About FVCBankcorp
FVCBankcorp, Inc. operates as the bank holding company for FVCbank that provides a range of banking services. The company serves the banking needs of commercial businesses, nonprofit organizations, professional service entities, and their respective owners and employees located in the greater Washington, D.C. and Baltimore metropolitan areas. The company’s strong infrastructure and wide range of products and services allowed it to develop deeper relationships with Colombo's customers, as well as enhance its platform for generating new relationships. Market Area The company operates in one of the most economically dynamic and wealthy regions of the Washington and Baltimore Metropolitan Statistical Areas (MSA), focusing primarily on the Virginia counties of Arlington, Fairfax, Loudoun and Prince William and the independent cities located within those counties, as well as Washington, D.C. and its Maryland suburbs and Baltimore, Maryland and its surrounding suburbs. The company’s market area's unemployment rate has generally remained below the national average for the last several years. In addition to the presence of the federal government, the Washington MSA is defined by attractive market demographics, including strong household incomes, dense populations and the presence of a diverse group of large and small businesses. The Washington MSA is home to 16 Fortune 500 companies, including eight based in Fairfax County. The Baltimore MSA also has strong economic factors which enhance the company’s business profile. The company’s business, financial condition, and results of operations have been profoundly affected by the pandemic, which will potentially have adverse effects on its future performance. The local economy in which the company operates began to strengthen and improve during 2021 and continued into 2022. Products and Services The company emphasizes providing commercial banking services to small and medium-sized businesses, professionals, non-profit organizations and associations, and investors living and working in and near its service area. The company offers retail banking services to accommodate the individual needs of both corporate customers, as well as the communities it serves. The company also offers online banking, mobile banking and a remote deposit service, which allows clients to facilitate and expedite deposit transactions through the use of electronic devices. A sophisticated suite of treasury management products is a key feature of the company’s client focused, relationship driven marketing. The company has partnered with experienced service providers in both insurance and merchant services to further augment the products available to its customers. Lending Products The company provides a variety of lending products to small and medium-sized businesses, including commercial real estate loans; commercial construction loans; commercial loans for a variety of business purposes such as for working capital, equipment purchases, lines of credit, and government contract financing; Small Business Administration (SBA) lending; asset based lending and accounts receivable financing; home equity loans, or home equity lines of credit; and consumer loans for constructive purposes. Through its partnership with ACM, the company purchases residential mortgage loans primarily originated in its market area that meet its product criteria and pricing, to help with the diversification of its loan portfolio. The company has acquired pools of other types of loans, student loans and other consumer loans, in order to diversify the loan portfolio, put capital to work before organic loan production requires it, and to increase margin. During 2020 and 2021, the company participated in the SBA's Paycheck Protection Program (PPP), which provided forgivable loans to small businesses to enable them to maintain payroll, rehire employees who had been laid off, and cover applicable overhead. These loans are fully guaranteed by the SBA and provide for the full forgiveness of the loans during a specified forgiveness period that meet specific guidelines provided by the SBA. Loans that do not meet forgiveness criteria will enter a repayment period of either 2 or 5 years. Commercial Real Estate Loans: Commercial real estate loans, which comprise the largest portion of the loan portfolio, are secured by both owner occupied and investor owned commercial properties, including multi-family residential real estate. Commercial real estate loans are structured using both variable and fixed rates and renegotiable rates which adjust in three to five years, with maturities of generally five to ten years. The company seeks to mitigate lending risks typical of this type of loan, such as declines in real estate values, changes in borrower cash flow and general economic conditions. The company typically requires a maximum loan to value of 80% and minimum cash flow and debt service coverages, of at least 1.20 to 1.00. Personal guarantees are generally required, but may be limited. The company generally requires that interest rates adjust not less frequently than five years. For purposes of geographic diversification, the company will also make commercial real estate loans outside of its primary and secondary markets, in an area extending south to Richmond, Virginia, and north of Baltimore, Maryland, and between Winchester, Virginia and the Eastern Shore of Maryland. Construction Loans: Commercial construction loans for the acquisition, development and construction of commercial real estate also comprise a significant and growing portion of the portfolio. The company’s typical commercial construction loan involves property that will ultimately be leased to a non-owner occupant. The company will finance construction projects of a speculative nature, which are well-conceived and structured with appropriate interest reserves and analyzed fully. In underwriting commercial construction loans, it considers the expected costs of the transaction, the loan to value ratio, the credit history, cash flows and liquidity of the borrower, the project and the guarantors, the debt service coverage ratios (which are stressed prior to approval), take out sources for the permanent loan or repayment of the construction loan, the reputation, experience and qualifications of the borrower, the general contractor and others involved with the project and other factors. Commercial Loans, Government Contracting: Commercial loans, excluding PPP loans, for a variety of business purposes, including working capital, equipment purchases, lines of credit, and government contract financing and asset based lending and accounts receivable financing, comprise approximately 13.2% of the company’s loan portfolio at December 31, 2022. The warehouse facility provided to ACM is also included in this loan type. The company makes commercial loans on a secured or unsecured basis. The company generally requires the owners, managing members, general partners and principals of the borrowing entity or that control more than 20% of the borrower to guaranty the loan, unless a combination of low leverage, significant income and debt service coverage ratios, and substantial experience in operating the business, strong management and internal controls and/or other factors are demonstrated. Commercial loans are typically made with variable or adjustable rates. The company has developed a special expertise in government contract financing. The company lends to government contractors or subcontractors headquartered in the Washington, D.C. metropolitan area. This