8-K
MVB FINANCIAL CORP (MVBF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): | October 31, 2022 | ||
|---|---|---|---|
| MVB Financial Corp. | |||
| --- | |||
| (Exact name of registrant as specified in its charter) | |||
| West Virginia | 001-38314 | 20-0034461 | |
| --- | --- | --- | |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |
| 301 Virginia Avenue, Fairmont, WV | 26554-2777 | ||
| --- | --- | ||
| (Address of principal executive offices) | (Zip Code) | (304) 363-4800 | |
| --- | |||
| (Registrant's telephone number, including area code) | |||
| Not Applicable | |||
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Securities registered pursuant to Section 12(b) of the Act: | ||
|---|---|---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common stock, $1.00 par value | MVBF | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On October 31, 2022, MVB Financial Corp. issued a press release announcing its financial results for the quarter ended September 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, is hereby furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release of MVB Financial Corp. dated October 31, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| MVB Financial Corp. | |
|---|---|
| By: | /s/ Donald T. Robinson |
| Donald T. Robinson<br>President and Chief Financial Officer |
Date: October 31, 2022
Document
Exhibit 99.1
N E W S R E L E A S E
MVB Financial Corp. Announces Third Quarter 2022 Results
(FAIRMONT, WV) October 31, 2022 – MVB Financial Corp. (NASDAQ: MVBF) (“MVB Financial,” “MVB” or the “Company”), the holding company for MVB Bank, Inc. ("MVB Bank"), today announced financial results for the third quarter of 2022, with reported net income of $2.7 million, or $0.22 basic and $0.21 diluted earnings per share.
| Quarterly | Year-to-Date | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2022 | 2021 | 2022 | 2021 | ||||||
| Third Quarter | Second Quarter | Third Quarter | ||||||||
| Net income | $ | 2,718 | $ | 2,956 | $ | 11,828 | $ | 8,538 | $ | 29,160 |
| Earnings per share - basic | $ | 0.22 | $ | 0.24 | $ | 1.00 | $ | 0.70 | $ | 2.49 |
| Earnings per share - diluted | $ | 0.21 | $ | 0.23 | $ | 0.92 | $ | 0.66 | $ | 2.32 |
“During the third quarter, we continued to drive strong loan production, counter-cyclical growth in low-cost deposits and net interest margin expansion, resulting in robust growth in net interest income, while maintaining strong asset quality,” said Larry F. Mazza, Chief Executive Officer, MVB Financial. “In addition, MVB’s year-to-date results evidenced significant progress in our efforts to drive growth in Fintech fee income, further diversifying our revenue base.”
Mazza added, “Amidst these favorable underlying trends, challenges also emerged. Higher interest rates and a slowing economy impacted our mortgage business and fee income and, coupled with elevated provisioning for loan losses related to our strong loan growth, impacted our earnings for the quarter.”
“As demonstrated throughout MVB’s history, and through our corporate values, we are ‘Adaptive’ as market conditions change. While we continue to successfully execute on our MVB-F1: Success Loves Speed Strategy, we are adjusting to wet track conditions by sharpening our focus. Specifically, we are implementing initiatives that are expected to drive a 12% reduction from MVB’s annualized third quarter 2022 noninterest expense base, with 75% of the projected cost savings to be achieved by the end of the first quarter 2023, and the remainder expected to be fully captured by the end of the third quarter of 2023.”
THIRD QUARTER 2022 HIGHLIGHTS
•Strong growth in low-cost deposits amidst cyclical industry headwinds
▪Total deposits were $2.70 billion as of September 30, 2022, an increase of $82.0 million, or 3.1%, from June 30, 2022 and $298.0 million, or 12.4%, from September 30, 2021.
▪Noninterest-bearing (“NIB”) deposits were $1.41 billion as of September 30, 2022, an increase of $68.9 million, or 5.1%, from June 30, 2022 and $412.4 million, or 41.3%, from September 30, 2021. NIB deposits represented 52% of total deposits as of September 30, 2022, as compared to 51% and 42% as of June 30, 2022 and September 30, 2021, respectively.
▪The cost of funds was 59 basis points for the quarter ended September 30, 2022 up 37 basis points compared to the quarter ended June 30, 2022 and 35 basis points compared to the quarter ended September 30, 2021. The increase from the prior quarter primarily reflected a change in deposit mix based on average balances, led by growth in average interest-bearing deposits as compared to relatively consistent average NIB deposits, as well as higher interest rates and increased Federal Home Loan Banks borrowings during the quarter. The increase in cost of funds compared to the prior year period mostly reflected higher interest rates, partially offset by the relatively higher contribution of NIB deposits relative to the prior year.
•Loan growth and margin expansion drive our strong growth in net interest income
▪Net interest income on a tax-equivalent basis totaled $30.1 million for the quarter ended September 30, 2022, up $3.2 million, or 11.8%, and $10.7 million, or 55.1%, from the quarters ended June 30, 2022 and September 30, 2021, respectively.
▪Total loan balances of $2.47 billion as of September 30, 2022 increased by $256.3 million, or 11.6%, compared to June 30, 2022 and $707.2 million, or 40.1%, compared to September 30, 2021.
▪Loans held-for-sale were $20.0 million as of September 30, 2022, compared to $11.9 million as of June 30, 2022 and none as of September 30, 2021, led by MVB Bank’s Small Business Administration (“SBA”) lending growth vehicle.
▪On a tax-equivalent basis, net interest margin for the quarter ended September 30, 2022 was 4.25%, an increase of 15 basis points versus the quarter ended June 30, 2022 and an increase of 100 basis points versus the quarter ended September 30, 2021. The quarter over quarter increase in net interest margin was due primarily to strong loan growth, higher loan yields, and significantly lower cash balances, partially offset by an increase in funding costs.
◦Asset quality indicators remained stable
▪Nonperforming loans totaled $22.4 million, or 0.9% of total loans, as of September 30, 2022, as compared to $19.3 million, or 0.9% of total loans, as of June 30, 2022, and $17.5 million, or 1.0% of total loans, as of September 30, 2021. Criticized loans as a percentage of total loans were 3.4%, as compared to 4.0% as of June 30, 2022, and 6.5% as of September 30, 2021.
▪Net charge-offs were $1.3 million, or 0.22% of total loans on an annualized basis, for the quarter ended September 30, 2022, compared to $1.2 million, or 0.21% of total loans on an annualized basis, for the quarter ended June 30, 2022. Net charge-offs on an annualized basis, for the quarter ended September 30, 2021, were not significant.
▪The provision for loan losses totaled $5.1 million for the quarter ended September 30, 2022, compared to $5.1 million for the quarter ended June 30, 2022, and $0.4 million for the quarter ended September 30, 2021. Allowance for loan losses was 1.07% of total loans as of September 30, 2022, an increase of four basis points from June 30, 2022 and a decline of 36 basis points from September 30, 2021. Approximately 84% of the increase in the allowance for loan losses for the quarter ended September 30, 2022 is attributable to strong growth in our loan balances during the quarter.
