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 fourth quarter
and year ended December 31, 2023, with reported net income of $7.9
million, or $0.62 basic and $0.61 diluted earnings per share for
the three months ended December 31, 2023.
Fourth Quarter 2023
Highlights As Compared to Third Quarter 2023
Net interest income increased 4.2%, or $1.2
million.
Net interest margin improved by 17 bps to
4.04%.
Earnings per share up 106.7% to
$0.62.
Loan growth of 2.1%; Balance sheet loan to
deposit ratio of 79.9% from 74.7%.
Noninterest expense declined by 7.9%, or
$2.4 million.
Book value per share and tangible book value
per share, a non-GAAP financial measure, increased 6.3% and 6.4% to
$22.68 and $22.43, respectively.
Asset quality measures improved; Capital
strength further enhanced.
From Larry F. Mazza, Chief Executive Officer, MVB
Financial:
“MVB closed a challenging year for the banking industry with
strong fourth quarter results. Loans and investment securities
continued to reprice higher, excess liquidity was redeployed as the
pace of loan growth picked up and funding costs stabilized, driving
significant improvement in net interest margin and net interest
income. At the same time, expenses were well-controlled,
Fintech-related fee income growth accelerated and measures of
safety, soundness, foundational strength and shareholder value were
improved and further enhanced. Team MVB’s resilience and
adaptability enabled us to navigate the disruptive industry events
last year, and now leave us well-positioned to drive further
improvement in earnings and profitability as market conditions
begin to turn favorably.”
FOURTH QUARTER 2023 HIGHLIGHTS
- Loan growth and net interest margin expansion powered net
interest income growth.
- Net interest income on a fully tax-equivalent basis, a non-GAAP
financial measure, increased 4.0%, or $1.2 million, to $31.3
million relative to the prior quarter, primarily reflecting net
interest margin expansion and higher average loan balances,
partially offset by lower interest-bearing balances with
banks.
- Net interest margin on a fully tax-equivalent basis, a non-GAAP
financial measure, was 4.06%, up 16 basis points from the prior
quarter, primarily reflecting higher earning asset yields, a
favorable shift in the mix of earning assets and deposit funding
and relatively stable funding costs. Total cost of funds was 2.44%,
compared to 2.43% for the prior quarter.
- Average earning asset balances decreased 0.3% during the fourth
quarter of 2023, primarily reflecting lower interest-bearing
balances with banks, primarily offset by higher average loan and
investment securities balances. Average total loan balances
increased 1.1%, largely driven by higher commercial loans.
- Deposit balances declined as funding mix optimization
continued.
- Total deposits declined 4.5%, or $137.4 million, to $2.9
billion, compared to the prior quarter-end, primarily reflecting
lower certificate of deposit (“CD”) balances, which includes a
10.5%, or $45.8 million, decline in brokered deposits, as the
Company looks to reduce higher-cost funding that had been added in
response to 2023 industry events.
- Total off-balance sheet deposits remained consistent at $1.09
billion as compared to $1.11 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.
- Noninterest bearing (“NIB”) deposit balances increased 9.4%, or
$103.4 million, to $1.20 billion, as compared to the prior
quarter-end, primarily reflecting gaming and seasonal
considerations. NIB deposits represented 41.3% of total deposits,
as compared to 36.0% of total deposits at the prior
quarter-end.
- Balance sheet loan to deposit ratio was 79.9% as of December
31, 2023, compared to 74.7% as of September 30, 2023.
- Asset quality measures improved; Capital strength and
shareholder value further enhanced.
- Nonperforming loans declined $2.3 million, or 22.0%, to $8.3
million, or 0.4% of total loans, from $10.6 million, or 0.5% of
total loans, at the prior quarter-end. Criticized loans as a
percentage of total loans were 5.3%, as compared to 6.1% at the
prior quarter-end. Net charge-offs were $0.5 million, or 0.1% of
total loans on an annualized basis, for the fourth quarter of 2023,
compared to $5.9 million, or 1.0%, for the prior quarter.
- The release of allowance for credit losses totaled $2.1
million, primarily reflecting the general improvement in credit
indicators and the continued changes in loan portfolio composition.
