MVB Financial Corp. (the “Company”) (NASDAQ: MVBF) today
reported net income of $14.9 million, or $1.27 basic and $1.15
diluted earnings per share, excluding discontinued operations, for
the three months ended June 30, 2019, an increase of 367.8%,
compared to $3.2 million, or $0.26 basic and diluted for the three
months ended March 31, 2019, and an increase of 427.4%, compared to
$2.8 million, or $0.25 basic and diluted for the same time period
in 2018.
Quarterly
Year-to-Date
2019
2019
2018
2019
2018
Second Quarter
First Quarter
Second Quarter
Net income from continuing operations
$
14,931
$
3,192
$
2,831
$
18,123
$
5,425
Net income from discontinued
operations
$
446
$
—
$
—
$
446
$
—
Net income
$
15,377
$
3,192
$
2,831
$
18,569
$
5,425
Earnings per share from continuing
operations - basic
$
1.27
$
0.26
$
0.25
$
1.54
$
0.49
Earnings per share from discontinued
operations - basic
$
0.04
$
—
$
—
$
0.04
$
—
Earnings per share - basic
$
1.31
$
0.26
$
0.25
$
1.58
$
0.49
Earnings per share from continuing
operations - diluted
$
1.15
$
0.26
$
0.25
$
1.41
$
0.47
Earnings per share from discontinued
operations - diluted
$
0.03
$
—
$
—
$
0.03
$
—
Earnings per share - diluted
$
1.18
$
0.26
$
0.25
$
1.44
$
0.47
As previously announced on April 29, 2019, the Company
recognized a $13.5 million pre-tax gain after a valuation on its
fintech investment portfolio that was recognized in the second
quarter of 2019. The after-tax gain was $10.1 million. Excluding
discontinued operations and this fintech investment gain, second
quarter 2019 core earnings increased 72.2% compared to the quarter
ended June 30, 2018.
Noninterest-bearing deposits increased $34.5 million, or 14.6%,
from March 31, 2019, and increased $106.6 million, or 65.0%, from
June 30, 2018, to a balance of $270.6 million as of June 30, 2019.
The growth in noninterest-bearing deposits was primarily driven by
MVB’s strategy to focus on Fintech and specialty deposits. As of
June 30, 2019, noninterest-bearing deposits were 19.6% of total
deposits, compared to 16.5% as of March 31, 2019, and 13.7% as of
June 30, 2018.
Interest income increased $847 thousand, or 4.3%, from the
quarter ended March 31, 2019, and increased $3.5 million, or 20.8%,
from the quarter ended June 30, 2018. The increase from the quarter
ended June 30, 2018, was primarily due to a $3.4 million increase
in interest and fees on loans driven by an increase in the average
balances of loans of $182.9 million, coupled with a 45-basis point
increase in the yield on commercial loans.
Mortgage closed loan production volume increased $185.4 million,
or 66.5%, from the quarter ended March 31, 2019, and increased
$17.7 million, or 4.0%, from the quarter ended June 30, 2018. As a
result of this volume increase, the volume of mortgage loans sold
increased $146.0 million, or 58.1%, from the quarter ended March
31, 2019, and increased $43.1 million, or 12.2%, from the quarter
ended June 30, 2018. As a result of the increases in production and
sold loan volume, mortgage fee income increased $3.2 million, or
47.9%, from the quarter ended March 31, 2019, and increased $801
thousand, or 8.8%, from the quarter ended June 30, 2018. Even with
these increases in volume, mortgage processing expense decreased
$93 thousand, or 11.5%, from the quarter ended March 31, 2019, and
decreased $276 thousand, or 27.8%, from the quarter ended June 30,
2018.
MANAGEMENT OVERVIEW
“The Second Quarter and first half of the year results very much
validate our adaptive MVB 3.0 strategy. All four verticals of MVB
Bank – Commercial, Fintech, Mortgage and Retail – had an
outstanding quarter and are firing on all cylinders. The gain
realized in the Second Quarter from our forward-thinking Fintech
investment portfolio was a critical boost to earnings. Our Fintech
investment portfolio is yielding more than a 200% Internal Rate of
Return (IRR) since inception. MVB is positioned to finish the year
in a record-setting fashion across the entire company. Our strong
earnings are helping us to extinguish our subordinated debt without
shareholder dilution. This year's results are from building a
strong foundation to be able to provide positive impact now and in
the future for our shareholders, clients, communities and teammates
as our trusted partners,” said Larry F. Mazza, CEO and President,
MVB Financial.
SECOND QUARTER 2019 HIGHLIGHTS
- Loans of $1.3 billion as of June 30, 2019, decreased $14.5
million, or 1.1%, from March 31, 2019, and increased $111.1
million, or 9.2%, from June 30, 2018. During the quarter ended June
30, 2019, residential mortgage loans totaling $51.6 million were
sold.
