More annual reports from FVCBankcorp, Inc.:
2023 Report2017 Annual Report April 18, 2018 To Our Shareholders: 2017 marked our 10th year of operations and was one of great accomplishment as FVCBankcorp, Inc. (the “Company”) surpassed $1 billion in total assets and again achieved record earnings. As we continue to see increases in market share and franchise value, we are well positioned to continue our growth trajectory by focusing on our core strengths into 2018. I am pleased to share our 2017 financial performance with you. The Company reported consolidated operating earnings of $9.7 million, or $0.84 diluted earnings per share, for the year ended December 31, 2017, compared to $6.9 million, or $0.63 diluted earnings per share, for the 2016 period. This represents a 40% growth in operating earnings year over year. The Company’s 2017 operating earnings exclude the impact of a $2.0 million write down in its deferred tax asset as a result of the enactment of the Tax Cuts and Jobs Act (“TCJA”) in December 2017. Including the write down, net income per generally accepted accounting principles (“GAAP”) for the year ended December 31, 2017 is $7.7 million, or $0.67 per diluted share. On an operating basis, excluding the impact of the TCJA, return on average assets was 1.01% and return on average equity was 10.88% for the year ended December 31, 2017. On a GAAP basis, the Company reported return on average assets of 0.80% and return on average equity of 8.64% for the year ended December 31, 2017, compared to a return on average assets of 0.88% and return on average equity of 8.91% for 2016. Total assets increased to $1.05 billion compared to $909.3 million as of December 31, 2017 and 2016, respectively, an increase of $144 million, or 16%. The Company’s focus on its relationship banking strategy has resulted in increases in its loans receivable portfolio and total deposits. Loans receivable, net of deferred fees, totaled $888.7 million as of December 31, 2017, compared to $768.1 million as of December 31, 2016, a year over year increase of $121 million, or 16%. Total deposits increased to $928.2 million as of December 31, 2017 compared to $776.0 million as of December 31, 2016, an increase of $152 million, or 20%. The Company’s increase in deposits is a result of several successful targeted promotions to continue its growth in core deposits. Noninterest-bearing deposits increased 6% to $175.4 million at December 31, 2017, or 19% of total deposits, compared to $165.7 million at December 31, 2016. Core deposits, which include total deposits less wholesale deposits, increased $99 million or 14% year over year. Wholesale deposits totaled $115.5 million, or 12% of total deposits at December 31, 2017. Tangible book value per share at December 31, 2017 was $9.03, an increase from $7.83 at December 31, 2016. This is remarkable as we completed a successful over-subscribed private placement of 500,000 shares of our common stock providing gross proceeds of $10.0 million in capital to the organization during the third quarter of 2017. We are also extremely pleased with the notable increase in the value of our common stock during 2017. Our stock price closed at $17.52 on December 29, 2017, a 30% year-over-year increase, and 1.9x our tangible book value. Net interest income totaled $32.1 million for the year ended December 31, 2017, compared to $27.2 million for 2016, an increase of 18%. Net interest margin was 3.45% and 3.53% for the years ended December 31, 2017 and 2016, respectively. Noninterest income for the years ended December 31, 2017 and 2016 was $3.0 million and $1.2 million, respectively. The Company recorded noninterest income of $443,000 from a claim on the bank owned life insurance (“BOLI”) policies during the first quarter of 2017. Recurring fee income was $1.3 million, an increase of 12% for the year ended December 31, 2017 compared to 2016. The Company continues to enhance its fee income opportunities through ancillary services designed to serve its clients’ financial needs. Noninterest expense was $19.3 million and $16.4 