Company Performance - FVCBankcorp reported quarterly earnings of $0.23 per share, exceeding the Zacks Consensus Estimate of $0.21 per share, and matching the earnings from the same quarter last year [5] - The company achieved revenues of $14.54 million for the quarter, surpassing the Zacks Consensus Estimate by 3.27%, although this represents a decline from $15.28 million in the previous year [12] - Over the last four quarters, FVCBankcorp has surpassed consensus EPS estimates two times [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.24 on revenues of $14.86 million, and for the current fiscal year, it is $0.90 on revenues of $57.4 million [8] - The stock is currently rated Zacks Rank 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [3] - The sustainability of the stock's price movement will depend on management's commentary during the earnings call [9] Industry Context - FVCBankcorp operates within the Zacks Banks - Southeast industry, which is currently ranked in the top 41% of over 250 Zacks industries [14] - The industry ranking suggests that stocks in the top 50% outperform those in the bottom 50% by a factor of more than 2 to 1 [14] - FVCBankcorp shares have underperformed the market, losing approximately 13.9% since the beginning of the year, compared to a 13.8% gain in the S&P 500 [15]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) FVCBankcorp, Inc. achieved significant financial improvements in Q2 2024, driven by disciplined pricing, strong deposit growth, and effective portfolio diversification [Second Quarter Selected Financial Highlights](index=1&type=section&id=Second%20Quarter%20Selected%20Financial%20Highlights) FVCBankcorp, Inc. reported continued improvement in its financial performance for Q2 2024, with significant increases in net income, net interest income, and margin compared to the linked quarter. The company also demonstrated strong deposit growth and maintained solid credit quality and a well-capitalized balance sheet Second Quarter Selected Financial Highlights | Metric | Q2 2024 | Q1 2024 | Change (QoQ) | Q2 2023 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | :------ | :----------- | | Net Income ($) | $4.2 million | $1.3 million | +$2.8 million | $4.2 million | -$0.0 million | | Diluted EPS ($) | $0.23 | $0.07 | +$0.16 | $0.23 | +$0.00 | | Net Interest Margin (%) | 2.59% | 2.47% | +12 bps | 2.60% | -1 bps | | Net Interest Income ($) | $13.7 million | $12.8 million | +$0.9 million | $14.4 million | -$0.7 million | | Total Deposits ($) | $1.97 billion | $1.86 billion | +$111.5 million | $2.09 billion | -$121.5 million | | Core Deposits (excl. wholesale) ($) | N/A | N/A | +$121.5 million | N/A | N/A | | Loans Past Due 30+ days ($) | $2.5 million | $3.9 million | -$1.4 million | N/A | N/A | | Total Risk-Based Capital Ratio (%) | 14.13% | N/A | N/A | N/A | N/A | | TCE to TA Ratio (Bank) (%) | 9.56% | N/A | N/A | 8.70% | +86 bps | - Commercial bank operating earnings (non-GAAP) for Q2 2024 increased by **$429 thousand**, or **12%**, to **$4.2 million** compared to **$3.7 million** in Q1 2024[6](index=6&type=chunk) - Pre-tax pre-provision operating income (non-GAAP) for Q2 2024 increased by **$984 thousand**, or **22%**, to **$5.5 million** compared to **$4.6 million** in Q1 2024[7](index=7&type=chunk) [Management Comments](index=2&type=section&id=Management%20Comments) The Chairman and CEO, David W. Pijor, highlighted the effectiveness of their disciplined approach to loan and deposit pricing, leading to two consecutive quarters of margin and net interest income improvement. The company continues to diversify its portfolios by acquiring new customer relationships and noted the positive performance of Atlantic Coast Mortgage (ACM) - The company's disciplined approach to loan and deposit pricing has resulted in two consecutive quarters of margin and net interest income improvement[9](index=9&type=chunk) - New loan originations totaled over **$41 million** and new non-maturity deposit accounts totaled **$176 million** during Q2 2024, supporting portfolio diversification[9](index=9&type=chunk) - Atlantic Coast Mortgage (ACM) recorded net income for the second quarter and year-to-date, despite a challenging mortgage environment[9](index=9&type=chunk) [Financial Condition (Balance Sheet)](index=2&type=section&id=Financial%20Condition%20(Balance%20Sheet)) The balance sheet shows increased total assets and loans, strong deposit growth, and robust capital ratios, despite a decrease in investment securities [Total Assets & Loans](index=2&type=section&id=Total%20Assets%20%26%20Loans) Total assets increased by 5% from December 31, 2023, reaching $2.30 billion at June 30, 2024. Loans receivable, net of deferred fees, also saw a 2% increase quarter-over-quarter, with significant new originations and renewals Total Assets & Loans | Metric | June 30, 2024 | Dec 31, 2023 | Change (QoQ) | June 30, 2023 | Change (YoY) | | :-------------------------- | :------------ | :----------- | :----------- | :------------ | :----------- | | Total Assets ($) | $2.30 billion | $2.19 billion | +$108.6 million (+5%) | $2.34 billion | -$45.2 million (-1.9%) | | Loans Receivable, Net ($) | $1.89 billion | $1.83 billion | +$34.2 million (+2%) | $1.90 billion | -$13.1 million (-0.7%) | | Loan Originations (Q2 2024) ($) | $41.1 million | N/A | N/A | N/A | N/A | | Loan Renewals (Q2 2024) ($) | $15.4 million | N/A | N/A | N/A | N/A | | Loan Payoffs (Q2 2024) ($) | $42.5 million | N/A | N/A | N/A | N/A | - The increase in loans receivable for Q2 2024 included **$19.6 million** related to the warehouse line held by ACM[11](index=11&type=chunk) - New loan originations in Q2 2024 had a weighted average rate of **8.38%**, and renewals had a weighted average rate of **8.95%**[11](index=11&type=chunk) [Investment Securities](index=2&type=section&id=Investment%20Securities) Investment securities decreased during Q2 2024 and year-to-date, primarily due to principal repayments, maturities, and an increase in unrealized losses Investment Securities | Metric | June 30, 2024 | Dec 31, 2023 | Change (QoQ) | June 30, 2023 | Change (YoY) | | :-------------------- | :------------ | :----------- | :----------- | :------------ | :----------- | | Investment Securities ($) | $162.4 million | $171.9 million | -$9.5 million (-5.5%) | $231.5 million | -$69.1 million (-29.8%) | - The decrease in investment securities during Q2 2024 was primarily due to **$4.6 million** in principal repayments and maturities[12](index=12&type=chunk) - For the six months ended June 30, 2024, the portfolio decreased **$9.4 million**, including a **$2.0 million** increase in unrealized losses[12](index=12&type=chunk) [Deposits & Funding](index=2&type=section&id=Deposits%20%26%20Funding) Total deposits increased by 6% quarter-over-quarter, driven by strong core deposit growth and new non-maturity accounts. Noninterest-bearing deposits decreased as customers shifted to interest-bearing products, while wholesale funding decreased Deposits & Funding | Metric | June 30, 2024 | March 31, 2024 | Change (QoQ) | June 30, 2023 | Change (YoY) | | :-------------------------- | :------------ | :------------- | :----------- | :------------ | :----------- | | Total Deposits ($) | $1.97 billion | $1.86 billion | +$111.5 million (+6%) | $2.09 billion | -$121.5 million (-5.8%) | | Noninterest-Bearing Deposits ($) | $373.8 million | $394.1 million | -$20.3 million (-5.1%) | $437.0 million | -$63.2 million (-14.5%) | | Noninterest-Bearing % of Total (%) | 19.0% | 21.2% | -2.2 pp | 20.9% | -1.9 pp | | Core Deposits (excl. wholesale) ($) | N/A | N/A | +$121.5 million (+8%) | N/A | N/A | | New Non-Maturity Deposits (Q2) ($) | $176.0 million | $112.6 million | +$63.4 million | N/A | N/A | | Wholesale Funding ($) | $306.9 million | $316.8 million | -$10.0 million (-3%) | N/A | N/A | | Average Wholesale Funding Rate (Q2) (%) | 3.70% | 4.01% | -31 bps | N/A | N/A | - The increase in core deposits included **$255.4 million** in reciprocal deposits at June 30, 2024[13](index=13&type=chunk) - Title and escrow-related deposits increased by **$51.8 million** during Q2 2024 due to improved activity[14](index=14&type=chunk) [Shareholders' Equity & Capital](index=3&type=section&id=Shareholders'%20Equity%20%26%20Capital) Shareholders' equity increased by 4% from December 31, 2023, primarily driven by year-to-date earnings and stock option exercises. The Bank remains well-capitalized with strong regulatory capital ratios Shareholders' Equity & Capital | Metric | June 30, 2024 | Dec 31, 2023 | Change (QoQ) | June 30, 2023 | Change (YoY) | | :-------------------------------- | :------------ | :----------- | :----------- | :------------ | :----------- | | Shareholders' Equity ($) | $226.5 million | $217.1 million | +$9.4 million (+4%) | $211.1 million | +$15.4 million (+7.3%) | | Book Value Per Share ($) | $12.45 | $12.19 | +$0.26 | $11.87 | +$0.58 | | Tangible Book Value Per Share ($) | $12.04 | $11.77 | +$0.27 | $11.44 | +$0.60 | | Total Risk-Based Capital Ratio (%) | 14.13% | 13.83% | +30 bps | 13.28% | +85 bps | | Common Equity Tier 1 Capital Ratio (%) | 13.09% | 12.80% | +29 bps | 12.26% | +83 bps | | Tier 1 Leverage Ratio (%) | 11.31% | 10.77% | +54 bps | 10.41% | +90 bps | - Year-to-date 2024 earnings contributed **$5.5 million** to the increase in shareholders' equity[16](index=16&type=chunk) - Accumulated other comprehensive loss decreased **$2.0 million** year-to-date 2024, primarily due to changes in interest rate swaps[16](index=16&type=chunk) [Asset Quality](index=3&type=section&id=Asset%20Quality) Asset quality shows a reduced credit loss provision, but an increase in nonaccrual loans, while the diversified commercial real estate portfolio remains strong [Credit Loss Provision & Nonperforming Loans](index=3&type=section&id=Credit%20Loss%20Provision%20%26%20Nonperforming%20Loans) The provision for credit losses decreased significantly compared to the prior year. While net recoveries were recorded, nonaccrual loans increased, leading to a decrease in ACL coverage to nonperforming loans Credit Loss Provision & Nonperforming Loans | Metric | Q2 2024 | Q2 2023 | Change (YoY) | YTD 2024 | YTD 2023 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | :------- | :------- | :----------- | | Provision