Press Release

MVB Financial Corp. Reports Second Quarter 2018 Earnings Highlighted by 25.3% Increase in Net Income

Company Release - 7/30/2018 12:00 PM ET

FAIRMONT, W. Va.--(BUSINESS WIRE)-- MVB Financial Corp. (the “Company”) (NASDAQ: MVBF) reported net income of $2.8 million, or $0.25 basic and diluted earnings per share for the three months ended June 30, 2018, an increase of 25.3% compared to $2.3 million, or $0.21 basic and $0.20 diluted earnings per share, for the same period in 2017.

For the three months ended June 30, 2018, loans increased $57.9 million, or 5.0%, to $1.2 billion, from March 31, 2018, which represents an annualized increase of 20.0%. The increase in loans has been driven by strong growth in MVB’s West Virginia markets, expansion in Northern Virginia, as well as the strategic addition of commercial lenders throughout its markets. In addition to the increase in loan volume during the quarter, loan yields increased 20 basis points. The Company continues to take advantage of industry consolidation while capitalizing on disruptions in the market to expand both the lending and deposit teams. These teams have extensive experience and relationships in MVB’s selected markets.

MANAGEMENT OVERVIEW
“When you look at the five phases of the banking industry’s most important measures, MVB is firing on all cylinders,” said Larry F. Mazza, CEO and President, MVB Financial. “A wise banker once told me, ‘The trend is your friend.’ The five trends from June 2017 to June 2018 are loan growth of 10%; NIB deposit growth of 35%; service charge income growth is 32%; capital is up 13%; and asset quality is excellent. When you look at all five phases, we expect the positive trend for MVB to continue throughout 2018.”

Mazza continued, “For the first half of the year, we saw an increase in borrowing to fund loan growth. In the second half of year, we are targeting deposit growth driven by our fintech and specialty deposit strategies.

“In the fintech world we see four ways to compete. One is client facing; we provide convenience through technology for our clients. The second is the efficiency vertical where we improve our clients’ banking experience in areas such as loan processing or check processing, all in a more efficient way developed by financial technology. The third is to invest in fintech. An example is our investment in BillGO, a payment processor based in Fort Collins, Colo. Because of our BillGO partnership, MVB was recently a runner up in Bank Director’s 2018 Best of FinXTech Awards. Partnerships such as this also provide an important source of new business referrals. Fourth and probably most important to us is being ‘The Bank of Fintech.’ We want to be a ‘one-stop payment shop’ building out our technical expertise in the payment stack.”

SECOND QUARTER 2018 HIGHLIGHTS

  • Loans of $1.2 billion as of June 30, 2018, increased $57.9 million, or 5.0%, from March 31, 2018, and increased $112.7 million, or 10.2%, from June 30, 2017.
  • Assets of $1.7 billion as of June 30, 2018, increased $103.9 million, or 6.6%, from March 31, 2018, and increased $178.4 million, or 11.8%, from June 30, 2017.
  • Deposits of $1.2 billion as of June 30, 2018, increased $42.0 million, or 3.6%, from March 31, 2018, and increased $96.3 million, or 8.8% from June 30, 2017. Noninterest-bearing deposits of $164.0 million increased $21.2 million, or 14.8%, from March 31, 2018, and increased $42.6 million, or 35.1%, from June 30, 2017.
  • MVB reported improvements in return on average assets, return on average equity, net interest margin, and efficiency ratio.
  • Net interest income of $12.7 million for the quarter ended June 30, 2018, increased $1.2 million, or 10.4%, from the quarter ended March 31, 2018, and increased $1.8 million, or 16.2% from the quarter ended June 30, 2017.
  • Noninterest income of $10.8 million for the quarter ended June 30, 2018, increased $1.8 million, or 19.4%, from the quarter ended March 31, 2018, and decreased $772 thousand, or 6.7%, from the quarter ended June 30, 2017.
  • $12.7 million of subordinated debt converted to common stock, which caused the issuance of 795,500 new shares and will provide an annual interest expense savings of $905 thousand.

LOANS
Loans totaled $1.2 billion as of June 30, 2018, an increase of $57.9 million, or 5.0%, from March 31, 2018, and an increase of $112.7 million, or 10.2%, from June 30, 2017. The growth in loans is primarily attributable to organic growth and the addition of commercial lenders within the Company’s primary lending areas. The yield on loans was 4.88% as of the quarter ended June 30, 2018, an increase of 20 basis points from the quarter ended March 31, 2018, and an increase of 38 basis points from the quarter ended June 30, 2017. The increase in yields is driven both by Fed rate increases and a commercial focus on increasing loan yields. In connection with the Company’s core conversion in 2017, the Company implemented a CRM system that has provided better insight on loan pricing.