million, for the years ended December 31, 2017 and 2016, respectively. The efficiency ratio decreased to 57.2% from 58.0%, for the years ended December 31, 2017 and 2016, respectively. Asset quality remains strong as nonperforming loans and loans ninety days or more past due totaled $789,000, or 0.07% of total assets. Troubled debt restructurings (“TDR”) decreased to $1.7 million at December 31, 2017, compared to $11.5 million at December 31, 2016. Nonperforming assets (including TDRs) to total assets was 0.58% and 1.29% for the years ended December 31, 2017 and 2016, respectively. The allowance for loan losses to total loans was 0.87% at December 31, 2017, reflecting credit quality improvement in the loan portfolio and refinements to the loan loss allocation as the loan portfolio grows. On behalf of your Board of Directors and employees, we thank you for your business, your referrals and your continued support as we start our 11th year of operations. We also thank our employees for their hard work and dedication, without which we would not be able to attain and exceed our strategic goals. We are excited about our 2018 objectives which will continue to enhance the performance of your Company. Best regards, David W. Pijor Chairman and Chief Executive Officer Annual Report 2017 1 DIRECTORS David W. Pijor Chairman L. Burwell Gunn Vice Chairman Patricia A. Ferrick EXECUTIVE OFFICERS David W. Pijor Chairman Chief Executive Officer Patricia A. Ferrick President B. Todd Dempsey Executive Vice President Chief Operating Officer Scott Laughlin Sidney G. Simmonds Thomas L. Patterson Daniel M. Testa Devin Satz Philip “Trey” R. Wills III Lawrence W. Schwartz Steven M. Wiltse William G. Byers Executive Vice President Chief Lending Officer Michael G. Nassy Executive Vice President Chief Credit Officer Sharon L. Jackson Executive Vice President Chief Deposit Officer Jennifer L. Deacon Executive Vice President Chief Financial Officer REGIONAL LENDING OFFICERS Alissa Curry Briggs Director of Commercial Real Estate Lending Christopher O. Turley Director of C&I Lending and Government Contractor Lending James C. Elliot Market President Prince William Lance D. Nobles Market President Loudoun OFFICERS Michelle L. Buckles Senior Vice President Director of Compliance Terry L. Elliott Senior Vice President Lending Terry F. Frey Senior Vice President Loan Administration Thomas Grantham Senior Vice President Lending Oliver James Senior Vice President Lending Mark Palmer Senior Vice President Lending Joshua F. Steele Senior Vice President Lending Jacqueline S. Marbell-Edson Senior Vice President Loan Administration Huong V. Song Senior Vice President Lending Alberta A. Gibson Senior Vice President Director of Human Resources Farideh Mullafiroze Senior Vice President Business Development Steffany R. Watson Senior Vice President Director of Cash Management 2 FVCBankcorp, Inc. Executive Team Seated David W. Pijor, Chairman and CEO Patricia A. Ferrick, President William G. Byers, EVP Chief Lending Officer B. Todd Dempsey, EVP Chief Operating Officer Sharon L. Jackson, EVP Chief Deposit Officer Jennifer L. Deacon, EVP Chief Financial Officer Michael G. Nassy, EVP Chief Credit Officer FVCbank began as an idea of Founder and CEO David Pijor. Since opening its doors in November 2007, FVCbank built a reputation of a community bank with a vision of helping people achieve their dreams. Now, 10 years later, the Bank has grown to six branches with over 85 employees and $1 billion in total assets. Of the Bank’s initial team, six continue to devote their time and talent as dedicated employees of FVCbank. Most of the founding shareholders remain invested in the Bank and many of the first customers continue to bank with FVCbank. Annual Report 2017 3 Loan and Deposit Growth Gross Loans (mm) Total Deposits (mm) 5 Year CAGR 22% $889 $768 $624 $510 $411 $1000 $900 $800 $700 $600 $500 $400 $300 $200 $100 0 5 Year CAGR 20% $928 $776 $627 $504 $430 $1000 $900 $800 $700 $600 $500 $400 $300 $200 $100 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Increasing Profitability