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Share Name | Share Symbol | Market | Type |
---|---|---|---|
MVB Financial Corporation | NASDAQ:MVBF | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 18.32 | 7.34 | 29.30 | 0 | 13:14:50 |
MVB Financial Corp. (NASDAQ: MVBF) (“MVB Financial,” “MVB” or the “Company”), the holding company for MVB Bank, Inc. ("MVB Bank"), today announced financial results for the third quarter of 2023, with reported net income of $3.9 million, or $0.30 basic and $0.29 diluted earnings per share.
Third Quarter 2023 Highlights As Compared to Second Quarter 2023
Balance sheet deposits increased 2.7%, or $80.0M.
Noninterest bearing deposits increased 10.8%, or $106.3M, and represent 36% of deposits.
Balance sheet loan to deposit ratio of 74.7%, compared to 78.1%.
Nonperforming loans decreased 22.4%, or $3.1M.
Net interest margin improved by 10 bps, to 3.87%.
From Larry F. Mazza, Chief Executive Officer, MVB Financial:
“While market conditions remained volatile during the third quarter, Team MVB built upon our already strong foundation. We continued to optimize our earnings power and grew low-cost deposits and reduced higher-cost funding, further optimizing our deposit mix, improving our strong liquidity position, and with asset yields continuing to reprice higher, drove improvement in our net interest margin. Additionally, although our cost of funds continued to move higher, this quarter marked the slowest pace of increase since the second quarter of 2022. Our loan pipelines continued to build, and we believe our balance sheet is well-positioned for the road ahead. At quarter-end, MVB had no outstanding FHLB or other short-term borrowings, no held to maturity investment securities and a limited concentration of CRE loans and office exposure. Since the industry disruption in March of this year, we took additional steps to enhance our risk management and compliance infrastructure in anticipation of changing industry requirements. These elevated costs have weighed on our earnings in the short-term, but leave us well positioned to drive growth and improve profitability, while maintaining our foundational strength in the long run.”
THIRD QUARTER 2023 HIGHLIGHTS
INCOME STATEMENT
Net interest income on a tax-equivalent basis totaled $30.1 million for the third quarter of 2023. This reflected an increase of $0.3 million, or 0.9%, from the second quarter of 2023 and was consistent as compared to the third quarter of 2022. The increase in net interest income compared to the second quarter of 2023 reflected a higher net interest margin, partially offset by a decline in total average earning asset balances.
Interest income increased $1.3 million, or 2.8%, from the second quarter of 2023 and increased $14.4 million, or 42.5%, from the third quarter of 2022. The tax-equivalent yield on loans was 7.0% for the third quarter of 2023, compared to 6.7% for the second quarter of 2023 and 5.3% for the third quarter of 2022. Higher loan yields compared to the second quarter of 2023 generally reflect the beneficial impact of higher interest rates on earning asset yields, while higher loan yields compared to the third quarter of 2022 reflect the cumulative impact of loans booked at higher yields than the prevailing portfolio yield in the prior year.
Interest expense increased $1.0 million, or 5.8%, from the second quarter of 2023 and increased $14.4 million from the third quarter of 2022. The cost of funds was 2.43% for the third quarter of 2023, up from 2.26% for the second quarter of 2023 and 0.59% for the third quarter of 2022. The increase from the prior quarter primarily reflected the impact of higher interest rates, including an increase in rates paid on money market checking deposits. The increase in cost of funds compared to the prior year period reflects the impact of increased time deposits in 2023 in response to market conditions, higher interest rates and the senior term loan, which was entered into during October 2022.
On a tax-equivalent basis, net interest margin for the third quarter of 2023 was 3.90%, an increase of 10 basis points versus the second quarter of 2023 and a decrease of 35 basis points versus the third quarter of 2022. See the table below for a reconciliation between net interest margin and net interest margin on a fully tax-equivalent basis, a non-GAAP measure. The increase in net interest margin from the second quarter of 2023 primarily reflected higher loan yields and a favorable shift in the mix of earning assets and deposit funding. Contraction in net interest margin from the third quarter of 2022 primarily reflected higher funding costs and an unfavorable shift in the mix of earning assets (loan balances declined, while lower yielding cash balances increased), partially offset by higher interest rates on loans.
Noninterest income totaled $5.8 million for the third quarter of 2023, a decrease of $0.6 million from the second quarter of 2023 and an increase of $0.3 million from the third quarter of 2022. The decrease compared to the prior quarter is primarily driven by declines of $2.6 million in equity method investment income from our mortgage companies, $0.7 million in payment card and service charge income and $0.4 million in other operating income. These decreases were partially offset by increases of $0.3 million in compliance and consulting income and $0.3 million in gain on sale of equity securities. Additionally, the second quarter of 2023 included losses of $1.0 million in acquisition and divestiture activity and $1.0 million in sale of loans, without comparable losses in the third quarter of 2023.