DEPOSITS
Deposits totaled $1.2 billion as of June 30, 2018, and increased $42.0 million, or 3.6%, from March 31, 2018, while increasing $96.3 million, or 8.8%, from June 30, 2017. Noninterest-bearing deposits totaled $164.0 million as of June 30, 2018, or 13.7%, of the total deposit base, an increase of $21.2 million, or 14.8%, from March 31, 2018, and an increase of $42.6 million, or 35.1%, from June 30, 2017. Noninterest-bearing deposits remain a core funding source for the Company. Management will continue to concentrate on balancing deposit growth with adequate net interest margin to meet strategic goals.

NET INTEREST INCOME
Net interest income for the quarter ended June 30, 2018, was $12.7 million, an increase of $1.2 million, or 10.4%, from the quarter ended March 31, 2018, and an increase of $1.8 million, or 16.2% from the quarter ended June 30, 2017. Net interest margin for the quarter ended June 30, 2018 was 3.38%, an increase of 9 basis points versus the quarter ended March 31, 2018, and an increase of 7 basis points versus the quarter ended June 30, 2017.

Interest expense increased 19.5% during the quarter ended June 30, 2018, compared to the quarter ended March 31, 2018, due to an increase of 14 basis points in the cost of interest-bearing liabilities, and increased 46.9% compared to the quarter ended June 30, 2017, due to an increase of 31 basis points in the cost of interest-bearing liabilities. The increase in the cost of interest-bearing liabilities compared to the quarter ended June 30, 2017, was the result of an $85.3 million increase in the average balances of FHLB and other borrowings, as well as a $1.2 million increase in the related interest expense.

In June 2018, subordinated debt in the amount of $12.7 million was converted into 795,500 shares of common stock. As a result of the conversions, the Company will save $905 thousand annually in interest expense.

ASSET QUALITY
Provision for loan loss was $605 thousand for the quarter ended June 30, 2018, an $82 thousand increase from the quarter ended June 30, 2017, due to a 10.2% increase in loans. The increase in loan loss provision is attributable to increased loan volume for the quarter ended June 30, 2018, compared to the quarter ended June 30, 2017, as well as lower historical loss rates for the period used to determine the allowance. Nonperforming loans increased $4.3 million, to 0.78%, of total loans as of June 30, 2018, compared to 0.79% of total loans as of March 31, 2018, and compared to 0.46% of total loans as of June 30, 2017. In addition, net charge-offs for the quarter ended June 30, 2018, decreased $126 thousand compared to the quarter ended June 30, 2017, resulting in an annualized net loan charge-offs to total loans ratio of 0.01% as of June 30, 2018.

NONINTEREST INCOME
Noninterest income totaled $10.8 million for the quarter ended June 30, 2018, an increase of $1.8 million, or 19.4%, from the quarter ended March 31, 2018, and a decrease of $772 thousand, or 6.7%, from the quarter ended June 30, 2017.

The $1.8 million increase in noninterest income from the quarter ended March 31, 2018, was due to an increase of $2.5 million in mortgage fee income. The increase was partially offset by a decrease of $413 thousand in commercial swap fee income, a decrease of $326 thousand in gain on sale of securities and a decrease of $212 thousand in gain on sale of portfolio loans. The increase in mortgage fee income was primarily the result of a $98.2 million increase in sold loan volume.

The $772 thousand decrease in noninterest income from the quarter ended June 30, 2017, was primarily due to a $384 thousand decrease in gain on derivatives, along with decreases of $270 thousand in commercial swap fees, $203 thousand in gain on sale of portfolio loans and $167 thousand in gain on sale of securities, all of which were partially offset by an increase of $111 thousand in mortgage fee income and an increase of $116 thousand in service charges on deposit accounts. The decrease in gain on derivatives was primarily the result of a decrease of $1.4 million in the valuation of open trades used to hedge the derivative asset.

NONINTEREST EXPENSE
Noninterest expense totaled $19.2 million for the quarter ended June 30, 2018, an increase of $2.5 million, or 15.0%, from the quarter ended March 31, 2018, and an increase of $746 thousand, or 4.0%, from the quarter ended June 30, 2017.

