MVB Financial Corp. Announces Fourth Quarter and Full Year 2023 Results

Rhea-AI Summary

MVB Financial Corp. (MVBF) reported net income of $7.9 million for Q4 2023, with $0.62 basic and $0.61 diluted earnings per share. Highlights include a 4.2% increase in net interest income, 106.7% rise in earnings per share, and 2.1% loan growth. The company also saw improvements in asset quality measures and capital strength.

Positive

• Net interest income increased by 4.2% to $31.3 million in Q4 2023.
• Earnings per share rose by 106.7% to $0.62 in Q4 2023 compared to the previous quarter.
• Loan growth of 2.1% was observed in Q4 2023, with a balance sheet loan to deposit ratio of 79.9%.
• Noninterest expense declined by 7.9% to $28.3 million in Q4 2023.
• Asset quality measures improved, with nonperforming loans declining by 22.0% to $8.3 million in Q4 2023.
• Capital strength was further enhanced, with the Community Bank Leverage Ratio at 10.5% and Tier 1 Risk-Based Capital Ratio at 14.4% as of December 31, 2023.

Negative

• None.

Insights

Financial Analyst

The reported financial results from MVB Financial Corp. reflect a positive trend for the fourth quarter, with significant earnings growth and an improved net interest margin (NIM). The increase in net interest income by 4.2% and the expansion of the NIM to 4.04% are particularly noteworthy, as they suggest an enhanced ability to generate revenue from interest-earning assets relative to the interest paid on deposits.

From an asset quality perspective, the reduction in nonperforming loans and the release of allowance for credit losses are indicative of a healthier loan portfolio and lower perceived risk of default. This improvement could potentially lead to reduced provisions for credit losses in the future, thereby positively impacting the bottom line. However, the decline in total deposits, particularly in higher-cost CDs and brokered deposits, points to a strategic shift in the bank's funding mix, which could have implications for funding stability and cost management.

Market Research Analyst

The banking sector has been facing headwinds from a volatile interest rate environment and increased competition for deposits. MVB Financial's report indicates an ability to navigate these challenges, as evidenced by controlled noninterest expenses and the growth in noninterest bearing deposits. The latter is a positive sign, as it suggests the bank's ability to attract depositors without incurring additional interest expense, a factor that can enhance net interest income in a rising rate environment.

The emphasis on Fintech-related fee income growth aligns with broader industry trends where banks are leveraging technology partnerships to diversify revenue streams. This strategic focus could position MVB Financial to capitalize on the growing digital finance ecosystem and could be a point of interest for stakeholders evaluating the company's long-term growth prospects.

Economist

The financial results of MVB Financial Corp. provide an insight into the broader economic trends affecting the banking industry. The increase in net interest margin suggests that the bank has effectively managed its interest rate risk amid fluctuating rates. The shift in deposit mix towards noninterest bearing accounts may reflect a strategic response to the tightening monetary policy by the Federal Reserve, which has raised interest rates to combat inflation. As higher rates increase the cost of borrowing, banks like MVB could benefit from a wider interest spread, but must also be cautious of potential impacts on loan demand and consumer behavior.

The bank's capital ratios, including the Community Bank Leverage Ratio and the Total Risk-Based Capital Ratio, have shown improvement and are above regulatory minimums, indicating a solid capital position that could support future growth or withstand economic downturns. This is a crucial factor for investor confidence, especially in uncertain economic conditions.

FAIRMONT, W.Va.--(BUSINESS WIRE)-- 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 fourth quarter and year ended December 31, 2023, with reported net income of $7.9 million, or $0.62 basic and $0.61 diluted earnings per share for the three months ended December 31, 2023.

Fourth Quarter 2023 Highlights As Compared to Third Quarter 2023

Net interest income increased 4.2%, or $1.2 million.

Net interest margin improved by 17 bps to 4.04%.

Earnings per share up 106.7% to $0.62.

Loan growth of 2.1%; Balance sheet loan to deposit ratio of 79.9% from 74.7%.

Noninterest expense declined by 7.9%, or $2.4 million.

Book value per share and tangible book value per share, a non-GAAP financial measure, increased 6.3% and 6.4% to $22.68 and $22.43, respectively.

Asset quality measures improved; Capital strength further enhanced.

From Larry F. Mazza, Chief Executive Officer, MVB Financial:

“MVB closed a challenging year for the banking industry with strong fourth quarter results. Loans and investment securities continued to reprice higher, excess liquidity was redeployed as the pace of loan growth picked up and funding costs stabilized, driving significant improvement in net interest margin and net interest income. At the same time, expenses were well-controlled, Fintech-related fee income growth accelerated and measures of safety, soundness, foundational strength and shareholder value were improved and further enhanced. Team MVB’s resilience and adaptability enabled us to navigate the disruptive industry events last year, and now leave us well-positioned to drive further improvement in earnings and profitability as market conditions begin to turn favorably.”

