MVB Financial Corp. Announces Third Quarter 2024 Results

Rhea-AI Summary

MVB Financial Corp (NASDAQ: MVBF) reported Q3 2024 net income of $2.1 million, or $0.16 per share. The digital asset program exit reduced EPS by $0.29 in Q3. Total deposits increased 4.1% to $3.00 billion, driven by a 60.8% increase in payments-related deposits. Noninterest bearing deposits represent 33.0% of total deposits. Net interest income declined 3.4% to $26.8 million, with net interest margin at 3.61%. The loan-to-deposit ratio was 72.3%, and tangible book value per share increased 2.2% to $23.20.

Positive

• Total deposits increased 4.1% ($118.8 million) to $3.00 billion
• Payments-related deposits grew 60.8% quarter-over-quarter
• Tangible book value per share increased 2.2% to $23.20
• Community Bank Leverage Ratio improved to 10.9% from 10.7%

Negative

• Net income decreased to $2.1 million with EPS of $0.16
• Digital asset program exit reduced EPS by $0.29
• Net interest income declined 3.4% to $26.8 million
• Nonperforming loans increased 23.6% to $28.6 million
• Total loans declined 1.6% ($35.5 million) to $2.17 billion

Insights

Financial Analyst

MVB Financial's Q3 2024 results reveal significant strategic shifts and mixed performance metrics. The $2.1 million net income ($0.16 EPS) was notably impacted by the digital asset program exit, which reduced EPS by $0.29. Key positives include a 60.8% increase in payments-related deposits and improved capital ratios, with Community Bank Leverage Ratio at 10.9%.

The bank's asset quality metrics show some stress, with nonperforming loans increasing to $28.6 million (1.3% of total loans). However, the 33% noninterest-bearing deposit ratio and 72.3% loan-to-deposit ratio indicate a stable funding structure. Net interest margin compressed to 3.61%, down 14 basis points, primarily due to the digital asset program wind-down and CD termination costs.

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 third quarter of 2024, with reported net income of $2.1 million, or $0.16 basic and diluted earnings per share.

Third Quarter 2024 Highlights

Previously disclosed digital asset program exit reduced EPS by $0.29 in third quarter and $0.37 year-to-date.

Noninterest bearing deposits represent 33.0% of total deposits.

On balance sheet payments-related deposits increased by 60.8% due to growth in existing relationships.

Tangible book value per share of $23.20, up 2.2% from the prior quarter.

Capital strength further enhanced.

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

“MVB continues to be proactive, and we have adapted our growth strategy related to changing market conditions. To this end, we have simplified our number of strategic initiatives to five as we move into fourth quarter. This laser focus by Team MVB will enhance our ability to effectively execute on our revised strategy.

“One example of this laser focus is our payments strategy. Growth in existing account relationships, along with new leadership and initiatives, drove a 60.8% quarter over quarter increase in payments-related deposit balances. Excluding the impact of the digital asset program wind-down and termination costs related to the decision to call two brokered certificates of deposit, net interest income and net interest margin are approaching a positive inflection point. Finally, while loan balances declined partly due to elevated payoff activity, our loan pipeline has improved from earlier this year.

“As previously disclosed, we began winding down MVB’s digital asset program account relationships during the second quarter due to changing market conditions and profitability challenges. While this process is now mostly complete, our third-quarter results reflected both the full quarter impact of this decision and lingering costs associated with the wind-down, without any associated revenue benefit. Alongside a higher cost base, these factors negatively affected earnings in the third quarter, overshadowing some of the positive trends we’ve seen.

“Through it all, MVB’s foundational strength remains intact, evidenced by stable asset quality, an enhanced capital base and growth in tangible book value per share. While our strategic shift has weighed on earnings in the short-term, we are increasingly well-positioned for future growth and improved profitability.”

