Press Release

MVB Financial Corp. Reports Third Quarter 2018 Earnings Highlighted by 54.4% Increase in Net Income and 98.2% Increase in Noninterest-Bearing Deposits

Company Release - 10/29/2018 4:15 PM ET

FAIRMONT, W.Va.--(BUSINESS WIRE)-- MVB Financial Corp. (the “Company”) (NASDAQ: MVBF) reported net income of $3.6 million, or $0.30 basic and $0.29 diluted earnings per share for the three months ended September 30, 2018, an increase of 54.4% compared to $2.3 million, or $0.21 basic and diluted earnings per share, for the same period in 2017.

Noninterest-bearing deposits increased $76.9 million, or 46.9%, from June 30, 2018, and increased $119.3 million, or 98.2%, from September 30, 2017, to a balance of $240.8 million as of September 30, 2018. The growth in noninterest-bearing deposits was primarily driven by MVB's strategy to focus on Fintech and specialty deposits. As of September 30, 2018, noninterest-bearing deposits were 17.46% of total deposits, compared to 13.71% as of June 30, 2018, and 10.43% as of September 30, 2017.

For the three months ended September 30, 2018, loans increased $81.4 million, or 6.7%, to $1.3 billion, from June 30, 2018, which represents an annualized increase of 26.8%. 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 9 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

“Building on MVB’s strong Second Quarter performance, our Third Quarter 2018 earnings from continuing operations are up 26 percent from last quarter, our new record high. MVB’s significant expansion in noninterest bearing deposits, as well as the strong economies in West Virginia and Northern Virginia are driving our growth,” said Larry F. Mazza, CEO and President, MVB Financial.

“After a three and a half year journey, MVB’s Fintech strategy hit a tipping point this year; the results are starting to show up on our balance sheet and income statement. The robust Fintech industry is just heating up, and we expect to continue to expand that vertical.”

THIRD QUARTER 2018 HIGHLIGHTS

  • Loans of $1.3 billion as of September 30, 2018, increased $81.4 million, or 6.7%, from June 30, 2018, and increased $202.0 million, or 18.5%, from September 30, 2017.
  • Assets of $1.7 billion as of September 30, 2018, increased $37.7 million, or 2.2%, from June 30, 2018, and increased $251.5 million, or 17.1%, from September 30, 2017.
  • Deposits of $1.4 billion as of September 30, 2018, increased $183.3 million, or 15.3%, from June 30, 2018, and increased $214.0 million, or 18.4% from September 30, 2017. Noninterest-bearing deposits of $240.8 million increased $76.9 million, or 46.9%, from June 30, 2018, and increased $119.3 million, or 98.2%, from September 30, 2017.
  • Net interest income of $13.5 million for the quarter ended September 30, 2018, increased $869 thousand, or 6.9%, from the quarter ended June 30, 2018, and increased $2.1 million, or 18.5% from the quarter ended September 30, 2017. Net interest margin of 3.43% for the quarter ended September 30, 2018, increased 5 basis points versus the quarter ended June 30, 2018, and increased 6 basis points versus the quarter ended September 30, 2017.
  • Noninterest income of $10.5 million for the quarter ended September 30, 2018, decreased $284 thousand, or 2.6%, from the quarter ended June 30, 2018, and increased $353 thousand, or 3.5%, from the quarter ended September 30, 2017.
  • $2.3 million of subordinated debt converted to common stock, which caused the issuance of 142,000 new shares and will provide an annual interest expense savings of $170 thousand.

LOANS

Loans totaled $1.3 billion as of September 30, 2018, an increase of $81.4 million, or 6.7%, from June 30, 2018, and an increase of $202.0 million, or 18.5%, from September 30, 2017. The growth in loans is attributable to organic growth and the addition of commercial lenders within the Company’s primary lending areas. The yield on loans was 4.97% as of the quarter ended September 30, 2018, an increase of 9 basis points from the quarter ended June 30, 2018, and an increase of 31 basis points from the quarter ended September 30, 2017. The increase in yields is driven both by Fed rate increases and a commercial focus on increasing loan yields.

DEPOSITS

Deposits totaled $1.4 billion as of September 30, 2018, and increased $183.3 million, or 15.3%, from June 30, 2018, while increasing $214.0 million, or 18.4%, from September 30, 2017. Noninterest-bearing deposits totaled $240.8 million as of September 30, 2018, or 17.5%, of the total deposit base, an increase of $76.9 million, or 46.9%, from June 30, 2018, and an increase of $119.3 million, or 98.2%, from September 30, 2017. Noninterest-bearing deposits remain a core funding source for the Company. Of the $240.8 million, noninterest-bearing balances of $100.6 million are related to Fintech and Title business opportunities.

