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 second quarter of
2024, with reported net income of $4.1 million, or $0.32 basic and
$0.31 diluted earnings per share.
Second Quarter 2024
Highlights
MVB names payments industry veteran Jeremy
Kuiper as Fintech President.
MVB and Intuit-Credit Karma renew
partnership agreement.
Exit of digital asset program account
relationships during second quarter reduced EPS by $0.08 with
strong funding and liquidity profile maintained.
Noninterest bearing deposits represent 34.1%
of total deposits | Loan-to-deposit ratio of 76.5%.
Noninterest expense declined 4.2% from prior
quarter on easing cost pressures.
From Larry F. Mazza, Chief Executive Officer, MVB
Financial:
“There were several notable developments during the second
quarter that impacted our near-term financial results, while also
helping to solidify our strategy, setting the stage for future
growth and improved profitability.
“First, we have extended the term of our partnership agreement
with Intuit-Credit Karma, the consumer technology platform with
more than 120 million members in the U.S. We have been trusted
partners for five years and look forward to further strengthening
our relationship to benefit our clients and communities.
“Second, as previously disclosed, MVB Bank has named Jeremy
Kuiper as Executive Vice President, Fintech President. Jeremy
brings 25 years of payments industry experience at the executive
and board level. With Jeremy’s expertise, we look forward to
expanding our Fintech banking to even greater success as a key
driver of deposits and fee income for MVB Bank.
“Finally, we initiated the process of winding down MVB’s digital
asset program account relationships. Changing market conditions and
profitability challenges contributed to an unfavorable risk/reward
dynamic, prompting our decision to exit this business. This action
reduced our second quarter EPS by $0.08.
“MVB’s second quarter financial results were otherwise solid,
marked by improved expense control, shareholder value creation in
the form of tangible book value per share growth, improved measures
of capital strength and seasonal considerations, primarily related
to MVB’s banking-as-a-service operations and online gaming
vertical. We are pleased with the strength of our liquidity,
despite the low seasonality and exit of digital asset program
account relationships.”
SECOND QUARTER 2024 HIGHLIGHTS
- Deposit trends reflect wind down of digital asset program
account relationships and expected seasonal factors.
- The Company expected a decline in total deposits upon the
conclusion of the NFL, college basketball and tax seasons, in
addition to electing to exit digital asset program account
relationships. Total deposits declined 8.3%, or $262.5 million, to
$2.9 billion compared to the prior quarter-end, primarily
reflecting lower noninterest bearing (“NIB”) deposits, which
decreased 29.3%, or $407.3 million, to $983.8 million. Digital
asset program account balances, which are noninterest bearing,
declined $307.0 million to $28.1 million as compared to the prior
quarter-end.
- The loan-to-deposit ratio was 76.5% as of June 30, 2024,
compared to 72.1% as of March 31, 2024, and 78.1% as of June 30,
2023. The loan-to-deposit ratio at June 30, 2024 aligns with the
Company’s liquidity management strategy.
- Net interest income lower on margin compression, deliberate
balance sheet contraction, decline in loan balances and seasonal
factors.
- Net interest income on a fully tax-equivalent basis, a non-U.S.
GAAP financial measure, declined 8.6%, or $2.6 million, to $27.7
million relative to the prior quarter, reflecting net interest
margin contraction and lower earning asset balances.
- Net interest margin on a fully tax-equivalent basis was 3.75%,
down eight basis points from the prior quarter, primarily
reflecting lower loan yields due to the migration of a $14.6
million loan to nonperforming status, lower loan balances and
slightly higher funding costs. Total cost of funds was 2.54%, up
two basis points compared to the prior quarter.
- Average earning asset balances declined 6.7% from the prior
quarter, reflecting lower interest-bearing balances with banks and
lower loan balances. The decline in cash balances primarily
reflects the deliberate exiting of digital asset program account
balances and, to a lesser extent, seasonal considerations related
to tax and gaming deposits. Average total loan balances declined
2.0% from the prior quarter, reflecting slower market demand.
- Expenses decline as cost pressures ease.
- Noninterest expense declined 4.2% to $28.9 million relative to
the prior quarter, primarily reflecting lower salaries and employee
benefits costs and lower professional fees. Relative to the prior
year-ago period, noninterest expense declined 4.5%.
- Noninterest income down on seasonal considerations and the
exit of digital asset program relationships; mortgage banking
profitable.