- Assets of $1.8 billion as of June 30, 2019, increased $43.1
million, or 2.4%, from March 31, 2019, and increased $147.6
million, or 8.8%, from June 30, 2018.
- Deposits of $1.4 billion as of June 30, 2019, decreased $52.9
million, or 3.7%, from March 31, 2019, and increased $181.9
million, or 15.2% from June 30, 2018. Noninterest-bearing deposits
of $270.6 million as of June 30, 2019, increased $34.5 million, or
14.6%, from March 31, 2019, and increased $106.6 million, or 65.0%,
from June 30, 2018.
- Net interest income of $14.5 million for the quarter ended June
30, 2019, increased $557 thousand, or 4.0%, from the quarter ended
March 31, 2019, and increased $1.9 million, or 14.8% from the
quarter ended June 30, 2018. Net interest margin of 3.46% for the
quarter ended June 30, 2019, increased 1 basis point versus the
quarter ended March 31, 2019, and increased 8 basis points versus
the quarter ended June 30, 2018.
- Noninterest income of $26.4 million for the quarter ended June
30, 2019, increased $17.6 million, or 201.0%, from the quarter
ended March 31, 2019, and increased $15.6 million, or 144.4%, from
the quarter ended June 30, 2018. During the quarter ended June 30,
2019, the Company recognized a $10.1 million after-tax gain
following a valuation on its fintech investment portfolio.
- Noninterest expense of $20.4 million for the quarter ended June
30, 2019, increased $1.9 million, or 10.5%, from the quarter ended
March 31, 2019, and increased $1.1 million, or 5.9%, from the
quarter ended June 30, 2018.
- During the second quarter of 2019, the Company opened an office
in Salt Lake City, Utah to house a new fintech sales team.
LOANS
Loans totaled $1.3 billion as of June 30, 2019, a decrease of
$14.5 million, or 1.1%, from March 31, 2019, and an increase of
$111.1 million, or 9.2%, from June 30, 2018. The linked quarter
decrease in loans is attributable to residential mortgage loan
sales totaling $51.6 million. Commercial loans have increased $22.8
million, or 2.4%, from the quarter ended March 31, 2019, and
increased $100.8 million, or 11.4%, from June 30, 2018. The
year-over-year growth in loans is attributable to organic growth
and the addition of commercial lenders within the Company’s primary
lending areas. The yield on loans was 5.22% as of the quarter ended
June 30, 2019, an increase of 2 basis points from the quarter ended
March 31, 2019, and an increase of 34 basis points from the quarter
ended June 30, 2018.
DEPOSITS
Deposits totaled $1.4 billion as of June 30, 2019, and decreased
$52.9 million, or 3.7%, from March 31, 2019, while increasing
$181.9 million, or 15.2%, from June 30, 2018. As a result of the
Company's efforts to improve net interest margin, high-cost
deposits have been allowed to mature. The primary driver of the
decrease in deposits from March 31, 2019, was a decrease of $95.9
million in brokered certificates of deposit. Noninterest-bearing
deposits totaled $270.6 million as of June 30, 2019, or 19.6%, of
the total deposit base, an increase of $34.5 million, or 14.6%,
from March 31, 2019, and an increase of $106.6 million, or 65.0%,
from June 30, 2018. Noninterest-bearing deposits remain a core
funding source for the Company. Of the $270.6 million in
noninterest-bearing deposits, balances of $89.7 million are related
to Fintech opportunities and balances of $37.0 million are related
to Title business opportunities. Total Fintech deposits are $106.3
million and total Title business deposits are $51.9 million as of
June 30, 2019.
NET INTEREST INCOME
Net interest income for the quarter ended June 30, 2019, was
$14.5 million, an increase of $557 thousand, or 4.0%, from the
quarter ended March 31, 2019, and an increase of $1.9 million, or
14.8%, from the quarter ended June 30, 2018. Net interest margin
for the quarter ended June 30, 2019 was 3.46%, an increase of 1
basis point versus the quarter ended March 31, 2019, and an
increase of 8 basis points versus the quarter ended June 30,
2018.
Interest income increased 4.3% during the quarter ended June 30,
2019, compared to the quarter ended March 31, 2019, a result of an
increase of 3 basis points in the yield on earning assets, and
increased 20.8% compared to the quarter ended June 30, 2018, due to
an increase of 36 basis points in the yield on earning assets. The
increase in the yield on earning assets compared to the quarter
ended March 31, 2019, was the result of a 6-basis point increase in
commercial loans. The increase in the yield on earning assets
compared to the quarter ended June 30, 2018, was the result of a
45-basis point increase in commercial loans.
Interest expense increased 5.1% during the quarter ended June
30, 2019, compared to the quarter ended March 31, 2019, due to an
increase of 7 basis points in the cost of interest-bearing
liabilities, and increased 38.5% compared to the quarter ended June
30, 2018, due to an increase of 45 basis points in the cost of
interest-bearing liabilities. The increase in the cost of
interest-bearing liabilities compared to the quarter ended March
31, 2019, was the result of a 15-basis point increase in money
market checking, a 11-basis point increase in CDs, a 9-basis point
increase in NOW accounts, and an 8-basis point increase in IRAs.
