FVCBankcorp, Inc. Announces Record Annual Earnings and 22% Loan Growth for 2022

FAIRFAX, Va.–(BUSINESS WIRE)–FVCBankcorp, Inc. (NASDAQ: FVCB) (the “Firm”) right this moment reported report annual 2022 internet earnings of $25.0 million, or $1.35 diluted earnings per share, in comparison with $21.9 million, or $1.20 diluted earnings per share, for 2021, a year-over-year enhance of $3.1 million, or 14%. Internet earnings for the yr ended December 31, 2022 consists of the Firm’s portion of losses from its membership curiosity in Atlantic Coast Mortgage, LLC (“ACM”), which was $659 thousand, in comparison with earnings of $1.5 million for the yr ended December 31, 2021. On December 15, 2022, the Firm introduced that the Board of Administrators accepted a five-for-four break up of the Firm’s widespread inventory within the type of a 25% inventory dividend for shareholders of report on January 9, 2023, payable on January 31, 2023. Earnings per share and all different per share info mirrored herein have been adjusted for the five-for-four break up of the Firm’s widespread inventory for comparative functions.

For the quarter ended December 31, 2022, the Firm reported internet earnings of $4.9 million, or $0.27 diluted earnings per share, in comparison with $6.5 million, or $0.36 diluted earnings per share, for the quarter ended December 31, 2021, a lower of $1.6 million. For the quarter ended December 31, 2022, the loss related to its membership curiosity in ACM was $1.4 million, in comparison with earnings of $1.1 million for similar interval of 2021.

“Our report 2022 annual earnings and robust double-digit mortgage progress are a results of our dedication to our relationship banking mannequin regardless of the financial headwinds that emerged within the final half of the yr. We executed on market alternatives so as to add stable mortgage relationships, which positions us properly for 2023 permitting us the flexibility to additional handle our stability sheet. We proceed to keep up our robust credit score self-discipline, but additionally stay vigilant via this market volatility. We’re enhancing our shopper relationships via the deployment of best-in-class know-how through the first quarter of 2023. These know-how initiatives will additional assist our enterprise growth groups’ capability to supply distinctive private service to our increasing shopper base,” stated David W. Pijor, Chairman and CEO.

Assertion of Situation

Whole property had been $2.34 billion at December 31, 2022 and $2.20 billion at December 31, 2021, a rise of $141.4 million, or 6%. For the fourth quarter of 2022, complete property elevated $139.3 million, or 6%.

Loans receivable, internet of deferred charges, had been $1.84 billion at December 31, 2022 and $1.50 billion at December 31, 2021, a rise of $336.6 million, or 22%, year-over-year. Excluding loans made below the U.S. Small Enterprise Administration’s Paycheck Safety Program (“PPP”), internet of charges, internet mortgage progress was $362.8 million, or 25% year-over-year. For the quarter, loans receivable, internet of deferred charges, elevated $126.0 million, or 7%. Through the fourth quarter of 2022, the Firm funded $111.8 million, had mortgage prepayments of $20.1 million, bought $39.4 million in residential mortgage loans via ACM and skilled a discount in warehouse line exercise of $5.1 million. At December 31, 2022, loans excellent below the warehouse lending facility to ACM totaled $42.7 million, a lower of $29.3 million, or 41%, from $72.0 million at December 31, 2021. This lower in warehouse line quantity is per the slowdown of residential mortgage mortgage demand within the Firm’s market.

PPP loans, internet of charges, totaled $2.0 million at December 31, 2022, a lower from $28.1 million at December 31, 2021 as loans proceed to be forgiven by the U.S. Small Enterprise Administration.

Funding securities had been $278.3 million at December 31, 2022 and $358.0 million at December 31, 2021. Funding securities decreased $79.7 million through the yr ended December 31, 2022, primarily because of principal paydowns of $37.1 million and a $49.0 million lower available in the market worth of the available-for-sale portfolio throughout 2022. The funding securities portfolio consists of primarily mortgage-backed securities that are assured by both the Federal Nationwide Mortgage Affiliation, the Federal Residence Mortgage Mortgage Company or the Authorities Nationwide Mortgage affiliation. The lower available in the market worth of the funding securities portfolio was pushed by the present rising fee setting and there was no other-than-temporary impairment at December 31, 2022.

