MVB Financial Corp. Announces Second Quarter 2022 Results

Rhea-AI Summary

MVB Financial Corp. (NASDAQ: MVBF) reported Q2 2022 net income of $3.0 million, or $0.24 per share. Total deposits rose 4.2% quarter-over-quarter to $2.61 billion, driven by strong noninterest-bearing deposits, primarily from the Fintech and gaming sectors. Loan balances increased 16.7% from Q1 2022 to $2.19 billion, reflecting robust loan growth, particularly in consumer sectors. Net interest margin improved to 4.10%, a rise of 92 basis points from Q1 2022, while noninterest income remained stable at $11.9 million. However, provision for loan losses surged to $5.1 million, highlighting some underlying risks.

Positive

• Net income of $3.0 million, up from $2.86 million in Q1 2022.
• Total deposits increased by 4.2% from Q1 2022, reaching $2.61 billion.
• Loan balances increased by 16.7% from Q1 2022, totaling $2.19 billion.
• Net interest margin expanded to 4.10%, up 92 basis points from prior quarter.
• Noninterest income remained stable at $11.9 million with significant increases in payment card income.

Negative

• Provision for loan losses increased significantly to $5.1 million from $1.3 million in Q1 2022.
• Decline in mortgage income by 41.4% from Q1 2022 and 111.4% from Q2 2021.

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 second quarter of 2022, with reported net income of $3.0 million, or $0.24 basic and $0.23 diluted earnings per share.

		Quarterly									Year-to-Date
		2022			2022			2021			2022			2021
		Second Quarter			First Quarter			Second Quarter
Net income		$	2,956		$	2,864		$	9,247		$	5,820		$	17,332
Earnings per share - basic		$	0.24		$	0.24		$	0.79		$	0.48		$	1.49
Earnings per share - diluted		$	0.23		$	0.22		$	0.73		$	0.45		$	1.39

“We continue to implement our MVB-F1: Success Loves Speed Strategy. Despite seasonality of our niche industries, our fast track growth vehicles remained strong because of our large noninterest-bearing deposit base, while our cost of funds held relatively steady. At the same time, robust loan growth and a favorable liquidity profile helped drive significant net interest margin expansion during the second quarter, while measures of asset quality remained stable,” said Larry F. Mazza, Chief Executive Officer, MVB Financial. “Our effort to diversify our net interest income through Fintech-related fee income increases also gained grip on the track. All in all, our growth vehicles are gaining speed through significant investment, highlighting the diversification inherent in our business strategy as we continue to maneuver in wet track conditions.

“Due to strong loan growth, we reported a significant increase in provision for loan losses, creating downward pressure on the quarter, which, along with the continued slowdown in the mortgage business, contributed to masking some very positive underlying trends.”

SECOND QUARTER 2022 HIGHLIGHTS

• Strong deposit growth despite seasonal variability
  • Total deposits were $2.61 billion as of June 30, 2022, an increase of $105.9 million, or 4.2%, from March 31, 2022 and $385.8 million, or 17.3%, from June 30, 2021.
  • Noninterest-bearing (“NIB”) deposits were $1.34 billion as of June 30, 2022, an increase of $33.9 million, or 2.6%, from March 31, 2022 and $410.3 million, or 44.0%, from June 30, 2021. NIB deposits represented 51% of total deposits as of June 30, 2022, as compared to 52% and 42% as of March 31, 2022 and June 30, 2021, respectively.
  • Growth in total deposits and NIB deposit balances was primarily attributable to the Company’s Fintech business and gaming growth vehicle. Gaming deposits totaled $1.01 billion as of June 30, 2022, up $40.4 million, or 4.2% from March 31, 2022 and $432.1 million, or 74.7%, from June 30, 2021. The pace of deposit growth slowed on a quarter over quarter basis relative to recent prior periods due to seasonal factors.
  • The cost of funds was 22 basis points for the quarter ended June 30, 2022, up one basis point compared to the quarter ended March 31, 2022 and down nine basis points compared to the quarter ended June 30, 2021. The quarter over quarter increase was driven primarily by the slight change in deposit mix, led by relatively faster growth in interest-bearing deposits as compared to NIB deposits and higher interest rates. The decline compared to the prior year period mostly reflected the relatively higher contribution of NIB deposits relative to the prior year.