The allowance for credit losses was 1.0% of total loans, as
compared to 1.1% as of the prior quarter-end.
- The Community Bank Leverage Ratio, Tier 1 Risk-Based Capital
Ratio and MVB Bank’s Total Risk-Based Capital Ratio were 10.5%,
14.4%, and 15.1%, respectively, compared to 10.4%, 14.0%, and
14.8%, respectively, at the prior quarter-end.
- The tangible common equity to tangible assets ratio was 8.6%,
compared to 7.8% at the prior quarter-end. Tangible book value per
share, a non-U.S. GAAP measure, increased 6.4% to $22.43, relative
to the prior quarter-end.
- Expenses declined on lower personnel costs; Fee income down
on mortgage loss; Fintech-related fee income increased.
- Noninterest expense declined 7.9% to $28.3 million relative to
the prior quarter, primarily reflecting lower salaries and employee
benefits costs and other operating expense. Professional fees
remained elevated due to actions taken to enhance regulatory and
compliance infrastructure.
- Total noninterest income declined 23.4% to $4.4 million
relative to the prior quarter, primarily reflecting increased
equity method investment losses, partially offset by higher payment
card and service charge income, which primarily relates to the
Company’s Fintech-related fee income initiatives.
INCOME STATEMENT
Net interest income on a tax-equivalent basis totaled $31.3
million for the fourth quarter of 2023, an increase of $1.2
million, or 4.0%, from the third quarter of 2023 and a decline of
$2.4 million, or 7.2%, from the fourth quarter of 2022. The
increase in net interest income compared to the third quarter of
2023 reflected a higher net interest margin, partially offset by a
slight decline in total average earning asset balances. The decline
compared to the fourth quarter of 2022 reflected higher funding
costs, partially offset by higher average earning asset
balances.
Interest income increased $1.4 million, or 2.8%, from the third
quarter of 2023 and increased $9.0 million, or 22.1%, compared to
the fourth quarter of 2022. The tax-equivalent yield on loans was
7.2% for the fourth quarter of 2023, compared to 7.0% for the third
quarter of 2023 and 6.1% for the fourth quarter of 2022. Higher
loan yields generally reflected the cumulative impact of loans
booked at higher yields than the prevailing portfolio yield in
prior periods and the repricing of variable rate loans.
Interest expense increased $0.1 million, or 0.7%, compared to
the third quarter of 2023 and $11.3 million, or 156.3%, compared to
the fourth quarter of 2022. The cost of funds was 2.44% for the
fourth quarter of 2023, consistent with the third quarter of 2023
and up 144 basis points compared to the fourth quarter of 2022. The
increase in cost of funds compared to the prior year reflected
higher funding costs across the board and a shift in the mix of
deposit funding toward higher cost deposit products.
On a fully tax-equivalent basis, net interest margin for the
fourth quarter of 2023 was 4.06%, an increase of 16 basis points
from the third quarter of 2023 and a decrease of 51 basis points
from the fourth 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 third quarter of 2023 primarily
reflected higher loan and investment portfolio yields, a favorable
shift in the mix of earning assets and deposit funding and stable
funding costs. Contraction in the net interest margin from the
fourth quarter of 2022 primarily reflected higher funding costs and
an unfavorable shift in the mix of deposit funding, partially
offset by higher earning asset yields.
Noninterest income totaled $4.4 million for the fourth quarter
of 2023, a decrease of $1.4 million, or 23.4%, from the third
quarter of 2023 and an increase of $1.0 million, or 29.2%, from the
fourth quarter of 2022. The decrease compared to the third quarter
of 2023 was primarily driven by an increase of $1.7 million in
equity method investment losses from our mortgage companies and a
$0.7 million loss on derivatives during the fourth quarter of 2023
without a comparable loss in the prior quarter, partially offset by
a $1.0 million increase in payment card and service charge income.
The increase in noninterest income from the fourth quarter of 2022
was primarily driven by increases of $2.4 million in gain on sale
of loans, $2.1 million in payment card and service charge income,
$1.5 million in holding gains on equity securities and $0.7 million
in other operating income. The increases were partially offset by a
$3.6 million gain on sale of assets in the fourth quarter of 2022
without a comparable gain in the current quarter, an increase of
$1.1 million in equity method investment losses from our mortgage
companies and a $0.7 million loss on derivatives in the fourth
quarter of 2023 without a comparable loss in the prior year.
