Market Overview

FVCBankcorp, Inc. Announces 51% Increase in Third Quarter Net Income

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FVCBankcorp, Inc. (NASDAQ:FVCB) (the "Company") today reported third
quarter 2018 earnings increased 51% from a year ago to $3.4 million, or
$0.27 diluted earnings per share, compared to $2.2 million, or $0.19
diluted earnings per share, for the quarterly period ended September 30,
2018. For the nine months ended September 30, 2018, earnings were $9.5
million, or $0.78 per diluted share, compared to $6.7 million, or $0.59
per diluted share, for the comparable nine month period of 2017. Net
income for the three and nine months ended September 30, 2018 include
merger-related expenses of $274 thousand and $671 thousand,
respectively, associated with the Company's acquisition of Colombo Bank.
Excluding these merger-related expenses, net of tax, net income for the
three and nine months ended September 30, 2018 would have been $3.6
million and $10.0 million, respectively. Diluted earnings per share
excluding merger-related expenses, net of tax, for the three and nine
months ended September 30, 2018 was $0.29 and $0.82, respectively.
Results for the three and nine month periods ended September 30, 2018
reflect the new lower federal statutory tax rate.

Return on average assets was 1.18% and return on average equity was
12.23% for the third quarter of 2018. For the comparable September 30,
2017 period, return on average assets was 0.93% and return on average
equity was 9.83%. Excluding merger-related expenses, net of tax, return
on average assets and return on average equity for the three months
ended September 30, 2018 was 1.27% and 13.13%, respectively. For the
nine months ended September 30, 2018, return on average assets and
return on average equity was 1.15% and 12.09%, respectively. Excluding
merger-related expenses, net of tax, return on average assets and return
on average equity for the nine months ended September 30, 2018 was 1.22%
and 12.81%, respectively.

Selected Highlights

  • During the third quarter, the Company completed a successful initial
    public offering issuing 1,750,000 shares of common stock raising $31.7
    million after offering expenses. This capital raise added
    approximately 247,000 shares to the Company's weighted average common
    shares outstanding, diluting earnings per share for the quarter by
    $0.01.
  • Total loans, net of deferred fees, increased $151.2 million, or 18%,
    from September 30, 2017 to September 30, 2018. Asset quality remains
    strong with nonperforming loans and loans past due 90 days or more as
    a percentage of total assets being 0.17% at September 30, 2018,
    compared to 0.31% at September 30, 2017.
  • Total deposits increased $147.1 million, or 17%, from September 30,
    2017 to September 30, 2018. Excluding a decrease in wholesale
    deposits, deposits increased $182.1 million year-over-year, or 24%.
  • Tangible book value per share at September 30, 2018 was $10.81, a 20%
    increase from $8.98 at September 30, 2017.
  • Quarterly operating earnings, before taxes and merger-related
    expenses, increased 35% year-over-year.
  • Efficiency ratio for the three months ended September 30, 2018 was
    56.0%, and excluding merger-related expenses, was 53.4%.

"Third quarter 2018 earnings demonstrate our continued ability to
attract new customer relationships as we completed our IPO and worked to
complete our acquisition of Colombo Bank, which closed on October 12,
2018. Our customer centric business model allowed the bank to increase
core deposits by 24% year-over-year and our loan portfolio by 18%
year-over-year. We are delighted to welcome Colombo's customers,
shareholders, and employees to our bank. With the system conversion
behind us, our business development team and 11 full-service branch
offices are ready to continue our core growth strategy while providing
our high-touch customer service to new and existing customers of
FVCbank," stated David W. Pijor, Chairman and CEO.

Balance Sheet

Total assets increased to $1.18 billion compared to $997.8 million as of
September 30, 2018 and 2017, respectively, an increase of $177.7
million, or 18%. Loans receivable, net of deferred fees, totaled $978.3
million as of September 30, 2018, compared to $827.1 million as of
September 30, 2017, a year-over-year increase of $151.2 million, or 18%.

Total deposits increased to $994.0 million as of September 30, 2018
compared to $846.9 million as of September 30, 2017, an increase of
$147.1 million, or 17%. Noninterest-bearing deposits increased 18% to
$211.8 million at September 30, 2018, or 21% of total deposits, compared
to $179.0 million at September 30, 2017. Noninterest-bearing deposits at
September 30, 2018 decreased $72.6 million from June 30, 2018 as
customers moved deposits to interest-bearing deposit products. Core
deposits, which include total deposits less wholesale deposits,
increased $182.1 million or 24% year-over-year. Wholesale deposits
totaled $50.6 million, or 5% of total deposits at September 30, 2018, a
decrease of $64.9 million from December 31, 2017 and a decrease of $26.7
million from June 30, 2018. The Company's increase in core deposits is a
result of several promotions in addition to the Company's success in
adding new customer relationships.