THIRD QUARTER 2024 HIGHLIGHTS

• Growth in payments and gaming deposits drive increased total deposits.
  • Total deposits increased 4.1%, or $118.8 million, to $3.00 billion compared to the prior quarter-end. Deposit growth was led by payments-related deposits, which increased by 60.8%, primarily due to the expansion of existing relationships. Deposit growth also reflected increased gaming deposits, partially offset by the movement of $70.2 million of banking-as-a-service deposits off balance sheet.
  • Noninterest bearing (“NIB”) deposits increased 0.5%, or $5.3 million, to $989.1 million. NIB deposits represent 33.0% of total deposits as of September 30, 2024.
  • The loan-to-deposit ratio was 72.3% as of September 30, 2024, compared to 76.5% as of June 30, 2024, and 74.7% as of September 30, 2023.
• Net interest income and net interest margin lower on digital asset program wind-down and certificate of deposit termination costs.
  • Net interest income on a fully tax-equivalent basis, a non-U.S. GAAP financial measure, declined 3.4%, or $0.9 million, to $26.8 million relative to the prior quarter, reflecting net interest margin contraction and lower earning assets balances.
  • Net interest margin on a fully tax-equivalent basis, a non-U.S. GAAP financial measure, was 3.61%, down 14 basis points from the prior quarter. Approximately 11 basis points of the decline in net interest margin is attributable to the wind down of the digital asset program. Also, approximately five basis points of net interest margin compression reflected termination costs of $0.3 million related to the Company’s decision to call two brokered certificates of deposit (“CDs”) with a value of $49.5 million during the third quarter. Total cost of funds was 2.77%, up 23 basis points compared to the prior quarter, primarily reflecting the full quarter impact of the shift in deposit mix from the wind-down of the digital asset program and the brokered CD termination costs.
  • Average earning assets balance declined 0.9%, or $26.1 million, from the prior quarter to $2.95 billion, reflecting lower average loan balances, partially offset by higher interest-bearing balances with banks. Average total loan balances declined 2.4%, or $53.3 million, from the prior quarter to $2.18 billion, reflecting elevated loan payoff activity and muted market demand.
• Noninterest income lower on digital asset program exit, masking progress on Fintech fee income and continued mortgage rebound.
  • Total noninterest income declined 6.8%, or $0.5 million, relative to the prior quarter, to $6.7 million. The decline is attributable to lower other operating income, primarily a $0.8 million decrease in wire transfer fees reflecting the full quarter impact of the digital asset program wind-down. Excluding other operating income, noninterest income increased 12.8%, reflecting a continued rebound in equity method investment income from our mortgage segment, as well as higher payment card and service charge income, consulting and compliance income and holding gains on equity securities.
  • Relative to the prior year period, total noninterest income increased by 15.0%, or $0.9 million, inclusive of the impact of the digital asset program wind-down, to $6.7 million, primarily reflecting higher payment card and service income, which increased by 35.1% year-over-year.
• Foundational strength intact, led by enhanced capital position, growth in tangible book value per share and stable asset quality.
  • The Community Bank Leverage Ratio, Tier 1 Risk-Based Capital Ratio and MVB Bank’s Total Risk-Based Capital Ratio were 10.9%, 14.9% and 15.7%, respectively, compared to 10.7%, 14.6% and 15.4%, respectively, at the prior quarter end.
  • The tangible common equity ratio, a non-U.S. GAAP financial measure, was 8.8% as of September 30, 2024, down from 8.9% as of June 30, 2024 and up from 7.8% as of September 30, 2023. As of September 30, 2024, accumulated other comprehensive loss declined $5.9 million, or 20.9%, and $17.8 million, or 44.2%, to $22.5 million as compared to $28.4 million at June 30, 2024 and $40.3 million at September 30, 2023, respectively. Adjusted for accumulated other comprehensive loss, the tangible common equity ratio was 9.4% as of September 30, 2024.
  • Book value per share and tangible book value per share, a non-U.S. GAAP measure, were $23.44 and $23.20, respectively, which represent increases of 2.2% and 2.2% relative to the prior quarter-end and 9.9% and 10.1% from the year-ago period.
  • Nonperforming loans increased $5.5 million, or 23.6%, to $28.6 million, or 1.3% of total loans, from $23.1 million, or 1.0% of total loans, at the prior quarter end. Approximately 47.2% of the balance of nonperforming loans is a single commercial multifamily loan, which had a balance of $13.5 million as of September 30, 2024, down $1.1 million from the prior quarter. The loan is current as of September 30, 2024 and the Company believes the loan is properly collateralized with a loan to value of less than 70%. Criticized loans as a percentage of total loans were 5.7%, consistent with the prior quarter end.
  • Net charge-offs were $0.7 million, or 0.1% of loans, for the third quarter of 2024, compared to $0.9 million, or 0.2% of loans, for the prior quarter.
  • Provision for credit losses totaled $1.0 million, compared to $0.3 million for the prior quarter and included a credit impairment of an available-for-sale debt security of $0.5 million during the third quarter.
  • Allowance for credit losses was 0.99% of total loans, as compared to 1.00% at the prior quarter end.

INCOME STATEMENT

Net interest income on a tax-equivalent basis totaled $26.8 million for the third quarter of 2024, a decline of $0.9 million, or 3.4%, from the second quarter of 2024 and $3.3 million, or 11.0%, from the third quarter of 2023. The decline from both prior periods reflects net interest margin contraction and lower average earning asset balances.

Interest income increased $0.5 million, or 1.1%, from the second quarter of 2024 and declined $1.7 million, or 3.5%, from the third quarter of 2023. The increase in interest income relative to the prior quarter reflects an increase in cash balances due to growth of payment deposits and seasonal considerations. The decline in interest income relative to the year-ago period reflects a decline in cash balances, driven by the exit of digital asset program accounts, and a decline in loan balances, partially offset by a higher tax-equivalent yield on loans and cash balances.

Interest expense increased $1.5 million, or 8.0%, from the second quarter of 2024 and $1.6 million, or 8.6%, from the third quarter of 2024. The cost of funds increased to 2.77% for the third quarter of 2024, as compared to 2.54% for the second quarter of 2024 and 2.43% for the third quarter of 2023. The higher cost of funds compared to the prior quarter was primarily attributable to the full quarter impact of the exit of the digital asset program account relationships and $0.3 million of termination costs related to the Company’s decision to call two brokered CDs during the third quarter. The process of winding down the digital asset program account relationships was initiated during the second quarter of 2024, and the deposits were replaced with higher cost funding throughout the third quarter of 2024. Relative to the year-ago period, the increase reflects the impact of higher interest rates on our deposits, a shift in the mix of average deposits, the exit of the digital asset program account relationships and the termination costs associated with the two brokered CDs that were called.