FOURTH QUARTER 2023 HIGHLIGHTS

• Loan growth and net interest margin expansion powered net interest income growth.
  • Net interest income on a fully tax-equivalent basis, a non-GAAP financial measure, increased 4.0%, or $1.2 million, to $31.3 million relative to the prior quarter, primarily reflecting net interest margin expansion and higher average loan balances, partially offset by lower interest-bearing balances with banks.
  • Net interest margin on a fully tax-equivalent basis, a non-GAAP financial measure, was 4.06%, up 16 basis points from the prior quarter, primarily reflecting higher earning asset yields, a favorable shift in the mix of earning assets and deposit funding and relatively stable funding costs. Total cost of funds was 2.44%, compared to 2.43% for the prior quarter.
  • Average earning asset balances decreased 0.3% during the fourth quarter of 2023, primarily reflecting lower interest-bearing balances with banks, primarily offset by higher average loan and investment securities balances. Average total loan balances increased 1.1%, largely driven by higher commercial loans.
• Deposit balances declined as funding mix optimization continued.
  • Total deposits declined 4.5%, or $137.4 million, to $2.9 billion, compared to the prior quarter-end, primarily reflecting lower certificate of deposit (“CD”) balances, which includes a 10.5%, or $45.8 million, decline in brokered deposits, as the Company looks to reduce higher-cost funding that had been added in response to 2023 industry events.
  • Total off-balance sheet deposits remained consistent at $1.09 billion as compared to $1.11 billion at the prior quarter-end. Off-balance sheet deposit networks are utilized to generate fee income, enhance capital efficiency and manage liquidity and concentration risk.
  • Noninterest bearing (“NIB”) deposit balances increased 9.4%, or $103.4 million, to $1.20 billion, as compared to the prior quarter-end, primarily reflecting gaming and seasonal considerations. NIB deposits represented 41.3% of total deposits, as compared to 36.0% of total deposits at the prior quarter-end.
  • Balance sheet loan to deposit ratio was 79.9% as of December 31, 2023, compared to 74.7% as of September 30, 2023.
• Asset quality measures improved; Capital strength and shareholder value further enhanced.
  • Nonperforming loans declined $2.3 million, or 22.0%, to $8.3 million, or 0.4% of total loans, from $10.6 million, or 0.5% of total loans, at the prior quarter-end. Criticized loans as a percentage of total loans were 5.3%, as compared to 6.1% at the prior quarter-end. Net charge-offs were $0.5 million, or 0.1% of total loans on an annualized basis, for the fourth quarter of 2023, compared to $5.9 million, or 1.0%, for the prior quarter.
  • The release of allowance for credit losses totaled $2.1 million, primarily reflecting the general improvement in credit indicators and the continued changes in loan portfolio composition. The allowance for credit losses was 1.0% of total loans, as compared to 1.1% as of the prior quarter-end.
  • The Community Bank Leverage Ratio, Tier 1 Risk-Based Capital Ratio and MVB Bank’s Total Risk-Based Capital Ratio were 10.5%, 14.4%, and 15.1%, respectively, compared to 10.4%, 14.0%, and 14.8%, respectively, at the prior quarter-end.
  • The tangible common equity to tangible assets ratio was 8.6%, compared to 7.8% at the prior quarter-end. Tangible book value per share, a non-U.S. GAAP measure, increased 6.4% to $22.43, relative to the prior quarter-end.
• Expenses declined on lower personnel costs; Fee income down on mortgage loss; Fintech-related fee income increased.
  • Noninterest expense declined 7.9% to $28.3 million relative to the prior quarter, primarily reflecting lower salaries and employee benefits costs and other operating expense. Professional fees remained elevated due to actions taken to enhance regulatory and compliance infrastructure.
  • Total noninterest income declined 23.4% to $4.4 million relative to the prior quarter, primarily reflecting increased equity method investment losses, partially offset by higher payment card and service charge income, which primarily relates to the Company’s Fintech-related fee income initiatives.

INCOME STATEMENT

Net interest income on a tax-equivalent basis totaled $31.3 million for the fourth quarter of 2023, an increase of $1.2 million, or 4.0%, from the third quarter of 2023 and a decline of $2.4 million, or 7.2%, from the fourth quarter of 2022. The increase in net interest income compared to the third quarter of 2023 reflected a higher net interest margin, partially offset by a slight decline in total average earning asset balances. The decline compared to the fourth quarter of 2022 reflected higher funding costs, partially offset by higher average earning asset balances.

Interest income increased $1.4 million, or 2.8%, from the third quarter of 2023 and increased $9.0 million, or 22.1%, compared to the fourth quarter of 2022. The tax-equivalent yield on loans was 7.2% for the fourth quarter of 2023, compared to 7.0% for the third quarter of 2023 and 6.1% for the fourth quarter of 2022. Higher loan yields generally reflected the cumulative impact of loans booked at higher yields than the prevailing portfolio yield in prior periods and the repricing of variable rate loans.

Interest expense increased $0.1 million, or 0.7%, compared to the third quarter of 2023 and $11.3 million, or 156.3%, compared to the fourth quarter of 2022. The cost of funds was 2.44% for the fourth quarter of 2023, consistent with the third quarter of 2023 and up 144 basis points compared to the fourth quarter of 2022. The increase in cost of funds compared to the prior year reflected higher funding costs across the board and a shift in the mix of deposit funding toward higher cost deposit products.