The increase in the cost of interest-bearing liabilities compared
to the quarter ended June 30, 2018, was the result of a 73-basis
point increase in FHLB and other borrowings, a 72-basis point
increase in money market checking, a 62-basis point increase in
CDs, a 34-basis point increase in IRAs, and an 18-basis point
increase in NOW accounts.
An increase in the Company's average noninterest-bearing
balances of $36.1 million from the quarter ended March 31, 2019,
helped to grow a 35-basis point favorable spread on net interest
margin for the quarter ended June 30, 2019, compared to a 30-basis
point favorable spread for the quarter ended March 31, 2019.
An increase in the Company’s average noninterest-bearing
balances of $104.5 million from the quarter ended June 30, 2018,
helped to grow a 35-basis point favorable spread on net interest
margin in 2019 compared to an 18-basis point favorable spread in
2018.
ASSET QUALITY
Provision for loan losses totaled $600 thousand for the quarter
ended June 30, 2019, an increase of $300 thousand, or 100.0%,
increase from the quarter ended March 31, 2019, and a decrease of
$5 thousand, or 0.8%, from the quarter ended June 30, 2018.
The $300 thousand increase from the quarter ended March 31, 2019
was primarily the result of an increase in net charge-offs of $677
thousand and an increase in certain average historical loss
rates.
The $5 thousand decrease from the quarter ended June 30, 2018
was the result of the net impact of decreased loan volume in the
second quarter of 2019 versus the same time period in 2018, a
decrease in the specific loan loss allocations in the second
quarter of 2019 versus the second quarter of 2018, and a decrease
in the commercial historical loss rates in the second quarter of
2019 versus the same time period in 2018.
Nonperforming loans decreased $307 thousand, to 0.51%, of total
loans as of June 30, 2019, compared to 0.53% of total loans as of
March 31, 2019, and compared to 0.78% of total loans as of June 30,
2018. In addition, net charge-offs for the quarter ended June 30,
2019, increased $677 thousand compared to the quarter ended March
31, 2019, and increased $653 thousand compared to the quarter ended
June 30, 2018.
NONINTEREST INCOME
Noninterest income totaled $26.4 million for the quarter ended
June 30, 2019, an increase of $17.6 million, or 201.0%, from the
quarter ended March 31, 2019, and an increase of $15.6 million, or
144.4%, from the quarter ended June 30, 2018.
The $17.6 million increase in noninterest income from the
quarter ended March 31, 2019, was due to an increase of $13.4
million in the holding gain on equity securities, an increase of
$3.2 million in mortgage fee income, an increase of $681 thousand
in the gain on derivatives, and an increase of $358 thousand in
commercial swap fee income. The increase in mortgage fee income of
$3.2 million was the result of an increase of $146.0 million, or
58.1%, in the volume of mortgage loans sold which was driven by an
increase of $185.4 million, or 66.5%, in mortgage closed production
volume. The increase in the gain on derivatives of $681 thousand
was the result of an increase of $40 thousand in the valuation of
the open trades used to hedge the locked pipeline, as well as a
37.5% increase in the locked mortgage pipeline during the quarter
ended June 30, 2019.
The $15.6 million increase in noninterest income from the
quarter ended June 30, 2018, was primarily due to an increase of
$13.6 million in the holding gain on equity securities, an increase
of $801 thousand in mortgage fee income, an increase of $478
thousand in the gain on derivative, an increase of $438 thousand in
commercial swap fee income, and an increase of $123 thousand in the
gain on sale of portfolio loans. The increase in mortgage fee
income was largely the result of an increase of $43.1 million, or
12.2%, in the volume of mortgage loans sold which was driven by an
increase of $17.7 million, or 4.0%, in mortgage closed production
volume. The increase in gain on derivatives of $478 thousand was
largely the result of an increase of 37.5% in the locked mortgage
pipeline during the three months ended June 30, 2019, compared to a
decrease of 0.5% in the locked mortgage pipeline during the three
months ended June 30, 2018.
NONINTEREST EXPENSE
Noninterest expense totaled $20.4 million for the quarter ended
June 30, 2019, an increase of $1.9 million, or 10.5%, from the
quarter ended March 31, 2019, and an increase of $1.1 million, or
5.9%, from the quarter ended June 30, 2018.
The $1.9 million increase in noninterest expense from the
quarter ended March 31, 2019, was primarily due to an increase of
$1.5 million in salaries and employee benefits and an increase of
$214 thousand in travel, entertainment, dues, and subscriptions.
The increase in salaries and employee benefits was primarily driven
by increased mortgage closed production volume.
The $1.1 million increase in noninterest expense from the
quarter ended June 30, 2018, was primarily due to an increase of
$786 thousand in salaries and employee benefits, an increase of
$273 thousand in travel, entertainment, dues, and subscriptions,
and an increase of $169 thousand in occupancy and equipment
expense. These increases were partially offset by a decrease of
$276 thousand in mortgage processing expense.
