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MVB Financial Corporation Announces Fourth Quarter Results and Record Earnings for Year-End 2021

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 fourth quarter and year ended December 31, 2021, with reported net income of $10.0 million, or $0.83 basic and $0.77 diluted earnings per share for the three months ended December 31, 2021.

 

 

Quarterly

 

Year-to-Date

 

 

2021

 

2021

 

2020

 

2021

 

2020

 

 

Fourth Quarter

 

Third Quarter

 

Fourth Quarter

 

 

Net income

 

$

9,959

 

$

11,828

 

$

11,838

 

$

39,121

 

$

37,411

Earnings per share - basic

 

$

0.83

 

$

1.00

 

$

1.00

 

$

3.32

 

$

3.13

Earnings per share - diluted

 

$

0.77

 

$

0.92

 

$

0.97

 

$

3.10

 

$

3.06

Earnings for the fourth quarter were impacted by the release of allowance for loan losses of $5.7 million. The after-tax impact of the release on basic and diluted earnings per share was $0.38 and $0.35, respectively, for the three months ended December 31, 2021.

“MVB’s fourth quarter and record earnings for 2021 reflect the diversity of our tech-forward business model, as well as our strong positioning for the future,” said Larry F. Mazza, Chief Executive Officer, MVB Financial. “The transformation of our ‘best-in-class’ funding profile continues, as noninterest-bearing deposits now represent 47% of MVB Bank’s total deposit funding, up from 8% when we pivoted our company seven years ago. At the same time, our loan growth initiatives have come to fruition against the backdrop of a strengthening economy and rising interest rates, leaving our highly-liquid balance sheet very well-positioned, highlighted on one side by strong low-cost funding, and on the other by an increasingly diverse loan growth engine.”

Mazza added, “Other recent highlights include substantial gains recognized from our Fintech investment portfolio, a core component of our business in which we not only provide banking services to Fintechs, but also build and invest in them as well. 2021 marked the successful completion of our MVB 3.0 three-year strategic plan, in which we exceeded our performance goals. We now look to implement our new three-year plan, called ‘MVB F1,’ the details of which we look forward to discussing at our Investor Conference in Las Vegas on March 14 and 15, 2022.”

FOURTH QUARTER 2021 HIGHLIGHTS

  • Fintech and Gaming verticals power continued favorable remix of funding base
    • Noninterest-bearing (“NIB”) deposits were $1.12 billion as of December 31, 2021, up $121.1 million, or 12%, and $404.6 million, or 57%, from September 30, 2021 and December 31, 2020, respectively. NIB deposits as a percentage of total deposits were 47% as of December 31, 2021, as compared to 42% and 36% as of September 30, 2021 and December 31, 2020, respectively.
    • Financial technology (“Fintech”) deposits totaled $1.14 billion as of December 31, 2021, up $166.4 million, or 17%, and $609.1 million, or 114%, from September 30, 2021 and December 31, 2020, respectively.
    • Gaming deposits, which are included in total Fintech deposits, totaled $911.6 million as of December 31, 2021, up $137.5 million, or 18%, and $553.7 million, or 155%, from September 30, 2021 and December 31, 2020, respectively.
  • Robust loan growth driven by an increasingly diverse customer base
    • Total loans of $1.87 billion increased by $105.7 million, or 6%, compared to September 30, 2021 and $416.1 million, or 29%, from December 31, 2020. Loans, excluding Paycheck Protection Program (“PPP”) loans of $131.7 million, totaled $1.74 billion as of December 31, 2021, an increase of $121.3 million, or 8%, from September 30, 2021, and an increase of $366.4 million, or 27% from December 31, 2020.
    • Loan growth during the quarter was driven primarily by our health care lending group and strategic lending partnerships.
    • The loan-to-deposit ratio was 78.6% as of December 31, 2021, as compared to 73.5% at September 30, 2021, and 73.3% as of December 31, 2020.
  • Strategic Fintech investments yield recent gains
    • For the quarter ended December 31, 2021, MVB recorded income of $2.8 million related to a strategic investment within its Fintech investment portfolio.
    • Since 2016, MVB’s Fintech investment portfolio has generated an internal rate of return of 184%.
  • Continued value creation at a peer-leading pace
    • Tangible book value (“TBV”) per share, a non-U.S. GAAP measure, was $22.17 as of December 31, 2021, an increase of 2% and 12% from September 30, 2021 and December 31, 2020, respectively. A reconciliation of TBV to its most comparable U.S. GAAP measure is included below.
    • Since 2016, MVB has increased TBV per share at a compound annual growth rate of just under 16%, which compares favorably to the regional peer average of 10%.
    • Reflecting MVB’s strong capital position and earnings profile as of December 31, 2021, the Company elected to increase the quarterly cash dividend to $0.15 per share for the fourth quarter of 2021, up $0.01 (or 7%) from the third quarter of 2021.

INCOME STATEMENT

On a fully tax-equivalent basis, net interest margin for the quarter ended December 31, 2021 was 3.28%, an increase of three basis points versus the quarter ended September 30, 2021 and a decrease of 16 basis points versus the quarter ended December 31, 2020. 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 tax-equivalent adjustments impacting net interest income were $0.3 million for the quarter ended December 31, 2021, $0.3 million for the quarter ended September 30, 2021 and $0.4 million for the quarter ended December 31, 2020.

