FVCBankcorp, Inc.FVCB
FVCBankcorp, Inc. Fair Value Disclosure
Fair Value Measurements
Determination of Fair Value
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with fair value measurements and disclosures topic of FASB ASC 820, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date (exit price). Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.
The fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.
Fair Value Hierarchy
In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.
Level 1 — Valuation is based on quoted prices in active markets for identical assets and liabilities.
Level 2 — Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market.
Level 3 — Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market.
The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements:
Securities available-for-sale: Securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that considers observable market data (Level 2).
Derivatives: The Company has interest rate swap derivatives on certain loans and interest rate swap derivatives on certain time deposits and borrowings, which the latter are designated as cash flow hedges. These derivatives are recorded at fair value using published yield curve rates from a national valuation service. These observable rates and inputs are applied to a third party industry-wide valuation model, and therefore, the valuations fall into a Level 2 category.
The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024:
Fair Value Measurements at December 31, 2025 Using | ||||||||||||||||||||||||||
Balance as of December 31, 2025 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||||
| Description | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Available-for-sale | ||||||||||||||||||||||||||
| Securities of U.S. government and federal agencies | $ | 9,116 | $ | — | $ | 9,116 | $ | — | ||||||||||||||||||
| Securities of state and local municipalities taxable | 312 | — | 312 | — | ||||||||||||||||||||||
| Corporate bonds | 14,772 | — | 14,772 | — | ||||||||||||||||||||||
| SBA pass-through securities | 38 | — | 38 | — | ||||||||||||||||||||||
| Mortgage-backed securities | 125,320 | — | 125,320 | — | ||||||||||||||||||||||
| Collateralized mortgage obligations | 3,601 | — | 3,601 | — | ||||||||||||||||||||||
| Total Available-for-Sale Securities | $ | 153,159 | $ | — | $ | 153,159 | $ | — | ||||||||||||||||||
| Derivative assets - interest rate swaps | $ | 1,425 | $ | — | $ | 1,425 | $ | — | ||||||||||||||||||
| Derivative assets - cash flow hedge | 71 | — | 71 | — | ||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Derivative liabilities - interest rate swaps | $ | 1,425 | $ | — | $ | 1,425 | $ | — | ||||||||||||||||||
Fair Value Measurements at December 31, 2024 Using | ||||||||||||||||||||||||||
Balance as of December 31, 2024 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||||
| Description | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Available-for-sale | ||||||||||||||||||||||||||
Securities of U.S. government and federal agencies | $ | 8,561 | $ | — | $ | 8,561 | $ | — | ||||||||||||||||||
| Securities of state and local municipalities taxable | 349 | — | 349 | — | ||||||||||||||||||||||
| Corporate bonds | 17,117 | — | 17,117 | — | ||||||||||||||||||||||
| SBA pass-through securities | 45 | — | 45 | — | ||||||||||||||||||||||
| Mortgage-backed securities | 127,676 | — | 127,676 | — | ||||||||||||||||||||||
| Collateralized mortgage obligations | 2,727 | — | 2,727 | — | ||||||||||||||||||||||
| Total Available-for-Sale Securities | $ | 156,475 | $ | — | $ | 156,475 | $ | — | ||||||||||||||||||
| Derivative assets - interest rate swaps | $ | 3,536 | $ | — | $ | 3,536 | $ | — | ||||||||||||||||||
| Derivative assets - cash flow hedge | 5,371 | — | 5,371 | — | ||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Derivative liabilties - interest rate swaps | $ | 3,536 | $ | — | $ | 3,536 | $ | — | ||||||||||||||||||
Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower of cost or market accounting or write-downs of individual assets.
The following describes the valuation techniques used by the Company to measure certain financial assets recorded at fair value on a nonrecurring basis in the financial statements:
At December 31, 2025 and 2024, all of the Company's individually evaluated loans were evaluated based upon the fair value of the collateral. In accordance with ASC 820, individually evaluated loans where an allowance is established based on the fair value of collateral (i.e., those loans that are collateral dependent) require classification in the fair value hierarchy. Fair value is measured based on the value of the collateral securing the loans. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the collateral is real estate. The value of real estate collateral is determined utilizing a market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Company using observable market data (Level 2). However, if the collateral is a house or building in the process of construction, has the value derived by discounting comparable sales due to lack of similar properties, or is discounted by the Company due to marketability, then the fair value is considered Level 3. The value of business equipment is based upon an outside appraisal if deemed significant, or the net book value on the applicable business’s financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Any fair value adjustments are recorded in the period incurred as provision for credit losses on the Consolidated Statements of Income.
