FVCBankcorp, Inc. Announces Second Quarter 2021 Earnings and Record Quarterly Loan Growth

Rhea-AI Summary

FVCBankcorp reported a 79% increase in net income to $5.2 million for Q2 2021, with diluted EPS of $0.36, up from $2.9 million in Q2 2020. Net revenues rose to $14.9 million from $13.4 million. For the first half of 2021, net income reached $10.7 million, a 62% increase year-over-year. Loan growth was notable, with an increase of 28% annualized. The company expects continued loan growth and is planning a transformational merger with Blue Ridge Bankshares.

Positive

• Net income increased 79% to $5.2 million for Q2 2021.
• Record loan growth of 28% annualized in Q2 2021.
• Net revenues rose to $14.9 million, up $1.5 million year-over-year.
• Core deposits increased by $85.6 million, or 22% annualized.

Negative

• Net interest margin decreased to 3.07%, down from 3.16% in Q2 2020.
• Noninterest expense increased 3% to $8.2 million, rising costs associated with merger activities.

FVCBankcorp, Inc. (NASDAQ: FVCB) (the “Company”) today reported second quarter 2021 net income of $5.2 million, or $0.36 diluted earnings per share, compared to $2.9 million, or $0.21 diluted earnings per share, for the quarterly period ended June 30, 2020, an increase of 79%. Net revenues, which include net interest income plus noninterest income, for the three months ended June 30, 2021 were $14.9 million, an increase of $1.5 million, from $13.4 million for the year ago quarter ended June 30, 2020.

For the six months ended June 30, 2021, the Company reported net income of $10.7 million, or $0.74 diluted earnings per share, compared to $6.6 million or $0.46 diluted earnings per share, for the same period of 2020, a year-over-year increase of $4.1 million, or 62%. Net income for the six months ended June 30, 2020 included elevated loan loss provisioning of $2.8 million and $676 thousand in one-time branch closure costs. Net revenues for the six months ended June 30, 2021 were $29.7 million, an increase of $3.4 million, from $26.3 million for the six months ended June 30, 2020.

For the three months ended June 30, 2021 and 2020, pre-tax pre-provision income (which excludes branch closure costs recorded during 2020) was $6.6 million and $6.1 million, respectively, an increase of $583 thousand or 10%. On a linked quarter basis, pre-tax pre-provision income was $7.0 million for the three months ended March 31, 2021. The decrease on a linked quarter basis was a result of an increase in noninterest expense during the second quarter of 2021, which is more fully discussed below. Pre-tax pre-provision annualized return on average assets for the three months ended June 30, 2021 and 2020 was 1.36% and 1.41%, respectively. For the six months ended June 30, 2021 and 2020, pre-tax pre-provision income (which excludes branch closure costs recorded during 2020) was $13.6 million and $11.8 million, respectively, an increase of $1.8 million, or 16%. Pre-tax pre-provision annualized return on average assets for the six months ended June 30, 2021 and 2020 was 1.43% and 1.44%, respectively. The Company believes the reporting of non-generally accepted accounting principles (“non-GAAP”) pre-tax pre-provision earnings to exclude branch closing impairment charges taken during 2020 are more reflective of the Company’s operating performance. A reconciliation of pre-tax pre-provision income can be found in the tables below.

Annualized return on average assets was 1.06% and annualized return on average equity was 10.41% for the second quarter of 2021. For the comparable quarterly June 30, 2020 period, annualized return on average assets was 0.67% and annualized return on average equity was 6.41%. For the year-to-date June 30, 2021 period, annualized return on average assets was 1.13% and annualized return on average equity was 10.96% compared to annualized return on average assets of 0.81% and annualized return on average equity of 7.35% for the six months ended June 30, 2020.

On July 14, 2021, the Company announced the signing of a definitive merger agreement with Blue Ridge Bankshares, Inc. (“Blue Ridge” NYSE: BRBS) (the “Merger”), pursuant to which the companies will combine in an all-stock merger of equals, subject to customary closing conditions including shareholder and regulatory approvals. In connection with the Merger, FVCbank, the Company’s wholly-owned commercial banking subsidiary, will be merged with and into Blue Ridge Bank, National Association (“Blue Ridge Bank”), the wholly-owned commercial banking subsidiary of Blue Ridge, with Blue Ridge Bank as the surviving bank.

Second Quarter Selected Highlights

• Record Quarterly Loan Growth. Loans receivable, net of deferred fees and excluding loans made under the U.S. Small Business Administration’s Paycheck Protection Program (“PPP”), totaled $1.37 billion at June 30, 2021, compared to $1.28 billion at March 31, 2021, an increase of $91.4 million, or 28% annualized. During the second quarter of 2021, the Company began originating loans under a warehouse lending facility, which contributed $58.0 million to quarterly loan growth.
• Improved on Credit Quality Metrics. During the second quarter of 2021, past due loans 30 days or more decreased to $2.2 million from $5.5 million at March 31, 2021. Nonperforming loans and loans past due 90 days or more and still accruing were 0.21% of total assets at June 30, 2021, compared to 0.31% at December 31, 2020, and decreasing $954 thousand from March 31, 2021.
• Strong Core Deposit Growth. Core deposits, which exclude wholesale deposits, increased $85.6 million, to $1.65 billion at June 30, 2021, or 22% annualized, from March 31, 2021. Noninterest-bearing deposits were $500.7 million at June 30, 2021, representing 30% of total deposits at June 30, 2021.
• Increased Net Interest Income. Net interest income increased $1.5 million to $14.2 million for the second quarter of 2021, compared to $12.7 million for the same 2020 period. Net interest margin was 3.07% for the quarter ended June 30, 2021, compared to 3.16% for the year ago quarter of 2020 and 3.22% for the first quarter of 2021, as increased excess liquidity continues to impact net interest margin for the second quarter of 2021.