Noninterest expense totaled $28.3 million for the fourth quarter
of 2023, a decrease of $2.4 million, or 7.9%, from the third
quarter of 2023 and an increase of $1.6 million, or 5.8%, from the
fourth quarter of 2022. The decrease from the third quarter of 2023
was driven by declines of $1.2 million in salaries and employee
benefits, $0.8 million in other operating expense and $0.4 million
in insurance, tax and assessment expense. The increase from the
fourth quarter of 2022 primarily reflected higher professional fees
of $1.8 million and higher salaries and employee benefits of $0.5
million, partially offset by a decline in other operating expense
of $0.7 million.
BALANCE SHEET
Loans totaled $2.32 billion at December 31, 2023, an increase of
$47.2 million, or 2.1%, and a decrease of $55.1 million, or 2.3%,
as compared to September 30, 2023 and December 31, 2022,
respectively. Loan growth compared to September 30, 2023 was driven
primarily by higher commercial loan balances. The decrease in loan
balances compared to December 31, 2022 primarily reflected
deliberate efforts to improve balance sheet liquidity, lower market
demand and the sale of $44.4 million of subprime automobile loans
during 2023. Loans held-for-sale, which represent MVB Bank’s
government guaranteed lending, were $0.6 million as of December 31,
2023, compared to $7.6 million at September 30, 2023 and $23.1
million at December 31, 2022. The decline in loans held-for-sale
from the prior periods was driven by loan sales and amortization of
the portfolio, as government guaranteed lending is no longer a
growth vehicle.
Deposits totaled $2.90 billion as of December 31, 2023, a
decrease of $137.4 million, or 4.5%, from September 30, 2023 and an
increase of $331.0 million, or 12.9%, from December 31, 2022. NIB
deposits totaled $1.20 billion as of December 31, 2023, an increase
of $103.4 million, or 9.4%, and a decrease of $34.3 million, or
2.8%, from September 30, 2023 and December 31, 2022, respectively.
The decrease in total deposits compared to September 30, 2023
primarily reflected a decline in CDs and brokered deposits. The
increase in total deposits relative to December 31, 2022 reflected
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 10.5% as of December 31,
2023, compared to 10.4% as of September 30, 2023 and 9.8% as of
December 31, 2022. MVB’s Tier 1 Risk-Based Capital Ratio was 14.4%
as of December 31, 2023, compared to 14.0% as of September 30, 2023
and 12.4% as of December 31, 2022. The Bank’s Total Risk-Based
Capital Ratio was 15.1% as of December 31, 2023, compared to 14.8%
as of September 30, 2023 and 13.4% as of December 31, 2022.
The Company issued a quarterly cash dividend of $0.17 per share
for the quarter ended December 31, 2023, consistent with the
quarters ended September 30, 2023 and December 31, 2022.
ASSET QUALITY
Nonperforming loans totaled $8.3 million, or 0.4% of total
loans, for the fourth quarter of 2023, as compared to $10.6
million, or 0.5% of total loans for the third quarter of 2023 and
$11.2 million, or 0.5% of total loans for the fourth quarter of
2022. Criticized loans were $122.4 million, or 5.3% of total loans,
as compared to $137.5 million, or 6.1% of total loans, for the
third quarter of 2023 and $71.2 million, or 3.0% of total loans,
for the fourth quarter of 2022.
Net charge-offs on an annualized basis were $0.5 million, or
0.1% of total loans, for the fourth quarter of 2023, compared to
$5.9 million, or 1.0% of total loans, for the third quarter of 2023
and $5.4 million, or 0.9% of total loans for the fourth quarter of
2022.
The release of allowance for credit losses totaled $2.1 million
for the quarter ended December 31, 2023, compared to a release of
$0.2 million for the quarter ended September 30, 2023 and a
provision of $2.7 million for the quarter ended December 31, 2022.
The release of allowance for credit losses for the quarter ended
December 31, 2023 was attributed to an improvement in asset quality
and the reduction in criticized loans. The allowance for credit
losses was 1.0% of total loans at December 31, 2023, as compared to
1.1% as of September 30, 2023 and 1.0% as of December 31, 2022.
