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
2024, with reported net income of $2.1 million, or $0.16 basic and
diluted earnings per share.
Third Quarter 2024
Highlights
Previously disclosed digital asset program
exit reduced EPS by $0.29 in third quarter and $0.37
year-to-date.
Noninterest bearing deposits represent 33.0%
of total deposits.
On balance sheet payments-related deposits
increased by 60.8% due to growth in existing relationships.
Tangible book value per share of $23.20, up
2.2% from the prior quarter.
Capital strength further enhanced.
From Larry F. Mazza, Chief Executive Officer, MVB
Financial:
“MVB continues to be proactive, and we have adapted our growth
strategy related to changing market conditions. To this end, we
have simplified our number of strategic initiatives to five as we
move into fourth quarter. This laser focus by Team MVB will enhance
our ability to effectively execute on our revised strategy.
“One example of this laser focus is our payments strategy.
Growth in existing account relationships, along with new leadership
and initiatives, drove a 60.8% quarter over quarter increase in
payments-related deposit balances. Excluding the impact of the
digital asset program wind-down and termination costs related to
the decision to call two brokered certificates of deposit, net
interest income and net interest margin are approaching a positive
inflection point. Finally, while loan balances declined partly due
to elevated payoff activity, our loan pipeline has improved from
earlier this year.
“As previously disclosed, we began winding down MVB’s digital
asset program account relationships during the second quarter due
to changing market conditions and profitability challenges. While
this process is now mostly complete, our third-quarter results
reflected both the full quarter impact of this decision and
lingering costs associated with the wind-down, without any
associated revenue benefit. Alongside a higher cost base, these
factors negatively affected earnings in the third quarter,
overshadowing some of the positive trends we’ve seen.
“Through it all, MVB’s foundational strength remains intact,
evidenced by stable asset quality, an enhanced capital base and
growth in tangible book value per share. While our strategic shift
has weighed on earnings in the short-term, we are increasingly
well-positioned for future growth and improved profitability.”
THIRD QUARTER 2024 HIGHLIGHTS
- Growth in payments and gaming deposits drive increased total
deposits.
- Total deposits increased 4.1%, or $118.8 million, to $3.00
billion compared to the prior quarter-end. Deposit growth was led
by payments-related deposits, which increased by 60.8%, primarily
due to the expansion of existing relationships. Deposit growth also
reflected increased gaming deposits, partially offset by the
movement of $70.2 million of banking-as-a-service deposits off
balance sheet.
- Noninterest bearing (“NIB”) deposits increased 0.5%, or $5.3
million, to $989.1 million. NIB deposits represent 33.0% of total
deposits as of September 30, 2024.
- The loan-to-deposit ratio was 72.3% as of September 30, 2024,
compared to 76.5% as of June 30, 2024, and 74.7% as of September
30, 2023.
- Net interest income and net interest margin lower on digital
asset program wind-down and certificate of deposit termination
costs.
- Net interest income on a fully tax-equivalent basis, a non-U.S.
GAAP financial measure, declined 3.4%, or $0.9 million, to $26.8
million relative to the prior quarter, reflecting net interest
margin contraction and lower earning assets balances.
- Net interest margin on a fully tax-equivalent basis, a non-U.S.
GAAP financial measure, was 3.61%, down 14 basis points from the
prior quarter. Approximately 11 basis points of the decline in net
interest margin is attributable to the wind down of the digital
asset program. Also, approximately five basis points of net
interest margin compression reflected termination costs of $0.3
million related to the Company’s decision to call two brokered
certificates of deposit (“CDs”) with a value of $49.5 million
during the third quarter. Total cost of funds was 2.77%, up 23
basis points compared to the prior quarter, primarily reflecting
the full quarter impact of the shift in deposit mix from the
wind-down of the digital asset program and the brokered CD
termination costs.
- Average earning assets balance declined 0.9%, or $26.1 million,
from the prior quarter to $2.95 billion, reflecting lower average
loan balances, partially offset by higher interest-bearing balances
with banks. Average total loan balances declined 2.4%, or $53.3
million, from the prior quarter to $2.18 billion, reflecting
elevated loan payoff activity and muted market demand.
- Noninterest income lower on digital asset program exit,
masking progress on Fintech fee income and continued mortgage
rebound.
- Total noninterest income declined 6.8%, or $0.5 million,
relative to the prior quarter, to $6.7 million. The decline is
attributable to lower other operating income, primarily a $0.8
million decrease in wire transfer fees reflecting the full quarter
impact of the digital asset program wind-down. Excluding other
operating income, noninterest income increased 12.8%, reflecting a
continued rebound in equity method investment income from our
mortgage segment, as well as higher payment card and service charge
income, consulting and compliance income and holding gains on
equity securities.
