Financial News

MVB Financial Corp. Announces Third Quarter 2023 Results

MVB Financial Corp. (NASDAQ: MVBF) (“MVB Financial,” “MVB” or the “Company”), the holding company for MVB Bank, Inc. ("MVB Bank"), today announced financial results for the third quarter of 2023, with reported net income of $3.9 million, or $0.30 basic and $0.29 diluted earnings per share.

Third Quarter 2023 Highlights As Compared to Second Quarter 2023

Balance sheet deposits increased 2.7%, or $80.0M.

Noninterest bearing deposits increased 10.8%, or $106.3M, and represent 36% of deposits.

Balance sheet loan to deposit ratio of 74.7%, compared to 78.1%.

Nonperforming loans decreased 22.4%, or $3.1M.

Net interest margin improved by 10 bps, to 3.87%.

From Larry F. Mazza, Chief Executive Officer, MVB Financial:

“While market conditions remained volatile during the third quarter, Team MVB built upon our already strong foundation. We continued to optimize our earnings power and grew low-cost deposits and reduced higher-cost funding, further optimizing our deposit mix, improving our strong liquidity position, and with asset yields continuing to reprice higher, drove improvement in our net interest margin. Additionally, although our cost of funds continued to move higher, this quarter marked the slowest pace of increase since the second quarter of 2022. Our loan pipelines continued to build, and we believe our balance sheet is well-positioned for the road ahead. At quarter-end, MVB had no outstanding FHLB or other short-term borrowings, no held to maturity investment securities and a limited concentration of CRE loans and office exposure. Since the industry disruption in March of this year, we took additional steps to enhance our risk management and compliance infrastructure in anticipation of changing industry requirements. These elevated costs have weighed on our earnings in the short-term, but leave us well positioned to drive growth and improve profitability, while maintaining our foundational strength in the long run.”

THIRD QUARTER 2023 HIGHLIGHTS

  • Strong core deposit growth and a favorable shift in deposit mix.
    • Total deposits increased 2.7%, or $80.0 million, to $3.04 billion, compared to the prior quarter-end, primarily reflecting strong growth in noninterest bearing (“NIB”) deposits, and increases due to payment relationships, gaming and seasonal considerations, partially offset by a decline in brokered deposits. Relative to the prior year, total deposits increased 12.7%, or $341.9 million.
    • Total off-balance sheet deposits were steady at $1.11 billion as compared to $1.06 billion at the prior quarter-end. Off-balance sheet deposit networks are utilized to generate fee income, enhance capital efficiency and manage liquidity and concentration risk.
    • NIB deposits increased 10.8%, or $106.3 million, to $1.09 billion, and represented 36.0% of total deposits, as compared to 33.4% of total deposits at the prior quarter-end.
    • Certificate of deposit (“CD”) balances, which include brokered deposits, declined 11.1%, or $78.1 million, to $622.5 million, reflecting the Company’s decision to reduce higher-cost deposit funding.
  • Net interest margin expansion drives improvement in net interest income.
    • Net interest income on a fully tax-equivalent basis, a non-GAAP financial measure, increased 0.9%, or $0.3 million, to $30.1 million relative to the prior quarter, reflecting net interest margin expansion, partially offset by a decline in total average earning asset balances.
    • Net interest margin on a fully tax-equivalent basis, a non-GAAP financial measure, was 3.90%, up 10 basis points from the prior quarter, primarily reflecting higher loan yields and a favorable shift in the mix of earning assets and deposit funding. Total cost of funds was 2.43%, compared to 2.26% for the prior quarter, representing the slowest pace of increase in the Company’s cost of funds since the second quarter of 2022.
    • Average earning asset balances decreased 2.8% during the third quarter of 2023, reflecting lower average loan balances and a decline in investment securities, partially offset by higher interest-bearing balances with banks. Average total loan balances declined 4.0%, reflecting lower commercial, real estate and consumer balances, including the sale certain of subprime automobile loans during the third quarter of 2023.
    • The loan to deposit ratio was 74.7% as of September 30, 2023, compared to 78.1% as of June 30, 2023 and 91.6% as of September 30, 2022.
  • Measures of foundational strength were generally stable.
    • The Community Bank Leverage Ratio, Tier 1 Risk-Based Capital Ratio and MVB Bank’s Total Risk-Based Capital Ratio were 10.4%, 14.0%, and 14.8%, respectively, compared to 10.0%, 13.8%, and 14.9%, respectively, at the prior quarter end.
    • Tangible book value per share, a non-U.S. GAAP measure discussed below, declined 1.1% to $21.08, relative to the prior quarter-end, and increased 8.77% from the year-ago period.
    • Nonperforming loans declined $3.1 million, or 22.4%, to $10.6 million, or 0.5% of total loans, from to $13.6 million, or 0.6% of total loans, at the prior quarter end. Criticized loans as a percentage of total loans were 6.1%, as compared to 3.1% at the prior quarter end. The increase is driven primarily by addition of one loan relationship, which is secured by a financial institution’s stock and all loan payments are current. Net charge-offs were $5.9 million, or 1.0% of total loans on an annualized basis, for the third quarter of 2023, compared to $1.2 million, or 0.2%, for the prior quarter. The increase from prior quarter is primarily related to a single charge-off related to a commercial client in the energy industry.
    • The release of allowance for credit losses totaled $0.2 million, compared to $4.2 million for the prior quarter. The net reserve release for the quarter reflected the aforementioned sale of subprime automobile loans, partially offset by the impact of increases in criticized loans and charge-offs. The allowance for credit losses was 1.1% of total loans, as compared to 1.3% as of the prior quarter-end, reflecting the changes in loan portfolio composition noted above.
  • Expenses trend higher on actions taken to enhance regulatory and compliance infrastructure in response to industry events earlier this year; fees lower, primarily due to seasonal factors.
    • Noninterest expense increased 1.5% to $30.7 million relative to the prior quarter, primarily reflecting higher professional fees and other operating costs related to recent actions taken in response to the market events in March 2023 and to enhance risk management and compliance-related infrastructure. Noninterest expenses other than professional fees declined 4.9% from the prior quarter.
    • Total noninterest income was $5.8 million for the third quarter of 2023, as compared to $6.4 million for the prior quarter, primarily reflecting a decline in payment card and service charge income due mostly to seasonal considerations, as well as a decline in equity method investments income.

INCOME STATEMENT

Net interest income on a tax-equivalent basis totaled $30.1 million for the third quarter of 2023. This reflected an increase of $0.3 million, or 0.9%, from the second quarter of 2023 and was consistent as compared to the third quarter of 2022. The increase in net interest income compared to the second quarter of 2023 reflected a higher net interest margin, partially offset by a decline in total average earning asset balances.

Interest income increased $1.3 million, or 2.8%, from the second quarter of 2023 and increased $14.4 million, or 42.5%, from the third quarter of 2022. The tax-equivalent yield on loans was 7.0% for the third quarter of 2023, compared to 6.7% for the second quarter of 2023 and 5.3% for the third quarter of 2022. Higher loan yields compared to the second quarter of 2023 generally reflect the beneficial impact of higher interest rates on earning asset yields, while higher loan yields compared to the third quarter of 2022 reflect the cumulative impact of loans booked at higher yields than the prevailing portfolio yield in the prior year.