The $2.5 million increase in noninterest expense from the quarter ended March 31, 2018, was primarily due to an increase of $2.0 million in salaries and employee benefits expense, a $127 thousand increase in data processing and communications and a $100 thousand increase in mortgage processing expense. The increase in salaries and employee benefits expense was largely driven by the addition of senior management, lenders, a treasury team and the opening of two new branches in 2017. The $746 thousand increase in noninterest expense from the quarter ended June 30, 2017, was primarily due to an increase of $696 thousand in salaries and employee benefits expense.

DIVIDEND
As previously announced on May 16, 2018, the Company declared a quarterly cash dividend of $0.025 per share to shareholders of record at the close of business on June 1, 2018, payable June 15, 2018. This was the second quarterly dividend for 2018 and was equal to the March 2018 payout of $0.025 per share.

About MVB Financial Corp.

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

MVB is a financial holding company headquartered in Fairmont, W.Va. Through its subsidiary, MVB Bank, Inc., and the bank’s subsidiary, MVB Mortgage, the company provides financial services to individuals and corporate clients in the Mid-Atlantic region.

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 Corp. 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 Earnings Release. These forward-looking statements are based on current expectations about the future and subject to risks and uncertainties. Forward-looking statements include information concerning possible or assumed future results of operations of the Company and its subsidiaries. When words such as “believes,” “expects,” “anticipates,” “may,” or similar expressions occur in this Earnings Release, the Company is making forward-looking statements. 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 the forward-looking statements contained in this Earnings Release. Those factors include, but are not limited to: credit risk, changes in market interest rates, inability to achieve merger-related synergies, competition, economic downturn or recession and government regulation and supervision. Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as well as its other filings with the SEC, which are available on the SEC website at www.sec.gov. Except as required by law, the Company undertakes no obligation to update or revise 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 Securities and Exchange Commission. 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, Executive Vice President and CFO
(304) 598-3500
drobinson@mvbbanking.com

 

MVB Financial Corp.

Financial Highlights

 
Condensed Consolidated Statements of Income

(Unaudited) (Dollars in thousands, except per share data)

       
Quarterly     Year-to-Date

2018

    2018     2017     2017     2017

Six Months
Ended
June 30,
2018

   

Six Months
Ended
June 30,
2017

 

Second
Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

Second
Quarter

Interest income $ 16,944 $ 15,054 $ 15,086 $ 14,630 $ 13,814 $ 31,998 $ 26,882
Interest expense 4,289   3,589   3,403   3,216   2,920   7,878   5,682
Net interest income 12,655 11,465 11,683 11,414 10,894 24,120 21,200
Provision for loan losses 605 474 1,036 96 523 1,079 1,041
Noninterest income 10,795 9,039 10,157 10,158 11,567 19,834 20,391
Noninterest expense 19,249   16,739   17,714   17,966   18,503   35,988   34,820
Income before income taxes 3,596 3,291 3,090 3,510 3,435 6,887 5,730
Income tax expense 765   697   1,667   1,192   1,175   1,462   1,896
Net income $ 2,831   $ 2,594   $ 1,423   $ 2,318   $ 2,260   $ 5,425   $ 3,834
Preferred dividends 122 121 124 123 122 243 251
Net income available to common shareholders $ 2,709   $ 2,473   $ 1,299   $ 2,195   $ 2,138   $ 5,182   $ 3,583
 
Earnings per share - basic $ 0.25 $ 0.24 $ 0.12 $ 0.21 $ 0.21 $ 0.49 $ 0.35
Earnings per share - diluted $ 0.25 $ 0.23 $ 0.12 $ 0.21 $ 0.20 $ 0.47 $ 0.35
 
Condensed Consolidated Balance Sheets

(Unaudited) (Dollars in thousands)

                       
          June 30, 2018 March 31, 2018 December 31, 2017 June 30, 2017
Cash and cash equivalents $ 23,950 $ 23,630 $ 20,305 $ 17,805
Certificates of deposit with other banks 14,778 14,778 14,778 14,527
Investment securities 229,054 233,483 231,507 175,110
Loans held for sale 98,799 51,280 66,794 107,825
Loans 1,215,072 1,157,173 1,105,941 1,102,378
Allowance for loan losses (10,651 ) (10,067 ) (9,878 ) (9,748 )
Net loans 1,204,421 1,147,106 1,096,063 1,092,630
Premises and equipment 26,418 26,477 26,686 27,462
Goodwill 18,480 18,480 18,480 18,480
Other assets 69,519   66,284   59,689   53,214  
Total assets $ 1,685,419   $ 1,581,518   $ 1,534,302   $ 1,507,053  
 