◦Quarter over quarter expense growth largely held in check
▪Noninterest expense totaled $30.0 million for the quarter ended September 30, 2022, an increase of $0.1 million, or 0.5%, from the quarter ended June 30, 2022 and an increase of $4.1 million, or 16.0%, from the quarter ended September 30, 2021. The increase from the quarter ended June 30, 2022 primarily reflects an increase in other operating expenses of $0.5 million, or 24.1%, and an increase in equipment depreciation and maintenance of $0.3 million, or 19.9%, mostly offset by a decrease in salaries and employee benefits of $0.7 million, or 3.5%. The increase relative to the prior year period primarily reflects higher salaries and employee benefits costs of $1.8 million, or 10.8%, and higher other operating expenses of $1.3 million, or 116.1%.
INCOME STATEMENT
Net interest income on a tax-equivalent basis totaled $30.1 million for the quarter ended September 30, 2022, up $3.2 million, or 11.8%, from the quarter ended June 30, 2022 and $10.7 million, or 55.1%, from the quarter ended September 30, 2021. The increase in net interest income compared to both periods generally reflects strong loan growth, primarily driven by the Company’s strategic lending partnerships growth vehicle and broad-based growth throughout CoRe Banking business.
Interest income increased $5.8 million, or 20.7%, to $33.9 million from the quarter ended June 30, 2022 and $13.4 million, or 65.5%, from the quarter ended September 30, 2021. The tax-equivalent yield on loans was 5.26% for the quarter ended September 30, 2022, compared to 5.06% for the quarter ended June 30, 2022 and 4.25% for the quarter ended September 30, 2021. Higher loan yields generally reflect new loan production at favorable interest rates and the impact of the Fed rate increases on our commercial loan portfolio.
Interest expense increased $2.6 million, or 183.7%, from the quarter ended June 30, 2022 and increased $2.7 million, or 192.3%, from the quarter ended September 30, 2021. The cost of funds was 59 basis points for the quarter ended September 30, 2022, up 37 basis point compared to the quarter ended June 30, 2022 and 35 basis points compared to the quarter ended September 30, 2021. The increase from the prior quarter primarily reflected a change in deposit mix based on average balances, led by growth in average interest-bearing deposits as compared to relatively consistent average NIB deposits, as well as higher interest rates and increased FHLB borrowings during the quarter. The increase in cost of funds compared to the prior year period mostly reflected higher interest rates, partially offset by the relatively higher contribution of NIB deposits relative to the prior year.
On a tax-equivalent basis, net interest margin for the quarter ended September 30, 2022 was 4.25%, an increase of 15 basis points versus the quarter ended June 30, 2022 and 100 basis points versus the quarter ended September 30, 2021. Please see the table below for a reconciliation between net interest margin and net interest margin on a fully tax-equivalent basis, a non-GAAP measure. The increase in net interest margin from the quarter ended June 30, 2022 reflected the impact of strong loan growth, partially offset by an increase in deposit costs. The increase in net interest margin from the quarter ended September 30, 2021 also reflected strong loan growth and an increase in deposit costs, to a greater extent. The average loan-to-deposit ratio during the quarter ended September 30, 2022 was 92.5%, compared to 82.9% for the quarter ended June 30, 2022, and 78.9% for the quarter ended September 30, 2021.
Noninterest income totaled $8.2 million for the quarter ended September 30, 2022, a decrease of $3.7 million, or 31.2% from the quarter ended June 30, 2022 and a decrease of $13.8 million, or 62.7%, from the quarter ended September 30, 2021.
The decrease in noninterest income compared to the prior quarter is driven by decreases in equity method investment income of $1.6 million, or 286.0%, in other operating income of $0.9 million, or 51.5%, and in payment card and service charge income of $0.7 million, or 17.5%. The sale of mortgaging servicing rights in June 2022 resulted in $1.2 million of the decrease in other operating income. The decrease in payment card and
service charge income is driven by decreased interchange income. The decline in equity method investment income was primarily due to lower mortgage banking revenue reflecting the continued sharp increase in market interest rates during the third quarter of 2022. Further disaggregation of the Company’s noninterest income is available below.
The decrease in noninterest income compared to the comparable quarter in the prior year is driven by a one-time gain on acquisition and divestiture activity in the quarter ended September 30, 2021 totaling $10.8 million.
Noninterest expense totaled $30.0 million for the quarter ended September 30, 2022, an increase of $0.1 million, or 0.5%, from the quarter ended June 30, 2022 and an increase of $4.1 million, or 16.0%, from the quarter ended September 30, 2021. The increase from the quarter ended June 30, 2022 in expenses primarily reflects a decrease in salaries and employee benefits of $0.7 million, or 3.5%, partially offset by an increase in other operating expenses of $0.5 million, or 24.1%. The increase relative to the prior year period primarily reflects higher salaries and employee benefits costs of $1.8 million, or 10.8% and higher other operating expenses of $1.3 million, or 116.1%. The increases in salaries and employee benefits were due to continued hiring during 2022 that resulted in a 30% increase in average full time equivalent employees for the nine months’ ended September 30, 2022 as compared to the nine months’ ended September 30, 2021. This hiring was strategic to front-line revenue producers and enhanced risk management infrastructure.
The Company continues to make Fintech investments to transform its business model and adapt to changing market conditions and opportunities. For the quarter ended September 30, 2022, earnings were impacted by approximately $1.6 million of net loss from its MVB Edge Ventures segment, as compared to net losses of $1.3 million and $1.6 million for the quarters ended June 30, 2022 and September 30, 2021, respectively.
BALANCE SHEET
Loans totaled $2.47 billion at September 30, 2022, an increase of $256.3 million, or 11.6%, and $707.2 million, or 40.1%, as compared to June 30, 2022 and September 30, 2021, respectively. Adjusted for the removal of PPP loans from all periods, loan balances increased by 11.8% from the quarter ended June 30, 2022 and by 51.6% from the quarter ended September 30, 2021. Loan growth for both periods was driven primarily by the Company’s strategic lending partnerships growth vehicle. Loans held-for-sale were $20.0 million as of September 30, 2022, compared to $11.9 million at June 30, 2022 and none at September 30, 2021, led by MVB Bank’s SBA lending growth vehicle.
Deposits totaled $2.70 billion as of September 30, 2022, an increase of $82.0 million, or 3.1%, from June 30, 2022 and $298.0 million, or 12.4%, from September 30, 2021. NIB deposits totaled $1.41 billion as of September 30, 2022, an increase $68.9 million, or 5.1%, from June 30, 2022 and $412.4 million, or 41.3%, from September 30, 2021. Growth in NIB deposit balances primarily reflects Fintech business, while the increase in total deposits also reflects an increase in brokered deposits and other certificates of deposit. At 52% of total deposits, NIB deposits continue to exceed all other deposits combined.