Interest expense increased $1.0 million, or 5.8%, from the second quarter of 2023 and increased $14.4 million from the third quarter of 2022. The cost of funds was 2.43% for the third quarter of 2023, up from 2.26% for the second quarter of 2023 and 0.59% for the third quarter of 2022. The increase from the prior quarter primarily reflected the impact of higher interest rates, including an increase in rates paid on money market checking deposits. The increase in cost of funds compared to the prior year period reflects the impact of increased time deposits in 2023 in response to market conditions, higher interest rates and the senior term loan, which was entered into during October 2022.

On a tax-equivalent basis, net interest margin for the third quarter of 2023 was 3.90%, an increase of 10 basis points versus the second quarter of 2023 and a decrease of 35 basis points versus the third quarter of 2022. See the table below for a reconciliation between net interest margin and net interest margin on a fully tax-equivalent basis, a non-GAAP measure. The increase in net interest margin from the second quarter of 2023 primarily reflected higher loan yields and a favorable shift in the mix of earning assets and deposit funding. Contraction in net interest margin from the third quarter of 2022 primarily reflected higher funding costs and an unfavorable shift in the mix of earning assets (loan balances declined, while lower yielding cash balances increased), partially offset by higher interest rates on loans.

Noninterest income totaled $5.8 million for the third quarter of 2023, a decrease of $0.6 million from the second quarter of 2023 and an increase of $0.3 million from the third quarter of 2022. The decrease compared to the prior quarter is primarily driven by declines of $2.6 million in equity method investment income from our mortgage companies, $0.7 million in payment card and service charge income and $0.4 million in other operating income. These decreases were partially offset by increases of $0.3 million in compliance and consulting income and $0.3 million in gain on sale of equity securities. Additionally, the second quarter of 2023 included losses of $1.0 million in acquisition and divestiture activity and $1.0 million in sale of loans, without comparable losses in the third quarter of 2023.

The $0.3 million increase in noninterest income from the third quarter of 2022 was primarily driven by increases of $0.8 million in other operating income, $0.3 million in compliance consulting income, $0.3 million in holding gain on equity securities, $0.3 million in equity method investment income and $0.2 million in gain on sale of equity securities. These increases were partially offset by declines of $1.0 million in gain on sale of loans, $0.5 million in payment and card service charge income, $0.1 million in insurance and investment services income.

Noninterest expense totaled $30.7 million for the third quarter of 2023, an increase of $0.4 million, or 1.5%, from the second quarter of 2023 and an increase of $2.5 million, or 9.0%, from the third quarter of 2022, primarily reflecting higher professional fees of $1.7 million, or 43.9%, and $1.8 million, or 45.3%, as compared to the second quarter of 2023 and the third quarter of 2022, respectively. Salaries and employee benefits expense increased $0.3 million, or 1.7%, and $0.1 million, or 0.7%, as compared to the second quarter of 2023 and the third quarter of 2022, respectively.

BALANCE SHEET

Loans totaled $2.27 billion at September 30, 2023, a decrease of $42.0 million, or 1.8%, and $201.0 million, or 8.1%, as compared to June 30, 2023 and September 30, 2022, respectively. The decline in loan balances compared to the prior quarters primarily reflects amortization of the loan portfolio and slower origination as the pipeline continues to build, in addition to the sale of $15.9 million of subprime automobile loans during the third quarter of 2023 and the sale of $20.4 million of subprime automobile loans during the second quarter of 2023. Loans held-for-sale, which represent MVB Bank’s government guaranteed lending growth vehicle, were $7.6 million as of September 30, 2023, compared to $7.0 million at June 30, 2023 and $20.0 million at September 30, 2022.

Deposits totaled $3.04 billion as of September 30, 2023, an increase of $80.0 million, or 2.7%, from June 30, 2023, and an increase of $341.9 million, or 12.7%, from September 30, 2022. NIB deposits totaled $1.09 billion as of September 30, 2023, an increase of $106.3 million, or 10.8%, from June 30, 2023 and a decrease of $317.9 million, or 22.5%, from September 30, 2022. The increase in total deposit balances compared to June 30, 2023 primarily reflects the increase in noninterest-bearing deposits, payment relationships, gaming and seasonal considerations, partially offset by a decrease in brokered deposits. The increase relative to September 30, 2022, reflects higher CDs and brokered deposits, partially offset by a decrease in NIB deposits driven by the highly-competitive deposit environment, higher interest rates and the utilization of off-balance sheet deposit networks to generate fee income, enhance capital efficiency and manage liquidity and concentration risk.

CAPITAL

The Community Bank Leverage Ratio was 10.4% as of September 30, 2023, compared to 10.0% as of June 30, 2023 and 11.1% as of September 30, 2022.

The tangible common equity ratio, a non-GAAP financial measure, was 7.8% of as of September 30, 2023, compared to 8.1% as of June 30, 2023 and 7.6% as of as of September 30, 2022. See the reconciliation of the tangible common equity ratio to its most directly comparable U.S. GAAP financial measure later in this release.

The Company issued a quarterly cash dividend of $0.17 per share for the third quarter of 2023, consistent with the second quarter of 2023 and the third quarter of 2022.

ASSET QUALITY

Nonperforming loans totaled $10.6 million, or 0.5% of total loans, as of September 30, 2023, as compared to $13.6 million, or 0.6% of total loans, as of June 30, 2023, and $22.4 million, or 0.9% of total loans, as of September 30, 2022. Criticized loans as a percentage of total loans were 6.1%, compared to 3.1% as of June 30, 2023 and 3.4% as of September 30, 2022.

Net charge-offs were $5.9 million, or 1.0% of total loans, for the third quarter of 2023, compared to $1.2 million, or 0.2% of total loans, for the second quarter of 2023 and $1.3 million, or 0.2% of total loans, for the third quarter of 2022.

The release of allowance for credit losses totaled $0.2 million compared to $4.2 million for the prior quarter. The Company sold $15.9 million and $20.4 million of subprime automobile loans during the quarters ended September 30, 2023 and June 30, 2023, respectively, and released the reserves associated with those loans, resulting in the net allowance releases. The allowance for credit losses was 1.1% of total loans at September 30, 2023, as compared to 1.3% at June 30, 2023 and 1.1% at September 30, 2022. The decline in the allowance ratio compared to the prior quarter largely reflects the aforementioned changes in loan portfolio composition.

About MVB Financial Corp.

MVB Financial, the holding company of MVB Bank, is publicly traded on The Nasdaq Capital Market® (“Nasdaq”) under the ticker “MVBF.”

MVB is a financial holding company headquartered in Fairmont, West Virginia. Through its subsidiary, MVB Bank, and MVB Bank’s subsidiaries, MVB Financial provides financial services to individuals and corporate clients in the Mid-Atlantic region and beyond.

Nasdaq is a leading global provider of trading, clearing, exchange technology, listing, information and public company services.

For more information about MVB, please visit ir.mvbbanking.com.

Forward-looking Statements

MVB Financial has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in this press release that are intended to be covered by the protections provided under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations about the future and are subject to risks and uncertainties. Forward-looking statements include, without limitation, information concerning possible or assumed future results of operations of the Company and its subsidiaries. Forward-looking statements can be identified by the use of words such as “may,” “could,” “should,” “would,” “will,” “plans,” “believes,” “estimates,” “expects,” “anticipates,” “intends,” “continues” or the negative of those terms or similar expressions. Note that many factors could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in forward-looking statements. Therefore, undue reliance should not be placed upon any forward-looking statements. Those factors include but are not limited to: market, economic, operational, liquidity and credit risk; changes in market interest rates; impacts related to or resulting from recent turmoil in the banking industry; inability to achieve anticipated synergies and successfully integrate recent mergers and acquisitions; inability to successfully execute business plans, including strategies related to investments in Fintech companies; competition; unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; changes in economic, business and political conditions; changes in demand for loan products and deposit flow; operational risks and risk management failures; and government regulation and supervision. Additional factors that may cause actual results to differ materially from those described in the forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as well as its other filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. Except as required by law, the Company disclaims any obligation to update, revise or correct any forward-looking statements.