Whole deposits and different borrowed funds elevated $186.4 million, or 10%, to $2.10 billion at December 31, 2022 from $1.91 billion at December 31, 2021. Whole deposits decreased $53.6 million, or 3%, throughout 2022. Noninterest-bearing deposits had been $438.3 million at December 31, 2022, or 24% of complete deposits. Wholesale deposits elevated $173.0 million to $248.0 million throughout the newest quarter and elevated $213.0 million for the yr ended December 31, 2022. The rise in wholesale deposits for each the quarter and yr ended December 31, 2022 was a results of funding the Firm’s report mortgage progress along with changing extra liquidity utilized by clients to fund their enterprise exercise. Different borrowed funds had been $265.0 million, $75.0 million and $25.0 million at December 31, 2022, September 30, 2022, and December 31, 2021, respectively.

Shareholders’ fairness at December 31, 2022 was $202.4 million, a lower of $7.4 million, in comparison with $209.8 million at December 31, 2021. The lower in shareholders’ fairness was attributable to a lower in accrued different complete earnings of $34.5 million, which was associated to the aforementioned lower available in the market worth of the Firm’s available-for-sale funding securities portfolio, offset by internet earnings recorded for the yr ended December 31, 2022 totaling $25.0 million.

E book worth per share at December 31, 2022 and December 31, 2021 was $11.58 and $12.23, respectively, reflecting the lower in accrued different complete earnings on the available-for-sale funding securities portfolio. Tangible guide worth per share (a non-GAAP monetary measure which is outlined within the tables under) at December 31, 2022 and December 31, 2021 was $11.14 and $11.76, respectively. In comparison with the linked quarter, tangible guide worth elevated 4% from $10.68 at September 30, 2022. Tangible guide worth per share, excluding accrued different complete earnings (a non-GAAP monetary measure which is outlined within the tables under), at December 31, 2022 and December 31, 2021 was $13.23 and $11.88, respectively. The Firm has a share repurchase program below which the Firm could buy as much as 1,351,075 shares of the Firm’s issued and excellent shares of widespread inventory, par worth $0.01 per share, or roughly 8% of its excellent widespread inventory at December 31, 2021. Through the fourth quarter of 2022, the Firm acquired 37,454 shares at a median worth of $19.50 (together with commissions) in accordance with the accepted share repurchase program.

The Firm’s financial institution subsidiary, FVCbank, stays well-capitalized at December 31, 2022, with complete risk-based capital of 13.28%, widespread fairness tier 1 risk-based capital of 12.45%, and tier 1 leverage ratio of 10.75%.

Asset High quality

The Firm recorded provision for mortgage losses of $729 thousand for the three months ended December 31, 2022, in comparison with a $500 thousand launch of provision for mortgage losses for the yr in the past quarter, and a $365 thousand provision for the third quarter of 2022. For the yr ended December 31, 2022, the Firm recorded provision for mortgage losses of $2.6 million in comparison with a launch of provision of $500 thousand for the yr ended December 31, 2021. The rise within the allowance for mortgage losses for the three months ended December 31, 2022 was primarily associated to supporting the expansion recorded within the mortgage portfolio through the fourth quarter. The Firm continues to lend to well-established and relationship-driven debtors and has a confirmed monitor report of low historic credit score losses.

The Firm continues to keep up its disciplined credit score tips including assist through the present rising rate of interest setting. The Firm proactively displays the affect of rising rates of interest on its adjustable loans because the business navigates via this financial cycle of elevated inflation and better rates of interest. Credit score high quality metrics stay robust for the fourth quarter of 2022 with a marginal lower in particular reserves to $86 thousand. The Firm recorded internet mortgage charge-offs of $2 thousand through the fourth quarter of 2022 from its bought client unsecured mortgage portfolio, in comparison with internet mortgage charge-offs of $35 thousand through the comparable 2021 interval. Internet charge-offs for the yr ended December 31, 2022 had been $417 thousand in comparison with $629 thousand for the yr ended December 31, 2021, per the Firm’s monitor report of low historic charge-offs. The allowance for mortgage losses at December 31, 2022 and December 31, 2021 was $16.0 million and $13.8 million, respectively. Allowance protection to nonperforming loans decreased to 357.0% at December 31, 2022, in comparison with 394.2% for the yr ended December 31, 2021.

