MVB Financial Corp. Reports Third Quarter 2017 Earnings
FAIRMONT, W.Va., Nov. 2, 2017 /PRNewswire/ -- MVB Financial Corp. (OTC Markets GroupOTCQB: MVBF) and its subsidiaries – MVB Bank and MVB Mortgage (collectively "MVB") – reported net income of $2.3 million or $0.21 per share basic and $0.21 per share diluted for the three months ended September 30, 2017, compared to $2.3 million or $0.25 per share basic and $0.24 per share diluted for the three months ended September 30, 2016.
Third quarter produced solid growth, a significant rise in stock price and an historic moment for MVB Financial Corp. - application for The Nasdaq® Capital Market. If the application is approved, MVB would be the first West Virginia company in 10 years, and the first West Virginia bank in 18 years, to be listed on The Nasdaq.
"Truly positive was the significant rise in MVB's stock price, which reached a new 52-week high during the third quarter. Without doubt, MVB is gaining notice from investors," said Larry F. Mazza, CEO and President, MVB Financial Corp. "MVB experienced an increase of more than 3 percent in deposit growth or nearly $40 million and net income available to common shareholders grew at a 10 percent pace in the third quarter when compared to the same quarter last year. For the remainder of 2017, we are solidly focused on maximizing our performance, especially in asset growth and expense control, and in developing our priorities for 2018. The best for MVB is yet to come."
Approximately 1.9 million shares of the Company's common stock was issued from a capital raise completed in December 2016 and 434,783 shares of the Company's common stock was issued from a rights offering completed in April 2017. These additional issued shares resulted in a $0.06 decrease in basic earnings per share for the three months ended September 30, 2017, compared to the same time period in 2016, while a $199 thousand increase in third quarter 2017 net income available to common shareholders versus third quarter 2016, resulted in a $0.02 increase in basic earnings per share.
THIRD QUARTER 2017 HIGHLIGHTS
- Net interest income of $11.4 million increased $520 thousand, or 4.8% from June 30, 2017, and $685 thousand, or 6.4% from the third quarter ended September 30, 2016.
- Total assets continue to steadily grow and reached $1.5 billion as of September 30, 2017.
- Deposits of $1.2 billion as of September 30, 2017 increased $65.6 million, or 6.0% from June 30, 2017, and increased $38.4 million, or 3.4% from September 30, 2016. Noninterest bearing deposit balances have steadily improved and reached $121.5 million as of September 30, 2017, an increase of $15.7 million since September 30, 2016.
- Strong credit quality continued with non-performing loans to total loans of 0.60% and annualized net loan charge-offs to total loans of 0.16% at September 30, 2017.
Third quarter 2017 saw two new, high technology MVB branches open in strong markets: Morgantown, West Virginia, and Leesburg, Virginia.
"MVB remains committed to high technology, high touch branch banking that does not follow the traditional legacy type branches, but instead moves toward the use of client-friendly technology and strong, positive relationships," Mazza said.
In 2016, management focused on diversifying its lending to reduce commercial real estate concentration levels. This coupled with higher than usual loan payoffs, reflected a smaller total loan growth than anticipated for the quarter. Loans as of September 30, 2017 totaled $1.094 billion, a decrease of $7.9 million, or 0.7% when compared to loan balances at June 30, 2017. In comparison to the September 30, 2016 balance, loans increased $18.4 million, or 1.7%.
"The commercial pipeline is stronger today. A very positive factor, especially for leveraging future growth, has been MVB's strong attention to establishing lending processes including robust monitoring of economic and other risk factors across the different types of lending done by MVB. We believe this exceeds regulatory expectations and gives us a competitive advantage," Mazza said.
Deposits as of September 30, 2017 totaled $1.165 billion, an increase of $65.6 million, or 6.0% when compared to deposit balances at June 30, 2017. In comparison to the September 30, 2016 deposit balance of $1.127 billion, deposits increased $38.4 million, or 3.4%. Noninterest bearing deposit balances have steadily improved and reached $121.5 million as of September 30, 2017, an increase of $15.7 million since September 30, 2016.