Interest income increased $2.6 million, or 13%, compared to the quarter ended September 30, 2021 and increased $3.7 million, or 19%, compared to the quarter ended December 31, 2020. The tax-equivalent yield on commercial loans increased 45 basis points compared to the quarter ended September 30, 2021. The decreases of 158 and 95 basis points in the yield on real estate loans and investments, respectively, drove the 24 basis point decrease in the tax-equivalent yield on earning assets compared to the quarter ended December 31, 2020.

Interest expense increased $0.2 million, or 11%, compared to the quarter ended September 30, 2021 and decreased $0.1 million, or 7%, compared to the quarter ended December 31, 2020. The increase compared to the quarter ended September 30, 2021 was the result of an increase of $0.3 million in interest on subordinated debt. Despite an increase in average deposits of $227.5 million during the quarter, interest on deposits decreased $0.1 million during the quarter, as NIB deposits grew as a percentage of total deposits and cost of interest-bearing deposits decreased.

MVB Bank's average NIB deposits increased by $239.6 million from the quarter ended September 30, 2021, maintaining a 19 basis point favorable spread on the tax-equivalent net interest margin for the quarter ended December 31, 2021, compared to a 16 basis point favorable spread for the quarter ended September 30, 2021. An increase in MVB Bank’s average NIB deposits of $406.0 million from the quarter ended December 31, 2020 helped to maintain a 19 basis point favorable spread on the tax-equivalent net interest margin for the quarter ended December 31, 2021, compared to a 18 basis point favorable spread for the same period in 2020.

Noninterest income totaled $14.5 million for the quarter ended December 31, 2021, a decrease of $7.4 million, or 34%, from the quarter ended September 30, 2021 and a decrease of $2.0 million, or 12%, from the quarter ended December 31, 2020.

The $7.4 million decrease in noninterest income from the quarter ended September 30, 2021 was due primarily to the gain on sale of branches of $10.8 million in the quarter ended September 30, 2021.

The $2.0 million decrease in noninterest income from the quarter ended December 31, 2020 was primarily due to decreases in equity method investment income of $7.7 million and gain on sale of equity securities of $3.5 million, offset by increases in holding gain on equity securities of $1.8 million, compliance consulting income of $2.1 million, payment card and service charge income of $1.3 million, gain on sale of portfolio loans of $1.1 million and other operating income of $2.4 million.

Noninterest expense totaled $29.1 million for the quarter ended December 31, 2021, an increase of $3.3 million, or 13%, from the quarter ended September 30, 2021 and an increase of $8.2 million, or 39%, from the quarter ended December 31, 2020.

The $3.3 million increase in noninterest expense from the quarter ended September 30, 2021 was due to an increase in salaries and employee benefits of $1.6 million, primarily driven by incentive compensation and new hires to further build-out the Fintech vertical at Victor Technologies, Inc. (“Victor”),as well as an increase in professional fees of $1.2 million. Victor makes it faster and more efficient for entities to launch a Fintech program. Its technology simplifies integration for Fintech companies and offers risk tools to banks to help them conduct due diligence, risk assessments, onboarding and oversight of their Fintech clients.

The $8.2 million increase in noninterest expense from the quarter ended December 31, 2020 was primarily due to increases in salaries and employee benefits of $5.8 million and professional fees of $1.4 million.

The efficiency ratio was 80.7% for the quarter ended December 31, 2021, compared to 62.9% and 61.0%% for the quarters ended September 30, 2021 and December 31, 2020, respectively, as a result of our ongoing expansion of our risk management and operations teams in support of Fintech initiatives .

BALANCE SHEET

Loan balances grew $105.7 million as compared to September 30, 2021 and $416.1 million as compared to December 31, 2020. Included in loans are PPP loans totaling $131.7 million at December 31, 2021, a decrease of $15.6 million, or 11%, from September 30, 2021, and an increase of $49.7 million, or 61%, from December 31, 2020.

The tax-equivalent yield on loans, including PPP loans, was 4.64% for the quarter ended December 31, 2021, an increase of 39 basis points from the quarter ended September 30, 2021 and a decrease of seven basis points from the quarter ended December 31, 2020.

Deposits totaled $2.38 billion as of December 31, 2021, a decrease of $21.3 million, or 1%, from September 30, 2021 and an increase of $395.2 million, or 20%, from December 31, 2020. With NIB deposits as a percentage of total deposits at 47% as of December 31, 2021, the Company’s strategy to evolve MVB Bank’s deposit mix by replacing high-cost deposits with NIB deposits has proved to be successful and viable long-term.

CAPITAL

There was no significant change in regulatory ratios quarter over quarter. The Community Bank Leverage Ratio was 11.6% and 12.0% as of December 31, 2021 and September 30, 2021, respectively. MVB Bank’s Tier 1 Risk-Based Capital Ratio was 15.8% and 15.7% as of December 31, 2021 and September 30, 2021, respectively. The Bank’s Total Risk-Based Capital Ratio was 16.7% and 16.9% as of December 31, 2021 and September 30, 2021, respectively.