• Robust loan growth and margin expansion drive strong growth in net interest income
  • Total loan balances of $2.19 billion as of June 30, 2022 increased by $313.3 million, or 16.7%, compared to March 31, 2022 and $519.9 million, or 31.1%, compared to June 30, 2021. Loan growth during the quarter was driven primarily by the Company’s strategic lending partnerships growth vehicle, primarily within residential mortgage, subprime consumer automobile and healthcare loans.
  • Loans held-for-sale were $11.9 million as of June 30, 2022, compared to $9.2 million as of March 31, 2022 and none as of June 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 June 30, 2022 was 4.10%, an increase of 92 basis points versus the quarter ended March 31, 2022 and 86 basis points versus the quarter ended June 30, 2021. The quarter over quarter increase in net interest margin was due primarily to strong loan growth, higher loan yields, accelerated accretion of the discount on purchased credit impaired (“PCI”) loans sold during the quarter and significantly lower cash balances, partially offset by a modest increase in funding costs. Accelerated accretion of the discount on the PCI loan portfolio contributed approximately 20 basis points to net interest margin during the second quarter of 2022.
  • Net interest income on a tax-equivalent basis totaled $27.0 million for the quarter ended June 30, 2022, up $4.9 million, or 22.0%, and $7.5 million, or 38.8%, from the quarters ended March 31, 2022 and June 30, 2021, respectively.

• Fintech fee income growth offsets continued investments and mortgage slowdown
  • Total noninterest income was $11.9 million for the quarter ended June 30, 2022 as compared to $11.9 million for the quarter ended March 31, 2022, and $13.6 million for the quarter ended June 30, 2021.
  • Payment card and service charge income for the quarter ended June 30, 2022 increased $1.4 million, or 52.0%, from the quarter ended March 31, 2022 and $2.1 million, or 108.5%, from the quarter ended June 30, 2021. The increase in payment card income was driven by growth in interchange income of $1.5 million, or 191.2%, from the quarter ended March 31, 2022 and $1.3 million, or 128.5%, from the quarter ended June 30, 2021, primarily driven by the Company’s Banking-as-a-Service relationships.
  • The Company continues to invest in the building of Fintechs to transform its business model and adapt to changing market conditions and opportunities. For the quarter ended June 30, 2022, earnings were impacted by approximately $1.3 million of net loss from its MVB Edge Ventures segment, as compared to net losses of $1.1 million and $0.2 million for the quarters ended March 31, 2022 and June 30, 2021, respectively.
  • Mortgage income was $0.7 million, down $0.5 million, or 41.4%, from the quarter ended March 31, 2022 and down $3.8 million, or 111.4%, from the quarter ended June 30, 2021. Lower mortgage income relative to both prior periods reflected the continued sharp increase in market interest rates during the second quarter of 2022.

• Measures of asset quality were stable
  • Nonperforming loans totaled $19.3 million, or 0.9% of total loans, as of June 30, 2022, as compared to $18.0 million, or 1.0% of total loans, as of March 31, 2022. Criticized loans as a percentage of total loans were 4.0%, as compared to 5.2% as of March 31, 2022.
  • Net charge-offs were $1.9 million, or 0.21% of total loans on an annualized basis, for the quarter ended June 30, 2022, compared to $0.7 million, or 0.12% of total loans on an annualized basis, for the quarter ended March 31, 2022, and compared to net recoveries totaling $0.2 million, or 0.05% of total loans on an annualized basis, for the quarter ended June 30, 2021.
  • The provision for loan losses totaled $5.1 million for the quarter ended June 30, 2022, compared to $1.3 million for the quarter ended March 31, 2022 and a release of allowance for loan losses of $1.5 million for the quarter ended June 30, 2021. Allowance for loan losses was 1.03% of total loans as of June 30, 2022, an increase of four basis points from March 31, 2022 and a decline of 44 basis points from June 30, 2021. The increase in provision for loan losses for the quarter ended June 30, 2022 primarily reflected the strong growth in loan balances during the quarter, including the expansion of the Company’s subprime consumer automobile portfolio of loans.

INCOME STATEMENT

Net interest income on a tax-equivalent basis totaled $27.0 million for the quarter ended June 30, 2022, up $4.9 million, or 22.0%, from the quarter ended March 31, 2022 and $7.5 million, or 38.8%, from the quarter ended June 30, 2021. The increase in net interest income compared to both periods generally reflects strong loan growth and higher loan yields, particularly driven by the consumer loan portfolio and by accelerated accretion of the discount on PCI loans sold during the quarter of $1.0 million.

Interest income increased $4.8 million, or 20.8%, to $51.4 million from the quarter ended March 31, 2022 and $7.3 million, or 34.8%, from the quarter ended June 30, 2021. The tax-equivalent yield on loans was 5.06% for the quarter ended June 30, 2022, compared to 4.71% for the quarter ended March 31, 2022 and 4.31% for the quarter ended June 30, 2021. Higher loan yields generally reflect new loan production at favorable interest rates and the changing mix of MVB Bank’s loan portfolio, including the expansion of its consumer subprime auto loan portfolio and the accelerated accretion on PCI loans.

