2019 Annual Report
Growing relationships.
Building success.
I
2019 Annual Report “Our team strives to create strong relationships with our
customers so that we can provide the highest level of
service possible to help them achieve their goals. These
relationships, combined with our industry expertise, allow
our customers to realize continued growth and success.”
– David W. Pijor, chairman and CEO of FVCB and FVCbank
TO OUR SHAREHOLDERS
As we prepare to share our 2019 financial performance with you and provide highlights of our
successes, we are struck by the significant changes in recent weeks brought on by the pandemic
crisis facing our world. It seems fitting to report that, above all, we are here, standing strong and
committed to work tirelessly to serve our customers and our communities during this unprecedented
time. Most importantly, we are committed to protecting our employees and our customers as we
remain open to provide financial services.
2019 was a year of continued growth for FVCBankcorp, Inc. We focused on core organic growth in
our markets which continue to enhance our market share and franchise value. Despite our earnings
being impacted by a flat yield curve and three rate cuts by the Federal Open Market Committee of
the Federal Reserve during 2019, I am pleased to report record earnings for the Company for 2019.
We reported consolidated net income of $15.8 million, or $1.07 per diluted earnings per share, for the
year ended December 31, 2019, compared to $10.9 million, or $0.85 diluted earnings per share, for
the year ended December 31, 2018. This represents a 46% increase in net income year-over-year. On
an operating earnings basis, which excludes merger-related expenses net of tax of $102 thousand
and $2.6 million for the years ended December 31, 2019 and 2018, respectively, net income was $15.9
million and $13.4 million, or $1.07 and $1.05 per diluted share, for the years ended December 31, 2019
and 2018, respectively.
On a GAAP basis, for the years ended December 31, 2019 and 2018, return on average assets was
1.09% and 0.94%, respectively. Return on average equity for the years ended December 31, 2019 and
2018 was 9.32% and 9.29%, respectively. On an operating earnings basis, return on average assets
and return on average equity for the year ended December 31, 2019 were 1.10% and 9.38% and were
1.16% and 11.47% for the year ended December 31, 2018.
Selected Highlights
•
•
•
Strong Loan Growth. Year-over-year loan growth was $133.8 million, or 12% from December 31,
2018 to December 31, 2019. We had loans held for sale totaling $11.2 million at December 31, 2019
compared to none for 2018.
Strong Year-Over-Year Deposit Growth. Year-over-year, deposit growth was $123.3 million, or
11% from December 31, 2018 to December 31, 2019. Noninterest-bearing deposits increased $72.9
million, or 31% during 2019, and represent 24% of the total deposit base at December 31, 2019.
Continued Earnings Growth. Net income for the year ended December 31, 2019 was $15.8 million,
an increase of $5.0 million, or 46%, as compared to $10.9 million for the year ended December
31, 2018. Net interest income increased $8.2 million, or 21% to $48.1 million for the year ended
December 31, 2019 as compared to 2018.
•
Improved Tangible Book Value. Tangible book value per share at December 31, 2019 was $12.26,
a 12% increase from $10.93 at December 31, 2018.
Balance Sheet
Total assets increased to $1.54 billion at December 31, 2019 compared to $1.35 billion at December 31,
2018, an increase of $185.7 million, or 14%. Loans receivable, net of deferred fees, totaled $1.27 billion at
December 31, 2019, compared to $1.14 billion at December 31, 2018, an increase of $133.8 million, or 12%.
Loans held for sale totaled $11.2 million at December 31, 2019, and are comprised of our unsecured
consumer loan portfolio that we purchased during the last two years. The earnings stream provided by
this portfolio was not as expected, as we recorded net charge-offs of $647 thousand during 2019.
Investment securities increased $16.3 million to $141.6 million at December 31, 2019, compared to $125.3
million at December 31, 2018.
