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For Immediate Release — April 19, 2016
Fairfax, VA – FVCBankcorp Inc. (OTCQX:FVCB) (the “Company”) reported unaudited consolidated earnings of $1.8 million for the first quarter of 2016, or $0.26 diluted earnings per share, an increase of $347 thousand, or 24.4%, compared with the 2015 first quarter. Return on average assets improved to 0.97% for the quarter, while return on average equity increased to 9.45%. Net income for the 2016 first quarter increased $736 thousand compared with the previous quarter, due to the significant loan growth in the 2015 fourth quarter, which increased the loan loss provision in that quarter and increased interest income to start 2016.
“Our first quarter 2016 results reflect our strongest earnings performance to date, fueled by the momentum coming into the new year,” stated David W. Pijor, chairman, president and CEO. “We are excited about the opportunities in our market as we continue to win relationships, and as each employee embraces our core culture in providing the best service to our customers.”
Balance Sheet
Total assets increased to $740.8 million compared with $604.8 million as of March 31, 2016, and 2015, respectively, an increase of 22.5%. Loans receivable totaled $639.6 million as of March 31, 2016, compared with $525.1 million as of March 31, 2015, an increase of $114.5 million, or 21.8%. Loans increased 10.3% on an annualized basis when compared to December 31, 2015. The Company currently has 13 commercial loan officers with a significant loan pipeline at the end of the first quarter.
Total deposits increased to $660.7 million as of March 31, 2016, compared with March 31, 2015, an increase of $128.7 million, or 24.2%. Deposits increased $34.1 million compared with the prior quarter ended December 31, 2015, an annualized growth rate of 21.7%. Noninterest-bearing deposits totaled $139.7 million at March 31, 2016, comprising 21.1% of total deposits and increased $10.6 million, or 32.9% on an annualized basis compared with the prior quarter. Wholesale deposits totaled $63.4 million, or 9.6% of total deposits at March 31, 2016, and represent an inexpensive, short-term funding source to support the balance sheet growth.
Tangible book value per share was $11.59 and $10.54 as of March 31, 2016, and 2015, respectively. The Company continues its strategic plan to improve shareholder return while maintaining capital ratios in excess of “well-capitalized” under the new Basel III guidelines.
Income Statement
Net interest income totaled $6.6 million, an increase of $1.2 million, or 22.1%, for the quarter ended March 31, 2016, compared with the quarter ended March 31, 2015. The Company’s net interest margin was 3.74% and 3.76% for the quarters ended March 31, 2016, and 2015, respectively. On a linked quarter basis, the margin improved to 3.74% from 3.63%. The improved net interest margin primarily results from growth in loans receivable funded by low-cost deposits.
Noninterest income totaled $261 thousand and $287 thousand for the quarters ended March 31, 2016, and 2015, respectively. While the Company maintains its commitment to be a low-fee bank for its customers, it has introduced new initiatives that are expected to enhance fee income in 2016 and future years.
Noninterest expenses increased $332 thousand, or 9.1%, for the 2016 first quarter compared with the 2015 first quarter. Salary and compensation related expenses increased $231 thousand or 10.3%, while other operating expenses increased $101 thousand, or 7.2%, for the same period. The efficiency ratio improved to 57.6%, compared with 63.7%, for the quarters ended March 31, 2016, and 2015, respectively. The increased salary and compensation related expenses result from the Company’s efforts to hire and reward experienced bankers to grow the Company’s core business of commercial lending and deposit services to small- and medium-sized businesses in its market. The efficiency ratio continues to improve as the Company’s net interest income outpaces the increases in operating expenses.
Asset Quality
Asset quality remains strong as nonperforming loans and loans 90 days or more past due totaled only $1.9 million, or 0.25% of total assets. Troubled debt restructurings totaled $12.0 million and are performing as agreed with no impairments. The Company charged-off a fully-reserved loan totaling $225 thousand during the quarter, in its efforts to proactively monitor credits and identify potential problems early.
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.
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