Deposits $ 1,195,868 $ 1,153,907 $ 1,159,580 $ 1,099,608
Borrowed funds 266,830 207,370 152,169 189,384
Other liabilities 56,926 69,820 72,361 71,227

Shareholders’ equity

165,795   150,421   150,192   146,834  

Total liabilities and shareholders’ equity

$ 1,685,419   $ 1,581,518   $ 1,534,302   $ 1,507,053  
 
 
Reportable Segments

(Unaudited)

 
Three Months Ended June 30, 2018    

Commercial &
Retail Banking

 

Mortgage
Banking

 

Financial
Holding
Company

 

Intercompany
Eliminations

  Consolidated
(Dollars in thousands)
Revenues:
Interest income $ 15,426 $ 1,772 $ 1 $ (255 ) $ 16,944
Mortgage fee income 154 9,152 (243 ) 9,063
Other income 1,068   706   1,489   (1,531 ) 1,732
Total operating income 16,648   11,630   1,490   (2,029 ) 27,739
Expenses:
Interest expense 3,164 1,081 542 (498 ) 4,289
Salaries and employee benefits 3,884 6,826 1,784 12,494
Provision for loan losses 625 (20 ) 605
Other expense 4,968   2,296   1,022   (1,531 ) 6,755
Total operating expenses 12,641   10,183   3,348   (2,029 ) 24,143
Income (loss) before income taxes 4,007 1,447 (1,858 ) 3,596
Income tax expense (benefit) 832   373   (440 )   765
Net income (loss) $ 3,175   $ 1,074   $ (1,418 ) $   $ 2,831
Preferred stock dividends 122 122
Net income (loss) available to common shareholders $ 3,175   $ 1,074   $ (1,540 ) $   $ 2,709
 
 
Three Months Ended March 31, 2018

Commercial &
Retail Banking

Mortgage
Banking

Financial
Holding
Company

Intercompany
Eliminations

Consolidated
(Dollars in thousands)
Revenues:
Interest income $ 13,838 $ 1,335 $ 1 $ (120 ) $ 15,054
Mortgage fee income 140 6,673 (250 ) 6,563
Other income 1,780   517   1,553   (1,374 ) 2,476
Total operating income 15,758   8,525   1,554   (1,744 ) 24,093
Expenses:
Interest expense 2,674 727 558 (370 ) 3,589
Salaries and employee benefits 3,569 5,416 1,488 10,473
Provision for loan losses 417 57 474
Other expense 4,559   2,122   959   (1,374 ) 6,266
Total operating expenses 11,219   8,322   3,005   (1,744 ) 20,802
Income (loss) before income taxes 4,539 203 (1,451 ) 3,291
Income tax expense (benefit) 978   53   (334 )   697
Net income (loss) $ 3,561   $ 150   $ (1,117 ) $   $ 2,594
Preferred stock dividends 121 121
Net income (loss) available to common shareholders $ 3,561   $ 150   $ (1,238 ) $   $ 2,473
 
                   
Three Months Ended June 30, 2017

Commercial &
Retail Banking

Mortgage
Banking

Financial
Holding
Company

Intercompany
Eliminations

Consolidated
(Dollars in thousands)
Revenues:
Interest income $ 12,907 $ 1,073 $ 1 $ (167 ) $ 13,814
Mortgage fee income 188 8,937 (173 ) 8,952
Other income 1,529   1,137   1,307   (1,358 ) 2,615
Total operating income 14,624   11,147   1,308   (1,698 ) 25,381
Expenses:
Interest expense 2,168 534 558 (340 ) 2,920
Salaries and employee benefits 3,267 7,147 1,384 11,798
Provision for loan losses 467 56 523
Other expense 5,065   2,044   954   (1,358 ) 6,705
Total operating expenses 10,967   9,781   2,896   (1,698 ) 21,946
Income (loss) before income taxes 3,657 1,366 (1,588 ) 3,435
Income tax expense (benefit) 1,165   540   (530 )   1,175
Net income (loss) $ 2,492   $ 826   $ (1,058 ) $   $ 2,260
Preferred stock dividends 122 122
Net income (loss) available to common shareholders $ 2,492   $ 826   $ (1,180 ) $   $ 2,138
 