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 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, 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.
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
Fourth Quarter
Third Quarter
Fourth Quarter
Interest income
$
49,699
$
48,325
$
40,702
$
189,818
$
125,957
Interest expense
18,592
18,460
7,253
66,535
14,154
Net interest income
31,107
29,865
33,449
123,283
111,803
Provision (release of allowance) for
credit losses
(2,103
)
(159
)
2,694
(1,921
)
14,194
Net interest income after provision
(release of allowance) for credit losses
33,210
30,024
30,755
125,204
97,609
Total noninterest income
4,438
5,791
3,435
19,715
27,565
Noninterest expense:
Salaries and employee benefits
14,863
16,016
14,317
63,371
62,534
Other expense
13,438
14,709
12,424
54,254
47,612
Total noninterest expenses
28,301
30,725
26,741
117,625
110,146
Income before income taxes
9,347
5,090
7,449
27,294
15,028
Income taxes
1,431
1,218
1,731
5,070
3,294
Net income from continuing operations
before noncontrolling interest
7,916
3,872
5,718
22,224
11,734
Income from discontinued operations before
income taxes
—
—
888
11,831
3,487
Income taxes - discontinued operations
—
—
236
3,049
834
Net income from discontinued
operations
—
—
652
8,782
2,653
Net (income) loss attributable to
noncontrolling interest
(5
)
(5
)
139
226
660
Net income available to common
shareholders
$
7,911
$
3,867
$
6,509
$
31,232
$
15,047
Earnings per share from continuing
operations - basic
$
0.62
$
0.30
$
0.47
$
1.77
$
1.01
Earnings per share from discontinued
operations - basic
$
—
$
—
$
0.05
$
0.69
$
0.22
Earnings per share - basic
$
0.62
$
0.30
$
0.52
$
2.46
$
1.23
Earnings per share from continuing
operations - diluted
$
0.61
$
0.29
$
0.45
$
1.72
$
0.96
Earnings per share from discontinued
operations - diluted
$
—
$
—
$
0.05
$
0.68
$
0.21
Earnings per share - diluted
$
0.61
$
0.29
$
0.50
$
2.40
$
1.17
Noninterest Income
(Unaudited) (Dollars in thousands)
Quarterly
Year-to-Date
2023
2023
2022
2023
2022
Fourth Quarter
Third Quarter
Fourth Quarter
Card acquiring income
$
1,348
$
845
$
497
$
3,603
$
2,790
Service charges on deposits
174
490
684
2,850
3,418
Interchange income
2,289
1,517
497
7,323
5,440
Total payment card and service charge
income
3,811
2,852
1,678
13,776
11,648
Equity method investments loss
(2,429
)
(750
)
(1,379
)
(2,499
)
(713
)
Compliance and consulting income
986
1,314
1,217
4,312
4,598
Gain (loss) on sale of loans
271
330
(2,131
)
(744
)
1,655
Investment portfolio gains (losses)
75
244
(1,397
)
(1,659
)
925
Loss on acquisition and divestiture
activity
—
—
—
(986
)
—
Other noninterest income
1,724
1,801
5,447
7,515
9,452
Total noninterest income
$
4,438
$
5,791
$
3,435
$
19,715
$
27,565
Condensed Consolidated Balance
Sheets (Unaudited) (Dollars in thousands)
December 31, 2023
September 30, 2023
December 31, 2022
Cash and cash equivalents
$
398,229
$
587,100
$
40,280
Securities available-for-sale, at fair
value
345,275
311,537
379,814
Equity securities
41,086
40,835
38,744
Loans held-for-sale
629
7,603
23,126
Loans receivable
2,317,594
2,270,433
2,372,645
Less: Allowance for credit losses
(22,124
)
(24,276
)
(23,837
)
Loans receivable, net
