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
2022, with reported net income of $2.7 million, or $0.22 basic and
$0.21 diluted earnings per share.
Quarterly
Year-to-Date
2022
2022
2021
2022
2021
Third Quarter
Second Quarter
Third Quarter
Net income
$
2,718
$
2,956
$
11,828
$
8,538
$
29,160
Earnings per share - basic
$
0.22
$
0.24
$
1.00
$
0.70
$
2.49
Earnings per share - diluted
$
0.21
$
0.23
$
0.92
$
0.66
$
2.32
“During the third quarter, we continued to drive strong loan
production, counter-cyclical growth in low-cost deposits and net
interest margin expansion, resulting in robust growth in net
interest income, while maintaining strong asset quality,” said
Larry F. Mazza, Chief Executive Officer, MVB Financial. “In
addition, MVB’s year-to-date results evidenced significant progress
in our efforts to drive growth in Fintech fee income, further
diversifying our revenue base.”
Mazza added, “Amidst these favorable underlying trends,
challenges also emerged. Higher interest rates and a slowing
economy impacted our mortgage business and fee income and, coupled
with elevated provisioning for loan losses related to our strong
loan growth, impacted our earnings for the quarter.”
“As demonstrated throughout MVB’s history, and through our
corporate values, we are ‘Adaptive’ as market conditions change.
While we continue to successfully execute on our MVB-F1: Success
Loves Speed Strategy, we are adjusting to wet track conditions by
sharpening our focus. Specifically, we are implementing initiatives
that are expected to drive a 12% reduction from MVB’s annualized
third quarter 2022 noninterest expense base, with 75% of the
projected cost savings to be achieved by the end of the first
quarter 2023, and the remainder expected to be fully captured by
the end of the third quarter of 2023.”
THIRD QUARTER 2022 HIGHLIGHTS
- Strong growth in low-cost deposits amidst cyclical industry
headwinds
- Total deposits were $2.70 billion as of September 30, 2022, an
increase of $82.0 million, or 3.1%, from June 30, 2022 and $298.0
million, or 12.4%, from September 30, 2021.
- Noninterest-bearing (“NIB”) deposits were $1.41 billion as of
September 30, 2022, an increase of $68.9 million, or 5.1%, from
June 30, 2022 and $412.4 million, or 41.3%, from September 30,
2021. NIB deposits represented 52% of total deposits as of
September 30, 2022, as compared to 51% and 42% as of June 30, 2022
and September 30, 2021, respectively.
- The cost of funds was 59 basis points for the quarter ended
September 30, 2022 up 37 basis points compared to the quarter ended
June 30, 2022 and 35 basis points compared to the quarter ended
September 30, 2021. The increase from the prior quarter primarily
reflected a change in deposit mix based on average balances, led by
growth in average interest-bearing deposits as compared to
relatively consistent average NIB deposits, as well as higher
interest rates and increased Federal Home Loan Banks borrowings
during the quarter. The increase in cost of funds compared to the
prior year period mostly reflected higher interest rates, partially
offset by the relatively higher contribution of NIB deposits
relative to the prior year.
- Loan growth and margin expansion drive our strong growth in
net interest income
- Net interest income on a tax-equivalent basis totaled $30.1
million for the quarter ended September 30, 2022, up $3.2 million,
or 11.8%, and $10.7 million, or 55.1%, from the quarters ended June
30, 2022 and September 30, 2021, respectively.
- Total loan balances of $2.47 billion as of September 30, 2022
increased by $256.3 million, or 11.6%, compared to June 30, 2022
and $707.2 million, or 40.1%, compared to September 30, 2021.
- Loans held-for-sale were $20.0 million as of September 30,
2022, compared to $11.9 million as of June 30, 2022 and none as of
September 30, 2021, led by MVB Bank’s Small Business Administration
(“SBA”) lending growth vehicle.
- On a tax-equivalent basis, net interest margin for the quarter
ended September 30, 2022 was 4.25%, an increase of 15 basis points
versus the quarter ended June 30, 2022 and an increase of 100 basis
points versus the quarter ended September 30, 2021. The quarter
over quarter increase in net interest margin was due primarily to
strong loan growth, higher loan yields, and significantly lower
cash balances, partially offset by an increase in funding
costs.
- Asset quality indicators remained stable
- Nonperforming loans totaled $22.4 million, or 0.9% of total
loans, as of September 30, 2022, as compared to $19.3 million, or
0.9% of total loans, as of June 30, 2022, and $17.5 million, or
1.0% of total loans, as of September 30, 2021. Criticized loans as
a percentage of total loans were 3.4%, as compared to 4.0% as of
June 30, 2022, and 6.5% as of September 30, 2021.
- Net charge-offs were $1.3 million, or 0.22% of total loans on
an annualized basis, for the quarter ended September 30, 2022,
compared to $1.2 million, or 0.21% of total loans on an annualized
basis, for the quarter ended June 30, 2022. Net charge-offs on an
annualized basis, for the quarter ended September 30, 2021, were
not significant.
