FVCBankcorp(FVCB) - 2024 Q3 - Quarterly Report

Financial Performance - Net income for the three months ended September 30, 2024, was $4.7 million, an increase of 16% from $4.0 million in the same period of 2023 [171]. - For the nine months ended September 30, 2024, net income was $10.2 million, compared to $8.9 million for the same period in 2023 [173]. - Commercial bank operating earnings for the three months ended September 30, 2024, were $4.7 million, compared to $4.0 million for the same period in 2023 [175]. - Diluted commercial bank operating earnings per share for the three months ended September 30, 2024, were $0.25, up from $0.22 in the same period of 2023 [177]. - Noninterest income for the three months ended September 30, 2024, was $815 thousand, up from $225 thousand in the same period of 2023 [171]. - Noninterest income for the nine months ended September 30, 2024, was $84.032 million, with an average yield of 5.29% [192]. Interest Income and Expenses - Net interest income increased by $878 thousand, or 7%, to $14.2 million for the three months ended September 30, 2024, compared to $13.3 million for the same period in 2023 [171]. - Interest income from loans totaled $27,381 thousand in Q3 2024, up from $25,243 thousand in Q3 2023, marking an increase of 8.5% [184]. - Interest expense on total interest-bearing deposits was $14,199 thousand in Q3 2024, compared to $13,799 thousand in Q3 2023, an increase of 2.9% [184]. - Net interest income for the nine months ended September 30, 2024, was $40.7 million, a decrease of $1.1 million, or 3%, compared to $41.7 million for the same period in 2023 [198]. - The net interest margin increased by 25 basis points to 2.64% for Q3 2024, compared to 2.39% in Q3 2023 [190]. Credit Losses and Allowance - The allowance for credit losses (ACL) is maintained at a level representing management's best estimate of expected losses in the loan portfolio, with minimal loss history since the bank's inception in 2007 [156]. - The company adopted the current expected credit losses (CECL) accounting standard as of January 1, 2023, impacting retained earnings and the allowance for credit losses [153]. - Provision for credit losses for the nine months ended September 30, 2024, was $6 thousand, compared to $132 thousand for the same period in 2023 [174]. - The total allowance for credit losses on loans was $19.067 million as of September 30, 2024, compared to $18.871 million at December 31, 2023 [245]. Asset and Loan Growth - Total loans increased to $1,879,152 thousand in Q3 2024, up from $1,868,819 thousand in Q3 2023, reflecting a growth of 0.6% [184]. - Loans receivable increased by $46.4 million, or 3%, to $1.87 billion at September 30, 2024, from $1.83 billion at December 31, 2023 [222]. - The commercial real estate loan portfolio totaled $1.06 billion, or 57% of total loans, at September 30, 2024, compared to $1.09 billion, or 60% of total loans, at December 31, 2023 [233]. Risk Management - The company emphasizes the importance of managing interest rate risk and credit risk to stabilize net interest income, which is its primary source of revenue [150]. - The company has a proactive approach to managing risks inherent in its real estate loan portfolio, particularly in light of potential downturns in the real estate market [143]. - The company maintains a conservative approach to risk management, adjusting expected losses based on risk ratings to mitigate potential credit risks [239]. Deposits and Funding - Total deposits rose by 6%, or $115.5 million, to $1.96 billion at September 30, 2024, compared to $1.85 billion at December 31, 2023 [221]. - Non-interest-bearing deposits were $357.0 million at September 30, 2024, representing 18% of total deposits [254]. - Wholesale deposits were $249.9 million at September 30, 2024, an increase of $4.6 million, or 2%, from $245.3 million at December 31, 2023 [255]. Nonperforming Loans and Assets - Nonperforming loans at September 30, 2024, totaled $3.6 million, or 0.16% of total assets, compared to $1.8 million, or 0.08%, of total assets at December 31, 2023 [207]. - Total nonperforming loans (NPLs) increased to $3,556,000 at September 30, 2024, up from $1,829,000 at December 31, 2023, representing a growth of 94.5% [233]. - The ratio of NPLs to total assets increased to 0.16% at September 30, 2024, from 0.08% at December 31, 2023 [233]. Capital and Liquidity - Shareholders' equity increased by $13.7 million to $230.8 million at September 30, 2024, with net income contributing $10.2 million to this increase [262]. - The common equity Tier 1 (CET1) capital ratio was 13.48% at September 30, 2024, exceeding the minimum requirement of 7.00% [269]. - Liquid assets totaled $342.7 million, or 15% of total assets, at September 30, 2024, up from $232.1 million, or 11% of total assets, at December 31, 2023 [274].