The $0.3 million increase in noninterest income from the third quarter of 2022 was primarily driven by increases of $0.8 million in other operating income, $0.3 million in compliance consulting income, $0.3 million in holding gain on equity securities, $0.3 million in equity method investment income and $0.2 million in gain on sale of equity securities. These increases were partially offset by declines of $1.0 million in gain on sale of loans, $0.5 million in payment and card service charge income, $0.1 million in insurance and investment services income.
Noninterest expense totaled $30.7 million for the third quarter of 2023, an increase of $0.4 million, or 1.5%, from the second quarter of 2023 and an increase of $2.5 million, or 9.0%, from the third quarter of 2022, primarily reflecting higher professional fees of $1.7 million, or 43.9%, and $1.8 million, or 45.3%, as compared to the second quarter of 2023 and the third quarter of 2022, respectively. Salaries and employee benefits expense increased $0.3 million, or 1.7%, and $0.1 million, or 0.7%, as compared to the second quarter of 2023 and the third quarter of 2022, respectively.
BALANCE SHEET
Loans totaled $2.27 billion at September 30, 2023, a decrease of $42.0 million, or 1.8%, and $201.0 million, or 8.1%, as compared to June 30, 2023 and September 30, 2022, respectively. The decline in loan balances compared to the prior quarters primarily reflects amortization of the loan portfolio and slower origination as the pipeline continues to build, in addition to the sale of $15.9 million of subprime automobile loans during the third quarter of 2023 and the sale of $20.4 million of subprime automobile loans during the second quarter of 2023. Loans held-for-sale, which represent MVB Bank’s government guaranteed lending growth vehicle, were $7.6 million as of September 30, 2023, compared to $7.0 million at June 30, 2023 and $20.0 million at September 30, 2022.
Deposits totaled $3.04 billion as of September 30, 2023, an increase of $80.0 million, or 2.7%, from June 30, 2023, and an increase of $341.9 million, or 12.7%, from September 30, 2022. NIB deposits totaled $1.09 billion as of September 30, 2023, an increase of $106.3 million, or 10.8%, from June 30, 2023 and a decrease of $317.9 million, or 22.5%, from September 30, 2022. The increase in total deposit balances compared to June 30, 2023 primarily reflects the increase in noninterest-bearing deposits, payment relationships, gaming and seasonal considerations, partially offset by a decrease in brokered deposits. The increase relative to September 30, 2022, reflects higher CDs and brokered deposits, partially offset by a decrease in NIB deposits driven by the highly-competitive deposit environment, higher interest rates and the utilization of off-balance sheet deposit networks to generate fee income, enhance capital efficiency and manage liquidity and concentration risk.
CAPITAL
The Community Bank Leverage Ratio was 10.4% as of September 30, 2023, compared to 10.0% as of June 30, 2023 and 11.1% as of September 30, 2022.
The tangible common equity ratio, a non-GAAP financial measure, was 7.8% of as of September 30, 2023, compared to 8.1% as of June 30, 2023 and 7.6% as of as of September 30, 2022. See the reconciliation of the tangible common equity ratio to its most directly comparable U.S. GAAP financial measure later in this release.
The Company issued a quarterly cash dividend of $0.17 per share for the third quarter of 2023, consistent with the second quarter of 2023 and the third quarter of 2022.
ASSET QUALITY
Nonperforming loans totaled $10.6 million, or 0.5% of total loans, as of September 30, 2023, as compared to $13.6 million, or 0.6% of total loans, as of June 30, 2023, and $22.4 million, or 0.9% of total loans, as of September 30, 2022. Criticized loans as a percentage of total loans were 6.1%, compared to 3.1% as of June 30, 2023 and 3.4% as of September 30, 2022.
Net charge-offs were $5.9 million, or 1.0% of total loans, for the third quarter of 2023, compared to $1.2 million, or 0.2% of total loans, for the second quarter of 2023 and $1.3 million, or 0.2% of total loans, for the third quarter of 2022.
The release of allowance for credit losses totaled $0.2 million compared to $4.2 million for the prior quarter. The Company sold $15.9 million and $20.4 million of subprime automobile loans during the quarters ended September 30, 2023 and June 30, 2023, respectively, and released the reserves associated with those loans, resulting in the net allowance releases. The allowance for credit losses was 1.1% of total loans at September 30, 2023, as compared to 1.3% at June 30, 2023 and 1.1% at September 30, 2022. The decline in the allowance ratio compared to the prior quarter largely reflects the aforementioned changes in loan portfolio composition.
About MVB Financial Corp.
MVB Financial, the holding company of MVB Bank, is publicly traded on The Nasdaq Capital Market® (“Nasdaq”) under the ticker “MVBF.”
MVB is a financial holding company headquartered in Fairmont, West Virginia. Through its subsidiary, MVB Bank, and MVB Bank’s subsidiaries, MVB Financial provides financial services to individuals and corporate clients in the Mid-Atlantic region and beyond.