2,295,470
2,246,157
2,348,808
Premises and equipment, net
20,928
21,468
23,630
Assets from discontinued operations
—
—
4,315
Goodwill
2,838
2,838
2,838
Other assets
209,427
220,045
207,295
Total assets
$
3,313,882
$
3,437,583
$
3,068,850
Noninterest-bearing deposits
$
1,197,272
$
1,093,903
$
1,231,544
Interest-bearing deposits
1,704,204
1,944,986
1,338,938
FHLB and other borrowings
—
—
102,333
Senior term loan
6,786
8,473
9,765
Subordinated debt
73,540
73,478
73,286
Liabilities from discontinued
operations
—
—
5,444
Other liabilities
42,738
45,374
46,149
Stockholders' equity
289,342
271,369
261,391
Total liabilities and stockholders'
equity
$
3,313,882
$
3,437,583
$
3,068,850
Reportable Segments
(Unaudited)
Twelve Months Ended December 31,
2023
CoRe Banking
Mortgage
Banking
Financial
Holding
Company
Other
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
189,498
$
416
$
41
$
—
$
(137
)
$
189,818
Interest expense
62,507
—
3,985
180
(137
)
66,535
Net interest income (expense)
126,991
416
(3,944
)
(180
)
—
123,283
Release of allowance for credit losses
(1,921
)
—
—
—
—
(1,921
)
Net interest income (expense) after
release of allowance for credit losses
128,912
416
(3,944
)
(180
)
—
125,204
Noninterest income
17,286
(2,486
)
10,453
9,138
(14,676
)
19,715
Noninterest expenses:
Salaries and employee benefits
37,265
7
17,041
9,058
—
63,371
Other expense
53,221
65
8,233
7,411
(14,676
)
54,254
Total noninterest expenses
90,486
72
25,274
16,469
(14,676
)
117,625
Income (loss) before income taxes
55,712
(2,142
)
(18,765
)
(7,511
)
—
27,294
Income taxes
12,342
(557
)
(4,923
)
(1,792
)
—
5,070
Net income (loss) from continuing
operations
43,370
(1,585
)
(13,842
)
(5,719
)
—
22,224
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)
43,370
(1,585
)
(13,842
)
3,063
—
31,006
Net loss attributable to noncontrolling
interest
—
—
—
226
—
226
Net income (loss) available to common
shareholders
$
43,370
$
(1,585
)
$
(13,842
)
$
3,289
$
—
$
31,232
Twelve Months Ended December 31,
2022
CoRe Banking
Mortgage
Banking
Financial
Holding
Company
Other
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
125,426
$
429
$
146
$
—
$
(44
)
$
125,957
Interest expense
10,920
—
3,234
44
(44
)
14,154
Net interest income (expense)
114,506
429
(3,088
)
(44
)
—
111,803
Provision for credit losses
14,194
—
—
—
—
14,194
Net interest income (expense) after
provision for credit losses
100,312
429
(3,088
)
(44
)
—
97,609
Noninterest income
22,673
37
10,576
6,120
(11,841
)
27,565
Noninterest expenses:
Salaries and employee benefits
36,960
8
16,582
8,984
—
62,534
Other expenses
44,873
142
8,049
6,389
(11,841
)
47,612
Total noninterest expenses
81,833
150
24,631
15,373
(11,841
)
110,146
Income (loss) before income taxes
41,152
316
(17,143
)
(9,297
)
—
15,028
Income taxes
8,882
77
(3,472
)
(2,193
)
—
3,294
Net income (loss) from continuing
operations
32,270
239
(13,671
)
(7,104
)
—
11,734
Income from discontinued operations before
income taxes
—
—
—
3,487
—
3,487
Income tax expense - discontinued
operations
—
—
—
834
—
834
Net income from discontinued
operations
—
—
—
2,653
—
2,653
Net income (loss)
32,270
239
(13,671
)
(4,451
)
—
14,387
Net loss attributable to noncontrolling
interest