Income Before Taxes (thousands) 5 Year CAGR 45% $14,536 $10,503 $8,279 $6,296 $3,525 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 0 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0 Efficiency Ratio 74.78% 65.21% 61.29% 58.02% 57.16% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 4 FVCBankcorp, Inc. Selected Financial Data For the year ended December 31, (Unaudited) (dollars in thousands, except per share data) 2017 2016 2015 2014 2013 2012 Selected Balances Total assets Total investment securities Total loans Allowance for loan losses Total deposits Subordinated notes, net of issuance costs Other borrowings Total shareholders’ equity Summary Results of Operations Interest income Interest expense Net interest income Provision for loan losses Net interest income after provision for loan losses Noninterest income - gains on sales of securities available for sales Noninterest income - gains on sales of loans Noninterest income - gain on foreclosure of other real estate owned Noninterest income - services charges and other income Noninterest expense Income before taxes Income tax expense (benefit) Net income Per Share Data (1) Net income, basic Net income, diluted Book value Tangible Book value Shares outstanding Significant Ratios Net interest margin Efficiency ratio Return on average assets Return on average equity Total capital (to risk weighted assets) Common equity tier capital (to risk weighted assets) Tier 1 capital (to risk weighted assets) Tier 1 (to average assets) Asset Quality Nonperforming assets and loans 90+ past due (2) Nonperforming assets and loans 90+ past due to total assets (2) Allowance for loan losses to loans Allowance for loan losses to nonperforming assets Net (recovery) charge-offs $ $ $ $ $ $ $ 1,053,224 $ 909,305 $ 736,807 $ 604,756 $ 506,717 $ 422,761 117,712 888,677 (7,725) 928,163 24,327 - 98,283 113,988 768,102 (6,452) 775,991 24,247 27,000 79,811 67,795 623,559 (6,239) 626,640 - 35,650 72,752 62,697 509,938 (5,565) 504,220 - 32,500 66,815 56,890 411,040 (4,792) 429,990 - 14,500 60,903 $ 40,302 $ 32,587 $ 26,557 $ 22,473 $ 18,491 $ 8,195 32,107 1,200 30,907 164 - 1,075 1,736 19,346 14,536 6,846 7,690 5,387 27,200 1,471 25,729 71 - - 1,149 16,446 10,503 3,571 6,932 3,665 22,892 1,073 21,819 68 - - 1,093 14,701 8,279 2,860 5,419 3,288 19,185 886 18,299 77 196 - 1,040 13,316 6,296 2,162 4,133 2,960 15,531 803 14,728 204 - - 821 12,228 3,525 1,297 2,228 29,128 331,428 (3,757) 378,702 - 2,500 39,143 15,095 2,515 12,580 1,227 11,353 23 - - 1,075 10,168 2,283 805 1,478 0.74 0.67 9.04 9.03 $ $ $ $ 0.68 0.63 7.84 7.83 $ $ $ $ 0.54 0.51 7.18 7.16 $ $ $ $ 0.41 0.41 6.59 6.58 $ $ $ $ 0.25 0.25 6.02 6.01 $ $ $ $ 0.22 0.22 5.65 5.62 10,868,984 10,178,909 10,141,281 10,137,691 10,110,805 6,931,243 3.45% 57.16% 0.80% 8.63% 12.83% 12.05% 12.05% 11.79% 3.53% 58.02% 0.88% 8.91% 13.16% 12.37% 12.37% 11.89% 3.69% 61.29% 0.85% 7.70% 12.20% 11.25% 11.25% 10.82% 3.63% 65.21% 0.76% 6.45% 13.62% N/A 12.53% 10.96% 3.59% 74.78% 0.50% 4.21% 15.89% N/A 14.71% 12.58% 4,655 $ 249 $ 2,559 $ 1,601 $ 2,988 $ 0.44% 0.87% 0.03% 0.84% 0.35% 1.00% 0.26% 1.09% 0.59% 1.17% 165.95% 2,591.16% 243.81% 347.51% 160.37% (73) $ 1,257 $ 399 $ 113 $ (231) $ Net (recovery) charge-offs to average loans (0.01%) 0.19% 0.07% 0.03% (0.06%) (1) Adjusted for 5-for-4 stock splits in 2017, 2016, and 2015 (2) excludes performing troubled debt restructurings Annual Report 2017 4.09% 74.46% 0.47% 4.11% 12.29% N/A 11.13% 9.16% 4,623 1.09% 1.13% 81.27% 225 0.07% 5 Ashburn Lance Nobles, Market President Loudoun Judith Jackson, CSR Masuma Kerawala, Assistant Branch Manager Leiah Rocheleau, VP Commercial Loan Officer Clive Yeo, VP Portfolio Credit Risk Review Officer The newest FVCbank location, opening its doors at the end of 2016, the Ashburn Branch team immediately reached out to the Loudoun County community to actively engage with its residents and businesses. Through a relationship-focused approach, the team achieved loan production and deposit goals earlier than anticipated for the year. 6 FVCBankcorp, Inc. Arlington Thomas Grantham, SVP