Strongest Quarter from Continuing Operations
in MVB's History
For the three months ended March 31, 2018, MVB Financial
Corp. (the “Company”) (NASDAQ: MVBF) reported net income of $2.6
million, or $0.24 basic and $0.23 diluted earnings per share
compared to $1.6 million, or $0.14 basic and diluted earnings per
share for the same period in 2017.
For the three months ended March 31, 2018, loans increased
$51.2 million or 4.6% from December 31, 2017, which represents
an annualized increase of 18.4%. The increase in loans has been
driven by our expansion in northern Virginia, as well as, the
addition of commercial lenders throughout our markets. In addition
to the increase in loan volume during the quarter, loan yields
increased 6 basis points. The Company continues to capitalize on
disruptions in the market to expand both the lending and deposit
teams. The locked Mortgage pipeline increased $61.8 million from
December 31, 2017, while over the same period noninterest
expense decreased by $975 thousand. The Company continues to
monitor expense control and evaluate opportunities for
efficiencies.
“If you heard my comments as part of MVB Financial’s Closing
Bell Ceremony on March 28, 2018, you know one thing for certain:
I’m excited! First quarter 2018 was our strongest quarter of
earnings from continuing operations in MVB history. I’m also
excited about our trading volume. MVB’s daily trading volume was
1,000 shares not too long ago, and now we’re trading nearly 20,000
shares a day,” said Larry F. Mazza, CEO and President, MVB
Financial.
“I’m excited because the Mortgage pipeline exceeded budget
expectations for the first quarter, and the pipeline is strong
looking ahead to the next quarter. I’m also excited about our
robust loan performance in the first quarter, which is due to
organic growth and the strategic addition of commercial lenders in
our key lending areas. I believe that we have a long runway to
grow, and we will through excellent execution, hard work, organic
growth and M&A. Our team is ready for the challenge. We are
focused, motivated and grateful for our families, teammates, Board
of Directors, shareholders, communities and especially for our
clients.”
FIRST QUARTER 2018 HIGHLIGHTS
- Loans of $1.2 billion as of
March 31, 2018, increased $51.2 million, or 4.6%, from
December 31, 2017, and increased $80.4 million, or 7.5%, from
March 31, 2017.
- Assets of $1.6 billion as of
March 31, 2018, increased $47.2 million, or 3.1%, from
December 31, 2017, and increased $147.6 million, or 10.3%,
from March 31, 2017.
- Deposits of $1.2 billion as of
March 31, 2018, remained flat from December 31, 2017, and
increased $17.4 million, or 1.5% from March 31, 2017.
Noninterest-bearing deposits of $142.8 million increased $16.9
million, or 13.4%, from December 31, 2017, and increased $23.6
million, or 19.7%, from March 31, 2017.
- Net interest income of $11.5 million
for the quarter ended March 31, 2018, decreased $218 thousand,
or 1.9%, from the quarter ended December 31, 2017, and
increased $1.2 million, or 11.2% from the quarter ended
March 31, 2017.
- Noninterest income of $9.0 million for
the quarter ended March 31, 2018, decreased $1.1 million, or
11.0%, from the quarter ended December 31, 2017, and increased
$215 thousand, or 2.4%, from the quarter ended March 31,
2017.
- Noninterest expense of $16.7 million
for the quarter ended March 31, 2018, decreased $975 thousand,
or 5.5%, from the quarter ended December 31, 2017, and
increased $422 thousand, or 2.6%, from the quarter ended
March 31, 2017.
FINANCIAL DETAILS
Loans totaled $1.2 billion as of March 31, 2018, an
increase of $51.2 million, or 4.6%, from December 31, 2017,
and an increase of $80.4 million, or 7.5%, from March 31,
2017. The growth in loans is primarily attributable to organic
growth and the addition of commercial lenders within the Company’s
primary lending areas. The yield on loans was 4.68% as of
March 31, 2018, an increase of 6 basis points from
December 31, 2017, and an increase of 36 basis points from
March 31, 2017. The increase in yields is driven both by Fed
rate increases and a commercial focus on increasing loan yields. In
connection with the Company’s core conversion in 2017, the Company
implemented a CRM system that has provided better insight on loan
pricing.
Deposits totaled $1.2 billion as of March 31, 2018, and
remained flat from December 31, 2017, while increasing $17.4
million, or 1.5% from March 31, 2017. Noninterest-bearing
deposits totaled $142.8 million as of March 31, 2018, or 12.4%
of the total deposit base, an increase of $16.9 million, or 13.4%,
from December 31, 2017, and an increase of $23.6 million, or
19.7%, from March 31, 2017. Noninterest-bearing deposits
remain a core funding source for the Company. Management will
continue to concentrate on balancing deposit growth with adequate
net interest margin to meet strategic goals.
