Fintech Initiatives Continue to Power Core Funding Transformation

Rhea-AI Summary

MVB Financial Corp. (NASDAQ: MVBF) reported a net income of $11.8 million for Q3 2021, translating to $1.00 basic and $0.92 diluted earnings per share. The company saw a 7% increase in noninterest-bearing deposits, totaling $999.3 million. Fintech deposits reached $975.7 million, growing 27% quarter-over-quarter. Notably, MVB expanded its technological focus, entering a partnership with NYDIG for Bitcoin-related products and increasing its investment in Interchecks Technologies.

The tangible book value per share rose to $21.64, with a 17% dividend increase to $0.14 per share.

Positive

• Net income increased to $11.8 million for Q3 2021, up from $6.5 million the previous year.
• Noninterest-bearing deposits rose by 7% quarter-over-quarter, totaling $999.3 million.
• Fintech deposits surged 27% from the previous quarter to $975.7 million.
• Tangible book value per share increased by 5% from the previous quarter, reaching $21.64.
• Quarterly dividend raised by 17% to $0.14 per share.

Negative

• Loan growth was limited due to the sale of $53.9 million in loans and $60 million of PPP loan forgiveness.
• Noninterest expense increased by 10% from the previous quarter, raising concerns about rising operational costs.

FAIRMONT, W. Va.--(BUSINESS WIRE)-- MVB Financial Corp. (NASDAQ: MVBF) (“MVB Financial,” “MVB” or the “Company”) today reported net income of $11.8 million, or $1.00 basic and $0.92 diluted earnings per share for the three months ended September 30, 2021.

		Quarterly									Year-to-Date
		2021			2021			2020			2021			2020
		Third Quarter			Second Quarter			Third Quarter
Net income		$	11,828		$	9,247		$	6,491		$	29,160		$	25,573
Earnings per share - basic		$	1.00		$	0.79		$	0.53		$	2.49		$	2.11
Earnings per share - diluted		$	0.92		$	0.73		$	0.53		$	2.32		$	2.07

“MVB’s third quarter results and actions reflect our embrace of the transformative power of technology in our industry,” said Larry F. Mazza, President and CEO, MVB Financial. “During the third quarter, we made further progress in our efforts to build a world-class deposit franchise, with noninterest-bearing Fintech deposits now representing nearly 42% of our total deposit funding. We remain the clear leader in the online gaming segment, and the wind is at our back, with 33 states, 29 of which are operational, representing 57% of the U.S. adult population, having legalized sports betting to date. In addition to the beneficial impact to our margin, especially in a rising rate environment, low-cost funding from our Fintech business allows us to redeploy resources to faster-growth markets and additional technology spend and investments. Toward that end, during the third quarter, we exited our Southern West Virginia banking market, entered into a partnership agreement with NYDIG that allows our Fintech clients to offer Bitcoin-related products and expanded our investment in Interchecks Technologies, Inc., a Fintech portfolio investment that has become more integrated in our core business.”

