FAIRFAX, Va.--(BUSINESS WIRE)--FVCBankcorp, Inc. (OTCQX:FVCB) reported unaudited consolidated earnings of $1.8 million for the second quarter of 2016, or $0.21 diluted earnings per share, an increase of $314 thousand, or 21.3% compared with the 2015 second quarter. Return on average assets was 0.94% for the quarter, while return on average equity increased to 9.30%.
Net income for the first half of 2016 totaled $3.6 million, an increase of $661 thousand, or 22.9%, compared with net income of $2.9 million for the same 2015 period. Diluted earnings per share for the six-months increased to $0.46 from $0.37, for the six-months ended June 30, 2016 and 2015, respectively, and reflect adjustments for the 25% stock dividend paid on June 30, 2016. The increased earnings is attributable to the growth in loans and deposits, both increasing at a five year compound annual growth rate in excess of 25%.
“We are pleased with our results for the first half of the year,” stated David W. Pijor, chairman, president and CEO. “We have strong momentum as we enter into the second half of the year and the regulatory capital from the subordinated debt offering provides additional capacity for the Bank to grow and creates a strong value proposition for our shareholders.”
Balance Sheet
Total assets increased to $796.8 million, compared with $663.6 million as of June 30, 2016 and 2015, respectively, an increase of $133.2 million, or 20.1%. Loans receivable totaled $664.1 million as of June 30, 2016, compared with $560.0 million as of June 30, 2015, an increase of $104.1 million, or 18.6%. For the quarter, loans increased $24.5 million, or 15.3% on an annualized basis. The Company’s loan pipeline is at a record high as we start the second half of the year. The strong loan pipeline is expected to result in higher loan closings in the third and fourth quarters of 2016.
Total deposits increased to $675.4 million as of June 30, 2016, compared with $588.1 million as of June 30, 2015, an increase of $87.3 million, or 14.8%. Wholesale deposits totaled $48.6 million, compared with $63.4 million as of June 30, 2016 and March 31, 2016, respectively, a decrease of $14.8 million, and represent only 7.2% of total deposits at June 30, 2016. Noninterest-bearing deposits totaled $150.1 million at June 30, 2016, comprising 22.2% of total deposits and increased $10.4 million, or 27.7%, on an annualized basis compared with the prior quarter ended March 31, 2016.
Tangible book value per share was $9.55 and $8.58 as of June 30, 2016 and 2015, respectively. The Company completed a $25 million subordinated debt offering in June of 2016, resulting in increased regulatory capital ratios well in excess of “well-capitalized” under the new Basel III guidelines. The additional capital provides capacity for the Company to continue its prudent strategic growth and enhance shareholder value.
Income Statement
Net interest income totaled $6.6 million, an increase of $942 thousand, or 16.7%, for the quarter ended June 30, 2016, compared with the quarter ended March 31, 2015. The Company’s net interest margin was 3.57% and 3.77% for the quarters ended June 30, 2016 and 2015, respectively. On a linked quarter basis, the margin decreased to 3.57% from 3.74%, primarily due to premiums on U.S. Department of Agriculture (USDA) loans and residential loan payoffs during the second quarter of 2016.
Noninterest income totaled $366 thousand and $281 thousand for the quarters ended June 30, 2016 and 2015, respectively. Noninterest expenses increased $535 thousand to $4.1 million for the quarter ended June 30, 2016, compared with the quarter ended June 30, 2015. The increase is primarily due to new hires and general compensation related increases over the prior year combined with expenses associated with a larger bank, including the holding company formation. The efficiency ratio improved slightly to 60.0%, compared with 60.6%, for the quarters ended June 30, 2016 and 2015, respectively.
Asset Quality
Asset quality remains sound as nonperforming assets and loans 90 days or more past due totaled only $3.1 million, or 0.39%, of total assets. The increase is primarily due to a USDA guaranteed loan that is over 90 days past due and expected to be repaid in the third quarter.
About FVCBankcorp Inc.
FVCbank commenced operations in November 2007 and is the wholly-owned subsidiary of FVCBankcorp, Inc. FVCbank is a $796.8 million Virginia chartered community bank serving small and mid-sized businesses and personal banking customers in the Washington D.C. Metropolitan and Northern Virginia 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. The Company expects to open its sixth branch office in Ashburn, Virginia in the third quarter of 2016.
For more information on the Company’s 2016 second quarter selected financial information, please visit the Investor Relations page of FVCBankcorp Inc.’s website, www.fvcbank.com.