Accounting standards require the consideration of subsequent events occurring after the balance sheet date for matters that require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s financial statements when filed with the SEC. Accordingly, the consolidated financial information in this announcement is subject to change.

Non-U.S. GAAP Financial Measures

This document contains supplemental financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management uses these non-U.S. GAAP measures in its analysis of the Company’s performance. These measures should not be considered a substitute for U.S. GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with U.S. GAAP. Management believes the presentation of non-U.S. GAAP financial measures that exclude the impact of specified items provide useful supplemental information that is essential to a proper understanding of the Company’s financial condition and results. Non-U.S. GAAP measures are not formally defined under U.S. GAAP, and other entities may use calculation methods that differ from those used by us. As a complement to U.S. GAAP financial measures, our management believes these non-U.S. GAAP financial measures assist investors in comparing the financial condition and results of operations of financial institutions due to the industry prevalence of such non-U.S. GAAP measures. See the tables below for a reconciliation of these non-U.S. GAAP measures to the most directly comparable U.S. GAAP financial measures.

MVB Financial Corp.

Financial Highlights

Consolidated Statements of Income

(Unaudited) (Dollars in thousands, except per share data)

 

 

 

Quarterly

 

Year-to-Date

 

 

2023

 

2023

 

2022

 

 

2023

 

 

2022

 

 

Third Quarter

 

Second Quarter

 

Third Quarter

 

 

Interest income

 

$

48,325

 

 

$

47,031

 

 

$

33,903

 

$

140,119

 

$

85,255

Interest expense

 

 

18,460

 

 

 

17,449

 

 

 

4,057

 

 

47,943

 

 

6,901

Net interest income

 

 

29,865

 

 

 

29,582

 

 

 

29,846

 

 

92,176

 

 

78,354

Provision (release of allowance) for credit losses

 

 

(159

)

 

 

(4,235

)

 

 

5,120

 

 

182

 

 

11,500

Net interest income after provision (release of allowance) for credit losses

 

 

30,024

 

 

 

33,817

 

 

 

24,726

 

 

91,994

 

 

66,854

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

 

 

5,791

 

 

 

6,419

 

 

 

5,467

 

 

15,277

 

 

24,130

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

16,016

 

 

 

15,746

 

 

 

15,905

 

 

48,508

 

 

48,217

Other expense

 

 

14,709

 

 

 

14,536

 

 

 

12,271

 

 

40,816

 

 

35,188

Total noninterest expenses

 

 

30,725

 

 

 

30,282

 

 

 

28,176

 

 

89,324

 

 

83,405

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

5,090

 

 

 

9,954

 

 

 

2,017

 

 

17,947

 

 

7,579

Income taxes

 

 

1,218

 

 

 

1,956

 

 

 

184

 

 

3,639

 

 

1,563

Net income from continuing operations before noncontrolling interest

 

 

3,872

 

 

 

7,998

 

 

 

1,833

 

 

14,308

 

 

6,016

Income from discontinued operations, before income taxes

 

 

 

 

 

 

 

 

935

 

 

11,831

 

 

2,599

Income taxes - discontinued operations

 

 

 

 

 

 

 

 

213

 

 

3,049

 

 

598

Net income from discontinued operations

 

 

 

 

 

 

 

 

722

 

 

8,782

 

 

2,001

Net (income) loss attributable to noncontrolling interest

 

 

(5

)

 

 

114

 

 

 

163

 

 

231

 

 

521

Net income available to common shareholders

 

$

3,867

 

 

$

8,112

 

 

$

2,718

 

$

23,321

 

$

8,538

 

 

 

 

 

 

 

 

 

 

 

Earnings per share from continuing operations - basic

 

$

0.30

 

 

$

0.64

 

 

$

0.16

 

$

1.15

 

$

0.54

Earnings per share from discontinued operations - basic

 

$

 

 

$

 

 

$

0.06

 

$

0.69

 

$

0.16

Earnings per share - basic

 

$

0.30

 

 

$

0.64

 

 

$

0.22

 

$

1.84

 

$

0.70

Earnings per share from continuing operations - diluted

 

$

0.29

 

 

$

0.63

 

 

$

0.16

 

$

1.12

 

$

0.51

Earnings per share from discontinued operations - diluted

 

$

 

 

$

 

 

$

0.05

 

$

0.67

 

$

0.15

Earnings per share - diluted

 

$

0.29

 

 

$

0.63

 

 

$

0.21

 

$

1.79

 

$

0.66

Noninterest Income

(Unaudited) (Dollars in thousands)

 

 

 

Quarterly

 

Year-to-Date

 

 

2023

 

2023

 

2022

 

 

2023

 

 

 

2022

 

 

Third Quarter

 

Second Quarter

 

Third Quarter

 

 

Card acquiring income

 

$

845

 

 

$

788

 

 

$

560

 

 

$

2,255

 

 

$

2,293

Service charges on deposits

 

 

490

 

 

 

1,060

 

 

 

889

 

 

 

2,676

 

 

 

2,734

Interchange income

 

 

1,517

 

 

 

1,655

 

 

 

1,864

 

 

 

5,034

 

 

 

4,943

Total payment card and service charge income

 

 

2,852

 

 

 

3,503

 

 

 

3,313

 

 

 

9,965

 

 

 

9,970

 

 

 

 

 

 

 

 

 

 

 

Equity method investments income (loss)

 

 

(750

)

 

 

1,873

 

 

 

(1,021

)

 

 

(70

)

 

 

666

Compliance and consulting income

 

 

1,314

 

 

 

996

 

 

 

966

 

 

 

3,326

 

 

 

3,380

Gain (loss) on sale of loans

 

 

330

 

 

 

(989

)

 

 

1,298

 

 

 

(1,015

)

 

 

3,786

Investment portfolio gains (losses)

 

 

244

 

 

 

(134

)

 

 

(217

)

 

 

(1,734

)

 

 

2,322

Loss on acquisition and divestiture activity

 

 

 

 

 

(986

)

 

 

 

 

 

(986

)

 

 

Other noninterest income

 

 

1,801

 

 

 

2,156

 

 

 

1,128

 

 

 

5,791

 

 

 

4,006

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

 

$

5,791

 

 

$

6,419

 

 

$

5,467

 

 

$

15,277

 

 

$

24,130

Condensed Consolidated Balance Sheets

(Unaudited) (Dollars in thousands)

 

 

 

September 30, 2023

 

June 30, 2023

 

September 30, 2022

Cash and cash equivalents

 

$

587,100

 

 

$

455,835

 

 

$

79,946

 

Securities available-for-sale, at fair value

 

 

311,537

 

 

 

329,137

 

 

 

366,742

 

Equity securities

 

 

40,835

 

 

 

41,082

 

 

 

34,101

 

Loans held-for-sale

 

 

7,603

 

 

 

7,009

 

 

 

19,977

 

Loans receivable

 

 

2,270,433

 