Net interest income for the third quarter of 2017 was $11.4 million, an increase of $520 thousand, or 4.8% from June 30, 2017 and $685 thousand, or 6.4% from the third quarter ended September 30, 2016. Net interest margin for the third quarter of 2017 was 3.37%, an increase of 6 basis points from June 30, 2017 and 20 basis points from the quarter ended September 30, 2016. Increased interest rates and an emphasis on loan yields helped to increase net interest income, despite higher than anticipated loan payoffs in 2017 and an ongoing focus on maintaining an appropriate level of commercial real estate concentration.
Provision for loan losses for the third quarter of 2017 was $96 thousand, a decrease of $427 thousand, or 81.6% from June 30, 2017 and a decrease of $979 thousand, or 91.1% from the third quarter ended September 30, 2016. The decrease in provision for loan loss is most attributable to historical loss rates that have declined substantially, which is the result of a significantly lower level of charge-offs in the current year versus the prior year, as well as the use of updated peer historical loan loss rates within the allowance for loan loss methodology. Meanwhile, the overall decrease was also impacted by decreased loan volume.
Through continued effective collection and successful workout efforts, the Company's nonperforming loans to total loans continues to be low and was 0.60% as of September 30, 2017, an increase of 14 basis points from June 30, 2017 and a decrease of 33 basis points from September 30, 2016. In addition, the Company's annualized net loan charge-offs to total loans was 0.16% as of September 30, 2017, an increase of 11 basis points from June 30, 2017 and a decrease of 21 basis points from September 30, 2016.
Noninterest income for the third quarter of 2017 was $10.2 million, a decrease of $1.4 million, or 12.2% from June 30, 2017 and a decrease of $2.4 million, or 18.9% from the third quarter ended September 30, 2016. The linked quarter decrease was primarily the result of a $2.3 million decrease in gain on derivatives. The year over year decrease was primarily the result of a $1.3 million decrease in gain on derivatives, a $374 thousand decrease in gain on sale of securities, and a $650 thousand decrease in mortgage fee income. Both decreases in the gain on derivatives was primarily attributable to a decrease in closed loan volume. MVB Mortgage noninterest income for the third quarter of 2017 was $8.8 million, a decrease of $1.3 million, or 13.0% from June 30, 2017 and a decrease of $2.2 million, or 20.1% from the third quarter ended September 30, 2016.
Noninterest expense for the third quarter of 2017 was $18.0 million, a decrease of $537 thousand, or 2.9% from June 30, 2017 and $773 thousand, or 4.1% from the third quarter ended September 30, 2016. The linked quarter and year over year decrease was primarily the result of a decrease in salaries and employee benefits related to closed mortgage loan volume, which decreased by 8.8% and 11.2%, respectively. Both the linked quarter and year over year decreases were also the result of decreased data processing fees related to the core system conversion that the bank implemented in the second quarter of 2017.
As previously announced, on August 16, 2017, MVB Financial Corp. declared a quarterly cash dividend of $0.025 per share to shareholders of record at the close of business on September 1, 2017, payable September 15, 2017. This was the third quarterly dividend for 2017 and was equal to the March and June 2017 payouts of $0.025 per share. The cash dividend of $0.075 through the nine months ended September 30, 2017, increased $0.015, or 25% compared to the nine months ended September 30, 2016.
About MVB Financial Corp.
MVB is a financial holding company headquartered in Fairmont, West Virginia. 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.
The OTCQB is a market tier operated by the OTC Market Group Inc., for over-the-counter traded companies that are current in their reporting with a U.S. regulator.