Net interest income for the quarter ended March 31, 2018,
was $11.5 million, a decrease of $218 thousand, or 1.9%, from the
quarter ended December 31, 2017, and an increase of $1.2
million, or 11.2% from the quarter ended March 31, 2017. The
decrease from the quarter ended December 31, 2017, was due to
fewer days in the quarter ended March 31, 2018, as well as
loan growth occurring late in first quarter of 2018. Net interest
margin for the quarter ended March 31, 2018 was 3.29%, flat
versus the quarter ended December 31, 2017, and an increase of
10 basis points versus the quarter ended March 31, 2017.
Interest expense increased 5.5% during the quarter ended
March 31, 2018, compared to the quarter ended
December 31, 2017, due to an increase of 8 basis points in the
cost of interest-bearing liabilities, and increased 29.9% compared
to the quarter ended March 31, 2017, due to an increase of 20
basis points in the cost of interest-bearing liabilities. The
rising cost of borrowings placed pressure on net interest margin
earned from our mortgage operations as the cost of short-term
borrowings to fund the mortgage business increased, while the yield
from loans held for sale remained relatively flat.
Provision for loan loss was $474 thousand for the quarter ended
March 31, 2018, a $44 thousand decrease from the quarter ended
March 31, 2017, despite a 7.5% increase in loans. The slight
decrease in loan loss provision is attributable to lower historical
loss rates for the period used to determine the allowance.
Nonperforming loans increased $2.5 million, to 0.79%, of total
loans as of March 31, 2018, compared to 0.61% of total loans
as of March 31, 2017. In addition, net charge-offs for the
quarter ended March 31, 2018, increased $38 thousand compared
to the quarter ended March 31, 2017, resulting in an
annualized net loan charge-offs to total loans ratio of 0.10% as of
March 31, 2018.
Noninterest income totaled $9.0 million for the quarter ended
March 31, 2018, a decrease of $1.1 million, or 11.0%, from the
quarter ended December 31, 2017, and an increase of $215
thousand, or 2.4%, from the quarter ended March 31, 2017.
The $1.1 million decrease in noninterest income from the quarter
ended December 31, 2017, was due to a decrease of $2.0 million
in mortgage fee income, which was partially offset by an increase
of $1.1 million in gain on derivatives. The decrease in mortgage
fee income was primarily the result of a $94.0 million decrease in
sold loan volume. The increase in gain on derivatives was primarily
the result of an increase in the locked mortgage pipeline from
$91.4 million as of December 31, 2017, to $153.2 million as of
March 31, 2018.
The $215 thousand increase in noninterest income from the
quarter ended March 31, 2017, was primarily due to a $2.5
million increase in gain on derivatives, along with increases of
$413 thousand in commercial swap fees, $203 thousand in gain on
sale of portfolio loans, and $143 thousand in gain on sale of
securities all of which were partially offset by a decrease of $3.1
million in mortgage fee income. The increase in gain on derivatives
was primarily the result of an increase in the locked mortgage
pipeline from 67.6% for the quarter ended March 31, 2018,
compared to a 12.8% increase in the locked mortgage pipeline for
the quarter ended March 31, 2017.
Noninterest expense totaled $16.7 million for the quarter ended
March 31, 2018, a decrease of $975 thousand, or 5.5%, from the
quarter ended December 31, 2017, and an increase of $422
thousand, or 2.6%, from the quarter ended March 31, 2017.
The $975 thousand decrease in noninterest expense from the
quarter ended December 31, 2017, was primarily due to a
decrease of $626 thousand in salaries and employee benefits expense
and a $448 thousand decrease in data processing and communications.
The decrease in salaries and employee benefits expense was
primarily the result of lower commissions paid due to a decrease in
mortgage closed loan volume of 22.4% versus the quarter ended
December 31, 2017. The Company is also experiencing lower data
processing and communications expenses related to a new core system
that was implemented in the second quarter of 2017.
The $422 thousand increase in noninterest expense from the
quarter ended March 31, 2017, was primarily due to an increase
of $511 thousand in salaries and employee benefits expense, due to
the addition of lenders, treasury team members and the opening of
two new branches in 2017. The Company continues to capitalize on
disruptions in the market to build out the sales team.