 

 

2,312,387

 

 

 

2,471,395

 

Less: Allowance for credit losses

 

 

(24,276

)

 

 

(30,294

)

 

 

(26,515

)

Loans receivable, net

 

 

2,246,157

 

 

 

2,282,093

 

 

 

2,444,880

 

Premises and equipment, net

 

 

21,468

 

 

 

22,407

 

 

 

24,639

 

Assets from discontinued operations

 

 

 

 

 

 

 

 

4,818

 

Goodwill

 

 

2,838

 

 

 

2,838

 

 

 

2,838

 

Other assets

 

 

220,045

 

 

 

211,446

 

 

 

161,981

 

Total assets

 

$

3,437,583

 

 

$

3,351,847

 

 

$

3,139,922

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

1,093,903

 

 

$

987,555

 

 

$

1,411,772

 

Interest-bearing deposits

 

 

1,944,986

 

 

 

1,971,384

 

 

 

1,285,186

 

FHLB and other borrowings

 

 

 

 

 

 

 

 

73,328

 

Senior term loan

 

 

8,473

 

 

 

8,835

 

 

 

 

Subordinated debt

 

 

73,478

 

 

 

73,414

 

 

 

73,222

 

Liabilities from discontinued operations

 

 

 

 

 

 

 

 

5,647

 

Other liabilities

 

 

45,374

 

 

 

36,362

 

 

 

46,407

 

Stockholders' equity

 

 

271,369

 

 

 

274,297

 

 

 

244,360

 

Total liabilities and stockholders' equity

 

$

3,437,583

 

 

$

3,351,847

 

 

$

3,139,922

 

Reportable Segments

(Unaudited)

 

Three Months Ended September 30, 2023

 

CoRe Banking

 

Mortgage Banking

 

Financial Holding Company

 

Other

 

Intercompany Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

Interest income

 

$

48,268

 

 

$

103

 

 

$

2

 

 

$

 

 

$

(48

)

 

$

48,325

 

Interest expense

 

 

17,454

 

 

 

 

 

 

1,000

 

 

 

54

 

 

 

(48

)

 

 

18,460

 

Net interest income (expense)

 

 

30,814

 

 

 

103

 

 

 

(998

)

 

 

(54

)

 

 

 

 

 

29,865

 

Release of allowance for credit losses

 

 

(159

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(159

)

Net interest income (expense) after release of allowance for credit losses

 

 

30,973

 

 

 

103

 

 

 

(998

)

 

 

(54

)

 

 

 

 

 

30,024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

4,980

 

 

 

(742

)

 

 

2,576

 

 

 

3,099

 

 

 

(4,122

)

 

 

5,791

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,787

 

 

 

 

 

 

4,129

 

 

 

2,100

 

 

 

 

 

 

16,016

 

Other expenses

 

 

14,701

 

 

 

13

 

 

 

1,992

 

 

 

2,125

 

 

 

(4,122

)

 

 

14,709

 

Total noninterest expenses

 

 

24,488

 

 

 

13

 

 

 

6,121

 

 

 

4,225

 

 

 

(4,122

)

 

 

30,725

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

11,465

 

 

 

(652

)

 

 

(4,543

)

 

 

(1,180

)

 

 

 

 

 

5,090

 

Income taxes

 

 

2,628

 

 

 

(153

)

 

 

(978

)

 

 

(279

)

 

 

 

 

 

1,218

 

Net income (loss)

 

 

8,837

 

 

 

(499

)

 

 

(3,565

)

 

 

(901

)

 

 

 

 

 

3,872

 

Net income attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

(5

)

Net income (loss) available to common shareholders

 

$

8,837

 

 

$

(499

)

 

$

(3,565

)

 

$

(906

)

 

$

 

 

$

3,867

 

Three Months Ended June 30, 2023

 

CoRe Banking

 

Mortgage Banking

 

Financial Holding Company

 

Other

 

Intercompany Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

Interest income

 

$

46,929

 

 

$

105

 

$

3

 

 

$

6

 

 

$

(12

)

 

$

47,031

 

Interest expense

 

 

16,439

 

 

 

 

 

999

 

 

 

23

 

 

 

(12

)

 

 

17,449

 

Net interest income (expense)

 

 

30,490

 

 

 

105

 

 

(996

)

 

 

(17

)

 

 

 

 

 

29,582

 

Provision for credit losses

 

 

(4,235

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,235

)

Net interest income (expense) after provision for credit losses

 

 

34,725

 

 

 

105

 

 

(996

)

 

 

(17

)

 

 

 

 

 

33,817

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

4,113

 

 

 

1,872

 

 

3,116

 

 

 

1,051

 

 

 

(3,733

)

 

 

6,419

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,053

 

 

 

7

 

 

4,623

 

 

 

2,063

 

 

 

 

 

 

15,746

 

Other expenses

 

 

14,148

 

 

 

18

 

 

2,163

 

 

 

1,940

 

 

 

(3,733

)

 

 

14,536

 

Total noninterest expenses

 

 

23,201

 

 

 

25

 

 

6,786

 

 

 

4,003

 

 

 

(3,733

)

 

 

30,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

15,637

 

 

 

1,952

 

 

(4,666

)

 

 

(2,969

)

 

 

 

 

 

9,954

 

Income taxes

 

 

3,237

 

 

 

643

 

 

(1,207

)

 

 

(717

)

 

 

 

 

 

1,956

 

Net income (loss)

 

 

12,400

 

 

 

1,309

 

 

(3,459

)

 

 

(2,252

)

 

 

 

 

 

7,998

 

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

114

 

 

 

 

 

 

114

 

Net income (loss) available to common shareholders

 

$

12,400

 

 

$

1,309

 

$

(3,459

)

 

$

(2,138

)

 

$

 

 

$

8,112

 

Three Months Ended September 30, 2022

 

CoRe Banking

 

Mortgage Banking

 

Financial Holding Company

 

Other

 

Intercompany Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

Interest income

 

$

33,777

 

$

103

 

 

$

33

 

 

$

 

 

$

(10

)

 

$

33,903

Interest expense

 

 

3,286

 

 

 

 

 

771

 

 

 

10

 

 

 

(10

)

 

 

4,057

Net interest income (expense)

 

 

30,491

 

 

103

 

 

 

(738

)

 

 

(10

)

 

 

 

 

 

29,846

Provision for credit losses

 

 

5,120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,120

Net interest income (expense) after provision for credit losses

 

 

25,371

 

 

103

 

 

 

(738

)

 

 

(10

)

 

 

 

 

 

24,726

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

5,356

 

 

(817

)

 

 

2,366

 

 

 

1,370

 

 

 

(2,808

)

 

 

5,467

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,354

 

 

8

 

 

 

4,274

 

 

 

2,269

 

 

 

 

 

 

15,905

Other expenses

 

 

11,523

 

 

25

 

 

 

1,810

 

 

 

1,722

 

 

 

(2,808

)

 

 

12,272

Total noninterest expenses

 

 

20,877

 

 

33

 

 

 

6,084

 

 

 

3,991

 

 

 

(2,808

)

 

 

28,177

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

9,850

 

 

(747

)

 

 

(4,456

)

 

 

(2,631

)

 

 

 

 

 

2,016

Income taxes

 

 

1,817

 

 

(192

)

 

 

(840

)

 

 

(601

)

 

 

 

 

 

184

Net income (loss) from continuing operations

 

 

8,033

 

 

(555

)

 

 