On a tax-equivalent basis, net interest margin for the third quarter of 2024 was 3.61%, a decline of 14 basis points versus the second quarter of 2024 and 29 basis points versus the third quarter of 2023. See the table below for a reconciliation between net interest margin and net interest margin on a fully tax-equivalent basis, a non-U.S. GAAP measure.

Noninterest income totaled $6.7 million for the third quarter of 2024, a decline of $0.5 million from the second quarter of 2024 and an increase of $0.9 million from the third quarter of 2023. The decline compared to the prior quarter is primarily driven by a decline of $1.2 million in other operating income, partially offset by increases of $0.5 million in holding gains on equity securities and $0.3 million in equity method investments income from our mortgage segment. The $0.9 million increase in noninterest income from the third quarter of 2023 was primarily driven by increases of $1.5 million in equity method investments income from our mortgage segment and $1.0 million in payment card and service charge income, partially offset by a decline of $1.6 million in other operating income.

Noninterest expense totaled $29.5 million for the third quarter of 2024, an increase of $0.6 million from the second quarter of 2024 and a decline of $1.2 million from the third quarter of 2023. The increase from the second quarter of 2024 primarily reflects increases of $0.8 million in salaries and employee benefits and $0.3 million in travel, entertainment, dues and subscriptions, partially offset by a $0.5 million decline in professional fees. The decline from the third quarter of 2023 primarily reflects declines of $1.0 million in professional fees and $0.9 million in other operating expense, partially offset by an increase of $0.7 million in salaries and employee benefit expense.

BALANCE SHEET

Loans totaled $2.17 billion as of September 30, 2024, a decline of $35.5 million, or 1.6%, from June 30, 2024, and $99.2 million, or 4.4%, from September 30, 2023. The decline in loan balances relative to the prior quarters primarily reflects slower loan growth based on overall market conditions and the impact of loan amortization and payoffs.

Deposits totaled $3.00 billion as of September 30, 2024, an increase of $118.8 million, or 4.1%, from June 30, 2024, and a decline of $37.2 million, or 1.2%, from September 30, 2023. The increase in deposits relative to the prior quarter reflects an increase in payment deposits of $190.9 million and higher CD balances. The increase in CD balances of $77.0 million, or 10.0%, to $846.8 million was primarily driven by a $25.1 million, or 5.0%, increase in brokered CDs and a $52.2 million, or 19.9%, increase in core CDs. Relative to the year-ago period, the decline in total deposits reflects a decline in NIB deposits and increased utilization of off-balance sheet deposit networks to generate fee income, enhance capital efficiency and manage liquidity and concentration risk.

NIB deposits totaled $989.1 million as of September 30, 2024, an increase of $5.3 million, or 0.5%, from June 30, 2024 and a decline of $104.8 million, or 9.6%, from September 30, 2023. Relative to the prior year period, the decline in NIB deposits reflected the exit of digital asset program accounts. Digital asset program account balances declined $6.7 million and $180.1 million to $21.4 million as compared to June 30, 2024 and September 30, 2023, respectively. NIB deposits represented 33.0% of total deposits as of September 30, 2024, compared to 34.1% of total deposits at the prior quarter-end and 36.0% for the year-ago period.

Off-balance sheet deposits totaled $1.44 billion as of September 30, 2024, an increase of $85.2 million, or 6.3%, compared to $1.36 billion at June 30, 2024, and $329.0 million, or 30%, from $1.11 billion at September 30, 2023. Management proactively moved $70.2 million of banking-as-a-service deposits off balance sheet due to uncertainty of the existing regulatory framework for brokered deposits and potential reclassification of certain banking-as-a-service deposits as brokered deposits. Off-balance sheet deposit networks are utilized to generate fee income, enhance capital efficiency and manage liquidity and concentration risk.

CAPITAL

The Community Bank Leverage Ratio was 10.9% as of September 30, 2024, compared to 10.7% as of June 30, 2024, and 10.4% as of September 30, 2023. MVB’s Tier 1 Risk-Based Capital Ratio was 14.9% as of September 30, 2024, compared to 14.6% as of June 30, 2024 and 14.0% as of September 30, 2023. The Bank’s Total Risk-Based Capital Ratio was 15.7% as of September 30, 2024, compared to 15.4% as of June 30, 2024 and 14.8% as of September 30, 2023.

The tangible common equity ratio, a non-U.S. GAAP financial measure, was 8.8% as of September 30, 2024, consistent with June 30, 2024, and up from 7.8% as of September 30, 2023. See the reconciliation of the tangible common equity ratio to its most directly comparable U.S. GAAP financial measure later in this release.

The Company issued a quarterly cash dividend of $0.17 per share for the third quarter of 2024, consistent with the second quarter of 2024 and the third quarter of 2023.

ASSET QUALITY

Nonperforming loans totaled $28.6 million, or 1.3% of total loans, as of September 30, 2024, as compared to $23.1 million, or 1.0% of total loans, as of June 30, 2024, and $10.6 million, or 0.5% of total loans, as of September 30, 2023. Criticized loans as a percentage of total loans were 5.7% as of September 30, 2024 and June 30, 2024, compared to 6.1% as of September 30, 2023.