Interest expense remained consistent from the quarter ended March 31, 2022 and decreased $0.3 million, or 19.6%, from the quarter ended June 30, 2021. The cost of funds was 22 basis points for the quarter ended June 30, 2022, up one basis point compared to the quarter ended March 31, 2022 and down nine basis points compared to the quarter ended June 30, 2021. The increase in cost of funds relative to the quarter ended March 31, 2022 reflects an increase in interest rates driving the cost of interest-bearing deposits, and a faster pace of growth in interest-bearing deposits as compared to NIB deposits for the quarter. The decrease in cost of funds relative to the comparable prior year quarter reflects a shift in the overall mix of deposit funding due to the growth in NIB deposits and a lessening focus on higher-cost deposits. The cost of interest-bearing liabilities increased by eight basis points as compared to the quarter ended March 31, 2022, primarily reflecting a six basis point increase in the cost of negotiable order of withdrawal (“NOW”) accounts and a four basis point increase in the overall cost of deposits. The cost of interest-bearing liabilities remained flat as compared to the quarter ended June 30, 2021, primarily driven by a 20 basis point decline in the cost of NOW accounts and a 12 basis point decrease in the overall cost of deposits, offset by the decrease in the average balance of NOW accounts and overall interest-bearing deposits of 18.5% and 8.7%, respectively.

On a tax-equivalent basis, net interest margin for the quarter ended June 30, 2022 was 4.10%, an increase of 92 basis points versus the quarter ended March 31, 2022 and 86 basis points versus the quarter ended June 30, 2021. Excluding accretion from the sale of PCI loans during the quarter, net interest margin for the quarter ended June 30, 2022, was 3.94%. 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 March 31, 2022 reflected the impact of strong loan growth and the impact of lower cash balances, partially offset by an increase in deposit costs. The average loan-to-deposit ratio during the quarter ended June 30, 2022 was 82.9%, compared to 69.7% for the quarter ended March 31, 2022. The increase in net interest margin relative to the quarter ended June 30, 2021 reflected strong loan growth and an improving deposit mix.

Noninterest income totaled $11.9 million for the quarter ended June 30, 2022, which is consistent with the quarter ended March 31, 2022 and a decrease of $1.7 million, or 12.7%, from the quarter ended June 30, 2021.

Noninterest income was unchanged from the prior quarter due to increases in payment card and service charge income of $1.4 million, or 52.0%, other operating income of $1.3 million, or 272.9%, and gain on sale of loans of $0.3 million, or 29.7%. Partially offsetting these increases were decreases in gain on sale of available-sale securities of $0.7 million, or 100.0%, and equity method investment income of $0.6 million, or 51.8%. Additionally, the Company experienced a decrease in equity method investment gain as compared to the preceding quarter. The decrease is due to a $1.8 million gain recognized in the first quarter related to a strategic investment within the Fintech investment portfolio, with no comparable gain in the current quarter. A sale of mortgaging servicing rights in June 2022 resulted in $1.2 million of the increase in other operating income. The increase in payment card and service charge income is driven by increased interchange income. Equity method investment income was lower by 51.8%, primarily due to lower mortgage banking revenue. Further disaggregation of the Company’s noninterest income is available below.

Noninterest expense totaled $29.8 million for the quarter ended June 30, 2022, an increase of $1.0 million, or 3.3%, from the quarter ended March 31, 2022 and an increase of $6.4 million, or 27.4%, from the quarter ended June 30, 2021. The increase from the quarter ended March 31, 2022 in expenses primarily reflects an increase in salaries and employee benefits of $1.0 million, or 5.7%. The increase relative to the prior year period primarily reflects higher salaries and employee benefits costs of $5.3 million, or 39.0%. The increases in salaries and employee benefits were due to continued hiring during the second quarter that resulted in a 35% increase in average full time equivalent employees for the first half of 2022 as compared to the first half of 2021, including front-line revenue producers and enhanced risk management infrastructure, amidst the transformation of the Company’s business model, mitigated in part by a focused reallocation of resources, including lower infrastructure costs related to a reduction in branch count.

BALANCE SHEET

Loans totaled $2.19 billion at June 30, 2022, an increase of $313.3 million, or 16.7%, and $519.9 million, or 31.1%, as compared to March 31, 2022 and June 30, 2021, respectively, and included outstanding paycheck protection program (“PPP”) loans of $22.3 million at June 30, 2022. Adjusted for the removal of PPP loans from all periods, loan balances increased by 18.1% from the quarter ended March 31, 2022 and by 47.2% from the quarter ended June 30, 2021. Loan growth for both periods was driven primarily by the Company’s strategic lending partnerships growth vehicle. Loans held-for-sale were $11.9 million as of June 30, 2022, compared to $9.2 million at March 31, 2022 and $0 at June 30, 2021, led by MVB Bank’s SBA lending growth vehicle.

Deposits totaled $2.61 billion as of June 30, 2022, an increase of $105.9 million, or 4.2%, from March 31, 2022 and $385.8 million, or 17.3%, from June 30, 2021. NIB deposits totaled $1.34 billion as of June 30, 2022, an increase $33.9 million, or 2.6%, from March 31, 2022 and $410.3 million, or 44.0%, from June 30, 2021. Growth in total and NIB deposit balances primarily reflects the Company’s Fintech business and gaming growth vehicle. Slower deposit growth is mostly attributable to seasonal variability, particularly in gaming deposits. At 51% of total deposits, NIB deposits continue to exceed all other deposits combined.