- The provision for loan losses totaled $5.1 million for the
quarter ended September 30, 2022, compared to $5.1 million for the
quarter ended June 30, 2022, and $0.4 million for the quarter ended
September 30, 2021. Allowance for loan losses was 1.07% of total
loans as of September 30, 2022, an increase of four basis points
from June 30, 2022 and a decline of 36 basis points from September
30, 2021. Approximately 84% of the increase in the allowance for
loan losses for the quarter ended September 30, 2022 is
attributable to strong growth in our loan balances during the
quarter.
- Quarter over quarter expense growth largely held in
check
- Noninterest expense totaled $30.0 million for the quarter ended
September 30, 2022, an increase of $0.1 million, or 0.5%, from the
quarter ended June 30, 2022 and an increase of $4.1 million, or
16.0%, from the quarter ended September 30, 2021. The increase from
the quarter ended June 30, 2022 primarily reflects an increase in
other operating expenses of $0.5 million, or 24.1%, and an increase
in equipment depreciation and maintenance of $0.3 million, or
19.9%, mostly offset by a decrease in salaries and employee
benefits of $0.7 million, or 3.5%. The increase relative to the
prior year period primarily reflects higher salaries and employee
benefits costs of $1.8 million, or 10.8%, and higher other
operating expenses of $1.3 million, or 116.1%.
INCOME STATEMENT
Net interest income on a tax-equivalent basis totaled $30.1
million for the quarter ended September 30, 2022, up $3.2 million,
or 11.8%, from the quarter ended June 30, 2022 and $10.7 million,
or 55.1%, from the quarter ended September 30, 2021. The increase
in net interest income compared to both periods generally reflects
strong loan growth, primarily driven by the Company’s strategic
lending partnerships growth vehicle and broad-based growth
throughout CoRe Banking business.
Interest income increased $5.8 million, or 20.7%, to $33.9
million from the quarter ended June 30, 2022 and $13.4 million, or
65.5%, from the quarter ended September 30, 2021. The
tax-equivalent yield on loans was 5.26% for the quarter ended
September 30, 2022, compared to 5.06% for the quarter ended June
30, 2022 and 4.25% for the quarter ended September 30, 2021. Higher
loan yields generally reflect new loan production at favorable
interest rates and the impact of the Fed rate increases on our
commercial loan portfolio.
Interest expense increased $2.6 million, or 183.7%, from the
quarter ended June 30, 2022 and increased $2.7 million, or 192.3%,
from the quarter ended September 30, 2021. The cost of funds was 59
basis points for the quarter ended September 30, 2022, up 37 basis
point compared to the quarter ended June 30, 2022 and 35 basis
points compared to the quarter ended September 30, 2021. The
increase from the prior quarter primarily reflected a change in
deposit mix based on average balances, led by growth in average
interest-bearing deposits as compared to relatively consistent
average NIB deposits, as well as higher interest rates and
increased FHLB borrowings during the quarter. The increase in cost
of funds compared to the prior year period mostly reflected higher
interest rates, partially offset by the relatively higher
contribution of NIB deposits relative to the prior year.
On a tax-equivalent basis, net interest margin for the quarter
ended September 30, 2022 was 4.25%, an increase of 15 basis points
versus the quarter ended June 30, 2022 and 100 basis points versus
the quarter ended September 30, 2021. Please 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 quarter ended June 30,
2022 reflected the impact of strong loan growth, partially offset
by an increase in deposit costs. The increase in net interest
margin from the quarter ended September 30, 2021 also reflected
strong loan growth and an increase in deposit costs, to a greater
extent. The average loan-to-deposit ratio during the quarter ended
September 30, 2022 was 92.5%, compared to 82.9% for the quarter
ended June 30, 2022, and 78.9% for the quarter ended September 30,
2021.
Noninterest income totaled $8.2 million for the quarter ended
September 30, 2022, a decrease of $3.7 million, or 31.2% from the
quarter ended June 30, 2022 and a decrease of $13.8 million, or
62.7%, from the quarter ended September 30, 2021.
The decrease in noninterest income compared to the prior quarter
is driven by decreases in equity method investment income of $1.6
million, or 286.0%, in other operating income of $0.9 million, or
51.5%, and in payment card and service charge income of $0.7
million, or 17.5%. The sale of mortgaging servicing rights in June
2022 resulted in $1.2 million of the decrease in other operating
income. The decrease in payment card and service charge income is
driven by decreased interchange income. The decline in equity
method investment income was primarily due to lower mortgage
banking revenue reflecting the continued sharp increase in market
interest rates during the third quarter of 2022. Further
disaggregation of the Company’s noninterest income is available
below.
The decrease in noninterest income compared to the comparable
quarter in the prior year is driven by a one-time gain on
acquisition and divestiture activity in the quarter ended September
30, 2021 totaling $10.8 million.