On a fully tax-equivalent basis, net interest margin for the fourth quarter of 2023 was 4.06%, an increase of 16 basis points from the third quarter of 2023 and a decrease of 51 basis points from the fourth quarter of 2022. See the table below for a reconciliation between net interest margin and net interest margin on a fully tax-equivalent basis, a non-GAAP measure. The increase in net interest margin from the third quarter of 2023 primarily reflected higher loan and investment portfolio yields, a favorable shift in the mix of earning assets and deposit funding and stable funding costs. Contraction in the net interest margin from the fourth quarter of 2022 primarily reflected higher funding costs and an unfavorable shift in the mix of deposit funding, partially offset by higher earning asset yields.

Noninterest income totaled $4.4 million for the fourth quarter of 2023, a decrease of $1.4 million, or 23.4%, from the third quarter of 2023 and an increase of $1.0 million, or 29.2%, from the fourth quarter of 2022. The decrease compared to the third quarter of 2023 was primarily driven by an increase of $1.7 million in equity method investment losses from our mortgage companies and a $0.7 million loss on derivatives during the fourth quarter of 2023 without a comparable loss in the prior quarter, partially offset by a $1.0 million increase in payment card and service charge income. The increase in noninterest income from the fourth quarter of 2022 was primarily driven by increases of $2.4 million in gain on sale of loans, $2.1 million in payment card and service charge income, $1.5 million in holding gains on equity securities and $0.7 million in other operating income. The increases were partially offset by a $3.6 million gain on sale of assets in the fourth quarter of 2022 without a comparable gain in the current quarter, an increase of $1.1 million in equity method investment losses from our mortgage companies and a $0.7 million loss on derivatives in the fourth quarter of 2023 without a comparable loss in the prior year.

Noninterest expense totaled $28.3 million for the fourth quarter of 2023, a decrease of $2.4 million, or 7.9%, from the third quarter of 2023 and an increase of $1.6 million, or 5.8%, from the fourth quarter of 2022. The decrease from the third quarter of 2023 was driven by declines of $1.2 million in salaries and employee benefits, $0.8 million in other operating expense and $0.4 million in insurance, tax and assessment expense. The increase from the fourth quarter of 2022 primarily reflected higher professional fees of $1.8 million and higher salaries and employee benefits of $0.5 million, partially offset by a decline in other operating expense of $0.7 million.

BALANCE SHEET

Loans totaled $2.32 billion at December 31, 2023, an increase of $47.2 million, or 2.1%, and a decrease of $55.1 million, or 2.3%, as compared to September 30, 2023 and December 31, 2022, respectively. Loan growth compared to September 30, 2023 was driven primarily by higher commercial loan balances. The decrease in loan balances compared to December 31, 2022 primarily reflected deliberate efforts to improve balance sheet liquidity, lower market demand and the sale of $44.4 million of subprime automobile loans during 2023. Loans held-for-sale, which represent MVB Bank’s government guaranteed lending, were $0.6 million as of December 31, 2023, compared to $7.6 million at September 30, 2023 and $23.1 million at December 31, 2022. The decline in loans held-for-sale from the prior periods was driven by loan sales and amortization of the portfolio, as government guaranteed lending is no longer a growth vehicle.

Deposits totaled $2.90 billion as of December 31, 2023, a decrease of $137.4 million, or 4.5%, from September 30, 2023 and an increase of $331.0 million, or 12.9%, from December 31, 2022. NIB deposits totaled $1.20 billion as of December 31, 2023, an increase of $103.4 million, or 9.4%, and a decrease of $34.3 million, or 2.8%, from September 30, 2023 and December 31, 2022, respectively. The decrease in total deposits compared to September 30, 2023 primarily reflected a decline in CDs and brokered deposits. The increase in total deposits relative to December 31, 2022 reflected higher CDs and brokered deposits, partially offset by a decrease in NIB deposits driven by the highly-competitive deposit environment, higher interest rates and the utilization of off-balance sheet deposit networks to generate fee income, enhance capital efficiency and manage liquidity and concentration risk.

CAPITAL

The Community Bank Leverage Ratio was 10.5% as of December 31, 2023, compared to 10.4% as of September 30, 2023 and 9.8% as of December 31, 2022. MVB’s Tier 1 Risk-Based Capital Ratio was 14.4% as of December 31, 2023, compared to 14.0% as of September 30, 2023 and 12.4% as of December 31, 2022. The Bank’s Total Risk-Based Capital Ratio was 15.1% as of December 31, 2023, compared to 14.8% as of September 30, 2023 and 13.4% as of December 31, 2022.

The Company issued a quarterly cash dividend of $0.17 per share for the quarter ended December 31, 2023, consistent with the quarters ended September 30, 2023 and December 31, 2022.

ASSET QUALITY

Nonperforming loans totaled $8.3 million, or 0.4% of total loans, for the fourth quarter of 2023, as compared to $10.6 million, or 0.5% of total loans for the third quarter of 2023 and $11.2 million, or 0.5% of total loans for the fourth quarter of 2022. Criticized loans were $122.4 million, or 5.3% of total loans, as compared to $137.5 million, or 6.1% of total loans, for the third quarter of 2023 and $71.2 million, or 3.0% of total loans, for the fourth quarter of 2022.

Net charge-offs on an annualized basis were $0.5 million, or 0.1% of total loans, for the fourth quarter of 2023, compared to $5.9 million, or 1.0% of total loans, for the third quarter of 2023 and $5.4 million, or 0.9% of total loans for the fourth quarter of 2022.