Income Statement

Net interest income totaled $9.9 million, an increase of $1.7 million,
or 21%, for the quarter ended September 30, 2018, compared to the year
ago quarter. The Company's net interest margin was 3.54% and 3.47% for
the quarters ended September 30, 2018 and 2017, respectively. On a
linked quarter basis, the margin increased 4 basis points from 3.50% for
the three months ended June 30, 2018, a result of increases in yields on
earning assets and strong growth in core deposit mix offset by an
increase in the cost of funds.

Noninterest income totaled $748 thousand and $353 thousand for the
quarters ended September 30, 2018 and 2017, respectively. Fee income
from fees on loans, service charges on deposits, and other fee income
was $638 thousand, an increase of 186% for the quarter ended September
30, 2018 compared to 2017. Included in loan income are fees from
interest rate swaps totaling $395 thousand for the third quarter of
2018. The increase in deposit and other fee income is primarily due to
initiatives the Company began during 2017 to enhance fee income through
ancillary services designed to assist its clients' financial needs.

Noninterest expense totaled $5.9 million for the quarter ended September
30, 2018, compared to $4.9 million for the same three-month period of
2017. The increase in noninterest expense year-over-year is primarily
attributable to the Company strategically hiring business development
officers and back office staff during 2017 to support the Company's
growth plans. As a result, salary and compensation related expenses
increased $541 thousand, or 18%, for the quarter ended September 30,
2018, compared to the same three-month period of 2017. In addition, the
Company recorded merger-related expenses of $274 thousand for the three
months ended September 30, 2018 which contributed to the increase in
noninterest expense for the quarter. Professional fees increased
slightly year-over-year as a result of implementation costs related to
regulatory compliance over the Company's internal control environment.
Increases in data processing and network administration, franchise taxes
and other operating expenses for the quarter ended September 30, 2018
compared to the same three-month period of 2017 is primarily growth
related. On a linked quarter basis, noninterest expense excluding
merger-related expenses increased 5% from the three months ended June
30, 2018. The efficiency ratio for the quarter ended September 30, 2018
was 56.0%, or 53.4% excluding merger-related expenses, a decrease from
57.1% from the year ago quarter.

Asset Quality

Asset quality remains strong as nonperforming loans and loans ninety
days or more past due totaled $2.0 million, or 0.17% of total assets.
Performing troubled debt restructurings ("TDR") decreased to $267,000 at
September 30, 2018, compared to $4.3 million at September 30, 2017.
Nonperforming assets (including TDRs and other real estate owned) to
total assets was 0.52% and 0.74% at September 30, 2018 and 2017,
respectively. The allowance for loan losses to total loans was 0.88% at
September 30, 2018, reflecting the Company's continued sound credit
quality and stable economic environment.

About FVCBankcorp Inc.

FVCBankcorp Inc. is the holding company for FVCbank, a wholly-owned
subsidiary of FVCB which commenced operations in November 2007. FVCbank
is a $1.17 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. Subsequent to
September 30, 2018, FVCbank completed the acquisition of Colombo Bank,
with approximately $188.7 million in assets. Locally owned and managed,
FVCbank is based in Fairfax, Virginia, and now has 11 full-service
offices in Arlington, Ashburn, Fairfax, Manassas, Reston and
Springfield, Virginia, Washington D.C., and Baltimore Bethesda,
Rockville and Silver Spring, Maryland.

For more information on the Company's 2018 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 risk factors previously disclosed in the "Risk Factors"
section included in the Company's prospectus filed with the Securities
and Exchange Commission on September 17, 2018 pursuant to Rule 424(b)(4)
under the Securities Act of 1933. 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)
 

 

For the Three Months Ended For the Nine Months Ended

For the Three Months Ended,

September 30, September 30, June 30, December 31,
(Unaudited) (Unaudited) (Unaudited)
  2018     2017     2018     2017     2018     2017  
Selected Balances
Total assets $ 1,175,437 $ 997,756 $ 1,139,449 $ 1,053,224
Total investment securities 116,931 122,877 122,644 121,150
Total loans, net of deferred fees 978,304 827,101 955,641 888,677
Allowance for loan losses (8,576 ) (7,271 ) (8,298 )
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