NET INTEREST INCOME

Net interest income for the quarter ended September 30, 2018, was $13.5 million, an increase of $869 thousand, or 6.9%, from the quarter ended June 30, 2018, and an increase of $2.1 million, or 18.5% from the quarter ended September 30, 2017. Net interest margin for the quarter ended September 30, 2018 was 3.43%, an increase of 5 basis points versus the quarter ended June 30, 2018, and an increase of 6 basis points versus the quarter ended September 30, 2017.

Interest expense increased 8.5% during the quarter ended September 30, 2018, compared to the quarter ended June 30, 2018, due to an increase of 9 basis points in the cost of interest-bearing liabilities, and increased 44.7% compared to the quarter ended September 30, 2017, due to an increase of 35 basis points in the cost of interest-bearing liabilities. The increase in the cost of interest-bearing liabilities compared to the quarter ended September 30, 2017, was the result of an $53.4 million increase in the average balance and an increase in short-term borrowing rates.

In August 2018, subordinated debt in the amount of $2.3 million was converted into 142,000 shares of common stock. In addition to this conversion, 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 these conversions, the Company will save $1.1 million annually in interest expense.

ASSET QUALITY

Provision for loan loss was $1.1 million for the quarter ended September 30, 2018, a $973 thousand increase from the quarter ended September 30, 2017, due to an 18.5% increase in loans. The increase in loan loss provision is attributable to increased loan volume for the quarter ended September 30, 2018, compared to the quarter ended September 30, 2017. Nonperforming loans increased $6.3 million, to 0.99%, of total loans as of September 30, 2018, compared to 0.78% of total loans as of June 30, 2018, and compared to 0.60% of total loans as of September 30, 2017. In addition, net charge-offs for the quarter ended September 30, 2018, decreased $167 thousand compared to the quarter ended September 30, 2017, resulting in an annualized net loan charge-offs to total loans ratio of 0.09% as of September 30, 2018.

NONINTEREST INCOME

Noninterest income totaled $10.5 million for the quarter ended September 30, 2018, a decrease of $284 thousand, or 2.6%, from the quarter ended June 30, 2018, and an increase of $353 thousand, or 3.5%, from the quarter ended September 30, 2017.

The $284 thousand decrease in noninterest income from the quarter ended June 30, 2018, was due to a decrease of $1.4 million in gain on derivatives related to the mortgage locked pipeline. The decrease was partially offset by an increase of $634 thousand in the holding gain on equity securities, primarily related to a $672 thousand holding gain on Fintech related investment, an increase of $165 thousand in other operating income, and an increase of $300 thousand in income on bank owned life insurance. The decrease in gain on derivatives was largely the result of a 19.6% decrease in the locked mortgage pipeline for the three months ended September 30, 2018, compared to an 8.0% increase in the locked mortgage pipeline for the three months ended June 30, 2018.

The $353 thousand increase in noninterest income from the quarter ended September 30, 2017, was primarily due to a $578 thousand increase in gain on derivative and a $623 thousand increase in the holding gain on equity securities. These increases were partially offset by a $1.0 million decrease in mortgage fee income. The increase in gain on derivatives was largely the result of an increase of $1.3 million in the valuation of the open trades used to hedge the derivative asset. The decrease in mortgage fee income was driven by the decrease of mortgage production volume, which decreased by $26.3 million or 6.6% for the three months ended September 30, 2018 compared to the three months ended September 30, 2017.

NONINTEREST EXPENSE

Noninterest expense totaled $18.4 million for the quarter ended September 30, 2018, a decrease of $832 thousand, or 4.3%, from the quarter ended June 30, 2018, and an increase of $451 thousand, or 2.5%, from the quarter ended September 30, 2017.

The $832 thousand decrease in noninterest expense from the quarter ended June 30, 2018, was primarily due to a decrease of $974 thousand in salaries and employee benefits expense and a $125 thousand decrease in mortgage processing expense. These decreases were partially offset by an increase of $227 thousand in professional fees as a result of the Company's Fintech initiatives. The decrease in salaries and employee benefits expense was largely driven by a reduction in commission related costs due to reduced mortgage loan volume. The $451 thousand increase in noninterest expense from the quarter ended September 30, 2017, was primarily due to an increase of $271 thousand in salaries and employee benefits expense and an increase of $164 thousand in professional fees.