CAPITAL
The Community Bank Leverage Ratio was 11.1% as of September 30, 2022, compared to 11.6% as of June 30, 2022 and 12.0% as of September 30, 2021. MVB’s Tier 1 Risk-Based Capital Ratio was 13.1% as of September 30, 2022, compared to 13.7% as of June 30, 2022 and 15.7% as of September 30, 2021. The Bank’s Total Risk-Based Capital Ratio was 14.1% as of September 30, 2022, compared to 14.7% as of June 30, 2022 and 17.0% as of September 30, 2021.
The Company issued a quarterly cash dividend of $0.17 per share for the quarter ended September 30, 2022, consistent with the quarter ended June 30, 2022 and up $0.03, or 21%, from the quarter ended September 30, 2021.
ASSET QUALITY
Nonperforming loans totaled $22.4 million, or 0.9% of total loans, as of September 30, 2022, as compared to $19.3 million, or 0.9% of total loans, as of June 30, 2022, and $17.5 million, or 1.0% of total loans, as of September 30, 2021. Criticized loans as a percentage of total loans were 3.4%, as compared to 4.0% as of June 30, 2022, and 6.5% as of September 30, 2021.
Net charge-offs were $1.3 million, or 0.22% of total loans on an annualized basis, for the quarter ended September 30, 2022, compared to $1.2 million, or 0.21% of total loans on an annualized basis, for the quarter ended June 30, 2022. Net charge-offs on an annualized basis, for the quarter ended September 30, 2021, were not significant.
Changes to the outstanding balances of the loan portfolios, the level of recognized charge-offs and the resulting historical loss rates and adjustments to the risk grading of loans within the portfolio are all contributing factors in the provision for loan losses. The provision for loan losses totaled $5.1 million for the quarter ended September 30, 2022, compared to $5.1 million for the quarter ended June 30, 2022, and $0.4 million for the quarter ended September 30, 2021. Allowance for loan losses to total loans was 1.07% as September 30, 2022, as compared to 1.03% as of June 30, 2022 and 1.43% as of September 30, 2021.
About MVB Financial Corp.
MVB Financial, the holding company of MVB Bank, is publicly traded on The Nasdaq Capital Market® (“Nasdaq”) under the ticker “MVBF.”
MVB Financial is a financial holding company headquartered in Fairmont, WV. Through its wholly-owned subsidiary, MVB Bank, and MVB Bank’s subsidiaries, MVB Financial provides financial services to individuals and corporate clients in the Mid-Atlantic region and beyond.
Nasdaq is a leading global provider of trading, clearing, exchange technology, listing, information and public company services.
For more information about MVB, please visit ir.mvbbanking.com.
Forward-looking Statements
MVB Financial has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in this press release that are intended to be covered by the protections provided under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations about the future and are subject to risks and uncertainties. Forward-looking statements include, without limitation, information concerning possible or assumed future results of operations of the Company and its subsidiaries. Forward-looking statements can be identified by the use of words such as “may,” “could,” “should,” “would,” “will,” “plans,” “believes,” “estimates,” “expects,” “anticipates,” “intends,” “continues” or the negative of those terms or similar expressions. Note that many factors could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in forward-looking statements. Therefore, undue reliance should not be placed upon any forward-looking statements. Those factors include but are not limited to: market, economic, operational, liquidity and credit risk; changes in market interest rates; inability to achieve anticipated synergies and successfully integrate recent mergers and acquisitions; inability to successfully execute business plans, including strategies related to investments in Fintech companies; competition; length and severity of the COVID-19 pandemic and its impact on the Company’s business and financial condition; changes in economic, business and political conditions; changes in demand for loan products and deposit flow; operational risks and risk management failures; and government regulation and supervision. Additional factors that may cause actual results to differ materially from those described in the forward-looking statements can be found in the Company’s Annual Report on Form
10-K for the year ended December 31, 2021, as well as its other filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. Except as required by law, the Company disclaims any obligation to update, revise or correct any forward-looking statements.
Accounting standards require the consideration of subsequent events occurring after the balance sheet date for matters that require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s financial statements when filed with the SEC. Accordingly, the consolidated financial information in this announcement is subject to change.
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
MVB Financial Corp.
Financial Highlights
Consolidated Statements of Income
(Unaudited) (Dollars in thousands, except per share data)
| Quarterly | Year-to-Date | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2022 | 2021 | 2022 | 2021 | ||||||
| Third Quarter | Second Quarter | Third Quarter | ||||||||
| Interest income | $ | 33,903 | $ | 28,090 | $ | 20,484 | $ | 85,255 | $ | 60,380 |
| Interest expense | 4,057 | 1,430 | 1,388 | 6,901 | 4,724 | |||||
| Net interest income | 29,846 | 26,660 | 19,096 | 78,354 | 55,656 | |||||
| Provision (release of allowance) for loan losses | 5,120 | 5,100 | 380 | 11,500 | (542) | |||||
| Net interest income after provision (release of allowance) for loan losses | 24,726 | 21,560 | 18,716 | 66,854 | 56,198 | |||||
| Total noninterest income | 8,191 | 11,909 | 21,951 | 31,970 | 48,053 | |||||
