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 first quarter of
2024, with reported net income of $4.5 million, or $0.35 basic and
$0.34 diluted earnings per share.
First Quarter 2024
Highlights As Compared to Fourth Quarter 2023
Total revenue increased 6.8%, or $2.4
million.
Fintech fee income grew 26.3%, or $1.0
million.
Noninterest bearing deposits increased
16.2%, or $193.8 million, and represent 44% of total
deposits.
Nonperforming loans declined 8.7%; Measures
of asset quality and capital strength were stable.
Book value per share and tangible book value
per share, a non-GAAP financial measure, each increased by
0.2% to $22.73 and $22.48, respectively.
From Larry F. Mazza, Chief Executive Officer, MVB
Financial:
“Turbulence in financial markets and the banking sector
persisted during the first quarter of 2024. Amidst these volatile
market conditions, MVB made progress on several key initiatives.
Most notably, we further solidified foundational measures of safety
and soundness. Our balance sheet liquidity position and the quality
of our funding mix improved, asset quality indicators were stable,
commercial real estate concentrations remained well within
regulatory guidelines and measures of capital strength were
maintained. We also remained proactive in investing at a
higher-than-normal pace to contend with changing regulatory
requirements following the industry events of early 2023. These
higher costs, alongside other cyclical and seasonal challenges,
weighed on our earnings for the first quarter.
“At the same time, initiatives to drive revenue growth are
bearing fruit. Banking-as-a-service fee income increased from the
prior quarter and the year-ago period, benefiting from seasonal
considerations, notably the influence of tax season, and growth in
the underlying business. Through these challenging times for the
banking sector, I’m pleased and encouraged by the adaptability of
the MVB Team and the resilience of our business model.”
FIRST QUARTER 2024 HIGHLIGHTS
- Strong core deposit growth.
- Total deposits increased 8.4%, or $243.9 million, to $3.15
billion, compared to the prior quarter-end, primarily reflecting
strong growth in noninterest bearing (“NIB”) deposits. Growth also
reflected strength in Banking-as-a-Service (“BaaS”) deposits and
increased balances due to seasonal tax volume and deposits tied to
payment relationships.
- Total off-balance sheet deposits increased to $1.53 billion as
compared to $1.09 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 16.2%, or $193.8 million, and 22.6%, or
$256.8 million, to $1.39 billion, as compared to the prior
quarter-end and the year-ago period, respectively. NIB deposit
growth relative to the prior quarter primarily reflected seasonal
tax deposits and growth in customer business volume. NIB deposits
represented 44.2% of total deposits, as compared to 41.3% of total
deposits at the prior quarter-end, and 36.0% for the year-ago
period.
- Certificate of deposit (“CD”) balances, which include brokered
deposits, increased 18.7%, or $109.5 million, to $696.3 million,
from the prior quarter-end.
- The loan-to-deposit ratio was 72.1% as of March 31, 2024,
compared to 79.9% as of December 31, 2023 and 74.9% as of March 31,
2023. The decline in the loan-to-deposit ratio reflects the
increase in deposits, primarily due to our BaaS business, combined
with a decline in loan balances driven by market conditions.
- Fintech fee income growth drove quarter and year-over-year
growth in noninterest income and total revenues.
- Payment card and service charge income, which includes BaaS fee
income, increased by 26.3% and 33.3% as compared to the prior
quarter and the year-ago period, respectively. Growth relative to
the prior quarter primarily related to increased transactional
volume due to seasonal tax deposits and expanded relationships with
our Fintech partners. Growth relative to the prior year is
primarily related to the increased transactional volume from
seasonal tax deposits year over year.
- Total noninterest income grew 76.5%, or $3.4 million, relative
to the prior quarter, to $7.8 million, primarily reflecting higher
payment card and service charge income and a decline in the loss on
equity method investments (mortgage banking). Relative to the prior
year, total noninterest income grew 155.4%, or $4.8 million,
reflecting higher payment card and service charge income and higher
other operating income.
- Total revenues increased $2.4 million, or 6.8%, and $2.2
million, or 6.1%, relative to the prior quarter and the year-ago
period, respectively. Revenue growth relative to both prior periods
reflected higher noninterest income partially offset by lower net
interest income.
- Net interest income declined on a slowdown in loan growth,
net interest margin contraction and seasonal considerations.