Total deposits increased to $1.29 billion at December 31, 2019 compared to $1.16 billion at December 31,
2018, an increase of $123.3 million, or 11%. Core deposits, which represent total deposits less wholesale
deposits, increased $107.7 million, or 10%, to $1.19 billion at December 31, 2019 compared to $1.08 billion
at December 31, 2018. Wholesale deposits totaled $100.0 million, or 8% of total deposits, at December
31, 2019, an increase of $15.6 million from December 31, 2018. Noninterest-bearing deposits increased
$72.9 million to $306.2 million at December 31, 2019 from $233.3 million at December 31, 2018, and
represented 24% of total deposits at December 31, 2019.
Income Statement
Net interest income totaled $48.1 million, an increase of $8.2 million, for the year ended December 31,
2019, compared to 2018. Our net interest margin decreased 3 basis points to 3.48% for the year ended
December 31, 2019 compared to 3.51% for the year ended December 31, 2018.
Noninterest income for the year-to-date period ended December 31, 2019 was $2.5 million, compared
to $1.7 million for the 2018 year-to-date period, an increase of $885 thousand, or 53%, which
was primarily driven by service charges on deposit accounts, income related to bank-owned life
insurance, and other fee income.
For the years ended December 31, 2019 and 2018, noninterest expense was $28.9 million and $26.4
million, respectively, the increase of which relates directly to the addition of Colombo to the our
expense structure and increases in staffing year-over-year. The efficiency ratios for operating
earnings for the years ended December 31, 2019 and 2018, were 56.6% and 55.1%, respectively.
For the year ended December 31, 2019, provision for income taxes was $4.2 million compared to $2.2
million for the year ended December 31, 2018. The effective tax rates for the years ended December
31, 2019 and 2018 were 20.9% and 17.1%, respectively. The effective tax rates in each period presented
are less than our statutory rate of 21% primarily because of discrete tax benefits recorded as a result
of exercises of nonqualified stock options during 2018 and 2019.
Asset Quality
Year-to-date provision expense for 2019 was $1.7 million compared to $1.9 million for the 2018
year-to-date period. Nonperforming loans and loans ninety days or more past due at December
31, 2019 totaled $10.7 million, or 0.70% of total assets, of which $1.3 million related to acquired
loans. All of our nonperforming loans are secured and have specific reserves totaling $393 thousand,
representing the expected losses associated with those loans. Included in nonperforming loans is
one loan totaling $3.9 million which is collateralized by property that is under a purchase and sales
agreement that we expect will close during the first quarter of 2020, and for which we expect to
receive full repayment. There were no new troubled debt restructurings (“TDR”) at December 31,
2019. Nonperforming assets (including other real estate owned, or OREO) to total assets was 0.95%
at December 31, 2019 compared to 0.57% for December 31, 2018.
The allowance for loan losses to total loans was 0.81% for each of the periods ended December 31,
2019 and December 31, 2018. The allowance for loan losses on our originated loan portfolio, excluding
the credit mark on acquired loans, was 0.88% of loans outstanding at December 31, 2019. Net
charge-offs of $648 thousand were recorded during 2019 which were primarily related to our
purchased consumer unsecured loan portfolio.
On behalf of your Board of Directors and employees, we thank you for your continued support
as we work together to address challenges brought on by the COVID-19 pandemic. We are grateful
to our team of bankers that provide expertise and a passion for personalized service each and
every day. We are proud to be part of this great country and to be part of such a resilient and
caring community.
Best regards,
David W. Pijor, Chairman and Chief Executive Officer
2019 Annual Report
1
EXECUTIVE OFFICERS
Seated, from left to right: Patricia A. Ferrick, President; David W. Pijor, Chairman and Chief Executive Officer.
Standing, from left to right: William G. Byers, Executive Vice President and Chief Lending Officer; Jennifer
L. Deacon, Executive Vice President and Chief Financial Officer; B. Todd Dempsey, Executive Vice President
and Chief Operating Officer; Sharon L. Jackson, Executive Vice President and Chief Deposit Officer; and,
Michael G. Nassy, Executive Vice President and Chief Credit Officer.