As previously announced on February 20, 2018, the Company
declared a quarterly cash dividend of $0.025 per share to
shareholders of record at the close of business on March 2, 2018,
payable March 15, 2018. This was the first quarterly dividend for
2018 and was equal to the quarterly payouts in 2017 of $0.025 per
share.
About MVB Financial Corp.
MVB Financial Corp. (“MVB Financial” or “MVB”), the holding
company of MVB Bank, is publicly traded on The Nasdaq Capital
Market® under the ticker “MVBF.”
MVB is a financial holding company headquartered in Fairmont,
W.Va. Through its subsidiary, MVB Bank, Inc., and the bank’s
subsidiary, MVB Mortgage, the company provides financial services
to individuals and corporate clients in the Mid-Atlantic
region.
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 Corp. 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 Earnings Release. These forward-looking
statements are based on current expectations about the future and
subject to risks and uncertainties. Forward-looking statements
include information concerning possible or assumed future results
of operations of the Company and its subsidiaries. When words
such as “believes,” “expects,” “anticipates,” “may,” or similar
expressions occur in this Earnings Release, the Company is making
forward-looking statements. 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 the forward-looking
statements contained in this Earnings Release. Those factors
include, but are not limited to: credit risk, changes in market
interest rates, inability to achieve merger-related synergies,
competition, economic downturn or recession and government
regulation and supervision. Additional factors that may cause
our actual results to differ materially from those described in our
forward-looking statements can be found in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2017, as
well as its other filings with the SEC, which are available on the
SEC website at www.sec.gov. Except as required by law, the Company
undertakes no obligation to update or revise 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 Securities and Exchange Commission.
Accordingly, the consolidated financial information in this
announcement is subject to change.
Questions or comments concerning this Earnings Release should be
directed to:
MVB Financial Corp.
Donald T. Robinson, Executive Vice President and CFO(304)
598-3500drobinson@mvbbanking.com
MVB Financial Corp.
Financial
Highlights
Condensed Consolidated Statements of Income
(Unaudited) (Dollars in thousands, except
per share data)
Quarterly 2018 2017
2017 2017 2017
First
Quarter
Fourth
Quarter
ThirdQuarter SecondQuarter
FirstQuarter Interest income $ 15,054 $ 15,086 $
14,630 $ 13,814 $ 13,068 Interest expense 3,589 3,403
3,216 2,920 2,762 Net interest income 11,465 11,683
11,414 10,894 10,306 Provision for loan losses 474 1,036 96 523 518
Noninterest income 9,039 10,157 10,158 11,567 8,824 Noninterest
expense 16,739 17,714 17,966 18,503
16,317 Income before income taxes 3,291 3,090 3,510 3,435 2,295
Income tax expense 697 1,667 1,192 1,175
721 Net income $ 2,594 $ 1,423 $ 2,318
$ 2,260 $ 1,574 Preferred dividends 121 124 123 122 129 Net
income available to common shareholders $ 2,473 $ 1,299
$ 2,195 $ 2,138 $ 1,445 Earnings per
share - basic $ 0.24 $ 0.12 $ 0.21 $ 0.21 $ 0.14 Earnings per share
- diluted $ 0.23 $ 0.12 $ 0.21 $ 0.20 $ 0.14
Condensed
Consolidated Balance Sheets
(Unaudited) (Dollars in thousands)
March 31, 2018
December 31, 2017 March 31, 2017 Cash and cash
equivalents $ 23,630 $ 20,305 $ 18,278 Certificates
of deposit with other banks 14,778 14,778 14,527 Investment
securities 233,483 231,507 172,754 Loans held for sale 51,280