Noninterest expense totaled $30.0 million for the quarter ended
September 30, 2022, an increase of $0.1 million, or 0.5%, from the
quarter ended June 30, 2022 and an increase of $4.1 million, or
16.0%, from the quarter ended September 30, 2021. The increase from
the quarter ended June 30, 2022 in expenses primarily reflects a
decrease in salaries and employee benefits of $0.7 million, or
3.5%, partially offset by an increase in other operating expenses
of $0.5 million, or 24.1%. The increase relative to the prior year
period primarily reflects higher salaries and employee benefits
costs of $1.8 million, or 10.8% and higher other operating expenses
of $1.3 million, or 116.1%. The increases in salaries and employee
benefits were due to continued hiring during 2022 that resulted in
a 30% increase in average full time equivalent employees for the
nine months’ ended September 30, 2022 as compared to the nine
months’ ended September 30, 2021. This hiring was strategic to
front-line revenue producers and enhanced risk management
infrastructure.
The Company continues to make Fintech investments to transform
its business model and adapt to changing market conditions and
opportunities. For the quarter ended September 30, 2022, earnings
were impacted by approximately $1.6 million of net loss from its
MVB Edge Ventures segment, as compared to net losses of $1.3
million and $1.6 million for the quarters ended June 30, 2022 and
September 30, 2021, respectively.
BALANCE SHEET
Loans totaled $2.47 billion at September 30, 2022, an increase
of $256.3 million, or 11.6%, and $707.2 million, or 40.1%, as
compared to June 30, 2022 and September 30, 2021, respectively.
Adjusted for the removal of PPP loans from all periods, loan
balances increased by 11.8% from the quarter ended June 30, 2022
and by 51.6% from the quarter ended September 30, 2021. Loan growth
for both periods was driven primarily by the Company’s strategic
lending partnerships growth vehicle. Loans held-for-sale were $20.0
million as of September 30, 2022, compared to $11.9 million at June
30, 2022 and none at September 30, 2021, led by MVB Bank’s SBA
lending growth vehicle.
Deposits totaled $2.70 billion as of September 30, 2022, an
increase of $82.0 million, or 3.1%, from June 30, 2022 and $298.0
million, or 12.4%, from September 30, 2021. NIB deposits totaled
$1.41 billion as of September 30, 2022, an increase $68.9 million,
or 5.1%, from June 30, 2022 and $412.4 million, or 41.3%, from
September 30, 2021. Growth in NIB deposit balances primarily
reflects Fintech business, while the increase in total deposits
also reflects an increase in brokered deposits and other
certificates of deposit. At 52% of total deposits, NIB deposits
continue to exceed all other deposits combined.
CAPITAL
The Community Bank Leverage Ratio was 11.1% as of September 30,
2022, compared to 11.6% as of June 30, 2022 and 12.0% as of
September 30, 2021. MVB’s Tier 1 Risk-Based Capital Ratio was 13.1%
as of September 30, 2022, compared to 13.7% as of June 30, 2022 and
15.7% as of September 30, 2021. The Bank’s Total Risk-Based Capital
Ratio was 14.1% as of September 30, 2022, compared to 14.7% as of
June 30, 2022 and 17.0% as of September 30, 2021.
The Company issued a quarterly cash dividend of $0.17 per share
for the quarter ended September 30, 2022, consistent with the
quarter ended June 30, 2022 and up $0.03, or 21%, from the quarter
ended September 30, 2021.
ASSET QUALITY
Nonperforming loans totaled $22.4 million, or 0.9% of total
loans, as of September 30, 2022, as compared to $19.3 million, or
0.9% of total loans, as of June 30, 2022, and $17.5 million, or
1.0% of total loans, as of September 30, 2021. Criticized loans as
a percentage of total loans were 3.4%, as compared to 4.0% as of
June 30, 2022, and 6.5% as of September 30, 2021.
Net charge-offs were $1.3 million, or 0.22% of total loans on an
annualized basis, for the quarter ended September 30, 2022,
compared to $1.2 million, or 0.21% of total loans on an annualized
basis, for the quarter ended June 30, 2022. Net charge-offs on an
annualized basis, for the quarter ended September 30, 2021, were
not significant.
Changes to the outstanding balances of the loan portfolios, the
level of recognized charge-offs and the resulting historical loss
rates and adjustments to the risk grading of loans within the
portfolio are all contributing factors in the provision for loan
losses. The provision for loan losses totaled $5.1 million for the
quarter ended September 30, 2022, compared to $5.1 million for the
quarter ended June 30, 2022, and $0.4 million for the quarter ended
September 30, 2021. Allowance for loan losses to total loans was
1.07% as September 30, 2022, as compared to 1.03% as of June 30,
2022 and 1.43% as of September 30, 2021.
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 Financial is a financial holding company headquartered in
Fairmont, WV. Through its wholly-owned 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; 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; length
and severity of the COVID-19 pandemic and its impact on the
Company’s business and financial condition; 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, 2021, 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.