ASSET QUALITY

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. Nonperforming loans totaled $17.7 million, or 0.9% of total loans, as of December 31, 2021, compared to 1.0% of total loans as of September 30, 2021 and 0.9% of total loans as of December 31, 2020. Criticized loans as a percentage of total loans were 5.4%, a decrease of 118 basis points, or 18%, from September 30, 2021, and a decrease of 413 basis points, or 2%, from December 31, 2020.

The release of allowance for loan losses totaled $5.7 million for the quarter ended December 31, 2021, compared to a provision for loan losses of $0.4 million for the quarter ended September 30, 2021 and a provision for loan losses of $0.2 million for the quarter ended December 31, 2020. The $5.7 million release was driven by a $2.6 million release allocated to a single loan, as well as improvements in allocation rates, portfolio risk grades and economic and business factors.

Allowance for loan losses to total loans was 1.0% as of December 31, 2021, a decrease of 45 basis points from September 30, 2021 and a decrease of 80 basis points from December 31, 2020. Excluding PPP loans, allowance for loan losses to total loans was 1.1% as of December 31, 2021.

There were $1.3 million net charge-offs for the quarter ended December 31, 2021, compared to $0.1 million in the quarter ended September 30, 2021 and $0.3 million for the quarter ended December 31, 2020.

About MVB Financial Corp.

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

MVB is a financial holding company headquartered in Fairmont, WV. Through its subsidiary, MVB Bank, and the bank’s subsidiaries, the Company provides financial services to individuals and corporate clients in the Mid-Atlantic region and beyond.

Nasdaq is a leading global provider of trading, clearing, exchange technology, listing, information and public company services.

For more information about MVB, please visit ir.mvbbanking.com.

Forward-looking Statements

MVB 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 financial technology 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, 2020, as well as its other filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. Except as required by law, the Company disclaims any obligation to update, revise or correct any forward-looking statements.

Accounting standards require the consideration of subsequent events occurring after the balance sheet date for matters that require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s financial statements when filed with the SEC. Accordingly, the consolidated financial information in this announcement is subject to change.

MVB Financial Corp.

Financial Highlights

Consolidated Statements of Income

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

 

 

 

Quarterly

 

Year-to-Date

 

 

2021

 

2021

 

2020

 

2021

 

 

2020

 

 

Fourth Quarter

 

Third Quarter

 

Fourth Quarter

 

 

Interest income

 

$

23,049

 

 

$

20,484

 

$

19,353

 

$

83,429

 

 

$

80,453

Interest expense

 

 

1,546

 

 

 

1,388

 

 

1,666

 

 

6,270

 

 

 

11,627

Net interest income

 

 

21,503

 

 

 

19,096

 

 

17,687

 

 

77,159

 

 

 

68,826

Provision (release of allowance) for loan losses

 

 

(5,733

)

 

 

380

 

 

214

 

 

(6,275

)

 

 

16,579

Net interest income after provision (release of allowance) for loan losses

 

 

27,236

 

 

 

18,716

 

 

17,473

 

 

83,434

 

 

 

52,247

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

14,542

 

 

 

21,951

 

 

16,576

 

 

62,596

 

 

 

91,837

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

18,110

 

 

 

16,528

 

 

12,269

 

 

60,210

 

 

 

61,629

Other expense

 

 

10,993

 

 

 

9,301

 

 

8,618

 

 

37,242

 

 

 

35,512

Total noninterest expenses

 

 

29,103

 

 

 

25,829

 

 

20,887

 

 

97,452

 

 

 

97,141

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

12,675

 

 

 

14,838

 

 

13,162

 

 

48,578

 

 

 

46,943

Income tax expense

 

 

2,876

 

 

 

3,164

 

 

1,324

 

 

9,882

 

 

 

9,532

Net income before noncontrolling interest

 

 

9,799

 

 

 

11,674

 

 

11,838

 

 

38,696

 

 

 

37,411

Net loss attributable to noncontrolling interest

 

 

160

 

 

 

154

 

 

 

 

425

 

 

 

Net income attributable to parent

 

 

9,959

 

 

 

11,828

 

 

11,838

 

 

39,121

 

 

 

37,411

Preferred dividends

 

 

 

 

 

 

 

116

 

 

35

 

 

 

461

Net income available to common shareholders

 

$

9,959

 

 

$

11,828

 

$

11,722

 

$

39,086

 

 

$

36,950

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - basic

 

$

0.83

 

 

$

1.00

 

$

1.00

 

$

3.32

 

 

$

3.13

Earnings per share - diluted

 

$

0.77

 

 

$

0.92

 

$

0.97

 

$

3.10

 

 

$

3.06

Condensed Consolidated Balance Sheets

(Unaudited) (Dollars in thousands)

 

 

 

December 31, 2021

 

September 30, 2021

 

December 31, 2020

Cash and cash equivalents

 

$

307,437

 

 

$

390,081

 

 

$

263,893

 

Certificates of deposit with banks

 

 

2,719

 

 

 

9,582

 

 

 

11,803

 

Investment securities available-for-sale

 

 

421,466

 

 

 

439,023

 

 

 

410,624

 

Equity securities

 

 

32,402

 

 

 

29,809

 

 

 

27,585

 

Loans held-for-sale

 

 

 

 

 

 

 

 

1,062

 

Loans receivable

 

 

1,869,838

 

 