2 Growing relationships. Building success.
DIRECTORS
David W. Pijor
Chairman/CEO
L. Burwell Gunn
Vice Chairman
Morton A. Bender
Patricia A. Ferrick
President
Scott Laughlin
Thomas L. Patterson
Devin Satz
Lawrence W. Schwartz
Sidney G. Simmonds
Daniel M. Testa
Philip “Trey” R. Wills III
Steven M. Wiltse
OFFICERS
Alissa Curry Briggs*
Executive Director of Commercial Real Estate Lending
Gerald A. Muccioli
Market President, Maryland and D.C.
James C. Elliott
Market President, Virginia
Oliver James
Director of C&I and Government Contractor Lending
Michelle L. Buckles
Senior Vice President, Director of Compliance
Farideh Mullafiroze
Senior Vice President, Business Development Officer
Lisa M. Craze
Senior Vice President, Loan Documentation and Administration
Mark Palmer
Senior Vice President, Commercial Loan Officer
Cynthia L. Piccione
Senior Vice President, Deposit Operations
Christine M. Rowe
Senior Vice President, Treasury Services Manager
Altaf Shadick
Senior Vice President, Director of Retail
Joshua F. Steele
Senior Vice President, Commercial Loan Officer
Huong V. Song
Senior Vice President, Commercial Loan Officer
Steffany R. Watson
Senior Vice President, Director of Treasury
Management Services
Terry L. Elliott
Senior Vice President, Commercial Loan Officer
Terry F. Frey
Senior Vice President, Loan Operations
Alberta A. Gibson
Senior Vice President, Director of Human Resources
Thomas W. Grantham
Senior Vice President, Commercial Loan Officer
Craig Laudeman
Senior Vice President, Commercial Loan Officer
Linda Long
Senior Vice President, Commercial Loan Officer
Jacqueline S. Marbell-Edson
Senior Vice President, Credit Administration
Tim Moorstein
Senior Vice President, C&I and Government Contract Loan Officer
*Executive Team Member
2019 Annual Report
3
SELECTED FINANCIAL DATA
(dollars and shares in thousands, except per share data)
INCOME STATEMENT DATA:
Interest income
Interest expense
Net interest income
Provision for loan losses
Net interest income after provision for loan losses
Non-interest income
Non-interest expense
Net income before income taxes
Provision for income taxes
Net income
BALANCE SHEET DATA:
Total assets
Loans receivable, net of fees
Allowance for loan losses
Total investment securities
Total deposits
Other borrowed funds
Total shareholders’ equity
Common shares outstanding
PER COMMON SHARE DATA:
Basic net income
Fully diluted net income
Book value
Tangible book value (1)
PERFORMANCE RATIOS:
Return on average assets
Return on average equity
Net interest margin (2)
Efficiency ratio (3)
Non-interest income to average assets
Non-interest expense to average assets
Loans receivable, net of fees to total deposits
ASSET QUALITY RATIOS:
Net charge-offs (recoveries) to average loans receivable, net of fees
Nonperforming loans to loans receivable, net of fees
Nonperforming assets to total assets
Allowance for loan losses to nonperforming loans
Allowance for loan losses to loans receivable, net of fees
CAPITAL RATIOS (Bank Only):
Tier 1 risk-based capital
Total risk-based capital
Common Equity Tier 1 capital
Leverage capital ratio
OTHER:
Average shareholders’ equity to average total assets