The release of allowance for credit losses totaled $2.1 million for the quarter ended December 31, 2023, compared to a release of $0.2 million for the quarter ended September 30, 2023 and a provision of $2.7 million for the quarter ended December 31, 2022. The release of allowance for credit losses for the quarter ended December 31, 2023 was attributed to an improvement in asset quality and the reduction in criticized loans. The allowance for credit losses was 1.0% of total loans at December 31, 2023, as compared to 1.1% as of September 30, 2023 and 1.0% as of December 31, 2022.

About MVB Financial Corp.

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

MVB is a financial holding company headquartered in Fairmont, West Virginia. Through its subsidiary, MVB Bank, and MVB Bank’s subsidiaries, MVB Financial provides financial services to individuals and corporate clients in the Mid-Atlantic region and beyond.

Nasdaq is a leading global provider of trading, clearing, exchange technology, listing, information and public company services.

For more information about MVB, please visit ir.mvbbanking.com.

Forward-looking Statements

MVB Financial has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in this press release that are intended to be covered by the protections provided under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations about the future and are subject to risks and uncertainties. Forward-looking statements include, without limitation, information concerning possible or assumed future results of operations of the Company and its subsidiaries. Forward-looking statements can be identified by the use of words such as “may,” “could,” “should,” “would,” “will,” “plans,” “believes,” “estimates,” “expects,” “anticipates,” “intends,” “continues” or the negative of those terms or similar expressions. Note that many factors could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in forward-looking statements. Therefore, undue reliance should not be placed upon any forward-looking statements. Those factors include but are not limited to: market, economic, operational, liquidity and credit risk; changes in market interest rates; impacts related to or resulting from recent turmoil in the banking industry; inability to successfully execute business plans, including strategies related to investments in Fintech companies; competition; unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; changes in economic, business and political conditions; changes in demand for loan products and deposit flow; operational risks and risk management failures; and government regulation and supervision. Additional factors that may cause actual results to differ materially from those described in the forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as well as its other filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. Except as required by law, the Company disclaims any obligation to update, revise or correct any forward-looking statements.

Accounting standards require the consideration of subsequent events occurring after the balance sheet date for matters that require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s financial statements when filed with the SEC. Accordingly, the consolidated financial information in this announcement is subject to change.

Non-U.S. GAAP Financial Measures

This document contains supplemental financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management uses these non-U.S. GAAP measures in its analysis of the Company’s performance. These measures should not be considered a substitute for U.S. GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with U.S. GAAP. Management believes the presentation of non-U.S. GAAP financial measures that exclude the impact of specified items provide useful supplemental information that is essential to a proper understanding of the Company’s financial condition and results. Non-U.S. GAAP measures are not formally defined under U.S. GAAP, and other entities may use calculation methods that differ from those used by us. As a complement to U.S. GAAP financial measures, our management believes these non-U.S. GAAP financial measures assist investors in comparing the financial condition and results of operations of financial institutions due to the industry prevalence of such non-U.S. GAAP measures. See the tables below for a reconciliation of these non-U.S. GAAP measures to the most directly comparable U.S. GAAP financial measures.

MVB Financial Corp. Financial Highlights Consolidated Statements of Income (Unaudited) (Dollars in thousands, except per share data)
		Quarterly											Year-to-Date
		2023				2023				2022			2023				2022
		Fourth Quarter				Third Quarter				Fourth Quarter
Interest income		$	49,699			$	48,325			$	40,702		$	189,818			$	125,957
Interest expense			18,592				18,460				7,253			66,535				14,154
Net interest income			31,107				29,865				33,449			123,283				111,803
Provision (release of allowance) for credit losses			(2,103	)			(159	)			2,694			(1,921	)			14,194
Net interest income after provision (release of allowance) for credit losses			33,210				30,024				30,755			125,204				97,609
Total noninterest income			4,438				5,791				3,435			19,715				27,565
Noninterest expense:
Salaries and employee benefits			14,863				16,016				14,317			63,371				62,534
Other expense			13,438				14,709				12,424			54,254				47,612
Total noninterest expenses			28,301				30,725				26,741			117,625				110,146
Income before income taxes			9,347				5,090				7,449			27,294				15,028
Income taxes			1,431				1,218				1,731			5,070				3,294
Net income from continuing operations before noncontrolling interest			7,916				3,872				5,718			22,224				11,734
Income from discontinued operations before income taxes			—				—				888			11,831				3,487
Income taxes - discontinued operations			—				—				236			3,049				834
Net income from discontinued operations			—				—				652			8,782				2,653
Net (income) loss attributable to noncontrolling interest			(5	)			(5	)			139			226				660
Net income available to common shareholders		$	7,911			$	3,867			$	6,509		$	31,232			$	15,047
Earnings per share from continuing operations - basic		$	0.62			$	0.30			$	0.47		$	1.77			$	1.01
Earnings per share from discontinued operations - basic		$	—			$	—			$	0.05		$	0.69			$	0.22
Earnings per share - basic		$	0.62			$	0.30			$	0.52		$	2.46			$	1.23
Earnings per share from continuing operations - diluted		$	0.61			$	0.29			$	0.45		$	1.72			$	0.96
Earnings per share from discontinued operations - diluted		$	—			$	—			$	0.05		$	0.68			$	0.21
Earnings per share - diluted		$	0.61			$	0.29			$	0.50		$	2.40			$	1.17