 

1,764,186

 

 

 

1,453,744

 

Allowance for loan losses

 

 

(18,266

)

 

 

(25,187

)

 

 

(25,844

)

Loans receivable, net

 

 

1,851,572

 

 

 

1,738,999

 

 

 

1,427,900

 

Premises and equipment, net

 

 

25,052

 

 

 

25,043

 

 

 

26,203

 

Goodwill

 

 

3,988

 

 

 

3,988

 

 

 

2,350

 

Other assets

 

 

143,708

 

 

 

152,299

 

 

 

160,056

 

Total assets

 

$

2,788,344

 

 

$

2,788,824

 

 

$

2,331,476

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

1,120,433

 

 

$

999,328

 

 

$

715,791

 

Interest-bearing deposits

 

 

1,257,172

 

 

 

1,399,612

 

 

 

1,266,598

 

Subordinated debt

 

 

73,030

 

 

 

72,966

 

 

 

43,407

 

Other liabilities

 

 

62,406

 

 

 

50,218

 

 

 

66,197

 

Stockholders' equity, including noncontrolling interest

 

 

275,303

 

 

 

266,700

 

 

 

239,483

 

Total liabilities and stockholders' equity

 

$

2,788,344

 

 

$

2,788,824

 

 

$

2,331,476

 

Reportable Segments

(Unaudited)

 

Twelve Months Ended December 31, 2021

 

CoRe

Banking

Mortgage

Banking

Financial

Holding

Company

Other

Intercompany

Eliminations

Consolidated

(Dollars in thousands)

 

Interest income

 

$

83,023

 

$

411

 

$

15

 

$

(8

)

$

(12

)

$

83,429

 

Interest expense

 

 

4,078

 

 

 

 

2,188

 

 

16

 

 

(12

)

 

6,270

 

Net interest income

 

 

78,945

 

 

411

 

 

(2,173

)

 

(24

)

 

 

 

77,159

 

Release of allowance for loan losses

 

 

(6,274

)

 

(1

)

 

 

 

 

 

 

 

(6,275

)

Net interest income after release of allowance for loan losses

 

 

85,219

 

 

412

 

 

(2,173

)

 

(24

)

 

 

 

83,434

 

 

 

 

 

 

 

 

 

Total noninterest income

 

 

33,179

 

 

16,342

 

 

11,103

 

 

15,002

 

 

(13,030

)

 

62,596

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

33,595

 

 

 

 

13,704

 

 

12,911

 

 

 

 

60,210

 

Other expense

 

 

37,033

 

 

16

 

 

6,573

 

 

6,650

 

 

(13,030

)

 

37,242

 

Total noninterest expenses

 

 

70,628

 

 

16

 

 

20,277

 

 

19,561

 

 

(13,030

)

 

97,452

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

47,770

 

 

16,738

 

 

(11,347

)

 

(4,583

)

 

 

 

48,578

 

Income tax expense (benefit)

 

 

9,154

 

 

4,068

 

 

(2,091

)

 

(1,249

)

 

 

 

9,882

 

Net income (loss) before noncontrolling interest

 

 

38,616

 

 

12,670

 

 

(9,256

)

 

(3,334

)

 

 

 

38,696

 

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

 

 

(425

)

 

 

 

(425

)

Net income (loss) attributable to parent

 

 

38,616

 

 

12,670

 

 

(9,256

)

 

(2,909

)

 

 

 

39,121

 

Preferred stock dividends

 

 

 

 

 

 

35

 

 

 

 

 

 

35

 

Net income (loss) available to common shareholders

 

$

38,616

 

$

12,670

 

$

(9,291

)

$

(2,909

)

$

 

$

39,086

 

Twelve Months Ended December 31, 2020

 

CoRe

Banking

Mortgage

Banking

Financial

Holding

Company

Other

Intercompany

Eliminations

Consolidated

(Dollars in thousands)

 

Interest income

 

$

75,812

$

6,269

 

$

3

 

$

$

(1,631

)

$

80,453

Interest expense

 

 

10,400

 

3,139

 

 

261

 

 

 

(2,173

)

 

11,627

Net interest income

 

 

65,412

 

3,130

 

 

(258

)

 

 

542

 

 

68,826

Provision (release of allowance) for loan losses

 

 

16,649

 

(70

)

 

 

 

 

 

 

16,579

Net interest income after provision (release of allowance) for loan losses

 

 

48,763

 

3,200

 

 

(258

)

 

 

542

 

 

52,247

 

 

 

 

 

 

 

 

Total noninterest income

 

 

24,420

 

63,490

 

 

6,685

 

 

5,909

 

(8,667

)

 

91,837

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

25,808

 

21,550

 

 

11,278

 

 

2,993

 

 

 

61,629

Other expense

 

 

31,389

 

5,074

 

 

5,265

 

 

1,909

 

(8,125

)

 

35,512

Total noninterest expenses

 

 

57,197

 

26,624

 

 

16,543

 

 

4,902

 

(8,125

)

 

97,141

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

15,986

 

40,066

 

 

(10,116

)

 

1,007

 

 

 

46,943

Income tax expense (benefit)

 

 

1,479

 

9,862

 

 

(2,082

)

 

273

 

 

 

9,532

Net income (loss)

 

 