CAPITAL

The Community Bank Leverage Ratio was 11.6% as of June 30, 2022, compared to 10.8% as of March 31, 2022 and 11.0% as of June 30, 2021. MVB’s Tier 1 Risk-Based Capital Ratio was 13.7% as of June 30, 2022, compared to 15.0% as of March 31, 2022 and 14.8% as of June 30, 2021. The Bank’s Total Risk-Based Capital Ratio was 14.7% as of June 30, 2022, compared to 15.9% as of March 31, 2022 and 16.0% as of June 30, 2021.

The Company issued a quarterly cash dividend of $0.17 per share for the quarter ended June 30, 2022, consistent with the quarter ended March 31, 2022 and up $0.05, or 42%, from the quarter ended June 30, 2021.

ASSET QUALITY

Nonperforming loans totaled $19.3 million, or 0.9% of total loans, as of June 30, 2022, as compared to $18.0 million, or 1.0% of total loans, as of March 31, 2022. There were no notable changes in the composition of nonperforming loans relative to March 31, 2022. Criticized loans as a percentage of total loans were 4.0%, as compared to 5.2% as of March 31, 2022.

Net charge-offs were $1.9 million, or 0.21% of total loans on an annualized basis, for the quarter ended June 30, 2022, compared to $0.7 million, or 0.12% of total loans on an annualized basis, for the quarter ended March 31, 2022 and compared to net recoveries totaling $0.2 million, or 0.05% of total loans on an annualized basis, for the quarter ended June 30, 2021.

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 June 30, 2022, compared to $1.3 million for the quarter ended March 31, 2022 and a release of allowance for loan losses of $1.5 million for the quarter ended June 30, 2021. Allowance for loan losses to total loans was 1.03% as June 30, 2022, as compared to 0.99% as of March 31, 2022 and 1.47% as of June 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 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 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
		Second Quarter			First Quarter			Second Quarter
Interest income		$	28,090		$	23,262		$	20,833			$	51,352		$	39,896
Interest expense			1,430			1,414			1,778				2,844			3,336
Net interest income			26,660			21,848			19,055				48,508			36,560
Provision (release of allowance) for loan losses			5,100			1,280			(1,540	)			6,380			(922	)
Net interest income after provision (release of allowance) for loan losses			21,560			20,568			20,595				42,128			37,482
Total noninterest income			11,909			11,870			13,644				23,779			26,102
Noninterest expense:
Salaries and employee benefits			18,983			17,961			13,661				36,944			25,572
Other expense			10,836			10,901			9,742				21,737			16,949
Total noninterest expenses			29,819			28,862			23,403				58,681			42,521
Income before income taxes			3,650			3,576			10,836				7,226			21,063
Income tax expense			859			905			1,673				1,764			3,842
Net income before noncontrolling interest			2,791			2,671			9,163				5,462			17,221
Net loss attributable to noncontrolling interest			165			193			84				358			111
Net income attributable to parent			2,956			2,864			9,247				5,820			17,332
Preferred dividends			—			—			—				—			35
Net income available to common shareholders		$	2,956		$	2,864		$	9,247			$	5,820		$	17,297
Earnings per share - basic		$	0.24		$	0.24		$	0.79			$	0.48		$	1.49
Earnings per share - diluted		$	0.23		$	0.22		$	0.73			$	0.45		$	1.39

Noninterest Income (Unaudited) (Dollars in thousands)
		Quarterly											Year-to-Date
			2022				2022				2021			2022				2021
		Second Quarter				First Quarter				Second Quarter
Card acquiring income		$	750			$	983			$	810		$	1,733			$	1,412
Service charges on deposits			973				872				113			1,845				361
Interchange income			2,292				787				1,003			3,079				1,646
Total payment card and service charge income			4,015				2,642				1,926			6,657				3,419
Income from ICM equity method investment 1			732				1,250				4,528			1,982				10,997
Loss from other equity method investments			(183	)			(112	)			—			(295	)			—
Total equity method investment income			549				1,138				4,528			1,687				10,997
Compliance and consulting income			3,750				3,869				1,868			7,619				3,149
Gain on sale of loans			1,405				1,083				1,447			2,488				2,217
Investment portfolio gains			145				2,394				2,412			2,539				4,070
Other noninterest income			2,045				744				1,463			2,789				2,250
Total noninterest income		$	11,909			$	11,870			$	13,644		$	23,779			$	26,102
1 Intercoastal Mortgage Company, LLC (“ICM”)

Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands)
		June 30, 2022				March 31, 2022				June 30, 2021
Cash and cash equivalents		$	161,761			$	353,972			$	332,771
Certificates of deposit with banks			496				2,229				11,803
Securities available-for-sale, at fair value			376,737				395,301				450,772
Equity securities			34,250				34,447				32,215
Loans held-for-sale			11,856				9,161				—
Loans receivable			2,215,114				1,897,853				1,697,326
Less: Allowance for loan losses			(22,734	)			(18,808	)			(24,882	)
Loans receivable, net			2,192,380				1,879,045				1,672,444
Premises and equipment, net			25,272				25,357				21,033
Goodwill			3,988				3,988				4,119
Assets of branches held-for-sale			—				—				59,488
Other assets			177,688				189,964				149,895
Total assets		$	2,984,428			$	2,893,464			$	2,734,540
Noninterest-bearing deposits		$	1,342,916			$	1,308,998			$	932,660
Interest-bearing deposits			1,272,054				1,200,081				1,296,515
Liabilities of branches held-for-sale			—				—				165,750
FHLB and other borrowings			—				—				100
Subordinated debt			73,158				73,094				43,480
Other liabilities			43,390				47,429				46,635
Stockholders' equity, including noncontrolling interest			252,910				263,862				249,400
Total liabilities and stockholders' equity		$	2,984,428			$	2,893,464			$	2,734,540

Reportable Segments (Unaudited)
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
Total 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 March 31, 2022		CoRe Banking			Mortgage Banking			Professional Services				Edge Ventures				Financial Holding Company				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	23,171		$	103		$	—			$	—			$	(7	)		$	(5	)		$	23,262
Interest expense			659			—			7				—				753				(5	)			1,414
Net interest income (expense)			22,512			103			(7	)			—				(760	)			—				21,848
Provision for loan losses			1,280			—			—				—				—				—				1,280
Net interest income (expense) after provision for loan losses			21,232			103			(7	)			—				(760	)			—				20,568
Total noninterest income			6,898			1,223			5,557				75				2,671				(4,554	)			11,870
Noninterest Expenses:
Salaries and employee benefits			9,508			—			3,798				599				4,056				—				17,961
Other expenses			11,048			—			1,155				1,047				2,205				(4,554	)			10,901
Total noninterest expenses			20,556			—			4,953				1,646				6,261				(4,554	)			28,862
Income (loss) before income taxes			7,574			1,326			597				(1,571	)			(4,350	)			—				3,576
Income taxes			1,631			341			164				(362	)			(869	)			—				905
Net income (loss)			5,943			985			433				(1,209	)			(3,481	)			—				2,671
Net loss attributable to noncontrolling interest			—			—			95				98				—				—				193
Net income (loss) available to common shareholders		$	5,943		$	985		$	528			$	(1,111	)		$	(3,481	)		$	—			$	2,864

Three Months Ended June 30, 2021		CoRe Banking				Mortgage Banking			Professional Services				Edge Ventures				Financial Holding Company				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	20,736			$	98		$	—			$	—			$	—			$	(1	)		$	20,833
Interest expense			1,287				—			3				—				490				(2	)			1,778
Net interest income (expense)			19,449				98			(3	)			—				(490	)			1				19,055
Release of allowance for loan losses			(1,540	)			—			—				—				—				—				(1,540	)
Net interest income (expense) after release of allowance for loan losses			20,989				98			(3	)			—				(490	)			1				20,595
Total noninterest income			6,700				4,546			3,286				—				2,309				(3,197	)			13,644
Noninterest Expenses:
Salaries and employee benefits			8,038				—			2,212				134				3,277				—				13,661
Other expenses			10,289				23			1,167				122				1,337				(3,196	)			9,742
Total noninterest expenses			18,327				23			3,379				256				4,614				(3,196	)			23,403
Income (loss) before income taxes			9,362				4,621			(96	)			(256	)			(2,795	)			—				10,836
Income taxes			1,266				1,120			(32	)			(66	)			(615	)			—				1,673
Net income (loss)			8,096				3,501			(64	)			(190	)			(2,180	)			—				9,163
Net loss attributable to noncontrolling interest			—				—			46				38				—				—				84
Net income (loss) available to common shareholders		$	8,096			$	3,501		$	(18	)		$	(152	)		$	(2,180	)		$	—			$	9,247

Six Months Ended June 30, 2022		CoRe Banking			Mortgage Banking			Professional Services				Edge Ventures				Financial Holding Company				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	51,081		$	206		$	—			$	—			$	80			$	(15	)		$	51,352
Interest expense			1,331			—			15				—				1,513				(15	)			2,844
Net interest income (expense)			49,750			206			(15	)			—				(1,433	)			—				48,508
Provision for loan losses			6,380			—			—				—				—				—				6,380
Net interest income (expense) after provision for loan losses			43,370			206			(15	)			—				(1,433	)			—				42,128
Total noninterest income			13,991			2,010			11,243				185				5,899				(9,549	)			23,779
Noninterest Expenses:
Salaries and employee benefits			19,456			—			7,670				1,323				8,495				—				36,944
Other expenses			21,961			94			2,562				2,217				4,452				(9,549	)			21,737
Total noninterest expenses			41,417			94			10,232				3,540				12,947				(9,549	)			58,681
Income (loss) before income taxes			15,944			2,122			996				(3,355	)			(8,481	)			—				7,226
Income taxes			3,402			548			259				(761	)			(1,684	)			—				1,764
Net income (loss)			12,542			1,574			737				(2,594	)			(6,797	)			—				5,462
Net loss attributable to noncontrolling interest			—			—			158				200				—				—				358
Net income (loss) available to common shareholders		$	12,542		$	1,574		$	895			$	(2,394	)		$	(6,797	)		$	—			$	5,820