Noninterest Income (Unaudited) (Dollars in thousands)
		Quarterly												Year-to-Date
		2023				2023				2022				2023				2022
		Fourth Quarter				Third Quarter				Fourth Quarter
Card acquiring income		$	1,348			$	845			$	497			$	3,603			$	2,790
Service charges on deposits			174				490				684				2,850				3,418
Interchange income			2,289				1,517				497				7,323				5,440
Total payment card and service charge income			3,811				2,852				1,678				13,776				11,648
Equity method investments loss			(2,429	)			(750	)			(1,379	)			(2,499	)			(713	)
Compliance and consulting income			986				1,314				1,217				4,312				4,598
Gain (loss) on sale of loans			271				330				(2,131	)			(744	)			1,655
Investment portfolio gains (losses)			75				244				(1,397	)			(1,659	)			925
Loss on acquisition and divestiture activity			—				—				—				(986	)			—
Other noninterest income			1,724				1,801				5,447				7,515				9,452
Total noninterest income		$	4,438			$	5,791			$	3,435			$	19,715			$	27,565

Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands)
		December 31, 2023				September 30, 2023				December 31, 2022
Cash and cash equivalents		$	398,229			$	587,100			$	40,280
Securities available-for-sale, at fair value			345,275				311,537				379,814
Equity securities			41,086				40,835				38,744
Loans held-for-sale			629				7,603				23,126
Loans receivable			2,317,594				2,270,433				2,372,645
Less: Allowance for credit losses			(22,124	)			(24,276	)			(23,837	)
Loans receivable, net			2,295,470				2,246,157				2,348,808
Premises and equipment, net			20,928				21,468				23,630
Assets from discontinued operations			—				—				4,315
Goodwill			2,838				2,838				2,838
Other assets			209,427				220,045				207,295
Total assets		$	3,313,882			$	3,437,583			$	3,068,850
Noninterest-bearing deposits		$	1,197,272			$	1,093,903			$	1,231,544
Interest-bearing deposits			1,704,204				1,944,986				1,338,938
FHLB and other borrowings			—				—				102,333
Senior term loan			6,786				8,473				9,765
Subordinated debt			73,540				73,478				73,286
Liabilities from discontinued operations			—				—				5,444
Other liabilities			42,738				45,374				46,149
Stockholders' equity			289,342				271,369				261,391
Total liabilities and stockholders' equity		$	3,313,882			$	3,437,583			$	3,068,850

Reportable Segments (Unaudited)
Twelve Months Ended December 31, 2023		CoRe Banking				Mortgage Banking				Financial Holding Company				Other				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	189,498			$	416			$	41			$	—			$	(137	)		$	189,818
Interest expense			62,507				—				3,985				180				(137	)			66,535
Net interest income (expense)			126,991				416				(3,944	)			(180	)			—				123,283
Release of allowance for credit losses			(1,921	)			—				—				—				—				(1,921	)
Net interest income (expense) after release of allowance for credit losses			128,912				416				(3,944	)			(180	)			—				125,204
Noninterest income			17,286				(2,486	)			10,453				9,138				(14,676	)			19,715
Noninterest expenses:
Salaries and employee benefits			37,265				7				17,041				9,058				—				63,371
Other expense			53,221				65				8,233				7,411				(14,676	)			54,254
Total noninterest expenses			90,486				72				25,274				16,469				(14,676	)			117,625
Income (loss) before income taxes			55,712				(2,142	)			(18,765	)			(7,511	)			—				27,294
Income taxes			12,342				(557	)			(4,923	)			(1,792	)			—				5,070
Net income (loss) from continuing operations			43,370				(1,585	)			(13,842	)			(5,719	)			—				22,224
Income from discontinued operations before income taxes			—				—				—				11,831				—				11,831
Income tax expense - discontinued operations			—				—				—				3,049				—				3,049
Net income from discontinued operations			—				—				—				8,782				—				8,782
Net income (loss)			43,370				(1,585	)			(13,842	)			3,063				—				31,006
Net loss attributable to noncontrolling interest			—				—				—				226				—				226
Net income (loss) available to common shareholders		$	43,370			$	(1,585	)		$	(13,842	)		$	3,289			$	—			$	31,232

Twelve Months Ended December 31, 2022		CoRe Banking			Mortgage Banking			Financial Holding Company				Other				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	125,426		$	429		$	146			$	—			$	(44	)		$	125,957
Interest expense			10,920			—			3,234				44				(44	)			14,154
Net interest income (expense)			114,506			429			(3,088	)			(44	)			—				111,803
Provision for credit losses			14,194			—			—				—				—				14,194
Net interest income (expense) after provision for credit losses			100,312			429			(3,088	)			(44	)			—				97,609
Noninterest income			22,673			37			10,576				6,120				(11,841	)			27,565
Noninterest expenses:
Salaries and employee benefits			36,960			8			16,582				8,984				—				62,534
Other expenses			44,873			142			8,049				6,389				(11,841	)			47,612
Total noninterest expenses			81,833			150			24,631				15,373				(11,841	)			110,146
Income (loss) before income taxes			41,152			316			(17,143	)			(9,297	)			—				15,028
Income taxes			8,882			77			(3,472	)			(2,193	)			—				3,294
Net income (loss) from continuing operations			32,270			239			(13,671	)			(7,104	)			—				11,734
Income from discontinued operations before income taxes			—			—			—				3,487				—				3,487
Income tax expense - discontinued operations			—			—			—				834				—				834
Net income from discontinued operations			—			—			—				2,653				—				2,653
Net income (loss)			32,270			239			(13,671	)			(4,451	)			—				14,387
Net loss attributable to noncontrolling interest			—			—			—				660				—				660
Net income (loss) available to common shareholders		$	32,270		$	239		$	(13,671	)		$	(3,791	)		$	—			$	15,047