Nasdaq is a leading global provider of trading, clearing, exchange technology, listing, information and public company services.
For more information about MVB, please visit ir.mvbbanking.com.
Forward-looking Statements
MVB Financial has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in this press release that are intended to be covered by the protections provided under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations about the future and are subject to risks and uncertainties. Forward-looking statements include, without limitation, information concerning possible or assumed future results of operations of the Company and its subsidiaries. Forward-looking statements can be identified by the use of words such as “may,” “could,” “should,” “would,” “will,” “plans,” “believes,” “estimates,” “expects,” “anticipates,” “intends,” “continues” or the negative of those terms or similar expressions. Note that many factors could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in forward-looking statements. Therefore, undue reliance should not be placed upon any forward-looking statements. Those factors include but are not limited to: market, economic, operational, liquidity and credit risk; changes in market interest rates; impacts related to or resulting from recent turmoil in the banking industry; inability to achieve anticipated synergies and successfully integrate recent mergers and acquisitions; inability to successfully execute business plans, including strategies related to investments in Fintech companies; competition; unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; changes in economic, business and political conditions; changes in demand for loan products and deposit flow; operational risks and risk management failures; and government regulation and supervision. Additional factors that may cause actual results to differ materially from those described in the forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as well as its other filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. Except as required by law, the Company disclaims any obligation to update, revise or correct any forward-looking statements.
Accounting standards require the consideration of subsequent events occurring after the balance sheet date for matters that require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s financial statements when filed with the SEC. Accordingly, the consolidated financial information in this announcement is subject to change.
Non-U.S. GAAP Financial Measures
This document contains supplemental financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management uses these non-U.S. GAAP measures in its analysis of the Company’s performance. These measures should not be considered a substitute for U.S. GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with U.S. GAAP. Management believes the presentation of non-U.S. GAAP financial measures that exclude the impact of specified items provide useful supplemental information that is essential to a proper understanding of the Company’s financial condition and results. Non-U.S. GAAP measures are not formally defined under U.S. GAAP, and other entities may use calculation methods that differ from those used by us. As a complement to U.S. GAAP financial measures, our management believes these non-U.S. GAAP financial measures assist investors in comparing the financial condition and results of operations of financial institutions due to the industry prevalence of such non-U.S. GAAP measures. See the tables below for a reconciliation of these non-U.S. GAAP measures to the most directly comparable U.S. GAAP financial measures.
MVB Financial Corp.
Financial Highlights
Consolidated Statements of Income
(Unaudited) (Dollars in thousands, except per share data)
Quarterly
Year-to-Date
2023
2023
2022
2023
2022
Third Quarter
Second Quarter
Third Quarter
Interest income
$
48,325
$
47,031
$
33,903
$
140,119
$
85,255
Interest expense
18,460
17,449
4,057
47,943
6,901
Net interest income
29,865
29,582
29,846
92,176
78,354
Provision (release of allowance) for credit losses
(159
)
(4,235
)
5,120
182
11,500
Net interest income after provision (release of allowance) for credit losses
30,024
33,817
24,726
91,994
66,854