- Total noninterest income declined 8.8%, or $0.7 million,
relative to the prior quarter, to $7.1 million, primarily
reflecting lower payment card and service charge income and other
operating income, which includes wire transfer fees. The declines
were partially offset by equity method investment income from our
mortgage segment, compared to a loss in the prior quarter, and
higher compliance and consulting income. Relative to the prior
year, which removes the seasonal component, total noninterest
income grew 11.3%, or $0.7 million, reflecting higher payment card
and service charge income, compliance and consulting income,
combined with losses on divestiture activity, loan sales and the
sale of equity securities that did not recur in the current
quarter.
- Capital strength further enhanced; tangible book value share
growth evidences continued value creation.
- The Community Bank Leverage Ratio, Tier 1 Risk-Based Capital
Ratio and MVB Bank’s Total Risk-Based Capital Ratio were 10.7%,
14.6% and 15.4%, respectively, compared to 10.1%, 14.4% and 15.2%,
respectively, at the prior quarter end. The tangible common equity
ratio, a non-U.S. GAAP financial measure, was 8.9% as of June 30,
2024, compared to 8.1% as of March 31, 2024, and June 30,
2023.
- Book value per share and tangible book value per share, a
non-U.S. GAAP measure discussed below, were $22.94 and $22.70,
respectively, increases of 0.9% and 1.0% relative to the prior
quarter-end and 6.4% and 6.5% from the year-ago period.
- Nonperforming loans increased $15.6 million, or 206.1%, to
$23.1 million, or 1.0% of total loans, from $7.5 million, or 0.3%
of total loans, at the prior quarter end, largely reflecting the
addition of a multifamily commercial construction loan with an
outstanding balance of $14.6 million. Criticized loans as a
percentage of total loans were 5.7%, as compared to 5.8% at the
prior quarter end. Net charge-offs were $0.9 million, or 0.2%, for
the second quarter of 2024, compared to $1.3 million, or 0.2%, for
the prior quarter.
- The provision for credit losses totaled $0.3 million, compared
to $2.0 million for the prior quarter. The allowance for credit
losses was 1.00% of total loans, as compared to 1.01% at the prior
quarter end.
INCOME STATEMENT
Net interest income on a tax-equivalent basis totaled $27.7
million for the second quarter of 2024, a decline of $2.6 million,
or 8.6%, from the first quarter of 2024 and $2.1 million, or 7.1%,
from the second quarter of 2023. The decline from both prior
periods reflects net interest margin contraction and lower average
earning asset balances.
Interest income declined $3.9 million, or 7.8%, from the first
quarter of 2024 and $0.9 million, or 1.9%, from the second quarter
of 2023. The decline in interest income relative to the prior
quarter reflects a decline in interest income from loans, driven by
lower loan balances and a lower tax-equivalent yield on loans due
primarily to the migration of a $14.6 million loan to nonperforming
status, and a decline in interest income from cash balances due to
seasonal considerations and the exit of digital asset program
accounts. The decline in interest income relative to the year-ago
period reflects a decline in interest income from loans, driven by
lower loan balances, partially offset by a higher tax-equivalent
yield on loans.
Interest expense declined $1.3 million, or 6.7%, from the first
quarter of 2024 and increased $1.1 million, or 6.3%, from the
second quarter of 2024. The cost of funds remained stable at 2.54%
for the second quarter of 2024 as compared to 2.52% for the first
quarter of 2024, and was up from 2.26% for the second quarter of
2023. Relative to the year-ago period, the increase reflects the
impact of higher interest rates on our deposits and a shift in the
mix of average deposits.
On a tax-equivalent basis, net interest margin for the second
quarter of 2024 was 3.75%, a decline of eight basis points versus
the first quarter of 2024 and five basis points versus the second
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. Contraction in net
interest margin from the prior quarter primarily reflects lower
earning asset balances, including lower cash and loan balances, and
the migration of a loan to nonperforming status. Relative to the
year-ago period, the contraction in net interest margin reflects
higher funding costs, which have outpaced the increase in average
earning asset yields, and lower earning asset balances.
Noninterest income totaled $7.1 million for the second quarter
of 2024, a decline of $0.7 million from the first quarter of 2024
and an increase of $0.7 million from the second quarter of 2023.