- Net interest income on a fully tax-equivalent basis, a non-GAAP
financial measure, declined 3.1%, or $1.0 million, to $30.3 million
relative to the prior quarter, reflecting net interest margin
contraction, partially offset by an increase in total average
earning asset balances.
- Net interest margin on a fully tax-equivalent basis, a non-GAAP
financial measure, was 3.83%, down 23 basis points from the prior
quarter, primarily reflecting higher interest rates on deposits and
elevated deposit balances driven by seasonal considerations
associated with a BaaS relationship, in addition to a decline in
average loan balances due to market conditions.
- Total cost of funds was 2.52%, up eight basis points compared
to the prior quarter, primarily reflecting an increase in balances
due to seasonal tax deposits.
- Average earning asset balances increased 4.3% from the prior
quarter, reflecting higher interest-bearing balances with banks and
higher investment securities balances, partially offset by lower
average loan balances. Average total loan balances declined 0.4%
from the prior quarter, reflecting slower market demand and
deliberate efforts to improve balance sheet liquidity.
- Measures of safety and soundness were generally stable.
- The Community Bank Leverage Ratio, Tier 1 Risk-Based Capital
Ratio and MVB Bank’s Total Risk-Based Capital Ratio were 10.1%,
14.4%, and 15.2%, respectively, compared to 10.5%, 14.4%, and
15.1%, respectively, at the prior quarter end.
- Tangible book value per share, a non-U.S. GAAP measure
discussed below, increased 0.2% to $22.48, relative to the prior
quarter-end, and increased 6.2% from the year-ago period.
- Nonperforming loans declined $0.7 million, or 8.7%, to $7.5
million, or 0.3% of total loans, from $8.3 million, or 0.4% of
total loans, at the prior quarter end. Criticized loans as a
percentage of total loans were 5.8%, as compared to 5.3% at the
prior quarter end. Net charge-offs were $1.3 million, or 0.2%, for
the first quarter of 2024, compared to $0.5 million, or 0.1%, for
the prior quarter. For the first quarter of 2024, net charge-offs
included $0.6 million related to a SBA loan secured by business
assets, $0.5 million related to the subprime consumer automotive
segment and $0.4 million related to a commercial client in the
energy industry.
- The provision for credit losses totaled $2.0 million, compared
to a release of allowance of $2.1 million for the prior quarter.
The allowance for credit losses was 1.01% of total loans, as
compared to 0.95% at the prior quarter end.
- Expenses higher due to employee compensation and continued
investment spend to enhance regulatory and compliance
infrastructure.
- Noninterest expense increased 6.7% to $30.2 million relative to
the prior quarter, primarily reflecting an increase in employee
benefits and continued elevated professional fees and other
operating costs to enhance risk management and compliance-related
infrastructure in response to changing regulatory requirements
following the industry events of March 2023.
INCOME STATEMENT
Net interest income on a tax-equivalent basis totaled $30.3
million for the first quarter of 2024, a decline of $1.0 million,
or 3.1%, from the fourth quarter of 2023 and $2.7 million, or 8.1%,
from the first quarter of 2023. The decline from both prior periods
reflects a lower net interest margin, partially offset by higher
average earning balances.
Interest income increased $0.3 million, or 0.7%, from the fourth
quarter of 2023 and increased $5.3 million, or 11.8%, from the
first quarter of 2023. Relative to the prior quarter, the slight
increase primarily reflects higher interest income from cash
balances due to seasonal considerations and increased interest
income from investment securities, mostly offset by a decline in
interest income from loans, driven by lower loan balances and a
lower tax-equivalent yield on loans. Relative to the prior year,
higher interest income reflects the cumulative impact of earning
assets booked at higher yields than the prevailing portfolio yield
in the prior period and the repricing of variable rate loans in a
higher interest rate environment.
Interest expense increased $1.3 million, or 7.0%, from the
fourth quarter of 2023 and $7.9 million, or 65.3%, from the first
quarter of 2023. The cost of funds was 2.52% for the first quarter
of 2024, up from 2.44% for the fourth quarter of 2023 and 1.59% for
the first quarter of 2023. Relative to the prior quarter, higher
interest expense primarily reflects higher interest rates on
deposits and seasonal increases in deposits due to tax season
driven by a BaaS relationship. Relative to the year-ago period, the
increase reflects the impact of higher interest rates on our
deposits.