Six Months Ended June 30, 2021		CoRe Banking				Mortgage Banking				Professional Services				Edge Ventures				Financial Holding Company				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	39,695			$	202			$	—			$	—			$	1			$	(2	)		$	39,896
Interest expense			2,379				—				3				—				956				(2	)			3,336
Net interest income (expense)			37,316				202				(3	)			—				(955	)			—				36,560
Release of allowance for loan losses			(920	)			(2	)			—				—				—				—				(922	)
Net interest income (expense) after release of allowance for loan losses			38,236				204				(3	)			—				(955	)			—				37,482
Total noninterest income			11,445				10,953				4,978				—				3,890				(5,164	)			26,102
Noninterest Expenses:
Salaries and employee benefits			15,874				—				3,106				246				6,346				—				25,572
Other expenses			17,729				86				1,685				193				2,420				(5,164	)			16,949
Total noninterest expenses			33,603				86				4,791				439				8,766				(5,164	)			42,521
Income (loss) before income taxes			16,078				11,071				184				(439	)			(5,831	)			—				21,063
Income taxes			2,403				2,684				27				(113	)			(1,159	)			—				3,842
Net income (loss)			13,675				8,387				157				(326	)			(4,672	)			—				17,221
Net loss attributable to noncontrolling interest			—				—				46				65				—				—				111
Net income (loss) attributable to parent			13,675				8,387				203				(261	)			(4,672	)			—				17,332
Preferred stock dividends			—				—				—				—				35				—				35
Net income (loss) available to common shareholders		$	13,675			$	8,387			$	203			$	(261	)		$	(4,707	)		$	—			$	17,297

Average Balances and Interest Rates (Unaudited) (Dollars in thousands)
		Three Months Ended											Three Months Ended											Three Months Ended
		June 30, 2022											March 31, 2022											June 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		$	197,613			$	304			0.62	%		$	595,574			$	214			0.15	%		$	178,792			$	40			0.09	%
CDs with banks			1,582				9			2.28				2,352				13			2.24				11,803				58			1.97
Investment securities:
Taxable			237,745				838			1.41				241,974				648			1.09				254,536				625			0.98
Tax-exempt 2			147,646				1,342			3.65				128,588				1,137			3.59				207,830				1,640			3.17
Loans and loans held-for-sale: 1
Commercial 3			1,564,266				20,021			5.13				1,453,262				16,979			4.74				1,416,669				15,884			4.50
Tax-exempt 2			4,930				52			4.23				5,066				52			4.16				6,905				78			4.53
Real estate			393,983				2,674			2.72				338,826				2,340			2.80				320,528				2,747			3.44
Consumer			88,366				3,142			14.26				54,623				2,128			15.80				6,550				122			7.47
Total loans			2,051,545				25,889			5.06				1,851,777				21,499			4.71				1,750,652				18,831			4.31
Total earning assets			2,636,131				28,382			4.32				2,820,265				23,511			3.38				2,403,613				21,194			3.54
Less: Allowance for loan losses			(19,927	)										(18,343	)										(26,625	)
Cash and due from banks			5,579											6,067											22,141
Other assets			237,016											248,803											193,165
Total assets		$	2,858,799										$	3,056,792										$	2,592,294
Liabilities
Deposits:
NOW		$	654,781			$	256			0.16	%		$	785,108			$	193			0.10	%		$	716,924			$	643			0.36	%
Money market checking			380,295				184			0.19				466,287				202			0.18				466,091				221			0.19
Savings			27,496				1			0.01				50,041				1			0.01				52,992				—			—
IRAs			6,314				17			1.08				6,370				17			1.08				12,358				40			1.30
CDs			75,487				203			1.08				87,237				243			1.13				156,507				332			0.85
Repurchase agreements and federal funds sold			11,566				1			0.03				11,823				5			0.17				10,833				3			0.11
FHLB and other borrowings			2,312				8			1.39				—				—			—				55,402				49			0.35
Subordinated debt			73,126				760			4.17				73,062				753			4.18				43,462				490			4.52
Total interest-bearing liabilities			1,231,377				1,430			0.47				1,479,928				1,414			0.39				1,514,569				1,778			0.47
Noninterest-bearing demand deposits			1,331,357											1,260,965											810,298
Other liabilities			40,900											46,318											28,688
Total liabilities			2,603,634											2,787,211											2,353,555
Stockholders’ equity
Preferred stock			—											—											—
Common stock			13,289											13,458											12,487
Paid-in capital			145,014											143,795											141,782
Treasury stock			(16,741	)										(16,741	)										(16,741	)
Retained earnings			137,989											137,633											98,413
Accumulated other comprehensive income (loss)			(25,097	)										(9,466	)										2,194
Total stockholders’ equity attributable to parent			254,454											268,679											238,135
Noncontrolling interest			711											902											604
Total stockholders’ equity			255,165											269,581											238,739
Total liabilities and stockholders’ equity		$	2,858,799										$	3,056,792										$	2,592,294
Net interest spread (tax-equivalent)										3.85	%										2.99	%										3.07	%
Net interest income and margin (tax-equivalent)2						$	26,952			4.10	%						$	22,097			3.18	%						$	19,416			3.24	%
Less: Tax-equivalent adjustments						$	(292	)									$	(249	)									$	(361	)
Net interest spread										3.80	%										2.96	%										3.01	%
Net interest income and margin						$	26,660			4.06	%						$	21,848			3.14	%						$	19,055			3.18	%