The decline compared to the prior quarter is primarily driven by
declines of $1.1 million in other operating income and $1.0 million
in payment card and service charge income, partially offset by
equity method investment income from our mortgage segment of $0.5
million in the current quarter, as compared to a loss of $1.1
million in the prior quarter. There was also a $0.7 million gain on
sale of available-for-sale investment securities during the first
quarter of 2024 without a comparable gain in the second quarter of
2024. The $0.7 million increase in noninterest income from the
second quarter of 2023 was primarily driven by increases of $0.3
million in payment card and service charge income and $0.3 million
in compliance consulting income. Additionally, there were losses on
the divestiture of Flexia Payments, LLC of $1.1 million and $1.0
million on sale of loans during the second quarter of 2023 without
corresponding losses in the current quarter. These increases were
partially offset by declines of $1.4 million in equity method
investment income from our mortgage segment and $0.7 million in
other operating income.
Noninterest expense totaled $28.9 million for the second quarter
of 2024, a decline of $1.3 million, or 4.2%, from the first quarter
of 2024 and $1.4 million, or 4.5%, from the second quarter of 2023.
The decline from the first quarter of 2024 primarily reflects
declines of $0.5 million in salaries and employee benefits, $0.5
million in professional fees and $0.2 million in other operating
expense. The decline from the second quarter of 2023 primarily
reflects declines of $1.9 million in other operating expense, $0.7
million in travel, entertainment, dues and subscriptions and $0.2
million in equipment depreciation and maintenance. These declines
were partially offset by increases of $1.2 million in professional
fees and $0.2 million in salaries and employee benefit expense.
BALANCE SHEET
Loans totaled $2.21 billion as of June 30, 2024, a decline of
$60.5 million, or 2.7%, from March 31, 2024, and $105.6 million, or
4.6%, from June 30, 2023. The decline in loan balances relative 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 $2.88 billion as of June 30, 2024, a decline of
$262.5 million, or 8.3%, from March 31, 2024, and $76.1 million, or
2.6%, from June 30, 2023. The decline in deposits relative to the
prior quarter reflects a decline in NIB deposits, partially offset
by higher CD balances of $769.8 million, representing an increase
of $73.5 million, or 10.6%, driven by a $50.1 million, or 11.2%,
increase in brokered CDs and a $24.1 million, or 10.1%, increase in
core CDs. 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.
NIB deposits totaled $983.8 million as of June 30, 2024, a
decline of $407.3 million, or 29.3%, from March 31, 2024, and
consistent with the balance as of June 30, 2023, representing a
slight decline of $3.7 million, or 0.4%. Relative to the period
ended March 31, 2024, the decline in NIB deposits reflected the
exit of digital asset program accounts, utilization of off-balance
sheet deposit networks and seasonal considerations. Digital asset
program account balances declined $307.0 million to $28.1 million
as compared to the prior quarter-end. The Company estimates that
exit of digital asset program account relationships reduced current
quarter earnings per share by $0.08, based on the interest income
that would have been earned on the average balance of the deposits
held in 2024 prior to the exit, which were held in cash, and the
wire fee income during the period. NIB deposits represented 34.1%
of total deposits as of June 30, 2024, compared to 44.2% of total
deposits at the prior quarter-end and 33.4% for the year-ago
period.
Off-balance sheet deposits totaled $1.4 billion as of June 30,
2024, a decline of $168.5 million, or 11%, compared to $1.5 billion
at March 31, 2024, and up $296.2 million, or 28%, from $1.1 billion
at June 30, 2023. 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 10.7% as of June 30, 2024,
compared to 10.1% as of March 31, 2024, and 10.0% as of June 30,
2023. MVB’s Tier 1 Risk-Based Capital Ratio was 14.6% as of June
30, 2024, compared to 14.4% as of March 31, 2024, and 13.8% as of
June 30, 2023. The Bank’s Total Risk-Based Capital Ratio was 15.4%
as of June 30, 2024, compared to 15.2% as of March 31, 2024, and
14.9% as of June 30, 2023.
The tangible common equity ratio, a non-U.S. GAAP financial
measure, was 8.9% as of June 30, 2024, compared to 8.1% as of March
31, 2024, and June 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 second quarter of 2024, consistent with the first quarter
of 2024 and the second quarter of 2023.