On a tax-equivalent basis, net interest margin for the first
quarter of 2024 was 3.83%, a decline of 23 basis points versus the
fourth quarter of 2023 and 57 basis points versus the first 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-GAAP measure. Contraction in net interest margin from
the prior quarter primarily reflects an unfavorable shift in the
mix of average earning assets, including lower loan balances,
higher cash and investment securities balances with lower yields
and higher funding costs driven by the volume of deposits and
higher interest rates on deposits associated with a BaaS
relationship. Relative to the year-ago period, the contraction in
net interest margin reflects higher funding costs, which have
significantly outpaced the increase in average earning asset
yields.
Noninterest income totaled $7.8 million for the first quarter of
2024, an increase of $3.4 million from the fourth quarter of 2023
and $4.8 million from the first quarter of 2023. The increase
compared to the prior quarter is primarily driven by a decline of
$1.3 million in equity method investment losses from our mortgage
segment, an increase of $1.0 million in payment card and service
charge income and a $0.7 million in gain on sale of
available-for-sale investment securities. Additionally, the fourth
quarter of 2023 included a $0.7 million loss on derivatives without
a comparable loss in the first quarter of 2024 and a $0.3 million
gain on sale of loans without a comparable gain in the first
quarter of 2024. The $4.8 million increase in noninterest income
from the first quarter of 2023 was primarily driven by increases of
$1.2 million in payment card and service charge income and $0.6
million in other operating income. There was a gain on sale of
available-for-sale investment securities of $0.7 million during the
first quarter of 2024, as compared to a loss of $1.5 million in the
first quarter of 2023. Additionally, there was a decline in holding
loss on equity securities of $0.3 million, and the first quarter of
2023 included a $0.4 million loss on sale of loans without a
comparable loss in the first quarter of 2024.
Noninterest expense totaled $30.2 million for the first quarter
of 2024, an increase of $1.9 million, or 6.7%, from the fourth
quarter of 2023 and $1.9 million, or 6.6%, from the first quarter
of 2023. The increase from the fourth quarter of 2023 primarily
reflects an increase in salaries and employee benefits of $1.6
million, or 10.9%. The increase from the first quarter of 2023
primarily reflects an increase of $2.8 million in professional
fees, partially offset by decreases of $0.4 million in other
operating expense, $0.4 million in travel, entertainment, dues and
subscriptions and $0.3 million in salaries and employee benefit
expense.
BALANCE SHEET
Loans totaled $2.27 billion at March 31, 2024, a decline of
$50.3 million, or 2.2%, and $93.8 million, or 4.0%, as compared to
December 31, 2023 and March 31, 2023, respectively. The decline in
loan balances compared to the prior quarters primarily reflects
lower market demand, the impact of loan amortization and payoffs
and slower loan growth based on overall market conditions and
portfolio management.
Deposits totaled $3.15 billion as of March 31, 2024, an increase
of $243.9 million, or 8.4%, from December 31, 2023, and a decline
of $5.5 million, or 0.2%, from March 31, 2023. Relative to the
prior quarter, deposit growth reflected strong growth in NIB
deposits and seasonal considerations due to tax season driven by a
BaaS relationship. Relative to the year-ago period, the decline
reflects the increased utilization of off-balance sheet deposit
networks to generate fee income, enhance capital efficiency and
manage liquidity and concentration risk, partially offset by the
increase in NIB deposits.
NIB deposits totaled $1.39 billion as of March 31, 2024, an
increase of $193.8 million, or 16.2%, from December 31, 2023 and an
increase of $256.8 million, or 22.6%, from March 31, 2023. Relative
to both prior periods, growth in NIB deposits reflected growth in
customer business volume and, for the immediately preceding
quarter, seasonal considerations. NIB deposits represented 44.2% of
total deposits, compared to 41.3% of total deposits at the prior
quarter-end, and 36.0% for the year-ago period.
CAPITAL
The Community Bank Leverage Ratio was 10.1% as of March 31,
2024, compared to 10.5% as of December 31, 2023 and 10.0% as of
March 31, 2023. MVB’s Tier 1 Risk-Based Capital Ratio was 14.4% as
of March 31, 2024, compared to 14.4% as of December 31, 2023 and
13.7% as of March 31, 2023. The Bank’s Total Risk-Based Capital
Ratio was 16.04% as of March 31, 2024, compared to 15.1% as of
December 31, 2023 and 14.9% as of March 31, 2023.