For more information, 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, 2016, 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. |
||||||||||||||||||||
| Financial Highlights |
||||||||||||||||||||
| Condensed Consolidated Statements of Income (Unaudited) (Dollars in thousands, except per share data) |
||||||||||||||||||||
| Nine Months Ended |
Three Months |
Three Months |
Three Months |
|||||||||||||||||
| 2017 |
2016 |
2017 |
2017 |
2016 |
||||||||||||||||
| Interest income |
$ |
41,512 |
$ |
40,485 |
$ |
14,630 |
$ |
13,814 |
$ |
13,523 |
||||||||||
| Interest expense |
8,898 |
8,319 |
3,216 |
2,920 |
2,794 |
|||||||||||||||
| Net interest income |
32,614 |
32,166 |
11,414 |
10,894 |
10,729 |
|||||||||||||||
| Provision for loan losses |
1,137 |
2,975 |
96 |
523 |
1,075 |
|||||||||||||||
| Noninterest income |
30,549 |
33,139 |
10,158 |
11,567 |
12,526 |
|||||||||||||||
| Noninterest expense |
52,786 |
52,395 |
17,966 |
18,503 |
18,739 |
|||||||||||||||
| Income from continuing operations, before income taxes |
9,240 |
9,935 |
3,510 |
3,435 |
3,441 |
|||||||||||||||
| Income tax expense - continuing operations |
3,088 |
3,265 |
1,192 |
1,175 |
1,131 |
|||||||||||||||
| Net income from continuing operations |
6,152 |
6,670 |
2,318 |
2,260 |
2,310 |
|||||||||||||||
| Income from discontinued operations, before income taxes |
— |
6,346 |
— |
— |
— |
|||||||||||||||
| Income tax benefit - discontinued operations |
— |
2,411 |
— |
— |
— |
|||||||||||||||
| Net income from discontinued operations |
— |
3,935 |
— |
— |
— |
|||||||||||||||
| Net income |
$ |
6,152 |
$ |
10,605 |
$ |
2,318 |
$ |
2,260 |
$ |
2,310 |
||||||||||
| Preferred dividends |
374 |
814 |
123 |
122 |
314 |
|||||||||||||||
| Net income available to common shareholders |
$ |
5,778 |
$ |
9,791 |
$ |
2,195 |
$ |
2,138 |
$ |
1,996 |
||||||||||
| Earnings per share from continuing operations - basic |
$ |
0.56 |
$ |
0.73 |
$ |
0.21 |
$ |
0.21 |
$ |
0.25 |
||||||||||
| Earnings per share from discontinued operations - basic |
$ |
— |
$ |
0.49 |
$ |
— |
$ |
— |
$ |
— |
||||||||||
| Earnings per common shareholder - basic |
$ |
0.56 |
$ |
1.22 |
$ |
0.21 |
$ |
0.21 |
$ |
0.25 |
||||||||||
| Earnings per share from continuing operations - diluted |
$ |
0.56 |
$ |
0.68 |
$ |
0.21 |
$ |
0.20 |
$ |
0.24 |
||||||||||
| Earnings per share from discontinued operations - diluted |
$ |
— |
$ |
0.40 |
$ |
— |
$ |
— |
$ |
— |
||||||||||
| Earnings per common shareholder - diluted |
$ |
0.56 |
$ |
1.08 |
$ |
0.21 |
$ |
0.20 |
$ |
0.24 |
||||||||||
| Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands) |
||||||||||||||||
| September 30, 2017 |
June 30, 2017 |
December 31, 2016 |
September 30, 2016 |
|||||||||||||
| Cash and cash equivalents |
$ |
20,272 |
$ |
17,805 |
$ |
17,340 |
$ |
28,804 |
||||||||
| Certificates of deposit with other banks |
14,778 |
14,527 |
14,527 |
7,174 |
||||||||||||
| Investment securities |
187,348 |
175,110 |
162,368 |
152,171 |
||||||||||||
| Loans held for sale |
69,057 |
107,825 |
90,174 |
123,109 |
||||||||||||
| Loans |
1,094,467 |
1,102,378 |
1,052,865 |
1,076,073 |
||||||||||||
| Allowance for loan losses |
(9,396) |
(9,748) |
(9,101) |
(9,150) |
||||||||||||
| Net loans |
1,092,630 |
1,092,630 |
1,043,764 |
1,066,923 |
||||||||||||
| Premises and equipment |
27,189 |
27,462 |
25,081 |
25,440 |
||||||||||||
| Goodwill |
18,480 |
18,480 |
18,480 |
18,480 |
||||||||||||
| Other assets |
41,836 |
53,214 |
47,070 |
46,494 |
||||||||||||
| Total assets |
$ |
1,471,590 |
$ |
1,507,053 |
$ |
1,418,804 |
$ |
1,468,595 |
||||||||
| Deposits |
$ |
1,165,199 |
$ |
1,099,608 |