- Relative to the prior year period, total noninterest income
increased by 15.0%, or $0.9 million, inclusive of the impact of the
digital asset program wind-down, to $6.7 million, primarily
reflecting higher payment card and service income, which increased
by 35.1% year-over-year.
- Foundational strength intact, led by enhanced capital
position, growth in tangible book value per share and stable asset
quality.
- The Community Bank Leverage Ratio, Tier 1 Risk-Based Capital
Ratio and MVB Bank’s Total Risk-Based Capital Ratio were 10.9%,
14.9% and 15.7%, respectively, compared to 10.7%, 14.6% and 15.4%,
respectively, at the prior quarter end.
- The tangible common equity ratio, a non-U.S. GAAP financial
measure, was 8.8% as of September 30, 2024, down from 8.9% as of
June 30, 2024 and up from 7.8% as of September 30, 2023. As of
September 30, 2024, accumulated other comprehensive loss declined
$5.9 million, or 20.9%, and $17.8 million, or 44.2%, to $22.5
million as compared to $28.4 million at June 30, 2024 and $40.3
million at September 30, 2023, respectively. Adjusted for
accumulated other comprehensive loss, the tangible common equity
ratio was 9.4% as of September 30, 2024.
- Book value per share and tangible book value per share, a
non-U.S. GAAP measure, were $23.44 and $23.20, respectively, which
represent increases of 2.2% and 2.2% relative to the prior
quarter-end and 9.9% and 10.1% from the year-ago period.
- Nonperforming loans increased $5.5 million, or 23.6%, to $28.6
million, or 1.3% of total loans, from $23.1 million, or 1.0% of
total loans, at the prior quarter end. Approximately 47.2% of the
balance of nonperforming loans is a single commercial multifamily
loan, which had a balance of $13.5 million as of September 30,
2024, down $1.1 million from the prior quarter. The loan is current
as of September 30, 2024 and the Company believes the loan is
properly collateralized with a loan to value of less than 70%.
Criticized loans as a percentage of total loans were 5.7%,
consistent with the prior quarter end.
- Net charge-offs were $0.7 million, or 0.1% of loans, for the
third quarter of 2024, compared to $0.9 million, or 0.2% of loans,
for the prior quarter.
- Provision for credit losses totaled $1.0 million, compared to
$0.3 million for the prior quarter and included a credit impairment
of an available-for-sale debt security of $0.5 million during the
third quarter.
- Allowance for credit losses was 0.99% of total loans, as
compared to 1.00% at the prior quarter end.
INCOME STATEMENT
Net interest income on a tax-equivalent basis totaled $26.8
million for the third quarter of 2024, a decline of $0.9 million,
or 3.4%, from the second quarter of 2024 and $3.3 million, or
11.0%, from the third quarter of 2023. The decline from both prior
periods reflects net interest margin contraction and lower average
earning asset balances.
Interest income increased $0.5 million, or 1.1%, from the second
quarter of 2024 and declined $1.7 million, or 3.5%, from the third
quarter of 2023. The increase in interest income relative to the
prior quarter reflects an increase in cash balances due to growth
of payment deposits and seasonal considerations. The decline in
interest income relative to the year-ago period reflects a decline
in cash balances, driven by the exit of digital asset program
accounts, and a decline in loan balances, partially offset by a
higher tax-equivalent yield on loans and cash balances.
Interest expense increased $1.5 million, or 8.0%, from the
second quarter of 2024 and $1.6 million, or 8.6%, from the third
quarter of 2024. The cost of funds increased to 2.77% for the third
quarter of 2024, as compared to 2.54% for the second quarter of
2024 and 2.43% for the third quarter of 2023. The higher cost of
funds compared to the prior quarter was primarily attributable to
the full quarter impact of the exit of the digital asset program
account relationships and $0.3 million of termination costs related
to the Company’s decision to call two brokered CDs during the third
quarter. The process of winding down the digital asset program
account relationships was initiated during the second quarter of
2024, and the deposits were replaced with higher cost funding
throughout the third quarter of 2024. Relative to the year-ago
period, the increase reflects the impact of higher interest rates
on our deposits, a shift in the mix of average deposits, the exit
of the digital asset program account relationships and the
termination costs associated with the two brokered CDs that were
called.
On a tax-equivalent basis, net interest margin for the third
quarter of 2024 was 3.61%, a decline of 14 basis points versus the
second quarter of 2024 and 29 basis points versus the third quarter
of 2023. See the table below for a reconciliation between net
interest margin and net interest margin on a fully tax-equivalent
basis, a non-U.S. GAAP measure.