| Noninterest expense: | ||||||||||
| Salaries and employee benefits | 18,316 | 18,983 | 16,528 | 55,260 | 42,100 | |||||
| Other expense | 11,649 | 10,836 | 9,301 | 33,386 | 26,250 | |||||
| Total noninterest expenses | 29,965 | 29,819 | 25,829 | 88,646 | 68,350 | |||||
| Income before income taxes | 2,952 | 3,650 | 14,838 | 10,178 | 35,901 | |||||
| Income tax expense | 397 | 859 | 3,164 | 2,161 | 7,006 | |||||
| Net income before noncontrolling interest | 2,555 | 2,791 | 11,674 | 8,017 | 28,895 | |||||
| Net loss attributable to noncontrolling interest | 163 | 165 | 154 | 521 | 265 | |||||
| Net income attributable to parent | 2,718 | 2,956 | 11,828 | 8,538 | 29,160 | |||||
| Preferred dividends | — | — | — | — | 35 | |||||
| Net income available to common shareholders | $ | 2,718 | $ | 2,956 | $ | 11,828 | $ | 8,538 | $ | 29,125 |
| Earnings per share - basic | $ | 0.22 | $ | 0.24 | $ | 1.00 | $ | 0.70 | $ | 2.49 |
| Earnings per share - diluted | $ | 0.21 | $ | 0.23 | $ | 0.92 | $ | 0.66 | $ | 2.32 |
Noninterest Income
(Unaudited) (Dollars in thousands)
| Quarterly | Year-to-Date | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2022 | 2021 | 2022 | 2021 | ||||||
| Third Quarter | Second Quarter | Third Quarter | ||||||||
| Card acquiring income | $ | 560 | $ | 750 | $ | 692 | $ | 2,293 | $ | 2,104 |
| Service charges on deposits | 889 | 973 | 138 | 2,734 | 499 | |||||
| Interchange income | 1,864 | 2,292 | 855 | 4,943 | 2,501 | |||||
| Total payment card and service charge income | 3,313 | 4,015 | 1,685 | 9,970 | 5,104 | |||||
| Income (loss) from ICM equity method investment 1 | (831) | 732 | 3,573 | 1,151 | 14,570 | |||||
| Loss from other equity method investments | (190) | (183) | — | (485) | — | |||||
| Total equity method investment income (loss) | (1,021) | 549 | 3,573 | 666 | 14,570 | |||||
| Compliance and consulting income | 3,736 | 3,750 | 3,013 | 11,355 | 6,162 | |||||
| Gain on sale of loans | 1,298 | 1,405 | 908 | 3,786 | 3,125 | |||||
| Investment portfolio gains (losses) | (217) | 145 | 1,065 | 2,322 | 5,135 | |||||
| Gains on acquisition and divestiture activity | — | — | 10,783 | — | 10,783 | |||||
| Other noninterest income | 1,082 | 2,045 | 924 | 3,871 | 3,174 | |||||
| Total noninterest income | $ | 8,191 | $ | 11,909 | $ | 21,951 | $ | 31,970 | $ | 48,053 |
1 Intercoastal Mortgage Company, LLC (“ICM”)
Condensed Consolidated Balance Sheets
(Unaudited) (Dollars in thousands)
| September 30, 2022 | June 30, 2022 | September 30, 2021 | ||||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | $ | 79,946 | $ | 161,761 | $ | 390,081 |
| Certificates of deposit with banks | — | 496 | 9,582 | |||
| Securities available-for-sale, at fair value | 366,742 | 376,737 | 439,023 | |||
| Equity securities | 34,101 | 34,250 | 29,809 | |||
| Loans held-for-sale | 19,977 | 11,856 | — | |||
| Loans receivable | 2,471,395 | 2,215,114 | 1,764,186 | |||
| Less: Allowance for loan losses | (26,515) | (22,734) | (25,187) | |||
| Loans receivable, net | 2,444,880 | 2,192,380 | 1,738,999 | |||
| Premises and equipment, net | 24,668 | 25,272 | 25,043 | |||
| Goodwill | 3,988 | 3,988 | 3,988 | |||
| Other assets | 165,620 | 177,688 | 152,299 | |||
| Total assets | $ | 3,139,922 | $ | 2,984,428 | $ | 2,788,824 |
| Noninterest-bearing deposits | $ | 1,411,772 | $ | 1,342,916 | $ | 999,328 |
| Interest-bearing deposits | 1,285,186 | 1,272,054 | 1,399,612 | |||
| FHLB and other borrowings | 73,328 | — | — | |||
| Subordinated debt | 73,222 | 73,158 | 72,966 | |||
| Other liabilities | 52,054 | 43,390 | 50,218 | |||
| Stockholders' equity, including noncontrolling interest | 244,360 | 252,910 | 266,700 | |||
| Total liabilities and stockholders' equity | $ | 3,139,922 | $ | 2,984,428 | $ | 2,788,824 |
Reportable Segments
(Unaudited)
| Three Months Ended September 30, 2022 | CoRe Banking | Mortgage Banking | Professional Services | Edge Ventures | Financial Holding Company | Intercompany Eliminations | Consolidated | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | |||||||||||||||||||||||||||||||
| Interest income | $ | 33,777 | $ | 103 | $ | — | $ | — | $ | 33 | $ | (10) | $ | 33,903 | |||||||||||||||||
| Interest expense | 3,286 | — | 10 | — | 771 | (10) | 4,057 | ||||||||||||||||||||||||
| Net interest income (expense) | 30,491 | 103 | (10) | — | (738) | — | 29,846 | ||||||||||||||||||||||||
| Provision for loan losses | 5,120 | — | — | — | — | — | 5,120 | ||||||||||||||||||||||||
| Net interest income (expense) after provision for loan losses | 25,371 | 103 | (10) | — | (738) | — | 24,726 | ||||||||||||||||||||||||
| Noninterest income | 5,356 | (817) | 5,666 | 115 | 2,366 | (4,495) | 8,191 | ||||||||||||||||||||||||
| Noninterest Expenses: | |||||||||||||||||||||||||||||||
| Salaries and employee benefits | 9,354 | 8 | 3,755 | 925 | 4,274 | — | 18,316 | ||||||||||||||||||||||||
| Other expenses | 11,523 | 25 | 1,394 | 1,392 | 1,810 | (4,495) | 11,649 | ||||||||||||||||||||||||
| Total noninterest expenses | 20,877 | 33 | 5,149 | 2,317 | 6,084 | (4,495) | 29,965 | ||||||||||||||||||||||||
| Income (loss) before income taxes | 9,850 | (747) | 507 | (2,202) | (4,456) | — | 2,952 | ||||||||||||||||||||||||
| Income taxes | 1,817 | (192) | 116 | (504) | (840) | — | 397 | ||||||||||||||||||||||||
| Net income (loss) | 8,033 | (555) | 391 | (1,698) | (3,616) | — | 2,555 | ||||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | — | — | 36 | 127 | — | — | 163 | ||||||||||||||||||||||||
| Net income (loss) available to common shareholders | $ | 8,033 | $ | (555) | $ | 427 | $ | (1,571) | $ | (3,616) | $ | — | $ | 2,718 | Three Months Ended June 30, 2022 | CoRe Banking | Mortgage Banking | Professional Services | Edge Ventures | Financial Holding Company | Intercompany Eliminations | Consolidated | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||