DIVIDEND

As previously announced on August 22, 2018, the Company declared a quarterly cash dividend of $0.03 per share to shareholders of record at the close of business on September 1, 2018, payable September 15, 2018. This was the third quarterly dividend for 2018 and includes a one-half cent, or 20% increase per share, compared to the March and June 2018 payouts 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 subsidiaries, MVB Mortgage and MVB Community Development Corporation, 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     2018     2017     2017    

Nine Months

Ended

September 30, 2018

   

Nine Months

Ended

September 30, 2017

  Third
Quarter
Second

Quarter

First
Quarter
Fourth

Quarter

Third
Quarter
Interest income $ 18,176 $ 16,944 $ 15,054 $ 15,086 $ 14,630 $ 50,174 $ 41,512
Interest expense 4,652   4,289   3,589   3,403   3,216   12,530   8,898
Net interest income 13,524 12,655 11,465 11,683 11,414 37,644 32,614
Provision for loan losses 1,069 605 474 1,036 96 2,148 1,137
Noninterest income 10,511 10,795 9,039 10,157 10,158 30,345 30,549
Noninterest expense 18,417   19,249   16,739   17,714   17,966   54,405   52,786
Income before income taxes 4,549 3,596 3,291 3,090 3,510 11,436 9,240
Income tax expense 970   765   697   1,667   1,192   2,432   3,088
Net income $ 3,579   $ 2,831   $ 2,594   $ 1,423   $ 2,318   $ 9,004   $ 6,152
Preferred dividends 123 122 121 124 123 366 374
Net income available to common shareholders $ 3,456   $ 2,709   $ 2,473   $ 1,299   $ 2,195   $ 8,638   $ 5,778
 
Earnings per share - basic $ 0.30 $ 0.25 $ 0.24 $ 0.12 $ 0.21 $ 0.80 $ 0.56
Earnings per share - diluted $ 0.29 $ 0.25 $ 0.23 $ 0.12 $ 0.21 $ 0.77 $ 0.56
 
Condensed Consolidated Balance Sheets

(Unaudited) (Dollars in thousands)

      September 30, 2018     June 30, 2018     December 31, 2017     September 30, 2017
Cash and cash equivalents     $ 22,045 $ 23,950 $ 20,305 $ 20,272
Certificates of deposit with other banks 14,778 14,778 14,778 14,778
Investment securities 226,306 229,054 231,507 187,348
Loans held for sale 63,706 98,799 66,794 69,057
Loans 1,296,460 1,215,072 1,105,941 1,094,467
Allowance for loan losses (11,439 ) (10,651 ) (9,878 ) (9,396 )
Net loans 1,285,021 1,204,421 1,096,063 1,085,071
Premises and equipment 26,706 26,418 26,686 27,189
Goodwill 18,480 18,480 18,480 18,480
Other assets 66,062   69,519   59,689   49,395  
Total assets $ 1,723,104   $ 1,685,419   $ 1,534,302   $ 1,471,590  
 
Deposits $ 1,379,186 $ 1,195,868 $ 1,159,580 $ 1,165,199
Borrowed funds 122,000 266,830 152,169 84,403
Other liabilities 51,042 56,926 72,361 73,011
Shareholders' equity 170,876   165,795   150,192   148,977  
Total liabilities and shareholders' equity $ 1,723,104   $ 1,685,419   $ 1,534,302   $ 1,471,590  
 
Reportable Segments

(Unaudited)

Three Months Ended September 30, 2018    

Commercial &

Retail Banking

   

Mortgage

Banking

   

Financial

Holding

Company

   

Intercompany

Eliminations

    Consolidated
(Dollars in thousands)
Revenues:
Interest income $ 16,506 $ 1,763 $ 1 $ (94 ) $ 18,176
Mortgage fee income 152 9,246 (390 ) 9,008
Other income 2,203   (738 ) 1,706   (1,668 ) 1,503
Total operating income 18,861   10,271   1,707   (2,152 ) 28,687
Expenses:
Interest expense 3,664 1,138 333 (483 ) 4,652
Salaries and employee benefits 3,493 6,047 1,980 11,520
Provision for loan losses 1,025 44 1,069
Other expense 5,274   2,147   1,145   (1,669 ) 6,897
Total operating expenses 13,456   9,376   3,458   (2,152 ) 24,138
Income (loss) before income taxes 5,405 895 (1,751 ) 4,549
Income tax expense (benefit) 1,121   229   (380 )   970
Net income (loss) $ 4,284   $ 666   $ (1,371 ) $   $ 3,579
Preferred stock dividends 123 123
Net income (loss) available to common shareholders $ 4,284   $ 666   $ (1,494 ) $   $ 3,456
                   
