.9 million and $5.4 million for the years ended December 31, 2016, and 2015, respectively, an increase of $1.5 million, or 27.9%. Diluted earnings per share was $0.79 and $0.64 for the respective periods. The increase in net income reflects the strong loan growth funded by low-cost deposits.

“2016 was a pivotal year in the Company’s existence, as we achieved record earnings and higher asset growth than the preceding year,” stated David W. Pijor, chairman, president and CEO. “We are excited about the opportunities in our market and our momentum as we begin our 10th year of operations.”

Balance Sheet

Total assets increased to $909.3 million, compared with $737.0 million as of December 31, 2016, and 2015, respectively, an increase of $172.5 million, or 23.4%. Loans receivable totaled $768.1 million as of December 31, 2016, compared with $623.6 million as of December 31, 2015, an increase of $144.5 million, or 23.2%. The Company deployed proceeds from the subordinated debt offering and excess liquidity to purchase investment securities. For the quarter, loans increased $80.4 million fueled by a robust loan pipeline and customer transactions predicated on closing before year-end.

Total deposits increased to $776.0 million as of December 31, 2016, compared with $626.6 million as of December 31, 2015, an increase of $149.4 million, or 23.8%. Noninterest-bearing deposits increased to $165.7 million from $129.0 million as of December 31, 2016, and 2015, respectively, an increase of $36.6 million, or 28.3%. Noninterest-bearing deposits comprised 21.3% and 20.6% of total deposits at December 31, 2016, and 2015, respectively. Wholesale deposits totaled $62.2 million as of December 31, 2016, compared with $55.4 million as of December 31, 2015, representing only 8.0% and 8.8% of total deposits for the respective periods. The increase in core deposits, and specifically, noninterest-bearing deposits, is primarily attributable to the Company’s relationship banking strategy with our growing customer base.

Tangible book value per share was $9.79 and $8.95 as of December 31, 2016, and 2015, respectively, an increase of $0.84, or 9.4% for the 12-month period.

Income Statement

Net interest income totaled $7.1 million, an increase of $1.1 million, or 18.1%, for the quarters ended December 31, 2016, and 2015, respectively. Net interest income increased to $27.2 million, compared with $22.9 million for the years ended December 31, 2016, and 2015, respectively, representing an increase of $4.3 million, or 18.8% for the 12-month period. Net interest income for the year ended December 31, 2016, also includes a full six months of the Company’s $25 million subordinated debt issued on June 20, 2016. The Company’s net interest margin was 3.52% and 3.69% for the years ended December 31, 2016, and 2015, respectively. On a linked quarter basis, the margin decreased to 3.36% from 3.47%, primarily due to the subordinated debt issuance noted above.

Noninterest expenses increased $1.7 million, or 11.9% for the years ended December 31, 2016, and 2015, respectively. Noninterest expenses increased $522 thousand, or 13.9% to $4.3 million for the quarter ended December 31, 2016, compared with the quarter ended December 31, 2015. Legal expenses totaling approximately $217 thousand associated with a charged-off loan were recognized in the 2016 fourth quarter. The efficiency ratio improved to 57.6%, compared with 59.6%, for the quarters ended December 31, 2016, and 2015, respectively.

The Company’s pre-provision net revenue increased $664 thousand to $3.1 million from $2.5 million, or 26.9% for the quarters ended December 31, 2016, and 2015, respectively. The improved performance is attributable to strong loan growth and continued operating efficiencies for the period.

Asset Quality

Asset quality remains strong as nonperforming assets and loans 90 days or more past due totaled only $249 thousand, or 0.03% of total assets. The Company recognized charge-offs totaling $1.3 million related to the disposition of five nonaccrual loans for the year ended December 31, 2016. FVCbank continues its credit discipline of monitoring the loan portfolio to identify issues early.

About FVCBankcorp Inc.

FVCbank commenced operations in November 2007 and is the wholly-owned subsidiary of FVCBankcorp, Inc. FVCbank is a $907.5 million Virginia chartered community bank serving small and mid-sized businesses and personal banking customers in the Washington D.C. Metropolitan and Northern Virginia area. Locally owned and managed, it is based in Fairfax, Virginia, and has five additional full-service offices in Arlington, Ashburn, Manassas, Reston and Springfield, Virginia.