DISCONTINUED OPERATIONS
On June 30, 2016, the Company entered into an Asset Purchase
Agreement with USI Insurance Services, in which USI purchased
substantially all of the assets and assumed certain liabilities of
MVB Insurance. Based on a measurement period that ended June 30,
2019, the Company has earned and is reasonably assured to receive
an earn-out payment related to the Asset Purchase Agreement with
USI Services. The Company expects to receive the earn-out payment
during the third quarter 2019 and as of June 30, 2019, have
estimated and recorded the earn-out payment as contingent
consideration from discontinued operations. The estimate of the
earn-out payment is $446 thousand, net of income taxes.
SUBSEQUENT EVENT
On June 30, 2014, the Company issued its Convertible
Subordinated Promissory Notes Due 2024 (the “Notes”) to various
investors, of which as of June 30, 2019, $12.4 million remained
outstanding. The proceeds from the Notes constitute Tier 2 capital
for bank regulatory capital purposes. The Notes are redeemable by
the Company at least five years after the original issuance date
upon prior approval from the Federal Reserve Board.
On July 10, 2019, the Company received a notice of non-objection
from the Federal Reserve for the Company to redeem all of the
outstanding Notes. The Company intends to provide notice to the
holders of the outstanding Notes and redeem the outstanding
Notes.
DIVIDEND
As previously announced on May 20, 2019, the Company declared a
quarterly cash dividend of $0.04 per share to shareholders of
record at the close of business on June 1, 2019, payable June 15,
2019. This was the second quarterly dividend for 2019 and includes
a one-half cent, or 14.3% increase per share, compared to the
previous quarter dividend of $0.035 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
subsidiaries, MVB Mortgage and MVB Community Development
Corporation, 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, 2018, 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) 598-3500 drobinson@mvbbanking.com
MVB Financial Corp.
Financial Highlights
Consolidated Statements of
Income
(Unaudited) (Dollars in
thousands, except per share data)
Quarterly
Year-to-Date
2019
2019
2018
2019
2018
Second Quarter
First Quarter
Second Quarter
Interest income
$
20,470
$
19,623
$
16,944
$
40,093
$
31,998
Interest expense
5,941
5,651
4,289
11,592
7,878
Net interest income
14,529
13,972
12,655
28,501
24,120
Provision for loan losses
600
300
605
900
1,079
Net interest income after provision for
loan losses
13,929
13,672
12,050
27,601
23,041
Noninterest income:
Mortgage fee income
9,864
6,670
9,063
16,534
15,626
Other income
16,523
2,095
1,732
18,618
4,208
Total noninterest income
26,387
8,765
10,795
35,152
19,834
Noninterest expense:
Salaries and employee benefits
13,280
11,734
12,494
25,014
22,967
Other expense
7,110
6,714
6,755
13,824
13,021
Total noninterest expenses
20,390
18,448
19,249
38,838
35,988
Income from continuing operations, before
income taxes
19,926
3,989
3,596
23,915
6,887
Income tax expense - continuing
operations
4,995
797
765
5,792
1,462
Net income from continuing operations
14,931
3,192
2,831
18,123
5,425
Income from discontinued operations,
before income taxes
600
—
—
600
—
Income tax expense - discontinued
operations
154
—
—
154
—
Net income from discontinued
operations
446
—
—
446
—
Net income
$
15,377
$
3,192
$
2,831
$
18,569
$
5,425
Preferred dividends
122
121
122
243
243
Net income available to common
shareholders
$
15,255
$
3,071
$
2,709
$
18,326
$
5,182
Earnings per share from continuing
operations - basic
$
1.27
$
0.26
$
0.25
$
1.54
$
0.49
Earnings per share from discontinued
operations - basic
0.04
—
—
0.04
—
Earnings per share - basic
$
1.31
$
0.26
$
0.25
$
1.58
$
0.49
Earnings per share from continuing
operations - diluted
$
1.15
$
0.26
$
0.25
$
1.41
$
0.47
Earnings per share from discontinued
operations - diluted
0.03
—
—
0.03
—
Earnings per share - diluted
$
1.18
$
0.26
$
0.25
$
1.44
$
0.47