Net charge-offs were $0.7 million, or 0.1% of average total loans, for the third quarter of 2024, compared to $0.9 million, or 0.2% of average total loans, for the second quarter of 2024 and $5.9 million, or 1.0% of average total loans, for the third quarter of 2023.

The provision for credit losses totaled $1.0 million, compared to $0.3 million for the prior quarter ended June 30, 2024, and a release of allowance of $0.2 million for the quarter ended September 30, 2023. The allowance for credit losses for loans was 0.99% of total loans at September 30, 2024, compared to 1.00% at June 30, 2024, and 1.1% at September 30, 2023.

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, 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 Financial, 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; risks, uncertainties and losses involved with the developing digital assets industry, including the evolving regulatory framework; 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; changes in deposit classifications; 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.

Questions or comments concerning this earnings release should be directed to:

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
			2024				2024				2023				2024				2023
		Third Quarter				Second Quarter				Third Quarter
Interest income		$	46,627			$	46,127			$	48,325			$	142,784			$	140,119
Interest expense			20,042				18,557				18,460				58,490				47,943
Net interest income			26,585				27,570				29,865				84,294				92,176
Provision (release of allowance) for credit losses			959				254				(159	)			3,210				182
Net interest income after provision (release of allowance) for credit losses			25,626				27,316				30,024				81,084				91,994
Total noninterest income			6,657				7,142				5,791				21,633				15,277
Noninterest expense:
Salaries and employee benefits			16,722				15,949				16,016				49,160				48,508
Other expense			12,763				12,981				14,709				39,446				40,816
Total noninterest expenses			29,485				28,930				30,725				88,606				89,324
Income before income taxes			2,798				5,528				5,090				14,111				17,947
Income taxes			642				1,379				1,218				3,304				3,639
Net income from continuing operations, before noncontrolling interest			2,156				4,149				3,872				10,807				14,308
Income from discontinued operations, before income taxes			—				—				—				—				11,831
Income taxes - discontinued operations			—				—				—				—				3,049
Net income from discontinued operations			—				—				—				—				8,782
Net Income, before noncontrolling interest			2,156				4,149				3,872				10,807				23,090
Net (income) loss attributable to noncontrolling interest			(76	)			(60	)			(5	)			(156	)			231
Net income available to common shareholders		$	2,080			$	4,089			$	3,867			$	10,651			$	23,321
Earnings per share from continuing operations - basic		$	0.16			$	0.32			$	0.30			$	0.83			$	1.15
Earnings per share from discontinued operations - basic		$	—			$	—			$	—			$	—			$	0.69
Earnings per share - basic		$	0.16			$	0.32			$	0.30			$	0.83			$	1.84
Earnings per share from continuing operations - diluted		$	0.16			$	0.31			$	0.29			$	0.81			$	1.12
Earnings per share from discontinued operations - diluted		$	—			$	—			$	—			$	—			$	0.67
Earnings per share - diluted		$	0.16			$	0.31			$	0.29			$	0.81			$	1.79

Noninterest Income (Unaudited) (Dollars in thousands)
		Quarterly										Year-to-Date
			2024			2024			2023				2024			2023
		Third Quarter			Second Quarter			Third Quarter
Card acquiring income		$	336		$	337		$	845			$	924		$	2,255
Service charges on deposits			1,088			1,103			490				3,714			2,676
Interchange income			2,428			2,377			1,517				7,844			5,034
Total payment card and service charge income			3,852			3,817			2,852				12,482			9,965
Equity method investments gain (loss)			746			484			(750	)			102			(70	)
Compliance and consulting income			1,291			1,274			1,314				3,565			3,326
Gain (loss) on sale of loans			26			—			330				26			(1,015	)
Investment portfolio gains (losses)			498			117			244				1,224			(1,734	)
Loss on acquisition and divestiture activity			—			—			—				—			(986	)
Other noninterest income			244			1,450			1,801				4,234			5,791
Total noninterest income		$	6,657		$	7,142		$	5,791			$	21,633		$	15,277

Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands)
		September 30, 2024				June 30, 2024				September 30, 2023
Cash and cash equivalents		$	610,911			$	455,517			$	587,100
Investment securities available-for-sale			374,828				361,254				311,537
Equity securities			41,760				41,261				40,835
Loans held-for-sale			—				—				7,603
Loans receivable			2,171,272				2,206,793				2,270,433
Less: Allowance for credit losses			(21,499	)			(22,084	)			(24,276	)
Loans receivable, net			2,149,773				2,184,709				2,246,157
Premises and equipment, net			18,838				19,540				21,468
Other assets			222,646				225,723		—		222,883
Total assets		$	3,418,756			$	3,288,004			$	3,437,583
Noninterest-bearing deposits		$	989,144			$	983,809			$	1,093,903
Interest-bearing deposits			2,012,504				1,899,043				1,944,986
Senior term loan			—				—				8,473
Subordinated debt			73,725				73,663				73,478
Other liabilities			40,183				34,826		—		45,374
Stockholders’ equity			303,200				296,663				271,369
Total liabilities and stockholders’ equity		$	3,418,756			$	3,288,004			$	3,437,583