Noninterest income totaled $6.7 million for the third quarter of
2024, a decline of $0.5 million from the second quarter of 2024 and
an increase of $0.9 million from the third quarter of 2023. The
decline compared to the prior quarter is primarily driven by a
decline of $1.2 million in other operating income, partially offset
by increases of $0.5 million in holding gains on equity securities
and $0.3 million in equity method investments income from our
mortgage segment. The $0.9 million increase in noninterest income
from the third quarter of 2023 was primarily driven by increases of
$1.5 million in equity method investments income from our mortgage
segment and $1.0 million in payment card and service charge income,
partially offset by a decline of $1.6 million in other operating
income.
Noninterest expense totaled $29.5 million for the third quarter
of 2024, an increase of $0.6 million from the second quarter of
2024 and a decline of $1.2 million from the third quarter of 2023.
The increase from the second quarter of 2024 primarily reflects
increases of $0.8 million in salaries and employee benefits and
$0.3 million in travel, entertainment, dues and subscriptions,
partially offset by a $0.5 million decline in professional fees.
The decline from the third quarter of 2023 primarily reflects
declines of $1.0 million in professional fees and $0.9 million in
other operating expense, partially offset by an increase of $0.7
million in salaries and employee benefit expense.
BALANCE SHEET
Loans totaled $2.17 billion as of September 30, 2024, a decline
of $35.5 million, or 1.6%, from June 30, 2024, and $99.2 million,
or 4.4%, from September 30, 2023. The decline in loan balances
relative to the prior quarters primarily reflects slower loan
growth based on overall market conditions and the impact of loan
amortization and payoffs.
Deposits totaled $3.00 billion as of September 30, 2024, an
increase of $118.8 million, or 4.1%, from June 30, 2024, and a
decline of $37.2 million, or 1.2%, from September 30, 2023. The
increase in deposits relative to the prior quarter reflects an
increase in payment deposits of $190.9 million and higher CD
balances. The increase in CD balances of $77.0 million, or 10.0%,
to $846.8 million was primarily driven by a $25.1 million, or 5.0%,
increase in brokered CDs and a $52.2 million, or 19.9%, increase in
core CDs. Relative to the year-ago period, the decline in total
deposits reflects a decline in NIB deposits and increased
utilization of off-balance sheet deposit networks to generate fee
income, enhance capital efficiency and manage liquidity and
concentration risk.
NIB deposits totaled $989.1 million as of September 30, 2024, an
increase of $5.3 million, or 0.5%, from June 30, 2024 and a decline
of $104.8 million, or 9.6%, from September 30, 2023. Relative to
the prior year period, the decline in NIB deposits reflected the
exit of digital asset program accounts. Digital asset program
account balances declined $6.7 million and $180.1 million to $21.4
million as compared to June 30, 2024 and September 30, 2023,
respectively. NIB deposits represented 33.0% of total deposits as
of September 30, 2024, compared to 34.1% of total deposits at the
prior quarter-end and 36.0% for the year-ago period.
Off-balance sheet deposits totaled $1.44 billion as of September
30, 2024, an increase of $85.2 million, or 6.3%, compared to $1.36
billion at June 30, 2024, and $329.0 million, or 30%, from $1.11
billion at September 30, 2023. Management proactively moved $70.2
million of banking-as-a-service deposits off balance sheet due to
uncertainty of the existing regulatory framework for brokered
deposits and potential reclassification of certain
banking-as-a-service deposits as brokered deposits. Off-balance
sheet deposit networks are utilized to generate fee income, enhance
capital efficiency and manage liquidity and concentration risk.
CAPITAL
The Community Bank Leverage Ratio was 10.9% as of September 30,
2024, compared to 10.7% as of June 30, 2024, and 10.4% as of
September 30, 2023. MVB’s Tier 1 Risk-Based Capital Ratio was 14.9%
as of September 30, 2024, compared to 14.6% as of June 30, 2024 and
14.0% as of September 30, 2023. The Bank’s Total Risk-Based Capital
Ratio was 15.7% as of September 30, 2024, compared to 15.4% as of
June 30, 2024 and 14.8% as of September 30, 2023.
The tangible common equity ratio, a non-U.S. GAAP financial
measure, was 8.8% as of September 30, 2024, consistent with June
30, 2024, and up from 7.8% as of September 30, 2023. 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 2024, consistent with the second quarter
of 2024 and the third quarter of 2023.