$ |
1,107,017 |
$ |
1,126,790 |
||||||||
| Borrowed funds |
84,403 |
189,384 |
90,921 |
136,112 |
||||||||||||
| Other liabilities |
73,011 |
71,227 |
75,241 |
80,316 |
||||||||||||
| Shareholders' equity |
148,977 |
146,834 |
145,625 |
125,377 |
||||||||||||
| Total liabilities and shareholders' equity |
$ |
1,471,590 |
$ |
1,507,053 |
$ |
1,418,804 |
$ |
1,468,595 |
||||||||
| Reportable Segments (Unaudited) |
||||||||||||||||||||
| Three Months Ended September 30, 2017 |
Commercial & |
Mortgage |
Financial |
Intercompany |
Consolidated |
|||||||||||||||
| (Dollars in thousands) |
||||||||||||||||||||
| Revenues: |
||||||||||||||||||||
| Interest income |
$ |
13,432 |
$ |
1,352 |
$ |
1 |
$ |
(155) |
$ |
14,630 |
||||||||||
| Mortgage fee income |
200 |
10,042 |
— |
(224) |
10,018 |
|||||||||||||||
| Insurance and investment services income |
147 |
— |
— |
— |
147 |
|||||||||||||||
| Other income |
1,319 |
(1,279) |
1,250 |
(1,297) |
(7) |
|||||||||||||||
| 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) from continuing operations, before |
4,822 |
467 |
(1,779) |
— |
3,510 |
|||||||||||||||
| Income tax expense (benefit) - continuing operations |
1,605 |
191 |
(604) |
— |
1,192 |
|||||||||||||||
| Net income (loss) from continuing operations |
3,217 |
276 |
(1,175) |
— |
2,318 |
|||||||||||||||
| 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 |
||||||||||
| Reportable Segments (Unaudited) |
||||||||||||||||||||
| Three Months Ended June 30, 2017 |
Commercial & |
Mortgage |
Financial |
Intercompany |
Consolidated |
|||||||||||||||
| (Dollars in thousands) |
||||||||||||||||||||
| Revenues: |
||||||||||||||||||||
| Interest income |
$ |
12,907 |
$ |
1,073 |
$ |
1 |
$ |
(167) |
$ |
13,814 |
||||||||||
| Mortgage fee income |
188 |
8,937 |
— |
(173) |
8,952 |
|||||||||||||||
| Insurance and investment services income |
124 |
— |
— |
— |
124 |
|||||||||||||||
| Other income |
1,405 |
1,137 |
1,307 |
(1,358) |
2,491 |
|||||||||||||||
| 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) from continuing operations, before |
3,657 |
1,366 |
(1,588) |
— |
3,435 |
|||||||||||||||
| Income tax expense (benefit) - continuing operations |
1,165 |
540 |
(530) |
— |
1,175 |
|||||||||||||||
| Net income (loss) from continuing operations |
2,492 |
826 |
(1,058) |
— |
2,260 |
|||||||||||||||
| 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 |
||||||||||
| Reportable Segments (Unaudited) |
||||||||||||||||||||||||
| Three Months Ended September 30, 2016 |
Commercial & |
Mortgage |
Financial |
Insurance |
Intercompany |
Consolidated |
||||||||||||||||||
| (Dollars in thousands) |
||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||
| Interest income |
$ |
12,528 |
$ |
1,183 |
$ |
1 |
$ |
— |
$ |
(189) |
$ |
13,523 |
||||||||||||
| Mortgage fee income |
(95) |
11,003 |
— |
— |
(240) |
10,668 |
||||||||||||||||||
| Insurance and investment services income |
128 |
— |
— |
— |
— |
128 |
||||||||||||||||||
| Other income |
1,687 |
(31) |
1,444 |
— |
(1,370) |
1,730 |
||||||||||||||||||
| Total operating income |
14,248 |
12,155 |
1,445 |
— |
(1,799) |
26,049 |
||||||||||||||||||
| Expenses: |
||||||||||||||||||||||||
| Interest expense |
2,113 |
552 |
560 |
— |
(431) |
2,794 |
||||||||||||||||||
| Salaries and employee benefits |
2,924 |
7,724 |
1,735 |
— |
— |
12,383 |
||||||||||||||||||
| Provision for loan losses |
1,075 |
— |
— |
— |
— |
1,075 |
||||||||||||||||||
| Other expense |
4,782 |
2,054 |
888 |
— |
(1,368) |
6,356 |
||||||||||||||||||
| Total operating expenses |
10,894 |
10,330 |
3,183 |
— |
(1,799) |
22,608 |
||||||||||||||||||
