Fairfax, VA-FVCBankcorp Inc. (OTCQX:FVCB) (the “Company”) today reported first quarter 2018 earnings increased 29% from a year ago to $3.0 million, or $0.25 diluted earnings per share, compared to $2.3 million, or $0.22 diluted earnings per share, for the quarterly period ended March 31, 2017. On a linked quarter basis, net income increased $2.0 million from December 31, 2017. Results for March 31, 2018 are reported using the new lower federal statutory tax rate and results for December 31, 2017 were impacted by a write down in the Company’s deferred tax asset as a result of the change to enactment of tax legislation during December 2017.
Return on average assets was 1.13% and return on average equity was 12.03% for the first quarter of 2018. For the comparable March 31, 2017 period, return on average assets was 1.03% and return on average equity was 11.42%.
- Total loans, net of deferred fees, increased $150 million, or 20%, from March 31, 2017 to March 31, 2018. Asset quality remains strong with nonperforming loans and loans past due 90 days or more as a percentage of total assets being 0.08% at March 31, 2018, compared to 0.05% at March 31, 2017.
- Total deposits increased $125 million, or 15%, from March 31, 2017 to March 31, 2018. The Company’s increase in deposits is a result of several targeted promotions in addition to continued growth in core deposits.
- Tangible book value per share at March 31, 2018 was $9.15, an increase from $8.08 at March 31, 2017.
“The Company saw stellar growth during the first quarter of 2018. Strong growth of our loan portfolio contributed to strong core earnings of $3.0 million for the quarter,” stated David W. Pijor, Chairman and CEO.
“We have a robust loan pipeline going into the second quarter and a number of deposit initiatives to support our growth in core deposits.”
Total assets increased to $1.08 billion compared to $922.3 million as of March 31, 2018 and 2017, respectively, an increase of $156 million, or 17%. Loans receivable, net of deferred fees, totaled $921.2 million as of March 31, 2018, compared to $770.8 million as of March 31, 2017, a year over year increase of $150 million, or 20%. For the first quarter of 2018, loans receivable, net of deferred fees, increased $33 million, or 15% on an annualized basis.
Total deposits increased to $938.7 million as of March 31, 2018 compared to $813.5 million as of March 31, 2017, an increase of $125 million, or 15%. Noninterest-bearing deposits increased 4% to $179.4 million at March 31, 2018, or 19% of total deposits, compared to $172.5 million at March 31, 2017. Core deposits, which include total deposits less wholesale deposits, increased $97 million or 13% year over year. Wholesale deposits totaled $104.8 million, or 11% of total deposits at March 31, 2018, a decrease of $10.7 million from December 31, 2017 and an increase of $28.5 million from March 31, 2017.
Net interest income totaled $8.8 million, an increase of $1.2 million, or 15%, for the quarter ended March 31, 2018, compared to the year ago quarter. The Company’s net interest margin was 3.43% and 3.42% for the quarters ended March 31, 2018 and 2017, respectively. On a linked quarter basis, the margin remained at 3.43%, a result of increases in earning assets being offset proportionately by increases in funding costs.
Noninterest income totaled $385,000 and $792,000 for the quarters ended March 31, 2018 and 2017, respectively. During the first quarter of 2017, the Company recorded noninterest income of $443,000 from a claim on the bank owned life insurance (“BOLI”) policies. Recurring fee income from fees on loans, service charges on deposits, and other fee income was $275,000, an increase of 51% for the quarter ended March 31, 2018 compared to 2017. This increase in recurring 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 $5.3 million for the quarter ended March 31, 2018, compared to $4.7 million for the same three-month period of 2017. The increase in noninterest expense is primarily attributable to the Company strategically hiring business development officers and back office staff during 2017 to support the Company’s growth plans in addition to annual compensation-related increases and associated taxes for 2018. As a result, salary and compensation related expenses increased $344 thousand, or 12%, for the quarter ended March 31, 2018, compared to the same three-month period of 2017. Increases in data processing and network administration, franchise taxes and other operating expenses for the quarter ended March 31, 2018 compared to the same three-month period of 2017 is primarily growth related. The efficiency ratio for the quarter ended March 31, 2018 was 57.5%, an increase from 56.9% from the year ago quarter.
Asset quality remains strong as nonperforming loans and loans ninety days or more past due totaled $838,000, or 0.08% of total assets. Troubled debt restructurings (“TDR”) decreased to $1.5 million at March 31, 2018, compared to $5.0 million at March 31, 2017. Nonperforming assets (including TDRs and other real estate owned) to total assets was 0.57% and 0.59% for the periods ended March 31, 2018 and 2017, respectively. The allowance for loan losses to total loans was 0.88% at March 31, 2018 and March 31, 2017, reflecting the Company’s continued low level of problem loans and stable economic environment.
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 $1.08 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 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, 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