ASSET QUALITY
Nonperforming loans totaled $23.1 million, or 1.0% of total
loans, as of June 30, 2024, as compared to $7.5 million, or 0.3% of
total loans, as of March 31, 2024, and $13.6 million, or 0.6% of
total loans, as of June 30, 2023. The increase in nonperforming
loans from the prior quarters was driven by the addition of one
$14.6 million commercial construction loan in the multifamily
space. 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%, compared to 5.8% as of March
31, 2024, and 3.1% as of June 30, 2023.
Net charge-offs were $0.9 million, or 0.2% of total loans, for
the second quarter of 2024, compared to $1.3 million, or 0.2% of
total loans, for the first quarter of 2024 and $1.2 million, or
0.2% of total loans, for the second quarter of 2023.
The provision for credit losses totaled $0.3 million, compared
to $2.0 million for the prior quarter ended March 31, 2024, and a
release of allowance of $4.2 million for the quarter ended June 30,
2023. The allowance for credit losses was 1.00% of total loans at
June 30, 2024, compared to 1.01% at March 31, 2024, and 1.31% at
June 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 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; 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.
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
Second Quarter
First Quarter
Second Quarter
Interest income
$
46,127
$
50,030
$
47,031
$
96,157
$
91,794
Interest expense
18,557
19,891
17,449
38,448
29,483
Net interest income
27,570
30,139
29,582
57,709
62,311
Provision (release of allowance) for
credit losses
254
1,997
(4,235
)
2,251
341
Net interest income after provision
(release of allowance) for credit losses
27,316
28,142
33,817
55,458
61,970
Total noninterest income
7,142
7,834
6,419
14,976
9,486
Noninterest expense:
Salaries and employee benefits
15,949
16,489
15,746
32,438
32,492
Other expense
12,981
13,702
14,536
26,683
26,107
Total noninterest expenses
28,930
30,191
30,282
59,121
58,599
Income before income taxes
5,528
5,785
9,954
11,313
12,857
Income taxes
1,379
1,283
1,956
2,662
2,421
Net income from continuing operations,
before noncontrolling interest
4,149
4,502
7,998
8,651
10,436
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
4,149
4,502
7,998
8,651
19,218
Net (income) loss attributable to
noncontrolling interest
(60
)
(20
)
114
(80
)
236
Net income available to common
shareholders
$
4,089
$
4,482
$
8,112
$
8,571
$
19,454
Earnings per share from continuing
operations - basic
$
0.32
$
0.35
$
0.64
$
0.67
$
0.84
Earnings per share from discontinued
operations - basic
$
—
$
—
$
—
$
—
$
0.69
Earnings per share - basic
$
0.32
$
0.35
$
0.64
$
0.67
$
1.54
Earnings per share from continuing
operations - diluted
$
0.31
$
0.34
$
0.63
$
0.66
$
0.82
Earnings per share from discontinued
operations - diluted
$
—
$
—
$
—
$
—
$
0.68
Earnings per share - diluted
$
0.31
$
0.34
$
0.63
$
0.66
$
1.50
Noninterest Income
(Unaudited) (Dollars in
thousands)
Quarterly
Year-to-Date
2024
2024
2023
2024
2023
Second Quarter
First Quarter
Second Quarter
Card acquiring income
$
337
$
251
$
788
$
588
$
1,410
Service charges on deposits
1,103
1,523
1,060
2,626
2,186
Interchange income
2,377
3,039
1,655
5,416
3,517
Total payment card and service charge
income
3,817
4,813
3,503
8,630
7,113
Equity method investments gain (loss)
484
(1,128
)
1,873
(644
)
680
Compliance and consulting income
1,274
1,000
996
2,274
2,012
Loss on sale of loans
—
—
(989
)
—
(1,345
)
Investment portfolio gains (losses)
117
609
(134
)
726
(1,978
)
Loss on acquisition and divestiture
activity
—
—
(986
)
—
(986
)
Other noninterest income
1,450
2,540
2,156
3,990
3,990
Total noninterest income
$
7,142
$