Average loans receivable, net of fees to average total deposits
Average common shares outstanding:
Basic
Diluted
2019
2018
2017
2016
2015
$ 66,734
18,671
48,063
1,720
46,343
2,546
28,877
20,012
4,184
$ 15,828
$ 51,924
12,110
39,814
1,920
37,894
1,661
26,448
13,107
2,238
$ 10,869
$ 40,302
8,195
32,107
1,200
30,907
2,975
19,346
14,536
6,846
$ 7,690
$ 32,587
5,387
27,200
1,471
25,729
1,220
16,446
10,503
3,571
$ 6,932
$ 1,537,295
1,270,526
(10,231)
141,589
1,285,722
49,487
179,078
13,902
$ 1,351,576
1,136,743
(9,159)
125,298
1,162,440
24,407
158,336
13,713
$ 1,053,224
888,677
(7,725)
117,712
928,163
24,327
98,283
10,869
$ 909,305
768,102
(6,452)
113,988
775,991
51,247
79,811
10,179
$ 1.15
1.07
12.88
12.26
1.09%
9.32%
3.48%
57.06%
0.18%
1.99%
99.82%
0.05%
0.84%
0.95%
95.39%
0.81%
12.72%
13.43%
12.72%
12.15%
11.71%
98.56%
13,817
14,825
$ 0.93
0.85
11.55
10.93
0.94%
9.29%
3.51%
63.07%
0.14%
2.28%
97.79%
0.05%
0.34%
0.57%
285.24%
0.81%
13.27%
14.02%
13.27%
12.41%
10.09%
96.56%
11,715
12,822
$ 0.74
0.67
9.04
9.03
0.80%
8.63%
3.43%
57.16%
0.31%
2.02%
95.75%
(0.01)%
0.09%
0.44%
979.09%
0.87%
12.05%
12.83%
12.05%
11.79%
9.32%
97.74%
10,435
11,545
$ 0.68
0.63
7.84
7.83
0.88%
8.91%
3.51%
58.02%
0.15%
2.08%
98.98%
0.19%
0.03%
0.03%
2,591.16%
0.84%
12.37%
13.16%
12.37%
11.89%
9.85%
96.05%
10,170
10,922
$ 26,557
3,665
22,892
1,073
21,819
1,161
14,701
8,279
2,860
$ 5,419
$ 736,807
623,559
(6,239)
67,795
626,640
35,650
72,752
10,141
$ 0.54
0.51
7.18
7.16
0.85%
7.70%
3.66%
61.29%
0.18%
2.30%
99.51%
0.07%
0.41%
0.35%
243.81%
1.00%
11.25%
12.20%
11.25%
10.82%
11.03%
97.83%
10,138
10,591
(1) Tangible book value is calculated as total shareholders’ equity, less goodwill and other intangible assets, divided by common shares outstanding.
(2) Net interest margin is calculated as net interest income divided by total average earning assets.
(3) Efficiency ratio is calculated as total non-interest expense divided by the total of net interest income and non-interest income. The efficiency ratio for 2018 was impacted
by merger expenses of $3.3 million associated with the Company’s acquisition of Colombo Bank.
4
Growing relationships. Building success. LOANS RECEIVABLE, Net of Fees (millions)
TOTAL DEPOSITS (millions)
%
0
R 2
G
A
C
R 2 1 %
G
A
C
$ -
$ -
2019
2019
INCOME BEFORE NONRECURRING
EXPENSES AND TAXES (thousands)
EFFICIENCY RATIO
%
6
R 2
G
A
C
$20,000
$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$ -
66.00%
64.00%
62.00%
60.00%
58.00%
56.00%
54.00%
52.00%
50.00%
2019
(3)
2019
2019 Annual Report
5
FIRST BAPTIST
CHURCH OF GLENARDEN
The First Baptist Church of Glenarden in Upper
Malboro, Maryland, has humble roots, starting as
a home-based Bible study in 1917. Now, what was
once a small group of believers has evolved into a
congregation of over 10,000.
As the First Baptist Church of Glenarden has served
the community and grown its ministry, FVCbank has
served and grown alongside them. From the start,
our banking philosophy matched them perfectly. Our
“no-fee” structure and desire to serve churches offered
a welcome change from the high-fees the church once
paid. FVCbank’s shared interest and visibility in the
community also made the choice easy for the church.