MVB Financial Corp.
Financial Highlights
Consolidated Statements of
Income
(Unaudited) (Dollars in
thousands, except per share data)
Quarterly
Year-to-Date
2022
2022
2021
2022
2021
Third Quarter
Second Quarter
Third Quarter
Interest income
$
33,903
$
28,090
$
20,484
$
85,255
$
60,380
Interest expense
4,057
1,430
1,388
6,901
4,724
Net interest income
29,846
26,660
19,096
78,354
55,656
Provision (release of allowance) for loan
losses
5,120
5,100
380
11,500
(542
)
Net interest income after provision
(release of allowance) for loan losses
24,726
21,560
18,716
66,854
56,198
Total noninterest income
8,191
11,909
21,951
31,970
48,053
Noninterest expense:
Salaries and employee benefits
18,316
18,983
16,528
55,260
42,100
Other expense
11,649
10,836
9,301
33,386
26,250
Total noninterest expenses
29,965
29,819
25,829
88,646
68,350
Income before income taxes
2,952
3,650
14,838
10,178
35,901
Income tax expense
397
859
3,164
2,161
7,006
Net income before noncontrolling
interest
2,555
2,791
11,674
8,017
28,895
Net loss attributable to noncontrolling
interest
163
165
154
521
265
Net income attributable to parent
2,718
2,956
11,828
8,538
29,160
Preferred dividends
—
—
—
—
35
Net income available to common
shareholders
$
2,718
$
2,956
$
11,828
$
8,538
$
29,125
Earnings per share - basic
$
0.22
$
0.24
$
1.00
$
0.70
$
2.49
Earnings per share - diluted
$
0.21
$
0.23
$
0.92
$
0.66
$
2.32
Noninterest Income
(Unaudited) (Dollars in
thousands)
Quarterly
Year-to-Date
2022
2022
2021
2022
2021
Third Quarter
Second Quarter
Third Quarter
Card acquiring income
$
560
$
750
$
692
$
2,293
$
2,104
Service charges on deposits
889
973
138
2,734
499
Interchange income
1,864
2,292
855
4,943
2,501
Total payment card and service charge
income
3,313
4,015
1,685
9,970
5,104
Income (loss) from ICM equity method
investment 1
(831
)
732
3,573
1,151
14,570
Loss from other equity method
investments
(190
)
(183
)
—
(485
)
—
Total equity method investment income
(loss)
(1,021
)
549
3,573
666
14,570
Compliance and consulting income
3,736
3,750
3,013
11,355
6,162
Gain on sale of loans
1,298
1,405
908
3,786
3,125
Investment portfolio gains (losses)
(217
)
145
1,065
2,322
5,135
Gains on acquisition and divestiture
activity
—
—
10,783
—
10,783
Other noninterest income
1,082
2,045
924
3,871
3,174
Total noninterest income
$
8,191
$
11,909
$
21,951
$
31,970
$
48,053
1 Intercoastal Mortgage Company, LLC
(“ICM”)
Condensed Consolidated Balance
Sheets
(Unaudited) (Dollars in
thousands)
September 30, 2022
June 30, 2022
September 30, 2021
Cash and cash equivalents
$
79,946
$
161,761
$
390,081
Certificates of deposit with banks
—
496
9,582
Securities available-for-sale, at fair
value
366,742
376,737
439,023
Equity securities
34,101
34,250
29,809
Loans held-for-sale
19,977
11,856
—
Loans receivable
2,471,395
2,215,114
1,764,186
Less: Allowance for loan losses
(26,515
)
(22,734
)
(25,187
)
Loans receivable, net
2,444,880
2,192,380
1,738,999
Premises and equipment, net
24,668
25,272
25,043
Goodwill
3,988
3,988
3,988
Other assets
165,620
177,688
152,299
Total assets
$
3,139,922
$
2,984,428
$
2,788,824
Noninterest-bearing deposits
$
1,411,772
$
1,342,916
$
999,328
Interest-bearing deposits
1,285,186
1,272,054
1,399,612
FHLB and other borrowings
73,328
—
—
Subordinated debt
73,222
73,158
72,966
Other liabilities
52,054
43,390
50,218
Stockholders' equity, including
noncontrolling interest
244,360
252,910
266,700
Total liabilities and stockholders'
equity
$
3,139,922
$
2,984,428
$
2,788,824
Reportable Segments
(Unaudited)
Three Months Ended September 30,
2022
CoRe Banking
Mortgage Banking
Professional Services
Edge Ventures
Financial Holding
Company
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
33,777
$
103
$
—
$
—
$
33
$
(10
)
$
33,903
Interest expense
3,286
—
10
—
771
(10
)
4,057
Net interest income (expense)
30,491
103
(10
)
—
(738
)
—
29,846
Provision for loan losses
5,120
—
—
—
—
—
5,120
Net interest income (expense) after
provision for loan losses
25,371
103
(10
)
—
(738
)
—
24,726
Noninterest income
5,356
(817
)
5,666
115
2,366
(4,495
)
8,191
Noninterest Expenses:
Salaries and employee benefits