7,834
$
6,419
$
14,976
$
9,486
Condensed Consolidated Balance
Sheets
(Unaudited) (Dollars in
thousands)
June 30, 2024
March 31, 2024
June 30, 2023
Cash and cash equivalents
$
455,517
$
640,426
$
455,835
Securities available-for-sale, at fair
value
361,254
349,678
329,137
Equity securities
41,261
41,037
41,082
Loans held-for-sale
—
—
7,009
Loans receivable
2,206,793
2,267,310
2,312,387
Less: Allowance for credit losses
(22,084
)
(22,804
)
(30,294
)
Loans receivable, net
2,184,709
2,244,506
2,282,093
Premises and equipment, net
19,540
19,968
22,407
Other assets
225,723
251,775
214,284
Total assets
$
3,288,004
$
3,547,390
$
3,351,847
Noninterest-bearing deposits
$
983,809
$
1,391,070
$
987,555
Interest-bearing deposits
1,899,043
1,754,259
1,971,384
Senior term loan
—
6,549
8,835
Subordinated debt
73,663
73,602
73,414
Other liabilities
34,826
30,082
36,362
Stockholders' equity
296,663
291,828
274,297
Total liabilities and stockholders'
equity
$
3,288,004
$
3,547,390
$
3,351,847
Reportable Segments
(Unaudited)
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 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
—
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 June 30,
2023
CoRe Banking
Mortgage Banking
Financial Holding
Company
Other
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
46,929
$
105
$
3
$
6
$
(12
)
$
47,031
Interest expense
16,439
—
999
23
(12
)
17,449
Net interest income (expense)
30,490
105
(996
)
(17
)
—
29,582
Release of allowance for credit losses
(4,235
)
—
—
—
—
(4,235
)
Net interest income (expense) after
release of allowance for credit losses
34,725
105
(996
)
(17
)
—
33,817
Noninterest income
4,113
1,872
3,116
1,051
(3,733
)
6,419
Noninterest Expenses:
Salaries and employee benefits
9,053
7
4,623
2,063
—
15,746
Other expenses
14,148
18
2,163
1,940
(3,733
)
14,536
Total noninterest expenses
23,201
25
6,786
4,003
(3,733
)
30,282
Income (loss), before income taxes
15,637
1,952
(4,666
)
(2,969
)
—
9,954
Income taxes
3,237
643
(1,207
)
(717
)
—
1,956
Net income (loss), before noncontrolling
interest
12,400
1,309
(3,459
)
(2,252
)
—
7,998
Net income attributable to noncontrolling
interest
—
—
—
114
—
114
Net income (loss) available to common
shareholders
$
12,400
$
1,309
$
(3,459
)
$
(2,138
)
$
—
$
8,112
Six Months Ended June 30, 2024
CoRe Banking
Mortgage Banking
Financial Holding
Company
Other
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
95,980
$
206
$
5
$
—
$
(34
)
$
96,157
Interest expense
36,562
—
1,881
39
(34
)
38,448
Net interest income (expense)
59,418
206
(1,876
)
(39
)
—
57,709
Provision for credit losses
2,251
—
—
—
—
2,251
Net interest income (expense) after
provision for credit losses
57,167
206
(1,876
)
(39
)
—
55,458
Noninterest income
12,419
(644
)
5,034
6,392
(8,225
)
14,976
Noninterest Expenses:
Salaries and employee benefits
19,182
—
9,151
4,105
—
32,438
Other expenses
27,078
—
3,921
3,909
(8,225
)
26,683
Total noninterest expenses
46,260
—
13,072
8,014
(8,225
)
59,121
Income (loss), before income taxes
23,326
(438
)
(9,914
)
(1,661
)
—
11,313
Income taxes
5,316
(84
)
(2,173
)
(397
)
—
2,662
Net income (loss), before noncontrolling
interest
18,010
(354
)
(7,741
)
(1,264
)
—
8,651
Net income attributable to noncontrolling
interest
—
—
—
(80
)
—
(80
)
Net income (loss) available to common
shareholders
$
18,010
$
(354
)
$
(7,741
)
$
(1,344
)
$
—
$
8,571
Six Months Ended June 30, 2023
CoRe Banking
Mortgage Banking
Financial Holding
Company
Other
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
91,591
$
210
$
36
$
—
$
(43
)
$
91,794
Interest expense
27,480
—
1,992
54
(43
)
29,483
Net interest income (expense)
64,111
210
(1,956
)
(54
)
—
62,311
Provision for credit losses
