Raising EPS Estimates and Maintaining “Outperform” Rating and Target Price
For Immediate Release — February 08, 2016
Fairfax, VA-FVCBankcorp, Inc. (OTCQX:FVCB) (the “Company”) reported unaudited consolidated earnings of $5.4 million for 2015, or $0.85 diluted earnings per share, an increase of $1.3 million, or 31.1% compared with 2014 net income of $4.1 million, or $0.79 diluted earnings per share. The improved earnings per share also reflect the increased number of shares from the five-for-four stock split distributed in May 2015. The record earnings for the year is attributable to the robust loan growth and low cost funding, as well as the Company’s improved operating efficiency.
Net income for the quarter ended December 31, 2015, was $1.0 million, or $0.15 diluted earnings per share, compared with $1.2 million, or $0.23 diluted earnings per share for the same 2014 quarter. The lower earnings for the 2015 fourth quarter reflect the increased provision for loan losses due to significant fourth quarter loan originations.
“2015 was a milestone year for FVCbank as our team achieved record loan growth and earnings in one of the most vibrant markets in the country,” stated David W. Pijor, Chairman, President and CEO. “We continue to win relationships and embrace our commitment to provide the best quality and service to our customers.”
Balance Sheet
Total assets increased to $736.8 million compared with $604.8 million as of December 31, 2015, and 2014, respectively, an increase of 21.8%. Loans receivable totaled $623.6 million as of December 31, 2015, compared with $509.9 million as of December 31, 2014, an increase of $113.6 million, or 22.3%. During the fourth quarter of 2015, loans increased $61.2 million, representing annualized growth in excess of 40%.
Total deposits increased $122.4 million, or 24.3% to $626.6 million as of December 31, 2015, compared with $504.2 million as of December 31, 2014. Non-interest bearing deposits comprise 20.6% of total deposits and increased $24.0 million, or 22.8% for the year. Wholesale deposits totaling $55.4 million, or 8.8% of total deposits, increased $11.0 million, while customer deposits increased $111.4 million for the 2015 year. The Company continues to leverage its suite of cash management products and high-touch service to new and existing customers as part of its relationship banking strategy.
Income Statement
Net interest income totaled $22.9 million, an increase of $3.7 million, or 19.3% for the year ended December 31, 2015, compared with the prior year. The Company’s net interest margin was 3.69% and 3.63% for the years ended December 31, 2015, and 2014, respectively. The improved net interest margin primarily results from growth in loans receivable year over year. Net interest income totaled $6.0 million and $5.3 million, for the quarters ended December 31, 2015, and 2014, respectively. The net interest margin was 3.63% and 3.70% for the same respective periods. The net interest margin remained stable in this low interest rate environment as the loan portfolio increased as a percentage of earning assets and continues to be funded by low cost deposits.
Non-interest income declined to $1.1 million from $1.2 million for the years ended December 31, 2015, and 2014, respectively, due to the gain on the sale of an SBA loan totaling $200 thousand recognized in the 2014 fourth quarter. Management has implemented new initiatives to enhance non-interest income, while maintaining its commitment to be a low fee bank for its customers.
The Company continues to attract high-performing experienced individuals as it grows prudently and soundly. Non-interest expenses increased $1.4 million, or 10.4% for the 2015 year. Salary and compensation related expenses increased $977 thousand, or 12.5%, while other operating expenses increased $408 thousand, or 7.4%, for the same period. The efficiency ratio improved to 61.5%, compared with 65.2%, for the years ended December 31, 2015, and 2014, respectively, reflecting the Company’s early investment in technology and experienced bankers.
Asset Quality
Asset quality remains strong. The Company reported non-performing asset and loans ninety days or more past due of $2.6 million, or 0.35% of total assets, compared with $1.6 million, or 0.26%, as of December 31, 2015, and 2014, respectively. Management continues its conservative credit culture through proactive monitoring and early identification of potential problem loans.
Financial data can be viewed here .
About FVCBankcorp, Inc.
The Company remains “well-capitalized” under the new Basel III guidelines adopted in 2015. The holding company was formed in 2015 to allow for flexibility in raising capital in the future to optimize shareholder value.
The Company plans to open a new branch location in Loudoun County in the first half of 2016 and continues to look for opportunities to expand FVCbank’s footprint throughout the Washington, D.C. Metropolitan area.
FVCbank commenced operations in November 2007 and is the wholly-owned subsidiary of FVCBankcorp. FVCbank is a $737 million Virginia chartered community bank serving small and mid-sized businesses and personal banking customers in the Washington, D.C. Metropolitan area. Locally owned and managed, it is based in Fairfax, Virginia, and has four additional full-service offices in Arlington, Manassas, Reston and Springfield, Virginia.
For more information on FVCBankcorp’s 2015 selected financial information, please visit the Investor Relations page of FVCBankcorp’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 FVCBankcorp’s plans, objectives, estimates, intentions and expectations as to future trends, plans, events or results of FVCBankcorp’s operations and polices 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.