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 September 30, 2017

Commercial &

Retail Banking

Mortgage

Banking

Financial

Holding

Company

Intercompany

Eliminations

Consolidated
(Dollars in thousands)
Revenues:
Interest income $ 13,432 $ 1,352 $ 1 $ (155 ) $ 14,630
Mortgage fee income 200 10,042 (224 ) 10,018
Other income 1,466   (1,279 ) 1,250   (1,297 ) 140
Total operating income 15,098   10,115   1,251   (1,676 ) 24,788
Expenses:
Interest expense 2,347 684 565 (380 ) 3,216
Salaries and employee benefits 3,107 6,768 1,374 11,249
Provision for loan losses 96 96
Other expense 4,822   2,100   1,091   (1,296 ) 6,717
Total operating expenses 10,276   9,648   3,030   (1,676 ) 21,278
Income (loss) before income taxes 4,822 467 (1,779 ) 3,510
Income tax expense (benefit) 1,605   191   (604 )   1,192
Net income (loss) $ 3,217   $ 276   $ (1,175 ) $   $ 2,318
Preferred stock dividends 123 123
Net income (loss) available to common shareholders $ 3,217   $ 276   $ (1,298 ) $   $ 2,195
                   
Nine Months Ended September 30, 2018

Commercial &

Retail Banking

Mortgage

Banking

Financial

Holding

Company

Intercompany

Eliminations

Consolidated
(Dollars in thousands)
Revenues:
Interest income $ 45,772 $ 4,870 $ 3 $ (471 ) $ 50,174
Mortgage fee income 444 25,071 (881 ) 24,634
Other income 5,052   485   4,748   (4,574 ) 5,711
Total operating income 51,268   30,426   4,751   (5,926 ) 80,519
Expenses:
Interest expense 9,503 2,945 1,433 (1,351 ) 12,530
Salaries and employee benefits 10,946 18,289 5,252 34,487
Provision for loan losses 2,067 81 2,148
Other expense 14,803   6,566   3,124   (4,575 ) 19,918
Total operating expenses 37,319   27,881   9,809   (5,926 ) 69,083
Income (loss) before income taxes 13,949 2,545 (5,058 ) 11,436
Income tax expense (benefit) 2,932   654   (1,154 )   2,432
Net income (loss) $ 11,017   $ 1,891   $ (3,904 ) $   $ 9,004
Preferred stock dividends 366 366
Net income (loss) available to common shareholders $ 11,017   $ 1,891   $ (4,270 ) $   $ 8,638
                   
Nine Months Ended September 30, 2017

Commercial &

Retail Banking

Mortgage

Banking

Financial

Holding

Company

Intercompany

Eliminations

Consolidated
(Dollars in thousands)
Revenues:
Interest income $ 38,651 $ 3,206 $ 3 $ (348 ) $ 41,512
Mortgage fee income 573 28,616 (585 ) 28,604
Other income 4,074   (1,973 ) 3,768   (3,924 ) 1,945
Total operating income 43,298   29,849   3,771   (4,857 ) 72,061
Expenses:
Interest expense 6,635 1,521 1,674 (932 ) 8,898
Salaries and employee benefits 9,030 19,870 4,109 33,009
Provision for loan losses 966 171 1,137
Other expense 14,539   6,244   2,919   (3,925 ) 19,777
Total operating expenses 31,170   27,806   8,702   (4,857 ) 62,821
Income (loss) before income taxes 12,128 2,043 (4,931 ) 9,240
Income tax expense (benefit) 3,931   827   (1,670 )   3,088
Net income (loss) $ 8,197   $ 1,216   $ (3,261 ) $   $ 6,152
Preferred stock dividends 374 374
Net income (loss) available to common shareholders $ 8,197   $ 1,216   $ (3,635 ) $   $ 5,778
 
Average Balances and Interest Rates

(Unaudited) (Dollars in thousands)