for Credit Losses ($) | $206 thousand | $618 thousand | -$412 thousand (-66.7%) | $206 thousand | $860 thousand | -$654 thousand (-76.0%) | | ACL to Total Loans (%) | 1.02% | 1.02% | 0 pp | N/A | N/A | N/A | | Nonaccrual Loans & 90+ Days Past Due ($) | $3.0 million | N/A | N/A | N/A | N/A | N/A | | Nonaccrual Loans % of Total Assets (%) | 0.13% | N/A | N/A | N/A | N/A | N/A | | Net Recoveries (Q2) ($) | $5 thousand | N/A | N/A | N/A | N/A | N/A | | ACL Coverage to Nonperforming Loans (%) | 603% | 1347% | -744 pp | N/A | N/A | N/A | - The increase in nonperforming loans at June 30, 2024, was primarily due to one commercial & industrial loan relationship placed on nonaccrual during Q1 2024[20](index=20&type=chunk) - The Company had no other real estate owned at June 30, 2024[20](index=20&type=chunk) [Loan Portfolio Composition](index=3&type=section&id=Loan%20Portfolio%20Composition) The commercial real estate portfolio, including construction loans, constitutes 65% of total loans and is diversified by asset type and geographic concentration. The company maintains disciplined management and comprehensive policies for monitoring and mitigating loan concentrations Loan Portfolio Composition | Loan Type | Amount (June 30, 2024) | % of Total Loans | | :-------------------------------- | :--------------------- | :--------------- | | Commercial Real Estate Loans ($) | $1.08 billion | 57% | | Construction Loans ($) | $165 million | 9% | | Office Buildings ($) | $136.4 million | 7% | | Retail Shopping Centers ($) | $260.8 million | 14% | | Multi-family Housing ($) | $178.2 million | 9% | - The commercial real estate portfolio is diversified across asset types and geographic concentrations within the Virginia and Maryland suburbs of the Company's market area[22](index=22&type=chunk) - The Company employs rigorous credit approval, monitoring, and administrative practices to manage and mitigate loan concentrations[22](index=22&type=chunk) [Commercial Real Estate & Construction Loan Details](index=4&type=section&id=Commercial%20Real%20Estate%20%26%20Construction%20Loan%20Details) A detailed breakdown of the commercial real estate and construction loan portfolio at June 30, 2024, showing owner-occupied, non-owner occupied, and construction segments by asset class, average loan-to-value, and geographic concentration. The portfolio exhibits strong credit quality with only one classified delinquency Commercial Real Estate & Construction Loan Details | Asset Class | Owner Occupied Principal ($ thousands) | Non-Owner Occupied Principal ($ thousands) | Construction Principal ($ thousands) | Total Bank Owned Principal ($ thousands) | % of Total Loans | | :-------------------------------- | :----------------------- | :--------------------------- | :--------------------- | :------------------------- | :--------------- | | Office, Class A | $7,476 | $3,717 | $0 | $11,193 | N/A | | Office, Class B | $12,143 | $57,324 | $0 | $69,467 | N/A | | Office, Class C | $5,138 | $1,902 | $873 | $7,913 | N/A | | Office, Medical | $1,155 | $41,514 | $5,129 | $47,798 | N/A | | **Subtotal Office** | **$25,912** | **$104,457** | **$6,002** | **$136,371** | **7%** | | Retail- Neighborhood/Community Shop | $0 | $81,612 | $11,376 | $92,988 | N/A | | Retail- Restaurant | $8,088 | $26,456 | $0 | $34,544 | N/A | | Retail- Single Tenant | $1,963 | $35,691 | $0 | $37,654 | N/A | | Retail- Anchored, Other | $0 | $42,957 | $0 | $42,957 | N/A | | Retail- Grocery-anchored | $0 | $51,455 | $1,247 | $52,702 | N/A | | **Subtotal Retail** | **$10,051** | **$238,171** | **$12,623** | **$260,845** | **14%** | | Multi-family, Class A (Market) | $0 | $0 | $1,026 | $1,026 | N/A | | Multi-family, Class B (Market) | $0 | $78,360 | $0 | $78,360 | N/A | | Multi-family, Class C (Market) | $0 | $71,355 | $7,047 | $78,402 | N/A | | Multi-Family-Affordable Housing | $0 | $16,360 | $4,034 | $20,394 | N/A | | **Subtotal Multi-family** | **$0** | **$166,075** | **$12,107** | **$178,182** | **9%** | | Industrial | $67,883 | $125,223 | $1,041 | $194,147 | N/A | | Warehouse | $18,451 | $9,399 | $0 | $27,850 | N/A | | Flex | $18,436 | $56,226 | $0 | $74,662 | N/A | | **Subtotal Industrial** | **$104,770** | **$190,848** | **$1,041** | **$296,659** | **16%** | | Hotels | $0 | $51,873 | $6,481 | $58,354 | 3% | | Mixed Use | $5,945 | $66,146 | $0 | $72,091 | 4% | | Land | $0 | $0 | $53,660 | $53,660 | 3% | | 1-4 Family construction | $0 | $0 | $49,265 | $49,265 | 3% | | Other (incl. net deferred fees) | $57,844 | $61,389 | $23,556 | $142,789 | 8% | | **Total CRE & Construction Loans** | **$204,522** | **$878,959** | **$164,735** | **$1,248,216** | **65%** | - The loans in the table exhibit strong credit quality, with only one classified delinquency totaling **$851 thousand** at June 30, 2024[24](index=24&type=chunk) - The Company believes it has appropriately reserved for possible credit concerns due to conservative underwriting and ongoing loan monitoring[24](index=24&type=chunk) [Minority Investment in Mortgage Banking Operation](index=4&type=section&id=Minority%20Investment%20in%20Mortgage%20Banking%20Operation) The Company's minority investment in Atlantic Coast Mortgage (ACM) generated significant income in Q2 2024, a substantial improvement from the prior year and linked quarter. ACM management is actively pursuing opportunities to reduce expenses and increase revenues Minority Investment in Mortgage Banking Operation | Metric | Q2 2024 | Q1 2024 | Change (QoQ) | Q2 2023 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | :------ | :----------- | | Income (Loss) from ACM ($) | $351 thousand | -$203 thousand | +$554 thousand | $20 thousand | +$331 thousand | | YTD Income (Loss) from ACM ($) | $148 thousand | N/A | N/A | -$781 thousand | +$929 thousand | - The investment in ACM aims to diversify the loan portfolio, provide competitive residential mortgage products, and generate additional revenue[25](index=25&type=chunk) - ACM management is continuing to evaluate opportunities to further reduce expenses and increase revenues[27](index=27&type=chunk) [Income Statement Analysis](index=6&type=section&id=Income%20Statement%20Analysis) The income statement reflects improved net interest income and margin, significant noninterest income growth, reduced noninterest expenses, and a stable tax provision [Net Interest Income & Margin](index=6&type=section&id=Net%20Interest%20Income%20%26%20Margin) Net interest income and margin improved quarter-over-quarter due to increased loan yields and controlled funding costs, despite a slight year-over-year decrease in net interest income driven by higher funding costs. The repricing of the commercial loan portfolio is expected to continue improving loan yields Net Interest Income & Margin | Metric | Q2 2024 | Q1 2024 | Change (QoQ) | Q2 2023 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | :------ | :----------- | | Net Interest Income ($) | $13.7 million | $12.8 million | +$0.9 million (+7%) | $14.4 million | -$0.7 million (-5%) | | Net Interest Margin (%) | 2.59% | 2.47% | +12 bps | 2.60% | -1 bps | | Interest Income ($) | $28.0 million | $26.8 million | +$1.1 million (+4%) | $27.2 million | +$0.8 million (+3%) | | Interest Expense ($) | $14.3 million | $14.0 million | +$0.3 million (+2%) | $12.8 million | +$1.5 million (+12%) | | Loan Yields (%) | 5.62% | 5.50% | +12 bps | 5.35% | +27 bps | | Cost of Deposits (%) | 2.88% | 2.82% | +6 bps | 2.41% | +47 bps | - Approximately **$404 million**, or **27%**, of the commercial loan portfolio is expected to reprice in the next 12 months, with an additional **19%** repricing in the following 24-36 months[32](index=32&type=chunk) - The Company's cumulative deposit beta remained at approximately **42%** from March 31, 2022, to June 30, 2024[34](index=34&type=chunk) [Noninterest Income](index=7&type=section&id=Noninterest%20Income) Total noninterest income increased significantly quarter-over-quarter, primarily driven by improved income from the minority interest in ACM. However, it saw a slight decrease year-over-year due to lower BOLI income and loan fees Noninterest Income | Metric | Q2 2024 | Q1 2024 | Change (QoQ) | Q2 2023 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | :------ | :----------- | | Total Noninterest Income ($) | $871 thousand | $395 thousand | +$476 thousand (+120.5%) | $891 thousand | -$20 thousand (-2.2%) | | Fees on Loans ($) | $38 thousand | $49 thousand | -$11 thousand (-22.4%) | $169 thousand | -$131 thousand (-77.5%) | | Service Charges on Deposit Accounts ($) | $279 thousand | $261 thousand | +$18 thousand (+6.9%) | $232 thousand | +$47 thousand (+20.3%) | | BOLI Income ($) | $66 thousand | $190 thousand | -$124 thousand (-65.3%) | $362 thousand | -$296 thousand (-81.8%) | | Income (Loss) from ACM ($) | $351 thousand | -$203 thousand | +$554 thousand (+272.9%) | $20 thousand | +$331 thousand (+1655.0%) | - The decrease in BOLI income was a direct result of the surrendered BOLI policies during Q1 2024[37](index=37&type=chunk) - Year-to-date noninterest income totaled **$1.3 million**, compared to a loss of **$3.7 million** for the same period in 2023, which was associated with securities sales transactions[38](index=38&type=chunk) [Noninterest Expense & Efficiency](index=7&type=section&id=Noninterest%20Expense%20%26%20Efficiency) Noninterest expense decreased year-over-year due to reduced salaries and occupancy costs, but increased slightly quarter-over-quarter due to higher incentive accruals and investment in customer software solutions. The efficiency ratio improved quarter-over-quarter Noninterest Expense & Efficiency | Metric | Q2 2024 | Q1 2024 | Change (QoQ) | Q2 2023 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | :------ | :----------- | | Total Noninterest Expense ($) | $9.0 million | $8.6 million | +$0.4 million (+4%) | $9.2 million | -$0.2 million (-2%) | | Salaries and Employee Benefits ($) | $4.7 million | $4.5 million | +$0.2 million (+4%) | $5.1 million | -$0.4 million (-8%) | | Occupancy Expense ($) | $0.5 million | $0.5 million | -$0.0 million (-1%) | $0.6 million | -$0.1 million (-16%) | | Internet Banking & Software Expense ($) | $0.7 million | $0.7 million | +$0.0 million (+5%) | $0.6 million | +$0.1 million (+25%) | | Efficiency Ratio (Core Bank Operating Earnings) (%) | 61.9% | 65.4% | -3.5 pp | 60.2% | +1.7 pp | - Full-time equivalent employees decreased from **129** at June 30, 2023, to **113** at June 30, 2024, reflecting reduced staffing and process improvements through technology[40](index=40&type=chunk) - The Company continues to identify and assess opportunities to reduce operating expenses[41](index=41&type=chunk) [Income Taxes](index=7&type=section&id=Income%20Taxes) The provision for income taxes remained stable quarter-over-quarter but saw a significant increase year-to-date, primarily due to nonrecurring taxes associated with the surrender of BOLI policies in Q1 2024 Income Taxes | Metric | Q2 2024 | Q1 2024 | Change (QoQ) | Q2 2023 | Change (YoY) | | :-------------------- | :------ | :------ | :----------- | :------ | :----------- | | Provision for Income Taxes ($) | $1.2 million | $3.2 million | -$2.0 million (-63.2%) | $1.2 million | -$0.0 million (-3.3%) | | YTD Provision for Income Taxes ($) | $4.4 million | N/A | N/A | $0.7 million | +$3.7 million (+496.2%) | - The year-to-date 2024 provision includes an additional **$2.4 million** associated with the surrender of BOLI policies during Q1 2024[44](index=44&type=chunk) [Company Overview](index=7&type=section&id=Company%20Overview) FVCBankcorp, Inc. is the holding company for FVCbank, a Virginia-chartered community bank with $2.30 billion in assets. It serves commercial businesses, nonprofit organizations, and professional service entities in the greater Baltimore and Washington, D.C. metropolitan areas through 8 full-service offices - FVCBankcorp, Inc. is the holding company for FVCbank, which commenced operations in November 2007[45](index=45&type=chunk) - FVCbank is a **$2.30 billion** asset-sized Virginia-chartered community bank[45](index=45&type=chunk) - The bank serves commercial businesses, nonprofit organizations, professional service entities, their owners, and employees in the greater Baltimore and Washington, D.C. metropolitan areas[45](index=45&type=chunk) - FVCbank operates **8 full-service offices** located in Arlington, Fairfax, Manassas, Reston, Springfield, Virginia; Washington, D.C.; and Baltimore and Bethesda, Maryland[45](index=45&type=chunk) [Cautionary Note About Forward-Looking Statements](index=8&type=section&id=Cautionary%20Note%20About%20Forward-Looking%20Statements) This section provides a cautionary note regarding forward-looking statements, emphasizing that they are based on expectations and subject to known and unknown risks and uncertainties. It lists various factors that could cause actual results to differ materially from those projected, including economic conditions, interest rate environment, liquidity, credit losses, market conditions, regulatory changes, and competitive pressures - Forward-looking statements are based largely on expectations and are subject to numerous known and unknown risks and uncertainties beyond the Company's control[47](index=47&type=chunk) - Key risk factors include general business and economic conditions (e.g., inflation, real estate valuations, unemployment), the impact of the interest rate environment on business and financial condition, changes in liquidity requirements, and potential for higher future credit losses[47](index=47&type=chunk) - Other significant risks involve market conditions (e.g., declines in real estate, capital market volatility), regulatory changes, competitive pressures, geopolitical conditions, natural disasters, and potential exposure to fraud and cyber-crime[47](index=47&type=chunk) [Financial Tables (Unaudited)](index=10&type=section&id=Financial%20Tables%20(Unaudited)) This section provides unaudited financial tables, including selected data, consolidated statements of condition and income, and average statements with yields [Selected Financial Data](index=10&type=section&id=Selected%20Financial%20Data) This table provides a comprehensive overview of FVCBankcorp, Inc.'s selected financial balances, summary results of operations, per share data, and key ratios for various periods, including GAAP and non-GAAP reconciliations Selected Financial Data | Metric | June 30, 2024 | June 30, 2023 | March 31, 2024 | Dec 31, 2023 | | :------------------------------------------ | :------------ | :------------ | :------------- | :----------- | | **Selected Balances ($ thousands)** | | | | | | Total assets | $2,299,194 | $2,344,372 | $2,182,662 | $2,190,558 | | Total loans, net of deferred fees | $1,886,929 | $1,903,814 | $1,852,746 | $1,828,564 | | Total deposits | $1,968,750 | $2,088,042 | $1,857,265 | $1,845,292 | | Total stockholders' equity | $226,491 | $211,051 | $220,661 | $217,117 | | **Summary Results of Operations (3 months) ($ thousands)** | | | | | | Net interest income | $13,670 | $14,388 | $12,792 | $12,659 | | Net income (loss) | $4,155 | $4,232 | $1,340 | $(5,071) | | **Per Share Data ($)** | | | | | | Net income (loss), diluted | $0.23 | $0.23 | $0.07 | $(0.28) | | Book value | $12.45 | $11.87 | $12.32 | $12.19 | | Tangible book value | $12.04 | $11.44 | $11.90 | $11.77 | | **Selected Ratios (%)** | | | | | | Net interest margin | 2.59 % | 2.60 % | 2.47 % | 2.37 % | | Return on average assets | 0.77 % | 0.73 % | 0.25 % | (0.92)% | | Return on average equity | 7.42 % | 8.17 % | 2.44 % | (9.51)% | | Efficiency | 61.86 % | 60.23 % | 65.41 % | NM | | **Capital Ratios - Bank (%)** | | | | | | Tangible common equity (to tangible assets) | 9.56 % | 8.70 % | 9.80 % | 10.12 % | | Total risk-based capital (to risk weighted assets) | 14.13 % | 13.28 % | 14.05 % | 13.83 % | | Nonperforming loans and loans 90+ past due to total assets | 0.13 % | 0.06 % | 0.14 % | 0.08 % | | Allowance for credit losses to nonperforming loans | 602.70 % | 1347.33 % | 631.44 % | 1031.77 % | [Summary Consolidated Statements of Condition](index=13&type=section&id=Summary%20Consolidated%20Statements%20of%20Condition) This table presents the consolidated balance sheet, detailing assets, liabilities, and stockholders' equity for FVCBankcorp, Inc. at various quarter-end dates, highlighting changes over the current quarter and year-ago period Summary Consolidated Statements of Condition | Metric | June 30, 2024 | March 31, 2024 | % Change Current Quarter | December 31, 2023 | June 30, 2023 | % Change From Year Ago | | :------------------------------------ | :------------ | :------------- | :----------------------- | :---------------- | :------------ | :--------------------- | | **Assets ($ thousands)** | | | | | | | | Total Assets | $2,299,194 | $2,182,662 | 5.3 % | $2,190,558 | $2,344,372 | (1.9)% | | Loans, net of fees | $1,886,929 | $1,852,746 | 1.8 % | $1,828,564 | $1,903,814 | (0.9)% | | Investment securities | $162,429 | $167,061 | (2.8)% | $171,859 | $231,468 | (29.8)% | | **Liabilities & Stockholders' Equity ($ thousands)** | | | | | | | | Total deposits | $1,968,752 | $1,857,265 | 6.0 % | $1,845,292 | $2,088,042 | (5.7)% | | Noninterest-bearing deposits | $373,848 | $394,143 | (5.1)% | $396,724 | $436,972 | (14.4)% | | Other borrowed funds | $57,000 | $57,000 | — % | $85,000 | $0 | — % | | Stockholders' equity | $226,491 | $220,661 | 2.6 % | $217,117 | $211,051 | 7.3 % | [Summary Consolidated Statements of Income](index=14&type=section&id=Summary%20Consolidated%20Statements%20of%20Income) This table presents the consolidated income statement, detailing revenues, expenses, and net income for FVCBankcorp, Inc. for the three and six months ended June 30, 2024, and comparable periods, including reconciliations to non-GAAP operating earnings Summary Consolidated Statements of Income | Metric | Q2 2024 | Q1 2024 | % Change Current Quarter | Q2 2023 | % Change From Year Ago | | :------------------------------------------ | :------ | :------ | :----------------------- | :------ | :--------------------- | | Net interest income ($ thousands) | $13,671 | $12,792 | 6.9 % | $14,388 | (5.0)% | | Provision for credit losses ($ thousands) | $206 | $0 | — % | $618 | (66.7)% | | Total noninterest income ($ thousands) | $871 | $395 | 120.5 % | $891 | (2.2)% | | Total noninterest expense ($ thousands) | $8,996 | $8,625 | 4.3 % | $9,203 | (2.2)% | | Net Income ($ thousands) | $4,155 | $1,340 | 210.1 % | $4,232 | (1.8)% | | Earnings per share - diluted ($) | $0.23 | $0.07 | 228.6 % | $0.23 | (1.9)% | | **YTD (6 months) ($ thousands)** | | | | | | | Net interest income | $26,462 | N/A | N/A | $28,402 | (6.8)% | | Provision for credit losses | $206 | N/A | N/A | $860 | (76.0)% | | Total noninterest income (loss) | $1,266 | N/A | N/A | $(3,736) | (133.9)% | | Total noninterest expense | $17,621 | N/A | N/A | $18,213 | (3.3)% | | Net Income | $5,495 | N/A | N/A | $4,854 | 13.2 % | | Earnings per share - diluted ($) | $0.30 | N/A | N/A | $0.27 | 12.3 % | [Average Statements of Condition and Yields on Earning Assets and Interest-Bearing Liabilities](index=17&type=section&id=Average%20Statements%20of%20Condition%20and%20Yields%20on%20Earning%20Assets%20and%20Interest-Bearing%20Liabilities) This table provides detailed average balances, interest income/expense, and average yields for earning assets and interest-bearing liabilities for the three and six months ended June 30, 2024, and comparable periods, illustrating the components of net interest margin Average Statements of Condition and Yields on Earning Assets and Interest-Bearing Liabilities | Metric | Q2 2024 Average Balance ($ thousands) | Q2 2024 Interest Income/Expense ($ thousands) | Q2 2024 Average Yield (%) | | :------------------------------------------ | :---------------------- | :------------------------------ | :-------------------- | | **Interest-earning assets:** | | | | | Total loans receivable, net of fees | $1,882,342 | $26,457 | 5.62 % | | Total interest-earning assets | $2,123,431 | $27,972 | 5.27 % | | **Interest-bearing liabilities:** | | | | | Total interest-bearing deposits | $1,420,454 | $12,894 | 3.65 % | | Total interest-bearing liabilities | $1,539,851 | $14,301 | 3.74 % | | Net Interest Margin | N/A | $13,671 | 2.59 % | | **YTD (6 months)** | | | | | Total loans receivable, net of fees | $1,861,614 | $51,771 | 5.56 % | | Total interest-earning assets | $2,103,435 | $54,799 | 5.21 % | | Total interest-bearing deposits | $1,413,506 | $25,435 | 3.62 % | | Total interest-bearing liabilities | $1,536,932 | $28,336 | 3.71 % | | Net Interest Margin | N/A | $26,463 | 2.53 % |