(3,616

)

 

 

(2,030

)

 

 

 

 

 

1,832

Income from discontinued operations, before income taxes

 

 

 

 

 

 

 

 

 

 

936

 

 

 

 

 

 

936

Income tax expense - discontinued operations

 

 

 

 

 

 

 

 

 

 

213

 

 

 

 

 

 

213

Net income from discontinued operations

 

 

 

 

 

 

 

 

 

 

723

 

 

 

 

 

 

723

Net income (loss)

 

 

8,033

 

 

(555

)

 

 

(3,616

)

 

 

(1,307

)

 

 

 

 

 

2,555

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

163

 

 

 

 

 

 

163

Net income (loss) available to common shareholders

 

$

8,033

 

$

(555

)

 

$

(3,616

)

 

$

(1,144

)

 

$

 

 

$

2,718

Nine Months Ended September 30, 2023

 

CoRe Banking

 

Mortgage Banking

 

Financial Holding Company

 

Other

 

Intercompany Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

Interest income

 

$

139,859

 

$

313

 

 

$

38

 

 

$

 

 

$

(91

)

 

$

140,119

Interest expense

 

 

44,934

 

 

 

 

 

2,992

 

 

 

108

 

 

 

(91

)

 

 

47,943

Net interest income (expense)

 

 

94,925

 

 

313

 

 

 

(2,954

)

 

 

(108

)

 

 

 

 

 

92,176

Provision for credit losses

 

 

182

 

 

 

 

 

 

 

 

 

 

 

 

 

 

182

Net interest income (expense) after provision for credit losses

 

 

94,743

 

 

313

 

 

 

(2,954

)

 

 

(108

)

 

 

 

 

 

91,994

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

12,111

 

 

(56

)

 

 

8,102

 

 

 

5,934

 

 

 

(10,814

)

 

 

15,277

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

27,891

 

 

7

 

 

 

13,702

 

 

 

6,908

 

 

 

 

 

 

48,508

Other expenses

 

 

39,903

 

 

65

 

 

 

6,072

 

 

 

5,590

 

 

 

(10,814

)

 

 

40,816

Total noninterest expenses

 

 

67,794

 

 

72

 

 

 

19,774

 

 

 

12,498

 

 

 

(10,814

)

 

 

89,324

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

39,060

 

 

185

 

 

 

(14,626

)

 

 

(6,672

)

 

 

 

 

 

17,947

Income taxes

 

 

8,380

 

 

(14

)

 

 

(3,127

)

 

 

(1,600

)

 

 

 

 

 

3,639

Net income (loss) from continuing operations

 

 

30,680

 

 

199

 

 

 

(11,499

)

 

 

(5,072

)

 

 

 

 

 

14,308

Income from discontinued operations, before income taxes

 

 

 

 

 

 

 

 

 

 

11,831

 

 

 

 

 

 

11,831

Income taxes - discontinued operations

 

 

 

 

 

 

 

 

 

 

3,049

 

 

 

 

 

 

3,049

Net income from discontinued operations

 

 

 

 

 

 

 

 

 

 

8,782

 

 

 

 

 

 

8,782

Net income (loss)

 

 

30,680

 

 

199

 

 

 

(11,499

)

 

 

3,710

 

 

 

 

 

 

23,090

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

231

 

 

 

 

 

 

231

Net income (loss) available to common shareholders

 

$

30,680

 

$

199

 

 

$

(11,499

)

 

$

3,941

 

 

$

 

 

$

23,321

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2022

 

CoRe Banking

 

Mortgage Banking

 

Financial Holding Company

 

Other

 

Intercompany Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

Interest income

 

$

84,858

 

$

309

 

$

113

 

 

$

 

 

$

(25

)

 

$

85,255

Interest expense

 

 

4,617

 

 

 

 

2,284

 

 

 

25

 

 

 

(25

)

 

 

6,901

Net interest income (expense)

 

 

80,241

 

 

309

 

 

(2,171

)

 

 

(25

)

 

 

 

 

 

78,354

Provision for credit losses

 

 

11,500

 

 

 

 

 

 

 

 

 

 

 

 

 

11,500

Net interest income (expense) after provision for credit losses

 

 

68,741

 

 

309

 

 

(2,171

)

 

 

(25

)

 

 

 

 

 

66,854

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

19,347

 

 

1,193

 

 

8,265

 

 

 

4,490

 

 

 

(9,165

)

 

 

24,130

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

28,810

 

 

8

 

 

12,769

 

 

 

6,630

 

 

 

 

 

 

48,217

Other expenses

 

 

33,484

 

 

119

 

 

6,262

 

 

 

4,489

 

 

 

(9,165

)

 

 

35,189

Total noninterest expenses

 

 

62,294

 

 

127

 

 

19,031

 

 

 

11,119

 

 

 

(9,165

)

 

 

83,406

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

25,794

 

 

1,375

 

 

(12,937

)

 

 

(6,654

)

 

 

 

 

 

7,578

Income taxes

 

 

5,219

 

 

356

 

 

(2,524

)

 

 

(1,488

)

 

 

 

 

 

1,563

Net income (loss) from continuing operations

 

 

20,575

 

 

1,019

 

 

(10,413

)

 

 

(5,166

)

 

 

 

 

 

6,015

Income from discontinued operations, before income taxes

 

 

 

 

 

 

 

 

 

2,600

 

 

 

 

 

 

2,600

Income tax expense - discontinued operations

 

 

 

 

 

 

 

 

 

598

 

 

 

 

 

 

598

Net income from discontinued operations

 

 

 

 

 

 

 

 

 

2,002

 

 

 

 

 

 

2,002

Net income (loss)

 

 

20,575

 

 

1,019

 

 

(10,413

)

 

 

(3,164

)

 

 

 

 

 

8,017

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

521

 

 

 

 

 

 

521

Net income (loss) available to common shareholders

 

$

20,575

 

$

1,019

 

$

(10,413

)

 

$

(2,643

)

 

$

 

 

$

8,538

Average Balances and Interest Rates

(Unaudited) (Dollars in thousands)

 

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

 

September 30, 2023

 

June 30, 2023

 

September 30, 2022

 

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing balances with banks

 

$

483,158

 

 

$

6,404

 

 

5.26

%

 

$

444,600

 

 

$

5,542

 

 

5.00

%

 

$

32,552

 

 

$

111

 

 

1.35

%

CDs with banks

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

232

 

 

 

2

 

 

3.42

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

206,340

 

 

 

1,056

 

 

2.03

 

 

 

220,687

 

 

 

1,229

 

 

2.23

 

 

 

231,953

 

 

 

897

 

 

1.53

 

Tax-exempt 1

 

 

107,490

 

 

 

1,016

 

 

3.75

 

 

 

123,497

 

 

 

1,147

 

 

3.73

 

 

 

144,719

 

 

 

1,346

 

 

3.69

 

Loans and loans held-for-sale: 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial 3

 

 

1,593,875

 

 

 

31,348

 

 

7.80

 

 

 

1,635,438

 

 

 

30,534

 

 

7.49

 

 

 

1,687,383

 

 

 

22,898

 

 

5.38

 

Tax-exempt 1

 

 

3,678

 

 

 

40

 

 

4.31

 

 

 

3,822

 

 

 

42

 

 

4.41

 

 

 

4,498

 

 

 

51

 

 

4.50

 

Real estate

 

 

573,579

 

 

 

6,351

 

 

4.39

 

 