For more information on the Company’s 2016 fourth quarter 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.

         
SELECTED FINANCIAL DATA
 
For the quarters ended December 31, For the years ended December 31,
(Unaudited) (Unaudited)
(dollars in thousands, except per share data)   2016     2015     2016     2015  
Selected Balances
Total assets $ 909,305 $ 736,807
Total investment securities 113,988 67,795
Total loans, net of deferred fees 768,102 623,559
Allowance for loan losses (6,452 ) (6,239 )
Total deposits 775,991 626,640
Subordinated debt 24,247 -
Other borrowings 27,000 35,650
Total shareholders’ equity 79,811 72,752
Summary Results of Operations
Interest income $ 8,758 $ 6,939 $ 32,587 $ 26,557
Interest expense 1,653 923 5,387 3,665
Net interest income 7,105 6,016 27,200 22,892
Provision for loan losses 561 845 1,471 1,073
Net interest income after provision for loan losses 6,544 5,171 25,729 21,819
Noninterest income - gains (losses) on securities sold - (67 ) 71 68
Noninterest income - service charges and other income 295 265 1,149 1,093
Noninterest expense 4,264 3,742 16,446 14,701
Income before taxes 2,575 1,627 10,503 8,279
Income tax expense 835 598 3,571 2,860
Net income 1,740 1,029 6,932 5,419
Per Share Data (2)
Net income, basic $ 0.21 $ 0.13 $ 0.85 $ 0.67
Net income, diluted $ 0.20 $ 0.12 $ 0.79 $ 0.64
Book value $ 9.80 $ 8.97
Tangible Book value $ 9.79 $ 8.95
Shares outstanding 8,143,127 8,113,025
Selected Ratios
Net interest margin 3.36 % 3.63 % 3.53 % 3.69 %
Return on average assets 0.81 % 0.61 % 0.88 % 0.85 %
Return on average equity 8.66 % 5.65 % 8.91 % 7.70 %
Efficiency (1) 57.62 % 59.58 % 58.01 % 61.46 %
Loans, net of deferred to total deposits 98.98 % 99.51 %
Noninterest-bearing deposits to total deposits 21.35 % 20.60 %
Capital Ratios
Tangible common equity (to tangible assets) 8.77 % 9.86 %
Total capital (to risk weighted assets) 13.11 % 12.20 %
Common Equity Tier 1 capital (to risk weighted assets) 12.34 % 11.25 %
Tier 1 capital (to risk weighted assets) 12.34 % 11.25 %
Tier 1 leverage (to average assets) 11.88 % 10.82 %
Asset Quality
Nonperforming assets and loans 90+ past due $ 249 $ 2,559
Troubled debt restructurings (TDRs) $ 11,509 $ 5,074
Nonperforming assets and loans 90+ past due to total assets (excl. TDRs) 0.03 % 0.35 %
Allowance for loan losses to loans 0.84 % 1.00 %
Allowance for loan losses to nonperforming assets 2591.16 % 243.81 %
Net charge-offs (recoveries) $ - $ (12 ) $ 1,257 $ 399
Net charge-offs to average loans 0.00 % 0.00 % 0.19 % 0.07 %
Selected Average Balances
Total assets $ 860,948 $ 677,312 $ 790,432 $ 638,281
Total earning assets $ 840,881 $ 658,342 $ 771,124 $ 619,811
Total loans, net of deferred $ 708,432 $ 579,705 $ 662,296 $ 548,784
Total deposits $ 749,430 $ 597,898 $ 689,521 $ 560,969
Other Data
Noninterest-bearing $ 165,662 $ 129,078
Interest-bearing checking, savings and money market $ 369,281 $ 285,623
Time deposits $ 178,884 $ 156,532
Wholesale deposits $ 62,164 $ 55,406

 

(1) Efficiency ratio is calculated as follow: (Noninterest expense/(Net interest income + noninterest income - nonrecurring realized gains/(losses))).
 
(2) All Per Share Data calculations have been retroactively adjusted for the five-for-four stock split declared May 2016.