| Interest income | $ | 27,910 | $ | 103 | $ | — | $ | — | $ | 87 | $ | (10) | $ | 28,090 | |||||||||||||||||
| Interest expense | 672 | — | 8 | — | 760 | (10) | 1,430 | ||||||||||||||||||||||||
| Net interest income (expense) | 27,238 | 103 | (8) | — | (673) | — | 26,660 | ||||||||||||||||||||||||
| Provision for loan losses | 5,100 | — | — | — | — | — | — | 5,100 | |||||||||||||||||||||||
| Net interest income (expense) after provision for loan losses | 22,138 | 103 | (8) | — | (673) | — | 21,560 | ||||||||||||||||||||||||
| Noninterest income | 7,093 | 787 | 5,686 | 110 | 3,228 | (4,995) | 11,909 | ||||||||||||||||||||||||
| Noninterest Expenses: | |||||||||||||||||||||||||||||||
| Salaries and employee benefits | 9,948 | — | 3,872 | 724 | 4,439 | — | 18,983 | ||||||||||||||||||||||||
| Other expenses | 10,913 | 94 | 1,407 | 1,170 | 2,247 | (4,995) | 10,836 | ||||||||||||||||||||||||
| Total noninterest expenses | 20,861 | 94 | 5,279 | 1,894 | 6,686 | (4,995) | 29,819 | ||||||||||||||||||||||||
| Income (loss) before income taxes | 8,370 | 796 | 399 | (1,784) | (4,131) | — | 3,650 | ||||||||||||||||||||||||
| Income taxes | 1,771 | 207 | 95 | (399) | (815) | — | 859 | ||||||||||||||||||||||||
| Net income (loss) | 6,599 | 589 | 304 | (1,385) | (3,316) | — | 2,791 | ||||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | — | — | 63 | 102 | — | — | 165 | ||||||||||||||||||||||||
| Net income (loss) available to common shareholders | $ | 6,599 | $ | 589 | $ | 367 | $ | (1,283) | $ | (3,316) | $ | — | $ | 2,956 | |||||||||||||||||
| Three Months Ended September 30, 2021 | CoRe Banking | Mortgage Banking | Professional Services | Edge Ventures | Financial Holding Company | Intercompany Eliminations | Consolidated | ||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||
| Interest income | $ | 20,383 | $ | 105 | $ | — | $ | — | $ | 1 | $ | (5) | $ | 20,484 | |||||||||||||||||
| Interest expense | 902 | — | 10 | — | 481 | (5) | 1,388 | ||||||||||||||||||||||||
| Net interest income (expense) | 19,481 | 105 | (10) | — | (480) | — | 19,096 | ||||||||||||||||||||||||
| Release of allowance for loan losses | 379 | 1 | — | — | — | — | 380 | ||||||||||||||||||||||||
| Net interest income (expense) after release of allowance for loan losses | 19,102 | 104 | (10) | — | (480) | — | 18,716 | ||||||||||||||||||||||||
| Noninterest income | 15,387 | 3,546 | 4,806 | 18 | 2,002 | (3,808) | 21,951 | ||||||||||||||||||||||||
| Noninterest Expenses: | |||||||||||||||||||||||||||||||
| Salaries and employee benefits | 8,296 | 47 | 3,993 | 808 | 3,384 | — | 16,528 | ||||||||||||||||||||||||
| Other expenses | 8,973 | (198) | 1,213 | 1,468 | 1,653 | (3,808) | 9,301 | ||||||||||||||||||||||||
| Total noninterest expenses | 17,269 | (151) | 5,206 | 2,276 | 5,037 | (3,808) | 25,829 | ||||||||||||||||||||||||
| Income (loss) before income taxes | 17,220 | 3,801 | (410) | (2,258) | (3,515) | — | 14,838 | ||||||||||||||||||||||||
| Income taxes | 3,657 | 922 | (103) | (581) | (731) | — | 3,164 | ||||||||||||||||||||||||
| Net income (loss) | 13,563 | 2,879 | (307) | (1,677) | (2,784) | — | 11,674 | ||||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | — | — | 90 | 64 | — | — | 154 | ||||||||||||||||||||||||
| Net income (loss) available to common shareholders | $ | 13,563 | $ | 2,879 | $ | (217) | $ | (1,613) | $ | (2,784) | $ | — | $ | 11,828 | Nine Months Ended September 30, 2022 | CoRe Banking | Mortgage Banking | Professional Services | Edge Ventures | Financial Holding Company | Intercompany Eliminations | Consolidated | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||
| Interest income | $ | 84,858 | $ | 309 | $ | — | $ | — | $ | 113 | $ | (25) | $ | 85,255 | |||||||||||||||||
| Interest expense | 4,617 | — | 25 | — | 2,284 | (25) | 6,901 | ||||||||||||||||||||||||
| Net interest income (expense) | 80,241 | 309 | (25) | — | (2,171) | — | 78,354 | ||||||||||||||||||||||||
| Provision for loan losses | 11,500 | — | — | — | — | — | 11,500 | ||||||||||||||||||||||||
| Net interest income (expense) after provision for loan losses | 68,741 | 309 | (25) | — | (2,171) | — | 66,854 | ||||||||||||||||||||||||
| Noninterest income | 19,347 | 1,193 | 16,909 | 300 | 8,265 | (14,044) | 31,970 | ||||||||||||||||||||||||
| Noninterest Expenses: | |||||||||||||||||||||||||||||||
| Salaries and employee benefits | 28,810 | 8 | 11,425 | 2,248 | 12,769 | — | 55,260 | ||||||||||||||||||||||||
| Other expenses | 33,484 | 119 | 3,956 | 3,609 | 6,262 | (14,044) | 33,386 | ||||||||||||||||||||||||
| Total noninterest expenses | 62,294 | 127 | 15,381 | 5,857 | 19,031 | (14,044) | 88,646 | ||||||||||||||||||||||||
| Income (loss) before income taxes | 25,794 | 1,375 | 1,503 | (5,557) | (12,937) | — | 10,178 | ||||||||||||||||||||||||
| Income taxes | 5,219 | 356 | 375 | (1,265) | (2,524) | — | 2,161 | ||||||||||||||||||||||||
| Net income (loss) | 20,575 | 1,019 | 1,128 | (4,292) | (10,413) | — | 8,017 | ||||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | — | — | 194 | 327 | — | — | 521 | ||||||||||||||||||||||||
| Net income (loss) available to common shareholders | $ | 20,575 | $ | 1,019 | $ | 1,322 | $ | (3,965) | $ | (10,413) | $ | — | $ | 8,538 | |||||||||||||||||
| Nine Months Ended September 30, 2021 | CoRe Banking | Mortgage Banking | Professional Services | Edge Ventures | Financial Holding Company | Intercompany Eliminations | Consolidated | ||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||
| Interest income | $ | 60,078 | $ | 307 | $ | — | $ | — | $ | 2 | $ | (7) | $ | 60,380 | |||||||||||||||||
| Interest expense | 3,281 | — | 13 | — | 1,437 | (7) | 4,724 | ||||||||||||||||||||||||
| Net interest income (expense) | 56,797 | 307 | (13) | — | (1,435) | — | 55,656 | ||||||||||||||||||||||||