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements%3A) Presents FVCBankcorp, Inc.'s unaudited consolidated financial statements for Q1 2024, including comparative data and accompanying notes [Consolidated Statement of Condition](index=4&type=section&id=Consolidated%20Statement%20of%20Condition) Total assets slightly decreased to **$2.18 billion**, liabilities reduced to **$1.96 billion**, and stockholders' equity increased to **$220.7 million** as of March 31, 2024 Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$2,182,662** | **$2,190,558** | **($7,896)** | | Loans, net | $1,833,828 | $1,809,693 | $24,135 | | Securities available-for-sale | $166,797 | $171,595 | ($4,798) | | Bank owned life insurance | $9,011 | $56,823 | ($47,812) | | **Total Liabilities** | **$1,962,001** | **$1,973,441** | **($11,440)** | | Total deposits | $1,857,265 | $1,845,292 | $11,973 | | Other borrowed funds | $57,000 | $85,000 | ($28,000) | | **Total Stockholders' Equity** | **$220,661** | **$217,117** | **$3,544** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income increased by **116%** to **$1.34 million** in Q1 2024, driven by a swing in non-interest income despite a **9%** decrease in net interest income Q1 2024 vs Q1 2023 Performance (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $12,792 | $14,014 | -8.7% | | Provision for credit losses | $0 | $242 | -100% | | Total non-interest income (loss) | $395 | ($4,627) | N/A | | Total noninterest expenses | $8,625 | $9,010 | -4.3% | | **Net Income** | **$1,340** | **$621** | **+115.8%** | | **Earnings per share, diluted** | **$0.07** | **$0.03** | **+133.3%** | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income for Q1 2024 was **$3.0 million**, a decrease from Q1 2023, influenced by net income and other comprehensive income Comprehensive Income Breakdown (in thousands) | Component | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income | $1,340 | $621 | | Other Comprehensive Income | $1,687 | $3,705 | | **Total Comprehensive Income** | **$3,027** | **$4,326** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating activities provided **$7.2 million** in cash, investing activities **$7.4 million**, while financing activities used **$15.7 million**, resulting in a net cash decrease of **$1.1 million** Net Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,152 | $2,557 | | Net cash provided by (used in) investing activities | $7,400 | ($671) | | Net cash (used in) provided by financing activities | ($15,658) | $4,161 | | **Net (decrease) increase in cash** | **($1,106)** | **$6,047** | - The company received **$47.8 million** in cash from the surrender of bank-owned life insurance policies during Q1 2024[18](index=18&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity increased to **$220.7 million** by March 31, 2024, driven by net income and positive other comprehensive income Changes in Stockholders' Equity (in thousands) | Description | Q1 2024 | | :--- | :--- | | Balance at December 31, 2023 | $217,117 | | Net income | $1,340 | | Other comprehensive income | $1,687 | | Common stock issuance & other | $504 | | **Balance at March 31, 2024** | **$220,661** | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies and financial data, including significant events like the Q1 2024 surrender of BOLI policies - In Q1 2024, the company surrendered BOLI policies with a cash value of **$48.0 million**, incurring an additional statutory income tax expense of **$1.6 million** and tax penalties of **$722 thousand**[31](index=31&type=chunk) - The company's investment in Atlantic Coast Mortgage, LLC (ACM) represents a **28.7%** ownership interest and is accounted for using the equity method[24](index=24&type=chunk) - Unrealized losses in the available-for-sale securities portfolio, totaling **$36.1 million**, are primarily attributed to interest rate increases rather than credit quality deterioration, with no allowance for credit losses recognized[37](index=37&type=chunk)[49](index=49&type=chunk) - The allowance for credit losses on loans was **$18.9 million** as of March 31, 2024, with no provision for credit losses recorded during the quarter[54](index=54&type=chunk)[78](index=78&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial performance and condition, highlighting increased net income, decreased net interest margin, stable asset quality, and the impact of BOLI policy surrender [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Net income increased to **$1.3 million** in Q1 2024, driven by lower noninterest expenses and the absence of prior year's securities loss, despite a compressed net interest margin Q1 Performance Summary (in thousands) | Metric | Q1 2024 | Q1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Net Income | $1,340 | $621 | +116% | | Net Interest Income | $12,792 | $14,014 | -9% | | Noninterest Income (Loss) | $395 | ($4,627) | N/A | | Noninterest Expense | $8,625 | $9,010 | -4% | - The net interest margin decreased to **2.47%** in Q1 2024 from **2.60%** in Q1 2023, primarily due to the cost of interest-bearing deposits increasing by **98 basis points**[193](index=193&type=chunk) - The surrender of BOLI policies in Q1 2024 resulted in a cash payout of **$48.0 million** but also incurred **$1.6 million** in income tax expense and **$722 thousand** in tax penalties[175](index=175&type=chunk) - Noninterest expense decreased by **4.3%**, mainly due to a **$484 thousand** reduction in salaries and benefits and a **$105 thousand** decrease in occupancy expense[210](index=210&type=chunk)[211](index=211&type=chunk) [Financial Condition](index=50&type=section&id=Financial%20Condition) Total assets remained stable at **$2.18 billion**, with net loans and deposits increasing by **1%**, while asset quality remained strong and capital ratios exceeded 'well capitalized' standards - Total assets were **$2.18 billion** at March 31, 2024, a slight decrease of **0.4%** from year-end 2023[213](index=213&type=chunk) - Nonperforming loans were **$3.0 million**, or **0.14%** of total assets, at March 31, 2024, compared to **$1.8 million**, or **0.08%**, at December 31, 2023[219](index=219&type=chunk)[224](index=224&type=chunk) - The commercial real estate (CRE) portfolio, including construction, totaled **$1.24 billion**, with office loans representing **$121.3 million** (**7%** of total loans) and retail loans representing **$266.1 million** (**14%** of total loans)[225](index=225&type=chunk)[227](index=227&type=chunk) - Tangible book value per share increased to **$11.90** at March 31, 2024, from **$11.77** at December 31, 2023[258](index=258&type=chunk)[266](index=266&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$247.3 million** in liquid assets and robust capital, with a total risk-based capital ratio of **14.05%**, exceeding 'well capitalized' standards - The Bank's total risk-based capital ratio was **14.05%** at March 31, 2024, exceeding the **10.50%** minimum requirement to be considered well-capitalized (including the conservation buffer)[264](index=264&type=chunk) - As of March 31, 2024, the estimated amount of total uninsured deposits (excluding collateralized deposits) was **$566.5 million**, representing **30.5%** of total deposits[249](index=249&type=chunk) - The company has access to secondary liquidity sources, including **$130 million** in FHLB secured borrowings and additional capacity at the FRB discount window[272](index=272&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This disclosure is not required for the registrant and no information is provided - The company has indicated that this disclosure is not required[283](index=283&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of the end of the reporting period[284](index=284&type=chunk) - No material changes to internal controls over financial reporting occurred during the last fiscal quarter[285](index=285&type=chunk) [PART II — OTHER INFORMATION](index=61&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, nor is management aware of any threatened proceedings - The company is not party to any material legal proceedings[287](index=287&type=chunk) [Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) No material changes in risk factors were reported from those disclosed in the Annual Report on Form 10-K - No material changes to risk factors were reported since the last Annual Report on Form 10-K[288](index=288&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Board of Directors renewed the share repurchase program for up to **1,300,000** shares, with no repurchases made during Q1 2024 - The Board of Directors renewed the share repurchase program, allowing for the purchase of up to **1,300,000** shares[292](index=292&type=chunk) - No shares were purchased under the program during the first quarter of 2024[289](index=289&type=chunk) [Defaults Upon Senior Securities](index=62&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - No defaults upon senior securities were reported[290](index=290&type=chunk) [Mine Safety Disclosures](index=62&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[290](index=290&type=chunk) [Other Information](index=62&type=section&id=Item%205.%20Other%20Information) No other information was reported, and no Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers - No other information was reported under this item[291](index=291&type=chunk) [Exhibits](index=63&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The report includes standard exhibits such as CEO/CFO certifications (31.1, 31.2, 32.1, 32.2) and XBRL financial data (101, 104)[296](index=296&type=chunk)

FVCBankcorp (FVCB) reported $13.19 million in revenue for the quarter ended March 2024, representing a year-over-year increase of 40.4%. EPS of $0.20 for the same period compares to $0.26 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $13.82 million, representing a surprise of -4.58%. The company has not delivered EPS surprise, with the consensus EPS estimate being $0.20.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street ...