 

593,767

 

 

 

5,691

 

 

3.84

 

 

 

579,685

 

 

 

4,707

 

 

3.22

 

Consumer

 

 

95,032

 

 

 

2,331

 

 

9.73

 

 

 

128,113

 

 

 

3,096

 

 

9.69

 

 

 

129,464

 

 

 

4,183

 

 

12.82

 

Total loans

 

 

2,266,164

 

 

 

40,070

 

 

7.02

 

 

 

2,361,140

 

 

 

39,363

 

 

6.69

 

 

 

2,401,030

 

 

 

31,839

 

 

5.26

 

Total earning assets

 

 

3,063,152

 

 

 

48,546

 

 

6.29

 

 

 

3,149,924

 

 

 

47,281

 

 

6.02

 

 

 

2,810,486

 

 

 

34,195

 

 

4.83

 

Less: Allowance for credit losses

 

 

(29,693

)

 

 

 

 

 

 

(35,143

)

 

 

 

 

 

 

(23,083

)

 

 

 

 

Cash and due from banks

 

 

6,686

 

 

 

 

 

 

 

5,756

 

 

 

 

 

 

 

5,399

 

 

 

 

 

Other assets

 

 

281,504

 

 

 

 

 

 

 

289,161

 

 

 

 

 

 

 

227,337

 

 

 

 

 

Total assets

 

$

3,321,649

 

 

 

 

 

 

$

3,409,698

 

 

 

 

 

 

$

3,020,139

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

674,745

 

 

$

4,970

 

 

2.92

%

 

$

682,277

 

 

$

4,816

 

 

2.83

%

 

$

734,271

 

 

$

1,394

 

 

0.75

%

Money market checking

 

 

537,592

 

 

 

3,294

 

 

2.43

 

 

 

615,962

 

 

 

2,439

 

 

1.59

 

 

 

258,527

 

 

 

422

 

 

0.65

 

Savings

 

 

72,206

 

 

 

438

 

 

2.41

 

 

 

72,289

 

 

 

351

 

 

1.95

 

 

 

71,370

 

 

 

153

 

 

0.85

 

IRAs

 

 

6,788

 

 

 

56

 

 

3.27

 

 

 

6,401

 

 

 

45

 

 

2.82

 

 

 

6,132

 

 

 

17

 

 

1.10

 

CDs

 

 

664,281

 

 

 

8,702

 

 

5.20

 

 

 

662,753

 

 

 

8,799

 

 

5.33

 

 

 

202,299

 

 

 

988

 

 

1.94

 

Repurchase agreements and federal funds sold

 

 

4,911

 

 

 

 

 

 

 

 

5,428

 

 

 

 

 

 

 

 

10,627

 

 

 

1

 

 

0.04

 

FHLB and other borrowings

 

 

278

 

 

 

 

 

 

 

 

158

 

 

 

 

 

 

 

 

48,058

 

 

 

311

 

 

2.57

 

Senior term loan

 

 

8,751

 

 

 

191

 

 

8.66

 

 

 

9,351

 

 

 

198

 

 

8.49

 

 

 

 

 

 

 

 

 

Subordinated debt

 

 

73,446

 

 

 

809

 

 

4.37

 

 

 

73,382

 

 

 

801

 

 

4.38

 

 

 

73,190

 

 

 

771

 

 

4.18

 

Total interest-bearing liabilities

 

 

2,042,998

 

 

 

18,460

 

 

3.58

 

 

 

2,128,001

 

 

 

17,449

 

 

3.29

 

 

 

1,404,474

 

 

 

4,057

 

 

1.15

 

Noninterest-bearing demand deposits

 

 

975,164

 

 

 

 

 

 

 

971,436

 

 

 

 

 

 

 

1,321,982

 

 

 

 

 

Other liabilities

 

 

38,021

 

 

 

 

 

 

 

38,842

 

 

 

 

 

 

 

37,019

 

 

 

 

 

Total liabilities

 

 

3,056,183

 

 

 

 

 

 

 

3,138,279

 

 

 

 

 

 

 

2,763,475

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

13,570

 

 

 

 

 

 

 

13,533

 

 

 

 

 

 

 

13,086

 

 

 

 

 

Paid-in capital

 

 

159,050

 

 

 

 

 

 

 

158,601

 

 

 

 

 

 

 

145,877

 

 

 

 

 

Treasury stock

 

 

(16,741

)

 

 

 

 

 

 

(16,741

)

 

 

 

 

 

 

(16,741

)

 

 

 

 

Retained earnings

 

 

146,504

 

 

 

 

 

 

 

148,600

 

 

 

 

 

 

 

144,816

 

 

 

 

 

Accumulated other comprehensive loss

 

 

(36,865

)

 

 

 

 

 

 

(32,714

)

 

 

 

 

 

 

(30,915

)

 

 

 

 

Total stockholders’ equity attributable to parent

 

 

265,518

 

 

 

 

 

 

 

271,279

 

 

 

 

 

 

 

256,123

 

 

 

 

 

Noncontrolling interest

 

 

(52

)

 

 

 

 

 

 

140

 

 

 

 

 

 

 

541

 

 

 

 

 

Total stockholders’ equity

 

 

265,466

 

 

 

 

 

 

 

271,419

 

 

 

 

 

 

 

256,664

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

3,321,649

 

 

 

 

 

 

$

3,409,698

 

 

 

 

 

 

$

3,020,139

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (tax-equivalent)

 

 

 

 

 

2.71

%

 

 

 

 

 

2.73

%

 

 

 

 

 

3.68

%

Net interest income and margin (tax-equivalent)1

 

 

 

$

30,086

 

 

3.90

%

 

 

 

$

29,832

 

 

3.80

%

 

 

 

$

30,138

 

 

4.25

%

Less: Tax-equivalent adjustments

 

 

 

$

(221

)

 

 

 

 

 

$

(250

)

 

 

 

 

 

$

(292

)

 

 

Net interest spread

 

 

 

 

 

2.68

%

 

 

 

 

 

2.70

%

 

 

 

 

 

3.64

%

Net interest income and margin

 

 

 

$

29,865

 

 

3.87

%

 

 

 

$

29,582

 

 

3.77

%

 

 

 

$

29,846

 

 

4.21

%

1 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a Federal tax rate of 21% for the periods presented, which is a non-GAAP financial measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 19.

2 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.

3 MVB Bank’s PPP loans totaling $3.0 million, $4.5 million and $20.1 million are included in this amount as of September 30, 2023, June 30, 2023 and September 30, 2022, respectively.