—
—
—
660
—
660
Net income (loss) available to common
shareholders
$
32,270
$
239
$
(13,671
)
$
(3,791
)
$
—
$
15,047
Average Balances and Interest
Rates (Unaudited) (Dollars in thousands)
Three Months Ended
Three Months Ended
Three Months Ended
December 31, 2023
September 30, 2023
December 31, 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
$
442,521
$
5,944
5.33
%
$
483,158
$
6,404
5.26
%
$
113,500
$
982
3.43
%
Investment securities:
Taxable
222,303
1,444
2.58
206,340
1,056
2.03
233,839
1,114
1.89
Tax-exempt1
98,464
876
3.53
107,490
1,016
3.75
136,313
1,343
3.91
Loans and loans held-for-sale:2
Commercial3
1,635,510
33,665
8.17
1,593,875
31,348
7.80
1,667,981
27,947
6.65
Tax-exempt1
3,492
38
4.32
3,678
40
4.31
4,161
47
4.48
Real estate
576,580
6,421
4.42
573,579
6,351
4.39
631,450
6,000
3.77
Consumer
76,088
1,503
7.84
95,032
2,331
9.73
139,705
3,563
10.12
Total loans
2,291,670
41,627
7.21
2,266,164
40,070
7.02
2,443,297
37,557
6.10
Total earning assets
3,054,958
49,891
6.48
3,063,152
48,546
6.29
2,926,949
40,996
5.56
Less: Allowance for credit losses
(24,079
)
(29,693
)
(27,530
)
Cash and due from banks
5,771
6,686
5,643
Other assets
292,574
281,504
266,292
Total assets
$
3,329,224
$
3,321,649
$
3,171,354
Liabilities
Deposits:
NOW
$
637,144
$
5,386
3.35
%
$
674,745
$
4,970
2.92
%
$
791,227
$
2,880
1.44
%
Money market checking
650,925
3,691
2.25
537,592
3,294
2.43
219,334
643
1.16
Savings
70,146
442
2.50
72,206
438
2.41
77,416
263
1.35
IRAs
7,296
66
3.59
6,788
56
3.27
6,053
20
1.31
CDs
590,517
8,014
5.38
664,281
8,702
5.20
314,723
2,380
3.00
Repurchase agreements and federal funds
sold
4,736
—
—
4,911
—
—
9,958
1
0.04
FHLB and other borrowings
11
—
—
278
—
—
11,128
115
4.10
Senior term loan
8,183
183
8.87
8,751
191
8.66
9,235
163
7.00
Subordinated debt
73,510
810
4.37
73,446
809
4.37
73,254
787
4.26
Total interest-bearing liabilities
2,042,468
18,592
3.61
2,042,998
18,460
3.58
1,512,328
7,252
1.90
Noninterest-bearing demand deposits
975,122
975,164
1,377,880
Other liabilities
39,410
38,021
40,264
Total liabilities
3,057,000
3,056,183
2,930,472
Stockholders’ equity
Common stock
13,588
13,570
13,452
Paid-in capital
160,106
159,050
156,111
Treasury stock
(16,741
)
(16,741
)
(16,741
)
Retained earnings
156,004
146,504
129,454
Accumulated other comprehensive loss
(40,688
)
(36,865
)
(41,793
)
Total stockholders’ equity attributable to
parent
272,269
265,518
240,483
Noncontrolling interest
(45
)
(52
)
399
Total stockholders’ equity
272,224
265,466
240,882
Total liabilities and stockholders’
equity
$
3,329,224
$
3,321,649
$
3,171,354
Net interest spread (tax-equivalent)
2.87
%
2.71
%
3.66
%
Net interest income and margin
(tax-equivalent)1
$
31,299
4.06
%
$
30,086
3.90
%
$
33,744
4.57
%
Less: Tax-equivalent adjustments
$
(193
)
$
(221
)
$
(295
)
Net interest spread
2.84
%
2.68
%
3.62
%
Net interest income and margin
$
31,107
4.04
%
$
29,865
3.87
%
$
33,449
4.53
%
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 16.
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 $2.7
million, $3.0 million and $13.6 million are included in this amount
for the three months ended December 31, 2023, September 30, 2023
and December 31, 2022, respectively.