[Press Release & Company Information](index=1&type=section&id=Press%20Release%20%26%20Company%20Information) [Contact Information](index=1&type=section&id=Contact%20Information) This section provides contact details for media and investor inquiries, including Chairman and CEO David W. Pijor and President Patricia A. Ferrick - Contact information for **David W. Pijor, Esq.**, Chairman and Chief Executive Officer, and **Patricia A. Ferrick**, President, including phone and email, is provided for further information[2](index=2&type=chunk) [Company Overview](index=7&type=section&id=Company%20Overview) FVCBankcorp, Inc. is the holding company for FVCbank, a Virginia-chartered community bank with $2.18 billion in assets, serving the greater Baltimore and Washington, D.C. metropolitan areas with 8 full-service offices - FVCBankcorp, Inc. is the holding company for FVCbank, a **$2.18 billion** asset-sized Virginia-chartered community bank[40](index=40&type=chunk) - FVCbank serves commercial businesses, nonprofit organizations, professional service entities, their owners and employees in the greater Baltimore and Washington, D.C. metropolitan areas[40](index=40&type=chunk) - The bank operates **8** full-service offices across Arlington, Fairfax, Manassas, Reston and Springfield, Virginia, Washington, D.C., and Baltimore, and Bethesda, Maryland[40](index=40&type=chunk) [First Quarter 2024 Financial Highlights](index=1&type=section&id=First%20Quarter%202024%20Financial%20Highlights) [Key Financial Metrics (GAAP & Non-GAAP)](index=1&type=section&id=Key%20Financial%20Metrics%20(GAAP%20%26%20Non-GAAP)) The Company reported a significant increase in GAAP net income and diluted EPS for Q1 2024 compared to Q1 2023, despite a nonrecurring tax provision related to BOLI surrender. Non-GAAP commercial bank operating earnings also increased quarter-over-quarter | Metric | Q1 2024 | Q1 2023 | | :----------------------- | :------ | :------ | | Net Income | $1.3 million | $621 thousand | | Diluted EPS | $0.07 | $0.03 | - Q1 2024 results include an additional provision for income taxes totaling **$2.4 million** related to the cumulative increases in BOLI policy cash values that were taxable upon the policies' surrender[5](index=5&type=chunk) | Metric | Q1 2024 | Q4 2023 | | :-------------------------------- | :---------- | :---------- | | Commercial Bank Operating Earnings | $3.7 million | $2.8 million | | Diluted Operating EPS | $0.20 | $0.15 | [Strategic Balance Sheet Repositioning](index=1&type=section&id=Strategic%20Balance%20Sheet%20Repositioning) The Company surrendered $48.0 million of BOLI policies yielding 2.74% (3.34% tax-equivalent) to pay down high-cost funding and fund new loan growth. This resulted in a nonrecurring $2.4 million tax increase in Q1 2024, with the full impact on net interest income expected in Q2 2024 - During Q1 2024, the Company surrendered **$48.0 million** of its bank-owned life insurance (BOLI) policies, which yielded **2.74%** (**3.34%** on a tax-equivalent basis)[6](index=6&type=chunk) - This transaction resulted in a nonrecurring increase of **$2.4 million** to the Company's tax provisioning related to the gain associated with the cash payout[6](index=6&type=chunk) - The Company used the proceeds to pay down high-cost funding and fund new loan growth, with the full impact on net interest income to be realized in Q2 2024[6](index=6&type=chunk) [Capital Strength](index=1&type=section&id=Capital%20Strength) FVCbank remains 'well capitalized' with all regulatory capital components exceeding required thresholds. The total risk-based capital ratio improved to 14.23% at March 31, 2024, from 13.83% at December 31, 2023, and the tangible common equity to total assets ratio increased to 10.30% from 8.92% year-over-year - All of FVCbank's regulatory capital components and ratios were well in excess of thresholds required to be considered 'well capitalized'[6](index=6&type=chunk) | Metric | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :----------------------------------- | :--------------- | :---------------- | :--------------- | | Total Risk-Based Capital to RWA | 14.23% | 13.83% | 13.48% | | Tangible Common Equity to Total Assets | 10.30% | 10.12% | 8.92% | [Credit Quality Overview](index=1&type=section&id=Credit%20Quality%20Overview) The Company maintained strong credit quality with nonperforming loans decreasing by 33% year-over-year to $3.0 million (0.14% of total assets) at March 31, 2024, despite a quarter-over-quarter increase. Net recoveries of $30 thousand were recorded in Q1 2024 | Metric | March 31, 2024 | March 31, 2023 | Change YoY | | :--------------------------------- | :------------- | :------------- | :--------- | | Nonperforming Loans | $3.0 million | $4.5 million | -$1.5 million (-33%) | | Nonperforming Loans to Total Assets | 0.14% | 0.19% | -0.05 pp | - Compared to December 31, 2023, nonperforming loans increased **$1.2 million** at March 31, 2024[6](index=6&type=chunk) - The Company recorded net recoveries of **$30 thousand** during the first quarter of 2024, or **0.01%** of average total loans[6](index=6&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) [CEO's Remarks](index=2&type=section&id=CEO's%20Remarks) CEO David W. Pijor expressed satisfaction with improved net interest margin and decreased noninterest expense. He highlighted the positive future impact of the BOLI surrender, growth in core relationships through new loan originations ($42 million) and non-time deposits ($113 million), and commitment to client service and technology - Management is pleased with continued efforts to improve net interest margin and decrease noninterest expense, as demonstrated in Q1 2024 results[10](index=10&type=chunk) - The surrender of **$48.0 million** in BOLI is expected to further improve net interest income and margin going forward[10](index=10&type=chunk) - Core relationships are increasing through the origination of over **$42 million** in new loans and **$113 million** in new non-time deposit accounts[10](index=10&type=chunk) [Detailed Financial Review](index=2&type=section&id=Detailed%20Financial%20Review) [Statement of Condition (Balance Sheet)](index=2&type=section&id=Statement%20of%20Condition%20(Balance%20Sheet)) Total assets slightly decreased quarter-over-quarter, while loans receivable and total deposits saw modest increases. The Company strategically reduced wholesale funding and increased shareholders' equity, maintaining a well-capitalized position [Assets](index=2&type=section&id=Assets) Total assets slightly decreased to $2.18 billion. Loans receivable increased by 1% to $1.85 billion, driven by new originations. Investment securities decreased by 3% due to principal repayments and market value decline | Metric | March 31, 2024 | December 31, 2023 | Change QoQ | | :-------------------- | :--------------- | :---------------- | :--------- | | Total Assets | $2.18 billion | $2.19 billion | -$7.9 million (-0.4%) | | Loans Receivable, net | $1.85 billion | $1.83 billion | +$24.2 million (+1%) | | Investment Securities | $167.1 million | $171.9 million | -$4.8 million (-3%) | - Loan originations totaled **$41.5 million** with a weighted average rate of **8.76%** during the first quarter of 2024[12](index=12&type=chunk) - The decrease in investment securities was primarily a result of **$2.8 million** in principal repayments and a **$2.0 million** decrease in the market value of the portfolio[13](index=13&type=chunk) [Liabilities and Equity](index=2&type=section&id=Liabilities%20and%20Equity) Total deposits increased by 1% to $1.86 billion, with noninterest-bearing deposits at 21.2% of total deposits. Time deposits increased significantly as customers sought higher rates. Wholesale funding decreased by 4%, and shareholders' equity increased by 2% to $220.7 million, contributing to improved book and tangible book values per share | Metric | March 31, 2024 | December 31, 2023 | Change QoQ | | :-------------------- | :--------------- | :---------------- | :--------- | | Total Deposits | $1.86 billion | $1.85 billion | +$12.0 million (+1%) | | Noninterest-Bearing Deposits | $394.1 million | $396.7 million | -$2.6 million (-0.7%) | | Time Deposits | $344.4 million | $306.3 million | +$38.0 million (+12%) | | Wholesale Funding | $316.8 million | $330.2 million | -$13.4 million (-4%) | | Shareholders' Equity | $220.7 million | $217.1 million | +$3.5 million (+2%) | | Metric | March 31, 2024 | December 31, 2023 | | :------------------------------------------------ | :--------------- | :---------------- | | Book Value Per Share | $12.32 | $12.19 | | Tangible Book Value Per Share (non-GAAP) | $11.90 | $11.77 | - The Bank is well-capitalized at March 31, 2024, with total risk-based capital of **14.23%**, common equity tier 1 risk-based capital of **13.18%**, and tier 1 leverage ratio of **11.18%**[19](index=19&type=chunk) [Asset Quality](index=3&type=section&id=Asset%20Quality) The Company recorded no provision for credit losses in Q1 2024. While nonaccrual loans increased quarter-over-quarter due to one commercial & industrial loan, overall credit quality remains strong, with watchlist credits decreasing and a diversified commercial real estate portfolio managed with disciplined policies [Credit Loss Provision and Allowance](index=3&type=section&id=Credit%20Loss%20Provision%20and%20Allowance) No provision for credit losses was recorded in Q1 2024, compared to $242 thousand in Q1 2023. The Allowance for Credit Losses (ACL) to total loans was 1.02%, slightly down from 1.03% QoQ, and ACL coverage to nonperforming loans decreased to 651% due to an increase in NPLs | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--------------------------------- | :------ | :------ | :------ | | Provision for Credit Losses | $0 | $0 | $242 thousand | | ACL to Total Loans, net of fees | 1.02% | 1.03% | 1.04% | | ACL Coverage to Nonperforming Loans | 651% | 1065% | 449% | [Nonperforming Loans and Watchlist Credits](index=3&type=section&id=Nonperforming%20Loans%20and%20Watchlist%20Credits) Nonaccrual loans and loans 90 days or more past due increased to $3.0 million (0.14% of total assets) from $1.8 million (0.08%) QoQ, primarily due to one commercial & industrial loan. Watchlist credits decreased to $28.0 million | Metric | March 31, 2024 | December 31, 2023 | Change QoQ | | :----------------------------------- | :--------------- | :---------------- | :--------- | | Nonaccrual Loans & 90+ Days Past Due | $3.0 million | $1.8 million | +$1.2 million | | Nonaccrual Loans to Total Assets | 0.14% | 0.08% | +0.06 pp | | Watchlist Credits | $28.0 million | $28.8 million | -$800 thousand | - The increase in nonperforming loans for Q1 2024 is primarily a result of one commercial & industrial loan relationship that was