“Record loan growth during the second quarter is not only attributable to the improvement in our local economy, but also a result of the efforts of our experienced business development team. While a portion of this loan growth was a result of our new warehouse lending facility, we also approved loan originations of close to $100 million this quarter, of which, $75 million funded. Our commitment to the markets we serve continues to drive over 10% deposit growth during 2021. With our robust pipeline of loan originations, we anticipate sustained double-digit loan growth for the remainder of 2021. We are also excited about our planned transformational merger with Blue Ridge Bankshares and look forward to realizing the promise of creating the fourth largest Virginia-based community bank,” stated David W. Pijor, Chairman and CEO.

Balance Sheet

Total assets increased to $1.98 billion at June 30, 2021 compared to $1.82 billion at December 31, 2020, an increase of $153.8 million, or 8%. Loans receivable, net of deferred fees and excluding PPP loans, totaled $1.37 billion at June 30, 2021 and $1.31 billion at December 31, 2020, an increase of $61.7 million, or 5%. Loans receivable, net of deferred fees, and excluding PPP loans, increased $91.4 million during the three months ended June 30, 2021. During the second quarter of 2021, the Company began originating loans under a warehouse lending facility, which contributed $58.0 million to quarterly loan growth. During the second quarter of 2021, loan originations, excluding PPP loans and warehouse lending originations, totaled approximately $95.3 million, of which $74.9 million funded during the quarter.

PPP loans, net of fees, totaled $99.5 million at June 30, 2021, a decrease from $163.5 million at March 31, 2021 and $153.0 million at December 31, 2020. Loans forgiven during the second quarter of 2021 totaled $70.9 million, and totaled $120.1 million year-to-date 2021. Remaining PPP loans originated during 2020 totaled $37.2 million at June 30, 2021. Net deferred fees associated with PPP loans totaled $2.4 million at June 30, 2021.

Investment securities increased $74.3 million to $200.7 million at June 30, 2021, compared to $126.4 million at December 31, 2020. During the three months ended June 30, 2021, the Company purchased $75.7 million in mortgage-backed securities to invest excess liquidity and improve net interest margin.

Total deposits increased to $1.68 billion at June 30, 2021 compared to $1.53 billion at December 31, 2020, an increase of $147.7 million, or 10%. Core deposits, which represent total deposits less wholesale deposits, increased $162.7 million, or 11%, to $1.65 billion at June 30, 2021 compared to $1.48 billion at December 31, 2020. Wholesale deposits totaled $35.0 million, or 2% of total deposits at June 30, 2021, a decrease of $15.0 million from December 31, 2020. Noninterest-bearing deposits increased $101.6 million to $500.7 million at June 30, 2021 from $399.1 million at December 31, 2020, and represented 30% of total deposits at June 30, 2021.

The Company’s bank subsidiary, FVCbank, remains well-capitalized at June 30, 2021 with a community bank leverage ratio of 11.48%.

Income Statement

Net income for the three months ended June 30, 2021 was $5.2 million, an increase of $2.3 million, or 79%, compared to $2.9 million for the same period of 2020. For the six months ended June 30, 2021, net income was $10.7 million, compared to $6.6 million for the same period of 2020. Both the three and six months’ periods of 2020 were impacted by increased provision for loan losses and impairment on branch closures totaling $676 thousand.

Net interest income totaled $14.2 million, an increase of $1.5 million, for the quarter ended June 30, 2021, compared to the year ago quarter, and increased by $143 thousand, compared to the first quarter of 2021. Interest expense on deposits decreased $1.3 million for the three months ended June 30, 2021 compared to the same period of 2020, and decreased $147 thousand compared to the three months ended March 31, 2021. All decreases were a result of continued targeted rate reductions and the repricing of the Company’s time deposits to lower interest rates upon renewal. Interest income includes loan mark accretion on acquired loans totaling $146 thousand, $132 thousand, and $126 thousand for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively. Lastly, net interest income for the three months ended June 30, 2021 benefited from PPP loan income, which contributed $1.5 million to interest income, of which $811 thousand was related to recognition of net deferred fees on forgiven loans. This compares to interest income from PPP loans of $1.8 million for the first quarter of 2021, which included recognition of net deferred fees of $927 thousand on forgiven loans. Remaining net deferred fees related to PPP loan originations totaled $2.4 million at June 30, 2021 and are being recognized in interest income over the remaining lives of the PPP loans, or sooner upon PPP loan forgiveness or repayment. For the six months ended June 30, 2021 and 2020, net interest income was $28.2 million and $24.9 million, respectively, an increase of $3.3 million, year-over-year.