Condensed Consolidated
Balance Sheets
(Unaudited) (Dollars in
thousands)
June 30, 2019
March 31, 2019
December 31, 2018
June 30, 2018
Cash and cash equivalents
$
21,209
$
17,958
$
22,221
$
23,950
Certificates of deposit with other
banks
14,530
14,778
14,778
14,778
Securities available-for-sale, at fair
value
215,587
224,741
221,614
222,085
Equity securities
18,364
9,841
9,599
6,969
Loans held for sale
119,906
65,955
75,807
98,799
Loans
1,326,682
1,341,218
1,304,366
1,215,072
Less: Allowance for loan losses
(11,168
)
(11,242
)
(10,939
)
(10,651
)
Net Loans
1,315,514
1,329,976
1,293,427
1,204,421
Premises and equipment
25,691
25,922
26,545
26,418
Goodwill
18,480
18,480
18,480
18,480
Other assets
83,737
82,257
68,498
69,519
Total assets
$
1,833,018
$
1,789,908
$
1,750,969
$
1,685,419
Noninterest-bearing deposits
$
270,592
$
236,086
$
213,597
$
163,986
Interest-bearing deposits
1,107,145
1,194,573
1,095,557
1,031,882
Borrowed funds
186,900
114,884
214,887
266,830
Other liabilities
67,705
63,493
50,155
56,926
Stockholders' equity
200,676
180,872
176,773
165,795
Total liabilities and stockholders'
equity
$
1,833,018
$
1,789,908
$
1,750,969
$
1,685,419
Reportable Segments
(Unaudited)
Three Months Ended June 30,
2019
Commercial & Retail
Banking
Mortgage Banking
Financial Holding
Company
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
18,820
$
2,032
$
1
$
(383)
$
20,470
Interest expense
4,743
1,499
287
(588)
5,941
Net interest income
14,077
533
(286)
205
14,529
Provision for loan losses
625
(25)
—
—
600
Net interest income after provision for
loan losses
13,452
558
(286)
205
13,929
Noninterest Income:
Mortgage fee income
277
9,792
—
(205)
9,864
Other income
15,464
1,135
1,495
(1,571)
16,523
Total noninterest income
15,741
10,927
1,495
(1,776)
26,387
Noninterest Expenses:
Salaries and employee benefits
4,220
7,038
2,022
—
13,280
Other expense
5,493
1,842
1,346
(1,571)
7,110
Total noninterest expenses
9,713
8,880
3,368
(1,571)
20,390
Income (loss) from continuing operations,
before income taxes
19,480
2,605
(2,159)
—
19,926
Income tax expense (benefit) - continuing
operations
4,785
703
(493)
—
4,995
Net income (loss) from continuing
operations
$
14,695
$
1,902
$
(1,666)
$
—
$
14,931
Income from discontinued operations,
before income taxes
$
—
$
—
$
600
$
—
$
600
Income tax expense - discontinued
operations
$
—
$
—
$
154
$
—
$
154
Net income from discontinued
operations
$
—
$
—
$
446
$
—
$
446
Net income (loss)
$
14,695
$
1,902
$
(1,220)
$
—
$
15,377
Preferred stock dividends
—
—
122
—
122
Net income (loss) available to common
shareholders
$
14,695
$
1,902
$
(1,342)
$
—
$
15,255
Three Months Ended March 31,
2019
Commercial & Retail
Banking
Mortgage Banking
Financial Holding
Company
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
18,327
$
1,538
$
1
$
(243)
$
19,623
Interest expense
4,754
993
285
(381)
5,651
Net interest income
13,573
545
(284)
138
13,972
Provision for loan losses
247
53
—
—
300
Net interest income after provision for
loan losses
13,326
492
(284)
138
13,672
Noninterest Income:
Mortgage fee income
109
6,697
—
(136)
6,670
Other income
1,566
476
1,779
(1,726)
2,095
Total noninterest income
1,675
7,173
1,779
(1,862)
8,765
Noninterest Expenses:
Salaries and employee benefits
4,395
5,159
2,180
—
11,734
Other expense
5,352
2,025
1,061
(1,724)
6,714
Total noninterest expenses
9,747
7,184
3,241
(1,724)
18,448
Income (loss) from continuing operations,
before income taxes
5,254
481
(1,746)
—
3,989
Income tax expense (benefit) - continuing
operations
1,054
146
(403)
—
797
Net income (loss) from continuing
operations
$
4,200
$
335
$
(1,343)
$
—
$
3,192
Net income (loss)
$
4,200
$
335
$
(1,343)
$
—
$
3,192
Preferred stock dividends
—
—
121
—
121
Net income (loss) available to common
shareholders
$
4,200
$
335
$
(1,464)
$
—
$
3,071
Three Months Ended June 30,
2018
Commercial & Retail
Banking
Mortgage Banking
Financial Holding
Company
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
15,426
$
1,772
$
1
$
(255)
$
16,944