9,354
8
3,755
925
4,274
—
18,316
Other expenses
11,523
25
1,394
1,392
1,810
(4,495
)
11,649
Total noninterest expenses
20,877
33
5,149
2,317
6,084
(4,495
)
29,965
Income (loss) before income taxes
9,850
(747
)
507
(2,202
)
(4,456
)
—
2,952
Income taxes
1,817
(192
)
116
(504
)
(840
)
—
397
Net income (loss)
8,033
(555
)
391
(1,698
)
(3,616
)
—
2,555
Net loss attributable to noncontrolling
interest
—
—
36
127
—
—
163
Net income (loss) available to common
shareholders
$
8,033
$
(555
)
$
427
$
(1,571
)
$
(3,616
)
$
—
$
2,718
Three Months Ended June 30,
2022
CoRe Banking
Mortgage Banking
Professional Services
Edge Ventures
Financial Holding
Company
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
27,910
$
103
$
—
$
—
$
87
$
(10
)
$
28,090
Interest expense
672
—
8
—
760
(10
)
1,430
Net interest income (expense)
27,238
103
(8
)
—
(673
)
—
26,660
Provision for loan losses
5,100
—
—
—
—
—
—
5,100
Net interest income (expense) after
provision for loan losses
22,138
103
(8
)
—
(673
)
—
21,560
Noninterest income
7,093
787
5,686
110
3,228
(4,995
)
11,909
Noninterest Expenses:
Salaries and employee benefits
9,948
—
3,872
724
4,439
—
18,983
Other expenses
10,913
94
1,407
1,170
2,247
(4,995
)
10,836
Total noninterest expenses
20,861
94
5,279
1,894
6,686
(4,995
)
29,819
Income (loss) before income taxes
8,370
796
399
(1,784
)
(4,131
)
—
3,650
Income taxes
1,771
207
95
(399
)
(815
)
—
859
Net income (loss)
6,599
589
304
(1,385
)
(3,316
)
—
2,791
Net loss attributable to noncontrolling
interest
—
—
63
102
—
—
165
Net income (loss) available to common
shareholders
$
6,599
$
589
$
367
$
(1,283
)
$
(3,316
)
$
—
$
2,956
Three Months Ended September 30,
2021
CoRe Banking
Mortgage Banking
Professional Services
Edge Ventures
Financial Holding
Company
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
20,383
$
105
$
—
$
—
$
1
$
(5
)
$
20,484
Interest expense
902
—
10
—
481
(5
)
1,388
Net interest income (expense)
19,481
105
(10
)
—
(480
)
—
19,096
Release of allowance for loan losses
379
1
—
—
—
—
380
Net interest income (expense) after
release of allowance for loan losses
19,102
104
(10
)
—
(480
)
—
18,716
Noninterest income
15,387
3,546
4,806
18
2,002
(3,808
)
21,951
Noninterest Expenses:
Salaries and employee benefits
8,296
47
3,993
808
3,384
—
16,528
Other expenses
8,973
(198
)
1,213
1,468
1,653
(3,808
)
9,301
Total noninterest expenses
17,269
(151
)
5,206
2,276
5,037
(3,808
)
25,829
Income (loss) before income taxes
17,220
3,801
(410
)
(2,258
)
(3,515
)
—
14,838
Income taxes
3,657
922
(103
)
(581
)
(731
)
—
3,164
Net income (loss)
13,563
2,879
(307
)
(1,677
)
(2,784
)
—
11,674
Net loss attributable to noncontrolling
interest
—
—
90
64
—
—
154
Net income (loss) available to common
shareholders
$
13,563
$
2,879
$
(217
)
$
(1,613
)
$
(2,784
)
$
—
$
11,828
Nine Months Ended September 30,
2022
CoRe Banking
Mortgage Banking
Professional Services
Edge Ventures
Financial Holding
Company
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
84,858
$
309
$
—
$
—
$
113
$
(25
)
$
85,255
Interest expense
4,617
—
25
—
2,284
(25
)
6,901
Net interest income (expense)
80,241
309
(25
)
—
(2,171
)
—
78,354
Provision for loan losses
11,500
—
—
—
—
—
11,500
Net interest income (expense) after
provision for loan losses
68,741
309
(25
)
—
(2,171
)
—
66,854
Noninterest income
19,347
1,193
16,909
300
8,265
(14,044
)
31,970
Noninterest Expenses:
Salaries and employee benefits
28,810
8
11,425
2,248
12,769
—
55,260
Other expenses
33,484
119
3,956
3,609
6,262
(14,044
)
33,386
Total noninterest expenses
62,294
127
15,381
5,857
19,031
(14,044
)
88,646
Income (loss) before income taxes
25,794
1,375
1,503
(5,557
)
(12,937
)
—
10,178
Income taxes
5,219
356
375
(1,265
)
(2,524
)
—
2,161
Net income (loss)
20,575
1,019
1,128
(4,292
)
(10,413
)
—
8,017
Net loss attributable to noncontrolling
interest
—
—
194
327
—
—
521
Net income (loss) available to common
shareholders
$
20,575
$
1,019
$
1,322
$
(3,965
)
$
(10,413
)
$
—
$
8,538
Nine Months Ended September 30,
2021
CoRe Banking
Mortgage Banking
Professional Services
Edge Ventures
Financial Holding
Company
Intercompany