14,507

 

30,204

 

 

(8,034

)

 

734

 

 

 

37,411

Preferred stock dividends

 

 

 

 

 

461

 

 

 

 

 

461

Net income (loss) available to common shareholders

 

$

14,507

$

30,204

 

$

(8,495

)

$

734

$

 

$

36,950

Average Balances and Interest Rates

(Unaudited) (Dollars in thousands)

 

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

 

December 31, 2021

 

September 30, 2021

 

December 31, 2020

 

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing balances with banks

 

$

376,667

 

 

$

141

 

 

0.15

%

 

$

184,131

 

 

$

60

 

 

0.13

%

 

$

266,999

 

 

$

82

 

 

0.12

%

CDs with banks

 

 

6,998

 

 

 

33

 

 

1.87

 

 

 

11,065

 

 

 

52

 

 

1.86

 

 

 

11,938

 

 

 

58

 

 

1.93

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

258,534

 

 

 

573

 

 

0.88

 

 

 

238,807

 

 

 

575

 

 

0.96

 

 

 

167,968

 

 

 

894

 

 

2.12

 

Tax-exempt 2

 

 

183,736

 

 

 

1,447

 

 

3.12

 

 

 

202,380

 

 

 

1,528

 

 

3.00

 

 

 

200,666

 

 

 

1,659

 

 

3.29

 

Loans and loans held-for-sale: 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial 3

 

 

1,451,347

 

 

 

17,653

 

 

4.83

 

 

 

1,416,236

 

 

 

15,646

 

 

4.38

 

 

 

1,136,899

 

 

 

13,763

 

 

4.82

 

Tax-exempt 2

 

 

5,811

 

 

 

65

 

 

4.41

 

 

 

6,678

 

 

 

77

 

 

4.57

 

 

 

7,501

 

 

 

92

 

 

4.87

 

Real estate

 

 

320,078

 

 

 

2,153

 

 

2.67

 

 

 

297,450

 

 

 

2,282

 

 

3.04

 

 

 

287,547

 

 

 

3,073

 

 

4.25

 

Consumer

 

 

32,903

 

 

 

1,306

 

 

15.75

 

 

 

16,133

 

 

 

602

 

 

14.80

 

 

 

6,053

 

 

 

99

 

 

6.51

 

Total loans

 

 

1,810,139

 

 

 

21,177

 

 

4.64

 

 

 

1,736,497

 

 

 

18,607

 

 

4.25

 

 

 

1,438,000

 

 

 

17,027

 

 

4.71

 

Total earning assets

 

 

2,636,074

 

 

 

23,370

 

 

3.52

 

 

 

2,372,880

 

 

 

20,822

 

 

3.48

 

 

 

2,085,571

 

 

 

19,720

 

 

3.76

 

Less: Allowance for loan losses

 

 

(24,977

)

 

 

 

 

 

 

(24,978

)

 

 

 

 

 

 

(26,568

)

 

 

 

 

Cash and due from banks

 

 

6,751

 

 

 

 

 

 

 

5,922

 

 

 

 

 

 

 

22,642

 

 

 

 

 

Other assets

 

 

203,957

 

 

 

 

 

 

 

200,536

 

 

 

 

 

 

 

215,716

 

 

 

 

 

Total assets

 

$

2,821,805

 

 

 

 

 

 

$

2,554,360

 

 

 

 

 

 

$

2,297,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

711,805

 

 

$

289

 

 

0.16

%

 

$

743,632

 

 

$

333

 

 

0.18

%

 

$

475,707

 

 

$

446

 

 

0.37

%

Money market checking

 

 

489,818

 

 

 

221

 

 

0.18

 

 

 

433,216

 

 

 

211

 

 

0.19

 

 

 

492,519

 

 

 

282

 

 

0.23

 

Savings

 

 

36,455

 

 

 

1

 

 

0.01

 

 

 

42,126

 

 

 

 

 

 

 

 

50,821

 

 

 

(2

)

 

(0.02

)

IRAs

 

 

6,439

 

 

 

18

 

 

1.11

 

 

 

7,302

 

 

 

21

 

 

1.14

 

 

 

13,410

 

 

 

49

 

 

1.45

 

CDs

 

 

91,059

 

 

 

263

 

 

1.15

 

 

 

121,482

 

 

 

333

 

 

1.09

 

 

 

235,412

 

 

 

679

 

 

1.15

 

Repurchase agreements and federal funds sold

 

 

11,249

 

 

 

3

 

 

0.11

 

 

 

10,941

 

 

 

3

 

 

0.11

 

 

 

10,070

 

 

 

4

 

 

0.16

 

FHLB and other borrowings

 

 

79

 

 

 

 

 

 

 

 

494

 

 

 

6

 

 

4.82

 

 

 

19,589

 

 

 

25

 

 

0.51

 

Subordinated debt

 

 

72,995

 

 

 

751

 

 

4.08

 

 

 

44,460

 

 

 

481

 

 

4.29

 

 

 

17,835

 

 

 

183

 

 

4.08

 

Total interest-bearing liabilities

 

 

1,419,899

 

 

 

1,546

 

 

0.43

 

 

 

1,403,653

 

 

 

1,388

 

 

0.39

 

 

 

1,315,363

 

 

 