THIRD QUARTER 2021 HIGHLIGHTS

• Strong core deposit growth reflects continued expansion of Fintech and gaming verticals
  • Noninterest-bearing (“NIB”) deposits were $999.3 million as of September 30, 2021, up $66.7 million, or 7%, and $356.5 million, or 55%, from June 30, 2021 and September 30, 2020, respectively. NIB deposits as a percentage of total deposits were 42% as of September 30, 2021, as compared to 42% and 34% as of June 30, 2021 and September 30, 2020, respectively.
  • Fintech deposits totaled $975.7 million as of September 30, 2021, up $209.8 million, or 27%, and $610.9 million, or 167%, from June 30, 2021 and September 30, 2020, respectively.
  • Gaming deposits, which are included in total Fintech deposits, totaled $774.1 million as of September 30, 2021, up $178.2 million, or 30%, and $567.5 million, or 275%, from June 30, 2021 and September 30, 2020, respectively.
  • Since the ruling by the U.S. Supreme Court that overturned the Professional and Amateur Sports Protection Act in 2018, 33 states have passed legislation that allows sports betting including 19 since the start of 2020, representing approximately 57% of the U.S. adult population.
• Loan expansion despite banking center sales and PPP forgiveness
  • Loans grew $66.9 million, or 4%, compared to the quarter ended June 30, 2021. The loan growth was despite the Company selling $53.9 million loans in the previously-announced branch sale and recognizing $60.0 million of PPP loan forgiveness during the quarter.
• Continued strong growth in tangible book value per share
  • Tangible book value (“TBV”) per share, a non-U.S. GAAP measure, was $21.64 as of September 30, 2021, an increase of 5% and 16% from June 30, 2021 and September 30, 2020, respectively. A reconciliation of TBV to its most comparable U.S. GAAP measure is included below.
  • As a result of this strong capital position and earnings as of September 30, 2021, the Company increased the quarterly dividend to $0.14 per share for the third quarter of 2021, up from $0.12 per share in the second quarter, an increase of 17%.
  • The Community Bank Leverage Ratio was 12.0% compared to 11.0% as of June 30, 2021. The increase is due to increases in capital due to earnings outpacing the increase in average assets and completion of the $30 million subordinated debt offering.
• Recent corporate actions reflect a focused reallocation of resources amid Fintech success
  • During the third quarter, MVB completed the sale of four banking centers in Southern West Virginia, recording a pre-tax gain of $10.8 million, marking its complete exit from the market. The transformation of the funding base resulting from the pivot toward Fintech has allowed the Company to eliminate physical infrastructure, most notably its banking center footprint, which has been reduced by nearly half, from 15 in 2018 to eight currently.
  • Resources have been refocused on MVB’s core, higher-growth markets and new business verticals. For example, in April 2021, MVB acquired Trabian Technology, Inc. (“Trabian”), a software development company that builds digital products, web and mobile applications for financial institutions, to enhance development of technology to support both internal efficiencies and external client growth. During the three months ended September 30, 2021, there was an increase of 16 employees within Trabian, primarily due to the continued hiring of software developers. Also during the third quarter of 2021, the Company entered into a new partnership agreement with NYDIG, a leading technology and financial services firm dedicated to Bitcoin, that allows MVB’s Fintech clients to offer Bitcoin-related products and expanded its investment in Interchecks Technologies, Inc. (“Interchecks”). Interchecks is a leading payment disbursement platform, which is a Fintech portfolio investment whose business and founding principles are becoming more integrated into MVB’s Fintech business vertical. During the three months ended September 30, 2021, Interchecks entered into a management contract with MVB Technology, LLC to support the continued development and sales of the Grand product.

INCOME STATEMENT

On a fully tax-equivalent basis, net interest margin for the quarter ended September 30, 2021 was 3.25%, an increase of one basis points versus the quarter ended June 30, 2021 and a decrease of ten basis points versus the quarter ended September 30, 2020. 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 tax-equivalent adjustments impacting net interest income were $0.3 million for the quarter ended September 30, 2021, $0.4 million for the quarter ended June 30, 2021 and $0.3 million for the quarter ended September 30, 2020.

Interest income decreased $0.3 million, or 2%, compared to the quarter ended June 30, 2021 and increased $1.9 million, or 10%, compared to the quarter ended September 30, 2020. The tax-equivalent yield on commercial loans decreased 17 basis points compared to the quarter ended June 30, 2021. The 44-basis point decrease in the yield on commercial loans and the 94-basis point decrease in the yield on investments drove the 40-basis point decrease in the tax-equivalent yield on earning assets compared to the quarter ended September 30, 2020.

Interest expense decreased $0.4 million, or 22%, compared to the quarter ended June 30, 2021 and decreased $1.2 million, or 47%, compared to the quarter ended September 30, 2020. The eight-basis point decrease in the cost of interest-bearing liabilities compared to the quarter ended June 30, 2021 was driven by an 18-basis point decrease in the cost of NOW accounts and overall a decrease of nine-basis points in the cost of deposits. The 40-basis point decrease in the cost of interest-bearing liabilities compared to the quarter ended September 30, 2020 was driven by a 34-basis point decrease in the cost of NOW accounts.

The Company's average NIB balances increased by $42.6 million from the quarter ended June 30, 2021 and the Company maintained a 16-basis point favorable spread on the tax-equivalent net interest margin for the quarter ended September 30, 2021, compared to a 17-basis point favorable spread for the quarter ended June 30, 2021. An increase in the Company’s average NIB balances of $310.4 million from the quarter ended September 30, 2020 helped to maintain a 16-basis point favorable spread on the tax-equivalent net interest margin for the quarter ended September 30, 2021, compared to a 26-basis point favorable spread for the same period in 2020.

Noninterest income totaled $22.0 million for the quarter ended September 30, 2021, an increase of $8.3 million, or 61%, from the quarter ended June 30, 2021 and an increase of $2.6 million, or 13%, from the quarter ended September 30, 2020.

The $8.3 million increase in noninterest income from the quarter ended June 30, 2021 was due primarily to the gain on sale of branches of $10.8 million and an increase in compliance and consulting income of $1.1 million. These increases were partially offset by decreases in equity method investment income related to the Company’s investment in Intercoastal Mortgage Company, LLC (“ICM”) of $1.0 million, gains on the sale of available-for-sale investments of $1.2 million and gains on the sale of loans of $0.5 million.