341
—
—
—
—
341
Net interest income (expense) after
provision for credit losses
63,770
210
(1,956
)
(54
)
—
61,970
Noninterest income
7,131
686
5,526
2,835
(6,692
)
9,486
Noninterest Expenses:
Salaries and employee benefits
18,104
7
9,573
4,808
—
32,492
Other expenses
25,202
52
4,080
3,465
(6,692
)
26,107
Total noninterest expenses
43,306
59
13,653
8,273
(6,692
)
58,599
Income (loss), before income taxes
27,595
837
(10,083
)
(5,492
)
—
12,857
Income taxes
5,752
139
(2,149
)
(1,321
)
—
2,421
Net income (loss) from continuing
operations
21,843
698
(7,934
)
(4,171
)
—
10,436
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
21,843
698
(7,934
)
4,611
—
19,218
Net loss attributable to noncontrolling
interest
—
—
—
236
—
236
Net income (loss) available to common
shareholders
$
21,843
$
698
$
(7,934
)
$
4,847
$
—
$
19,454
Average Balances and Interest
Rates
(Unaudited) (Dollars in
thousands)
Three Months Ended
Three Months Ended
Three Months Ended
June 30, 2024
March 31, 2024
June 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
$
380,278
$
5,065
5.36
%
$
549,894
$
7,341
5.37
%
$
444,600
$
5,542
5.00
%
Investment securities:
Taxable
252,963
1,905
3.03
246,091
1,743
2.85
220,687
1,229
2.23
Tax-exempt 1
102,785
684
2.68
106,309
887
3.36
123,497
1,147
3.73
Loans and loans held-for-sale: 2
Commercial
1,597,359
30,824
7.76
1,626,286
32,152
7.95
1,635,438
30,534
7.49
Tax-exempt 1
3,261
35
4.32
3,373
37
4.41
3,822
42
4.41
Real estate
563,011
6,391
4.57
576,148
6,612
4.62
593,767
5,691
3.84
Consumer
73,531
1,374
7.52
77,300
1,452
7.55
128,113
3,096
9.69
Total loans
2,237,162
38,624
6.94
2,283,107
40,253
7.09
2,361,140
39,363
6.69
Total earning assets
2,973,188
46,278
6.26
3,185,401
50,224
6.34
3,149,924
47,281
6.02
Less: Allowance for credit losses
(22,596
)
(22,258
)
(35,143
)
Cash and due from banks
4,528
5,405
5,756
Other assets
305,644
335,029
289,161
Total assets
$
3,260,764
$
3,503,577
$
3,409,698
Liabilities
Deposits:
NOW
$
465,587
$
4,139
3.58
%
$
555,530
$
4,929
3.57
%
$
682,277
$
4,816
2.83
%
Money market checking
400,205
3,337
3.35
408,764
3,759
3.70
615,962
2,439
1.59
Savings
112,225
944
3.38
163,611
1,640
4.03
72,289
351
1.95
IRAs
7,948
81
4.10
7,762
74
3.83
6,401
45
2.82
CDs
731,337
9,130
5.02
674,611
8,529
5.08
662,753
8,799
5.33
Repurchase agreements and federal funds
sold
3,459
4
0.47
2,951
—
—
5,428
—
—
FHLB and other borrowings
—
—
—
44
1
9.14
158
—
—
Senior term loan 3
2,736
114
16.76
6,736
150
8.96
9,351
198
8.49
Subordinated debt
73,629
808
4.41
73,571
809
4.42
73,382
801
4.38
Total interest-bearing liabilities
1,797,126
18,557
4.15
1,893,580
19,891
4.22
2,128,001
17,449
3.29
Noninterest-bearing demand deposits
1,139,070
1,279,194
971,436
Other liabilities
36,101
42,017
38,842
Total liabilities
2,972,297
3,214,791
3,138,279
Stockholders’ equity
Common stock
13,731
13,659
13,533
Paid-in capital
162,518
161,532
158,601
Treasury stock
(16,741
)
(16,741
)
(16,741
)
Retained earnings
161,709
160,933
148,600
Accumulated other comprehensive loss
(32,299
)
(30,559
)
(32,714
)
Total stockholders’ equity attributable to
parent
288,918
288,824
271,279
Noncontrolling interest
(451
)
(38
)
140
Total stockholders’ equity
288,467
288,786
271,419
Total liabilities and stockholders’
equity
$
3,260,764
$
3,503,577
$
3,409,698
Net interest spread (tax-equivalent)
2.11
%
2.12
%
2.73
%
Net interest income and margin
(tax-equivalent)1
$
27,721
3.75
%
$
30,333
3.83
%
$
29,832
3.80
%
Less: Tax-equivalent adjustments
$
(151
)
$
(194
)
$
(250
)
Net interest spread
2.09
%
2.10
%
2.70
%
Net interest income and margin
$
27,570
3.73
%
$
30,139
3.81
%
$
29,582
3.77
%
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.