Eliminations
Consolidated
(Dollars in thousands)
Interest income
$
60,078
$
307
$
—
$
—
$
2
$
(7
)
$
60,380
Interest expense
3,281
—
13
—
1,437
(7
)
4,724
Net interest income (expense)
56,797
307
(13
)
—
(1,435
)
—
55,656
Release of allowance for loan losses
(541
)
(1
)
—
—
—
—
(542
)
Net interest income (expense) after
release of allowance for loan losses
57,338
308
(13
)
—
(1,435
)
—
56,198
Noninterest income
26,832
14,499
9,784
18
5,892
(8,972
)
48,053
Noninterest Expenses:
Salaries and employee benefits
24,170
47
7,099
1,054
9,730
—
42,100
Other expenses
26,702
(112
)
2,898
1,661
4,073
(8,972
)
26,250
Total noninterest expenses
50,872
(65
)
9,997
2,715
13,803
(8,972
)
68,350
Income (loss) before income taxes
33,298
14,872
(226
)
(2,697
)
(9,346
)
—
35,901
Income taxes
6,060
3,606
(76
)
(694
)
(1,890
)
—
7,006
Net income (loss)
27,238
11,266
(150
)
(2,003
)
(7,456
)
—
28,895
Net loss attributable to noncontrolling
interest
—
—
136
129
—
—
265
Net income (loss) attributable to
parent
27,238
11,266
(14
)
(1,874
)
(7,456
)
—
29,160
Preferred stock dividends
—
—
—
—
35
—
35
Net income (loss) available to common
shareholders
$
27,238
$
11,266
$
(14
)
$
(1,874
)
$
(7,491
)
$
—
$
29,125
Average Balances and Interest
Rates
(Unaudited) (Dollars in
thousands)
Three Months Ended
Three Months Ended
Three Months Ended
September 30, 2022
June 30, 2022
September 30, 2021
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
$
32,552
$
111
1.35
%
$
197,613
$
304
0.62
%
$
184,131
$
60
0.13
%
CDs with banks
232
2
3.42
1,582
9
2.28
11,065
52
1.86
Investment securities:
Taxable
231,953
897
1.53
237,745
838
1.41
238,807
575
0.96
Tax-exempt 2
144,719
1,346
3.69
147,646
1,342
3.65
202,380
1,528
3.00
Loans and loans held-for-sale: 1
Commercial 3
1,687,383
22,898
5.38
1,564,266
20,021
5.13
1,416,236
15,646
4.38
Tax-exempt 2
4,498
51
4.50
4,930
52
4.23
6,678
77
4.57
Real estate
579,685
4,707
3.22
393,983
2,674
2.72
297,450
2,282
3.04
Consumer
129,464
4,183
12.82
88,366
3,142
14.26
16,133
602
14.80
Total loans
2,401,030
31,839
5.26
2,051,545
25,889
5.06
1,736,497
18,607
4.25
Total earning assets
2,810,486
34,195
4.83
2,636,131
28,382
4.32
2,372,880
20,822
3.48
Less: Allowance for loan losses
(23,083
)
(19,927
)
(24,978
)
Cash and due from banks
5,399
5,579
5,922
Other assets
227,337
237,016
200,536
Total assets
$
3,020,139
$
2,858,799
$
2,554,360
Liabilities
Deposits:
NOW
$
734,271
$
1,393
0.75
%
$
654,781
$
256
0.16
%
$
743,632
$
333
0.18
%
Money market checking
258,527
422
0.65
380,295
184
0.19
433,216
211
0.19
Savings
71,370
153
0.85
27,496
1
0.01
42,126
—
—
IRAs
6,132
17
1.10
6,314
17
1.08
7,302
21
1.14
CDs
202,299
988
1.94
75,487
203
1.08
121,482
333
1.09
Repurchase agreements and federal funds
sold
10,627
1
0.04
11,566
1
0.03
10,941
3
0.11
FHLB and other borrowings
48,058
311
2.57
2,312
8
1.39
494
6
4.82
Subordinated debt
73,190
772
4.18
73,126
760
4.17
44,460
481
4.29
Total interest-bearing liabilities
1,404,474
4,057
1.15
1,231,377
1,430
0.47
1,403,653
1,388
0.39
Noninterest-bearing demand deposits
1,321,982
1,331,357
852,872
Other liabilities
37,019
40,900
36,097
Total liabilities
2,763,475
2,603,634
2,292,622
Stockholders’ equity
Common stock
13,086
13,289
12,704
Paid-in capital
145,877
145,014
141,246
Treasury stock
(16,741
)
(16,741
)
(16,741
)
Retained earnings
144,816
137,989
122,361
Accumulated other comprehensive income
(loss)
(30,915
)
(25,097
)
1,207
Total stockholders’ equity attributable to
parent
256,123
254,454
260,777
Noncontrolling interest
541
711
961
Total stockholders’ equity
256,664
255,165
261,738
Total liabilities and stockholders’
equity
$
3,020,139
$
2,858,799
$
2,554,360
Net interest spread (tax-equivalent)
3.68
%
3.85
%
3.09
%
Net interest income and margin
(tax-equivalent)2
$
30,138
4.25
%
$
26,952
4.10
%
$
19,434
3.25
%
Less: Tax-equivalent adjustments
$
(292
)
$
(292
)
$
(338
)
Net interest spread
3.64
%
3.80
%
3.03
%
Net interest income and margin
$
29,846
4.21
%
$
26,660
4.06
%
$
19,096
3.19
%
1 Non-accrual loans are included in total
loan balances, lowering the effective yield for the portfolio in
the aggregate.