The allowance for mortgage losses to complete loans, internet of charges and excluding PPP loans, was 0.87% at December 31, 2022, in comparison with 0.94% at December 31, 2021. The Firm doesn’t report a reserve on ACM’s warehouse traces as a result of repurchase settlement in place with ACM, and as such, the allowance for mortgage losses to complete loans when excluding the warehouse traces was 0.89% at December 31, 2022. The efficient reserve protection, which incorporates each the allowance for mortgage losses and the remaining unaccreted honest worth low cost on acquired loans, to complete loans, excluding PPP loans, was 0.90% at December 31, 2022, in comparison with 0.99% at December 31, 2021. As of December 31, 2022, the Firm accounted for its allowance below the incurred loss mannequin. Starting January 1, 2023, the Firm will implement the provisions of the present anticipated credit score losses accounting normal.

Nonperforming loans and loans 90 days or extra late at December 31, 2022 totaled $4.5 million, or 0.19% of complete property, composed of three industrial relationships and two client relationships. This compares to $3.5 million in nonperforming loans and loans 90 days or extra late at December 31, 2021, or 0.16% of complete property. The Firm had no different actual property owned and has two residential mortgage loans totaling $829 thousand that qualify as troubled debt restructurings at December 31, 2022.

Earnings Assertion

For the yr ended December 31, 2022, internet earnings was $25.0 million, a rise of $3.1 million, or 14%, in comparison with $21.9 million for 2021. Internet earnings for the three months ended December 31, 2022 was $4.9 million, a lower of $1.6 million, in comparison with $6.5 million for a similar interval of 2021. As beforehand talked about, internet earnings for the fourth quarter of 2022 consists of the Firm’s portion of losses from it membership curiosity in ACM, which totaled $1.4 million for the quarter ended December 31, 2022, in comparison with earnings of $1.1 million for similar interval of 2021. For the yr ended December 31, 2022, the loss related to its membership curiosity in ACM was $659 thousand, in comparison with earnings from ACM of $1.5 million for the yr ended December 31, 2021.

For the years ended December 31, 2022 and 2021, internet curiosity earnings was $65.2 million and $57.9 million, respectively, a rise of $7.3 million, or 13%. Curiosity earnings elevated $12.3 million, or 18%, to $80.7 million for the yr ended December 31, 2022, as in comparison with $68.4 million for the comparable 2021 interval. PPP mortgage earnings contributed $592 thousand to curiosity earnings for the yr ended December 31, 2022, in comparison with $5.4 million for the yr ended December 31, 2021, a lower of $4.8 million, or 89%. Curiosity expense totaled $15.4 million for the yr ended December 31, 2022, a rise of $5.0 million, in comparison with $10.5 million for the comparable 2021 interval, primarily a results of the rising rate of interest setting.

Internet curiosity earnings totaled $15.9 million, a rise of $641 thousand, or 4%, for the quarter ended December 31, 2022, in comparison with the yr in the past quarter. Curiosity earnings on loans elevated $5.4 million, or 33%, for the three months ended December 31, 2022, in comparison with the identical interval of 2021. The rise in curiosity earnings for the three months ended December 31, 2022, in comparison with the yr in the past quarter was associated to a rise in each mortgage yields, which elevated 58 foundation factors, and the amount of common loans, which elevated $300.5 million (excluding PPP loans). Mortgage curiosity earnings (excluding PPP curiosity earnings) elevated $6.2 million, or 41%, for the three months ended December 31, 2022, as in comparison with the identical interval of 2021. PPP mortgage earnings was $37 thousand for the three months ended December 31, 2022, in comparison with $899 thousand for the three months ended December 31, 2021, a lower of $862 thousand, or 96%.

The Firm’s internet curiosity margin decreased 17 foundation factors to 2.96% for the quarter ended December 31, 2022, in comparison with 3.13% for the quarter ended December 31, 2021. The lower is primarily as a result of rising fee setting and related rising prices of funding. Internet curiosity margin for the years ended December 31, 2022 and 2021 was 3.19% and three.09%, respectively, a rise of 10 foundation factors. The rise in internet curiosity margin throughout 2022 was as a result of repricing of the variable fee mortgage portfolio earlier within the yr forward of will increase in funding prices, along with elevated mortgage origination quantity at larger rates of interest. The common yield on complete loans for the fourth quarter of 2022 was 4.91%, in comparison with 4.64% for the linked quarter ended September 30, 2022, and 4.33% for the yr in the past quarter. The price of funds, which incorporates noninterest-bearing deposits, elevated 101 foundation factors to 1.50% for the fourth quarter of 2022 as in comparison with 0.49% for the fourth quarter of 2021. Price of interest-bearing deposits for the fourth quarter of 2022 was 1.72%, in comparison with 0.63% for the fourth quarter of 2021, a rise of 109 foundation factors, a results of rising rates of interest as a consequence of contractionary financial coverage being enacted by the Federal Reserve.