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 $22.3 million, $41.7 million and $207.3 million are included in this amount as of June 30, 2022, March 31, 2022 and June 30, 2021, respectively.

		Six Months Ended											Six Months Ended
		June 30, 2022											June 30, 2021
		Average Balance				Interest Income/ Expense				Yield/ Cost			Average Balance				Interest Income/ Expense				Yield/ Cost
Assets
Interest-bearing balances with banks		$	395,494			$	518			0.26	%		$	218,919			$	105			0.10	%
CDs with banks			1,964				22			2.26				11,803				115			1.96
Investment securities:
Taxable			239,849				1,486			1.25				213,944				1,256			1.18
Tax-exempt 2			138,170				2,478			3.62				210,146				3,354			3.22
Loans and loans held-for-sale: 1
Commercial 3			1,509,071				37,000			4.94				1,339,983				30,055			4.52
Tax-exempt 2			4,998				105			4.24				7,055				159			4.54
Real estate			366,557				5,014			2.76				306,878				5,430			3.57
Consumer			71,588				5,271			14.85				7,120				160			4.53
Total loans			1,952,214				47,390			4.90				1,661,036				35,804			4.35
Total earning assets			2,727,691				51,894			3.84				2,315,848				40,634			3.54
Less: Allowance for loan losses			(19,139	)										(26,399	)
Cash and due from banks			5,822											21,549
Other assets			242,875											201,533
Total assets		$	2,957,249										$	2,512,531
Liabilities
Deposits:
NOW		$	650,903			$	449			0.14	%		$	618,478			$	987			0.32	%
Money market checking			423,053				386			0.18				476,628				452			0.19
Savings			38,706				2			0.01				46,366				5			0.02
IRAs			6,341				34			1.08				12,525				82			1.32
CDs			81,329				446			1.11				162,694				758			0.94
Repurchase agreements and federal funds sold			11,693				3			0.05				10,542				8			0.15
FHLB and other borrowings			1,163				11			1.91				50,901				88			0.35
Subordinated debt			73,094				1,513			4.17				43,444				956			4.44
Total interest-bearing liabilities			1,286,282				2,844			0.45				1,421,578				3,336			0.47
Noninterest-bearing demand deposits			1,365,037											816,078
Other liabilities			43,594											36,960
Total liabilities			2,694,913											2,274,616
Stockholders’ equity
Preferred stock			—											1,168
Common stock			13,373											12,433
Paid-in capital			144,408											139,330
Treasury stock			(16,741	)										(16,741	)
Retained earnings			137,815											99,336
Accumulated other comprehensive income (loss)			(17,325	)										2,083
Total stockholders’ equity attributable to parent			261,530											237,609
Noncontrolling interest			806											306
Total stockholders’ equity			262,336											237,915
Total liabilities and stockholders’ equity		$	2,957,249										$	2,512,531
Net interest spread (tax-equivalent)										3.39	%										3.07	%
Net interest income and margin (tax-equivalent)2						$	49,050			3.63	%						$	37,298			3.25	%
Less: Tax-equivalent adjustments						$	(542	)									$	(738	)
Net interest spread										3.35	%										3.00	%
Net interest income and margin						$	48,508			3.59	%						$	36,560			3.18	%

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 $22.3 million and $207.3 million are included in this amount as of June 30, 2022 and June 30, 2021, respectively.