66,794 71,921 Loans 1,157,173 1,105,941 1,076,782 Allowance for
loan losses (10,067 ) (9,878 ) (9,372 ) Net loans 1,147,106
1,096,063 1,067,410 Premises and equipment 26,477 26,686 26,079
Goodwill 18,480 18,480 18,480 Other assets 66,284 59,689
44,502 Total assets $ 1,581,518 $
1,534,302 $ 1,433,951 Deposits $
1,153,907 $ 1,159,580 $ 1,136,466 Borrowed funds 207,370 152,169
90,611 Other liabilities 69,820 72,361 68,149 Shareholders' equity
150,421 150,192 138,725 Total
liabilities and shareholders' equity $ 1,581,518 $ 1,534,302
$ 1,433,951
Reportable Segments
(Unaudited)
Three Months Ended March 31, 2018
Commercial &
Retail Banking
Mortgage
Banking
Financial
Holding Company
Intercompany
Eliminations
Consolidated (Dollars in thousands) Revenues:
Interest income $ 13,838 $ 1,335 $ 1 $ (120 ) $ 15,054 Mortgage fee
income 140 6,673 — (250 ) 6,563 Other income 1,780 517
1,553 (1,374 ) 2,476 Total operating income 15,758
8,525 1,554 (1,744 ) 24,093 Expenses: Interest
expense 2,674 727 558 (370 ) 3,589 Salaries and employee benefits
3,569 5,416 1,488 — 10,473 Provision for loan losses 417 57 — — 474
Other expense 4,559 2,122 959 (1,374 ) 6,266
Total operating expenses 11,219 8,322 3,005
(1,744 ) 20,802 Income (loss) before income taxes 4,539 203 (1,451
) — 3,291 Income tax expense (benefit) 978 53 (334 )
— 697 Net income (loss) $ 3,561 $ 150 $ (1,117
) $ — $ 2,594 Preferred stock dividends — — 121 — 121 Net
income (loss) available to common shareholders $ 3,561 $ 150
$ (1,238 ) $ — $ 2,473
Three Months Ended March
31, 2017
Commercial &
Retail Banking
Mortgage
Banking
Financial
Holding
Company
Intercompany
Eliminations
Consolidated (Dollars in thousands) Revenues:
Interest income $ 12,312 $ 781 $ 1 $ (26 ) $ 13,068 Mortgage fee
income 185 9,637 — (188 ) 9,634 Other income 1,077 (1,831 )
1,210 (1,266 ) (810 ) Total operating income 13,574
8,587 1,211 (1,480 ) 21,892 Expenses: Interest
expense 2,119 304 551 (212 ) 2,762 Salaries and employee benefits
2,657 5,955 1,350 — 9,962 Provision for loan losses 500 18 — — 518
Other expense 4,650 2,098 875 (1,268 ) 6,355
Total operating expenses 9,926 8,375 2,776
(1,480 ) 19,597 Income (loss) before income taxes
3,648 212 (1,565 ) — 2,295 Income tax expense (benefit) 1,161
96 (536 ) — 721 Net income (loss) $
2,487 $ 116 $ (1,029 ) $ — $ 1,574
Preferred stock dividends — — 129 — 129 Net income (loss) available
to common shareholders $ 2,487 $ 116 $ (1,158 ) $ —
$ 1,445
Average Balances and Interest
Rates
(Unaudited) (Dollars in thousands)
Three Months Ended
March 31, 2018
Three Months Ended
December 31, 2017
Three Months Ended
March 31, 2017
AverageBalance
InterestIncome/ Expense
Yield/Cost AverageBalance
InterestIncome/ Expense
Yield/Cost AverageBalance
InterestIncome/ Expense
Yield/Cost Assets Interest-bearing deposits in
banks $ 3,883 $ 18 1.83 % $ 4,636 $ 15 1.28 % $ 2,734 $ 10 1.48 %
CDs with other banks 14,778 72 1.97 14,778 75 2.01 14,527 69 1.93
Investment securities: Taxable 154,430 895 2.35 147,459 774 2.08
108,862 546 2.03 Tax-exempt 75,556 655 3.51 68,759 572 3.30 56,280
430 3.10 Loans and loans held for sale: 1 Commercial 775,764 8,943
4.68 770,664 9,042 4.65 746,364 7,943 4.32 Tax exempt 14,464 123
3.46 14,679 128 3.46 15,329 131 3.47 Real estate 360,744 4,190 4.71
374,047 4,300 4.56 352,144 3,764 4.33 Consumer 12,517 158
5.11 13,006 180 5.49 14,370
175 4.94 Total loans 1,163,489 13,414
4.68 1,172,396 13,650 4.62
1,128,207 12,013 4.32 Total earning assets
1,412,136 15,054 4.32 1,408,028 15,086
4.25 1,310,610 13,068 4.04 Less:
Allowance for loan losses (9,987 ) (9,579 ) (9,427 ) Cash and due
from banks 15,966 16,969 15,246 Other assets 102,645 96,103
86,215 Total assets $ 1,520,760 $ 1,511,521