 

 

Nine Months Ended

 

Nine Months Ended

 

 

September 30, 2023

 

September 30, 2022

 

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing balances with banks

 

$

405,012

 

 

$

15,099

 

 

4.98

%

 

$

273,184

 

 

$

630

 

 

0.31

%

CDs with banks

 

 

 

 

 

 

 

 

 

 

1,381

 

 

 

24

 

 

2.32

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

221,089

 

 

 

4,133

 

 

2.50

 

 

 

237,188

 

 

 

2,383

 

 

1.34

 

Tax-exempt 1

 

 

122,818

 

 

 

3,471

 

 

3.78

 

 

 

140,377

 

 

 

3,824

 

 

3.64

 

Loans and loans held-for-sale: 2

 

 

 

 

 

 

 

 

 

 

 

 

Commercial 3

 

 

1,616,510

 

 

 

90,413

 

 

7.48

 

 

 

1,569,161

 

 

 

59,899

 

 

5.10

 

Tax-exempt 1

 

 

3,813

 

 

 

125

 

 

4.38

 

 

 

4,829

 

 

 

156

 

 

4.32

 

Real estate

 

 

596,070

 

 

 

18,343

 

 

4.11

 

 

 

438,380

 

 

 

9,722

 

 

2.97

 

Consumer

 

 

120,075

 

 

 

9,290

 

 

10.34

 

 

 

91,092

 

 

 

9,454

 

 

13.88

 

Total loans

 

 

2,336,468

 

 

 

118,171

 

 

6.76

 

 

 

2,103,462

 

 

 

79,231

 

 

5.04

 

Total earning assets

 

 

3,085,387

 

 

 

140,874

 

 

6.10

 

 

 

2,755,592

 

 

 

86,092

 

 

4.18

 

Less: Allowance for credit losses

 

 

(31,656

)

 

 

 

 

 

 

(20,468

)

 

 

 

 

Cash and due from banks

 

 

4,252

 

 

 

 

 

 

 

5,680

 

 

 

 

 

Other assets

 

 

303,233

 

 

 

 

 

 

 

237,637

 

 

 

 

 

Total assets

 

$

3,361,216

 

 

 

 

 

 

$

2,978,441

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

717,527

 

 

$

14,448

 

 

2.69

%

 

$

678,991

 

 

$

1,844

 

 

0.36

%

Money market checking

 

 

455,463

 

 

 

6,661

 

 

1.96

 

 

 

367,608

 

 

 

807

 

 

0.29

 

Savings

 

 

79,187

 

 

 

1,430

 

 

2.41

 

 

 

49,714

 

 

 

155

 

 

0.42

 

IRAs

 

 

6,448

 

 

 

128

 

 

2.65

 

 

 

6,271

 

 

 

52

 

 

1.11

 

CDs

 

 

572,078

 

 

 

21,396

 

 

5.00

 

 

 

122,095

 

 

 

1,433

 

 

1.57

 

Repurchase agreements and federal funds sold

 

 

5,974

 

 

 

 

 

 

 

 

11,334

 

 

 

4

 

 

0.05

 

FHLB and other borrowings

 

 

23,449

 

 

 

888

 

 

5.06

 

 

 

16,966

 

 

 

322

 

 

2.54

 

Senior term loan

 

 

9,285

 

 

 

583

 

 

8.39

 

 

 

 

 

 

 

 

 

Subordinated debt

 

 

73,383

 

 

 

2,409

 

 

4.39

 

 

 

73,126

 

 

 

2,284

 

 

4.18

 

Total interest-bearing liabilities

 

 

1,942,794

 

 

 

47,943

 

 

3.30

 

 

 

1,326,105

 

 

 

6,901

 

 

0.70

 

Noninterest-bearing demand deposits

 

 

1,107,712

 

 

 

 

 

 

 

1,350,533

 

 

 

 

 

Other liabilities

 

 

37,987

 

 

 

 

 

 

 

41,379

 

 

 

 

 

Total liabilities

 

 

3,088,493

 

 

 

 

 

 

 

2,718,017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

13,525

 

 

 

 

 

 

 

13,276

 

 

 

 

 

Paid-in capital

 

 

157,034

 

 

 

 

 

 

 

144,903

 

 

 

 

 

Treasury stock

 

 

(16,741

)

 

 

 

 

 

 

(16,741

)

 

 

 

 

Retained earnings

 

 

153,769

 

 

 

 

 

 

 

140,174

 

 

 

 

 

Accumulated other comprehensive income loss

 

 

(34,980

)

 

 

 

 

 

 

(21,905

)

 

 

 

 

Total stockholders’ equity attributable to parent

 

 

272,607

 

 

 

 

 

 

 

259,707

 

 

 

 

 

Noncontrolling interest

 

 

116

 

 

 

 

 

 

 

717

 

 

 

 

 

Total stockholders’ equity

 

 

272,723

 

 

 

 

 

 

 

260,424

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

3,361,216

 

 

 

 

 

 

$

2,978,441

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (tax-equivalent)

 

 

 

 

 

2.80

%

 

 

 

 

 

3.48

%

Net interest income and margin (tax-equivalent)1

 

 

 

$

92,931

 

 

4.03

%

 

 

 

$

79,191

 

 

3.84

%

Less: Tax-equivalent adjustments

 

 

 

$

(755

)

 

 

 

 

 

$

(837

)

 

 

Net interest spread

 

 

 

 

 

2.77

%

 

 

 

 

 

3.44

%

Net interest income and margin

 

 

 

$

92,176

 

 

3.99

%

 

 

 

$

78,354

 

 

3.80

%

1 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a Federal tax rate of 21% for the periods presented, which is a non-GAAP financial measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 19.

2 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.

3 MVB Bank’s PPP loans totaling $3.0 million and $20.1 million are included in this amount as of September 30, 2023 and September 30, 2022, respectively.

Selected Financial Data

(Unaudited) (Dollars in thousands, except per share data)

 

 

 

Quarterly

 

Year-to-Date

 

 

2023

 

2023

 

2022

 

 

2023

 

 

 

2022

 

 

 

Third Quarter

 

Second Quarter

 

Third Quarter

 

 

Earnings and Per Share Data:

 

 

 

 

 

 

 

 

 

 

Net income

 

$

3,867

 

 

$

8,112

 

 

$

2,718

 

 

$

23,321

 

 

$

8,538

 

Earnings per share from continuing operations - basic

 

$

0.30

 

 

$

0.64

 

 

$

0.16

 

 

$

1.15

 

 

$

0.54

 

Earnings per share from discontinued operations - basic

 

$

 

 

$

 

 

$

0.06

 

 

$

0.69

 

 

$

0.16

 

Earnings per share - basic

 

$

0.30

 

 

$

0.64

 

 

$

0.22

 

 

$

1.84

 

 

$

0.70

 

Earnings per share from continuing operations - diluted

 

$

0.29

 

 

$

0.63

 

 

$

0.16

 

 

$

1.12

 

 

$

0.51

 

Earnings per share from discontinued operations - diluted

 

$

 

 

$

 

 

$

0.05

 

 

$

0.67

 

 

$

0.15

 

Earnings per share - diluted

 

$

0.29

 

 

$

0.63

 

 

$

0.21

 

 

$

1.79

 

 

$

0.66

 

Cash dividends paid per common share

 

$

0.17

 

 

$

0.17

 

 

$

0.17

 

 

$

0.51

 

 

$

0.51

 

Book value per common share

 

$

21.33

 

 

$

21.57

 

 

$

19.85

 

 

$

21.33

 

 

$

19.85

 

Tangible book value per common share 1

 

$

21.08

 

 

$

21.31

 

 

$

19.38

 

 

$

21.08

 

 

$

19.38

 

Weighted-average shares outstanding - basic

 

 

12,722,010

 

 

 

12,689,669

 

 

 

12,238,505

 

 

 

12,678,708

 

 

 

12,170,028

 

Weighted-average shares outstanding - diluted

 

 

13,116,629

 

 

 

12,915,294

 

 

 

12,854,951

 

 

 

13,012,834

 

 

 

12,852,574

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

Return on average assets 2

 

 

0.5

%

 

 

1.0

%

 

 

0.4

%

 

 

0.9

%

 

 

0.4

%

Return on average equity 2

 

 

5.8

%

 

 

12.0

%

 

 