ASSET QUALITY
Nonperforming loans totaled $28.6 million, or 1.3% of total
loans, as of September 30, 2024, as compared to $23.1 million, or
1.0% of total loans, as of June 30, 2024, and $10.6 million, or
0.5% of total loans, as of September 30, 2023. Criticized loans as
a percentage of total loans were 5.7% as of September 30, 2024 and
June 30, 2024, compared to 6.1% as of September 30, 2023.
Net charge-offs were $0.7 million, or 0.1% of average total
loans, for the third quarter of 2024, compared to $0.9 million, or
0.2% of average total loans, for the second quarter of 2024 and
$5.9 million, or 1.0% of average total loans, for the third quarter
of 2023.
The provision for credit losses totaled $1.0 million, compared
to $0.3 million for the prior quarter ended June 30, 2024, and a
release of allowance of $0.2 million for the quarter ended
September 30, 2023. The allowance for credit losses for loans was
0.99% of total loans at September 30, 2024, compared to 1.00% at
June 30, 2024, and 1.1% at September 30, 2023.
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 Financial 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 Financial, 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 successfully execute business
plans, including strategies related to investments in Fintech
companies; risks, uncertainties and losses involved with the
developing digital assets industry, including the evolving
regulatory framework; 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;
changes in deposit classifications; 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, 2023, 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.
Questions or comments concerning this earnings release should be
directed to:
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
2024
2024
2023
2024
2023
Third Quarter
Second
Quarter
Third Quarter
Interest income
$
46,627
$
46,127
$
48,325
$
142,784
$
140,119
Interest expense
20,042
18,557
18,460
58,490
47,943
Net interest income
26,585
27,570
29,865
84,294
92,176
Provision (release of allowance) for
credit losses
959
254
(159
)
3,210
182
Net interest income after provision
(release of allowance) for credit losses
25,626
27,316
30,024
81,084
91,994
Total noninterest income
6,657
7,142
5,791
21,633
15,277
Noninterest expense:
Salaries and employee benefits
16,722
15,949
16,016
49,160
48,508
Other expense
12,763
12,981
14,709
39,446
40,816
Total noninterest expenses
29,485
28,930
30,725
88,606
89,324
Income before income taxes
2,798
5,528
5,090
14,111
17,947
Income taxes
642
1,379
1,218
3,304
3,639
Net income from continuing operations,
before noncontrolling interest
2,156
4,149
3,872
10,807
14,308
Income from discontinued operations,
before income taxes
—
—
—
—
11,831
Income taxes - discontinued operations
—
—
—
—
3,049
Net income from discontinued
operations
—
—
—
—
8,782
Net Income, before noncontrolling
interest
2,156
4,149
3,872
10,807
23,090
Net (income) loss attributable to
noncontrolling interest
(76
)
(60
)
(5
)
(156
)
231
Net income available to common
shareholders
$
2,080
$
4,089
$
3,867
$
10,651
$
23,321
Earnings per share from continuing
operations - basic
$
0.16
$
0.32
$
0.30
$
0.83
$
1.15
Earnings per share from discontinued
operations - basic
$
—
$
—
$
—
$
—
$
0.69
Earnings per share - basic
$
0.16
$
0.32
$
0.30
$
0.83
$
1.84
Earnings per share from continuing
operations - diluted
$
0.16
$
0.31
$
0.29
$
0.81
$
1.12
Earnings per share from discontinued
operations - diluted
$
—
$
—
$
—
$
—
$
0.67
Earnings per share - diluted
$
0.16
$
0.31
$
0.29
$
0.81
$
1.79
Noninterest Income
(Unaudited) (Dollars in
thousands)
Quarterly
Year-to-Date
2024
2024
2023
2024
2023
Third Quarter
Second
Quarter
Third Quarter
Card acquiring income
$
336
$
337
$
845
$
924
$
2,255
Service charges on deposits
1,088
1,103
490
3,714
2,676
Interchange income
2,428
2,377
1,517
7,844
5,034
Total payment card and service charge
income
3,852
3,817
2,852
12,482
9,965
Equity method investments gain (loss)
746
484
(750
)
102
(70
)
Compliance and consulting income