Interest expense
3,164
1,081
542
(498)
4,289
Net interest income
12,262
691
(541)
243
12,655
Provision for loan losses
625
(20)
—
—
605
Net interest income after provision for
loan losses
11,637
711
(541)
243
12,050
Noninterest Income:
Mortgage fee income
154
9,152
—
(243)
9,063
Other income
1,068
706
1,489
(1,531)
1,732
Total noninterest income
1,222
9,858
1,489
(1,774)
10,795
Noninterest Expenses:
Salaries and employee benefits
3,884
6,826
1,784
—
12,494
Other expense
4,968
2,296
1,022
(1,531)
6,755
Total noninterest expenses
8,852
9,122
2,806
(1,531)
19,249
Income (loss) from continuing operations,
before income taxes
4,007
1,447
(1,858)
—
3,596
Income tax expense (benefit) - continuing
operations
832
373
(440)
—
765
Net income (loss) from continuing
operations
$
3,175
$
1,074
$
(1,418)
$
—
$
2,831
Net income (loss)
$
3,175
$
1,074
$
(1,418)
$
—
$
2,831
Preferred stock dividends
—
—
122
—
122
Net income (loss) available to common
shareholders
$
3,175
$
1,074
$
(1,540)
$
—
$
2,709
Six Months Ended June 30, 2019
Commercial & Retail
Banking
Mortgage Banking
Financial Holding
Company
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
37,147
$
3,570
$
3
$
(627)
$
40,093
Interest expense
9,497
2,492
572
(969)
11,592
Net interest income
27,650
1,078
(569)
342
28,501
Provision for loan losses
872
28
—
—
900
Net interest income after provision for
loan losses
26,778
1,050
(569)
342
27,601
Noninterest Income:
Mortgage fee income
386
16,489
—
(341)
16,534
Other income
17,030
1,611
3,274
(3,297)
18,618
Total noninterest income
17,416
18,100
3,274
(3,638)
35,152
Noninterest Expenses:
Salaries and employee benefits
8,615
12,197
4,202
—
25,014
Other expense
10,845
3,867
2,408
(3,296)
13,824
Total noninterest expenses
19,460
16,064
6,610
(3,296)
38,838
Income (loss) from continuing operations,
before income taxes
24,734
3,086
(3,905)
—
23,915
Income tax expense (benefit) - continuing
operations
5,839
849
(896)
—
5,792
Net income (loss) from continuing
operations
18,895
2,237
(3,009)
—
18,123
Income from discontinued operations,
before income taxes
—
—
600
—
600
Income tax expense - discontinued
operations
—
—
154
—
154
Net income from discontinued
operations
—
—
446
—
446
Net income (loss)
$
18,895
$
2,237
$
(2,563)
$
—
$
18,569
Preferred stock dividends
—
—
243
—
243
Net income (loss) available to common
shareholders
$
18,895
$
2,237
$
(2,806)
$
—
$
18,326
Six Months Ended June 30, 2018
Commercial & Retail
Banking
Mortgage Banking
Financial Holding
Company
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
29,265
$
3,107
$
2
$
(376)
$
31,998
Interest expense
5,838
1,808
1,100
(868)
7,878
Net interest income
23,427
1,299
(1,098)
492
24,120
Provision for loan losses
1,042
37
—
—
1,079
Net interest income after provision for
loan losses
22,385
1,262
(1,098)
492
23,041
Noninterest Income:
Mortgage fee income
292
15,825
—
(491)
15,626
Other income
2,848
1,223
3,043
(2,906)
4,208
Total noninterest income
3,140
17,048
3,043
(3,397)
19,834
Noninterest Expenses:
Salaries and employee benefits
7,453
12,242
3,272
—
22,967
Other expense
9,527
4,418
1,981
(2,905)
13,021
Total noninterest expenses
16,980
16,660
5,253
(2,905)
35,988
Income (loss) from continuing operations,
before income taxes
8,545
1,650
(3,308)
—
6,887
Income tax expense (benefit) - continuing
operations
1,810
426
(774)
—
1,462
Net income (loss) from continuing
operations
6,735
1,224
(2,534)
—
5,425
Net income (loss)
$
6,735
$
1,224
$
(2,534)
$
—
$
5,425
Preferred stock dividends
—
—
243
—
243
Net income (loss) available to common
shareholders
$
6,735
$
1,224
$
(2,777)
$
—
$
5,182
Average Balances and Interest
Rates
(Unaudited) (Dollars in
thousands)
Three Months Ended June
30, 2019
Three Months Ended
March 31, 2019
Three Months Ended June
30, 2018
Average Balance
Interest Income/
Expense
Yield/ Cost
Average Balance
Interest Income/
Expense
Yield/ Cost
Average Balance
Interest Income/
Expense
Yield/ Cost
Assets
Interest-bearing deposits in banks
$
9,582
$
52
2.18
%
$
7,546
$
49