| Release of allowance for loan losses | (541) | (1) | — | — | — | — | (542) | ||||||||||||||||||||||||
| Net interest income (expense) after release of allowance for loan losses | 57,338 | 308 | (13) | — | (1,435) | — | 56,198 | ||||||||||||||||||||||||
| Noninterest income | 26,832 | 14,499 | 9,784 | 18 | 5,892 | (8,972) | 48,053 | ||||||||||||||||||||||||
| Noninterest Expenses: | |||||||||||||||||||||||||||||||
| Salaries and employee benefits | 24,170 | 47 | 7,099 | 1,054 | 9,730 | — | 42,100 | ||||||||||||||||||||||||
| Other expenses | 26,702 | (112) | 2,898 | 1,661 | 4,073 | (8,972) | 26,250 | ||||||||||||||||||||||||
| Total noninterest expenses | 50,872 | (65) | 9,997 | 2,715 | 13,803 | (8,972) | 68,350 | ||||||||||||||||||||||||
| Income (loss) before income taxes | 33,298 | 14,872 | (226) | (2,697) | (9,346) | — | 35,901 | ||||||||||||||||||||||||
| Income taxes | 6,060 | 3,606 | (76) | (694) | (1,890) | — | 7,006 | ||||||||||||||||||||||||
| Net income (loss) | 27,238 | 11,266 | (150) | (2,003) | (7,456) | — | 28,895 | ||||||||||||||||||||||||
| Net loss attributable to noncontrolling interest | — | — | 136 | 129 | — | — | 265 | ||||||||||||||||||||||||
| Net income (loss) attributable to parent | 27,238 | 11,266 | (14) | (1,874) | (7,456) | — | 29,160 | ||||||||||||||||||||||||
| Preferred stock dividends | — | — | — | — | 35 | — | 35 | ||||||||||||||||||||||||
| Net income (loss) available to common shareholders | $ | 27,238 | $ | 11,266 | $ | (14) | $ | (1,874) | $ | (7,491) | $ | — | $ | 29,125 |
Average Balances and Interest Rates
(Unaudited) (Dollars in thousands)
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2022 | June 30, 2022 | September 30, 2021 | ||||||||||||||||
| Average<br>Balance | Interest<br>Income/<br>Expense | Yield/<br>Cost | Average<br>Balance | Interest<br>Income/<br>Expense | Yield/<br>Cost | Average<br>Balance | Interest<br>Income/<br>Expense | Yield/<br>Cost | ||||||||||
| Assets | ||||||||||||||||||
| Interest-bearing balances with banks | $ | 32,552 | $ | 111 | 1.35 | % | $ | 197,613 | $ | 304 | 0.62 | % | $ | 184,131 | $ | 60 | 0.13 | % |
| CDs with banks | 232 | 2 | 3.42 | 1,582 | 9 | 2.28 | 11,065 | 52 | 1.86 | |||||||||
| Investment securities: | ||||||||||||||||||
| Taxable | 231,953 | 897 | 1.53 | 237,745 | 838 | 1.41 | 238,807 | 575 | 0.96 | |||||||||
| Tax-exempt 2 | 144,719 | 1,346 | 3.69 | 147,646 | 1,342 | 3.65 | 202,380 | 1,528 | 3.00 | |||||||||
| Loans and loans held-for-sale: 1 | ||||||||||||||||||
| Commercial 3 | 1,687,383 | 22,898 | 5.38 | 1,564,266 | 20,021 | 5.13 | 1,416,236 | 15,646 | 4.38 | |||||||||
| Tax-exempt 2 | 4,498 | 51 | 4.50 | 4,930 | 52 | 4.23 | 6,678 | 77 | 4.57 | |||||||||
| Real estate | 579,685 | 4,707 | 3.22 | 393,983 | 2,674 | 2.72 | 297,450 | 2,282 | 3.04 | |||||||||
| Consumer | 129,464 | 4,183 | 12.82 | 88,366 | 3,142 | 14.26 | 16,133 | 602 | 14.80 | |||||||||
| Total loans | 2,401,030 | 31,839 | 5.26 | 2,051,545 | 25,889 | 5.06 | 1,736,497 | 18,607 | 4.25 | |||||||||
| Total earning assets | 2,810,486 | 34,195 | 4.83 | 2,636,131 | 28,382 | 4.32 | 2,372,880 | 20,822 | 3.48 | |||||||||
| Less: Allowance for loan losses | (23,083) | (19,927) | (24,978) | |||||||||||||||
| Cash and due from banks | 5,399 | 5,579 | 5,922 | |||||||||||||||
| Other assets | 227,337 | 237,016 | 200,536 | |||||||||||||||
| Total assets | $ | 3,020,139 | $ | 2,858,799 | $ | 2,554,360 | ||||||||||||
| Liabilities | ||||||||||||||||||
| Deposits: | ||||||||||||||||||
| NOW | $ | 734,271 | $ | 1,393 | 0.75 | % | $ | 654,781 | $ | 256 | 0.16 | % | $ | 743,632 | $ | 333 | 0.18 | % |
| Money market checking | 258,527 | 422 | 0.65 | 380,295 | 184 | 0.19 | 433,216 | 211 | 0.19 | |||||||||
| Savings | 71,370 | 153 | 0.85 | 27,496 | 1 | 0.01 | 42,126 | — | — | |||||||||
| IRAs | 6,132 | 17 | 1.10 | 6,314 | 17 | 1.08 | 7,302 | 21 | 1.14 | |||||||||
| CDs | 202,299 | 988 | 1.94 | 75,487 | 203 | 1.08 | 121,482 | 333 | 1.09 | |||||||||
| Repurchase agreements and federal funds sold | 10,627 | 1 | 0.04 | 11,566 | 1 | 0.03 | 10,941 | 3 | 0.11 | |||||||||
| FHLB and other borrowings | 48,058 | 311 | 2.57 | 2,312 | 8 | 1.39 | 494 | 6 | 4.82 | |||||||||
| Subordinated debt | 73,190 | 772 | 4.18 | 73,126 | 760 | 4.17 | 44,460 | 481 | 4.29 | |||||||||
| Total interest-bearing liabilities | 1,404,474 | 4,057 | 1.15 | 1,231,377 | 1,430 | 0.47 | 1,403,653 | 1,388 | 0.39 | |||||||||
| Noninterest-bearing demand deposits | 1,321,982 | 1,331,357 | 852,872 | |||||||||||||||
| Other liabilities | 37,019 | 40,900 | 36,097 | |||||||||||||||
| Total liabilities | 2,763,475 | 2,603,634 | 2,292,622 | |||||||||||||||
| Stockholders’ equity | ||||||||||||||||||
| Common stock | 13,086 | 13,289 | 12,704 | |||||||||||||||
| Paid-in capital | 145,877 | 145,014 | 141,246 | |||||||||||||||
| Treasury stock | (16,741) | (16,741) | (16,741) | |||||||||||||||
| Retained earnings | 144,816 | 137,989 | 122,361 | |||||||||||||||
| Accumulated other comprehensive income (loss) | (30,915) | (25,097) | 1,207 | |||||||||||||||
| Total stockholders’ equity attributable to parent | 256,123 | 254,454 | 260,777 | |||||||||||||||
| Noncontrolling interest | 541 | 711 | 961 | |||||||||||||||
| Total stockholders’ equity | 256,664 | 255,165 | 261,738 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 3,020,139 | $ | 2,858,799 | $ | 2,554,360 | ||||||||||||
| Net interest spread (tax-equivalent) | 3.68 | % | 3.85 | % | 3.09 | % | ||||||||||||
| Net interest income and margin (tax-equivalent)2 | $ | 30,138 | 4.25 | % | $ | 26,952 | 4.10 | % | $ | 19,434 | 3.25 | % | ||||||
| Less: Tax-equivalent adjustments | $ | (292) | $ | (292) | $ | (338) | ||||||||||||
| Net interest spread | 3.64 | % | 3.80 | % | 3.03 | % | ||||||||||||
| Net interest income and margin | $ | 29,846 | 4.21 | % | $ | 26,660 | 4.06 | % | $ | 19,096 | 3.19 | % |
1 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.