The tangible common equity ratio, a non-GAAP financial measure,
was 8.1% as of March 31, 2024, compared to 8.6% as of December 31,
2023 and 7.5% as of as of March 31, 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 first quarter of 2024, consistent with the fourth quarter
of 2023 and the first quarter of 2023.
ASSET QUALITY
Nonperforming loans totaled $7.5 million, or 0.3% of total
loans, as of March 31, 2024, as compared to $8.3 million, or 0.4%
of total loans, as of December 31, 2023, and $13.1 million, or 0.6%
of total loans, as of March 31, 2023. Criticized loans as a
percentage of total loans were 5.8%, compared to 5.3% as of
December 31, 2023 and 3.6% as of March 31, 2023.
Net charge-offs were $1.3 million, or 0.2% of total loans, for
the first quarter of 2024, compared to $0.5 million, or 0.1% of
total loans, for the fourth quarter of 2023 and $1.7 million, or
0.3% of total loans, for the first quarter of 2023.
The provision for credit losses totaled $2.0 million compared to
a $2.1 million release of allowance for the prior quarter ended
December 31, 2023, and provision of $4.6 million for the quarter
ended March 31, 2023. The allowance for credit losses was 1.01% of
total loans at March 31, 2024, as compared to 0.95% at December 31,
2023 and 1.50% at March 31, 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 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
2024
2023
2023
First Quarter
Fourth Quarter
First Quarter
Interest income
$
50,030
$
49,699
$
44,763
Interest expense
19,891
18,592
12,034
Net interest income
30,139
31,107
32,729
Provision (release of allowance) for
credit losses
1,997
(2,103
)
4,576
Net interest income after provision
(release of allowance) for credit losses
28,142
33,210
28,153
Total noninterest income
7,834
4,438
3,067
Noninterest expense:
Salaries and employee benefits
16,489
14,863
16,746
Other expense
13,702
13,438
11,571
Total noninterest expenses
30,191
28,301
28,317
Income before income taxes
5,785
9,347
2,903
Income taxes
1,283
1,431
465
Net income from continuing operations,
before noncontrolling interest
4,502
7,916
2,438
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
4,502
7,916
11,220
Net (income) loss attributable to
noncontrolling interest
(20
)
(5
)
122
Net income available to common
shareholders
$
4,482
$
7,911
$
11,342
Earnings per share from continuing
operations - basic
$
0.35
$
0.62
$
0.20
Earnings per share from discontinued
operations - basic
$
—
$
—
$
0.70
Earnings per share - basic
$
0.35
$
0.62
$
0.90
Earnings per share from continuing
operations - diluted
$
0.34
$
0.61
$
0.20
Earnings per share from discontinued
operations - diluted
$
—
$
—
$
0.67
Earnings per share - diluted
$
0.34
$
0.61
$
0.87
Noninterest Income
(Unaudited) (Dollars in
thousands)
Quarterly
2024
2023
2023
First Quarter
Fourth Quarter
First Quarter
Card acquiring income
$
251
$
1,348
$
622
Service charges on deposits
1,523
174
1,126
Interchange income
3,039
2,289
1,862
Total payment card and service charge
income
4,813
3,811
3,610
Equity method investments loss
(1,128
)
(2,429
)
(1,193
)
Compliance and consulting income
1,000
986
1,016
Gain (loss) on sale of loans
—
271
(356
)
Investment portfolio gains (losses)
609
75
(1,844
)
Other noninterest income
2,540
1,724
1,834
Total noninterest income
$
7,834
$
4,438
$
3,067
Condensed Consolidated Balance
Sheets
(Unaudited) (Dollars in
thousands)
March 31, 2024
December 31, 2023
March 31, 2023
Cash and cash equivalents
$
640,426
$
398,229
$
575,265
Securities available-for-sale, at fair
value
349,678
345,275
339,578