The Company’s net interest margin decreased 9 basis points to 3.07% for the quarter ended June 30, 2021 compared to 3.16% for the quarter ended June 30, 2020. On a linked quarter basis, net interest margin decreased 15 basis points from 3.22% for the three months ended March 31, 2021. Excess liquidity continues to compress net interest margin, decreasing margin by 27 basis points during the second quarter of 2021. Despite the growth in both the Company’s loan and investment securities portfolios to deploy excess liquidity, the Company’s continued strong deposit growth offset this asset growth during the second quarter of 2021. The average yield on total loans for the second quarter of 2021 was 4.36%, compared to 4.38% for the linked quarter ended March 31, 2021, and 4.36% for the year ago quarter. Net deferred fees recognized from PPP loan forgiveness has contributed to the average yield of the loan portfolio, as the yield on PPP loans increased to 4.26% for the second quarter of 2021, compared to 2.63% for the year ago quarter ended June 30, 2020.

Cost of interest-bearing deposits for the second quarter of 2021 was 0.66%, compared to 1.20% for the second quarter of 2020, a decrease of 54 basis points, or 45%, primarily as a result of the Company having aggressively decreased its deposit rates during 2020 to offset the repricing of its variable rate loan portfolio. The cost of deposits, which includes noninterest-bearing deposits, decreased 6 basis points to 0.45% for the second quarter of 2021 as compared to 0.51% for the first quarter of 2021, and decreased 41 basis points from 0.86% for the year ago quarter of 2020.

Noninterest income totaled $685 thousand and $687 thousand for the quarters ended June 30, 2021 and 2020, respectively. Fee income from loans was $27 thousand, a decrease of $19 thousand, for the quarter ended June 30, 2021 compared to the second quarter of 2020. Service charges on deposit accounts and other fee income totaled $408 thousand for the second quarter of 2021, an increase of 14%, or $49 thousand, from the year ago quarter, primarily resulting from an increase in analysis fees. Income from bank-owned life insurance decreased $32 thousand to $250 thousand for the three months ended June 30, 2021 compared to $282 thousand for the same period of 2020. Noninterest income for the year-to-date period ended June 30, 2021 was $1.5 million, compared to $1.4 million for the 2020 year-to-date period, an increase of $95 thousand, or 7%, which was primarily driven by an increase in service charges on deposit accounts and other fee income, and offset by fair value losses on loans held for sale of $451 thousand recorded during the first quarter of 2020.

Noninterest expense totaled $8.2 million for the quarter ended June 30, 2021, compared to $8.0 million for the same three-month period of 2020, an increase of $230 thousand, or 3%. On a linked quarter basis, noninterest expense was $7.9 million for the quarter ended March 31, 2021, an increase of $346 thousand, or 4%. The increase in noninterest expense compared to the year ago quarter was primarily related to an increase in salaries and benefits expense of $476 thousand, which is primarily related to additions to business development staff and associated accruals for incentive compensation during the second quarter of 2021. In addition, professional fees increased $296 thousand to $503 thousand for the three months ended June 30, 2021 compared to $207 thousand for the year ago quarter as the Company recognized expenses related to its announced merger with Blue Ridge. These increases in noninterest expense during the quarter ended June 30, 2021 as compared to the same period of 2020 were partially offset by the branch impairment charges totaling $676 thousand that were recorded during the second quarter of 2020. Loan legal expenses of $193 thousand were recognized during the second quarter of 2021, which contributed to the increase in noninterest expense on a linked quarter basis. For the six months ended June 30, 2021 and 2020, noninterest expense, was $16.1 million and $15.2 million, respectively, an increase of $903 thousand, or 6%, primarily as a result of the aforementioned additions to business development staffing and associated increases in incentive accruals and the increase in professional fees associated with merger and acquisition costs.

The efficiency ratio for the quarter ended June 30, 2021 was 55.3%, an increase from 54.7% for the quarter ended June 30, 2020 (excluding branch closure costs), primarily as a result of increased professional fees recorded for the proposed merger with Blue Ridge. The efficiency ratios for the six months ended June 30, 2021 and 2020, excluding branch closure costs recorded during 2020 were 54.2% and 55.3%, respectively.

The Company recorded a provision for income taxes of $1.5 million for the three months ended June 30, 2021, compared to $754 thousand for the same period of 2020. The effective tax rates for the three months ended June 30, 2021 and 2020 were 22.2% and 20.7%, respectively. The effective tax rates for each of the three months ended June 30, 2021 and 2020 are less than the Company’s combined federal and state statutory rate of 22.5% primarily because of discrete tax benefits recorded as a result of exercises of nonqualified stock options during 2021 and 2020. For the six months ended June 30, 2021 and 2020, provision for income taxes was $2.9 million and $1.7 million, respectively.

Asset Quality

The Company recorded no provision for loan losses for the three months ended June 30, 2021, compared to $1.8 million for the year ago quarter. The Company is not required to implement the provisions of the current expected credit losses accounting standard until January 1, 2023, and is continuing to account for the allowance for loans losses under the incurred loss model. The decrease in the provision for loan losses for the three months ended June 30, 2021 is primarily related to the improvement in certain credit quality metrics during the second quarter of 2021, specifically, a reduction in the Company’s past due loans and specific reserves for certain watchlist loans which saw improvements in credit quality during the quarter. No provision for loan losses was recorded for the six months ended June 30, 2021 compared to $2.8 million for the six months ended June 30, 2020.

The allowance for loan losses to total loans, excluding PPP loans, was 1.04% at June 30, 2021, compared to 1.14% at December 31, 2020. The effective reserve coverage, which includes both the allowance for loan losses and the remaining unaccreted fair value discount on acquired loans, to total loans, excluding PPP loans, was 1.22% at June 30, 2021 compared to 1.27% at December 31, 2020. Net charge-offs of $62 thousand recorded during the second quarter of 2021 were related to purchased unsecured consumer loans.