The following tables summarize the Company's assets that were measured at fair value on a nonrecurring basis at December 31, 2025 and 2024:
Fair Value Measurements Using | ||||||||||||||||||||||||||
Balance as of December 31, 2025 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||||
| Description | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Collateral-dependent loans: | ||||||||||||||||||||||||||
| Commercial real estate | $ | 9,030 | $ | — | $ | — | $ | 9,030 | ||||||||||||||||||
| Total collateral-dependent loans | $ | 9,030 | $ | — | $ | — | $ | 9,030 | ||||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||||||||||||
Balance as of December 31, 2024 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||||
| Description | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Collateral-dependent loans: | ||||||||||||||||||||||||||
| Commercial real estate | $ | 9,812 | $ | — | $ | — | $ | 9,812 | ||||||||||||||||||
| Total collateral-dependent loans | $ | 9,812 | $ | — | $ | — | $ | 9,812 | ||||||||||||||||||
The following tables display quantitative information about Level 3 Fair Value Measurements at December 31, 2025 and 2024:
Quantitative information about Level 3 Fair Value Measurements at December 31, 2025 | ||||||||||||||||||||||||||||||||
| Assets | Fair Value | Valuation Technique(s) | Unobservable input | Range | (Avg.) | |||||||||||||||||||||||||||
| Collateral-dependent loans: | ||||||||||||||||||||||||||||||||
| Commercial real estate | $ | 9,030 | Discounted appraised value | Marketability/Selling costs | 6.50% - 6.50% | 6.50 | % | |||||||||||||||||||||||||
Quantitative information about Level 3 Fair Value Measurements at December 31, 2024 | ||||||||||||||||||||||||||||||||
| Assets | Fair Value | Valuation Technique(s) | Unobservable input | Range | (Avg.) | |||||||||||||||||||||||||||
| Collateral-dependent loans: | ||||||||||||||||||||||||||||||||
| Commercial real estate | $ | 9,812 | Discounted appraised value | Marketability/Selling costs | 10% - 10% | 10.00 | % | |||||||||||||||||||||||||
The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company's financial instruments as of December 31, 2025 and 2024.
Fair Value Measurements as of December 31, 2025 using | |||||||||||||||||||||||
Carrying Amount | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||
| Cash and due from banks | $ | 5,684 | $ | 5,684 | $ | — | $ | — | |||||||||||||||
| Interest-bearing deposits at other institutions | 121,947 | 121,947 | — | — | |||||||||||||||||||
| Securities held-to-maturity | 265 | — | 262 | — | |||||||||||||||||||
| Securities available-for-sale | 153,159 | — | 153,159 | — | |||||||||||||||||||
| Restricted stock | 5,446 | — | 5,446 | — | |||||||||||||||||||
| Loans, net | 1,922,397 | — | — | 1,882,271 | |||||||||||||||||||
| Bank owned life insurance | 9,508 | — | 9,508 | — | |||||||||||||||||||
| Accrued interest receivable | 10,277 | — | 10,277 | — | |||||||||||||||||||
| Derivative assets - interest rate swaps | 1,425 | — | 1,425 | — | |||||||||||||||||||
| Derivative assets - cash flow hedge | 71 | — | 71 | — | |||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||
| Checking | $ | 1,104,262 | $ | — | $ | 1,104,262 | $ | — | |||||||||||||||
| Savings and money market | 331,048 | — | 331,048 | — | |||||||||||||||||||
| Time deposits | 277,010 | — | 277,810 | — | |||||||||||||||||||
| Wholesale deposits | 284,957 | — | 285,101 | — | |||||||||||||||||||
| Subordinated notes | 18,750 | — | 19,007 | — | |||||||||||||||||||
| Accrued interest payable | 2,076 | — | 2,076 | — | |||||||||||||||||||
| Derivative liabilities - interest rate swaps | 1,425 | — | 1,425 | — | |||||||||||||||||||
Fair Value Measurements as of December 31, 2024 using | |||||||||||||||||||||||
Carrying Amount | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||
| Cash and due from banks | $ | 8,161 | $ | 8,161 | $ | — | $ | — | |||||||||||||||
| Interest-bearing deposits at other institutions | 82,789 | 82,789 | — | — | |||||||||||||||||||
| Securities held-to-maturity | 265 | — | 256 | — | |||||||||||||||||||
| Securities available-for-sale | 156,475 | — | 156,475 | — | |||||||||||||||||||
| Restricted stock | 8,186 | — | 8,186 | — | |||||||||||||||||||
| Loans, net | 1,852,106 | — | — | 1,779,966 | |||||||||||||||||||
| Bank owned life insurance | 9,219 | — | 9,219 | — | |||||||||||||||||||
| Accrued interest receivable | 10,315 | — | 10,315 | — | |||||||||||||||||||
| Derivative assets - interest rate swaps | 3,536 | — | 3,536 | — | |||||||||||||||||||
| Derivative assets - cash flow hedge | 5,371 | — | 5,371 | — | |||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||
| Checking | $ | 989,477 | $ | — | $ | 989,477 | $ | — | |||||||||||||||
| Savings and money market | 383,087 | — | 383,087 | — | |||||||||||||||||||
| Time deposits | 248,154 | — | 248,674 | — | |||||||||||||||||||
| Wholesale deposits | 249,887 | — | 250,168 | — | |||||||||||||||||||
| FHLB advances | 50,000 | — | 50,000 | — | |||||||||||||||||||
| Subordinated notes | 18,695 | — | 18,709 | — | |||||||||||||||||||
| Accrued interest payable | 2,505 | — | 2,505 | — | |||||||||||||||||||
| Derivative liabilities - interest rate swaps | 3,536 | — | 3,536 | — | |||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Mar 20, 2025 | |
| 2023 | Mar 21, 2024 | |
| 2022 | Mar 24, 2023 | |
| 2021 | Mar 24, 2022 | |
| 2020 | Mar 25, 2021 | |
| 2019 | Mar 27, 2020 | |
| 2018 | Mar 29, 2019 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.