Twelve Months Ended
Twelve Months Ended
December 31, 2023
December 31, 2022
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Assets
Interest-bearing balances with banks
$
414,466
$
21,043
5.08
%
$
232,935
$
1,613
0.69
%
CDs with banks
—
—
—
1,033
24
2.32
Investment securities:
Taxable
221,395
5,576
2.52
236,344
3,496
1.48
Tax-exempt1
116,680
4,347
3.73
139,353
5,166
3.71
Loans and loans held-for-sale:2
Commercial3
1,621,299
124,078
7.65
1,594,069
87,845
5.51
Tax-exempt1
3,732
163
4.37
4,661
203
4.36
Real estate
591,157
24,764
4.19
487,044
15,721
3.23
Consumer
108,988
10,793
9.90
103,345
13,017
12.60
Total loans
2,325,176
159,798
6.87
2,189,119
116,786
5.33
Total earning assets
3,077,717
190,764
6.20
2,798,784
127,085
4.54
Less: Allowance for loan losses
(29,746
)
(22,248
)
Cash and due from banks
6,659
5,670
Other assets
302,036
244,861
Total assets
$
3,356,666
$
3,027,067
Liabilities
Deposits:
NOW
$
697,266
$
19,851
2.85
%
$
707,282
$
4,724
0.67
%
Money market checking
504,730
10,352
2.05
330,208
1,449
0.44
Savings
76,908
1,871
2.43
56,697
418
0.74
IRAs
6,662
194
2.91
6,216
71
1.14
CDs
576,726
29,392
5.10
170,648
3,814
2.24
Repurchase agreements and federal funds
sold
5,662
1
0.02
10,987
6
0.05
FHLB and other borrowings
17,542
890
5.07
15,494
437
2.82
Senior term loan
9,007
766
8.50
2,328
163
7.00
Subordinated debt
73,415
3,219
4.38
73,159
3,072
4.20
Total interest-bearing liabilities
1,967,918
66,536
3.38
1,373,019
14,154
1.03
Noninterest-bearing demand deposits
1,074,292
1,357,426
Other liabilities
40,435
41,098
Total liabilities
3,082,645
2,771,543
Stockholders’ equity
Preferred stock
—
—
Common stock
13,541
13,320
Paid-in capital
159,523
147,728
Treasury stock
(16,741
)
(16,741
)
Retained earnings
154,041
137,498
Accumulated other comprehensive loss
(36,419
)
(26,918
)
Total stockholders’ equity attributable to
parent
273,945
254,887
Noncontrolling interest
76
637
Total stockholders’ equity
274,021
255,524
Total liabilities and stockholders’
equity
$
3,356,666
$
3,027,067
Net interest spread (tax-equivalent)
2.82
%
3.51
%
Net interest income and margin
(tax-equivalent)1
$
124,228
4.04
%
$
112,931
4.04
%
Less: Tax-equivalent adjustments
$
(946
)
$
(1,128
)
Net interest spread
2.79
%
3.47
%
Net interest income and margin
$
123,283
4.01
%
$
111,803
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-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 16.
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 $2.7
million and $13.6 million are included in this amount for the years
ended December 31, 2023 and December 31, 2022,
respectively.
Selected Financial Data
(Unaudited) (Dollars in thousands, except per share data)
Quarterly
Year-to-Date
2023
2023
2022
2023
2022
Fourth Quarter
Third Quarter
Fourth Quarter
Earnings and Per Share Data:
Net income
$
7,911
$
3,867
$
6,509
31,232
15,047
Earnings per share from continuing
operations - basic
$
0.62
$
0.30
$
0.47
$
1.77
$
1.01
Earnings per share from discontinued
operations - basic
$
—
$
—
$
0.05
$
0.69
$
0.22
Earnings per share - basic
$
0.62
$
0.30
$
0.52
$
2.46
$
1.23
Earnings per share from continuing
operations - diluted
$
0.61
$
0.29
$
0.45
$
1.72
$
0.96
Earnings per share from discontinued
operations - diluted
$
—
$
—
$
0.05
$
0.68
$
0.21
Earnings per share - diluted
$
0.61
$
0.29
$
0.50
$
2.40
$
1.17
Cash dividends paid per common share
$
0.17
$
0.17
$
0.17
$
0.68
$
0.68
Book value per common share
$
22.68
$
21.33
$
20.69
$
22.68
$
20.69
Tangible book value per common share 1
$
22.43