1,291
1,274
1,314
3,565
3,326
Gain (loss) on sale of loans
26
—
330
26
(1,015
)
Investment portfolio gains (losses)
498
117
244
1,224
(1,734
)
Loss on acquisition and divestiture
activity
—
—
—
—
(986
)
Other noninterest income
244
1,450
1,801
4,234
5,791
Total noninterest income
$
6,657
$
7,142
$
5,791
$
21,633
$
15,277
Condensed Consolidated Balance
Sheets
(Unaudited) (Dollars in
thousands)
September 30, 2024
June 30, 2024
September 30, 2023
Cash and cash equivalents
$
610,911
$
455,517
$
587,100
Investment securities
available-for-sale
374,828
361,254
311,537
Equity securities
41,760
41,261
40,835
Loans held-for-sale
—
—
7,603
Loans receivable
2,171,272
2,206,793
2,270,433
Less: Allowance for credit losses
(21,499
)
(22,084
)
(24,276
)
Loans receivable, net
2,149,773
2,184,709
2,246,157
Premises and equipment, net
18,838
19,540
21,468
Other assets
222,646
225,723
—
222,883
Total assets
$
3,418,756
$
3,288,004
$
3,437,583
Noninterest-bearing deposits
$
989,144
$
983,809
$
1,093,903
Interest-bearing deposits
2,012,504
1,899,043
1,944,986
Senior term loan
—
—
8,473
Subordinated debt
73,725
73,663
73,478
Other liabilities
40,183
34,826
—
45,374
Stockholders’ equity
303,200
296,663
271,369
Total liabilities and stockholders’
equity
$
3,418,756
$
3,288,004
$
3,437,583
Reportable Segments
(Unaudited)
Three Months Ended September 30,
2024
CoRe Banking
Mortgage Banking
Financial Holding
Company
Other
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
46,539
$
103
$
2
$
—
$
(17
)
$
46,627
Interest expense
19,234
—
808
17
(17
)
20,042
Net interest income (expense)
27,305
103
(806
)
(17
)
—
26,585
Provision for credit losses
459
—
500
—
—
959
Net interest income (expense) after
provision for credit losses
26,846
103
(1,306
)
(17
)
—
25,626
Noninterest income
4,574
768
2,956
2,332
(3,973
)
6,657
Noninterest Expenses:
Salaries and employee benefits
10,075
—
4,528
2,119
—
16,722
Other expenses
13,164
4
2,240
1,328
(3,973
)
12,763
Total noninterest expenses
23,239
4
6,768
3,447
(3,973
)
29,485
Income (loss), before income taxes
8,181
867
(5,118
)
(1,132
)
—
2,798
Income taxes
1,774
204
(1,063
)
(273
)
—
642
Net income (loss), before noncontrolling
interest
6,407
663
(4,055
)
(859
)
—
2,156
Net income attributable to noncontrolling
interest
—
—
—
(76
)
—
(76
)
Net income (loss) available to common
shareholders
$
6,407
$
663
$
(4,055
)
$
(935
)
$
—
$
2,080
Three Months Ended June 30,
2024
CoRe Banking
Mortgage Banking
Financial Holding
Company
Other
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
46,038
$
103
$
3
$
—
$
(17
)
$
46,127
Interest expense
17,635
—
922
17
(17
)
18,557
Net interest income (expense)
28,403
103
(919
)
(17
)
—
27,570
Provision for credit losses
254
—
—
—
—
254
Net interest income (expense) after
provision for credit losses
28,149
103
(919
)
(17
)
—
27,316
Noninterest income
4,898
485
2,769
3,128
(4,138
)
7,142
Noninterest Expenses:
Salaries and employee benefits
9,359
—
4,473
2,117
—
15,949
Other expenses
13,257
—
2,080
1,782
(4,138
)
12,981
Total noninterest expenses
22,616
—
6,553
3,899
(4,138
)
28,930
Income (loss) before income taxes
10,431
588
(4,703
)
(788
)
—
5,528
Income taxes
2,438
145
(1,016
)
(188
)
—
1,379
Net income (loss), before noncontrolling
interest
7,993
443
(3,687
)
(600
)
—
4,149
Net income attributable to noncontrolling
interest
—
—
—
(60
)
—
(60
)
Net income (loss) available to common
shareholders
$
7,993
$
443
$
(3,687
)
$
(660
)
$
—
$
4,089
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), before noncontrolling
interest
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
Nine Months Ended September 30,
2024
CoRe Banking
Mortgage Banking
Financial Holding
Company
Other
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
142,519
$
309
$
7
$
—
$
(51
)
$
142,784
Interest expense
55,796
—
2,689
56
(51
)
58,490
Net interest income (expense)
86,723
309
(2,682
)
(56
)
—
84,294
Provision for credit losses
2,710
—
500
—
—
3,210
Net interest income (expense) after
provision for credit losses
84,013
309
(3,182
)
(56
)
—
81,084