placed on nonaccrual[21](index=21&type=chunk) [Commercial Real Estate Portfolio](index=3&type=section&id=Commercial%20Real%20Estate%20Portfolio) Commercial real estate (CRE) loans totaled $1.09 billion (59% of total loans) and construction loans $155 million (8%). The portfolio is diversified by asset type and geography, with rigorous credit approval and monitoring practices | Loan Type | Amount | % of Total Loans | | :-------------------------- | :------------- | :--------------- | | Commercial Real Estate | $1.09 billion | 59% | | Construction Loans | $155 million | 8% | | Office Buildings | $121.3 million | 7% | | Retail Shopping Centers | $266.1 million | 14% | | Multi-family Housing | $178.2 million | 10% | - The commercial real estate portfolio, including construction loans, is diversified by asset type and geographic concentration[23](index=23&type=chunk) - The Company manages this portion of the portfolio with comprehensive policies to monitor, measure and mitigate its loan concentrations, including rigorous credit approval, monitoring and administrative practices[23](index=23&type=chunk) [Minority Investment in Mortgage Banking Operation](index=4&type=section&id=Minority%20Investment%20in%20Mortgage%20Banking%20Operation) The Company reported a pre-tax loss of $226 thousand from its minority investment in Atlantic Coast Mortgage, LLC (ACM) in Q1 2024, a significant improvement from the $1.3 million loss in Q4 2023. ACM management is actively working to reduce expenses and increase revenues | Metric | Q1 2024 | Q4 2023 | | :-------------------------------- | :---------- | :---------- | | Pre-tax Loss from ACM Investment | $226 thousand | $1.3 million | - ACM management is continuing to evaluate opportunities to further reduce expenses and increase revenues[25](index=25&type=chunk) [Income Statement](index=6&type=section&id=Income%20Statement) Net income significantly increased year-over-year, but Q1 2024 was impacted by nonrecurring BOLI taxes. Net interest income saw a modest QoQ increase, driven by improved net interest margin, while noninterest income turned positive due to the absence of securities sale losses. Noninterest expenses decreased, primarily due to reduced salaries and benefits [Net Interest Income and Margin](index=6&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income increased 1% QoQ to $12.8 million but decreased 9% YoY. Net interest margin improved 10 basis points QoQ to 2.47% but decreased 13 basis points YoY. Total interest income increased 6% YoY, with loan yields increasing to 5.50%. Total interest expense remained stable QoQ but increased significantly YoY due to higher funding costs | Metric | Q1 2024 | Q4 2023 | Q1 2023 | Change QoQ | Change YoY | | :---------------- | :------ | :------ | :------ | :--------- | :--------- | | Net Interest Income | $12.8M | $12.7M | $14.0M | +1% | -9% | | Net Interest Margin | 2.47% | 2.37% | 2.60% | +10 bps | -13 bps | - The decrease in net interest income compared to the year-ago quarter is primarily due to an increase in funding costs[28](index=28&type=chunk) - Loan yields increased **8 basis points** to **5.50%** QoQ and **39 basis points** YoY[30](index=30&type=chunk) - Approximately **$353 million**, or **24%**, of the Company's commercial loan portfolio is expected to reprice in the next **12 months**[31](index=31&type=chunk) [Noninterest Income](index=6&type=section&id=Noninterest%20Income) Noninterest income totaled $395 thousand in Q1 2024, a significant improvement from losses in prior quarters due to the absence of investment securities sale losses. BOLI income decreased by 42.9% YoY due to policy surrender | Metric | Q1 2024 | Q4 2023 | Q1 2023 | Change QoQ | Change YoY | | :-------------------- | :------ | :------ | :------ | :--------- | :--------- | | Total Noninterest Income (Loss) | $395 thousand | -$9.9 million | -$4.6 million | +104% | +108.5% | - The positive noninterest income in Q1 2024 is largely due to the absence of losses from the sale of available-for-sale investment securities, which impacted Q1 2023 and Q4 2023[34](index=34&type=chunk) - Income from bank-owned life insurance decreased **$142 thousand** (**42.9%**) to **$190 thousand** YoY, a direct result of the surrendered BOLI[35](index=35&type=chunk) [Noninterest Expense](index=7&type=section&id=Noninterest%20Expense) Total noninterest expense decreased 8% QoQ and 4% YoY to $8.6 million. This reduction was primarily driven by a $738 thousand decrease in salaries and benefits QoQ, resulting from reduced staffing and process improvements through technology. Occupancy expense also decreased, while internet banking and software expense increased due to enhanced customer software solutions | Metric | Q1 2024 | Q4 2023 | Q1 2023 | Change QoQ | Change YoY | | :-------------------- | :------ | :------ | :------ | :--------- | :--------- | | Total Noninterest Expense | $8.6 million | $9.4 million | $9.0 million | -8% | -4% | - Salaries and benefits expense decreased **$738 thousand** QoQ and **$484 thousand** YoY, primarily due to reduced staffing (FTE decreased from **118** to **111** QoQ) and process improvement through technology[37](index=37&type=chunk) - Internet banking and software expense increased **$133 thousand** YoY due to the implementation of enhanced customer software solutions[38](index=38&type=chunk) [Income Taxes](index=7&type=section&id=Income%20Taxes) The Company recorded an income tax provision of $3.2 million in Q1 2024, compared to a benefit of $486 thousand in Q1 2023. This provision includes an additional $2.4 million related to the surrender of BOLI policies | Metric | Q1 2024 | Q1 2023 | | :---------------------- | :---------- | :---------- | | Income Tax Expense (Benefit) | $3.2 million | -$486 thousand | - The provision for income taxes for Q1 2024 includes an additional **$2.4 million** associated with the Company's surrendering of its BOLI policies[39](index=39&type=chunk) [Financial Tables](index=9&type=section&id=Financial%20Tables) [Selected Financial Data](index=9&type=section&id=Selected%20Financial%20Data) This section provides a comprehensive overview of selected financial balances, results of operations, per share data, key ratios, capital ratios, and asset quality metrics for the current and prior periods, including GAAP to non-GAAP reconciliations - Contains tables for Selected Balances, Summary Results of Operations, Per Share Data, Selected Ratios, Reconciliation of Net Income (GAAP) to Commercial Bank Operating Earnings (Non-GAAP), Capital Ratios - Bank, Asset Quality, Selected Average Balances, and Other Data[46](index=46&type=chunk)[47](index=47&type=chunk) [Summary Consolidated Statements of Condition](index=11&type=section&id=Summary%20Consolidated%20Statements%20of%20Condition) This table presents a detailed consolidated balance sheet, showing assets, liabilities, and shareholders' equity at March 31, 2024, December 31, 2023, and March 31, 2023, along with quarter-over-quarter and year-over-year percentage changes - Provides a detailed breakdown of assets (Cash, Investment securities, Loans by type, BOLI, etc.), liabilities (Deposits by type, Borrowed funds, etc.), and Shareholders' Equity with comparative data and percentage changes[49](index=49&type=chunk) [Summary Consolidated Statements of Income (Loss)](index=12&type=section&id=Summary%20Consolidated%20Statements%20of%20Income%20(Loss)) This table provides a detailed consolidated income statement, outlining net interest income, provision for credit losses, noninterest income (loss), noninterest expense, income taxes, and net income (loss) for the three months ended March 31, 2024, December 31, 2023, and March 31, 2023, including GAAP to non-GAAP reconciliations - Presents a detailed income statement including Net Interest Income, Provision for Credit Losses, various Noninterest Income and Expense categories, Income Tax Expense (Benefit), and Net Income (Loss)[51](index=51&type=chunk) - Includes reconciliations of Net Income (GAAP) to Commercial Bank Operating Earnings (Non-GAAP) and Pre-Tax Pre-Provision Income (Non-GAAP)[51](index=51&type=chunk) [Average Statements of Condition and Yields on Earning Assets and Interest-Bearing Liabilities](index=15&type=section&id=Average%20Statements%20of%20Condition%20and%20Yields%20on%20Earning%20Assets%20and%20Interest-Bearing%20Liabilities) This table presents average balances, interest income/expense, and average yields for interest-earning assets and interest-bearing liabilities for the three months ended March 31, 2024, December 31, 2023, and March 31, 2023, providing insights into the Company's net interest margin calculation - Details average balances, interest income/expense, and average yields for various interest-earning assets (Loans by type, Investment securities, Interest-bearing deposits) and interest-bearing liabilities (Deposits by type, Borrowed funds)[52](index=52&type=chunk) - Includes the calculation of Net Interest Margin based on average balances[52](index=52&type=chunk) [Cautionary Note About Forward-Looking Statements](index=7&type=section&id=Cautionary%20Note%20About%20Forward-Looking%20Statements) [Forward-Looking Statements Disclaimer](index=7&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section serves as a standard disclaimer, warning that the press release contains forward-looking statements subject to known and unknown risks and uncertainties. It lists various factors that could cause actual results to differ materially from projections, including economic conditions, interest rate environment, liquidity, credit losses, market conditions, regulatory changes, and competitive pressures - The press release may contain forward-looking statements that represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of beliefs concerning future events[42](index=42&type=chunk) - Actual results, performance or achievements could differ materially from those contemplated due to a number of known and unknown risks and uncertainties[42](index=42&type=chunk) - Key factors include general business and economic conditions, the impact of the interest rate environment, changes in liquidity requirements, credit losses, market conditions, and regulatory changes[42](index=42&type=chunk)[43](index=43&type=chunk)

FVCBankcorp, Inc. (FVCB) has extended its current share repurchase program to Mar 31, 2025, from Mar 31, 2024. Per the program, the company is authorized to buy back up to 1,300,000 shares, which represents approximately 7% of its outstanding shares of common stock as of Dec 31, 2023.During 2023, FVCBankcorp bought back 115,750 shares of its common stock at a cost of $1.4 million. As of Dec 31, 2023, 1,275,202 shares remained available under the authorization.Prior to this, the company extended its share re ...

