FVCB net income rises 19% as margin widens, but slides from the second quarter

FVCBankcorp, Inc. reported net income of $6.6 million, or $0.37 per diluted share, for the quarter ended September 30, 2026, up 19% from $5.6 million a year earlier as a wider net interest margin offset weaker noninterest income. Net interest income rose 15% from a year earlier to $18.4 million, but profit fell from $8.22 million in the second quarter, when prepayment fees and a business-sale gain lifted results.

A wider margin, with a lighter linked quarter

The year-over-year improvement came mostly from the spread. Net interest margin was 3.32%, 41 basis points above 2.91% a year earlier, as the cost of funds fell to 2.42% from 2.78% and the yield on loans edged up to 5.99% from 5.90%. Net interest income of $18.4 million compared with $16.0 million. Nine-month net income was $21.2 million, or $1.17 a diluted share, including an $847,000 pre-tax gain on the Bearing sale, against $16.4 million, or $0.90, for the 2025 period.

Sequentially the picture dims. Margin narrowed 21 basis points from 3.53% in the second quarter, and net interest income slipped $715,000, or 4%. FVCBankcorp said the second quarter included $1.0 million of loan prepayment fee income; excluding it, net interest income still rose $285,000, or 2%, and margin was 3.35% in the second quarter, 3 basis points above the latest reading. Average loans fell $50.7 million as closings slipped into the fourth quarter, with the proceeds parked in interest-bearing deposits that grew $83.4 million on average.

Noninterest income thinned to $303,000 from $1.0 million a year earlier and $2.2 million in the linked quarter, which held an $847,000 pre-tax gain on the sale of the bank's interest in Bearing Insurance Group. The latest quarter also absorbed a $403,000 loss on the ACM minority membership interest, against $508,000 of ACM income a year earlier. Noninterest expense rose 5% to $10.0 million from $9.5 million, though it was $603,000, or 6%, below the second quarter; full-time equivalent employees reached 134 from 118 a year earlier. Patricia A. Ferrick, the company's president, said the results reflect “the successful execution of our strategic initiatives and our continued commitment to deliver enhanced value to our shareholders and our customers.”

Deposits contract 3% in the quarter while loans hold near $1.91 billion

Loans, net of fees, were $1.91 billion, up $55.5 million, or 3%, from $1.86 billion a year earlier and $14.6 million higher than June 30, though down from $1.94 billion at December 31, 2025. Third-quarter originations totaled $71.2 million at a weighted average rate of 7.02%, while $62.6 million paid off at 5.89% and $61.3 million renewed at 6.84% — repricing that supports the loan yield.

Deposits told a different story. Total deposits of $2.00 billion fell $55.2 million, or 3%, in the quarter, and core deposits declined $45.1 million, or 2%, a decrease the company said it expected after large customer transactions at the end of the second quarter. Noninterest-bearing deposits rose $12.0 million, or 3% from June 30, to $427.3 million, up 14% from $374.4 million a year earlier, and were about 21% of total deposits. Wholesale deposits fell $10.0 million, or 4% sequentially from June 30, to $231.1 million at a 3.51% weighted average rate. The efficiency ratio was 53.29% against 55.50% a year earlier, though it was 49.7% in the second quarter.

Watchlist loans fall 56% from year-end as CRE concentration eases to 275% of capital

Credit metrics improved. The provision for credit losses was $186,000 versus $375,000 a year earlier, and nine-month net charge-offs were $499,000 against $876,000. Watchlist loans dropped $32.4 million, or 56%, to $25.5 million from $57.9 million at December 31, 2025, a nine-month comparison; the release's summary bullet calls the same drop a decrease from “prior quarter end” without giving a June 30 watchlist balance. FVCBankcorp attributed the decline mainly to improved performance on a $31.3 million construction loan. Nonperforming loans were $11.0 million, or 0.48% of assets, versus $11.4 million at June 30, and the $18.8 million allowance equaled 0.98% of loans, up from 0.97% at year end.

Commercial real estate remains the concentration to monitor: $935.3 million of CRE loans were 49% of the portfolio, office exposure was $126.9 million, or 7%, and CRE plus construction equaled 275% of risk-based capital. Chairman and CEO David Pijor framed the shift as diversification: “Our focus on diversifying our loan portfolio has contributed to the reduction in our commercial real estate concentrations to 275% of risk-based capital, the lowest in our recent history.”

A $0.07 dividend and the fourth-quarter pipeline test

The board declared a quarterly cash dividend of $0.07 a share on October 15, payable November 16 to shareholders of record on October 26; the company estimated the aggregate payment at about $1.3 million. FVCbank's total risk-based capital ratio was 16.66%, its common equity tier 1 ratio 15.64% and its leverage ratio 13.08%, while the tangible common equity to tangible assets ratio rose to 11.99% from 11.38% at year end. Tangible book value per share was $14.49, up from $13.74 at December 31 and $13.41 a year earlier; shareholders' equity was $268.5 million.

The next scheduled catalyst is the fourth-quarter 2026 results release, which has not been dated; readers can then see whether the loan closings pushed into the fourth quarter close, after average loans fell $50.7 million in the third quarter, and whether deposit outflows reverse. Pijor said: “Our loan pipeline is very strong giving us solid momentum going into the fourth quarter to continue to selectively grow our loan portfolio and customer base, balance sheet, earnings and shareholder value.”