Reportable Segments (Unaudited)
Three Months Ended September 30, 2024		CoRe Banking			Mortgage Banking			Financial Holding Company				Other				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	46,539		$	103		$	2			$	—			$	(17	)		$	46,627
Interest expense			19,234			—			808				17				(17	)			20,042
Net interest income (expense)			27,305			103			(806	)			(17	)			—				26,585
Provision for credit losses			459			—			500				—				—				959
Net interest income (expense) after provision for credit losses			26,846			103			(1,306	)			(17	)			—				25,626
Noninterest income			4,574			768			2,956				2,332				(3,973	)			6,657
Noninterest Expenses:
Salaries and employee benefits			10,075			—			4,528				2,119				—				16,722
Other expenses			13,164			4			2,240				1,328				(3,973	)			12,763
Total noninterest expenses			23,239			4			6,768				3,447				(3,973	)			29,485
Income (loss), before income taxes			8,181			867			(5,118	)			(1,132	)			—				2,798
Income taxes			1,774			204			(1,063	)			(273	)			—				642
Net income (loss), before noncontrolling interest			6,407			663			(4,055	)			(859	)			—				2,156
Net income attributable to noncontrolling interest			—			—			—				(76	)			—				(76	)
Net income (loss) available to common shareholders		$	6,407		$	663		$	(4,055	)		$	(935	)		$	—			$	2,080

Three Months Ended June 30, 2024		CoRe Banking			Mortgage Banking			Financial Holding Company				Other				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	46,038		$	103		$	3			$	—			$	(17	)		$	46,127
Interest expense			17,635			—			922				17				(17	)			18,557
Net interest income (expense)			28,403			103			(919	)			(17	)			—				27,570
Provision for credit losses			254			—			—				—				—				254
Net interest income (expense) after provision for credit losses			28,149			103			(919	)			(17	)			—				27,316
Noninterest income			4,898			485			2,769				3,128				(4,138	)			7,142
Noninterest Expenses:
Salaries and employee benefits			9,359			—			4,473				2,117				—				15,949
Other expenses			13,257			—			2,080				1,782				(4,138	)			12,981
Total noninterest expenses			22,616			—			6,553				3,899				(4,138	)			28,930
Income (loss) before income taxes			10,431			588			(4,703	)			(788	)			—				5,528
Income taxes			2,438			145			(1,016	)			(188	)			—				1,379
Net income (loss), before noncontrolling interest			7,993			443			(3,687	)			(600	)			—				4,149
Net income attributable to noncontrolling interest			—			—			—				(60	)			—				(60	)
Net income (loss) available to common shareholders		$	7,993		$	443		$	(3,687	)		$	(660	)		$	—			$	4,089

Three Months Ended September 30, 2023		CoRe Banking				Mortgage Banking				Financial Holding Company				Other				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	48,268			$	103			$	2			$	—			$	(48	)		$	48,325
Interest expense			17,454				—				1,000				54				(48	)			18,460
Net interest income (expense)			30,814				103				(998	)			(54	)			—				29,865
Release of allowance for credit losses			(159	)			—				—				—				—				(159	)
Net interest income (expense) after release of allowance for credit losses			30,973				103				(998	)			(54	)			—				30,024
Noninterest income			4,980				(742	)			2,576				3,099				(4,122	)			5,791
Noninterest Expenses:
Salaries and employee benefits			9,787				—				4,129				2,100				—				16,016
Other expenses			14,701				13				1,992				2,125				(4,122	)			14,709
Total noninterest expenses			24,488				13				6,121				4,225				(4,122	)			30,725
Income (loss), before income taxes			11,465				(652	)			(4,543	)			(1,180	)			—				5,090
Income taxes			2,628				(153	)			(978	)			(279	)			—				1,218
Net income (loss), before noncontrolling interest			8,837				(499	)			(3,565	)			(901	)			—				3,872
Net income attributable to noncontrolling interest			—				—				—				(5	)			—				(5	)
Net income (loss) available to common shareholders		$	8,837			$	(499	)		$	(3,565	)		$	(906	)		$	—			$	3,867

Nine Months Ended September 30, 2024		CoRe Banking			Mortgage Banking			Financial Holding Company				Other				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	142,519		$	309		$	7			$	—			$	(51	)		$	142,784
Interest expense			55,796			—			2,689				56				(51	)			58,490
Net interest income (expense)			86,723			309			(2,682	)			(56	)			—				84,294
Provision for credit losses			2,710			—			500				—				—				3,210
Net interest income (expense) after provision for credit losses			84,013			309			(3,182	)			(56	)			—				81,084
Noninterest income			16,993			124			7,990				8,724				(12,198	)			21,633
Noninterest Expenses:
Salaries and employee benefits			29,257			—			13,679				6,224				—				49,160
Other expenses			40,242			4			6,161				5,237				(12,198	)			39,446
Total noninterest expenses			69,499			4			19,840				11,461				(12,198	)			88,606
Income (loss), before income taxes			31,507			429			(15,032	)			(2,793	)			—				14,111
Income taxes			7,090			120			(3,236	)			(670	)			—				3,304
Net income (loss), before noncontrolling interest			24,417			309			(11,796	)			(2,123	)			—				10,807
Net income attributable to noncontrolling interest			—			—			—				(156	)			—				(156	)
Net income (loss) available to common shareholders		$	24,417		$	309		$	(11,796	)		$	(2,279	)		$	—			$	10,651