The $2.6 million increase in noninterest income from the quarter ended September 30, 2020 was primarily due to the gain on acquisition and divestiture activity of $10.8 million from the sale of four banking centers in Southern West Virginia, as well as increases of $1.9 million and $1.0 million in compliance and consulting income and payment card and service charge income, respectively. The increase in compliance and consulting income was due to Chartwell Compliance’s continued client expansion and additional income from Trabian, which was acquired in April 2021. The increase in payment card and service charge income was the result of the Company’s banking-as-a-service relationships and card acquiring business growth. These increases were partially offset by decreases in equity method investment income related to the Company’s investment in ICM of $10.0 million from the transition to the equity method from the mortgage combination with ICM that occurred in July 2020.

Noninterest expense totaled $25.8 million for the quarter ended September 30, 2021, an increase of $2.4 million, or 10%, from the quarter ended June 30, 2021 and an increase of $7.6 million, or 41%, from the quarter ended September 30, 2020.

The $2.4 million increase in noninterest expense from the quarter ended June 30, 2021 was due to an increase in salaries and employee benefits of $2.9 million, primarily driven by new hires to further build-out the Fintech vertical at the Bank, Chartwell Compliance, Trabian and the shared services at the Holding Company.

The $7.6 million increase in noninterest expense from the quarter ended September 30, 2020 was primarily due to increases in salaries and employee benefits of $6.0 million and professional fees of $1.1 million.

BALANCE SHEET

Loan growth will continue to enhance future profitability and loan balances grew $66.9 million as compared to June 30, 2021 and $335.6 million as compared to September 30, 2020. Included in loans are PPP loans totaling $147.3 million at September 30, 2021, a decrease of $60.0 million, or 29%, from June 30, 2021, and an increase of $59.4 million, or 68%, from September 30, 2020. Additionally, $54.2 million of loans were included in the sale of the four Southern West Virginia market branches to Summit Community Bank.

The tax-equivalent yield on loans, including PPP loans, was 4.25% for the quarter ended September 30, 2021, a decrease of six basis points from the quarter ended June 30, 2021 and a decrease of 26 basis points from the quarter ended September 30, 2020. These decreases were primarily the result of a decrease in the yield on commercial loans.

Deposits totaled $2.40 billion as of September 30, 2021, an increase of $169.8 million, or 8%, from June 30, 2021 and an increase of $500.0 million, or 26%, from September 30, 2020. With NIB deposits as a percentage of total deposits at 42% as of September 30, 2021, the Company’s strategy to evolve its deposit mix by replacing high-cost deposits with NIB deposits has proved to be successful and viable long-term.

CAPITAL

Subordinated debt of $30.0 million was issued on September 28, 2021 with a rate fixed at 3.25% for five years then floating, adjustable annually, to the Three-Month Term SOFR, plus 254 basis points. These notes qualify as Tier 2 capital for regulatory purposes.

Due to strong earnings and the issuance of subordinated debt, all regulatory capital ratios increased quarter over quarter. The Community Bank Leverage Ratio was 12.0% and 11.0% as of September 30, 2021 and June 30, 2021, respectively. The Bank’s Tier 1 Risk-Based Capital was 15.7% and 14.8% as of September 30, 2021 and June 30, 2021, respectively. The Bank’s Total Risk-Based Capital was 17.0% and 16.0% as of September 30, 2021 and June 30, 2021, respectively.

ASSET QUALITY

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. Nonperforming loans totaled $17.5 million, or 1.0% of total loans, as of September 30, 2021, compared to 0.9% of total loans as of June 30, 2021 and compared to 1.0% of total loans as of September 30, 2020. Criticized loans as a percentage of total loans were 6.5%, a decrease of 77 basis points, or 11%, from June 30, 2021, and a decrease of 174 basis points, or 21%, from September 30, 2020.

The provision for loan losses totaled $0.4 million for the quarter ended September 30, 2021, compared to a release of allowance for loan losses of $1.5 million for the quarter ended June 30, 2021 and a provision of $8.6 million for the quarter ended September 30, 2020.

Allowance for loan losses to total loans was 1.4% as of September 30, 2021, a decrease of four basis points from June 30, 2021 and a decrease of 39 basis points from September 30, 2020. Excluding PPP loans of $147.3 million, allowance for loan losses to total loans was 1.6% as of September 30, 2021.

There were no significant net charge-offs for the quarter ended September 30, 2021 and none in the quarter ended June 30, 2021, compared to $1.9 million of net charge-offs for the quarter ended September 30, 2020.