Nonperforming loans and loans 90 days or more past due at June 30, 2021 totaled $4.1 million, or 0.21% of total assets. This compares to $5.6 million in nonperforming loans and loans 90 days or more past due at December 31, 2020, or 0.31% of total assets. All of the Company’s nonperforming loans are secured and have specific reserves totaling $1.1 million, representing the expected losses associated with those loans. The Company has one troubled debt restructuring at June 30, 2021 totaling $95 thousand which is a consumer residential loan. Nonperforming assets (including other real estate owned) to total assets was 0.40% at June 30, 2021 compared to 0.52% for December 31, 2020.

About FVCBankcorp, Inc.

FVCBankcorp, Inc. is the holding company for FVCbank, a wholly-owned subsidiary that commenced operations in November 2007. FVCbank is a $1.98 billion asset-sized Virginia-chartered community bank serving the banking needs of commercial businesses, nonprofit organizations, professional service entities, their owners and employees located in the greater Baltimore and Washington D.C., metropolitan areas. FVCbank is based in Fairfax, Virginia, and has 9 full-service offices in Arlington, Fairfax, Manassas, Reston and Springfield, Virginia, Washington D.C., and Baltimore, Bethesda, and Rockville, Maryland.

For more information on the Company’s 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 ability to close the Merger on the expected terms and schedule; difficulties, delays and unforeseen costs in completing the Merger and in integrating the company’s and Blue Ridge’s businesses; the ability to realize cost savings and other benefits of the Merger; business disruption during the pendency of or following the Merger, and the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and in other periodic and current reports filed with the Securities and Exchange Commission. 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)
(Unaudited)
		At or For the Three Months Ended June 30,								At or For the Six Months Ended June 30,							At or For the Three Months Ended
		6/30/2021				6/30/2020				6/30/2021			6/30/2020				3/31/2021				12/31/2020
Selected Balances
Total assets		$	1,975,251			$	1,781,149										$	1,884,517			$	1,821,481
Total investment securities			207,044				128,690											141,745				132,978
Total loans, net of deferred fees			1,474,278				1,478,120											1,446,912				1,466,083
Allowance for loan losses			(14,359	)			(12,894	)										(14,421	)			(14,958	)
Total deposits			1,680,209				1,519,036											1,594,639				1,532,493
Subordinated debt			44,146				24,527											44,116				44,085
Other borrowings			25,000				25,000											25,000				25,000
Total stockholders’ equity			200,687				180,652											194,929				189,500
Summary Results of Operations
Interest income		$	16,776			$	16,281			$	33,554		$	33,212			$	16,778			$	17,129
Interest expense			2,590				3,586				5,325			8,306				2,735				3,010
Net interest income			14,186				12,695				28,229			24,906				14,043				14,119
Provision for loan losses			- -				1,750				-			2,816				-				500
Net interest income after provision for loan losses			14,186				10,945				28,229			22,090				14,043				13,619
Noninterest income - loan fees, service charges and other			435				405				978			1,170				543				476
Noninterest income - bank owned life insurance			250				282				498			565				248				264
Noninterest income - gain on sales of securities available-for-sale			- -				- -				- -			97				- -				- -
Noninterest income - loss on loans held for sale			- -				- -				- -			(451	)			- -				- -
Noninterest expense			8,228				7,998				16,110			15,207				7,882				7,885
Income before taxes			6,643				3,634				13,595			8,264				6,952				6,474
Income tax expense			1,478				754				2,861			1,651				1,383				1,460
Net income			5,165				2,880				10,734			6,613				5,569				5,014
Per Share Data
Net income, basic		$	0.38			$	0.21			$	0.79		$	0.49			$	0.41			$	0.37
Net income, diluted		$	0.36			$	0.21			$	0.74		$	0.46			$	0.38			$	0.36
Book value		$	14.70			$	13.42										$	14.29			$	14.03
Tangible book value (1)		$	14.10			$	12.79										$	13.69			$	13.41
Shares outstanding			13,647,600				13,459,317											13,638,934				13,510,760
Selected Ratios
Net interest margin (2)			3.07		%		3.16		%		3.15	%		3.26		%		3.22		%		3.28		%
Return on average assets (2)			1.06		%		0.67		%		1.13	%		0.81		%		1.19		%		1.11		%
Return on average equity (2)			10.41		%		6.41		%		10.96	%		7.35		%		11.53		%		10.68		%
Efficiency (3)			55.33		%		59.77		%		54.23	%		57.85		%		53.13		%		53.07		%
Loans, net of deferred fees to total deposits			87.74		%		97.31		%									90.74		%		95.67		%
Noninterest-bearing deposits to total deposits			29.80		%		29.13		%									31.47		%		26.04		%
Reconciliation of Net Income (GAAP) to Operating Earnings (Non-GAAP) (4)
Net income (from above)		$	5,165			$	2,880			$	10,734		$	6,613			$	5,569			$	5,014
Add: Impairment on branch closures			- -				676				- -			676				- -				- -
Less: provision for income taxes associated with non-GAAP adjustments			- -				(142	)			- -			(142	)			- -				- -
Net income, as adjusted		$	5,165			$	3,414			$	10,734		$	7,147			$	5,569			$	5,014
Net income, diluted, on an operating basis		$	0.36			$	0.25			$	0.74		$	0.50			$	0.38			$	0.36
Return on average assets (non-GAAP operating earnings)			1.06		%		0.79		%		1.13	%		0.87		%		1.19		%		1.11		%
Return on average equity (non-GAAP operating earnings)			10.41		%		7.60		%		10.96	%		7.94		%		11.53		%		10.68		%
Efficiency ratio (non-GAAP operating earnings) (3)			55.33		%		54.72		%		54.23	%		55.28		%		53.13		%		53.07		%
Capital Ratios - Bank
Tangible common equity (to tangible assets)			9.79		%		9.71		%									9.95		%		9.99		%
Tier 1 leverage (to average assets)			11.48		%		11.05		%									11.65		%		11.65		%
Asset Quality
Nonperforming loans and loans 90+ past due		$	4,069			$	8,493										$	5,023			$	5,621
Performing troubled debt restructurings (TDRs)			95				99											96				97
Other real estate owned			3,866				3,866											3,866				3,866
Nonperforming loans and loans 90+ past due to total assets (excl. TDRs)			0.21		%		0.48		%									0.27		%		0.31		%
Nonperforming assets to total assets			0.40		%		0.69		%									0.47		%		0.52		%
Nonperforming assets (including TDRs) to total assets			0.41		%		0.70		%									0.48		%		0.53		%
Allowance for loan losses to loans			0.97		%		0.87		%									1.00		%		1.02		%
Allowance for loan losses to nonperforming loans			352.89		%		151.82		%									287.10		%		266.11		%
Net charge-offs		$	62			$	82			$	599		$	153			$	537			$	98
Net charge-offs to average loans (2)			0.02		%		0.02		%		0.08	%		0.02		%		0.15		%		0.03		%
Selected Average Balances
Total assets		$	1,947,983			$	1,721,612			$	1,907,455		$	1,636,284			$	1,866,477			$	1,812,298
Total earning assets			1,852,126				1,615,125				1,810,389			1,536,659				1,768,189				1,710,345
Total loans, net of deferred fees			1,444,543				1,415,383				1,450,394			1,347,021				1,456,310				1,485,121
Total deposits			1,654,016				1,459,834				1,614,518			1,370,263				1,574,581				1,527,313
Other Data
Noninterest-bearing deposits		$	500,655			$	442,443										$	501,812			$	399,062
Interest-bearing checking, savings and money market			901,124				655,959											822,888				820,378
Time deposits			243,430				320,628											234,939				263,053
Wholesale deposits			35,000				100,006											35,000				50,000
(1) Non-GAAP Reconciliation		At June 30,
(Dollars in thousands, except per share data)			2021				2020
Total stockholders’ equity		$	200,687			$	180,652
Less: goodwill and intangibles, net			(8,199	)			(8,525	)
Tangible Common Equity		$	192,488			$	172,127
Book value per common share		$	14.70			$	13.42
Less: intangible book value per common share			(0.60	)			(0.63	)
Tangible book value per common share		$	14.10			$	12.79
(2) Annualized.
(3) Efficiency ratio is calculated as noninterest expense divided by the sum of net interest income and noninterest income.
(4) Some of the financial measures discussed throughout the press release are "non-GAAP financial measures." In accordance with SEC rules, the Company classifies a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP in our consolidated statements of income, balance sheets or statements of cash flows.