Noninterest earnings for the yr ended December 31, 2022 was $2.8 million, in comparison with $4.3 million for 2021, a lower of $1.5 million, which was primarily pushed by the loss recorded from the Firm’s membership curiosity in ACM of $659 thousand for the yr ended December 31, 2022, in comparison with earnings from its membership curiosity in ACM of $1.5 million for the yr ended December 31, 2021.

Over the last a number of months of 2022, ACM made strategic investments via hiring high tier mortgage originators and extra assist infrastructure together with new branches, to place itself for the present and future mortgage setting. This funding, which has considerably elevated ACM’s overhead bills forward of future earnings, coupled with traditionally low origination volumes and tighter margins, have brought on short-term losses that weren’t beforehand forecast or budgeted. Nevertheless, ACM has vital money reserves to attract from and it’s anticipated that these strategic investments will buoy ACM as a high mortgage originator within the Firm’s area throughout the subsequent a number of years. The Firm continues to learn from synergies created by its ACM funding, together with warehouse line exercise, mortgage purchases and buyer referrals.

Noninterest earnings reported for the quarter ended December 31, 2022 was a lack of $10 thousand whereas noninterest earnings for the quarter ended December 31, 2021 totaled $1.8 million. The Firm recorded a lack of $787 thousand on its minority membership pursuits for the three months ended December 31, 2022 in comparison with earnings of $1.1 million for the yr in the past quarter. The Firm recorded a loss on its membership curiosity with ACM of $1.4 million, offset by honest worth positive aspects for different fairness investments made by the Firm. Payment earnings from loans was $74 thousand for the quarter ended December 31, 2022, in comparison with $36 thousand for the fourth quarter of 2021. Service fees on deposit accounts and different price earnings totaled $347 thousand for the fourth quarter of 2022, a lower of $35 thousand from the yr in the past quarter. Earnings from bank-owned life insurance coverage (“BOLI”) elevated $108 thousand to $356 thousand for the three months ended December 31, 2022, in comparison with $248 thousand for a similar interval of 2021, because the Firm bought further BOLI totaling $15 million through the second quarter of 2022.

For every of the years ended December 31, 2022 and 2021, noninterest expense was $34.5 million. For the years ended December 31, 2022 and 2021, noninterest expense included merger-related bills totaling $125 thousand and $1.4 million, respectively, related to the Firm’s proposed merger with Blue Ridge Bankshares, Inc., which was mutually terminated by each firms on January 20, 2022. When excluding merger-related bills, noninterest expense for the years ended December 31, 2022 and 2021 was $34.3 million and $33.1 million, respectively, a rise of $1.2 million, or 4%, which was primarily a end result will increase in salaries and advantages bills, offset by a year-over-year lower in skilled charges of $279 thousand, which had been attributable to the Firm’s membership curiosity buy in ACM throughout 2021.

Noninterest expense was $9.2 million and $9.0 million for the quarters ended December 31, 2022 and 2021, respectively, a rise of $198 thousand, or 2%. Occupancy and tools expense elevated $72 thousand through the fourth quarter of 2022 when in comparison with the yr in the past quarter. Authorized bills associated to mortgage exercises (which is included in different working expense on the earnings assertion) decreased $96 thousand for the fourth quarter of 2022 when in comparison with the yr in the past quarter, primarily because of diminished exercise bills in an continued effort to additional mitigate credit score threat and potential loss.

The effectivity ratios, excluding merger-related bills, for the years ended December 31, 2022 and 2021, had been 50.4% and 53.2%, respectively, an enchancment of 5% year-over-year because the Firm elevated revenues and continued to leverage know-how. A reconciliation of the effectivity ratio, a non-GAAP monetary measure, may be discovered within the tables under.