About MVB Financial Corp.

MVB Financial Corp., the holding company of MVB Bank, Inc., is publicly traded on The Nasdaq Capital Market® (“Nasdaq”) under the ticker “MVBF.”

MVB is a financial holding company headquartered in Fairmont, WV. Through its subsidiary, MVB Bank, Inc., and the bank’s subsidiaries, the Company 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 financial technology 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, 2020, 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
		2021			2021				2020			2021				2020
		Third Quarter			Second Quarter				Third Quarter
Interest income		$	20,484		$	20,833			$	18,627		$	60,380			$	61,100
Interest expense		1,388			$	1,778			2,617			4,724				10,461
Net interest income		19,096			$	19,055			16,010			55,656				50,639
Provision (release of allowance) for loan losses		380			$	(1,540	)		8,631			(542		)		16,365
Net interest income after provision (release of allowance) for loan losses		18,716			$	20,595			7,379			56,198				34,274
Total noninterest income		21,951			$	13,644			19,398			48,053				75,761
Noninterest expense:
Salaries and employee benefits		16,528			$	13,661			10,519			42,100				49,360
Other expense		9,301			$	9,742			7,746			26,250				26,894
Total noninterest expenses		25,829			$	23,403			18,265			68,350				76,254
Income before income taxes		14,838			$	10,836			8,512			35,901				33,781
Income tax expense		3,164			$	1,673			2,021			7,006				8,208
Net income before noncontrolling interest		11,674			$	9,163			6,491			28,895				25,573
Net loss attributable to noncontrolling interest		154			$	84			—			265				—
Net income attributable to parent		11,828			$	9,247			6,491			29,160				25,573
Preferred dividends		—			$	—			116			35				345
Net income available to common shareholders		$	11,828		$	9,247			$	6,375		$	29,125			$	25,228
Earnings per share - basic		$	1.00		$	0.79			$	0.53		$	2.49			$	2.11
Earnings per share - diluted		$	0.92		$	0.73			$	0.53		$	2.32			$	2.07

Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands)
		September 30, 2021			June 30, 2021			September 30, 2020
Cash and cash equivalents		$	390,081		$	332,771		$	295,823
Certificates of deposit with banks		9,582			11,803			12,301
Securities available-for-sale, at fair value		439,023			450,772			297,964
Equity securities		29,809			32,215			24,164
Loans held-for-sale		—			—			2,271
Loans receivable		1,764,186			1,697,326			1,428,593
Less: Allowance for loan losses		(25,187)			(24,882)			(25,913)
Loans receivable, net		1,738,999			1,672,444			1,402,680
Premises and equipment, net		25,043			21,033			26,176
Goodwill		3,988			4,119			2,350
Assets of branches held-for-sale		—			59,488			—
Other assets		152,299			149,895			150,730
Total assets		$	2,788,824		$	2,734,540		$	2,214,459
Noninterest-bearing deposits		$	999,328		$	932,660		$	642,835
Interest-bearing deposits		1,399,612			1,296,515			1,256,122
Liabilities of branches held-for-sale		—			165,750			—
FHLB and other borrowings		—			100			25,800
Subordinated debt		72,966			43,480			4,124
Other liabilities		50,218			46,635			51,462
Stockholders' equity, including noncontrolling interest		266,700			249,400			234,116
Total liabilities and stockholders' equity		$	2,788,824		$	2,734,540		$	2,214,459

Reportable Segments (Unaudited)
Three Months Ended September 30, 2021		CoRe Banking			Mortgage Banking				Financial Holding Company				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	20,383		$	105			$	1			$	(5	)		$	20,484
Interest expense		912			—				481				(5		)		1,388
Net interest income		19,471			105				(480		)		—				19,096
Provision for loan losses		379			1				—				—				380
Net interest income after provision for loan losses		19,092			104				(480		)		—				18,716
Total noninterest income		20,211			3,546				2,002				(3,808		)		21,951
Noninterest Expenses:
Salaries and employee benefits		13,097			47				3,384				—				16,528
Other expense		11,654			(198		)		1,653				(3,808		)		9,301
Total noninterest expenses		24,751			(151		)		5,037				(3,808		)		25,829
Income (loss) before income taxes		14,552			3,801				(3,515		)		—				14,838
Income tax expense (benefit)		2,973			922				(731		)		—				3,164
Net income (loss) before noncontrolling interest		11,579			2,879				(2,784		)		—				11,674
Net loss attributable to noncontrolling interest		154			—				—				—				154
Net income (loss) attributable to parent		11,733			2,879				(2,784		)		—				11,828
Preferred stock dividends		—			—				—				—				—
Net income (loss) available to common shareholders		$	11,733		$	2,879			$	(2,784	)		$	—			$	11,828