Six Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
Average Balance
Interest Income/
Expense
Yield/ Cost
Average Balance
Interest Income/
Expense
Yield/ Cost
Assets
Interest-bearing balances with banks
$
465,086
$
12,406
5.36
%
$
365,291
$
8,695
4.80
%
Investment securities:
Taxable
249,527
3,648
2.94
228,587
3,077
2.71
Tax-exempt 1
104,547
1,570
3.02
130,609
2,456
3.79
Loans and loans held-for-sale: 2
Commercial
1,611,822
62,975
7.86
1,628,015
59,065
7.32
Tax-exempt 1
3,317
72
4.37
3,882
85
4.42
Real estate
569,579
13,004
4.59
607,501
11,992
3.98
Consumer
75,416
2,827
7.54
132,804
6,959
10.57
Total loans
2,260,134
78,878
7.02
2,372,202
78,101
6.64
Total earning assets
3,079,294
96,502
6.30
3,096,689
92,329
6.01
Less: Allowance for credit losses
(22,427
)
(32,653
)
Cash and due from banks
4,967
3,015
Other assets
320,338
314,279
Total assets
$
3,382,172
$
3,381,330
Liabilities
Deposits:
NOW
$
510,558
$
9,068
3.57
%
$
739,273
$
9,478
2.59
%
Money market checking
404,484
7,096
3.53
413,718
3,367
1.64
Savings
137,918
2,585
3.77
82,735
991
2.42
IRAs
7,856
155
3.97
6,276
72
2.31
CDs
702,974
17,657
5.05
525,213
12,695
4.87
Repurchase agreements and federal funds
sold
3,205
5
0.31
6,514
—
—
FHLB and other borrowings
22
1
9.14
35,347
888
5.07
Senior term loan 3
4,736
264
11.21
9,557
392
8.27
Subordinated debt
73,600
1,617
4.42
73,350
1,600
4.40
Total interest-bearing liabilities
1,845,353
38,448
4.19
1,891,983
29,483
3.14
Noninterest-bearing demand deposits
1,209,132
1,174,965
Other liabilities
39,059
37,969
Total liabilities
3,093,544
3,104,917
Stockholders’ equity
Common stock
13,695
13,502
Paid-in capital
162,025
156,009
Treasury stock
(16,741
)
(16,741
)
Retained earnings
161,322
157,464
Accumulated other comprehensive income
loss
(31,429
)
(34,022
)
Total stockholders’ equity attributable to
parent
288,872
276,212
Noncontrolling interest
(244
)
201
Total stockholders’ equity
288,628
276,413
Total liabilities and stockholders’
equity
$
3,382,172
$
3,381,330
Net interest spread (tax-equivalent)
2.11
%
2.87
%
Net interest income and margin
(tax-equivalent)1
$
58,054
3.79
%
$
62,846
4.09
%
Less: Tax-equivalent adjustments
$
(345
)
$
(535
)
Net interest spread
2.09
%
2.84
%
Net interest income and margin
$
57,709
3.77
%
$
62,311
4.06
%
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
Second Quarter
First Quarter
Second Quarter
Earnings and Per Share Data:
Net income
$
4,089
$
4,482
$
8,112
$
8,571
$
19,454
Earnings per share from continuing
operations - basic
$
0.32
$
0.35
$
0.64
$
0.67
$
0.84
Earnings per share from discontinued
operations - basic
$
—
$
—
$
—
$
—
$
0.69
Earnings per share - basic
$
0.32
$
0.35
$
0.64
$
0.67
$
1.54
Earnings per share from continuing
operations - diluted
$
0.31
$
0.34
$
0.63
$
0.66
$
0.82
Earnings per share from discontinued
operations - diluted
$
—
$
—
$
—
$
—
$
0.68
Earnings per share - diluted
$
0.31
$
0.34
$
0.63
$
0.66
$
1.50
Cash dividends paid per common share
$
0.17
$
0.17
$
0.17
$
0.34
$
0.34
Book value per common share
$
22.94
$
22.73
$
21.57
$
22.94
$
21.57
Tangible book value per common share 1
$
22.70
$
22.48
$
21.31
$
22.70
$
21.31
Weighted-average shares outstanding -
basic
12,883,426
12,810,956
12,689,669
12,847,191
12,656,698