Equity securities
41,037
41,086
38,576
Loans held-for-sale
—
629
19,893
Loans receivable
2,267,310
2,317,594
2,361,153
Less: Allowance for credit losses
(22,804
)
(22,124
)
(35,513
)
Loans receivable, net
2,244,506
2,295,470
2,325,640
Premises and equipment, net
19,968
20,928
22,869
Goodwill
—
—
—
Other assets
251,775
212,265
230,055
Total assets
$
3,547,390
$
3,313,882
$
3,551,876
Noninterest-bearing deposits
$
1,391,070
$
1,197,272
$
1,134,257
Interest-bearing deposits
1,754,259
1,704,204
2,016,558
Senior term loan
6,549
6,786
9,647
Subordinated debt
73,602
73,540
73,350
Other liabilities
30,082
42,738
46,748
Stockholders' equity
291,828
289,342
271,316
Total liabilities and stockholders'
equity
$
3,547,390
$
3,313,882
$
3,551,876
Reportable Segments
(Unaudited)
Three Months Ended March 31,
2024
CoRe Banking
Mortgage Banking
Financial Holding
Company
Other
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
49,942
$
103
$
2
$
—
$
(17
)
$
50,030
Interest expense
18,927
—
959
22
(17
)
19,891
Net interest income (expense)
31,015
103
(957
)
(22
)
—
30,139
Provision for credit losses
1,997
—
—
—
—
1,997
Net interest income (expense) after
provision for credit losses
29,018
103
(957
)
(22
)
—
28,142
Noninterest income
7,521
(1,129
)
2,265
3,264
(4,087
)
7,834
Noninterest Expenses:
Salaries and employee benefits
9,823
—
4,678
1,988
—
16,489
Other expenses
13,821
—
1,841
2,127
(4,087
)
13,702
Total noninterest expenses
23,644
—
6,519
4,115
(4,087
)
30,191
Income (loss), before income taxes
12,895
(1,026
)
(5,211
)
(873
)
—
5,785
Income taxes
2,878
(229
)
(1,157
)
(209
)
—
1,283
Net income (loss), before noncontrolling
interest
10,017
(797
)
(4,054
)
(664
)
—
4,502
Net income attributable to noncontrolling
interest
—
—
—
(20
)
—
(20
)
Net income (loss) available to common
shareholders
$
10,017
$
(797
)
$
(4,054
)
$
(684
)
$
—
$
4,482
Three Months Ended December 31,
2023
CoRe Banking
Mortgage Banking
Financial Holding
Company
Other
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
49,639
$
103
$
3
$
—
$
(46
)
$
49,699
Interest expense
17,573
—
993
72
(46
)
18,592
Net interest income (expense)
32,066
103
(990
)
(72
)
—
31,107
Provision for credit losses
(2,103
)
—
—
—
—
(2,103
)
Net interest income (expense) after
provision for credit losses
34,169
103
(990
)
(72
)
—
33,210
Noninterest income
5,175
(2,430
)
2,351
3,204
(3,862
)
4,438
Noninterest Expenses:
Salaries and employee benefits
9,374
—
3,339
2,150
—
14,863
Other expenses
13,318
—
2,161
1,821
(3,862
)
13,438
Total noninterest expenses
22,692
—
5,500
3,971
(3,862
)
28,301
Income (loss) before income taxes
16,652
(2,327
)
(4,139
)
(839
)
—
9,347
Income taxes
3,962
(543
)
(1,796
)
(192
)
—
1,431
Net income (loss), before noncontrolling
interest
12,690
(1,784
)
(2,343
)
(647
)
—
7,916
Net income attributable to noncontrolling
interest
—
—
—
(5
)
—
(5
)
Net income (loss) available to common
shareholders
$
12,690
$
(1,784
)
$
(2,343
)
$
(652
)
$
—
$
7,911
Three Months Ended March 31,
2023
CoRe Banking
Mortgage Banking
Financial Holding
Company
Other
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
44,662
$
105
$
33
$
(6
)
$
(31
)
$
44,763
Interest expense
11,041
—
993
31
(31
)
12,034
Net interest income (expense)
33,621
105
(960
)
(37
)
—
32,729
Provision for credit losses
4,576
—
—
—
—
4,576
Net interest income (expense) after
provision for credit losses
29,045
105
(960
)
(37
)
—
28,153
Noninterest income
3,018
(1,186
)
2,410
1,784
(2,959
)
3,067
Noninterest Expenses:
Salaries and employee benefits
9,051
—
4,950
2,745
—
16,746
Other expenses
11,054
34
1,917
1,525