Commercial Loan Officer Sylvana Mascarenhas, VP Branch Manager Miguel Cisneros, Assistant Branch Manager Alissa Curry Briggs, Director Commercial Real Estate Lending Eric Radcliffe, VP Commercial Loan Officer Courtney Williams, AVP Junior Portfolio Credit Risk Review Officer Jocelyn Dorsey, CSR LaDonna Simon, VP Business Development Mark Palmer, SVP Commercial Lender Karl Eckert, Head Teller Living and working in the community in which they serve, the FVCbank Arlington Branch team holds a unique perspective and extensive expertise in serving the business landscape in this area. Serving Arlington, Washington, D.C., Alexandria, as well as southern Maryland, this team carries vast experience in servicing businesses from all industries and sectors. A majority of FVCbank’s Commercial Real Estate lenders call the Arlington office home. Annual Report 2017 7 Fairfax Sharon Ricciardi, VP Business Development Brittany Bower, Assistant Branch Manager Josh Grimes, Technical Support Administrator Michelle Buckles, SVP Director of Compliance Anna M. Keefe, Assistant to CEO Susan Abughannam, Receptionist Loan Administrator I Chandna Singhla, Teller Stephanie Carey, VP Branch Administration Joshua Steele, SVP Commercial Lender Serving as FVCbank headquarters since the doors opened on November 27, 2007, the Fairfax location houses the Bank’s executive offices and the original branch. With the combined experience of the Fairfax Branch team, Business Development Officers, Lending, Executive Assistants, Receptionist, Compliance and IT professionals, the Bank continues to grow and thrive. 8 FVCBankcorp, Inc. Fairfax Terry Frey, SVP Loan Administration Patricia D. Bhatia, VP Loan Servicing Lisa Craze, VP Loan Administration Sharon Frey, Loan Administration Gail Edmonds, Loan Compliance Analyst Natalie Heymer, Junior Documentation Specialist Brooke Johnson, VP Loan Reporting The FVCbank Loan Administration and Servicing teams serve as the backbone to the Lending team providing guidance and support to all lenders. The Loan Administration team plays a critical role in documenting and booking loans while making certain all deadlines are met. The experienced Loan Servicing group has many functions including responding to all customer inquiries and quality control review. Annual Report 2017 9 Fairfax Armina So, AVP Senior Underwriter Jacqueline Marbell-Edson, SVP Credit Administration Brandon Parker, VP Senior Underwriter and Team Leader Brennan Rader, AVP Senior Underwriter Farideh Mullafiroze, SVP Business Development Courtney Williams, AVP Junior Portfolio Credit Risk Review Officer Greg Kassing, VP Portfolio Credit Risk Review Officer Through the dedicated efforts of the FVCbank Credit Administration team, the Bank’s loan portfolio remains clean. This team provides all the underwriting for our commercial loans and is the oversight of all activities related to a bank’s credit process. They make certain that the loan portfolio maintains its quality while managing the credit risk. They guarantee and ensure compliance with the Bank’s policies and procedures. 10 FVCBankcorp, Inc. Manassas Pawanjeet Sekhon, CSR Amarjit Ubee, Teller Tonya L. Smith, VP Retail Lending Nancy Walker, VP Branch Manager James C. Elliott, Market President Prince William Terry Elliott, SVP Commercial Loan Officer Crissy Everly, VP Assistant Controller David Clark, VP Controller Serving the Prince William County community since June 2008, FVCbank’s Manassas Branch serves as home to many integral teams providing financial services for the Bank. The following teams operate out of the Manassas location: Lending, Branch Retail, Accounting, Deposit Operations, BSA, Cash Management, Compliance, Human Resources and Underwriting. The lending, branch retail and accounting teams provide customer-centric service to facilitate relationships and help businesses reach established goals. Annual Report 2017 11 Manassas Steffany Watson, SVP Director of Treasury Management Services Christine M. Rowe, VP Treasury Management Jennifer Sutherland, Human Resources Generalist Nardos Welch, Treasury