or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 Fairfax, Virginia 22030 (Address of principal executive offices) (Zip Code) (I.R.S. Employer Identification No.) For the transition period from_______to_______ Commission file ...

[PART I — FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for FVCBankcorp, Inc. as of September 30, 2023, and for the three and nine months then ended, including balance sheets, statements of income, comprehensive income, cash flows, and changes in stockholders' equity, along with accompanying notes, noting the adoption of the Current Expected Credit Loss (CECL) accounting standard on January 1, 2023, which resulted in a **$2.8 million** net reduction to retained earnings [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased slightly to **$2.31 billion** at September 30, 2023, from **$2.34 billion** at December 31, 2022, primarily driven by a decrease in securities available-for-sale and FHLB advances, largely offset by an increase in total deposits, while total stockholders' equity increased to **$211.2 million** from **$202.4 million** over the same period Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2023 (Unaudited) | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$2,305,472** | **$2,344,322** | | Loans, net | $1,830,664 | $1,824,394 | | Securities available-for-sale | $216,146 | $278,069 | | **Total Liabilities** | **$2,094,226** | **$2,141,940** | | Total deposits | $1,995,971 | $1,830,162 | | FHLB advances | $50,000 | $235,000 | | **Total Stockholders' Equity** | **$211,246** | **$202,382** | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Net income for the third quarter of 2023 was **$4.0 million**, a significant decrease from **$7.0 million** in the third quarter of 2022, and for the nine months ended September 30, 2023, net income was **$8.9 million**, down from **$20.1 million** year-over-year, primarily due to a substantial increase in interest expense (**$14.1M** in Q3 2023 vs **$3.6M** in Q3 2022), which outpaced the growth in interest income, leading to lower net interest income Income Statement Summary (in thousands) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $13,335 | $17,526 | $41,737 | $49,364 | | (Recovery of) Provision for credit losses | $(729) | $365 | $132 | $1,900 | | Total noninterest (loss) income | $225 | $575 | $(3,511) | $2,844 | | **Net Income** | **$4,039** | **$7,043** | **$8,892** | **$20,080** | Earnings Per Share | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | EPS, basic | $0.23 | $0.40 | $0.50 | $1.15 | | EPS, diluted | $0.22 | $0.38 | $0.49 | $1.09 | [Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company reported a total comprehensive loss of **$33 thousand** for Q3 2023, a significant improvement from a loss of **$3.3 million** in Q3 2022, and for the nine months ended September 30, 2023, total comprehensive income was **$10.6 million**, compared to a loss of **$17.5 million** in the prior-year period, driven by a reclassification adjustment for realized securities losses and smaller unrealized losses on securities available for sale Comprehensive Income (Loss) Summary (in thousands) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $4,039 | $7,043 | $8,892 | $20,080 | | Total other comprehensive (loss) | $(4,072) | $(10,388) | $1,733 | $(37,537) | | **Total comprehensive income (loss)** | **$(33)** | **$(3,345)** | **$10,625** | **$(17,457)** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2023, net cash provided by operating activities was **$11.7 million**, net cash from investing activities was **$37.6 million**, primarily due to **$35.8 million** in proceeds from the sale of available-for-sale securities, and net cash used in financing activities was **$49.0 million**, driven by a **$185.0 million** net decrease in FHLB advances, partially offset by a **$155.9 million** net increase in time deposits, resulting in a net increase in cash and cash equivalents of **$307 thousand** Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $11,740 | $13,894 | | Net cash provided by (used in) investing activities | $37,615 | $(83,692) | | Net cash (used in) provided by financing activities | $(49,048) | $57,005 | | **Net increase (decrease) in cash** | **$307** | **$(12,793)** | [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies and financial statement components, including the adoption of the CECL standard on January 1, 2023, which resulted in a **$2.8 million** net reduction to retained earnings, and the Q1 2023 balance sheet repositioning through the sale of **$40.3 million** in securities at a **$4.6 million** pre-tax loss to reduce high-cost debt - The company adopted the CECL standard (ASU 2016-13) on January 1, 2023, recording a net reduction of retained earnings of **$2.8 million**. This included a **$2.9 million** increase in the allowance for credit losses on loans and an **$800 thousand** increase to the reserve for unfunded commitments[27](index=27&type=chunk)[56](index=56&type=chunk) - In Q1 2023, the company sold available-for-sale investment securities with a book value of **$40.3 million**, realizing a pre-tax loss of **$4.6 million**. The proceeds were used to reduce high-cost FHLB advances and fund higher-yielding commercial loans[78](index=78&type=chunk) - As of September 30, 2023, the company had no financial instruments indexed to LIBOR, having completed its transition to Alternative Reference Rates (ARRs) like SOFR[234](index=234&type=chunk) - The company's investment in Atlantic Coast Mortgage, LLC (ACM) resulted in a loss of **$650 thousand** for Q3 2023 and **$1.4 million** for the nine months ended September 30, 2023[22](index=22&type=chunk)[286](index=286&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance and condition, highlighting the impact of the rising interest rate environment which compressed the net interest margin due to rapidly increasing funding costs, while maintaining strong credit quality and a solid capital and liquidity position by successfully reducing wholesale funding and growing core deposits [Results of Operations](index=47&type=section&id=Results%20of%20Operations) For Q3 2023, net income decreased to **$4.0 million** from **$7.0 million** in Q3 2022, primarily due to a **24%** drop in net interest income to **$13.3 million**, with the net interest margin compressing significantly to **2.39%** from **3.38%** year-over-year as the cost of interest-bearing deposits surged to **3.40%** from **0.88%**, while noninterest income fell due to a larger loss from the minority interest in ACM, and noninterest expense saw a modest **5.2%** increase driven by higher FDIC insurance and software costs Q3 Performance Summary | Metric | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | Net Income | $4.0 million | $7.0 million | | Diluted EPS | $0.22 | $0.38 | | Return on Average Assets (ROA) | 0.70% | 1.32% | | Return on Average Equity (ROE) | 7.57% | 13.87% | - The net interest margin decreased to **2.39%** for Q3 2023 from **3.38%** in Q3 2022, primarily due to the cost of interest-bearing deposits increasing **252 basis points** to **3.40%**[257](index=257&type=chunk) - For the nine months ended Sep 30, 2023, non-interest income was a loss of **$3.5 million**, primarily due to a **$4.6 million** loss on the sale of securities and a **$1.4 million** loss from the investment in ACM[286](index=286&type=chunk)[289](index=289&type=chunk) - FDIC insurance expense increased **178.1%** in Q3 2023 compared to Q3 2022, due to the FDIC increasing the assessment rate to replenish its deposit insurance fund[292](index=292&type=chunk)[293](index=293&type=chunk) [Financial Condition and Asset Quality](index=63&type=section&id=Financial%20Condition%20and%20Asset%20Quality) Total assets remained stable at **$2.31 billion** as of September 30, 2023, with the loan portfolio seeing minimal growth, increasing by **0.3%** to **$1.85 billion**, while asset quality improved significantly, with nonperforming loans decreasing by **66%** to **$1.5 million** (**0.07%** of total assets) from **$4.5 million** at year-end 2022, and the allowance for credit losses on loans as a percentage of total loans increased to **1.06%** from **0.87%** at year-end, reflecting the adoption of CECL Asset Quality Metrics | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Nonperforming Loans (NPLs) | $1,510 thousand | $4,493 thousand | | NPLs / Total Assets | 0.07% | 0.19% | | Allowance for credit losses / NPLs | 1,248.28% | 357.00% | - Special mention loans decreased to **$811 thousand** at September 30, 2023, from **$10.4 million** at December 31, 2022, primarily due to two relationships totaling **$9.6 million** paying off[304](index=304&type=chunk) - The commercial real estate portfolio, including office and retail, exhibited strong credit quality with no delinquencies and no classified loans at September 30, 2023[313](index=313&type=chunk) [Capital Resources and Liquidity](index=69&type=section&id=Capital%20Resources%20and%20Liquidity) The company's capital and liquidity positions remain strong, with shareholders' equity increasing to **$211.2 million** and tangible book value per share rising to **$11.44** from **$11.14** at year-end 2022, as all of the Bank's regulatory capital ratios exceeded "well capitalized" minimums, including a Total risk-based capital ratio of **13.93%**, and robust liquidity supported by growth in core deposits, access to wholesale funding, significant available borrowing capacity of **$481.6 million** with the FHLB and **$135.9 million** with the FRB, and improved estimated uninsured deposits at **31.8%** of total deposits Bank's Regulatory Capital Ratios (as of Sep 30, 2023) | Ratio | Actual | Minimum to be Well Capitalized | | :--- | :--- | :--- | | Total risk-based capital | 13.93% | > 10.00% | | Tier 1 risk-based capital | 12.92% | > 8.00% | | Common equity tier 1 capital | 12.92% | > 6.50% | | Leverage capital ratio | 10.62% | > 5.00% | Tangible Book Value Per Share (Non-GAAP) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Tangible book value per common share | $11.44 | $11.14 | - As of September 30, 2023, the Bank had additional borrowing capacity of approximately **$481.6 million** from the FHLB and **$135.9 million** from the FRB[357](index=357&type=chunk) - Estimated uninsured deposits (excluding collateralized deposits) improved to **31.8%** of total deposits at September 30, 2023, down from **39.7%** at December 31, 2022[352](index=352&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=74&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that this section is not required for this filing, as is permitted for smaller reporting companies - The company indicates that this disclosure is not required[366](index=366&type=chunk) [Controls and Procedures](index=74&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of