2.63
%
$
3,473
$
17
1.96
%
CDs with other banks
14,579
73
2.01
14,778
73
2.00
14,778
74
2.02
Investment securities:
Taxable
123,803
768
2.49
139,692
879
2.55
151,224
891
2.36
Tax-exempt
99,664
894
3.60
92,417
837
3.67
81,164
717
3.54
Loans and loans held for sale: 1
Commercial
965,652
13,065
5.43
951,836
12,594
5.37
831,118
10,318
4.98
Tax exempt
13,047
114
3.50
14,251
123
3.50
14,260
123
3.46
Real estate
446,825
5,363
4.81
411,639
4,941
4.87
394,814
4,656
4.73
Consumer
9,396
141
6.02
9,654
127
5.34
11,850
148
5.00
Total loans
1,434,920
18,683
5.22
1,387,380
17,785
5.20
1,252,042
15,245
4.88
Total earning assets
1,682,548
20,470
4.88
1,641,813
19,623
4.85
1,502,681
16,944
4.52
Less: Allowance for loan losses
(11,216)
(11,071)
(10,132)
Cash and due from banks
15,982
16,088
16,792
Other assets
138,299
112,301
107,421
Total assets
$
1,825,613
$
1,759,131
$
1,616,762
Liabilities
Deposits:
NOW
$
363,837
$
839
0.92
$
357,005
$
729
0.83
$
459,784
$
846
0.74
Money market
checking
327,904
1,287
1.57
297,607
1,044
1.42
229,763
484
0.85
Savings
39,661
1
0.01
40,235
1
0.01
46,478
7
0.06
IRAs
17,718
83
1.88
17,826
79
1.80
17,997
69
1.54
CDs
415,201
2,338
2.26
428,610
2,270
2.15
275,004
1,124
1.64
Repurchase agreements and federal funds
sold
11,644
11
0.38
14,206
14
0.40
20,118
20
0.39
FHLB and other borrowings
153,926
1,095
2.85
175,222
1,229
2.84
226,487
1,197
2.12
Subordinated debt
17,491
287
6.58
17,524
285
6.60
32,015
542
6.79
Total
interest-bearing liabilities
1,347,382
5,941
1.77
1,348,235
5,651
1.70
1,307,646
4,289
1.32
Noninterest bearing demand deposits
250,658
214,541
146,135
Other liabilities
36,729
18,450
9,890
Total
liabilities
1,634,769
1,581,226
1,463,671
Stockholders’ equity
Preferred stock
7,834
7,834
7,834
Common stock
11,695
11,659
10,686
Paid-in capital
117,648
116,925
101,577
Treasury stock
(1,084)
(1,084)
(1,084)
Retained earnings
59,512
49,161
41,277
Accumulated other comprehensive income
(4,761)
(6,590)
(7,199)
Total
stockholders’ equity
190,844
177,905
153,091
Total liabilities
and stockholders’ equity
$
1,825,613
$
1,759,131
$
1,616,762
Net interest spread
3.11
3.15
3.20
Net interest income-margin
$
14,529
3.46
%
$
13,972
3.45
%
$
12,655
3.38
%
1
Non-accrual loans are included in total
loan balances, lowering the effective yield for the portfolio in
the aggregate.
Average Balances and Interest
Rates
(Unaudited) (Dollars in
thousands)
Six Months Ended June 30,
2019
Six Months Ended June 30,
2018
Average Balance
Interest Income/
Expense
Yield/ Cost
Average Balance
Interest Income/
Expense
Yield/ Cost
Assets
Interest-bearing deposits in banks
$
8,570
$
102
2.40
%
$
3,677
$
35
1.94
%
CDs with other banks
14,678
145
1.99
14,778
146
1.99
Investment securities:
Taxable
130,164
1,647
2.55
152,818
1,786
2.36
Tax-exempt
96,060
1,731
3.63
78,375
1,372
3.53
Loans and loans held for sale: 1
Commercial
958,782
25,659
5.40
803,593
19,261
4.83
Tax exempt
13,646
237
3.50
14,362
246
3.46
Real estate
429,278
10,304
4.84
378,095
8,846
4.72
Consumer
9,524
268
5.67
12,182
306
5.07
Total loans
1,411,230
36,468
5.21
1,208,232
28,659
4.78
Total earning assets
1,660,702
40,093
4.87
1,457,880
31,998
4.43
Less: Allowance for loan losses
(11,144)
(10,059)
Cash and due from banks
16,034
16,381
Other assets
126,913
104,401
Total assets
$
1,792,505
$
1,568,603
Liabilities
Deposits:
NOW
$
360,440
$
1,568
0.88
$
451,828
$
1,608
0.72
Money market
checking
312,839
2,330
1.50
235,586
927
0.79
Savings
39,946
2
0.01
46,511
27
0.12
IRAs
17,771
163
1.85
17,845
131
1.48
CDs
421,869
4,608
2.20
272,160
2,135
1.58
Repurchase agreements and federal funds
sold
12,918
25
0.39
20,360
39
0.38
FHLB and other borrowings
164,515
2,324
2.85
193,529
1,911
1.99
Subordinated debt
17,507
572
6.59
32,766
1,100
6.77
Total
interest-bearing liabilities
1,347,805
11,592
1.73
1,270,585
7,878
1.25
Noninterest bearing demand deposits
232,699
137,383
Other liabilities
27,590
9,284
Total
liabilities
1,608,094
1,417,252
Stockholders’ equity
Preferred stock
7,834
7,834
Common stock