Management Officer Bertie A. Gibson, SVP Director of Human Resources Dominique Baptiste, AVP Treasury Management Terry Byard, Assistant Compliance Officer Joanna Atchison, VP Senior Underwriter Always on call, FVCbank’s Cash Management team serves as the face and the voice for all customers supporting the technology and electronic banking services. FVCbank’s Human Resources department works to recruit and retain the best and the brightest bankers to provide service for our customers. The Compliance team maintains and monitors all Bank operations to ensure transactions occur in accordance with all guidelines and regulations. 12 FVCBankcorp, Inc. Manassas Megan Piccione, AML Specialist Lauren O’Loughlin, BSA Specialist Cathy Nisley, AVP Deposit Operations Barbara Bowman, Operations Officer Jan Olson, Operations Specialist Colin Reid, VP BSA Officer Kimberly Shahid, Operations Specialist II Cynthia L. Piccione, VP Operations Providing strong, internal and external support, the Deposit Operations team works efficiently to monitor and process transactions. Likewise, operating in a highly regulated environment, FVCbank’s Bank Secrecy Act (BSA) team monitors and maintains operations in compliance with regulations. Both teams provide service through FVCbank’s Manassas Branch. Annual Report 2017 13 Reston Oliver James, SVP Commercial Lender Peggy Elie, VP Branch Manager Todd Frantum, Teller Jason Brooks, VP Commercial Lender Debra Noviello, Portfolio Coordinator Christopher O. Turley, Director C&I and Government Contract Lending Allyson Kavaljian, Teller Uriel Gregoire, Portfolio Manager Representing the third office for FVCbank, the Reston Branch opened in 2011 as a combination branch and loan production office. Building the branch around experienced commercial lenders with extensive GovCon experience, the Reston location offered the opportunity to capitalize on Northern Virginia’s high growth market. Today, this location houses FVCbank’s GovCon and Commercial and Industrial (C&I) lending teams with in-depth knowledge of the regulations and challenges facing this industry. 14 FVCBankcorp, Inc. Springfield Mila Robinson, Teller Majshda Bahri, VP Business Development Pati Gambino, VP Branch Manager Barbi Levengood, Assistant Branch Manager Rebeka Afreen, Head Teller FVCbank opened its central Springfield office in December 2013 recognizing the value and energy of the market in that region. The leadership provided by dynamic and seasoned banking professionals allowed the team to quickly create relationships in the business community. As a cohesive group, the team understands the needs of the community, the goals of its customers and provides the right solutions and expertise to achieve success. Annual Report 2017 15 Navneet Warraich, CSR Huong V. Song, SVP Commercial Lender Colleen Hube, Loan Documentation Specialist Anthony Ranghelli, VP Director of IT Celebrating 10 years of dedicated service, FVCbank’s team members, including Branch, Lenders, IT and Loan Servicing staff (pictured above), build on the Bank’s foundation and look to the future with a focus on continued support for shareholders and customers, allowing them to achieve their goals. Starting with a team of 11 employees, FVCbank since expanded to nearly 90 talented experts, each one bringing unique backgrounds and expertise, to provide comprehensive support for our customers. 16 FVCBankcorp, Inc. LOCATIONS Headquarters 11325 Random Hills Road, Suite 240 Fairfax, VA 22030 Phone: 703.436.3800 Arlington Branch 2500 Wilson Boulevard, Suite 100 Arlington, VA 22201 Phone: 703.387.5050 Ashburn Branch 43800 Central Station Drive, Suite 150 Ashburn, VA 20147 Phone: 571.919.6780 Fairfax Branch 11325 Random Hills Road, Suite 140 Fairfax, VA 22030 Phone: 703.436.3800 Manassas Branch 7900 Sudley Road Manassas, VA 20109 Phone: 703.656.7300 Reston Branch 11260 Roger Bacon Drive, Suite 101 Reston, VA 20190 Phone: 703.436.3880 Springfield Branch 6975 Springfield Boulevard Springfield, VA 22150 Phone: 703.672.2590 www.fvcbank.com
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