Total noninterest income
5,791
6,419
5,467
15,277
24,130
Noninterest expense:
Salaries and employee benefits
16,016
15,746
15,905
48,508
48,217
Other expense
14,709
14,536
12,271
40,816
35,188
Total noninterest expenses
30,725
30,282
28,176
89,324
83,405
Income before income taxes
5,090
9,954
2,017
17,947
7,579
Income taxes
1,218
1,956
184
3,639
1,563
Net income from continuing operations before noncontrolling interest
3,872
7,998
1,833
14,308
6,016
Income from discontinued operations, before income taxes
—
—
935
11,831
2,599
Income taxes - discontinued operations
—
—
213
3,049
598
Net income from discontinued operations
—
—
722
8,782
2,001
Net (income) loss attributable to noncontrolling interest
(5
)
114
163
231
521
Net income available to common shareholders
$
3,867
$
8,112
$
2,718
$
23,321
$
8,538
Earnings per share from continuing operations - basic
$
0.30
$
0.64
$
0.16
$
1.15
$
0.54
Earnings per share from discontinued operations - basic
$
—
$
—
$
0.06
$
0.69
$
0.16
Earnings per share - basic
$
0.30
$
0.64
$
0.22
$
1.84
$
0.70
Earnings per share from continuing operations - diluted
$
0.29
$
0.63
$
0.16
$
1.12
$
0.51
Earnings per share from discontinued operations - diluted
$
—
$
—
$
0.05
$
0.67
$
0.15
Earnings per share - diluted
$
0.29
$
0.63
$
0.21
$
1.79
$
0.66
Noninterest Income
(Unaudited) (Dollars in thousands)
Quarterly
Year-to-Date
2023
2023
2022
2023
2022
Third Quarter
Second Quarter
Third Quarter
Card acquiring income
$
845
$
788
$
560
$
2,255
$
2,293
Service charges on deposits
490
1,060
889
2,676
2,734
Interchange income
1,517
1,655
1,864
5,034
4,943
Total payment card and service charge income
2,852
3,503
3,313
9,965
9,970
Equity method investments income (loss)
(750
)
1,873
(1,021
)
(70
)
666
Compliance and consulting income
1,314
996
966
3,326
3,380
Gain (loss) on sale of loans
330
(989
)
1,298
(1,015
)
3,786
Investment portfolio gains (losses)
244
(134
)
(217
)
(1,734
)
2,322
Loss on acquisition and divestiture activity
—
(986
)
—
(986
)
—
Other noninterest income
1,801
2,156
1,128
5,791
4,006
Total noninterest income
$
5,791
$
6,419
$
5,467
$
15,277
$
24,130
Condensed Consolidated Balance Sheets
(Unaudited) (Dollars in thousands)
September 30, 2023
June 30, 2023
September 30, 2022
Cash and cash equivalents
$
587,100
$
455,835
$
79,946
Securities available-for-sale, at fair value
311,537
329,137
366,742
Equity securities
40,835
41,082
34,101
Loans held-for-sale
7,603
7,009
19,977
Loans receivable
2,270,433
2,312,387
2,471,395
Less: Allowance for credit losses
(24,276
)
(30,294
)
(26,515
)
Loans receivable, net
2,246,157
2,282,093
2,444,880
Premises and equipment, net
21,468
22,407
24,639
Assets from discontinued operations
—
—
4,818
Goodwill
2,838
2,838
2,838
Other assets
220,045
211,446
161,981
Total assets
$
3,437,583
$
3,351,847
$
3,139,922
Noninterest-bearing deposits
$
1,093,903
$
987,555
$
1,411,772
Interest-bearing deposits
1,944,986
1,971,384
1,285,186
FHLB and other borrowings
—
—
73,328
Senior term loan
8,473
8,835
—
Subordinated debt
73,478
73,414
73,222
Liabilities from discontinued operations
—
—
5,647
Other liabilities
45,374
36,362
46,407
Stockholders' equity
271,369
274,297
244,360
Total liabilities and stockholders' equity
$
3,437,583
$
3,351,847
$
3,139,922
Reportable Segments
(Unaudited)
Three Months Ended September 30, 2023
CoRe Banking
Mortgage Banking
Financial Holding Company
Other
Intercompany Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
48,268
$
103
$
2
$
—
$
(48
)
$
48,325
Interest expense
17,454
—
1,000
54
(48
)
18,460
Net interest income (expense)
30,814
103
(998
)
(54
)
—
29,865
Release of allowance for credit losses
(159
)
—
—
—
—
(159
)
Net interest income (expense) after release of allowance for credit losses
30,973
103
(998
)
(54
)
—
30,024
Noninterest income
4,980
(742
)
2,576
3,099
(4,122
)
5,791
Noninterest Expenses:
Salaries and employee benefits
9,787
—
4,129
2,100
—
16,016
Other expenses
14,701
13
1,992
2,125
(4,122
)
14,709
Total noninterest expenses
24,488
13
6,121
4,225
(4,122
)
30,725
Income (loss) before income taxes
11,465
(652
)
(4,543
)
(1,180
)
—
5,090
Income taxes
2,628
(153
)
(978
)
(279
)
—
1,218
Net income (loss)
8,837
(499
)
(3,565
)
(901
)
—
3,872
Net income attributable to noncontrolling interest
—
—
—
(5
)
—
(5