Three Months Ended June 30, 2021		CoRe Banking				Mortgage Banking			Financial Holding Company				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	20,736			$	98		$	—			$	(1	)		$	20,833
Interest expense		1,290				—			490				(2		)		1,778
Net interest income		19,446				98			(490		)		1				19,055
Release of allowance for loan losses		(1,540		)		—			—				—				(1,540		)
Net interest income after release of allowance for loan losses		20,986				98			(490		)		1				20,595
Total noninterest income		9,986				4,546			2,309				(3,197		)		13,644
Noninterest Expenses:
Salaries and employee benefits		10,384				—			3,277				—				13,661
Other expense		11,578				23			1,337				(3,196		)		9,742
Total noninterest expenses		21,962				23			4,614				(3,196		)		23,403
Income (loss) before income taxes		9,010				4,621			(2,795		)		—				10,836
Income tax expense (benefit)		1,168				1,120			(615		)		—				1,673
Net income (loss) before noncontrolling interest		7,842				3,501			(2,180		)		—				9,163
Net loss attributable to noncontrolling interest		84				—			—				—				84
Net income (loss) attributable to parent		7,926				3,501			(2,180		)		—				9,247
Preferred stock dividends		—				—			—				—				—
Net income (loss) available to common shareholders		$	7,926			$	3,501		$	(2,180	)		$	—			$	9,247

Three Months Ended September 30, 2020		CoRe Banking				Mortgage Banking				Financial Holding Company				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	18,737			$	78			$	—			$	(188	)		$	18,627
Interest expense		2,553				232				20				(188		)		2,617
Net interest income		16,184				(154		)		(20		)		—				16,010
Provision for loan losses		8,631				—				—				—				8,631
Net interest income after provision for loan losses		7,553				(154		)		(20		)		—				7,379
Total noninterest income		3,106				16,793				1,481				(1,982		)		19,398
Noninterest Expenses:
Salaries and employee benefits		7,526				82				2,911				—				10,519
Other expense		8,389				68				1,271				(1,982		)		7,746
Total noninterest expenses		15,915				150				4,182				(1,982		)		18,265
Income (loss) before income taxes		(5,256		)		16,489				(2,721		)		—				8,512
Income tax expense (benefit)		(1,556		)		4,245				(668		)		—				2,021
Net income (loss)		(3,700		)		12,244				(2,053		)		—				6,491
Preferred stock dividends		—				—				116				—				116
Net income (loss) available to common shareholders		$	(3,700	)		$	12,244			$	(2,169	)		$	—			$	6,375

Nine Months Ended September 30, 2021		CoRe Banking				Mortgage Banking				Financial Holding Company				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	60,078			$	307			$	2			$	(7	)		$	60,380
Interest expense		3,294				—				1,437				(7		)		4,724
Net interest income		56,784				307				(1,435		)		—				55,656
Release of allowance for loan losses		(541		)		(1		)		—				—				(542		)
Net interest income after release of allowance for loan losses		57,325				308				(1,435		)		—				56,198
Total noninterest income		36,634				14,499				5,892				(8,972		)		48,053
Noninterest Expenses:
Salaries and employee benefits		32,323				47				9,730				—				42,100
Other expense		31,261				(112		)		4,073				(8,972		)		26,250
Total noninterest expenses		63,584				(65		)		13,803				(8,972		)		68,350
Income (loss) before income taxes		30,375				14,872				(9,346		)		—				35,901
Income tax expense (benefit)		5,290				3,606				(1,890		)		—				7,006
Net income (loss) before noncontrolling interest		25,085				11,266				(7,456		)		—				28,895
Net loss attributable to noncontrolling interest		265				—				—				—				265
Net income (loss) attributable to parent		25,350				11,266				(7,456		)		—				29,160
Preferred stock dividends		—				—				35				—				35
Net income (loss) available to common shareholders		$	25,350			$	11,266			$	(7,491	)		$	—			$	29,125

Nine Months Ended September 30, 2020		CoRe Banking			Mortgage Banking			Financial Holding Company				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	56,693		$	6,034		$	2			$	(1,629	)		$	61,100
Interest expense		9,418			3,136			78				(2,171		)		10,461
Net interest income (loss)		47,275			2,898			(76		)		542				50,639
Provision for loan losses		16,361			4			—				—				16,365
Net interest income (loss) after provision for loan losses		30,914			2,894			(76		)		542				34,274
Total noninterest income		24,394			53,140			4,664				(6,437		)		75,761
Noninterest Expenses:
Salaries and employee benefits		19,562			21,550			8,248				—				49,360
Other expense		24,172			4,780			3,837				(5,895		)		26,894
Total noninterest expenses		43,734			26,330			12,085				(5,895		)		76,254
Income (loss) before income taxes		11,574			29,704			(7,497		)		—				33,781
Income tax expense (benefit)		2,336			7,696			(1,824		)		—				8,208
Net income (loss)		9,238			22,008			(5,673		)		—				25,573
Preferred stock dividends		—			—			345				—				345
Net income (loss) available to common shareholders		$	9,238		$	22,008		$	(6,018	)		$	—			$	25,228