FVCBankcorp, Inc.
Summary Consolidated Statements of Condition
(Dollars in thousands)
(Unaudited)
								% Change								% Change
								Current								From
		6/30/2021			3/31/2021			Quarter		12/31/2020			6/30/2020			Year Ago
Cash and due from banks		$	24,856		$	16,593		49.8	%	$	20,835		$	25,613		-3.0	%
Interest-bearing deposits at
other financial institutions			190,553			203,285		-6.3	%		120,228			64,989		193.2	%
Investment securities			200,672			135,368		48.2	%		126,415			122,082		64.4	%
Restricted stock, at cost			6,372			6,377		-0.1	%		6,563			6,608		-3.6	%
Loans held for sale, at fair value			- -			- -		0.0	%		- -			- -		0.0	%
Loans, net of fees:
Commercial real estate			829,683			782,005		6.1	%		788,218			779,036		6.5	%
Commercial and industrial			140,611			109,737		28.1	%		119,200			105,957		32.7	%
Paycheck protection program			99,455			163,470		-39.2	%		152,978			169,425		-41.3	%
Commercial construction			207,790			218,507		-4.9	%		221,523			227,746		-8.8	%
Consumer real estate			184,560			159,790		15.5	%		168,531			177,366		4.1	%
Consumer nonresidential			12,179			13,403		-9.1	%		15,633			18,590		-34.5	%
Total loans, net of fees			1,474,278			1,446,912		1.9	%		1,466,083			1,478,120		-0.3	%
Allowance for loan losses			(14,359)			(14,421)		-0.4	%		(14,958)			(12,894)		11.4	%
Loans, net			1,459,919			1,432,491		1.9	%		1,451,125			1,465,226		-0.4	%
Premises and equipment, net			1,527			1,520		0.5	%		1,654			1,818		-16.0	%
Goodwill and intangibles, net			8,199			8,277		-0.9	%		8,357			8,525		-3.8	%
Bank owned life insurance (BOLI)			38,675			38,425		0.7	%		38,178			37,633		2.8	%
Other real estate owned			3,866			3,866		0.0	%		3,866			3,866		0.0	%
Other assets			40,612			38,315		6.0	%		44,260			44,789		-9.3	%
Total Assets		$	1,975,251		$	1,884,517		4.8	%	$	1,821,481		$	1,781,149		10.9	%
Deposits:
Noninterest-bearing		$	500,655		$	501,812		-0.2	%	$	399,062		$	442,443		13.2	%
Interest-bearing checking			610,823			534,436		14.3	%		537,834			387,683		57.6	%
Savings and money market			290,301			288,452		0.6	%		282,544			268,276		8.2	%
Time deposits			243,430			234,939		3.6	%		263,053			320,628		-24.1	%
Wholesale deposits			35,000			35,000		0.0	%		50,000			100,006		-65.0	%
Total deposits			1,680,209			1,594,639		5.4	%		1,532,493			1,519,036		10.6	%
Other borrowed funds			25,000			25,000		0.0	%		25,000			25,000		0.0	%
Subordinated notes, net of
issuance costs			44,146			44,116		0.1	%		44,085			24,527		80.0	%
Other liabilities			25,209			25,833		-2.4	%		30,403			31,934		-21.1	%
Stockholders’ equity			200,687			194,929		3.0	%		189,500			180,652		11.1	%
Total Liabilities & Stockholders'
Equity		$	1,975,251		$	1,884,517		4.8	%	$	1,821,481		$	1,781,149		10.9	%