)
Net income (loss) available to common shareholders
$
8,837
$
(499
)
$
(3,565
)
$
(906
)
$
—
$
3,867
Three Months Ended June 30, 2023
CoRe Banking
Mortgage Banking
Financial Holding Company
Other
Intercompany Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
46,929
$
105
$
3
$
6
$
(12
)
$
47,031
Interest expense
16,439
—
999
23
(12
)
17,449
Net interest income (expense)
30,490
105
(996
)
(17
)
—
29,582
Provision for credit losses
(4,235
)
—
—
—
—
(4,235
)
Net interest income (expense) after provision for credit losses
34,725
105
(996
)
(17
)
—
33,817
Noninterest income
4,113
1,872
3,116
1,051
(3,733
)
6,419
Noninterest Expenses:
Salaries and employee benefits
9,053
7
4,623
2,063
—
15,746
Other expenses
14,148
18
2,163
1,940
(3,733
)
14,536
Total noninterest expenses
23,201
25
6,786
4,003
(3,733
)
30,282
Income (loss) before income taxes
15,637
1,952
(4,666
)
(2,969
)
—
9,954
Income taxes
3,237
643
(1,207
)
(717
)
—
1,956
Net income (loss)
12,400
1,309
(3,459
)
(2,252
)
—
7,998
Net loss attributable to noncontrolling interest
—
—
—
114
—
114
Net income (loss) available to common shareholders
$
12,400
$
1,309
$
(3,459
)
$
(2,138
)
$
—
$
8,112
Three Months Ended September 30, 2022
CoRe Banking
Mortgage Banking
Financial Holding Company
Other
Intercompany Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
33,777
$
103
$
33
$
—
$
(10
)
$
33,903
Interest expense
3,286
—
771
10
(10
)
4,057
Net interest income (expense)
30,491
103
(738
)
(10
)
—
29,846
Provision for credit losses
5,120
—
—
—
—
5,120
Net interest income (expense) after provision for credit losses
25,371
103
(738
)
(10
)
—
24,726
Noninterest income
5,356
(817
)
2,366
1,370
(2,808
)
5,467
Noninterest Expenses:
Salaries and employee benefits
9,354
8
4,274
2,269
—
15,905
Other expenses
11,523
25
1,810
1,722
(2,808
)
12,272
Total noninterest expenses
20,877
33
6,084
3,991
(2,808
)
28,177
Income (loss) before income taxes
9,850
(747
)
(4,456
)
(2,631
)
—
2,016
Income taxes
1,817
(192
)
(840
)
(601
)
—
184
Net income (loss) from continuing operations
8,033
(555
)
(3,616
)
(2,030
)
—
1,832
Income from discontinued operations, before income taxes
—
—
—
936
—
936
Income tax expense - discontinued operations
—
—
—
213
—
213
Net income from discontinued operations
—
—
—
723
—
723
Net income (loss)
8,033
(555
)
(3,616
)
(1,307
)
—
2,555
Net loss attributable to noncontrolling interest
—
—
—
163
—
163
Net income (loss) available to common shareholders
$
8,033
$
(555
)
$
(3,616
)
$
(1,144
)
$
—
$
2,718
Nine Months Ended September 30, 2023
CoRe Banking
Mortgage Banking
Financial Holding Company
Other
Intercompany Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
139,859
$
313
$
38
$
—
$
(91
)
$
140,119
Interest expense
44,934
—
2,992
108
(91
)
47,943
Net interest income (expense)
94,925
313
(2,954
)
(108
)
—
92,176
Provision for credit losses
182
—
—
—
—
182
Net interest income (expense) after provision for credit losses
94,743
313
(2,954
)
(108
)
—
91,994
Noninterest income
12,111
(56
)
8,102
5,934
(10,814
)
15,277
Noninterest Expenses:
Salaries and employee benefits
27,891
7
13,702
6,908
—
48,508
Other expenses
39,903
65
6,072
5,590
(10,814
)
40,816
Total noninterest expenses
67,794
72
19,774
12,498
(10,814
)
89,324
Income (loss) before income taxes
39,060
185
(14,626
)
(6,672
)
—
17,947
Income taxes
8,380
(14
)
(3,127
)
(1,600
)
—
3,639
Net income (loss) from continuing operations
30,680
199
(11,499
)
(5,072
)
—
14,308
Income from discontinued operations, before income taxes
—
—
—
11,831
—
11,831
Income taxes - discontinued operations
—
—
—
3,049
—
3,049
Net income from discontinued operations
—
—
—
8,782
—
8,782
Net income (loss)
30,680
199
(11,499
)
3,710
—
23,090
Net loss attributable to noncontrolling interest
—
—
—
231
—
231
Net income (loss) available to common shareholders
$
30,680
$
199
$
(11,499
)
$
3,941
$
—
$
23,321
Nine Months Ended September 30, 2022
CoRe Banking
Mortgage Banking
Financial Holding Company
Other
Intercompany Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
84,858
$
309
$
113
$
—
$
(25
)
$
85,255
Interest expense
4,617
—
2,284
25
(25
)
6,901
Net interest income (expense)
80,241
309
(2,171
)
(25
)
—
78,354
Provision for credit losses
11,500
—
—
—
—
11,500
Net interest income (expense) after provision for credit losses