1,666

 

 

0.50

 

Noninterest-bearing demand deposits

 

 

1,092,520

 

 

 

 

 

 

 

852,872

 

 

 

 

 

 

 

686,537

 

 

 

 

 

Other liabilities

 

 

42,318

 

 

 

 

 

 

 

36,097

 

 

 

 

 

 

 

59,841

 

 

 

 

 

Total liabilities

 

 

2,554,737

 

 

 

 

 

 

 

2,292,622

 

 

 

 

 

 

 

2,061,741

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

597

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,334

 

 

 

 

 

Common stock

 

 

12,878

 

 

 

 

 

 

 

12,704

 

 

 

 

 

 

 

12,095

 

 

 

 

 

Paid-in capital

 

 

142,479

 

 

 

 

 

 

 

141,246

 

 

 

 

 

 

 

124,970

 

 

 

 

 

Treasury stock

 

 

(16,741

)

 

 

 

 

 

 

(16,741

)

 

 

 

 

 

 

(5,922

)

 

 

 

 

Retained earnings

 

 

129,896

 

 

 

 

 

 

 

122,361

 

 

 

 

 

 

 

98,046

 

 

 

 

 

Accumulated other comprehensive income (loss)

 

 

(3,188

)

 

 

 

 

 

 

1,207

 

 

 

 

 

 

 

(903

)

 

 

 

 

Total stockholders’ equity attributable to parent

 

 

265,921

 

 

 

 

 

 

 

260,777

 

 

 

 

 

 

 

235,620

 

 

 

 

 

Noncontrolling interest

 

 

1,147

 

 

 

 

 

 

 

961

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

267,068

 

 

 

 

 

 

 

261,738

 

 

 

 

 

 

 

235,620

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

2,821,805

 

 

 

 

 

 

$

2,554,360

 

 

 

 

 

 

$

2,297,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (tax-equivalent)

 

 

 

 

 

3.09

 

 

 

 

 

 

3.09

 

 

 

 

 

 

3.26

 

Net interest income and margin (tax-equivalent) 2

 

$

21,824

 

 

3.28

%

 

 

 

$

19,434

 

 

3.25

%

 

 

 

$

18,054

 

 

3.44

%

Less: Tax-equivalent adjustments

 

 

 

$

(320

)

 

 

 

 

 

$

(338

)

 

 

 

 

 

$

(367

)

 

 

Net interest spread

 

 

 

 

 

3.04

 

 

 

 

 

 

3.03

 

 

 

 

 

 

3.19

 

Net interest income and margin

 

 

 

$

21,503

 

 

3.24

%

 

 

 

$

19,096

 

 

3.19

%

 

 

 

$

17,687

 

 

3.37

%

 

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 $131.7 million, $147.3 million and $82.0 million are included in this amount for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively.

 

 

Twelve Months Ended

 

Twelve Months Ended

 

 

December 31, 2021

 

December 31, 2020

 

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing balances with banks

 

$

249,801

 

 

$

305

 

 

0.12

%

 

$

125,259

 

 

$

191

 

 

0.15

%

CDs with banks

 

 

10,406

 

 

 

201

 

 

1.93

 

 

 

12,484

 

 

 

246

 

 

1.97

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

231,450

 

 

 

2,405

 

 

1.04

 

 

 

121,607

 

 

 

2,448

 

 

2.01

 

Tax-exempt 2

 

 

201,532

 

 

 

6,328

 

 

3.14

 

 

 

144,389

 

 

 

5,361

 

 

3.71

 

Loans and loans held-for-sale: 1

 

 

 

 

 

 

 

 

 

 

 

 

Commercial 3

 

 

1,387,273

 

 

 

63,551

 

 

4.58

 

 

 

1,136,858

 

 

 

54,434

 

 

4.79

 

Tax-exempt 2

 

 

6,646

 

 

 

300

 

 

4.51

 

 

 

8,966

 

 

 

422

 

 

4.70

 

Real estate

 

 

307,829

 

 

 

9,662

 

 

3.14

 

 

 

403,166

 

 

 

18,100

 

 

4.49

 

Consumer

 

 

15,890

 

 

 

2069

 

 

13.02

 

 

 

6,973

 

 

 

465

 

 

6.67

 

Total loans

 

 

1,717,638

 

 

 

75,582

 

 

4.40

 

 

 

1,555,963

 

 

 

73,421

 

 

4.72

 

Total earning assets

 

 

2,410,827

 

 

 

84,821

 

 

3.52

 

 

 

1,959,702

 

 

 

81,667

 

 

4.17

 

Less: Allowance for loan losses

 

 

(25,682

)

 

 

 

 

 

 

(18,079

)

 

 

 

 

Cash and due from banks

 

 

13,874

 

 

 

 

 

 

 

26,460

 

 

 

 

 

Other assets

 

 

201,893

 

 

 

 

 

 

 

181,439

 

 

 

 

 

Total assets

 

$

2,600,912

 

 

 

 

 

 

$

2,149,522

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

673,547

 

 

$

1,612

 

 

0.24

%

 

$

408,110

 

 

$

2,521

 

 

0.62

%

Money market checking

 

 

469,010

 

 

 

883

 

 

0.19

 

 

 

458,606

 

 

 

2,680

 