Nine Months Ended September 30, 2023		CoRe Banking			Mortgage Banking				Financial Holding Company				Other				Intercompany Eliminations				Consolidated
(Dollars in thousands)
Interest income		$	139,859		$	313			$	38			$	—			$	(91	)		$	140,119
Interest expense			44,934			—				2,992				108				(91	)			47,943
Net interest income (expense)			94,925			313				(2,954	)			(108	)			—				92,176
Provision for credit losses			182			—				—				—				—				182
Net interest income (expense) after provision for credit losses			94,743			313				(2,954	)			(108	)			—				91,994
Noninterest income			12,111			(56	)			8,102				5,934				(10,814	)			15,277
Noninterest Expenses:
Salaries and employee benefits			27,891			7				13,702				6,908				—				48,508
Other expenses			39,903			65				6,072				5,590				(10,814	)			40,816
Total noninterest expenses			67,794			72				19,774				12,498				(10,814	)			89,324
Income (loss), before income taxes			39,060			185				(14,626	)			(6,672	)			—				17,947
Income taxes			8,380			(14	)			(3,127	)			(1,600	)			—				3,639
Net income (loss) from continuing operations			30,680			199				(11,499	)			(5,072	)			—				14,308
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), before noncontrolling interest			30,680			199				(11,499	)			3,710				—				23,090
Net loss attributable to noncontrolling interest			—			—				—				231				—				231
Net income (loss) available to common shareholders		$	30,680		$	199			$	(11,499	)		$	3,941			$	—			$	23,321

Average Balances and Interest Rates (Unaudited) (Dollars in thousands)
		Three Months Ended											Three Months Ended											Three Months Ended
		September 30, 2024											June 30, 2024											September 30, 2023
		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		$	400,330			$	5,218			5.19	%		$	380,278			$	5,065			5.36	%		$	483,158			$	6,404			5.26	%
Investment securities:
Taxable			258,151				1,846			2.84				252,963				1,905			3.03				206,340				1,056			2.03
Tax-exempt 1			104,769				867			3.29				102,785				684			2.68				107,490				1,016			3.75
Loans and loans held-for-sale: 2
Commercial			1,553,666				31,136			7.97				1,597,359				30,824			7.76				1,593,875				31,348			7.80
Tax-exempt 1			3,129				34			4.32				3,261				35			4.32				3,678				40			4.31
Real estate			558,691				6,446			4.59				563,011				6,391			4.57				573,579				6,351			4.39
Consumer			68,337				1,269			7.39				73,531				1,374			7.52				95,032				2,331			9.73
Total loans			2,183,823				38,885			7.08				2,237,162				38,624			6.94				2,266,164				40,070			7.02
Total earning assets			2,947,073				46,816			6.32				2,973,188				46,278			6.26				3,063,152				48,546			6.29
Less: Allowance for credit losses			(22,043	)										(22,596	)										(29,693	)
Cash and due from banks			4,638											4,528											6,686
Other assets			284,640											305,644											281,504
Total assets		$	3,214,308										$	3,260,764										$	3,321,649
Liabilities
Deposits:
NOW		$	534,494			$	4,422			3.29	%		$	465,587			$	4,139			3.58	%		$	674,745			$	4,970			2.92	%
Money market checking			434,174				3,378			3.10				400,205				3,337			3.35				537,592				3,294			2.43
Savings			116,861				883			3.01				112,225				944			3.38				72,206				438			2.41
IRAs			8,164				91			4.43				7,948				81			4.10				6,788				56			3.27
CDs			800,986				10,440			5.19				731,337				9,130			5.02				664,281				8,702			5.20
Repurchase agreements and federal funds sold			3,589				19			2.11				3,459				4			0.47				4,911				—			—
FHLB and other borrowings			44				—			—				—				—			—				278				—			—
Senior term loan 3			—				—			—				2,736				114			16.76				8,751				191			8.66
Subordinated debt			73,702				809			4.37				73,629				808			4.41				73,446				809			4.37
Total interest-bearing liabilities			1,972,014				20,042			4.04				1,797,126				18,557			4.15				2,042,998				18,460			3.58
Noninterest-bearing demand deposits			910,787											1,139,070											975,164
Other liabilities			37,591											36,101											38,021
Total liabilities			2,920,392											2,972,297											3,056,183
Stockholders’ equity
Common stock			13,776											13,731											13,570
Paid-in capital			163,189											162,518											159,050
Treasury stock			(16,741	)										(16,741	)										(16,741	)
Retained earnings			160,694											161,709											146,504
Accumulated other comprehensive loss			(27,069	)										(32,299	)										(36,865	)
Total stockholders’ equity attributable to parent			293,849											288,918											265,518
Noncontrolling interest			67											(451	)										(52	)
Total stockholders’ equity			293,916											288,467											265,466
Total liabilities and stockholders’ equity		$	3,214,308										$	3,260,764										$	3,321,649
Net interest spread (tax-equivalent)										2.28	%										2.11	%										2.71	%
Net interest income and margin (tax-equivalent)1						$	26,774			3.61	%						$	27,721			3.75	%						$	30,086			3.90	%
Less: Tax-equivalent adjustments						$	(189	)									$	(151	)									$	(221	)
Net interest spread										2.25	%										2.09	%										2.68	%
Net interest income and margin						$	26,585			3.59	%						$	27,570			3.73	%						$	29,865			3.87	%

1In 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-U.S. GAAP financial measure. See the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 19.