Average Balances and Interest Rates (Unaudited) (Dollars in thousands)
		Three Months Ended											Three Months Ended											Three Months Ended
		September 30, 2021											June 30, 2021											September 30, 2020
		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		$	184,131			$	60			0.13	%		$	178,792			$	40			0.09	%		$	174,203			$	45			0.10	%
CDs with banks		11,065				52				1.86			11,803				58				1.97			12,641				61				1.91
Investment securities:
Taxable		238,807				575				0.96			254,536				625				0.98			103,497				411				1.58
Tax-exempt 2		202,380				1,528				3.00			207,830				1,640				3.17			142,301				1,344				3.75
Loans and loans held-for-sale: 1
Commercial 3		1,416,236				15,646				4.38			1,416,669				16,058				4.55			1,160,214				14,108				4.82
Tax-exempt 2		6,678				77				4.57			6,905				78				4.53			7,752				91				4.66
Real estate		297,450				2,282				3.04			320,528				2,573				3.22			325,992				2,749				3.35
Consumer		16,133				602				14.80			6,550				122				7.47			6,613				119				7.14
Total loans		1,736,497				18,607				4.25			1,750,652				18,831				4.31			1,500,571				17,067				4.51
Total earning assets		2,372,880				20,822				3.48			2,403,613				21,194				3.54			1,933,213				18,928				3.88
Less: Allowance for loan losses		(24,978		)									(26,625		)									(18,906		)
Cash and due from banks		5,922											22,141											28,299
Other assets		200,536											193,165											205,038
Total assets		$	2,554,360										$	2,592,294										$	2,147,644
Liabilities
Deposits:
NOW		$	743,632			$	333			0.18	%		$	716,924			$	643			0.36	%		$	381,375			$	496			0.52	%
Money market checking		433,216				211				0.19			466,091				221				0.19			479,418				380				0.31
Savings		42,126				—				—			52,992				—				—			49,698				7				0.06
IRAs		7,302				21				1.14			12,358				40				1.30			12,389				44				1.41
CDs		121,482				333				1.09			156,507				332				0.85			334,828				967				1.15
Repurchase agreements and federal funds sold		10,941				3				0.11			10,833				3				0.11			10,145				4				0.16
FHLB and other borrowings		494				6				4.82			55,402				49				0.35			34,138				699				8.12
Subordinated debt		44,460				481				4.29			43,462				490				4.52			4,124				20				1.92
Total interest-bearing liabilities		1,403,653				1,388				0.39			1,514,569				1,778				0.47			1,306,115				2,617				0.79
Noninterest-bearing demand deposits		852,872											810,298											542,467
Other liabilities		36,097											28,688											68,223
Total liabilities		2,292,622											2,353,555											1,916,805
Stockholders’ equity
Preferred stock		—											—											7,334
Common stock		12,704											12,487											12,066
Paid-in capital		141,246											141,782											124,003
Treasury stock		(16,741		)									(16,741		)									(2,022		)
Retained earnings		122,361											98,413											90,113
Accumulated other comprehensive income		1,207											2,194											(655		)
Total stockholders’ equity attributable to parent		260,777											238,135											230,839
Noncontrolling interest		961											604											—
Total stockholders’ equity		261,738											238,739											230,839
Total liabilities and stockholders’ equity		$	2,554,360										$	2,592,294										$	2,147,644
Net interest spread (tax-equivalent)										3.09											3.07											3.09
Net interest income and margin (tax-equivalent) 2						$	19,434			3.25	%						$	19,416			3.24	%						$	16,311			3.35	%
Less: Tax-equivalent adjustments						$	(338	)									$	(361	)									$	(301	)
Net interest spread										3.03	%										3.01	%										3.03	%
Net interest income and margin						$	19,096			3.19	%						$	19,055			3.18	%						$	16,010			3.29	%
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 The Company’s PPP loans totaling $147.3 million, $207.3 million and $87.9 million are included in this amount for the three months ended September 30, 2021, June 30, 2021 and September 30, 2020, respectively.