2 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 following this table.
3 MVB Bank’s PPP loans totaling $20.1
million, $22.3 million and $147.3 million are included in this
amount as of September 30, 2022, June 30, 2022 and September 30,
2021, respectively.
Nine Months Ended
Nine Months Ended
September 30, 2022
September 30, 2021
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Assets
Interest-bearing balances with banks
$
273,184
$
630
0.31
%
$
207,195
$
164
0.11
%
CDs with banks
1,381
24
2.32
11,554
168
1.94
Investment securities:
Taxable
237,188
2,383
1.34
222,323
1,831
1.10
Tax-exempt 2
140,377
3,824
3.64
207,529
4,881
3.14
Loans and loans held-for-sale: 1
Commercial 3
1,569,161
59,899
5.10
1,365,680
45,905
4.49
Tax-exempt 2
4,829
156
4.32
6,928
237
4.57
Real estate
438,380
9,722
2.97
303,701
7,509
3.31
Consumer
91,092
9,454
13.88
10,157
762
10.03
Total loans
2,103,462
79,231
5.04
1,686,466
54,413
4.31
Total earning assets
2,755,592
86,092
4.18
2,335,067
61,457
3.52
Less: Allowance for loan losses
(20,468
)
(25,920
)
Cash and due from banks
5,680
16,274
Other assets
237,637
201,198
Total assets
$
2,978,441
$
2,526,619
Liabilities
Deposits:
NOW
$
678,991
$
1,844
0.36
%
$
660,655
$
1,323
0.27
%
Money market checking
367,608
807
0.29
461,998
662
0.19
Savings
49,714
155
0.42
44,938
4
0.01
IRAs
6,271
52
1.11
10,764
102
1.27
CDs
122,095
1,433
1.57
148,807
1,091
0.98
Repurchase agreements and federal funds
sold
11,334
4
0.05
10,677
10
0.13
FHLB and other borrowings
16,966
322
2.54
33,914
95
0.37
Subordinated debt
73,126
2,284
4.18
43,786
1,437
4.39
Total interest-bearing liabilities
1,326,105
6,901
0.70
1,415,539
4,724
0.45
Noninterest-bearing demand deposits
1,350,533
828,469
Other liabilities
41,379
36,665
Total liabilities
2,718,017
2,280,673
Stockholders’ equity
Preferred stock
—
774
Common stock
13,276
12,524
Paid-in capital
144,903
139,980
Treasury stock
(16,741
)
(16,741
)
Retained earnings
140,174
107,094
Accumulated other comprehensive income
(loss)
(21,905
)
1,788
Total stockholders’ equity attributable to
parent
259,707
245,419
Noncontrolling interest
717
527
Total stockholders’ equity
260,424
245,946
Total liabilities and stockholders’
equity
$
2,978,441
$
2,526,619
Net interest spread (tax-equivalent)
3.48
%
3.07
%
Net interest income and margin
(tax-equivalent)2
$
79,191
3.84
%
$
56,733
3.25
%
Less: Tax-equivalent adjustments
$
(837
)
$
(1,077
)
Net interest spread
3.44
%
3.01
%
Net interest income and margin
$
78,354
3.80
%
$
55,656
3.19
%
1 Non-accrual loans are included in total
loan balances, lowering the effective yield for the portfolio in
the aggregate.
2 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 following this table.
3 MVB Bank’s PPP loans totaling $20.1
million and $147.3 million are included in this amount as of
September 30, 2022 and September 30, 2021, respectively.