Weighted-average shares outstanding -
diluted
13,045,660
13,119,292
12,915,294
13,058,791
12,959,725
Performance Ratios:
Return on average assets 2
0.5
%
0.5
%
1.0
%
0.5
%
1.2
%
Return on average equity 2
5.7
%
6.2
%
12.0
%
5.9
%
14.1
%
Net interest margin 3 4
3.75
%
3.83
%
3.80
%
3.79
%
4.09
%
Efficiency ratio 5
83.3
%
79.5
%
84.1
%
81.3
%
70.9
%
Overhead ratio 2 6
3.5
%
3.4
%
3.6
%
3.5
%
3.5
%
Equity to assets
9.0
%
8.2
%
8.2
%
9.0
%
8.2
%
Asset Quality Data and Ratios:
Charge-offs
$
1,538
$
2,150
$
3,700
$
3,688
$
8,547
Recoveries
$
688
$
835
$
2,468
$
1,523
$
5,637
Net loan charge-offs to total loans 2
7
0.2
%
0.2
%
0.2
%
0.2
%
0.3
%
Allowance for credit losses
$
22,084
$
22,084
$
30,294
$
22,084
$
30,294
Allowance for credit losses to total loans
8
1.00
%
1.01
%
1.31
%
1.00
%
1.31
%
Nonperforming loans
$
23,099
$
7,546
$
13,646
$
23,099
$
13,646
Nonperforming loans to total loans
1.0
%
0.3
%
0.6
%
1.0
%
0.6
%
Mortgage Company Equity Method
Investees Production Data9:
Mortgage pipeline
$
927,875
$
790,771
$
748,756
$
927,875
$
748,756
Loans originated
$
1,383,405
$
1,050,089
$
1,167,596
$
2,433,494
$
2,167,711
Loans closed
$
828,849
$
653,306
$
820,665
$
1,482,155
$
1,495,882
Loans sold
$
639,035
$
916,115
$
786,469
$
1,555,150
$
1,221,723
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
Six Months Ended
(Dollars in thousands)
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Net interest margin - U.S. GAAP
basis
Net interest income
$
27,570
$
30,139
$
29,582
$
57,709
$
62,311
Average interest-earning assets
$
2,973,188
$
3,185,401
$
3,149,924
3,079,294
3,096,689
Net interest margin
3.73
%
3.81
%
3.77
%
3.77
%
4.06
%
Net interest margin - non-U.S. GAAP
basis
Net interest income
$
27,570
$
30,139
$
29,582
$
57,709
$
62,311
Impact of fully tax-equivalent
adjustment
151
194
250
345
535
Net interest income on a fully
tax-equivalent basis
$
27,721
$
30,333
$
29,832
58,054
62,846
Average interest-earning assets
$
2,973,188
$
3,185,401
$
3,149,924
$
3,079,294
$
3,096,689
Net interest margin on a fully
tax-equivalent basis
3.75
%
3.83
%
3.80
%
3.79
%
4.09
%
Non-U.S. GAAP Reconciliation:
Tangible Book Value per Common Share and Tangible Common Equity
Ratio
(Unaudited) (Dollars in
thousands, except per share data)
June 30, 2024
March 31, 2024
June 30, 2023
Tangible Book Value per Common
Share
Goodwill
$
2,838
$
2,838
$
2,838
Intangibles
307
330
397
Total intangibles
$
3,145
3,168
3,235
Total equity attributable to parent
$
296,625
291,850
274,349
Less: Total intangibles
(3,145
)
(3,168
)
(3,235
)
Tangible common equity
$
293,480
$
288,682
$
271,114
Tangible common equity
$
293,480
$
288,682
$
271,114
Common shares outstanding (000s)
12,928
12,841
12,720
Tangible book value per common share
$
22.70
$
22.48
$
21.31
Tangible Common Equity Ratio
Total assets
$
3,288,004
$
3,547,390
$
3,351,847
Less: Total intangibles
(3,145
)
(3,168
)
(3,235
)
Tangible assets
$
3,284,859
$
3,544,222
$
3,348,612
Tangible assets
$
3,284,859
$
3,544,222
$
3,348,612
Tangible common equity
$
293,480
$
288,682
$
271,114
Tangible common equity ratio
8.9
%
8.1
%
8.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240729597676/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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