FVCBankcorp, Inc.
Summary Consolidated Income Statements
(In thousands, except per share data)
(Unaudited)
		For the Three Months Ended
								% Change						% Change
								Current						From
		6/30/2021			3/31/2021			Quarter			6/30/2020			Year Ago
Net interest income		$	14,186		$	14,043		1.0	%		$	12,695		11.7	%
Provision for loan losses			- -			- -		0.0	%			1,750		-100.0	%
Net interest income after provision for loan losses			14,186			14,043		1.0	%			10,945		29.6	%
Noninterest income:
Fees on loans			27			20		35.0	%			46		-41.3	%
Service charges on deposit accounts			247			243		1.6	%			223		10.8	%
BOLI income			250			248		0.8	%			282		-11.3	%
Other fee income			161			280		-42.5	%			136		18.4	%
Total noninterest income			685			791		-13.4	%			687		-0.3	%
Noninterest expense:
Salaries and employee benefits			4,458			4,548		-2.0	%			3,982		12.0	%
Occupancy and equipment expense			820			807		1.6	%			859		-4.5	%
Data processing and network administration			551			563		-2.1	%			494		11.5	%
State franchise taxes			487			504		-3.4	%			466		4.5	%
Professional fees			503			354		42.1	%			207		143.0	%
Impairment on branch closures			- -			- -		0.0	%			676		-100.0	%
Other operating expense			1,409			1,106		27.4	%			1,314		7.2	%
Total noninterest expense			8,228			7,882		4.4	%			7,998		2.9	%
Net income before income taxes			6,643			6,952		-4.4	%			3,634		82.8	%
Income tax expense			1,478			1,383		6.9	%			754		96.0	%
Net Income		$	5,165		$	5,569		-7.3	%		$	2,880		79.3	%
Earnings per share - basic		$	0.38		$	0.41		-7.7	%		$	0.21		76.8	%
Earnings per share - diluted		$	0.36		$	0.38		-7.1	%		$	0.21		72.0	%
Weighted-average common shares outstanding - basic			13,647,193			13,578,279						13,455,053
Weighted-average common shares outstanding - diluted			14,517,154			14,536,449						13,924,239
Reconciliation of Net Income (GAAP) to Operating Earnings (Non-GAAP):
GAAP net income reported above		$	5,165		$	5,569					$	2,880
Add: Impairment loss			- -			- -						676
Subtract: provision for income taxes associated with non-GAAP adjustments			-			-						(142)
Net Income, Operating earnings (non-GAAP)		$	5,165		$	5,569					$	3,414
Earnings per share - basic (non-GAAP operating earnings)		$	0.38		$	0.41					$	0.25
Earnings per share - diluted (non-GAAP operating earnings)		$	0.36		$	0.38					$	0.25
Return on average assets (non-GAAP operating earnings)			1.06%			1.19%						0.79%
Return on average equity (non-GAAP operating earnings)			10.41%			11.53%						7.60%
Efficiency ratio (non-GAAP operating earnings)			55.33%			53.13%						54.72%
Reconciliation of Net Income (GAAP) to Pre-Tax Pre-Provision Income (Non-GAAP):
GAAP net income reported above		$	5,165		$	5,569					$	2,880
Add: Provision for loan losses			- -			- -						1,750
Add: Impairment losses			- -			- -						676
Add: Income tax expense			1,478			1,383						754
Pre-tax pre-provision income		$	6,643		$	6,952					$	6,060
Earnings per share - basic (non-GAAP pre-tax pre-provision)		$	0.49		$	0.51					$	0.45
Earnings per share - diluted (non-GAAP pre-tax pre-provision)		$	0.46		$	0.48					$	0.44
Return on average assets (non-GAAP operating earnings)			1.36%			1.49%						1.41%
Return on average equity (non-GAAP operating earnings)			13.39%			14.40%						13.49%