$ 1,402,644
Liabilities Deposits: NOW $
443,784 $ 762 0.70 $ 467,095 $ 807 0.69 $ 415,627 $ 525 0.51 Money
market checking 241,472 443 0.74 238,262 432 0.72 236,845 458 0.78
Savings 46,544 20 0.17 44,685 19 0.17 48,092 19 0.16 IRAs 17,691 62
1.43 17,200 59 1.36 16,573 50 1.22 CDs 269,286 1,011 1.52 278,446
1,025 1.46 264,626 854 1.31 Repurchase agreements and federal funds
sold 20,605 19 0.37 24,727 19 0.30 23,113 17 0.30 FHLB and other
borrowings 160,205 714 1.81 122,388 474 1.54 103,990 288 1.12
Subordinated debt 33,524 558 6.75 33,524
568 6.72 33,524 551 6.67
Total interest-bearing liabilities 1,233,111 3,589
1.18 1,226,327 3,403 1.10 1,142,390
2,762 0.98 Noninterest bearing demand deposits
129,385 127,417 113,021 Other liabilities 8,673 7,419
9,226 Total liabilities 1,371,169 1,361,163
1,264,637
Stockholders’ equity Preferred stock
7,834 7,834 8,212 Common stock 10,525 10,496 10,048 Paid-in capital
99,110 99,123 93,476 Treasury stock (1,084 ) (1,084 ) (1,084 )
Retained earnings 38,004 36,982 31,651 Accumulated other
comprehensive income (4,798 ) (2,993 ) (4,296 ) Total stockholders’
equity 149,591 150,358 138,007 Total
liabilities and stockholders’ equity $ 1,520,760 $ 1,511,521
$ 1,402,644 Net interest spread 3.14 3.15 3.06
Net interest income-margin $ 11,465 3.29 % $ 11,683
3.29 % $ 10,306 3.19 %
1 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 2018
2017 2017 2017
2017
First
Quarter
Fourth
Quarter
ThirdQuarter
SecondQuarter
FirstQuarter
Earnings and Per Share Data: Net income $ 2,594 $ 1,423 $
2,318 $ 2,260 $ 1,574 Net income available to common shareholders
2,473 1,299 2,195 2,138 1,445 Earnings per share - basic 0.24 0.12
0.21 0.21 0.14 Earnings per share - diluted 0.23 0.12 0.21 0.20
0.14 Cash dividends paid per common share 0.025 0.025 0.025 0.025
0.025 Book value per common share 13.53 13.63 13.51 13.31 13.09
Weighted average shares outstanding - basic 10,474,138 10,444,627
10,443,443 10,343,933 9,996,544 Weighted average shares outstanding
- diluted 12,714,353 10,823,994 12,410,070 12,181,433 10,009,341
Performance Ratios: Return on average assets 1 0.68 %
0.38 % 0.63 % 0.63 % 0.45 % Return on average equity 1 6.94 % 3.79
% 6.28 % 6.30 % 4.56 % Net interest margin 2 3.29 % 3.29 % 3.37 %
3.31 % 3.19 % Efficiency ratio 3 81.64 % 81.11 % 83.28 % 82.38 %
85.30 % Overhead ratio 1 4 4.40 % 4.69 % 4.87 % 5.19 % 4.65 %
Asset Quality Data and Ratios: Charge-offs $ 356 $
572 $ 472 $ 163 $ 290 Recoveries 71 18 24 16 43 Net loan
charge-offs to total loans 1 5 0.10 % 0.20 % 0.16 % 0.05 % 0.09 %
Allowance for loan losses 10,067 9,878 9,396 9,748 9,372 Allowance
for loan losses to total loans 6 0.87 % 0.89 % 0.86 % 0.88 % 0.87 %
Nonperforming loans 9,102 9,699 6,559 5,103 6,575 Nonperforming
loans to total loans 0.79 % 0.88 % 0.60 % 0.46 % 0.61 %
Capital Ratios: Equity to assets 9.51 % 9.79 % 10.12 % 9.74
% 9.67 % Leverage ratio 9.50 % 9.27 % 9.41 % 9.59 % 9.24 % Common
equity Tier 1 capital ratio 10.60 % 10.55 % 10.76 % 10.32 % 10.15 %
Tier 1 risk-based capital ratio 11.57 % 11.54 % 11.79 % 11.33 %
11.19 % Total risk-based capital ratio 14.80 % 14.87 % 15.18 %
14.66 % 14.63 %
1 annualized for the quarterly periods
presented
2 net interest income as a percentage of
average interest earning assets
3 noninterest expense as a percentage of
net interest income and noninterest income
4 noninterest expense as a percentage of
average assets
5 charge-offs less recoveries
6 excludes loans held for sale
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180507005870/en/
MVB Financial Corp.Amy Baker, 844-682-2265VP, Corporate
Communicationsabaker@mvbbanking.com
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