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, 2022
June 30, 2022
September 30, 2021
September 30, 2022
September 30, 2021
Net interest margin - U.S. GAAP
basis
Net interest income
$
29,846
$
26,660
$
19,096
$
78,354
$
55,656
Average interest-earning assets
$
2,810,486
$
2,636,131
$
2,372,880
2,755,592
2,335,067
Net interest margin
4.21
%
4.06
%
3.19
%
3.80
%
3.19
%
Net interest margin - non-U.S. GAAP
basis
Net interest income
$
29,846
$
26,660
$
19,096
$
78,354
$
55,656
Impact of fully tax-equivalent
adjustment
292
292
338
837
1,077
Net interest income on a fully
tax-equivalent basis
$
30,138
$
26,952
$
19,434
79,191
56,733
Average interest-earning assets
$
2,810,486
$
2,636,131
$
2,372,880
$
2,755,592
$
2,335,067
Net interest margin on a fully
tax-equivalent basis
4.25
%
4.10
%
3.25
%
3.84
%
3.25
%
Selected Financial
Data
(Unaudited) (Dollars in
thousands, except per share data)
Quarterly
Year-to-Date
2022
2022
2021
2022
2021
Third Quarter
Second Quarter
Third Quarter
Earnings and Per Share Data:
Net income
$
2,718
$
2,956
$
11,828
$
8,538
$
29,160
Net income available to common
shareholders
$
2,718
$
2,956
$
11,828
$
8,538
$
29,125
Earnings per share - basic
$
0.22
$
0.24
$
1.00
$
0.70
$
2.49
Earnings per share - diluted
$
0.21
$
0.23
$
0.92
$
0.66
$
2.32
Cash dividends paid per common share
$
0.17
$
0.17
$
0.14
$
0.51
$
0.36
Book value per common share
$
19.85
$
20.63
$
22.18
$
19.85
$
22.18
Tangible book value per common share 1
$
19.38
$
20.14
$
21.64
$
19.38
$
21.64
Weighted-average shares outstanding -
basic
12,238,505
12,176,805
11,880,348
12,170,028
11,684,570
Weighted-average shares outstanding -
diluted
12,854,951
12,895,581
12,824,309
12,852,574
12,565,809
Performance Ratios:
Return on average assets 2
0.4
%
0.4
%
1.9
%
0.4
%
1.5
%
Return on average equity 2
4.2
%
4.6
%
18.1
%
4.4
%
15.8
%
Net interest margin 3 4
4.25
%
4.10
%
3.25
%
3.84
%
3.25
%
Efficiency ratio 5
78.8
%
77.3
%
62.9
%
80.4
%
65.9
%
Overhead ratio 2 6
4.0
%
4.2
%
4.0
%
4.0
%
3.6
%
Equity to assets
7.8
%
8.5
%
9.5
%
7.8
%
9.5
%
Asset Quality Data and Ratios:
Charge-offs
$
3,653
$
2,529
$
98
$
7,305
$
363
Recoveries
$
2,313
$
1,355
$
23
$
4,054
$
248
Net loan charge-offs to total loans 2
7
0.2
%
0.2
%
—
%
0.2
%
—
%
Allowance for loan losses
$
26,515
$
22,734
$
25,187
$
26,515
$
25,187
Allowance for loan losses to total loans
8
1.07
%
1.03
%
1.43
%
1.07
%
1.43
%
Nonperforming loans
$
22,350
$
19,295
$
17,453
$
22,350
$
17,453
Nonperforming loans to total loans
0.9
%
0.9
%
1.0
%
0.9
%
1.0
%
Intercoastal Mortgage Company, LLC
Production Data9:
Mortgage pipeline
$
792,388
$
1,114,061
$
1,150,116
$
792,388
$
1,150,116
Loans originated
$
606,805
$
976,004
$
1,456,588
$
2,713,508
$
5,222,394
Loans closed
$
615,585
$
843,305
$
1,233,605
$
2,239,732
$
4,630,597
Loans sold
$
619,059
$
692,553
$
1,098,475
$
1,999,706
$
4,368,875
1 common equity less total goodwill and
intangibles per common share, a non-U.S. GAAP measure
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
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 ICM, an entity
in which we have a 40% ownership interest that we account for as an
equity method investment
Non-GAAP Reconciliation:
Tangible Book Value per Common Share
(Unaudited) (Dollars in
thousands, except per share data)
September 30, 2022
June 30, 2022
September 30, 2021
Goodwill
$
3,988
$
3,988
$
3,988
Intangibles
1,806
1,981
2,518
Total intangibles
5,794
5,969
6,506
Total equity attributable to parent
243,913
252,300
265,565
Less: Total intangibles
(5,794
)
(5,969
)
(6,506
)
Tangible common equity
$
238,119
$
246,331
$
259,059
Tangible common equity
$
238,119
$
246,331
$
259,059
Common shares outstanding (000s)
12,287
12,229
11,972
Tangible book value per common share
$
19.38
$
20.14
$
21.64
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221031005268/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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