Average Balances and Interest Rates (Unaudited) (Dollars in thousands)
		Three Months Ended											Three Months Ended											Three Months Ended
		December 31, 2023											September 30, 2023											December 31, 2022
		Average Balance				Interest Income/ Expense				Yield/ Cost			Average Balance				Interest Income/ Expense				Yield/ Cost			Average Balance				Interest Income/ Expense				Yield/ Cost
Assets
Interest-bearing balances with banks		$	442,521			$	5,944			5.33	%		$	483,158			$	6,404			5.26	%		$	113,500			$	982			3.43	%
Investment securities:
Taxable			222,303				1,444			2.58				206,340				1,056			2.03				233,839				1,114			1.89
Tax-exempt1			98,464				876			3.53				107,490				1,016			3.75				136,313				1,343			3.91
Loans and loans held-for-sale:2
Commercial3			1,635,510				33,665			8.17				1,593,875				31,348			7.80				1,667,981				27,947			6.65
Tax-exempt1			3,492				38			4.32				3,678				40			4.31				4,161				47			4.48
Real estate			576,580				6,421			4.42				573,579				6,351			4.39				631,450				6,000			3.77
Consumer			76,088				1,503			7.84				95,032				2,331			9.73				139,705				3,563			10.12
Total loans			2,291,670				41,627			7.21				2,266,164				40,070			7.02				2,443,297				37,557			6.10
Total earning assets			3,054,958				49,891			6.48				3,063,152				48,546			6.29				2,926,949				40,996			5.56
Less: Allowance for credit losses			(24,079	)										(29,693	)										(27,530	)
Cash and due from banks			5,771											6,686											5,643
Other assets			292,574											281,504											266,292
Total assets		$	3,329,224										$	3,321,649										$	3,171,354
Liabilities
Deposits:
NOW		$	637,144			$	5,386			3.35	%		$	674,745			$	4,970			2.92	%		$	791,227			$	2,880			1.44	%
Money market checking			650,925				3,691			2.25				537,592				3,294			2.43				219,334				643			1.16
Savings			70,146				442			2.50				72,206				438			2.41				77,416				263			1.35
IRAs			7,296				66			3.59				6,788				56			3.27				6,053				20			1.31
CDs			590,517				8,014			5.38				664,281				8,702			5.20				314,723				2,380			3.00
Repurchase agreements and federal funds sold			4,736				—			—				4,911				—			—				9,958				1			0.04
FHLB and other borrowings			11				—			—				278				—			—				11,128				115			4.10
Senior term loan			8,183				183			8.87				8,751				191			8.66				9,235				163			7.00
Subordinated debt			73,510				810			4.37				73,446				809			4.37				73,254				787			4.26
Total interest-bearing liabilities			2,042,468				18,592			3.61				2,042,998				18,460			3.58				1,512,328				7,252			1.90
Noninterest-bearing demand deposits			975,122											975,164											1,377,880
Other liabilities			39,410											38,021											40,264
Total liabilities			3,057,000											3,056,183											2,930,472
Stockholders’ equity
Common stock			13,588											13,570											13,452
Paid-in capital			160,106											159,050											156,111
Treasury stock			(16,741	)										(16,741	)										(16,741	)
Retained earnings			156,004											146,504											129,454
Accumulated other comprehensive loss			(40,688	)										(36,865	)										(41,793	)
Total stockholders’ equity attributable to parent			272,269											265,518											240,483
Noncontrolling interest			(45	)										(52	)										399
Total stockholders’ equity			272,224											265,466											240,882
Total liabilities and stockholders’ equity		$	3,329,224										$	3,321,649										$	3,171,354
Net interest spread (tax-equivalent)										2.87	%										2.71	%										3.66	%
Net interest income and margin (tax-equivalent)1						$	31,299			4.06	%						$	30,086			3.90	%						$	33,744			4.57	%
Less: Tax-equivalent adjustments						$	(193	)									$	(221	)									$	(295	)
Net interest spread										2.84	%										2.68	%										3.62	%
Net interest income and margin						$	31,107			4.04	%						$	29,865			3.87	%						$	33,449			4.53	%
1 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a Federal tax rate of 21% for the periods presented, which is a non-GAAP financial measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 16.
2 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.
3 MVB Bank’s PPP loans totaling $2.7 million, $3.0 million and $13.6 million are included in this amount for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively.