 
    Three Months Ended

September 30, 2018

    Three Months Ended

June 30, 2018

    Three Months Ended

September 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 $ 5,178 $ 30 2.30 % $ 3,473 $ 17 1.96 % $ 4,484 $ 15 1.33 %
CDs with other banks 14,778 73 1.96 14,778 74 2.02 14,711 74 2.00
Investment securities:
Taxable 148,499 869 2.32 151,224 891 2.36 126,880 693 2.17
Tax-exempt 79,961 715 3.55 81,164 717 3.54 56,264 443 3.12
Loans and loans held for sale: 1
Commercial 883,051 11,323 5.09 831,118 10,318 4.98 762,650 8,742 4.55
Tax exempt 14,231 125 3.48 14,260 123 3.46 14,991 130 3.44
Real estate 408,719 4,909 4.77 394,814 4,656 4.73 349,459 4,346 4.93
Consumer 10,844   132   4.83   11,850   148   5.00   13,462   187   5.51  
Total loans 1,316,845   16,489   4.97   1,252,042   15,245   4.88   1,140,562   13,405   4.66  
Total earning assets 1,565,261   18,176   4.61   1,502,681   16,944   4.52   1,342,901   14,630   4.32  
Less: Allowance for loan losses (10,717 ) (10,132 ) (9,760 )
Cash and due from banks 18,020 16,792 17,501
Other assets 108,618   107,421   123,898  
Total assets $ 1,681,182   $ 1,616,762   $ 1,474,540  
 
Liabilities
Deposits:
NOW $ 413,121 $ 773 0.74 $ 459,784 $ 846 0.74 $ 436,493 $ 675 0.61
Money market checking 246,624 676 1.09 229,763 484 0.85 246,160 458 0.74
Savings 42,760 1 0.01 46,478 7 0.06 46,807 20 0.17
IRAs 17,950 75 1.66 17,997 69 1.54 16,649 56 1.33
CDs 348,467 1,585 1.80 275,004 1,124 1.64 249,698 874 1.39
Repurchase agreements and federal funds sold 17,911 10 0.22 20,118 20 0.39 25,093 20 0.32
FHLB and other borrowings 202,670 1,199 2.35 226,487 1,197 2.12 149,313 548 1.46
Subordinated debt 19,932   333   6.63   32,015   542   6.79   33,524   565   6.69  
Total interest-bearing liabilities 1,309,435   4,652   1.41   1,307,646   4,289   1.32   1,203,737   3,216   1.06  
Noninterest bearing demand deposits 193,116 146,135 115,343
Other liabilities 10,710   9,890   7,703  
Total liabilities 1,513,261   1,463,671   1,326,783  
 
Stockholders’ equity
Preferred stock 7,834 7,834 7,834
Common stock 11,467 10,686 10,495
Paid-in capital 113,482 101,577 98,289
Treasury stock (1,084 ) (1,084 ) (1,084 )
Retained earnings 43,793 41,277 35,152
Accumulated other comprehensive income (7,571 ) (7,199 ) (2,929 )
Total stockholders’ equity 167,921   153,091   147,757  
Total liabilities and stockholders’ equity $ 1,681,182   $ 1,616,762   $ 1,474,540  
 
Net interest spread 3.20 3.20 3.26
Net interest income-margin $ 13,524   3.43 % $ 12,655   3.38 % $ 11,414   3.37 %

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)

 
    Nine Months Ended

September 30, 2018

    Nine Months Ended

September 30, 2017

  Average
Balance
    Interest
Income/
Expense
    Yield/
Cost
Average
Balance
    Interest
Income/
Expense
    Yield/
Cost
Assets
Interest-bearing deposits in banks $ 4,183 $ 64 2.05 % $ 3,504 $ 37 1.41 %
CDs with other banks 14,778 220 1.99 14,566 213 1.96
Investment securities:
Taxable 151,362 2,655 2.35 118,497 1,884 2.13
Tax-exempt 78,910 2,087 3.54 55,426 1,291 3.11
Loans and loans held for sale: 1
Commercial 830,371 30,582 4.92 744,967 24,854 4.46
Tax exempt 14,318 371 3.46 15,193 392 3.45
Real estate 388,494 13,755 4.73 358,309 12,312 4.59
Consumer 11,731   440   5.01   13,880   529   5.10  
Total loans 1,244,914   45,148   4.85   1,132,349   38,087   4.50  
Total earning assets 1,494,147   50,174   4.49   1,324,342   41,512   4.19  
Less: Allowance for loan losses (10,281 ) (9,641 )
Cash and due from banks 16,933 16,060
Other assets 105,743   103,576  
Total assets $ 1,606,542   $ 1,434,337  
 