Noninterest income
16,993
124
7,990
8,724
(12,198
)
21,633
Noninterest Expenses:
Salaries and employee benefits
29,257
—
13,679
6,224
—
49,160
Other expenses
40,242
4
6,161
5,237
(12,198
)
39,446
Total noninterest expenses
69,499
4
19,840
11,461
(12,198
)
88,606
Income (loss), before income taxes
31,507
429
(15,032
)
(2,793
)
—
14,111
Income taxes
7,090
120
(3,236
)
(670
)
—
3,304
Net income (loss), before noncontrolling
interest
24,417
309
(11,796
)
(2,123
)
—
10,807
Net income attributable to noncontrolling
interest
—
—
—
(156
)
—
(156
)
Net income (loss) available to common
shareholders
$
24,417
$
309
$
(11,796
)
$
(2,279
)
$
—
$
10,651
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 tax expense - discontinued
operations
—
—
—
3,049
—
3,049
Net income from discontinued
operations
—
—
—
8,782
—
8,782
Net income (loss), before noncontrolling
interest
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
Average Balances and Interest
Rates
(Unaudited) (Dollars in
thousands)
Three Months Ended
Three Months Ended
Three Months Ended
September 30, 2024
June 30, 2024
September 30, 2023
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
$
400,330
$
5,218
5.19
%
$
380,278
$
5,065
5.36
%
$
483,158
$
6,404
5.26
%
Investment securities:
Taxable
258,151
1,846
2.84
252,963
1,905
3.03
206,340
1,056
2.03
Tax-exempt 1
104,769
867
3.29
102,785
684
2.68
107,490
1,016
3.75
Loans and loans held-for-sale: 2
Commercial
1,553,666
31,136
7.97
1,597,359
30,824
7.76
1,593,875
31,348
7.80
Tax-exempt 1
3,129
34
4.32
3,261
35
4.32
3,678
40
4.31
Real estate
558,691
6,446
4.59
563,011
6,391
4.57
573,579
6,351
4.39
Consumer
68,337
1,269
7.39
73,531
1,374
7.52
95,032
2,331
9.73
Total loans
2,183,823
38,885
7.08
2,237,162
38,624
6.94
2,266,164
40,070
7.02
Total earning assets
2,947,073
46,816
6.32
2,973,188
46,278
6.26
3,063,152
48,546
6.29
Less: Allowance for credit losses
(22,043
)
(22,596
)
(29,693
)
Cash and due from banks
4,638
4,528
6,686
Other assets
284,640
305,644
281,504
Total assets
$
3,214,308
$
3,260,764
$
3,321,649
Liabilities
Deposits:
NOW
$
534,494
$
4,422
3.29
%
$
465,587
$
4,139
3.58
%
$
674,745
$
4,970
2.92
%
Money market checking
434,174
3,378
3.10
400,205
3,337
3.35
537,592
3,294
2.43
Savings
116,861
883
3.01
112,225
944
3.38
72,206
438
2.41
IRAs
8,164
91
4.43
7,948
81
4.10
6,788
56
3.27
CDs
800,986
10,440
5.19
731,337
9,130
5.02
664,281
8,702
5.20
Repurchase agreements and federal funds
sold
3,589
19
2.11
3,459
4
0.47
4,911
—
—
FHLB and other borrowings
44
—
—
—
—
—
278
—
—
Senior term loan 3
—
—
—
2,736
114
16.76
8,751
191
8.66
Subordinated debt
73,702
809
4.37
73,629
808
4.41
73,446
809
4.37
Total interest-bearing liabilities
1,972,014
20,042
4.04
1,797,126
18,557
4.15
2,042,998
18,460
3.58
Noninterest-bearing demand deposits
910,787
1,139,070
975,164
Other liabilities
37,591
36,101
38,021
Total liabilities
2,920,392
2,972,297
3,056,183
Stockholders’ equity
Common stock
13,776
13,731
13,570
Paid-in capital
163,189
162,518
159,050
Treasury stock
(16,741
)
(16,741
)
(16,741
)
Retained earnings
160,694
161,709
146,504
Accumulated other comprehensive loss
(27,069
)
(32,299
)
(36,865
)
Total stockholders’ equity attributable to
parent
293,849
288,918
265,518
Noncontrolling interest
67
(451
)
(52
)
Total stockholders’ equity
293,916
288,467
265,466
Total liabilities and stockholders’
equity
$
3,214,308
$
3,260,764
$
3,321,649
Net interest spread (tax-equivalent)
2.28
%
2.11
%
2.71
%
Net interest income and margin
(tax-equivalent)1
$
26,774
3.61
%
$
27,721
3.75
%
$
30,086
3.90
%
Less: Tax-equivalent adjustments
$
(189
)
$
(151
)
$
(221
)
Net interest spread
2.25
%
2.09
%
2.68
%
Net interest income and margin
$
26,585
3.59
%
$
27,570
3.73
%
$
29,865
3.87
%
1In 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-U.S. GAAP
financial measure. See the reconciliation of this non-U.S. 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 The senior term loan was paid off in May
2024, and the unamortized debt issuance costs were recorded as
interest expense upon the repayment.