The following table reconciles, for the periods shown below, net interest margin on a fully tax-equivalent basis:

		Three Months Ended												Six Months Ended
(Dollars in thousands)		June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022				June 30, 2021
Net interest margin - U.S. GAAP basis
Net interest income		$	26,660			$	21,848			$	19,055			$	48,508			$	36,560
Average interest-earning assets		$	2,636,131			$	2,820,265			$	2,403,613				2,727,691				2,315,848
Net interest margin			4.06	%			3.14	%			3.18	%			3.59	%			3.18	%
Net interest margin - non-U.S. GAAP basis
Net interest income		$	26,660			$	21,848			$	19,055			$	48,508			$	36,560
Impact of fully tax-equivalent adjustment			292				249				361				542				738
Net interest income on a fully tax-equivalent basis		$	26,952			$	22,097			$	19,416				49,050				37,298
Average interest-earning assets		$	2,636,131			$	2,820,265			$	2,403,613			$	2,727,691			$	2,315,848
Net interest margin on a fully tax-equivalent basis			4.10	%			3.18	%			3.24	%			3.63	%			3.25	%

Selected Financial Data (Unaudited) (Dollars in thousands, except per share data)
		Quarterly												Year-to-Date
			2022				2022				2021				2022				2021
		Second Quarter				First Quarter				Second Quarter
Earnings and Per Share Data:
Net income		$	2,956			$	2,864			$	9,247			$	5,820			$	17,332
Net income available to common shareholders		$	2,956			$	2,864			$	9,247			$	5,820			$	17,297
Earnings per share - basic		$	0.24			$	0.24			$	0.79			$	0.48			$	1.49
Earnings per share - diluted		$	0.23			$	0.22			$	0.73			$	0.45			$	1.39
Cash dividends paid per common share		$	0.17			$	0.17			$	0.12			$	0.34			$	0.22
Book value per common share		$	20.63			$	21.66			$	21.12			$	20.63			$	21.12
Tangible book value per common share 1		$	20.14			$	21.16			$	20.54			$	20.14			$	20.54
Weighted-average shares outstanding - basic			12,176,805				12,093,179				11,639,237				12,135,223				11,585,059
Weighted-average shares outstanding - diluted			12,895,581				12,927,811				12,612,030				12,870,892				12,449,973
Performance Ratios:
Return on average assets 2			0.4	%			0.4	%			1.4	%			0.4	%			1.4	%
Return on average equity 2			4.6	%			4.2	%			15.5	%			4.4	%			14.6	%
Net interest margin 3 4			4.10	%			3.18	%			3.24	%			3.63	%			3.25	%
Efficiency ratio 5			77.3	%			85.6	%			71.6	%			81.2	%			67.9	%
Overhead ratio 2 6			4.2	%			3.8	%			3.6	%			4.0	%			3.4	%
Equity to assets			8.5	%			9.1	%			9.1	%			8.5	%			9.1	%
Asset Quality Data and Ratios:
Charge-offs		$	2,529			$	1,124			$	—			$	3,652			$	265
Recoveries		$	1,355			$	386			$	208			$	1,741			$	225
Net loan charge-offs to total loans 2 7			0.2	%			0.2	%			(0.1	) %			0.2	%			—	%
Allowance for loan losses		$	22,734			$	18,808			$	24,882			$	22,734			$	24,882
Allowance for loan losses to total loans 8			1.03	%			0.99	%			1.47	%			1.03	%			1.47	%
Nonperforming loans		$	19,295			$	18,048			$	15,501			$	19,295			$	15,501
Nonperforming loans to total loans			0.9	%			1.0	%			0.9	%			0.9	%			0.9	%
Intercoastal Mortgage Company, LLC Production Data9:
Mortgage pipeline		$	1,114,061			$	1,092,006			$	1,238,935			$	1,114,061			$	1,238,935
Loans originated		$	976,004			$	1,130,698			$	1,677,431			$	2,106,702			$	3,765,806
Loans closed		$	843,305			$	780,842			$	1,490,965			$	1,624,147			$	3,396,991
Loans sold		$	692,553			$	688,094			$	1,493,198			$	1,380,646			$	3,271,288

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)
		June 30, 2022				March 31, 2022				June 30, 2021
Goodwill		$	3,988			$	3,988			$	4,119
Intangibles			1,981				2,155				2,692
Total intangibles			5,969				6,143				6,811
Total equity attributable to parent			252,300				263,080				248,611
Less: Preferred equity			—				—				—
Less: Total intangibles			(5,969	)			(6,143	)			(6,811	)
Tangible common equity		$	246,331			$	256,937			$	241,800
Tangible common equity		$	246,331			$	256,937			$	241,800
Common shares outstanding (000s)			12,229				12,143				11,774
Tangible book value per common share		$	20.14			$	21.16			$	20.54

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220801005774/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 were MVB Financial's earnings for Q2 2022?

MVB Financial reported a net income of $3.0 million, or $0.24 per share, for Q2 2022.

How much did MVB Financial's total deposits increase in Q2 2022?

Total deposits rose by 4.2% to $2.61 billion in Q2 2022.

What was the increase in loans for MVB Financial in Q2 2022?

Loans increased by 16.7% from Q1 2022, totaling $2.19 billion.

What is the current net interest margin for MVB Financial?

The net interest margin for Q2 2022 is 4.10%, an increase of 92 basis points from Q1 2022.

What was the impact of loan losses on MVB Financial's earnings in Q2 2022?

The provision for loan losses increased to $5.1 million, indicating heightened credit risk.