As we continue to give back to the community in which
we serve, we proudly support the church’s financial aid
program through our shareholders.
“The fact that we both have a
relationship-minded focus gives
us a synergy that facilitates our
working well together.”
– William G. Gentry Jr., CFO, First Baptist Church of Glenarden
6 Growing relationships. Building success.
CLERK OF THE CIRCUIT COURT
OF PRINCE WILLIAM COUNTY
The Clerk of the Circuit Court provides professional judicial services to the people of the
31st Judicial District of Virginia, which includes Prince William County and the cities of
Manassas and Manassas Park. Jacqueline Smith has served as the Clerk since May 1, 2017,
and is the only elected Clerk serving the jurisdiction.
FVCbank serves as a natural fit for the Prince
William Circuit Court because of our local
roots, continued community involvement
and government acumen. We built and
strengthened our partnership with our
relationship-driven support, industry
knowledge and government experience.
Just as the Clerk holds responsibility for
managing many different functions for the
court and the judicial process, FVCbank
handles the many different elements
involved in supporting their financial
needs and organizational goals.
Our dedicated staff also bolsters the
Clerk of the Circuit Court by serving as
good corporate citizens actively playing
a role in the Prince William community and
helping the Circuit Court serve them well.
“The level and quality of
service has been outstanding
since the day we started our
relationship with FVCbank.”
– Jacqueline Smith, Clerk of the Circuit
Court of Prince William County
2019 Annual Report
7
TL TRANSPORTATION
TL Transportation of Annapolis, Maryland, is a full-service last-mile delivery company
with over 1,000 drivers delivering packages on over 400 routes all across the east
coast. Priding themselves on service and safety measures setting them apart from their
competition, TL Transportation knew FVCbank’s entrepreneurial spirit would match
them perfectly.
One of our mottos and philosophy, “We think like
entrepreneurs, but work as a team” resonates
with TL Transportation and mirrors how they
approach their own business.
With guidance from FVCbank to
establish short-term outside financing,
they quadrupled their business in the
first year. Through all this growth,
we continued quickly and efficiently
processing loans and lines of credit
to them.
TL Transportation experienced
challenges with financing the opening
of three new locations and the hiring of
300 drivers within three weeks. FVCbank
rose to the challenge, providing short term
financial solutions that contributed to their
continuing success.
“Our company could not have
succeeded without FVCbank’s
fantastic branch managers
and market president.”
– Herschel Lowe, CEO, TL Transportation
8 Growing relationships. Building success.
ENGLISH GARDENS, INC.
For Peter Field, the owner of English Gardens,
Inc., in northern Virginia, the success of his
landscape design, building and construction
business is the result of its high-quality work.
Backed by an excellent reputation and strong
relationships in the community, English Gardens
has served its customers since its start in 1985.
These relationships led Field to FVCbank.
He evaluates the people within an industry
to decide whether to do business with them.
His positive experiences with our team, helping
him grow his business, solidified his desire to
develop a long-standing working relationship
with FVCbank.
For him, this quality of service is on display
company-wide. For example, to combat cash
flow challenges, FVCbank has helped English
Gardens, Inc. secure various lines of credit over
the years. This approach not only supports the
day-to-day operations of the company but also
allows them to purchase additional properties
to rehab and resell.
“I have found nothing but high-quality people
at FVCbank. If I have a question and need an
answer immediately, every single person
at FVCbank makes sure I have what I need.”
– Peter Field, owner of the English Gardens, Inc.
2019 Annual Report
9
WASHINGTON PROPERTY COMPANY
Since its inception in 2005, Washington Property Company (WPC) quickly became one of the
most respected real estate development and investment firms in the Washington, D.C. area.