68,741
309
(2,171
)
(25
)
—
66,854
Noninterest income
19,347
1,193
8,265
4,490
(9,165
)
24,130
Noninterest Expenses:
Salaries and employee benefits
28,810
8
12,769
6,630
—
48,217
Other expenses
33,484
119
6,262
4,489
(9,165
)
35,189
Total noninterest expenses
62,294
127
19,031
11,119
(9,165
)
83,406
Income (loss) before income taxes
25,794
1,375
(12,937
)
(6,654
)
—
7,578
Income taxes
5,219
356
(2,524
)
(1,488
)
—
1,563
Net income (loss) from continuing operations
20,575
1,019
(10,413
)
(5,166
)
—
6,015
Income from discontinued operations, before income taxes
—
—
—
2,600
—
2,600
Income tax expense - discontinued operations
—
—
—
598
—
598
Net income from discontinued operations
—
—
—
2,002
—
2,002
Net income (loss)
20,575
1,019
(10,413
)
(3,164
)
—
8,017
Net loss attributable to noncontrolling interest
—
—
—
521
—
521
Net income (loss) available to common shareholders
$
20,575
$
1,019
$
(10,413
)
$
(2,643
)
$
—
$
8,538
Average Balances and Interest Rates
(Unaudited) (Dollars in thousands)
Three Months Ended
Three Months Ended
Three Months Ended
September 30, 2023
June 30, 2023
September 30, 2022
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Assets
Interest-bearing balances with banks
$
483,158
$
6,404
5.26
%
$
444,600
$
5,542
5.00
%
$
32,552
$
111
1.35
%
CDs with banks
—
—
—
—
—
—
232
2
3.42
Investment securities:
Taxable
206,340
1,056
2.03
220,687
1,229
2.23
231,953
897
1.53
Tax-exempt 1
107,490
1,016
3.75
123,497
1,147
3.73
144,719
1,346
3.69
Loans and loans held-for-sale: 2
Commercial 3
1,593,875
31,348
7.80
1,635,438
30,534
7.49
1,687,383
22,898
5.38
Tax-exempt 1
3,678
40
4.31
3,822
42
4.41
4,498
51
4.50
Real estate
573,579
6,351
4.39
593,767
5,691
3.84
579,685
4,707
3.22
Consumer
95,032
2,331
9.73
128,113
3,096
9.69
129,464
4,183
12.82
Total loans
2,266,164
40,070
7.02
2,361,140
39,363
6.69
2,401,030
31,839
5.26
Total earning assets
3,063,152
48,546
6.29
3,149,924
47,281
6.02
2,810,486
34,195
4.83
Less: Allowance for credit losses
(29,693
)
(35,143
)
(23,083
)
Cash and due from banks
6,686
5,756
5,399
Other assets
281,504
289,161
227,337
Total assets
$
3,321,649
$
3,409,698
$
3,020,139
Liabilities
Deposits:
NOW
$
674,745
$
4,970
2.92
%
$
682,277
$
4,816
2.83
%
$
734,271
$
1,394
0.75
%
Money market checking
537,592
3,294
2.43
615,962
2,439
1.59
258,527
422
0.65
Savings
72,206
438
2.41
72,289
351
1.95
71,370
153
0.85
IRAs
6,788
56
3.27
6,401
45
2.82
6,132
17
1.10
CDs
664,281
8,702
5.20
662,753
8,799
5.33
202,299
988
1.94
Repurchase agreements and federal funds sold
4,911
—
—
5,428
—
—
10,627
1
0.04
FHLB and other borrowings
278
—
—
158
—
—
48,058
311
2.57
Senior term loan
8,751
191
8.66
9,351
198
8.49
—
—
—
Subordinated debt
73,446
809
4.37
73,382
801
4.38
73,190
771
4.18
Total interest-bearing liabilities
2,042,998
18,460
3.58
2,128,001
17,449
3.29
1,404,474
4,057
1.15
Noninterest-bearing demand deposits
975,164
971,436
1,321,982
Other liabilities
38,021
38,842
37,019
Total liabilities
3,056,183
3,138,279
2,763,475
Stockholders’ equity
Common stock
13,570
13,533
13,086
Paid-in capital
159,050
158,601
145,877
Treasury stock
(16,741
)
(16,741
)
(16,741
)
Retained earnings
146,504
148,600
144,816
Accumulated other comprehensive loss
(36,865
)
(32,714
)
(30,915
)
Total stockholders’ equity attributable to parent
265,518
271,279
256,123
Noncontrolling interest
(52
)
140
541
Total stockholders’ equity
265,466
271,419
256,664
Total liabilities and stockholders’ equity
$
3,321,649
$
3,409,698
$
3,020,139
Net interest spread (tax-equivalent)
2.71
%
2.73
%
3.68
%
Net interest income and margin (tax-equivalent)1
$
30,086
3.90
%
$
29,832
3.80
%
$
30,138
4.25
%
Less: Tax-equivalent adjustments
$
(221
)
$
(250
)
$
(292
)
Net interest spread
2.68
%
2.70
%
3.64
%
Net interest income and margin
$
29,865
3.87
%
$
29,582
3.77
%
$
29,846
4.21
%
1 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a Federal tax rate of 21% for the periods presented, which is a non-GAAP financial measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 19.
2 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.
3 MVB Bank’s PPP loans totaling $3.0 million, $4.5 million and $20.1 million are included in this amount as of September 30, 2023, June 30, 2023 and September 30, 2022, respectively.