 
Six Months Ended June 30, 2018

Commercial &
Retail Banking

Mortgage
Banking

Financial
Holding
Company

Intercompany
Eliminations

Consolidated
(Dollars in thousands)
Revenues:
Interest income $ 29,265 $ 3,107 $ 2 $ (376 ) $ 31,998
Mortgage fee income 292 15,825 (491 ) 15,626
Other income 2,848   1,223   3,043   (2,906 ) 4,208
Total operating income 32,405   20,155   3,045   (3,773 ) 51,832
Expenses:
Interest expense 5,838 1,808 1,100 (868 ) 7,878
Salaries and employee benefits 7,453 12,242 3,272 22,967
Provision for loan losses 1,042 37 1,079
Other expense 9,527   4,418   1,981   (2,905 ) 13,021
Total operating expenses 23,860   18,505   6,353   (3,773 ) 44,945
Income (loss) before income taxes 8,545 1,650 (3,308 ) 6,887
Income tax expense (benefit) 1,810   426   (774 )   1,462
Net income (loss) $ 6,735   $ 1,224   $ (2,534 ) $   $ 5,425
Preferred stock dividends 243 243
Net income (loss) available to common shareholders $ 6,735   $ 1,224   $ (2,777 ) $   $ 5,182
 
                   
Six Months Ended June 30, 2017

Commercial &
Retail Banking

Mortgage
Banking

Financial
Holding
Company

Intercompany
Eliminations

Consolidated
(Dollars in thousands)
Revenues:
Interest income $ 25,218 $ 1,854 $ 2 $ (192 ) $ 26,882
Mortgage fee income 373 18,574 (361 ) 18,586
Other income 2,609   (694 ) 2,518   (2,628 ) 1,805
Total operating income 28,200   19,734   2,520   (3,181 ) 47,273
Expenses:
Interest expense 4,288 838 1,109 (553 ) 5,682
Salaries and employee benefits 5,924 13,101 2,735 21,760
Provision for loan losses 967 74 1,041
Other expense 9,716   4,143   1,829   (2,628 ) 13,060
Total operating expenses 20,895   18,156   5,673   (3,181 ) 41,543
Income (loss) before income taxes 7,305 1,578 (3,153 ) 5,730
Income tax expense (benefit) 2,326   636   (1,066 )   1,896
Net income (loss) $ 4,979   $ 942   $ (2,087 ) $   $ 3,834
Preferred stock dividends 251 251
Net income (loss) available to common shareholders $ 4,979   $ 942   $ (2,338 ) $   $ 3,583
 
 
Average Balances and Interest Rates

(Unaudited) (Dollars in thousands)

 
   

Three Months Ended
June 30, 2018

   

Three Months Ended
March 31, 2018

   

Three Months Ended
June 30, 2017

 

Average
Balance

   

Interest
Income/
Expense

   

Yield/
Cost

Average
Balance

   

Interest
Income/
Expense

   

Yield/
Cost

Average
Balance

   

Interest
Income/
Expense

   

Yield/
Cost

Assets
Interest-bearing deposits in banks $ 3,473 $ 17 1.96 % $ 3,883 $ 18 1.83 % $ 3,277 $ 12 1.47 %
CDs with other banks 14,778 74 2.02 14,778 72 1.97 14,456 70 1.94
Investment securities:
Taxable 151,224 891 2.36 154,430 895 2.35 119,553 645 2.16
Tax-exempt 81,164 717 3.54 75,556 655 3.51 53,733 418 3.12
Loans and loans held for sale: 1
Commercial 831,118 10,318 4.98 775,764 8,943 4.68 725,707 8,170 4.52
Tax exempt 14,260 123 3.46 14,464 123 3.46 15,263 131 3.44
Real estate 394,814 4,656 4.73 360,744 4,190 4.71 373,353 4,201 4.51
Consumer 11,850   148   5.00   12,517   158   5.11   13,817   167   4.85  
Total loans

1,252,042

  15,245   4.88   1,163,489   13,414   4.68   1,128,140   12,669   4.50  
Total earning assets 1,502,681   16,944   4.52   1,412,136   15,054   4.32   1,319,159   13,814   4.20  
Less: Allowance for loan losses (10,132 ) (9,987 ) (9,734 )
Cash and due from banks 16,792 15,966 15,407
Other assets 107,421   102,645   100,205  
Total assets $ 1,616,762   $ 1,520,760   $ 1,425,037  
 