area of lending encompasses lines of credit for working capital, financing of government leases, mergers and acquisition financing, and, less frequently term loans, to operating companies that recognize over 50% of their total revenues from services provided to federal government agencies or rated state and municipal governments. The company’s borrowers are typically engaged in technology or service businesses, but may also include construction and equipment providers, or entities working on classified projects. A government contractor borrower must have an acceptable level of eligible accounts receivable, provide appropriate security instruments perfecting the company’s rights in the accounts receivable or other collateral, and are subject to periodic review and monitoring of their receivables, contract backlog and contract compliance. The contractor is typically required to have its primary deposit relationship with the company. Consumer Residential: The company actively originates loans for residential 1-4 family trust investment purposes and HELOCs in the communities it serves in the Washington and Baltimore MSAs. In addition, the company has portfolio mortgage products that it developed for use by ACM to help diversify its total loan portfolio. The company’s HELOCs generally have a maximum loan to value of up to 85%, however, due to the favorable economic conditions and strong residential real estate market in these markets, actual loan to values are typically lower than the maximum. The company provides HELOCs as a service to its customers and when it receives referrals from various mortgage brokers within its market area. The company has also purchased portfolios of 1-4 family residential first mortgage loans on properties primarily located in its market area for yield and diversification. Other Loans: The company occasionally originates consumer loans both on an unsecured basis and secured by non-real estate collateral. The company has also purchased pools of unsecured consumer loans and student loans from a third party for yield and diversification. The lending activities in which the company engages carry the risk that the borrowers will be unable to perform on their obligations. As such, interest rate policies of the Board of Governors of the Federal Reserve System (the Federal Reserve) and general economic conditions, nationally and in its market areas, could have a significant impact on its results of operations. The company’s lending activities are subject to a variety of lending limits imposed by state and federal law. Investment Portfolio As of December 31, 2022, the company’s investment portfolio included securities of U.S. government and federal agencies; securities of state and local municipalities tax exempt; securities of state and local municipalities taxable; corporate bonds; SBA pass-through securities; mortgage-backed securities; and collateralized mortgage obligations. Deposit Products The company offers a wide array of deposit products for individuals, professionals, government contractors and other businesses, including interest and noninterest-bearing transaction accounts, certificates of deposit, savings, and money market accounts. The company is a relationship based bank, and maintenance of significant deposit relationships is a factor in its decision to make loans and the pricing of its products. The company’s sophisticated treasury management and online banking platform allows a commercial customer to view balances, initiate payments, pay bills (including positive pay), issue stop payments, reconcile accounts and set up custom alerts. Online wires, ACH (including positive authorization), remote capture, cash disbursement and cash concentration are additional payment options available to businesses. The company provides customers with a sophisticated escrow management product which facilitates and simplifies management of multiple escrow balances. The company also provides secure credit card processing and merchant services, with reporting tailored to customer needs. Additionally, the company offers online and mobile banking products to its consumer depositors, to complement its branch network. Other Services Through third party networks, the company offers its customers access to a full range of business insurance products and business and consumer credit card products. Strategy The company provides a full range of banking services that become integral to its customers' business operations, which helps to enhance its ability to retain its relationships. The company offers a better value proposition to its customers by providing high-touch service with few added fees. The company’s capabilities and reputation enable it to be selective in loan and customer selection, which contributes to its strong asset quality, and its ability to provide multiple services to customers. The company intends to continue expanding its market position through organic growth, through expansion of its relationships with its existing customers, acquisition of new customers and acquisition of seasoned bankers with strong customer relationships, through selective branching, and potentially opportunistic acquisitions or other strategic transactions, while increasing profitability, maintaining strong asset quality and a high level of customer service. Supervision and Regulation The company is a bank holding company registered under the Bank Holding Company Act of 1956, as amended (the Act), and is subject to regulation and supervision by the Board of Governors of the Federal Reserve System (the Federal Reserve). The bank is a Virginia chartered commercial bank and a member of the Federal Reserve System, or a state member bank, whose accounts are insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (FDIC) up to the maximum legal limits of the FDIC. The bank is subject to regulation, supervision and regular examination by the Virginia Bureau of Financial Institutions (the VBFI) and the Federal Reserve. The laws and regulations governing the bank have been promulgated to protect depositors and the Deposit Insurance Fund, and not for the purpose of protecting shareholders. Smaller institutions, including the bank, are subject to rules promulgated by the Consumer Financial Protection Bureau but continue to be examined and supervised by federal banking agencies for compliance with federal consumer protection laws and regulations. The deposits of the bank are insured up to applicable limits by the FDIC’s Deposit Insurance Fund and are subject to deposit insurance assessments to maintain the Deposit Insurance Fund. The company is subject to several federal laws that are designed to combat money laundering, terrorist financing, and transactions with persons, companies or foreign governments designated by U.S. authorities (AML laws). This category of laws includes the Bank Secrecy Act of 1970, the Money Laundering Control Act of 1986, the USA PATRIOT Act of 2001, and the Anti-Money Laundering Act of 2020. The Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA), which became effective May 24, 2018, amended the Dodd-Frank Act to provide regulatory relief for certain smaller and regional financial institutions, such as the company and the bank. The bank’s mortgage origination activities are subject to the Federal Reserve’s Regulation Z, which implements the Truth in Lending Act. The bank's record of performance under the CRA (Community Reinvestment Act) is publicly available. History FVCBankcorp, Inc. was founded in 2007. The company, a Virginia corporation, was incorporated in 2015.