FVCBankcorp, Inc.
Summary Consolidated Income Statements
(In thousands, except per share data)
(Unaudited)
		For the Six Months Ended
								% Change
								From
		6/30/2021			6/30/2020			Year Ago
Net interest income		$	28,229		$	24,906		13.3	%
Provision for loan losses			- -			2,816		-100.0	%
Net interest income after provision for loan losses			28,229			22,090		27.8	%
Noninterest income:
Fees on loans			47			442		-89.4	%
Service charges on deposit accounts			490			463		5.8	%
Gain on sale of securities available-for-sale			- -			97		-100.0	%
Loss on loans held for sale			- -			(451)		-100.0	%
BOLI income			498			565		-11.9	%
Other fee income			441			265		66.4	%
Total noninterest income			1,476			1,381		6.9	%
Noninterest expense:
Salaries and employee benefits			9,006			8,010		12.4	%
Occupancy and equipment expense			1,627			1,715		-5.1	%
Data processing and network administration			1,114			928		20.0	%
State franchise taxes			991			932		6.3	%
Professional fees			857			432		98.4	%
Impairment on branch closures			- -			676		-100.0	%
Other operating expense			2,515			2,514		0.0	%
Total noninterest expense			16,110			15,207		5.9	%
Net income before income taxes			13,595			8,264		64.5	%
Income tax expense			2,861			1,651		73.3	%
Net Income		$	10,734		$	6,613		62.3	%
Earnings per share - basic		$	0.79		$	0.49		62.2	%
Earnings per share - diluted		$	0.74		$	0.46		59.3	%
Weighted-average common shares outstanding - basic			13,612,736			13,603,411
Weighted-average common shares outstanding - diluted			14,526,801			14,259,843
Reconciliation of Net Income (GAAP) to Operating Earnings (Non-GAAP):
GAAP net income reported above		$	10,734		$	6,613
Add: Impairment loss			- -			676
Subtract: provision for income taxes associated with non-GAAP adjustments			-			(142)
Net Income, Operating earnings (non-GAAP)		$	10,734		$	7,147
Earnings per share - basic (non-GAAP operating earnings)		$	0.79		$	0.53
Earnings per share - diluted (non-GAAP operating earnings)		$	0.74		$	0.50
Return on average assets (non-GAAP operating earnings)			1.13%			0.87%
Return on average equity (non-GAAP operating earnings)			10.96%			7.94%
Efficiency ratio (non-GAAP operating earnings)			54.23%			55.28%
Reconciliation of Net Income (GAAP) to Pre-Tax Pre-Provision Income (Non-GAAP):
GAAP net income reported above		$	10,734		$	6,613
Add: Provision for loan losses			- -			2,816
Add: Impairment losses			- -			676
Add: Income tax expense			2,861			1,651
Pre-tax pre-provision income		$	13,595		$	11,756
Earnings per share - basic (non-GAAP pre-tax pre-provision)		$	1.00		$	0.86
Earnings per share - diluted (non-GAAP pre-tax pre-provision)		$	0.94		$	0.82
Return on average assets (non-GAAP operating earnings)			1.43%			1.44%
Return on average equity (non-GAAP operating earnings)			13.88%			13.07%

FVCBankcorp, Inc.
Average Statements of Condition and Yields on Earning Assets and Interest-Bearing Liabilities
(Dollars in thousands)
(Unaudited)
		For the Three Months Ended
		6/30/2021									3/31/2021									6/30/2020
		Average				Interest			Average		Average				Interest			Average		Average				Interest			Average
		Balance				Income/Expense			Yield		Balance				Income/Expense			Yield		Balance				Income/Expense			Yield
Interest-earning assets:
Loans receivable, net of fees (1)
Commercial real estate		$	796,220			$	8,616		4.33	%	$	782,639			$	8,396		4.29	%	$	770,326			$	8,355		4.34	%
Commercial and industrial			120,021				1,421		4.74	%		111,360				1,344		4.83	%		103,226				1,287		4.99	%
Paycheck protection program			138,550				1,474		4.26	%		162,066				1,832		4.52	%		121,843				801		2.63	%
Commercial construction			212,004				2,382		4.49	%		220,835				2,427		4.40	%		222,685				2,588		4.65	%
Consumer real estate			164,938				1,633		3.96	%		165,211				1,676		4.06	%		177,783				2,023		4.55	%
Consumer nonresidential			12,810				225		7.04	%		14,199				258		7.27	%		19,520				360		7.37	%
Total loans			1,444,543				15,751		4.36	%		1,456,310				15,933		4.38	%		1,415,383				15,414		4.36	%
Investment securities (2)(3)			178,875				956		2.14	%		128,988				806		2.50	%		128,797				852		2.65	%
Interest-bearing deposits at
other financial institutions			228,708				71		0.12	%		182,891				45		0.10	%		70,945				21		0.12	%
Total interest-earning assets			1,852,126				16,778		3.62	%		1,768,189				16,784		3.80	%		1,615,125				16,287		4.03	%
Non-interest earning assets:
Cash and due from banks			15,954									15,346									19,645
Premises and equipment, net			1,525									1,610									2,050
Accrued interest and other
assets			92,805									96,226									96,362
Allowance for loan losses			(14,427	)								(14,894	)								(11,570	)
Total Assets		$	1,947,983								$	1,866,477								$	1,721,612
Interest-bearing liabilities:
Interest checking		$	565,074			$	742		0.53	%	$	523,712			$	717		0.56	%	$	341,081				597		0.70	%
Savings and money market			297,003				351		0.47	%		278,774				324		0.47	%		263,588				435		0.66	%
Time deposits			238,113				722		1.22	%		246,486				917		1.51	%		321,775				1,724		2.15	%
Wholesale deposits			35,000				39		0.45	%		45,778				43		0.38	%		132,072				369		1.13	%
Total interest-bearing deposits			1,135,190				1,854		0.66	%		1,094,750				2,001		0.74	%		1,058,516				3,125		1.19	%
Other borrowed funds			25,000				85		1.36	%		25,000				83		1.35	%		25,000				35		0.50	%
Subordinated notes, net of
issuance costs			44,127				651		5.92	%		44,096				651		5.99	%		24,514				426		6.48	%
Total interest-bearing liabilities			1,204,317				2,590		0.86	%		1,163,846				2,735		0.95	%		1,108,030				3,586		1.30	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits			518,826									479,831									401,318
Other liabilities			26,374									29,625									32,585
Stockholders’ equity			198,466									193,175									179,679
Total Liabilities and Stockholders' Equity		$	1,947,983								$	1,866,477								$	1,721,612
Net Interest Margin							14,188		3.07	%						14,049		3.22	%						12,701		3.16	%
(1) Non-accrual loans are included in average balances.
(2) The average yields for investment securities are reported on a fully taxable-equivalent basis at a rate of 21%. The taxable equivalent adjustment to interest income for the three months ended June 30, 2021 and 2020 iss $2 and $6, respectively.
For the three months ended March 31, 2021, the taxable equivalent adjustment to interest income is $6.
(3) The average balances for investment securities includes restricted stock.