Nine Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Assets
Interest-bearing balances with banks
$
443,475
$
17,624
5.31
%
$
405,012
$
15,099
4.98
%
Investment securities:
Taxable
252,423
5,494
2.91
221,089
4,133
2.50
Tax-exempt 1
104,622
2,436
3.11
122,818
3,471
3.78
Loans and loans held-for-sale: 2
Commercial
1,592,295
94,112
7.89
1,616,510
90,413
7.48
Tax-exempt 1
3,254
106
4.35
3,813
125
4.38
Real estate
565,923
19,450
4.59
596,070
18,343
4.11
Consumer
73,039
4,095
7.49
120,075
9,290
10.34
Total loans
2,234,511
117,763
7.04
2,336,468
118,171
6.76
Total earning assets
3,035,031
143,317
6.31
3,085,387
140,874
6.10
Less: Allowance for credit losses
(22,298
)
(31,656
)
Cash and due from banks
4,856
4,252
Other assets
308,351
303,233
Total assets
$
3,325,940
$
3,361,216
Liabilities
Deposits:
NOW
$
518,595
$
13,490
3.47
%
$
717,527
$
14,448
2.69
%
Money market checking
414,453
10,474
3.38
455,463
6,661
1.96
Savings
130,848
3,468
3.54
79,187
1,430
2.41
IRAs
7,958
246
4.13
6,448
128
2.65
CDs
735,883
28,097
5.10
572,078
21,396
5.00
Repurchase agreements and federal funds
sold
3,334
23
0.92
5,974
—
—
FHLB and other borrowings
29
2
5.99
23,449
888
5.06
Senior term loan 3
3,146
264
11.21
9,285
583
8.39
Subordinated debt
73,634
2,426
4.40
73,383
2,409
4.39
Total interest-bearing liabilities
1,887,880
58,490
4.14
1,942,794
47,943
3.30
Noninterest-bearing demand deposits
1,109,089
1,107,712
Other liabilities
38,566
37,987
Total liabilities
3,035,535
3,088,493
Stockholders’ equity
Common stock
13,722
13,525
Paid-in capital
162,416
157,034
Treasury stock
(16,741
)
(16,741
)
Retained earnings
161,113
153,769
Accumulated other comprehensive income
loss
(29,965
)
(34,980
)
Total stockholders’ equity attributable to
parent
290,545
272,607
Noncontrolling interest
(140
)
116
Total stockholders’ equity
290,405
272,723
Total liabilities and stockholders’
equity
$
3,325,940
$
3,361,216
Net interest spread (tax-equivalent)
2.17
%
2.80
%
Net interest income and margin
(tax-equivalent)1
$
84,827
3.73
%
$
92,931
4.03
%
Less: Tax-equivalent adjustments
$
(533
)
$
(755
)
Net interest spread
2.14
%
2.77
%
Net interest income and margin
$
84,294
3.71
%
$
92,176
3.99
%
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-U.S. GAAP
financial measure. See the reconciliation of this non-U.S. 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 The senior term loan was paid off in May
2024, and the unamortized debt issuance costs were recorded as
interest expense upon the repayment.