(2,959
)
11,571
Total noninterest expenses
20,105
34
6,867
4,270
(2,959
)
28,317
Income (loss), before income taxes
11,958
(1,115
)
(5,417
)
(2,523
)
—
2,903
Income taxes
2,515
(504
)
(942
)
(604
)
—
465
Net income (loss) from continuing
operations
9,443
(611
)
(4,475
)
(1,919
)
—
2,438
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
9,443
(611
)
(4,475
)
6,863
—
11,220
Net loss attributable to noncontrolling
interest
—
—
—
122
—
122
Net income (loss) available to common
shareholders
$
9,443
$
(611
)
$
(4,475
)
$
6,985
$
—
$
11,342
Average Balances and Interest
Rates
(Unaudited) (Dollars in
thousands)
Three Months Ended
Three Months Ended
Three Months Ended
March 31, 2024
December 31, 2023
March 31, 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
$
549,894
$
7,341
5.37
%
$
442,521
$
5,944
5.33
%
$
285,102
$
3153
4.49
%
Investment securities:
Taxable
246,091
1,743
2.85
222,303
1,444
2.58
236,574
1,848
3.17
Tax-exempt 1
106,309
887
3.36
98,464
876
3.53
137,799
1,308
3.85
Loans and loans held-for-sale: 2
Commercial
1,626,286
32,152
7.95
1,635,510
33,665
8.17
1,620,509
28,538
7.14
Tax-exempt 1
3,373
37
4.41
3,492
38
4.32
3,944
43
4.42
Real estate
576,148
6,612
4.62
576,580
6,421
4.42
621,388
6,295
4.11
Consumer
77,300
1,452
7.55
76,088
1,503
7.84
137,547
3,862
11.39
Total loans
2,283,107
40,253
7.09
2,291,670
41,627
7.21
2,383,388
38,738
6.59
Total earning assets
3,185,401
50,224
6.34
3,054,958
49,891
6.48
3,042,863
45,047
6.00
Less: Allowance for credit losses
(22,258
)
(24,079
)
(30,135
)
Cash and due from banks
5,405
5,771
243
Other assets
335,029
292,574
339,676
Total assets
$
3,503,577
$
3,329,224
$
3,352,647
Liabilities
Deposits:
NOW
$
555,530
$
4,929
3.57
%
$
637,144
$
5,386
3.35
%
$
796,901
$
4,661
2.37
%
Money market checking
408,764
3,759
3.70
650,925
3,691
2.25
209,227
928
1.80
Savings
163,611
1,640
4.03
70,146
442
2.50
93,297
641
2.79
IRAs
7,762
74
3.83
7,296
66
3.59
6,151
27
1.78
CDs
674,611
8,529
5.08
590,517
8,014
5.38
386,144
3,896
4.09
Repurchase agreements and federal funds
sold
2,951
—
—
4,736
—
—
7,612
1
0.05
FHLB and other borrowings
44
1
9.14
11
—
—
71,166
888
5.06
Senior term loan
6,736
150
8.96
8,183
183
8.87
9,765
194
8.06
Subordinated debt
73,571
809
4.42
73,510
810
4.37
73,318
798
4.41
Total interest-bearing liabilities
1,893,580
19,891
4.22
2,042,468
18,592
3.61
1,653,581
12,034
2.95
Noninterest-bearing demand deposits
1,279,194
975,122
1,380,516
Other liabilities
42,017
39,410
37,087
Total liabilities
3,214,791
3,057,000
3,071,184
Stockholders’ equity
Common stock
13,659
13,588
13,471
Paid-in capital
161,532
160,106
153,389
Treasury stock
(16,741
)
(16,741
)
(16,741
)
Retained earnings
160,933
156,004
166,426
Accumulated other comprehensive loss
(30,559
)
(40,688
)
(35,345
)
Total stockholders’ equity attributable to
parent
288,824
272,269
281,200
Noncontrolling interest
(38
)
(45
)
263
Total stockholders’ equity
288,786
272,224
281,463
Total liabilities and stockholders’
equity
$
3,503,577
$
3,329,224
$
3,352,647
Net interest spread (tax-equivalent)
2.12
%
2.87
%
3.05
%
Net interest income and margin
(tax-equivalent)1
$
30,333
3.83
%
$
31,299
4.06
%
$
33,013
4.40
%
Less: Tax-equivalent adjustments
$
(194
)
$
(193
)
$
(284
)
Net interest spread
2.10
%
2.84
%
3.02
%
Net interest income and margin
$
30,139
3.81
%
$
31,107
4.04
%
$
32,729
4.36
%
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-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 17.
2 Non-accrual loans are included in total
loan balances, lowering the effective yield for the portfolio in
the aggregate.