2 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.

3 The senior term loan was paid off in May 2024, and the unamortized debt issuance costs were recorded as interest expense upon the repayment.

		Nine Months Ended											Nine Months Ended
		September 30, 2024											September 30, 2023
		Average Balance				Interest Income/ Expense				Yield/ Cost			Average Balance				Interest Income/ Expense				Yield/ Cost
Assets
Interest-bearing balances with banks		$	443,475			$	17,624			5.31	%		$	405,012			$	15,099			4.98	%
Investment securities:
Taxable			252,423				5,494			2.91				221,089				4,133			2.50
Tax-exempt 1			104,622				2,436			3.11				122,818				3,471			3.78
Loans and loans held-for-sale: 2
Commercial			1,592,295				94,112			7.89				1,616,510				90,413			7.48
Tax-exempt 1			3,254				106			4.35				3,813				125			4.38
Real estate			565,923				19,450			4.59				596,070				18,343			4.11
Consumer			73,039				4,095			7.49				120,075				9,290			10.34
Total loans			2,234,511				117,763			7.04				2,336,468				118,171			6.76
Total earning assets			3,035,031				143,317			6.31				3,085,387				140,874			6.10
Less: Allowance for credit losses			(22,298	)										(31,656	)
Cash and due from banks			4,856											4,252
Other assets			308,351											303,233
Total assets		$	3,325,940										$	3,361,216
Liabilities
Deposits:
NOW		$	518,595			$	13,490			3.47	%		$	717,527			$	14,448			2.69	%
Money market checking			414,453				10,474			3.38				455,463				6,661			1.96
Savings			130,848				3,468			3.54				79,187				1,430			2.41
IRAs			7,958				246			4.13				6,448				128			2.65
CDs			735,883				28,097			5.10				572,078				21,396			5.00
Repurchase agreements and federal funds sold			3,334				23			0.92				5,974				—			—
FHLB and other borrowings			29				2			5.99				23,449				888			5.06
Senior term loan 3			3,146				264			11.21				9,285				583			8.39
Subordinated debt			73,634				2,426			4.40				73,383				2,409			4.39
Total interest-bearing liabilities			1,887,880				58,490			4.14				1,942,794				47,943			3.30
Noninterest-bearing demand deposits			1,109,089											1,107,712
Other liabilities			38,566											37,987
Total liabilities			3,035,535											3,088,493
Stockholders’ equity
Common stock			13,722											13,525
Paid-in capital			162,416											157,034
Treasury stock			(16,741	)										(16,741	)
Retained earnings			161,113											153,769
Accumulated other comprehensive income loss			(29,965	)										(34,980	)
Total stockholders’ equity attributable to parent			290,545											272,607
Noncontrolling interest			(140	)										116
Total stockholders’ equity			290,405											272,723
Total liabilities and stockholders’ equity		$	3,325,940										$	3,361,216
Net interest spread (tax-equivalent)										2.17	%										2.80	%
Net interest income and margin (tax-equivalent)1						$	84,827			3.73	%						$	92,931			4.03	%
Less: Tax-equivalent adjustments						$	(533	)									$	(755	)
Net interest spread										2.14	%										2.77	%
Net interest income and margin						$	84,294			3.71	%						$	92,176			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-U.S. GAAP financial measure. See the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 19.

2 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.

3 The senior term loan was paid off in May 2024, and the unamortized debt issuance costs were recorded as interest expense upon the repayment.