4.2

%

 

 

11.4

%

 

 

4.4

%

Net interest margin 3 4

 

 

3.90

%

 

 

3.80

%

 

 

4.25

%

 

 

4.03

%

 

 

3.84

%

Efficiency ratio 5 10

 

 

86.2

%

 

 

84.1

%

 

 

78.8

%

 

 

75.4

%

 

 

80.4

%

Overhead ratio 2 6

 

 

3.7

%

 

 

3.6

%

 

 

4.0

%

 

 

3.5

%

 

 

4.0

%

Equity to assets

 

 

7.9

%

 

 

8.2

%

 

 

7.8

%

 

 

7.9

%

 

 

7.8

%

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Data and Ratios:

 

 

 

 

 

 

 

 

 

 

Charge-offs

 

$

8,064

 

 

$

3,700

 

 

$

3,653

 

 

$

16,611

 

 

$

7,305

 

Recoveries

 

$

2,205

 

 

$

2,468

 

 

$

2,313

 

 

$

7,842

 

 

$

4,054

 

Net loan charge-offs to total loans 2 7

 

 

1.0

%

 

 

0.2

%

 

 

0.2

%

 

 

0.5

%

 

 

0.2

%

Allowance for credit losses

 

$

24,276

 

 

$

30,294

 

 

$

26,515

 

 

$

24,276

 

 

$

26,515

 

Allowance for credit losses to total loans 8

 

 

1.07

%

 

 

1.31

%

 

 

1.07

%

 

1.07

%

 

 

1.07

%

Nonperforming loans

 

$

10,593

 

 

$

13,646

 

 

$

22,350

 

 

$

10,593

 

 

$

22,350

 

Nonperforming loans to total loans

 

 

0.5

%

 

 

0.6

%

 

 

0.9

%

 

 

0.5

%

 

 

0.9

%

 

 

 

 

 

 

 

 

 

 

 

Mortgage Company Equity Method Investees Production Data9:

 

 

 

 

 

 

 

 

 

 

Mortgage pipeline

 

$

643,578

 

 

$

748,756

 

 

$

792,388

 

 

$

643,578

 

 

$

792,388

 

Loans originated

 

$

1,131,963

 

 

$

1,167,596

 

 

$

606,805

 

 

$

3,299,253

 

 

$

2,713,508

 

Loans closed

 

$

786,885

 

 

$

820,665

 

 

$

615,585

 

 

$

2,282,768

 

 

$

2,239,732

 

Loans sold

 

$

605,296

 

 

$

786,469

 

 

$

619,059

 

 

$

1,827,019

 

 

$

1,999,706

 

1 Common equity less total goodwill and intangibles per common share, a non-U.S. GAAP measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 19.

2 Annualized for the quarterly periods presented.

3 Net interest income as a percentage of average interest-earning assets.

4 Presented on a fully tax-equivalent basis, a non-GAAP financial measure.

5 Noninterest expense as a percentage of net interest income and noninterest income, a non-U.S. GAAP measure.

6 Noninterest expense as a percentage of average assets, a non-U.S. GAAP measure.

7 Charge-offs, less recoveries.

8 Excludes loans held-for-sale.

9 Information is related to Intercoastal Mortgage Company, LLC and Warp Speed Holdings LLC, entities in which MVB has an ownership interest that are accounted for as equity method investments.

10 Includes net income from discontinued operations.

Non-GAAP Reconciliation: Net Interest Margin on a Full Tax-Equivalent Basis

The following table reconciles, for the periods shown below, net interest margin on a fully tax-equivalent basis:

 

 

 

Three Months Ended

 

Nine Months Ended

(Dollars in thousands)

 

September 30,

2023

 

June 30,

2023

 

September 30,

2022

 

September 30,

2023

 

September 30,

2022

Net interest margin - U.S. GAAP basis

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

29,865

 

 

$

29,582

 

 

$

29,846

 

 

$

92,176

 

 

$

78,354

 

Average interest-earning assets

 

$

3,063,152

 

 

$

3,149,924

 

 

$

2,810,486

 

 

 

3,085,387

 

 

 

2,755,592

 

Net interest margin

 

 

3.87

%

 

 

3.77

%

 

 

4.21

%

 

 

3.99

%

 

 

3.80

%

 

 

 

 

 

 

 

 

 

 

 

Net interest margin - non-U.S. GAAP basis

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

29,865

 

 

$

29,582

 

 

$

29,846

 

 

$

92,176

 

 

$

78,354

 

Impact of fully tax-equivalent adjustment

 

 

221

 

 

 

250

 

 

 

292

 

 

 

755

 

 

 

837

 

Net interest income on a fully tax-equivalent basis

 

$

30,086

 

 

$

29,832

 

 

$

30,138

 

 

 

92,931

 

 

 

79,191

 

Average interest-earning assets

 

$

3,063,152

 

 

$

3,149,924

 

 

$

2,810,486

 

 

$

3,085,387

 

 

$

2,755,592

 

Net interest margin on a fully tax-equivalent basis

 

 

3.90

%

 

 

3.80

%

 

 

4.25

%

 

 

4.03

%

 

 

3.84

%

Non-U.S. GAAP Reconciliation: Tangible Book Value per Common Share and Tangible Common Equity Ratio

(Unaudited) (Dollars in thousands, except per share data)

 

 

 

September 30, 2023

 

June 30, 2023

 

September 30, 2022

Tangible Book Value per Common Share

 

 

 

 

 

 

Goodwill

 

$

2,838

 

 

$

2,838

 

 

$

3,988

 

Intangibles

 

 

375

 

 

 

397

 

 

 

1,806

 

Total intangibles

 

$

3,213

 

 

 

3,235

 

 

 

5,794

 

 

 

 

 

 

 

 

Total equity attributable to parent

 

$

271,416

 

 

 

274,349

 

 

 

243,913

 

Less: Total intangibles

 

 

(3,213

)

 

 

(3,235

)

 

 

(5,794

)

Tangible common equity

 

$

268,203

 

 

$

271,114

 

 

$

238,119

 

 

 

 

 

 

 

 

Tangible common equity

 

$

268,203

 

 

$

271,114

 

 

$

238,119

 

Common shares outstanding (000s)

 

 

12,726

 

 

 

12,720

 

 

 

12,287

 

Tangible book value per common share

 

$

21.08

 

 

$

21.31

 

 

$

19.38

 

 

 

 

 

 

 

 

Tangible Common Equity Ratio

 

 

 

 

 

 

Total assets

 

$

3,437,583

 

 

$

3,351,847

 

 

$

3,139,922

 

Less: Total intangibles

 

 

(3,213

)

 

 

(3,235

)

 

 

(5,794

)

Tangible assets

 

$

3,434,370

 

 

$

3,348,612

 

 

$

3,134,128

 

 

 

 

 

 

 

 

Tangible assets

 

$

3,434,370

 

 

$

3,348,612

 

 

$

3,134,128

 

Tangible common equity

 

$

268,203

 

 

$

271,114

 

 

$

238,119

 

Tangible common equity ratio

 

 

7.8

%

 

 

8.1

%

 

 

7.6

%

 

Contacts

Questions or comments concerning this earnings release should be directed to:

MVB Financial Corp.

Donald T. Robinson, President and Chief Financial Officer

(304) 598-3500

drobinson@mvbbanking.com

Amy Baker, VP, Corporate Communications and Marketing

(844) 682-2265

abaker@mvbbanking.com

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