$
21.08
$
20.25
$
22.43
$
20.25
Weighted-average shares outstanding -
basic
12,740,193
12,722,010
12,604,193
12,694,206
12,279,462
Weighted-average shares outstanding -
diluted
13,024,562
13,116,629
13,012,460
12,997,332
12,870,734
Performance Ratios:
Return on average assets 2
1.0
%
0.5
%
0.8
%
0.9
%
0.5
%
Return on average equity 2
11.6
%
5.8
%
10.8
%
11.4
%
5.9
%
Net interest margin 3 4
4.06
%
3.90
%
4.57
%
4.04
%
4.04
%
Efficiency ratio 5 10
79.6
%
86.2
%
72.3
%
82.3
%
78.2
%
Overhead ratio 2 6
3.4
%
3.7
%
3.6
%
3.5
%
3.9
%
Equity to assets
8.7
%
7.9
%
8.5
%
8.7
%
8.5
%
Asset Quality Data and Ratios:
Charge-offs
$
1,868
$
8,064
$
7,878
$
18,479
$
15,183
Recoveries
$
1,343
$
2,205
$
2,507
$
9,185
$
6,560
Net loan charge-offs to total loans 2
7
0.1
%
1.0
%
0.9
%
0.4
%
0.4
%
Allowance for credit losses
$
22,124
$
24,276
$
23,837
$
22,124
$
23,837
Allowance for credit losses to total loans
8
0.95
%
1.07
%
1.00
%
0.95
%
1.00
%
Nonperforming loans
$
8,267
$
10,593
$
11,165
$
8,267
$
11,165
Nonperforming loans to total loans
0.4
%
0.5
%
0.5
%
0.4
%
0.5
%
Mortgage Company Equity Method
Investees Production Data9:
Mortgage pipeline
$
706,873
$
643,578
$
678,345
$
706,873
$
678,345
Loans originated
$
1,020,128
$
1,131,963
$
407,070
$
4,319,382
$
3,120,577
Loans closed
$
724,453
$
786,885
$
388,417
$
3,007,221
$
2,628,149
Loans sold
$
639,788
$
605,296
$
326,003
$
2,466,807
$
2,325,709
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 16.
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
Twelve Months Ended
(Dollars in thousands)
December 31,
2023
September 30,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Net interest margin - U.S. GAAP
basis
Net interest income
$
31,107
$
29,865
$
33,449
$
123,283
$
111,803
Average interest-earning assets
3,054,958
3,063,152
2,926,949
3,077,717
2,798,784
Net interest margin
4.04
%
3.87
%
4.53
%
4.01
%
3.99
%
Net interest margin - non-U.S. GAAP
basis
Net interest income
$
31,107
$
29,865
$
33,449
$
123,283
$
111,803
Impact of fully tax-equivalent
adjustment
193
221
295
946
1,128
Net interest income on a fully
tax-equivalent basis
31,299
30,086
33,744
124,228
112,931
Average interest-earning assets
3,054,958
3,063,152
2,926,949
3,077,717
2,798,784
Net interest margin on a fully
tax-equivalent basis
4.06
%
3.90
%
4.57
%
4.04
%
4.04
%
Non-U.S. GAAP Reconciliation:
Tangible Book Value per Common Share and Tangible Common Equity
Ratio (Unaudited) (Dollars in thousands, except per share
data)
December 31, 2023
September 30, 2023
December 31, 2022
Tangible Book Value per Common
Share
Goodwill
$
2,838
$
2,838
$
3,988
Intangibles
352
375
1,631
Total intangibles
$
3,190
$
3,213
$
5,619
Total equity attributable to parent
$
289,384
$
271,416
$
261,084
Less: Total intangibles
(3,190
)
(3,213
)
(5,619
)
Tangible common equity
$
286,194
$
268,203
$
255,465
Tangible common equity
$
286,194
$
268,203
$
255,465
Common shares outstanding (000s)
12,758
12,726
12,618
Tangible book value per common share
$
22.43
$
21.08
$
20.25
Tangible Common Equity Ratio
Total assets
$
3,313,882
$
3,437,583
$
3,068,850
Less: Total intangibles
(3,190
)
(3,213
)
(5,619
)
Tangible assets
$
3,310,692
$
3,434,370
$
3,063,231
Tangible assets
$
3,310,692
$
3,434,370
$
3,063,231
Tangible common equity
$
286,194
$
268,203
$
255,465
Tangible common equity ratio
8.6
%
7.8
%
8.3
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240214563423/en/
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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