		Twelve Months Ended											Twelve Months Ended
		December 31, 2023											December 31, 2022
		Average Balance				Interest Income/ Expense				Yield/ Cost			Average Balance				Interest Income/ Expense				Yield/ Cost
Assets
Interest-bearing balances with banks		$	414,466			$	21,043			5.08	%		$	232,935			$	1,613			0.69	%
CDs with banks			—				—			—				1,033				24			2.32
Investment securities:
Taxable			221,395				5,576			2.52				236,344				3,496			1.48
Tax-exempt1			116,680				4,347			3.73				139,353				5,166			3.71
Loans and loans held-for-sale:2
Commercial3			1,621,299				124,078			7.65				1,594,069				87,845			5.51
Tax-exempt1			3,732				163			4.37				4,661				203			4.36
Real estate			591,157				24,764			4.19				487,044				15,721			3.23
Consumer			108,988				10,793			9.90				103,345				13,017			12.60
Total loans			2,325,176				159,798			6.87				2,189,119				116,786			5.33
Total earning assets			3,077,717				190,764			6.20				2,798,784				127,085			4.54
Less: Allowance for loan losses			(29,746	)										(22,248	)
Cash and due from banks			6,659											5,670
Other assets			302,036											244,861
Total assets		$	3,356,666										$	3,027,067
Liabilities
Deposits:
NOW		$	697,266			$	19,851			2.85	%		$	707,282			$	4,724			0.67	%
Money market checking			504,730				10,352			2.05				330,208				1,449			0.44
Savings			76,908				1,871			2.43				56,697				418			0.74
IRAs			6,662				194			2.91				6,216				71			1.14
CDs			576,726				29,392			5.10				170,648				3,814			2.24
Repurchase agreements and federal funds sold			5,662				1			0.02				10,987				6			0.05
FHLB and other borrowings			17,542				890			5.07				15,494				437			2.82
Senior term loan			9,007				766			8.50				2,328				163			7.00
Subordinated debt			73,415				3,219			4.38				73,159				3,072			4.20
Total interest-bearing liabilities			1,967,918				66,536			3.38				1,373,019				14,154			1.03
Noninterest-bearing demand deposits			1,074,292											1,357,426
Other liabilities			40,435											41,098
Total liabilities			3,082,645											2,771,543
Stockholders’ equity
Preferred stock			—											—
Common stock			13,541											13,320
Paid-in capital			159,523											147,728
Treasury stock			(16,741	)										(16,741	)
Retained earnings			154,041											137,498
Accumulated other comprehensive loss			(36,419	)										(26,918	)
Total stockholders’ equity attributable to parent			273,945											254,887
Noncontrolling interest			76											637
Total stockholders’ equity			274,021											255,524
Total liabilities and stockholders’ equity		$	3,356,666										$	3,027,067
Net interest spread (tax-equivalent)										2.82	%										3.51	%
Net interest income and margin (tax-equivalent)1						$	124,228			4.04	%						$	112,931			4.04	%
Less: Tax-equivalent adjustments						$	(946	)									$	(1,128	)
Net interest spread										2.79	%										3.47	%
Net interest income and margin						$	123,283			4.01	%						$	111,803			3.99	%
1 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a Federal tax rate of 21% for the periods presented, which is a non-GAAP financial measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 16.
2 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.
3 MVB Bank’s PPP loans totaling $2.7 million and $13.6 million are included in this amount for the years ended December 31, 2023 and December 31, 2022, respectively.

Selected Financial Data (Unaudited) (Dollars in thousands, except per share data)
		Quarterly												Year-to-Date
		2023				2023				2022				2023				2022
		Fourth Quarter				Third Quarter				Fourth Quarter
Earnings and Per Share Data:
Net income		$	7,911			$	3,867			$	6,509				31,232				15,047
Earnings per share from continuing operations - basic		$	0.62			$	0.30			$	0.47			$	1.77			$	1.01
Earnings per share from discontinued operations - basic		$	—			$	—			$	0.05			$	0.69			$	0.22
Earnings per share - basic		$	0.62			$	0.30			$	0.52			$	2.46			$	1.23
Earnings per share from continuing operations - diluted		$	0.61			$	0.29			$	0.45			$	1.72			$	0.96
Earnings per share from discontinued operations - diluted		$	—			$	—			$	0.05			$	0.68			$	0.21
Earnings per share - diluted		$	0.61			$	0.29			$	0.50			$	2.40			$	1.17
Cash dividends paid per common share		$	0.17			$	0.17			$	0.17			$	0.68			$	0.68
Book value per common share		$	22.68			$	21.33			$	20.69			$	22.68			$	20.69
Tangible book value per common share 1		$	22.43			$	21.08			$	20.25			$	22.43			$	20.25
Weighted-average shares outstanding - basic			12,740,193				12,722,010				12,604,193				12,694,206				12,279,462
Weighted-average shares outstanding - diluted			13,024,562				13,116,629				13,012,460				12,997,332				12,870,734
Performance Ratios:
Return on average assets 2			1.0	%			0.5	%			0.8	%			0.9	%			0.5	%
Return on average equity 2			11.6	%			5.8	%			10.8	%			11.4	%			5.9	%
Net interest margin 3 4			4.06	%			3.90	%			4.57	%			4.04	%			4.04	%
Efficiency ratio 5 10			79.6	%			86.2	%			72.3	%			82.3	%			78.2	%
Overhead ratio 2 6			3.4	%			3.7	%			3.6	%			3.5	%			3.9	%
Equity to assets			8.7	%			7.9	%			8.5	%			8.7	%			8.5	%
Asset Quality Data and Ratios:
Charge-offs		$	1,868			$	8,064			$	7,878			$	18,479			$	15,183
Recoveries		$	1,343			$	2,205			$	2,507			$	9,185			$	6,560
Net loan charge-offs to total loans 2 7			0.1	%			1.0	%			0.9	%			0.4	%			0.4	%
Allowance for credit losses		$	22,124			$	24,276			$	23,837			$	22,124			$	23,837
Allowance for credit losses to total loans 8			0.95	%			1.07	%			1.00	%			0.95	%			1.00	%
Nonperforming loans		$	8,267			$	10,593			$	11,165			$	8,267			$	11,165
Nonperforming loans to total loans			0.4	%			0.5	%			0.5	%			0.4	%			0.5	%
Mortgage Company Equity Method Investees Production Data9:
Mortgage pipeline		$	706,873			$	643,578			$	678,345			$	706,873			$	678,345
Loans originated		$	1,020,128			$	1,131,963			$	407,070			$	4,319,382			$	3,120,577
Loans closed		$	724,453			$	786,885			$	388,417			$	3,007,221			$	2,628,149
Loans sold		$	639,788			$	605,296			$	326,003			$	2,466,807			$	2,325,709
1 Common equity less total goodwill and intangibles per common share, a non-U.S. GAAP measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 16.
2 Annualized for the quarterly periods presented.
3 Net interest income as a percentage of average interest-earning assets.
4 Presented on a fully tax-equivalent basis, a non-GAAP financial measure.
5 Noninterest expense as a percentage of net interest income and noninterest income, a non-U.S. GAAP measure.
6 Noninterest expense as a percentage of average assets, a non-U.S. GAAP measure.
7 Charge-offs, less recoveries.
8 Excludes loans held for sale.
9 Information is related to Intercoastal Mortgage Company, LLC and Warp Speed Holdings LLC, entities in which MVB has an ownership interest that are accounted for as equity method investments.
10 Includes net income from discontinued operations.