Liabilities
Deposits:
NOW $

459,784

$ 846 0.74 $ 443,784 $ 762 0.70 $ 432,729 $ 603 0.56
Money market checking 229,763 484 0.85 241,472 443 0.74 237,173 432 0.73
Savings 46,478 7 0.06 46,544 20 0.17 48,590 20 0.17
IRAs 17,997 69 1.54 17,691 62 1.43 16,282 53 1.31
CDs 275,004 1,124 1.64 269,286 1,011 1.52 256,887 855 1.33
Repurchase agreements and federal funds sold 20,118 20 0.39 20,605 19 0.37 21,268 19 0.36
FHLB and other borrowings 226,487 1,197 2.12 160,205 714 1.81 112,385 380 1.36
Subordinated debt 32,015   542   6.79   33,524   558   6.75   33,524   558   6.68  
Total interest-bearing liabilities 1,307,646   4,289   1.32   1,233,111   3,589   1.18   1,158,838   2,920   1.01  
Noninterest bearing demand deposits 146,135 129,385 114,974
Other liabilities 9,890   8,673   7,698  
Total liabilities 1,463,671   1,371,169   1,281,510  
 
Stockholders’ equity
Preferred stock 7,834 7,834 7,834
Common stock 10,686 10,525 10,375
Paid-in capital 101,577 99,110 96,986
Treasury stock (1,084 ) (1,084 ) (1,084 )
Retained earnings 41,277 38,004 32,764
Accumulated other comprehensive income (7,199 ) (4,798 ) (3,348 )
Total stockholders’ equity 153,091   149,591   143,527  
Total liabilities and stockholders’ equity $ 1,616,762   $ 1,520,760   $ 1,425,037  
 
Net interest spread 3.20 3.14 3.19
Net interest income-margin $ 12,655   3.38 % $ 11,465   3.29 % $ 10,894   3.31 %
 

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

 
 
Average Balances and Interest Rates

(Unaudited) (Dollars in thousands)

 
   

Six Months Ended
June 30, 2018

   

Six Months Ended
June 30, 2017

 

Average
Balance

   

Interest
Income/
Expense

   

Yield/
Cost

Average
Balance

   

Interest
Income/
Expense

   

Yield/
Cost

Assets
Interest-bearing deposits in banks $ 3,677 $ 35 1.94 % $ 3,007 $ 21 1.41 %
CDs with other banks 14,778 146 1.99 14,491 140 1.95
Investment securities:
Taxable 152,818 1,786 2.36 114,237 1,191 2.10
Tax-exempt 78,375 1,372 3.53 54,999 848 3.11
Loans and loans held for sale: 1
Commercial

803,593

19,261 4.83 735,979 16,113 4.41
Tax exempt 14,362 246 3.46 15,296 262 3.45
Real estate 378,095 8,846 4.72 362,807 7,965 4.43
Consumer 12,182   306   5.07   14,092   342   4.89  
Total loans 1,208,232   28,659   4.78   1,128,174   24,682   4.41  
Total earning assets 1,457,880   31,998   4.43   1,314,908   26,882   4.12  
Less: Allowance for loan losses (10,059 ) (9,581 )
Cash and due from banks 16,381 15,327
Other assets

104,401

  93,248  
Total assets $ 1,568,603   $ 1,413,902  
 
Liabilities
Deposits:
NOW $ 451,828 $ 1,608 0.72 $ 424,225 $ 1,126 0.54
Money market checking 235,586 927 0.79 237,010 891 0.76
Savings 46,511 27 0.12 48,342 40 0.17
IRAs 17,845 131 1.48 16,426 103 1.26
CDs 272,160 2,135 1.58 260,735 1,709 1.32
Repurchase agreements and federal funds sold 20,360 39 0.38 22,186 36 0.33
FHLB and other borrowings 193,529 1,911 1.99 108,210 668 1.24
Subordinated debt 32,766   1,100   6.77   33,524   1,109   6.67  
Total interest-bearing liabilities 1,270,585   7,878   1.25   1,150,658   5,682   1.00  
Noninterest bearing demand deposits 137,383 114,003
Other liabilities