 

0.58

 

Savings

 

 

42,800

 

 

 

5

 

 

0.01

 

 

 

45,420

 

 

 

6

 

 

0.01

 

IRAs

 

 

9,674

 

 

 

121

 

 

1.25

 

 

 

13,691

 

 

 

218

 

 

1.59

 

CDs

 

 

134,250

 

 

 

1,355

 

 

1.01

 

 

 

349,787

 

 

 

4,869

 

 

1.39

 

Repurchase agreements and federal funds sold

 

 

10,821

 

 

 

13

 

 

0.12

 

 

 

9,856

 

 

 

23

 

 

0.23

 

FHLB and other borrowings

 

 

25,275

 

 

 

93

 

 

0.37

 

 

 

68,407

 

 

 

1,049

 

 

1.53

 

Subordinated debt

 

 

51,149

 

 

 

2,188

 

 

4.28

 

 

 

7,568

 

 

 

261

 

 

3.45

 

Total interest-bearing liabilities

 

 

1,416,526

 

 

 

6,270

 

 

0.44

 

 

 

1,361,445

 

 

 

11,627

 

 

0.85

 

Noninterest-bearing demand deposits

 

 

895,024

 

 

 

 

 

 

 

502,457

 

 

 

 

 

Other liabilities

 

 

38,090

 

 

 

 

 

 

 

61,169

 

 

 

 

 

Total liabilities

 

 

2,349,640

 

 

 

 

 

 

 

1,925,071

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

730

 

 

 

 

 

 

 

7,334

 

 

 

 

 

Common stock

 

 

12,614

 

 

 

 

 

 

 

12,047

 

 

 

 

 

Paid-in capital

 

 

140,610

 

 

 

 

 

 

 

130,312

 

 

 

 

 

Treasury stock

 

 

(16,741

)

 

 

 

 

 

 

(2,637

)

 

 

 

 

Retained earnings

 

 

112,842

 

 

 

 

 

 

 

77,044

 

 

 

 

 

Accumulated other comprehensive income (loss)

 

 

534

 

 

 

 

 

 

 

351

 

 

 

 

 

Total stockholders’ equity attributable to parent

 

 

250,589

 

 

 

 

 

 

 

224,451

 

 

 

 

 

Noncontrolling interest

 

 

683

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

251,272

 

 

 

 

 

 

 

224,451

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

2,600,912

 

 

 

 

 

 

$

2,149,522

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (tax-equivalent)

 

 

 

 

 

3.08

 

 

 

 

 

 

3.32

 

Net interest income and margin (tax-equivalent) 2

 

$

78,551

 

 

3.26

%

 

 

 

$

70,040

 

 

3.57

%

Less: Tax-equivalent adjustments

 

 

 

$

(1,392

)

 

 

 

 

 

$

(1,214

)

 

 

Net interest spread

 

 

 

 

 

3.02

 

 

 

 

 

 

3.25

 

Net interest income and margin

 

 

 

$

77,159

 

 

3.20

%

 

 

 

$

68,826

 

 

3.51

%

 

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 $131.7 million and $82.0 million are included in this amount for the years ended December 31, 2021 and December 31, 2020, respectively.

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

 

 

Three Months Ended

 

Twelve Months Ended

(Dollars in thousands)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

December 31,

2021

 

December 31,

2020

Net interest margin - U.S. GAAP basis

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

21,503

 

 

$

19,096

 

 

$

17,687

 

 

$

77,159

 

 

$

68,826

 

Average interest-earning assets

 

 

2,636,074

 

 

 

2,372,880

 

 

 

2,085,571

 

 

 

2,410,827

 

 

 

1,959,702

 

Net interest margin

 

 

3.24

%

 

 

3.19

%

 

 

3.37

%

 

 

3.20

%

 

 

3.51

%

 

 

 

 

 

 

 

 

 

 

 

Net interest margin - non-U.S. GAAP basis

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

21,503

 

 

$

19,096

 

 

$

17,687

 

 

$

77,159

 

 

$

68,826

 

Impact of fully tax-equivalent adjustment

 

 

320

 

 

 

338

 

 

 

367

 

 

 

1,392

 

 

 

1,214

 

Net interest income on a fully tax-equivalent basis

 

 

21,824

 

 

 

19,434

 

 

 

18,054

 

 

 

78,551

 

 

 

70,040

 

Average interest-earning assets

 

 

2,636,074

 

 

 

2,372,880

 

 

 

2,085,571

 

 

 

2,410,827

 

 

 

1,959,702

 

Net interest margin on a fully tax-equivalent basis

 

 

3.28

%

 

 

3.25

%

 

 

3.44

%

 

 

3.26

%

 

 

3.57

%

Selected Financial Data

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

 

 

 

Quarterly

 

Year-to-Date

 

 

2021

 

2021

 

2020

 

2021

 

2020

 

 

Fourth Quarter

 

Third Quarter

 

Fourth Quarter

 

 

Earnings and Per Share Data:

 

 

 

 

 

 

 

 

 

 

Net income

 

$

9,959

 

 

$

11,828

 

 

$

11,838

 

 

 

39,121

 

 

 

37,411

 

Net income available to common shareholders

 

$

9,959

 

 

$

11,828

 

 

$

11,722

 

 