11,677
10,606
Paid-in capital
117,292
100,350
Treasury stock
(1,084)
(1,084)
Retained earnings
54,362
39,650
Accumulated other comprehensive income
(5,670)
(6,005)
Total
stockholders’ equity
184,411
151,351
Total liabilities
and stockholders’ equity
$
1,792,505
$
1,568,603
Net interest spread
3.13
3.18
Net interest income-margin
$
28,501
3.46
%
$
24,120
3.34
%
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
Year-to-Date
2019
2019
2018
2019
2018
Second Quarter
First Quarter
Second Quarter
Earnings and Per Share Data:
Net income from continuing operations
$
14,931
$
3,192
$
2,831
$
18,123
$
5,425
Net income from discontinued
operations
$
446
$
—
$
—
$
446
$
—
Net income
$
15,377
$
3,192
$
2,831
$
18,569
$
5,425
Net income available to common
shareholders
15,255
3,071
2,709
18,326
5,182
Earnings per share from continuing
operations - basic
1.27
0.26
0.25
1.54
0.49
Earnings per share from discontinued
operations - basic
0.04
—
—
0.04
—
Earnings per share - basic
1.31
0.26
0.25
1.58
0.49
Earnings per share from continuing
operations - diluted
1.15
0.26
0.25
1.41
0.47
Earnings per share from discontinued
operations - diluted
0.03
—
—
0.03
—
Earnings per share - diluted
1.18
0.26
0.25
1.44
0.47
Cash dividends paid per common share
0.040
0.035
0.025
0.075
0.050
Book value per common share
16.46
14.90
13.93
16.46
13.93
Tangible book value per common share
14.84
13.26
12.25
14.84
12.25
Weighted average shares outstanding -
basic
11,644,061
11,607,543
10,634,805
11,625,903
10,554,916
Weighted average shares outstanding -
diluted
13,155,302
13,177,281
11,502,148
13,139,612
10,941,671
Performance Ratios:
Return on average assets - continuing
operations 1
3.27
%
0.73
%
0.70
%
2.02
%
0.69
%
Return on average assets - discontinued
operations 1
0.10
%
—
%
—
%
0.05
%
—
%
Return on average assets 1
3.37
%
0.73
%
0.70
%
2.07
%
0.69
%
Return on average equity - continuing
operations 1
31.30
%
7.18
%
7.40
%
19.66
%
7.17
%
Return on average equity - discontinued
operations 1
0.93
%
—
%
—
%
0.48
%
—
%
Return on average equity 1
32.23
%
7.18
%
7.40
%
20.14
%
7.17
%
Net interest margin 2
3.46
%
3.45
%
3.38
%
3.46
%
3.34
%
Efficiency ratio 3
49.83
%
81.14
%
82.09
%
61.02
%
81.88
%
Overhead ratio 1 4
4.47
%
4.19
%
4.76
%
4.33
%
4.59
%
Equity to assets
10.95
%
10.11
%
9.84
%
10.95
%
9.84
%
Asset Quality Data and Ratios:
Charge-offs
$
676
$
—
$
29
$
676
$
385
Recoveries
2
3
8
5
79
Net loan charge-offs to total loans 1
5
0.20
%
—
%
0.01
%
0.10
%
0.05
%
Allowance for loan losses
$
11,168
$
11,242
$
10,651
$
11,168
$
10,651
Allowance for loan losses to total loans
6
0.84
%
0.84
%
0.88
%
0.84
%
0.88
%
Nonperforming loans
$
6,768
$
7,075
$
9,419
$
6,768
$
9,419
Nonperforming loans to total loans
0.51
%
0.53
%
0.78
%
0.51
%
0.78
%
Mortgage Data:
Locked pipeline
$
243,884
$
186,747
$
208,880
$
243,884
$
208,880
Sold loan volume
$
397,597
$
251,563
$
354,453
$
649,160
$
610,740
Sold loan refinance volume
$
106,292
$
81,661
$
82,907
$
187,953
$
179,837
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
Non-GAAP Reconciliation: Tangible
Book Value per Common Share
(Unaudited) (Dollars in
thousands)
Quarterly
2019
2019
2018
Second Quarter
First Quarter
Second Quarter
Goodwill
$
18,480
$
18,480
$
18,480
Core deposit intangibles
504
527
598
Total intangibles
18,984
19,007
19,078
Total equity
200,677
180,872
165,795
Less: Preferred equity
(7,834)
(7,834)
(7,834)
Less: Total intangibles
(18,984)
(19,007)
(19,078)
Tangible common equity
173,859
154,031
138,883
Tangible common equity
173,859
154,031
138,883
Common shares outstanding (000s)
11,713
11,615
11,338
Tangible book value per common share
$
14.84
$
13.26
$
12.25
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190729005155/en/
Amy Baker VP, Corporate Communications & Marketing
abaker@mvbbanking.com 844-682-2265
Grafico Azioni MVB Financial (NASDAQ:MVBF)
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Grafico Azioni MVB Financial (NASDAQ:MVBF)
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