WPC quickly developed extensive relationships within the D.C. Metropolitan Area, creating
unique and experienced insight into the market. Their team is known for its talent and creativity
in identifying overlooked, under-valued and under-utilized properties, which offer opportunities
to maximize potential return on investments.
As WPC continued to grow, this
specialized knowledge, and the goal
of maximizing its potential, led WCP’s
renowned team to engage FVCbank
as their banking partner.
Washington Property Company
successfully closed a significant
construction loan with FVCbank
and looks forward to growing this
relationship with more shared projects.
Financing partnerships such as the one
with FVCbank work to solve problems
and overcome hurdles as they arise. These
partnerships remain crucial for businesses
like Washington Property Company.
10 Growing relationships. Building success.
“FVCbank is flexible, works
to understand the project and
our business, and provides
financing options that many
other banks couldn’t offer.”
– Charles K. Nulsen III, president,
Washington Property Company
OASYS
OASYS, a trusted contactor in Washington, D.C., provides business process
engineering services for government clients. A standout company from their
competition, they prioritize their clients’ needs above all and provide high-quality
services, creating excellent and meaningful results.
FVCbank conducts business and strives for excellence this same way, allowing a fruitful
partnership to form between the two organizations.
For example, FVCbank supported OASYS every step of the way offering support and
resources when they experienced rapid growth and success. We were able to develop
a process for them, allowing for continued sustainable growth, both managed and
maintained by the OASYS team.
“The team at OASYS values communication
and transparency in the workplace. As a
result, OASYS could not be happier with
the quality relationships they have with
their representative team at FVCbank.”
– Tony Johnson, president, CEO and founder, OASYS
OASYS also credits FVCbank for
providing open communication and
transparency within the workplace
and building quality rapport with all
their customers. They look forward
to a long-standing partnership with
FVCbank, working together towards
future successes.
HOLDER
2019 Annual Report
11
11
2019 Annual Report “We would like to thank our customers for allowing us to
serve as dedicated partners in the growth of their business.
Our team believes in our customers, and watching them
thrive in their respective markets affirms our commitment
to excellence in helping them to achieve success.”
– Patricia A. Ferrick, president of FVCB and FVCbank
12 Growing relationships. Building success.
2019 Annual Report
13
OUR LOCATIONS
Headquarters
11325 Random Hills Road, Suite 240
Fairfax Branch (VA)
11325 Random Hills Road, Suite 140
Rockville Branch (MD)
1600 E. Gude Drive
Fairfax, VA 22030
Phone: 703.436.3800
Fairfax, VA 22030
Phone: 703.672.2580
Rockville, MD 20850
Phone: 240.268.2265
Arlington Branch (VA)
2500 Wilson Boulevard, Suite 100
Manassas Branch (VA)
7900 Sudley Road, Suite 100
Arlington, VA 22201
Phone: 703.387.5050
Manassas, VA 20109
Phone: 703.656.7300
Ashburn Branch (VA)
43800 Central Station Drive, Suite 150
Lutherville Loan Office (MD)
22 West Padonia Road,
Suite A-200
Lutherville, MD 21093
Phone: 410.387.2620
Reston Branch (VA)
11260 Roger Bacon Drive, Suite 101
Reston, VA 20190
Phone: 703.436.3880
Ashburn, VA 20147
Phone: 571.919.6780
Baltimore Branch (MD)
224 Albemarle Street
Baltimore, MD 21202
Phone: 410.685.4611
Bethesda Branch (MD)
6929 Arlington Road
Bethesda, MD 20814
Phone: 301.652.2265
Silver Spring Branch (MD)
7901 Eastern Avenue
Silver Spring, MD 20910
Phone: 301.562.8443
Springfield Branch (VA)
6975 Springfield Boulevard
Springfield, VA 22150
Phone: 703.672.2590
Washington, D.C. Branch
1301 9th Street NW
Washington, D.C. 20001
Phone: 202.628.5500
14
www.fvcbank.com
Growing relationships. Building success.