FVCBankcorp, Inc.
Average Statements of Condition and Yields on Earning Assets and Interest-Bearing Liabilities
(Dollars in thousands)
(Unaudited)
		For the Six Months Ended
		6/30/2021							6/30/2020
		Average			Interest		Average		Average			Interest		Average
		Balance			Income/Expense		Yield		Balance			Income/Expense		Yield
Interest-earning assets:
Loans receivable, net of fees (1)
Commercial real estate		$	789,467	$	17,011		4.31	%	$	763,658	$	17,382		4.55	%
Commercial and industrial			115,715		2,765		4.78	%		106,705		2,858		5.36	%
Paycheck protection program			150,243		3,307		4.40	%		60,921		801		2.63	%
Commercial construction			216,395		4,808		4.44	%		221,395		5,389		4.87	%
Consumer real estate			165,074		3,308		4.01	%		180,897		4,145		4.58	%
Consumer nonresidential			13,500		484		7.16	%		13,445		488		7.26	%
Total loans			1,450,394		31,683		4.37	%		1,347,021		31,063		4.61	%
Investment securities (2)(3)			154,069		1,763		2.29	%		136,160		1,823		2.68	%
Loans held for sale, at fair value			- -		- -		- -	%		6,899		236		6.84	%
Interest-bearing deposits at
other financial institutions			205,926		116		0.11	%		46,579		102		0.44	%
Total interest-earning assets			1,810,389		33,562		3.71	%		1,536,659		33,224		4.32	%
Non-interest earning assets:
Cash and due from banks			15,652							16,537
Premises and equipment, net			1,567							1,996
Accrued interest and other
assets			94,506							92,018
Allowance for loan losses			(14,659)							(10,926)
Total Assets		$	1,907,455						$	1,636,284
Interest-bearing liabilities:
Interest checking		$	544,507	$	1,459		0.54	%	$	307,528		1,478		0.97	%
Savings and money market			287,939		675		0.47	%		245,542		1,070		0.88	%
Time deposits			242,277		1,640		1.36	%		337,792		3,804		2.27	%
Wholesale deposits			40,359		81		0.41	%		126,560		949		1.52	%
Total interest-bearing deposits			1,115,082		3,855		0.70	%		1,017,422		7,301		1.45	%
Other borrowed funds			25,000		168		1.35	%		32,071		215		1.34	%
Subordinated notes, net of
issuance costs			44,111		1,302		5.95	%		24,504		790		6.48	%
Total interest-bearing liabilities			1,184,193		5,325		0.91	%		1,073,997		8,306		1.56	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits			499,436							352,841
Other liabilities			27,991							29,529
Stockholders’ equity			195,835							179,917
Total Liabilities and Stockholders' Equity		$	1,907,455						$	1,636,284
Net Interest Margin					28,237		3.15	%				24,918		3.26	%
(1) Non-accrual loans are included in average balances.
(2) The average yields for investment securities are reported on a fully taxable-equivalent basis at a rate of 21%. The taxable
equivalent adjustment to interest income was $8 and $12 for the six months ended June 30, 2021 and 2020, respectively.
(3) The average balances for investment securities includes restricted stock.

 

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FAQ

What were FVCB's Q2 2021 earnings results?

FVCB reported a net income of $5.2 million, or $0.36 diluted EPS, for Q2 2021, a 79% increase from Q2 2020.

What is the current loan growth rate for FVCB?

FVCB achieved a record loan growth of 28% annualized during Q2 2021.

What are FVCB's future prospects following their merger announcement?

FVCB is planning a merger with Blue Ridge Bankshares, expected to enhance its market position and drive growth.

How much did FVCB's net revenues increase in Q2 2021?

Net revenues increased to $14.9 million, up $1.5 million from $13.4 million in Q2 2020.

Did FVCB experience any changes in its net interest margin?

Yes, FVCB's net interest margin decreased to 3.07% for Q2 2021, down from 3.16% in the prior year.