Non-GAAP Reconciliation: Net Interest Margin on a Full Tax-Equivalent Basis
The following table reconciles, for the periods shown below, net interest margin on a fully tax-equivalent basis:
		Three Months Ended												Twelve Months Ended
(Dollars in thousands)		December 31, 2023				September 30, 2023				December 31, 2022				December 31, 2023				December 31, 2022
Net interest margin - U.S. GAAP basis
Net interest income		$	31,107			$	29,865			$	33,449			$	123,283			$	111,803
Average interest-earning assets			3,054,958				3,063,152				2,926,949				3,077,717				2,798,784
Net interest margin			4.04	%			3.87	%			4.53	%			4.01	%			3.99	%
Net interest margin - non-U.S. GAAP basis
Net interest income		$	31,107			$	29,865			$	33,449			$	123,283			$	111,803
Impact of fully tax-equivalent adjustment			193				221				295				946				1,128
Net interest income on a fully tax-equivalent basis			31,299				30,086				33,744				124,228				112,931
Average interest-earning assets			3,054,958				3,063,152				2,926,949				3,077,717				2,798,784
Net interest margin on a fully tax-equivalent basis			4.06	%			3.90	%			4.57	%			4.04	%			4.04	%

Non-U.S. GAAP Reconciliation: Tangible Book Value per Common Share and Tangible Common Equity Ratio (Unaudited) (Dollars in thousands, except per share data)
		December 31, 2023				September 30, 2023				December 31, 2022
Tangible Book Value per Common Share
Goodwill		$	2,838			$	2,838			$	3,988
Intangibles			352				375				1,631
Total intangibles		$	3,190			$	3,213			$	5,619
Total equity attributable to parent		$	289,384			$	271,416			$	261,084
Less: Total intangibles			(3,190	)			(3,213	)			(5,619	)
Tangible common equity		$	286,194			$	268,203			$	255,465
Tangible common equity		$	286,194			$	268,203			$	255,465
Common shares outstanding (000s)			12,758				12,726				12,618
Tangible book value per common share		$	22.43			$	21.08			$	20.25
Tangible Common Equity Ratio
Total assets		$	3,313,882			$	3,437,583			$	3,068,850
Less: Total intangibles			(3,190	)			(3,213	)			(5,619	)
Tangible assets		$	3,310,692			$	3,434,370			$	3,063,231
Tangible assets		$	3,310,692			$	3,434,370			$	3,063,231
Tangible common equity		$	286,194			$	268,203			$	255,465
Tangible common equity ratio			8.6	%			7.8	%			8.3	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240214563423/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

Source: MVB Financial Corp.

FAQ

What was MVB Financial Corp.'s net income for Q4 2023?

MVB Financial Corp. reported a net income of $7.9 million for the fourth quarter of 2023.

What was the earnings per share for MVB Financial Corp. in Q4 2023?

MVB Financial Corp. had earnings per share of $0.62 basic and $0.61 diluted for the fourth quarter of 2023.

How much did net interest income increase by in Q4 2023 for MVB Financial Corp.?

Net interest income for MVB Financial Corp. increased by 4.2% to $31.3 million in the fourth quarter of 2023.

What was the loan growth percentage for MVB Financial Corp. in Q4 2023?

MVB Financial Corp. observed a loan growth of 2.1% in the fourth quarter of 2023.

How did asset quality measures change for MVB Financial Corp. in Q4 2023?

MVB Financial Corp. saw improvements in asset quality measures, with nonperforming loans declining by 22.0% to $8.3 million in the fourth quarter of 2023.