2 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a Federal tax rate of 21% for the periods presented, which is a non-GAAP financial measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure following this table.
3 MVB Bank’s PPP loans totaling $20.1 million, $22.3 million and $147.3 million are included in this amount as of September 30, 2022, June 30, 2022 and September 30, 2021, respectively.
| Nine Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | |||||||||||
| Average<br>Balance | Interest<br>Income/<br>Expense | Yield/<br>Cost | Average<br>Balance | Interest<br>Income/<br>Expense | Yield/<br>Cost | |||||||
| Assets | ||||||||||||
| Interest-bearing balances with banks | $ | 273,184 | $ | 630 | 0.31 | % | $ | 207,195 | $ | 164 | 0.11 | % |
| CDs with banks | 1,381 | 24 | 2.32 | 11,554 | 168 | 1.94 | ||||||
| Investment securities: | ||||||||||||
| Taxable | 237,188 | 2,383 | 1.34 | 222,323 | 1,831 | 1.10 | ||||||
| Tax-exempt 2 | 140,377 | 3,824 | 3.64 | 207,529 | 4,881 | 3.14 | ||||||
| Loans and loans held-for-sale: 1 | ||||||||||||
| Commercial 3 | 1,569,161 | 59,899 | 5.10 | 1,365,680 | 45,905 | 4.49 | ||||||
| Tax-exempt 2 | 4,829 | 156 | 4.32 | 6,928 | 237 | 4.57 | ||||||
| Real estate | 438,380 | 9,722 | 2.97 | 303,701 | 7,509 | 3.31 | ||||||
| Consumer | 91,092 | 9,454 | 13.88 | 10,157 | 762 | 10.03 | ||||||
| Total loans | 2,103,462 | 79,231 | 5.04 | 1,686,466 | 54,413 | 4.31 | ||||||
| Total earning assets | 2,755,592 | 86,092 | 4.18 | 2,335,067 | 61,457 | 3.52 | ||||||
| Less: Allowance for loan losses | (20,468) | (25,920) | ||||||||||
| Cash and due from banks | 5,680 | 16,274 | ||||||||||
| Other assets | 237,637 | 201,198 | ||||||||||
| Total assets | $ | 2,978,441 | $ | 2,526,619 | ||||||||
| Liabilities | ||||||||||||
| Deposits: | ||||||||||||
| NOW | $ | 678,991 | $ | 1,844 | 0.36 | % | $ | 660,655 | $ | 1,323 | 0.27 | % |
| Money market checking | 367,608 | 807 | 0.29 | 461,998 | 662 | 0.19 | ||||||
| Savings | 49,714 | 155 | 0.42 | 44,938 | 4 | 0.01 | ||||||
| IRAs | 6,271 | 52 | 1.11 | 10,764 | 102 | 1.27 | ||||||
| CDs | 122,095 | 1,433 | 1.57 | 148,807 | 1,091 | 0.98 | ||||||
| Repurchase agreements and federal funds sold | 11,334 | 4 | 0.05 | 10,677 | 10 | 0.13 | ||||||
| FHLB and other borrowings | 16,966 | 322 | 2.54 | 33,914 | 95 | 0.37 | ||||||
| Subordinated debt | 73,126 | 2,284 | 4.18 | 43,786 | 1,437 | 4.39 | ||||||
| Total interest-bearing liabilities | 1,326,105 | 6,901 | 0.70 | 1,415,539 | 4,724 | 0.45 | ||||||
| Noninterest-bearing demand deposits | 1,350,533 | 828,469 | ||||||||||
| Other liabilities | 41,379 | 36,665 | ||||||||||
| Total liabilities | 2,718,017 | 2,280,673 | ||||||||||
| Stockholders’ equity | ||||||||||||
| Preferred stock | — | 774 | ||||||||||
| Common stock | 13,276 | 12,524 | ||||||||||
| Paid-in capital | 144,903 | 139,980 | ||||||||||
| Treasury stock | (16,741) | (16,741) | ||||||||||
| Retained earnings | 140,174 | 107,094 | ||||||||||
| Accumulated other comprehensive income (loss) | (21,905) | 1,788 | ||||||||||
| Total stockholders’ equity attributable to parent | 259,707 | 245,419 | ||||||||||
| Noncontrolling interest | 717 | 527 | ||||||||||
| Total stockholders’ equity | 260,424 | 245,946 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 2,978,441 | $ | 2,526,619 | ||||||||
| Net interest spread (tax-equivalent) | 3.48 | % | 3.07 | % | ||||||||
| Net interest income and margin (tax-equivalent)2 | $ | 79,191 | 3.84 | % | $ | 56,733 | 3.25 | % | ||||
| Less: Tax-equivalent adjustments | $ | (837) | $ | (1,077) | ||||||||
| Net interest spread | 3.44 | % | 3.01 | % | ||||||||
| Net interest income and margin | $ | 78,354 | 3.80 | % | $ | 55,656 | 3.19 | % |
1 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.
2 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a Federal tax rate of 21% for the periods presented, which is a non-GAAP financial measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure following this table.
3 MVB Bank’s PPP loans totaling $20.1 million and $147.3 million are included in this amount as of September 30, 2022 and September 30, 2021, respectively.