9,284

  8,459  
Total liabilities

1,417,252

  1,273,120  
 
Stockholders’ equity
Preferred stock 7,834 8,022
Common stock 10,606 10,212
Paid-in capital 100,350 95,240
Treasury stock (1,084 ) (1,084 )
Retained earnings 39,650 32,211
Accumulated other comprehensive income (6,005 ) (3,819 )
Total stockholders’ equity 151,351   140,782  
Total liabilities and stockholders’ equity $ 1,568,603   $ 1,413,902  
 
Net interest spread 3.18 3.13
Net interest income-margin $ 24,120   3.34 % $ 21,200   3.25 %
 

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

 
 
Selected Financial Data

(Unaudited) (Dollars in thousands, except per share data)

 
    Quarterly     Year-to-Date
2018     2018     2017     2017     2017   2018     2017
 

Second
Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

Second
Quarter

Earnings and Per Share Data:
Net income $ 2,831 $ 2,594 $ 1,423 $ 2,318 $ 2,260 $ 5,425 $ 3,834
Net income available to common shareholders 2,709 2,473 1,299 2,195 2,138 5,182 3,583
Earnings per share - basic 0.25 0.24 0.12 0.21 0.21 0.49 0.35
Earnings per share - diluted 0.25 0.23 0.12 0.21 0.20 0.47 0.35
Cash dividends paid per common share 0.025 0.025 0.025 0.025 0.025 0.05 0.05
Book value per common share 13.93 13.53 13.63 13.51 13.31 13.93 13.31
Weighted average shares outstanding - basic 10,634,805 10,474,138 10,444,627 10,443,443 10,343,933 10,554,916 10,171,198
Weighted average shares outstanding - diluted 11,502,148 12,714,353 10,823,994 12,410,070 12,181,433 10,941,671 10,172,254
 
Performance Ratios:
Return on average assets 1 0.70 % 0.68 % 0.38 % 0.63 % 0.63 % 0.69 % 0.54 %
Return on average equity 1 7.40 % 6.94 % 3.79 % 6.28 % 6.30 % 7.17 % 5.45 %
Net interest margin 2 3.38 % 3.29 % 3.29 % 3.37 % 3.31 % 3.34 % 3.25 %
Efficiency ratio 3 82.09 % 81.64 % 81.11 % 83.28 % 82.38 % 81.88 % 83.72 %
Overhead ratio 1 4 4.76 % 4.40 % 4.69 % 4.87 % 5.19 % 4.59 % 4.93 %
 
Asset Quality Data and Ratios:
Charge-offs $ 29 $ 356 $ 572 $ 472 $ 163 $ 385 $ 453
Recoveries 8 71 18 24 16 79 59
Net loan charge-offs to total loans 1 5 0.01 % 0.10 % 0.20 % 0.16 % 0.05 % 0.05 % 0.07 %
Allowance for loan losses 10,651 10,067 9,878 9,396 9,748 10,651 9,748
Allowance for loan losses to total loans 6 0.88 % 0.87 % 0.89 % 0.86 % 0.88 % 0.88 % 0.88 %
Nonperforming loans 9,419 9,102 9,699 6,559 5,103 9,419 5,103
Nonperforming loans to total loans 0.78 % 0.79 % 0.88 % 0.60 % 0.46 % 0.78 % 0.46 %
 
Capital Ratios:
Equity to assets 9.84 % 9.51 % 9.79 % 10.12 % 9.74 % 9.84 % 9.74 %
Leverage ratio 9.90 % 9.50 % 9.27 % 9.41 % 9.59 % 9.90 % 9.59 %
Common equity Tier 1 capital ratio 11.28 % 10.60 % 10.55 % 10.76 % 10.32 % 11.28 % 10.32 %
Tier 1 risk-based capital ratio 12.20 % 11.57 % 11.54 % 11.79 % 11.33 % 12.20 % 11.33 %
Total risk-based capital ratio 14.34 % 14.80 % 14.87 % 15.18 % 14.66 % 14.34 % 14.66 %
 

1 annualized for the quarterly periods presented

2 net interest income as a percentage of average interest earning assets

3 noninterest expense as a percentage of net interest income and noninterest income

4 noninterest expense as a percentage of average assets

5 charge-offs less recoveries

6 excludes loans held for sale

MVB Financial Corp.
Amy Baker, 844-682-2265
VP, Corporate Communications
abaker@mvbbanking.com

Source: MVB Financial Corp.

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