Nine Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Assets
Interest-bearing balances with banks
$
405,012
$
15,099
4.98
%
$
273,184
$
630
0.31
%
CDs with banks
—
—
—
1,381
24
2.32
Investment securities:
Taxable
221,089
4,133
2.50
237,188
2,383
1.34
Tax-exempt 1
122,818
3,471
3.78
140,377
3,824
3.64
Loans and loans held-for-sale: 2
Commercial 3
1,616,510
90,413
7.48
1,569,161
59,899
5.10
Tax-exempt 1
3,813
125
4.38
4,829
156
4.32
Real estate
596,070
18,343
4.11
438,380
9,722
2.97
Consumer
120,075
9,290
10.34
91,092
9,454
13.88
Total loans
2,336,468
118,171
6.76
2,103,462
79,231
5.04
Total earning assets
3,085,387
140,874
6.10
2,755,592
86,092
4.18
Less: Allowance for credit losses
(31,656
)
(20,468
)
Cash and due from banks
4,252
5,680
Other assets
303,233
237,637
Total assets
$
3,361,216
$
2,978,441
Liabilities
Deposits:
NOW
$
717,527
$
14,448
2.69
%
$
678,991
$
1,844
0.36
%
Money market checking
455,463
6,661
1.96
367,608
807
0.29
Savings
79,187
1,430
2.41
49,714
155
0.42
IRAs
6,448
128
2.65
6,271
52
1.11
CDs
572,078
21,396
5.00
122,095
1,433
1.57
Repurchase agreements and federal funds sold
5,974
—
—
11,334
4
0.05
FHLB and other borrowings
23,449
888
5.06
16,966
322
2.54
Senior term loan
9,285
583
8.39
—
—
—
Subordinated debt
73,383
2,409
4.39
73,126
2,284
4.18
Total interest-bearing liabilities
1,942,794
47,943
3.30
1,326,105
6,901
0.70
Noninterest-bearing demand deposits
1,107,712
1,350,533
Other liabilities
37,987
41,379
Total liabilities
3,088,493
2,718,017
Stockholders’ equity
Common stock
13,525
13,276
Paid-in capital
157,034
144,903
Treasury stock
(16,741
)
(16,741
)
Retained earnings
153,769
140,174
Accumulated other comprehensive income loss
(34,980
)
(21,905
)
Total stockholders’ equity attributable to parent
272,607
259,707
Noncontrolling interest
116
717
Total stockholders’ equity
272,723
260,424
Total liabilities and stockholders’ equity
$
3,361,216
$
2,978,441
Net interest spread (tax-equivalent)
2.80
%
3.48
%
Net interest income and margin (tax-equivalent)1
$
92,931
4.03
%
$
79,191
3.84
%
Less: Tax-equivalent adjustments
$
(755
)
$
(837
)
Net interest spread
2.77
%
3.44
%
Net interest income and margin
$
92,176
3.99
%
$
78,354
3.80
%
1 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a Federal tax rate of 21% for the periods presented, which is a non-GAAP financial measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 19.
2 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.
3 MVB Bank’s PPP loans totaling $3.0 million and $20.1 million are included in this amount as of September 30, 2023 and September 30, 2022, respectively.
Selected Financial Data
(Unaudited) (Dollars in thousands, except per share data)
Quarterly
Year-to-Date
2023
2023
2022
2023
2022
Third Quarter
Second Quarter
Third Quarter
Earnings and Per Share Data:
Net income
$
3,867
$
8,112
$
2,718
$
23,321
$
8,538
Earnings per share from continuing operations - basic
$
0.30
$
0.64
$
0.16
$
1.15
$
0.54
Earnings per share from discontinued operations - basic
$
—
$
—
$
0.06
$
0.69
$
0.16
Earnings per share - basic
$
0.30
$
0.64
$
0.22
$
1.84
$
0.70
Earnings per share from continuing operations - diluted
$
0.29
$
0.63
$
0.16
$
1.12
$
0.51
Earnings per share from discontinued operations - diluted
$
—
$
—
$
0.05
$
0.67
$
0.15
Earnings per share - diluted
$
0.29
$
0.63
$
0.21
$
1.79
$
0.66
Cash dividends paid per common share
$
0.17
$
0.17
$
0.17
$
0.51
$
0.51
Book value per common share
$
21.33
$
21.57
$
19.85
$
21.33
$
19.85
Tangible book value per common share 1
$
21.08
$
21.31
$
19.38
$
21.08
$
19.38
Weighted-average shares outstanding - basic
12,722,010
12,689,669
12,238,505
12,678,708
12,170,028
Weighted-average shares outstanding - diluted
13,116,629
12,915,294
12,854,951
13,012,834
12,852,574
Performance Ratios:
Return on average assets 2
0.5
%
1.0
%
0.4
%
0.9
%
0.4
%
Return on average equity 2
5.8
%
12.0
%
4.2
%
11.4
%
4.4
%
Net interest margin 3 4
3.90
%
3.80
%
4.25
%
4.03
%
3.84
%
Efficiency ratio 5 10
86.2
%
84.1