The following table reconciles, for the periods shown below, net interest margin on a fully tax-equivalent basis:
| Three Months Ended | Nine Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands) | September 30, 2022 | June 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||
| Net interest margin - U.S. GAAP basis | |||||||||||||||
| Net interest income | $ | 29,846 | $ | 26,660 | $ | 19,096 | $ | 78,354 | $ | 55,656 | |||||
| Average interest-earning assets | $ | 2,810,486 | $ | 2,636,131 | $ | 2,372,880 | 2,755,592 | 2,335,067 | |||||||
| Net interest margin | 4.21 | % | 4.06 | % | 3.19 | % | 3.80 | % | 3.19 | % | |||||
| Net interest margin - non-U.S. GAAP basis | |||||||||||||||
| Net interest income | $ | 29,846 | $ | 26,660 | $ | 19,096 | $ | 78,354 | $ | 55,656 | |||||
| Impact of fully tax-equivalent adjustment | 292 | 292 | 338 | 837 | 1,077 | ||||||||||
| Net interest income on a fully tax-equivalent basis | $ | 30,138 | $ | 26,952 | $ | 19,434 | 79,191 | 56,733 | |||||||
| Average interest-earning assets | $ | 2,810,486 | $ | 2,636,131 | $ | 2,372,880 | $ | 2,755,592 | $ | 2,335,067 | |||||
| Net interest margin on a fully tax-equivalent basis | 4.25 | % | 4.10 | % | 3.25 | % | 3.84 | % | 3.25 | % |
Selected Financial Data
(Unaudited) (Dollars in thousands, except per share data)
| Quarterly | Year-to-Date | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Third Quarter | Second Quarter | Third Quarter | |||||||||||||
| Earnings and Per Share Data: | |||||||||||||||
| Net income | $ | 2,718 | $ | 2,956 | $ | 11,828 | $ | 8,538 | $ | 29,160 | |||||
| Net income available to common shareholders | $ | 2,718 | $ | 2,956 | $ | 11,828 | $ | 8,538 | $ | 29,125 | |||||
| Earnings per share - basic | $ | 0.22 | $ | 0.24 | $ | 1.00 | $ | 0.70 | $ | 2.49 | |||||
| Earnings per share - diluted | $ | 0.21 | $ | 0.23 | $ | 0.92 | $ | 0.66 | $ | 2.32 | |||||
| Cash dividends paid per common share | $ | 0.17 | $ | 0.17 | $ | 0.14 | $ | 0.51 | $ | 0.36 | |||||
| Book value per common share | $ | 19.85 | $ | 20.63 | $ | 22.18 | $ | 19.85 | $ | 22.18 | |||||
| Tangible book value per common share 1 | $ | 19.38 | $ | 20.14 | $ | 21.64 | $ | 19.38 | $ | 21.64 | |||||
| Weighted-average shares outstanding - basic | 12,238,505 | 12,176,805 | 11,880,348 | 12,170,028 | 11,684,570 | ||||||||||
| Weighted-average shares outstanding - diluted | 12,854,951 | 12,895,581 | 12,824,309 | 12,852,574 | 12,565,809 | ||||||||||
| Performance Ratios: | |||||||||||||||
| Return on average assets 2 | 0.4 | % | 0.4 | % | 1.9 | % | 0.4 | % | 1.5 | % | |||||
| Return on average equity 2 | 4.2 | % | 4.6 | % | 18.1 | % | 4.4 | % | 15.8 | % | |||||
| Net interest margin 3 4 | 4.25 | % | 4.10 | % | 3.25 | % | 3.84 | % | 3.25 | % | |||||
| Efficiency ratio 5 | 78.8 | % | 77.3 | % | 62.9 | % | 80.4 | % | 65.9 | % | |||||
| Overhead ratio 2 6 | 4.0 | % | 4.2 | % | 4.0 | % | 4.0 | % | 3.6 | % | |||||
| Equity to assets | 7.8 | % | 8.5 | % | 9.5 | % | 7.8 | % | 9.5 | % | |||||
| Asset Quality Data and Ratios: | |||||||||||||||
| Charge-offs | $ | 3,653 | $ | 2,529 | $ | 98 | $ | 7,305 | $ | 363 | |||||
| Recoveries | $ | 2,313 | $ | 1,355 | $ | 23 | $ | 4,054 | $ | 248 | |||||
| Net loan charge-offs to total loans 2 7 | 0.2 | % | 0.2 | % | — | % | 0.2 | % | — | % | |||||
| Allowance for loan losses | $ | 26,515 | $ | 22,734 | $ | 25,187 | $ | 26,515 | $ | 25,187 | |||||
| Allowance for loan losses to total loans 8 | 1.07 | % | 1.03 | % | 1.43 | % | 1.07 | % | 1.43 | % | |||||
| Nonperforming loans | $ | 22,350 | $ | 19,295 | $ | 17,453 | $ | 22,350 | $ | 17,453 | |||||
| Nonperforming loans to total loans | 0.9 | % | 0.9 | % | 1.0 | % | 0.9 | % | 1.0 | % | |||||
| Intercoastal Mortgage Company, LLC Production Data9: | |||||||||||||||
| Mortgage pipeline | $ | 792,388 | $ | 1,114,061 | $ | 1,150,116 | $ | 792,388 | $ | 1,150,116 | |||||
| Loans originated | $ | 606,805 | $ | 976,004 | $ | 1,456,588 | $ | 2,713,508 | $ | 5,222,394 | |||||
| Loans closed | $ | 615,585 | $ | 843,305 | $ | 1,233,605 | $ | 2,239,732 | $ | 4,630,597 | |||||
| Loans sold | $ | 619,059 | $ | 692,553 | $ | 1,098,475 | $ | 1,999,706 | $ | 4,368,875 |
1 common equity less total goodwill and intangibles per common share, a non-U.S. GAAP measure
2 annualized for the quarterly periods presented
3 net interest income as a percentage of average interest-earning assets
4 presented on a fully tax-equivalent basis
5 noninterest expense as a percentage of net interest income and noninterest income, a non-U.S. GAAP measure
6 noninterest expense as a percentage of average assets, a non-U.S. GAAP measure
7 charge-offs less recoveries
8 excludes loans held-for-sale
9 information is related to ICM, an entity in which we have a 40% ownership interest that we account for as an equity method investment
Non-GAAP Reconciliation: Tangible Book Value per Common Share
(Unaudited) (Dollars in thousands, except per share data)
| September 30, 2022 | June 30, 2022 | September 30, 2021 | ||||
|---|---|---|---|---|---|---|
| Goodwill | $ | 3,988 | $ | 3,988 | $ | 3,988 |
| Intangibles | 1,806 | 1,981 | 2,518 | |||
| Total intangibles | 5,794 | 5,969 | 6,506 | |||
| Total equity attributable to parent | 243,913 | 252,300 | 265,565 | |||
| Less: Total intangibles | (5,794) | (5,969) | (6,506) | |||
| Tangible common equity | $ | 238,119 | $ | 246,331 | $ | 259,059 |
| Tangible common equity | $ | 238,119 | $ | 246,331 | $ | 259,059 |
| Common shares outstanding (000s) | 12,287 | 12,229 | 11,972 | |||
| Tangible book value per common share | $ | 19.38 | $ | 20.14 | $ | 21.64 |
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