Selected Financial
Data
(Unaudited) (Dollars in
thousands, except per share data)
Quarterly
Year-to-Date
2024
2024
2023
2024
2023
Third Quarter
Second Quarter
Third Quarter
Earnings and Per Share Data:
Net income
$
2,080
$
4,089
$
3,867
$
10,651
$
23,321
Earnings per share from continuing
operations - basic
$
0.16
$
0.32
$
0.30
$
0.83
$
1.15
Earnings per share from discontinued
operations - basic
$
—
$
—
$
—
$
—
$
0.69
Earnings per share - basic
$
0.16
$
0.32
$
0.30
$
0.83
$
1.84
Earnings per share from continuing
operations - diluted
$
0.16
$
0.31
$
0.29
$
0.81
$
1.12
Earnings per share from discontinued
operations - diluted
$
—
$
—
$
—
$
—
$
0.67
Earnings per share - diluted
$
0.16
$
0.31
$
0.29
$
0.81
$
1.79
Cash dividends paid per common share
$
0.17
$
0.17
$
0.17
$
0.51
$
0.51
Book value per common share
$
23.44
$
22.94
$
21.33
$
23.44
$
21.33
Tangible book value per common share 1
$
23.20
$
22.70
$
21.08
$
23.20
$
21.08
Weighted-average shares outstanding -
basic
12,927,962
12,883,426
12,722,010
12,874,311
12,678,708
Weighted-average shares outstanding -
diluted
13,169,011
13,045,660
13,116,629
13,121,245
13,012,834
Performance Ratios:
Return on average assets 2
0.3
%
0.5
%
0.5
%
0.4
%
0.9
%
Return on average equity 2
2.8
%
5.7
%
5.8
%
4.9
%
11.4
%
Net interest margin 3 4
3.61
%
3.75
%
3.90
%
3.73
%
4.03
%
Efficiency ratio 5
88.7
%
83.3
%
86.2
%
83.6
%
75.4
%
Overhead ratio 2 6
3.7
%
3.5
%
3.7
%
3.6
%
3.5
%
Equity to assets
8.9
%
9.0
%
7.9
%
8.9
%
7.9
%
Asset Quality Data and Ratios:
Charge-offs
$
1,392
$
1,538
$
8,064
$
5,080
$
16,611
Recoveries
$
681
$
688
$
2,205
$
2,204
$
7,842
Net loan charge-offs to total loans 2
7
0.1
%
0.2
%
1.0
%
0.2
%
0.5
%
Allowance for credit losses
$
21,499
$
22,084
$
24,276
$
21,499
$
24,276
Allowance for credit losses to total loans
8
0.99
%
1.00
%
1.07
%
0.99
%
1.07
%
Nonperforming loans
$
28,556
$
23,099
$
10,593
$
28,556
$
10,593
Nonperforming loans to total loans
1.3
%
1.0
%
0.5
%
1.3
%
0.5
%
Mortgage Company Equity Method
Investees Production Data9:
Mortgage pipeline
$
1,048,865
$
927,875
$
643,578
$
1,048,865
$
643,578
Loans originated
$
1,469,223
$
1,383,405
$
1,131,963
$
3,902,717
$
3,299,253
Loans closed
$
937,333
$
828,849
$
786,885
$
2,419,488
$
2,282,768
Loans sold
$
655,668
$
639,035
$
605,296
$
2,210,818
$
1,827,019
1 Common equity less total goodwill and
intangibles per common share, a non-U.S. GAAP measure. See the
reconciliation of this non-U.S. 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-U.S. 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.
Non-U.S. GAAP Reconciliation:
Net Interest Margin on a Fully 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, 2024
June 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Net interest margin - U.S. GAAP
basis
Net interest income
$
26,585
$
27,570
$
29,865
$
84,294
$
92,176
Average interest-earning assets
$
2,947,073
$
2,973,188
$
3,063,152
3,035,031
3,085,387
Net interest margin
3.59
%
3.73
%
3.87
%
3.71
%
3.99
%
Net interest margin - non-U.S. GAAP
basis
Net interest income
$
26,585
$
27,570
$
29,865
$
84,294
$
92,176
Impact of fully tax-equivalent
adjustment
189
151
221
533
755
Net interest income on a fully
tax-equivalent basis
$
26,774
$
27,721
$
30,086
84,827
92,931
Average interest-earning assets
$
2,947,073
$
2,973,188
$
3,063,152
$
3,035,031
$
3,085,387
Net interest margin on a fully
tax-equivalent basis
3.61
%
3.75
%
3.90
%
3.73
%
4.03
%
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, 2024
June 30, 2024
September 30, 2023
Tangible Book Value per Common
Share
Goodwill
$
2,838
$
2,838
$
2,838
Intangibles
285
307
375
Total intangibles
$
3,123
3,145
3,213
Total equity attributable to parent
$
303,086
296,625
271,416
Less: Total intangibles
(3,123
)
(3,145
)
(3,213
)
Tangible common equity
$
299,963
$
293,480
$
268,203
Tangible common equity
$
299,963
$
293,480
$
268,203
Common shares outstanding (000s)
12,928
12,928
12,726
Tangible book value per common share
$
23.20
$
22.70
$
21.08
Tangible Common Equity Ratio
Total assets
$
3,418,756
$
3,288,004
$
3,437,583
Less: Total intangibles
(3,123
)
(3,145
)
(3,213
)
Tangible assets
$
3,415,633
$
3,284,859
$
3,434,370
Tangible assets
$
3,415,633
$
3,284,859
$
3,434,370
Tangible common equity
$
299,963
$
293,480
$
268,203
Tangible common equity ratio
8.8
%
8.9
%
7.8
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241030097498/en/
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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