Selected Financial
Data
(Unaudited) (Dollars in
thousands, except per share data)
Quarterly
2024
2023
2023
First Quarter
Fourth Quarter
First Quarter
Earnings and Per Share Data:
Net income
$
4,482
$
7,911
$
11,342
Earnings per share from continuing
operations - basic
$
0.35
$
0.62
$
0.20
Earnings per share from discontinued
operations - basic
$
—
$
—
$
0.70
Earnings per share - basic
$
0.35
$
0.62
$
0.90
Earnings per share from continuing
operations - diluted
$
0.34
$
0.61
$
0.20
Earnings per share from discontinued
operations - diluted
$
—
$
—
$
0.67
Earnings per share - diluted
$
0.34
$
0.61
$
0.87
Cash dividends paid per common share
$
0.17
$
0.17
$
0.17
Book value per common share
$
22.73
$
22.68
$
21.43
Tangible book value per common share 1
$
22.48
$
22.43
$
21.17
Weighted-average shares outstanding -
basic
12,810,956
12,740,193
12,623,361
Weighted-average shares outstanding -
diluted
13,119,292
13,024,562
13,016,082
Performance Ratios:
Return on average assets 2
0.5
%
1.0
%
1.4
%
Return on average equity 2
6.2
%
11.6
%
16.1
%
Net interest margin 3 4
3.83
%
4.06
%
4.40
%
Efficiency ratio 5
79.5
%
79.6
%
61.4
%
Overhead ratio 2 6
3.4
%
3.4
%
3.4
%
Equity to assets
8.2
%
8.7
%
7.6
%
Asset Quality Data and Ratios:
Charge-offs
$
2,150
$
1,868
$
4,847
Recoveries
$
835
$
1,343
$
3,169
Net loan charge-offs to total loans 2
7
0.2
%
0.1
%
0.3
%
Allowance for credit losses
$
22,804
$
22,124
$
35,513
Allowance for credit losses to total loans
8
1.01
%
0.95
%
1.50
%
Nonperforming loans
$
7,546
$
8,267
$
13,085
Nonperforming loans to total loans
0.3
%
0.4
%
0.6
%
Mortgage Company Equity Method
Investees Production Data9:
Mortgage pipeline
$
790,771
$
706,873
$
714,258
Loans originated
$
1,050,089
$
1,020,128
$
232,660
Loans closed
$
653,306
$
724,453
$
385,011
Loans sold
$
916,115
$
639,788
$
302,782
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 17.
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.
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
(Dollars in thousands)
March 31, 2024
December 31, 2023
March 31, 2023
Net interest margin - U.S. GAAP
basis
Net interest income
$
30,139
$
31,107
$
32,729
Average interest-earning assets
$
3,185,401
$
3,054,958
$
3,042,863
Net interest margin
3.81
%
4.04
%
4.36
%
Net interest margin - non-U.S. GAAP
basis
Net interest income
$
30,139
$
31,107
$
32,729
Impact of fully tax-equivalent
adjustment
194
193
284
Net interest income on a fully
tax-equivalent basis
$
30,333
$
31,299
$
33,013
Average interest-earning assets
$
3,185,401
$
3,054,958
$
3,042,863
Net interest margin on a fully
tax-equivalent basis
3.83
%
4.06
%
4.40
%
Non-U.S. GAAP Reconciliation:
Tangible Book Value per Common Share and Tangible Common Equity
Ratio
(Unaudited) (Dollars in
thousands, except per share data)
March 31, 2024
December 31, 2023
March 31, 2023
Tangible Book Value per Common
Share
Goodwill
$
2,838
$
2,838
$
2,838
Intangibles
330
352
420
Total intangibles
$
3,168
3,190
3,258
Total equity attributable to parent
$
291,850
289,384
271,131
Less: Total intangibles
(3,168
)
(3,190
)
(3,258
)
Tangible common equity
$
288,682
$
286,194
$
267,873
Tangible common equity
$
288,682
$
286,194
$
267,873
Common shares outstanding (000s)
12,841
12,758
12,653
Tangible book value per common share
$
22.48
$
22.43
$
21.17
Tangible Common Equity Ratio
Total assets
$
3,547,390
$
3,313,882
$
3,551,876
Less: Total intangibles
(3,168
)
(3,190
)
(3,258
)
Tangible assets
$
3,544,222
$
3,310,692
$
3,548,618
Tangible assets
$
3,544,222
$
3,310,692
$
3,548,618
Tangible common equity
$
288,682
$
286,194
$
267,873
Tangible common equity ratio
8.1
%
8.6
%
7.5
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240429858018/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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