 

39,086

 

 

 

36,950

 

Earnings per share - basic

 

$

0.83

 

 

$

1.00

 

 

$

1.00

 

 

$

3.32

 

 

$

3.13

 

Earnings per share - diluted

 

$

0.77

 

 

$

0.92

 

 

$

0.97

 

 

$

3.10

 

 

$

3.06

 

Cash dividends paid per common share

 

$

0.15

 

 

$

0.14

 

 

$

0.09

 

 

$

0.51

 

 

$

0.36

 

Book value per common share

 

$

22.70

 

 

$

22.18

 

 

$

20.14

 

 

$

22.70

 

 

$

20.14

 

Tangible book value per common share 1

 

$

22.17

 

 

$

21.64

 

 

$

19.73

 

 

$

22.17

 

 

$

19.73

 

Weighted-average shares outstanding - basic

 

 

12,057,451

 

 

 

11,880,348

 

 

 

11,752,841

 

 

 

11,778,557

 

 

 

11,821,574

 

Weighted-average shares outstanding - diluted

 

 

12,944,919

 

 

 

12,824,309

 

 

 

12,144,471

 

 

 

12,613,620

 

 

 

12,088,106

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

Return on average assets 2

 

 

1.4

%

 

 

1.9

%

 

 

2.1

%

 

 

1.5

%

 

 

1.7

%

Return on average equity 2

 

 

15.0

%

 

 

18.1

%

 

 

20.1

%

 

 

15.6

%

 

 

16.7

%

Net interest margin 3 4

 

 

3.28

%

 

 

3.25

%

 

 

3.44

%

 

 

3.26

%

 

 

3.57

%

Efficiency ratio 5

 

 

80.7

%

 

 

62.9

%

 

 

61.0

%

 

 

69.7

%

 

 

60.5

%

Overhead ratio 2 6

 

 

4.1

%

 

 

4.0

%

 

 

3.6

%

 

 

3.7

%

 

 

4.5

%

Equity to assets

 

 

9.8

%

 

 

9.5

%

 

 

10.3

%

 

 

9.8

%

 

 

10.3

%

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Data and Ratios:

 

 

 

 

 

 

 

 

 

 

Charge-offs

 

$

1,619

 

 

$

98

 

 

$

300

 

 

$

1,619

 

 

$

2,190

 

Recoveries

 

$

316

 

 

$

23

 

 

$

16

 

 

$

316

 

 

$

33

 

Net loan charge-offs to total loans 2 7

 

 

0.1

%

 

 

%

 

 

0.1

%

 

 

0.1

%

 

 

0.1

%

Allowance for loan losses

 

$

18,266

 

 

$

25,187

 

 

$

25,844

 

 

$

18,266

 

 

$

25,844

 

Allowance for loan losses to total loans 8

 

 

1.0

%

 

 

1.4

%

 

 

1.8

%

 

 

1.0

%

 

 

1.8

%

Nonperforming loans

 

$

17,713

 

 

$

17,453

 

 

$

13,713

 

 

$

17,713

 

 

$

13,713

 

Nonperforming loans to total loans

 

 

0.9

%

 

 

1.0

%

 

 

0.9

%

 

 

0.9

%

 

 

0.9

%

 

 

 

 

 

 

 

 

 

 

 

Intercoastal Mortgage Company, LLC Production Data9:

 

 

 

 

 

 

 

 

 

 

Mortgage pipeline

 

$

1,007,990

 

 

$

1,150,116

 

 

$

1,536,826

 

 

$

1,007,990

 

 

$

1,536,826

 

Loans originated

 

$

1,046,977

 

 

$

1,456,588

 

 

$

4,461,922

 

 

$

6,269,371

 

 

$

4,461,922

 

Loans closed

 

$

977,354

 

 

$

1,233,605

 

 

$

3,468,646

 

 

$

5,607,951

 

 

$

3,468,646

 

Loans sold

 

$

957,153

 

 

$

1,098,475

 

 

$

2,948,724

 

 

$

5,326,029

 

 

$

2,948,724

 

 

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 Intercoastal Mortgage Company, LLC, 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)

 

 

 

Year-to-Date

 

 

December 31, 2021

 

September 30, 2021

 

December 31, 2020

Goodwill

 

$

3,988

 

 

$

3,988

 

 

$

2,350

 

Intangibles

 

 

2,316

 

 

 

2,518

 

 

 

2,400

 

Total intangibles

 

 

6,304

 

 

 

6,506

 

 

 

4,750

 

 

 

 

 

 

 

 

Total equity attributable to parent

 

 

274,328

 

 

 

265,565

 

 

 

239,483

 

Less: Preferred equity

 

 

 

 

 

 

 

 

(7,334

)

Less: Total intangibles

 

 

(6,304

)

 

 

(6,506

)

 

 

(4,750

)

Tangible common equity

 

 

268,024

 

 

 

259,059

 

 

 

227,399

 

 

 

 

 

 

 

 

Tangible common equity

 

 

268,024

 

 

 

259,059

 

 

 

227,399

 

Common shares outstanding (000s)

 

 

12,087

 

 

 

11,972

 

 

 

11,526

 

Tangible book value per common share

 

$

22.17

 

 

$

21.64

 

 

$

19.73

 

 

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