		Nine Months Ended											Nine Months Ended
		September 30, 2021											September 30, 2020
		Average Balance				Interest Income/ Expense				Yield/ Cost			Average Balance				Interest Income/ Expense				Yield/ Cost
Assets
Interest-bearing balances with banks		$	207,195			$	164			0.11	%		$	77,667			$	110			0.19	%
CDs with banks		11,554				168				1.94			12,667				187				1.97
Investment securities:
Taxable		222,323				1,831				1.10			104,450				1,554				1.98
Tax-exempt 2		207,529				4,881				3.14			125,493				3,703				3.93
Loans and loans held-for-sale: 1
Commercial 3		1,365,680				45,905				4.49			1,138,438				42,292				4.95
Tax-exempt 2		6,928				237				4.57			9,457				329				4.64
Real estate		303,701				7,509				3.31			428,989				13,402				4.16
Consumer		10,157				762				10.03			6,805				370				7.24
Total loans		1,686,466				54,413				4.31			1,583,689				56,393				4.74
Total earning assets		2,335,067				61,457				3.52			1,903,966				61,947				4.33
Less: Allowance for loan losses		(25,920		)									(14,857		)
Cash and due from banks		16,274											27,781
Other assets		201,198											178,701
Total assets		$	2,526,619										$	2,095,591
Liabilities
Deposits:
NOW		$	660,655			$	1,323			0.27	%		$	385,413			$	2,070			0.72	%
Money market checking		461,998				662				0.19			447,219				2,397				0.71
Savings		44,938				4				0.01			43,606				16				0.05
IRAs		10,764				102				1.27			13,785				169				1.63
CDs		148,807				1,091				0.98			388,190				4,188				1.44
Repurchase agreements and federal funds sold		10,677				10				0.13			9,784				19				0.26
FHLB and other borrowings		33,914				95				0.37			75,451				1,524				2.69
Subordinated debt		43,786				1,437				4.39			4,124				78				2.52
Total interest-bearing liabilities		1,415,539				4,724				0.45			1,367,572				10,461				1.02
Noninterest-bearing demand deposits		828,469											442,378
Other liabilities		36,665											63,853
Total liabilities		2,280,673											1,873,803
Stockholders’ equity
Preferred stock		774											7,334
Common stock		12,524											12,031
Paid-in capital		139,980											123,342
Treasury stock		(16,741		)									(1,533		)
Retained earnings		107,094											81,476
Accumulated other comprehensive income (loss)		1,788											(862		)
Total stockholders’ equity attributable to parent		245,419											221,788
Noncontrolling interest		527											—
Total stockholders’ equity		245,946											221,788
Total liabilities and stockholders’ equity		$	2,526,619										$	2,095,591
Net interest spread (tax-equivalent)										3.07											3.31
Net interest income and margin (tax-equivalent) 2						$	56,733			3.25	%						$	51,486			3.60	%
Less: Tax-equivalent adjustments						$	(1,077	)									$	(847	)
Net interest spread										3.01	%										3.26	%
Net interest income and margin						$	55,656			3.19	%						$	50,639			3.54	%
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 The Company’s PPP loans totaling $147.3 million and $87.9 million are included in this amount for the nine months ended September 30, 2021 and September 30, 2020, 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, 2021				June 30, 2021				September 30, 2020				September 30, 2021				September 30, 2020
Net interest margin - U.S. GAAP basis
Net interest income		$	19,096			$	19,055			$	16,010			$	55,656			$	50,639
Average interest-earning assets		2,372,880				2,403,613				1,933,213				2,335,067				1,903,966
Net interest margin		3.19		%		3.18		%		3.29		%		3.19		%		3.54		%
Net interest margin - non-U.S. GAAP basis
Net interest income		$	19,096			$	19,055			$	16,010			$	55,656			$	50,639
Impact of fully tax-equivalent adjustment		338				361				301				1,077				847
Net interest income on a fully tax-equivalent basis		19,434				19,416				16,311				56,733				51,486
Average interest-earning assets		$	2,372,880			$	2,403,613			$	1,933,213			$	2,335,067			$	1,903,966
Net interest margin on a fully tax-equivalent basis		3.25		%		3.24		%		3.35		%		3.25		%		3.60		%