%
78.8
%
75.4
%
80.4
%
Overhead ratio 2 6
3.7
%
3.6
%
4.0
%
3.5
%
4.0
%
Equity to assets
7.9
%
8.2
%
7.8
%
7.9
%
7.8
%
Asset Quality Data and Ratios:
Charge-offs
$
8,064
$
3,700
$
3,653
$
16,611
$
7,305
Recoveries
$
2,205
$
2,468
$
2,313
$
7,842
$
4,054
Net loan charge-offs to total loans 2 7
1.0
%
0.2
%
0.2
%
0.5
%
0.2
%
Allowance for credit losses
$
24,276
$
30,294
$
26,515
$
24,276
$
26,515
Allowance for credit losses to total loans 8
1.07
%
1.31
%
1.07
%
1.07
%
1.07
%
Nonperforming loans
$
10,593
$
13,646
$
22,350
$
10,593
$
22,350
Nonperforming loans to total loans
0.5
%
0.6
%
0.9
%
0.5
%
0.9
%
Mortgage Company Equity Method Investees Production Data9:
Mortgage pipeline
$
643,578
$
748,756
$
792,388
$
643,578
$
792,388
Loans originated
$
1,131,963
$
1,167,596
$
606,805
$
3,299,253
$
2,713,508
Loans closed
$
786,885
$
820,665
$
615,585
$
2,282,768
$
2,239,732
Loans sold
$
605,296
$
786,469
$
619,059
$
1,827,019
$
1,999,706
1 Common equity less total goodwill and intangibles per common share, a non-U.S. GAAP measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 19.
2 Annualized for the quarterly periods presented.
3 Net interest income as a percentage of average interest-earning assets.
4 Presented on a fully tax-equivalent basis, a non-GAAP financial measure.
5 Noninterest expense as a percentage of net interest income and noninterest income, a non-U.S. GAAP measure.
6 Noninterest expense as a percentage of average assets, a non-U.S. GAAP measure.
7 Charge-offs, less recoveries.
8 Excludes loans held-for-sale.
9 Information is related to Intercoastal Mortgage Company, LLC and Warp Speed Holdings LLC, entities in which MVB has an ownership interest that are accounted for as equity method investments.
10 Includes net income from discontinued operations.
Non-GAAP Reconciliation: Net Interest Margin on a Full Tax-Equivalent Basis
The following table reconciles, for the periods shown below, net interest margin on a fully tax-equivalent basis:
Three Months Ended
Nine Months Ended
(Dollars in thousands)
September 30, 2023
June 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Net interest margin - U.S. GAAP basis
Net interest income
$
29,865
$
29,582
$
29,846
$
92,176
$
78,354
Average interest-earning assets
$
3,063,152
$
3,149,924
$
2,810,486
3,085,387
2,755,592
Net interest margin
3.87
%
3.77
%
4.21
%
3.99
%
3.80
%
Net interest margin - non-U.S. GAAP basis
Net interest income
$
29,865
$
29,582
$
29,846
$
92,176
$
78,354
Impact of fully tax-equivalent adjustment
221
250
292
755
837
Net interest income on a fully tax-equivalent basis
$
30,086
$
29,832
$
30,138
92,931
79,191
Average interest-earning assets
$
3,063,152
$
3,149,924
$
2,810,486
$
3,085,387
$
2,755,592
Net interest margin on a fully tax-equivalent basis
3.90
%
3.80
%
4.25
%
4.03
%
3.84
%
Non-U.S. GAAP Reconciliation: Tangible Book Value per Common Share and Tangible Common Equity Ratio
(Unaudited) (Dollars in thousands, except per share data)
September 30, 2023
June 30, 2023
September 30, 2022
Tangible Book Value per Common Share
Goodwill
$
2,838
$
2,838
$
3,988
Intangibles
375
397
1,806
Total intangibles
$
3,213
3,235
5,794
Total equity attributable to parent
$
271,416
274,349
243,913
Less: Total intangibles
(3,213
)
(3,235
)
(5,794
)
Tangible common equity
$
268,203
$
271,114
$
238,119
Tangible common equity
$
268,203
$
271,114
$
238,119
Common shares outstanding (000s)
12,726
12,720
12,287
Tangible book value per common share
$
21.08
$
21.31
$
19.38
Tangible Common Equity Ratio
Total assets
$
3,437,583
$
3,351,847
$
3,139,922
Less: Total intangibles
(3,213
)
(3,235
)
(5,794
)
Tangible assets
$
3,434,370
$
3,348,612
$
3,134,128
Tangible assets
$
3,434,370
$
3,348,612
$
3,134,128
Tangible common equity
$
268,203
$
271,114
$
238,119
Tangible common equity ratio
7.8
%
8.1
%
7.6
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20231026268056/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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