the end of the period covered by the report, with no material changes in internal control over financial reporting during the last fiscal quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2023[367](index=367&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter[368](index=368&type=chunk) [PART II — OTHER INFORMATION](index=75&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=75&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, nor is it aware of any threatened material legal proceedings - The company reports it is not party to any material legal proceedings[371](index=371&type=chunk) [Risk Factors](index=75&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes to risk factors from the last Annual Report on Form 10-K are reported[372](index=372&type=chunk) [Issuer Purchases of Equity Securities](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company renewed its share repurchase program on March 16, 2023, authorizing the purchase of up to **1,300,000 shares** of its common stock through March 31, 2024, with no shares repurchased during the three months ended September 30, 2023 - The Board of Directors renewed the share repurchase program, authorizing the purchase of up to **1,300,000 shares**. The program expires on March 31, 2024[380](index=380&type=chunk) - No shares were repurchased during the three months ended September 30, 2023[374](index=374&type=chunk) [Other Information (Items 3-6)](index=75&type=section&id=Other%20Information%20(Items%203-6)) The company reports no defaults upon senior securities, no mine safety disclosures, and no other material information to disclose under Item 5, with a list of exhibits filed with the report, including officer certifications and XBRL data, provided under Item 6 - The company reported no defaults on senior securities (Item 3), no mine safety disclosures (Item 4), and no other information (Item 5)[375](index=375&type=chunk)[377](index=377&type=chunk)[378](index=378&type=chunk) - Item 6 lists the exhibits filed with the 10-Q, including officer certifications and XBRL data[383](index=383&type=chunk)

[PART I — FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) FVCBankcorp's Q2 2023 net income declined to $4.2 million due to higher interest expenses, with year-to-date results impacted by a securities loss and CECL adoption [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets remained stable at $2.34 billion, with deposits increasing by $257.9 million to offset FHLB advances, while net loans grew and stockholders' equity rose by $8.7 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and equivalents | $75,004 | $81,553 | | Securities available-for-sale | $231,204 | $278,069 | | Loans, net | $1,884,372 | $1,824,394 | | **Total Assets** | **$2,344,372** | **$2,344,322** | | **Liabilities & Equity** | | | | Total Deposits | $2,088,042 | $1,830,162 | | FHLB Advances | $0 | $235,000 | | **Total Liabilities** | **$2,133,321** | **$2,141,940** | | **Total Stockholders' Equity** | **$211,051** | **$202,382** | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q2 2023 decreased to $4.2 million due to lower net interest income, while year-to-date net income dropped to $4.9 million, primarily impacted by a $4.6 million securities sale loss Income Statement Summary (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Total Interest Income | $27,203 | $19,026 | $52,537 | $36,249 | | Total Interest Expense | $12,815 | $2,239 | $24,135 | $4,411 | | **Net Interest Income** | **$14,388** | **$16,787** | **$28,402** | **$31,838** | | Provision for credit losses | $618 | $1,185 | $860 | $1,535 | | Total Noninterest (Loss) Income | $891 | $645 | $(3,736) | $2,269 | | **Net Income** | **$4,233** | **$6,425** | **$4,854** | **$13,039** | | **Diluted EPS** | **$0.23** | **$0.35** | **$0.27** | **$0.71** | [Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Total comprehensive income for Q2 2023 improved to $6.3 million from a $3.6 million loss, driven by positive other comprehensive income, with year-to-date comprehensive income reaching $10.7 million Comprehensive Income (Loss) Summary (in thousands) | Metric | Q2 2023 | Q2 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $4,233 | $6,425 | $4,854 | $13,039 | | Total Other Comprehensive Income (Loss) | $2,100 | $(9,978) | $5,805 | $(27,149) | | **Total Comprehensive Income (Loss)** | **$6,333** | **$(3,553)** | **$10,659** | **$(14,110)** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was $5.5 million, with a $6.9 million outflow from financing activities due to FHLB repayment, resulting in a $1.0 million net increase in cash and equivalents Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $5,488 | $6,454 | | Net cash (used in) provided by investing activities | $2,487 | $(179,201) | | Net cash (used in) provided by financing activities | $(6,947) | $159,864 | | **Net increase (decrease) in cash** | **$1,028** | **$(12,883)** | [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including the CECL adoption's $2.8 million impact on retained earnings, a Q1 2023 balance sheet repositioning, and the completion of the LIBOR to SOFR transition - The company adopted the Current Expected Credit Loss (CECL) model on January 1, 2023, recording a net reduction of retained earnings of **$2.8 million**. This included a **$2.9 million** increase in the allowance for credit losses on loans and a **$0.8 million** increase to the reserve for unfunded commitments[27](index=27&type=chunk)[56](index=56&type=chunk) - In Q1 2023, the company sold available-for-sale securities with a book value of **$40.3 million**, realizing a pre-tax loss of **$4.6 million**. The proceeds were used to pay down high-cost FHLB advances and fund new loans[79](index=79&type=chunk) - As of June 30, 2023, the company has completed its transition away from LIBOR for all its financial instruments, with new benchmark rates based on SOFR[232](index=232&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the decline in Q2 2023 net income due to compressed net interest margin and strategic losses, highlighting strong asset quality, balance sheet repositioning, and robust capital levels [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Q2 2023 net income declined to $4.2 million, and year-to-date net income dropped to $4.9 million, primarily due to decreased net interest income, a securities sale loss, and increased noninterest expenses Key Performance Metrics | Metric | Q2 2023 | Q2 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income (in millions) | $4.2 | $6.4 | $4.9 | $13.0 | | Diluted EPS | $0.23 | $0.35 | $0.27 | $0.71 | | Annualized ROA | 0.73% | 1.21% | 0.42% | 1.26% | | Annualized ROE | 8.17% | 12.93% | 4.70% | 12.78% | - Excluding the loss on securities sales and merger-related expenses, non-GAAP commercial bank operating earnings were **$8.4 million** for the first six months of 2023, compared to **$13.1 million** for the same period in 2022[237](index=237&type=chunk) [Discussion and Analysis of Financial Condition](index=63&type=section&id=Discussion%20and%20Analysis%20of%20Financial%20Condition) Total assets remained stable at $2.34 billion, with a strategic shift in funding mix to increase deposits and pay down FHLB advances, while asset quality improved, and capital and liquidity remained strong - Total deposits increased by **$257.9 million** (**14%**) to **$2.09 billion** at June 30, 2023, from year-end 2022. This was used to pay down all FHLB advances, which stood at **$235.0 million** at year-end[298](index=298&type=chunk)[338](index=338&type=chunk) - Asset quality improved significantly, with nonperforming loans falling to **$1.4 million** (**0.06% of total assets**) at June 30, 2023, from **$4.5 million** (**0.19% of total assets**) at December 31, 2022[304](index=304&type=chunk) - Liquidity is strong, with total available borrowing capacity of approximately **$813 million** from the FHLB, FRB, and federal funds lines. The liquidity position was **172%** of estimated uninsured deposits as of June 30, 2023[357](index=357&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=74&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not required for the current filing - Quantitative and Qualitative Disclosures About Market Risk are not required for this report[366](index=366&type=chunk) [Controls and Procedures](index=74&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the last fiscal quarter - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2023[367](index=367&type=chunk) - No changes occurred in the company's internal control over financial reporting during the last fiscal quarter that materially affected, or are likely to materially affect, these controls[368](index=368&type=chunk) [PART II — OTHER INFORMATION](index=75&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=75&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, nor is management aware of any threatened proceedings - As of the filing date, the company is not involved in any material legal proceedings[371](index=371&type=chunk) [Risk Factors](index=75&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have been reported since the Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes in risk factors are reported since the last Annual Report on Form 10-K[372](index=372&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Board renewed the share repurchase program for up to 1.3 million shares, with 24,798 shares repurchased in Q2 2023 at an average price of $9.16 per share - The Board of Directors renewed a share repurchase program on March 16, 2023, authorizing the buyback of up to **1,300,000 shares** of common stock[378](index=378&type=chunk) Share Repurchases in Q2 2023 | Period | Total Shares Purchased | Average Price Paid per Share ($) | | :--- | :--- | :--- | | April 2023 | 0 | — | | May 2023 | 24,798 | $9.16 | | June 2023 | 0 | — | | **Total Q2** | **24,798** | **$9.16** | [Other Information and Exhibits](index=75&type=section&id=Item%203,%204,%205,%206) The company reported no defaults on senior securities, no mine safety disclosures, and no other material information, with exhibits including officer certifications and XBRL data - There were no defaults upon senior securities (Item 3), no mine safety disclosures (Item 4), and no other information to report (Item 5)[375](index=375&type=chunk)[377](index=377&type=chunk)[378](index=378&type=chunk) - Exhibits filed with the report include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and financial data in XBRL format (101, 104)[380](index=380&type=chunk)

or Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2023 (Registrant's telephone number, including area code) ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-38647 FVCBankcorp, Inc. (Exact name of registrant as specified in i ...