Selected Financial Data (Unaudited) (Dollars in thousands, except per share data)
		Quarterly												Year-to-Date
		2021				2021				2020				2021				2020
		Third Quarter				Second Quarter				Third Quarter
Earnings and Per Share Data:
Net income		$	11,828			$	9,247			$	6,491			$	29,160			$	25,573
Net income available to common shareholders		$	11,828			$	9,247			$	6,375			$	29,125			$	25,228
Earnings per share - basic		$	1.00			$	0.79			$	0.53			$	2.49			$	2.11
Earnings per share - diluted		$	0.92			$	0.73			$	0.53			$	2.32			$	2.07
Cash dividends paid per common share		$	0.14			$	0.12			$	0.09			$	0.36			$	0.27
Book value per common share		$	22.18			$	21.12			$	19.07			$	22.18			$	19.07
Tangible book value per common share		$	21.64			$	20.54			$	18.66			$	21.64			$	18.66
Weighted-average shares outstanding - basic		11,880,348				11,639,237				11,948,989				11,684,570				11,948,857
Weighted-average shares outstanding - diluted		12,824,309				12,612,030				12,116,418				12,565,809				12,185,137
Performance Ratios:
Return on average assets 1		1.9		%		1.4		%		1.2		%		1.5		%		1.6		%
Return on average equity 1		18.1		%		15.5		%		11.3		%		15.8		%		15.4		%
Net interest margin 2 3		3.25		%		3.24		%		3.35		%		3.25		%		3.60		%
Efficiency ratio 4		62.9		%		71.6		%		51.6		%		65.9		%		60.3		%
Overhead ratio 1 5		4.0		%		3.6		%		3.4		%		3.6		%		4.9		%
Equity to assets		9.5		%		9.1		%		10.6		%		9.5		%		10.6		%
Asset Quality Data and Ratios:
Charge-offs		$	98			$	—			$	111			$	363			$	1,890
Recoveries		$	23			$	208			$	5			$	248			$	17
Net loan charge-offs to total loans 1 6		—		%		(0.1		)%		—		%		—		%		0.2		%
Allowance for loan losses		$	25,187			$	24,882			$	25,913			$	25,187			$	25,913
Allowance for loan losses to total loans 7		1.4		%		1.5		%		1.8		%		1.4		%		1.8		%
Nonperforming loans		$	17,453			$	15,501			$	14,893			$	17,453			$	14,893
Nonperforming loans to total loans		1.0		%		0.9		%		1.0		%		1.0		%		1.0		%
ICM Production Data:
Mortgage pipeline		$	1,150,116			$	1,238,935			$	1,538,554			$	1,150,116			$	1,538,554
Loans originated		$	1,456,588			$	1,677,431			$	2,291,065			$	5,222,394			$	2,291,065
Loans closed		$	1,233,605			$	1,490,965			$	1,619,379			$	4,630,597			$	1,619,379
Loans sold		$	1,098,475			$	1,493,198			$	1,215,512			$	4,368,875			$	1,215,512
1 annualized for the quarterly periods presented 2 net interest income as a percentage of average interest-earning assets 3 presented on a fully tax-equivalent basis 4 noninterest expense as a percentage of net interest income and noninterest income, a non-U.S. GAAP measure 5 noninterest expense as a percentage of average assets, a non-U.S. GAAP measure 6 charge-offs less recoveries 7 excludes loans held for sale

Non-GAAP Reconciliation: Tangible Book Value per Common Share (Unaudited) (Dollars in thousands, except per share data)
		September 30, 2021				June 30, 2021				September 30, 2020
Goodwill		$	3,988			$	4,119			$	2,350
Intangibles		2,518				2,692				2,554
Total intangibles		6,506				6,811				4,904
Total equity attributable to parent		265,565				248,611				234,116
Less: Preferred equity		—				—				(7,334		)
Less: Total intangibles		(6,506		)		(6,811		)		(4,904		)
Tangible common equity		259,059				241,800				221,878
Tangible common equity		259,059				241,800				221,878
Common shares outstanding (000s)		11,972				11,774				11,889
Tangible book value per common share		$	21.64			$	20.54			$	18.66

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211101005832/en/

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

Amy Baker, VP, Corporate Communications and Marketing

(844) 682-2265

abaker@mvbbanking.com

Source: MVB Financial Corp.

FAQ

What are MVB Financial's Q3 2021 earnings results?

MVB Financial reported net income of $11.8 million for Q3 2021, or $1.00 basic earnings per share.

How have MVB's deposits changed in Q3 2021?

As of September 30, 2021, noninterest-bearing deposits increased to $999.3 million, a 7% rise from the previous quarter.

What is the amount of Fintech deposits for MVB Financial?

Fintech deposits reached $975.7 million in Q3 2021, up 27% from the prior quarter.

Did MVB Financial increase its dividend in Q3 2021?

Yes, MVB Financial increased its quarterly dividend by 17% to $0.14 per share.

What is the tangible book value per share for MVB Financial?

The tangible book value per share for MVB Financial was $21.64 as of September 30, 2021.