Selected Financial Data (Unaudited) (Dollars in thousands, except per share data)
		Quarterly													Year-to-Date
			2024				2024				2023					2024				2023
		Third Quarter				Second Quarter				Third Quarter
Earnings and Per Share Data:
Net income		$	2,080			$	4,089			$	3,867				$	10,651			$	23,321
Earnings per share from continuing operations - basic		$	0.16			$	0.32			$	0.30				$	0.83			$	1.15
Earnings per share from discontinued operations - basic		$	—			$	—			$	—				$	—			$	0.69
Earnings per share - basic		$	0.16			$	0.32			$	0.30				$	0.83			$	1.84
Earnings per share from continuing operations - diluted		$	0.16			$	0.31			$	0.29				$	0.81			$	1.12
Earnings per share from discontinued operations - diluted		$	—			$	—			$	—				$	—			$	0.67
Earnings per share - diluted		$	0.16			$	0.31			$	0.29				$	0.81			$	1.79
Cash dividends paid per common share		$	0.17			$	0.17			$	0.17				$	0.51			$	0.51
Book value per common share		$	23.44			$	22.94			$	21.33				$	23.44			$	21.33
Tangible book value per common share 1		$	23.20			$	22.70			$	21.08				$	23.20			$	21.08
Weighted-average shares outstanding - basic			12,927,962				12,883,426				12,722,010					12,874,311				12,678,708
Weighted-average shares outstanding - diluted			13,169,011				13,045,660				13,116,629					13,121,245				13,012,834
Performance Ratios:
Return on average assets 2			0.3	%			0.5	%			0.5	%				0.4	%			0.9	%
Return on average equity 2			2.8	%			5.7	%			5.8	%				4.9	%			11.4	%
Net interest margin 3 4			3.61	%			3.75	%			3.90	%				3.73	%			4.03	%
Efficiency ratio 5			88.7	%			83.3	%			86.2	%				83.6	%			75.4	%
Overhead ratio 2 6			3.7	%			3.5	%			3.7	%				3.6	%			3.5	%
Equity to assets			8.9	%			9.0	%			7.9	%				8.9	%			7.9	%
Asset Quality Data and Ratios:
Charge-offs		$	1,392			$	1,538			$	8,064				$	5,080			$	16,611
Recoveries		$	681			$	688			$	2,205				$	2,204			$	7,842
Net loan charge-offs to total loans 2 7			0.1	%			0.2	%			1.0	%				0.2	%			0.5	%
Allowance for credit losses		$	21,499			$	22,084			$	24,276				$	21,499			$	24,276
Allowance for credit losses to total loans 8			0.99	%			1.00	%			1.07	%				0.99	%			1.07	%
Nonperforming loans		$	28,556			$	23,099			$	10,593				$	28,556			$	10,593
Nonperforming loans to total loans			1.3	%			1.0	%			0.5	%				1.3	%			0.5	%
Mortgage Company Equity Method Investees Production Data9:
Mortgage pipeline		$	1,048,865			$	927,875			$	643,578				$	1,048,865			$	643,578
Loans originated		$	1,469,223			$	1,383,405			$	1,131,963				$	3,902,717			$	3,299,253
Loans closed		$	937,333			$	828,849			$	786,885				$	2,419,488			$	2,282,768
Loans sold		$	655,668			$	639,035			$	605,296				$	2,210,818			$	1,827,019

1 Common equity less total goodwill and intangibles per common share, a non-U.S. GAAP measure. See the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 19.

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-U.S. 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.

Non-U.S. GAAP Reconciliation: Net Interest Margin on a Fully Tax-Equivalent Basis The following table reconciles, for the periods shown below, net interest margin on a fully tax-equivalent basis:
		Three Months Ended												Nine Months Ended
(Dollars in thousands)		September 30, 2024				June 30, 2024				September 30, 2023				September 30, 2024				September 30, 2023
Net interest margin - U.S. GAAP basis
Net interest income		$	26,585			$	27,570			$	29,865			$	84,294			$	92,176
Average interest-earning assets		$	2,947,073			$	2,973,188			$	3,063,152				3,035,031				3,085,387
Net interest margin			3.59	%			3.73	%			3.87	%			3.71	%			3.99	%
Net interest margin - non-U.S. GAAP basis
Net interest income		$	26,585			$	27,570			$	29,865			$	84,294			$	92,176
Impact of fully tax-equivalent adjustment			189				151				221				533				755
Net interest income on a fully tax-equivalent basis		$	26,774			$	27,721			$	30,086				84,827				92,931
Average interest-earning assets		$	2,947,073			$	2,973,188			$	3,063,152			$	3,035,031			$	3,085,387
Net interest margin on a fully tax-equivalent basis			3.61	%			3.75	%			3.90	%			3.73	%			4.03	%

Non-U.S. GAAP Reconciliation: Tangible Book Value per Common Share and Tangible Common Equity Ratio (Unaudited) (Dollars in thousands, except per share data)
		September 30, 2024				June 30, 2024				September 30, 2023
Tangible Book Value per Common Share
Goodwill		$	2,838			$	2,838			$	2,838
Intangibles			285				307				375
Total intangibles		$	3,123				3,145				3,213
Total equity attributable to parent		$	303,086				296,625				271,416
Less: Total intangibles			(3,123	)			(3,145	)			(3,213	)
Tangible common equity		$	299,963			$	293,480			$	268,203
Tangible common equity		$	299,963			$	293,480			$	268,203
Common shares outstanding (000s)			12,928				12,928				12,726
Tangible book value per common share		$	23.20			$	22.70			$	21.08
Tangible Common Equity Ratio
Total assets		$	3,418,756			$	3,288,004			$	3,437,583
Less: Total intangibles			(3,123	)			(3,145	)			(3,213	)
Tangible assets		$	3,415,633			$	3,284,859			$	3,434,370
Tangible assets		$	3,415,633			$	3,284,859			$	3,434,370
Tangible common equity		$	299,963			$	293,480			$	268,203
Tangible common equity ratio			8.8	%			8.9	%			7.8	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030097498/en/

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's (MVBF) earnings per share in Q3 2024?

MVB Financial reported earnings of $0.16 per share in Q3 2024.

How much did MVBF's payments-related deposits grow in Q3 2024?

MVBF's payments-related deposits increased by 60.8% compared to the previous quarter.

What was MVBF's net interest margin in Q3 2024?

MVBF's net interest margin was 3.61% in Q3 2024, down 14 basis points from the previous quarter.

How did MVBF's digital asset program exit impact Q3 2024 results?

The digital asset program exit reduced earnings per share by $0.29 in Q3 2024.