The Firm recorded a provision for earnings taxes of $1.0 million for the three months ended December 31, 2022, in comparison with $2.0 million for a similar interval of 2021. The efficient tax charges for the three months ended December 31, 2022 and 2021 had been 17.4% and 23.3%, respectively. The efficient tax fee for the three months ended December 31, 2022 was lower than the Firm’s mixed federal and state statutory fee of twenty-two.5% primarily due to discrete tax advantages recorded because of workouts of nonqualified inventory choices through the aforementioned interval. For the years ended December 31, 2022 and 2021, provision for earnings taxes was $6.0 million and $6.3 million, respectively.

About FVCBankcorp, Inc.

FVCBankcorp, Inc. is the holding firm for FVCbank, a wholly-owned subsidiary that commenced operations in November 2007. FVCbank is a $2.34 billion asset-sized Virginia-chartered group financial institution serving the banking wants of business companies, nonprofit organizations, skilled service entities, their house owners and staff situated within the larger Baltimore and Washington, D.C. metropolitan areas. FVCbank relies in Fairfax, Virginia, and has 9 full-service places of work in Arlington, Fairfax, Manassas, Reston and Springfield, Virginia, Washington D.C., and Baltimore, Bethesda, and Rockville, Maryland.

For extra details about the Firm, please go to the Investor Relations web page of FVCBankcorp, Inc.’s web site, www.fvcbank.com.

Warning about Ahead-Trying Statements

This press launch accommodates forward-looking statements throughout the that means of the Non-public Securities Litigation Reform Act of 1995. These statements embrace, however should not restricted, statements of targets, intentions, and expectations as to future traits, plans, occasions or outcomes of the Firm’s operations and insurance policies and concerning common financial circumstances. In some instances, forward-looking statements may be recognized by use of phrases similar to “could,” “will,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “proceed,” “ought to,” and related phrases or phrases. These statements are based mostly upon present and anticipated financial circumstances, nationally and within the Firm’s market, rates of interest and rate of interest coverage, aggressive components, and different circumstances which by their nature, should not inclined to correct forecast and are topic to vital uncertainty. Due to these uncertainties and the assumptions on which this dialogue and the forward-looking statements are based mostly, precise future operations and outcomes sooner or later could differ materially from these indicated herein. These forward-looking statements are based mostly on present beliefs that contain vital dangers, uncertainties, and assumptions. Components that would trigger the Firm’s precise outcomes to vary materially from these indicated in these forward-looking statements, embrace, however should not restricted to: common enterprise and financial circumstances nationally or within the markets that the Firm serves; modifications within the degree of the Firm’s nonperforming property and charge-offs; modifications within the assumptions underlying the institution of reserves for attainable mortgage losses; the Firm’s administration of dangers inherent in its actual property mortgage portfolio, and the chance of a protracted downturn in the actual property market, which may impair the worth of the Firm’s collateral and the flexibility to promote collateral upon any foreclosures; credit score threat, market threat, and liquidity threat affecting the Firm’s securities portfolio, in addition to modifications within the estimates used to worth the securities within the portfolio; geopolitical circumstances, together with acts or threats of terrorism, or actions taken by the USA or different governments in response to acts or threats of terrorism and/or navy conflicts, which may affect enterprise and financial circumstances in the USA and overseas; the results of, and modifications in, commerce, financial and monetary insurance policies and legal guidelines, together with rate of interest insurance policies of the Board of Governors of the Federal Reserve System, inflation, rate of interest, market and financial fluctuations; the affect of the COVID-19 pandemic, together with the adversarial affect on the Firm’s enterprise and operations and on the Firm’s clients, which can lead to, amongst different issues, elevated delinquencies, defaults, foreclosures and losses on loans; the affect of modifications in monetary companies insurance policies, legal guidelines and laws, together with legal guidelines, laws and insurance policies regarding taxes, banking, securities and insurance coverage, and the applying thereof by regulatory our bodies; technological modifications, together with potential publicity to fraud, negligence, laptop theft and cyber-crime; and the chance components and different cautionary language included within the Firm’s Annual Report on Kind 10-Ok for the yr ended December 31, 2021 and in different periodic and present stories filed with the Securities and Trade Fee. Due to these uncertainties and the assumptions on which the forward-looking statements are based mostly, precise operations and outcomes sooner or later could differ materially from these indicated herein. Readers are cautioned in opposition to putting undue reliance on any such forward-looking statements. The Firm’s previous outcomes should not essentially indicative of future efficiency.