Liabilities
Deposits:
NOW $ 438,784 $ 2,382 0.73 $ 428,359 $ 1,802 0.56
Money market checking 239,305 1,604 0.90 240,094 1,349 0.75
Savings 45,247 27 0.08 47,825 59 0.16
IRAs 17,880 207 1.55 16,501 159 1.29
CDs 297,876 3,718 1.67 257,015 2,583 1.34
Repurchase agreements and federal funds sold 19,535 49 0.34 23,165 56 0.32
FHLB and other borrowings 196,610 3,110 2.11 122,062 1,216 1.33
Subordinated debt 28,441   1,433   6.74   33,524   1,674   6.68  
Total interest-bearing liabilities 1,283,678   12,530   1.31   1,168,545   8,898   1.02  
Noninterest bearing demand deposits 156,165 114,455
Other liabilities 9,764   8,204  
Total liabilities 1,449,607   1,291,204  
 
Stockholders’ equity
Preferred stock 7,834 7,959
Common stock 10,896 10,307
Paid-in capital 104,776 96,268
Treasury stock (1,084 ) (1,084 )
Retained earnings 41,046 33,202
Accumulated other comprehensive income (6,533 ) (3,519 )
Total stockholders’ equity 156,935   143,133  
Total liabilities and stockholders’ equity $ 1,606,542   $ 1,434,337  
 
Net interest spread 3.18 3.17
Net interest income-margin $ 37,644   3.37 % $ 32,614   3.29 %

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     2018     2017     2017 2018     2017
  Third

Quarter

Second

Quarter

First

Quarter

Fourth

Quarter

Third
Quarter
Earnings and Per Share Data:
Net income $ 3,579 $ 2,831 $ 2,594 $ 1,423 $ 2,318 $ 9,004 $ 6,152
Net income available to common shareholders 3,456 2,709 2,473 1,299 2,195 8,638 5,778
Earnings per share - basic 0.30 0.25 0.24 0.12 0.21 0.80 0.56
Earnings per share - diluted 0.29 0.25 0.23 0.12 0.21 0.77 0.56
Cash dividends paid per common share 0.030 0.025 0.025 0.025 0.025 0.08 0.075
Book value per common share 14.13 13.93 13.53 13.63 13.51 14.13 13.51
Weighted average shares outstanding - basic 11,416,202 10,634,805 10,474,138 10,444,627 10,443,443 10,845,166 10,262,944
Weighted average shares outstanding - diluted 13,113,259 11,502,148 12,714,353 10,823,994 12,410,070 11,690,314 10,288,534
 
Performance Ratios:
Return on average assets 1 0.85 % 0.70 % 0.68 % 0.38 % 0.63 % 0.75 % 0.57 %
Return on average equity 1 8.53 % 7.40 % 6.94 % 3.79 % 6.28 % 7.65 % 5.73 %
Net interest margin 2 3.43 % 3.38 % 3.29 % 3.29 % 3.37 % 3.37 % 3.29 %
Efficiency ratio 3 76.63 % 82.09 % 81.64 % 81.11 % 83.28 % 80.02 % 83.57 %
Overhead ratio 1 4 4.38 % 4.76 % 4.40 % 4.69 % 4.87 % 4.52 % 4.91 %
 
Asset Quality Data and Ratios:
Charge-offs $ 294 $ 29 $ 356 $ 572 $ 472 $ 679 $ 925
Recoveries 13 8 71 18 24 92 83
Net loan charge-offs to total loans 1 5 0.09 % 0.01 % 0.10 % 0.20 % 0.16 % 0.06 % 0.10 %
Allowance for loan losses 11,439 10,651 10,067 9,878 9,396 11,439 9,396
Allowance for loan losses to total loans 6 0.88 % 0.88 % 0.87 % 0.89 % 0.86 % 0.88 % 0.86 %
Nonperforming loans 12,846 9,419 9,102 9,699 6,559 12,846 6,559
Nonperforming loans to total loans 0.99 % 0.78 % 0.79 % 0.88 % 0.60 % 0.99 % 0.60 %
 
Capital Ratios:
Equity to assets 9.92 % 9.84 % 9.51 % 9.79 % 10.12 % 9.92 % 10.12 %
Leverage ratio 9.91 % 9.90 % 9.50 % 9.27 % 9.41 % 9.91 % 9.41 %
Common equity Tier 1 capital ratio 11.27 % 11.28 % 10.60 % 10.55 % 10.76 % 11.27 % 10.76 %
Tier 1 risk-based capital ratio 12.15 % 12.20 % 11.57 % 11.54 % 11.79 % 12.15 % 11.79 %
Total risk-based capital ratio 14.10 % 14.34 %

14.80

% 14.87 % 15.18 % 14.10 % 15.18 %

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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