| Income (loss) from continuing operations, |
3,354 |
1,825 |
(1,738) |
— |
— |
3,441 |
||||||||||||||||||
| Income tax expense (benefit) - continuing |
1,027 |
704 |
(600) |
— |
— |
1,131 |
||||||||||||||||||
| Net income (loss) from continuing |
2,327 |
1,121 |
(1,138) |
— |
— |
2,310 |
||||||||||||||||||
| Income (loss) from discontinued operations |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
| Income tax expense (benefit) - |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||||||
| Net income (loss) from discontinued |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||||||
| Net income (loss) |
$ |
2,327 |
$ |
1,121 |
$ |
(1,138) |
$ |
— |
$ |
— |
$ |
2,310 |
||||||||||||
| Preferred stock dividends |
— |
— |
314 |
— |
— |
314 |
||||||||||||||||||
| Net income (loss) available to common |
$ |
2,327 |
$ |
1,121 |
$ |
(1,452) |
$ |
— |
$ |
— |
$ |
1,996 |
||||||||||||
| Reportable Segments (Unaudited) |
||||||||||||||||||||
| Nine Months Ended September 30, 2017 |
Commercial & |
Mortgage |
Financial |
Intercompany |
Consolidated |
|||||||||||||||
| (Dollars in thousands) |
||||||||||||||||||||
| Revenues: |
||||||||||||||||||||
| Interest income |
$ |
38,651 |
$ |
3,206 |
$ |
3 |
$ |
(348) |
$ |
41,512 |
||||||||||
| Mortgage fee income |
573 |
28,616 |
— |
(585) |
28,604 |
|||||||||||||||
| Insurance and investment services income |
395 |
— |
— |
— |
395 |
|||||||||||||||
| Other income |
3,679 |
(1,973) |
3,768 |
(3,924) |
1,550 |
|||||||||||||||
| 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) from continuing operations, before |
12,128 |
2,043 |
(4,931) |
— |
9,240 |
|||||||||||||||
| Income tax expense (benefit) - continuing operations |
3,931 |
827 |
(1,670) |
— |
3,088 |
|||||||||||||||
| Net income (loss) from continuing operations |
8,197 |
1,216 |
(3,261) |
— |
6,152 |
|||||||||||||||
| Income (loss) from discontinued operations |
— |
— |
— |
— |
— |
|||||||||||||||
| Income tax expense (benefit) - discontinued operations |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||||
| Net income (loss) from discontinued operations |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||||
| 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 |
||||||||||
| Reportable Segments (Unaudited) |
||||||||||||||||||||||||
| Nine Months Ended September 30, 2016 |
Commercial & |
Mortgage |
Financial |
Insurance |
Intercompany |
Consolidated |
||||||||||||||||||
| (Dollars in thousands) |
||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||
| Interest income |
$ |
37,583 |
$ |
3,278 |
$ |
2 |
$ |
— |
$ |
(378) |
$ |
40,485 |
||||||||||||
| Mortgage fee income |
(190) |
27,862 |
— |
— |
(822) |
26,850 |
||||||||||||||||||
| Insurance and investment services income |
303 |
— |
— |
— |
— |
303 |
||||||||||||||||||
| Other income |
4,161 |
1,804 |
4,310 |
— |
(4,289) |
5,986 |
||||||||||||||||||
| Total operating income |
41,857 |
32,944 |
4,312 |
— |
(5,489) |
73,624 |
||||||||||||||||||
| Expenses: |
||||||||||||||||||||||||
| Interest expense |
6,312 |
1,543 |
1,665 |
— |
(1,201) |
8,319 |
||||||||||||||||||
| Salaries and employee benefits |
8,654 |
20,866 |
4,907 |
— |
— |
34,427 |
||||||||||||||||||
| Provision for loan losses |
2,975 |
— |
— |
— |
— |
2,975 |
||||||||||||||||||
| Other expense |
13,686 |
5,979 |
2,591 |
— |
(4,288) |
17,968 |
||||||||||||||||||
| Total operating expenses |
31,627 |
28,388 |
9,163 |
— |
(5,489) |
63,689 |
||||||||||||||||||
| Income (loss) from continuing operations, |
10,230 |
4,556 |
(4,851) |
— |
— |
9,935 |
||||||||||||||||||
| Income tax expense (benefit) - continuing |
3,177 |
1,762 |
(1,674) |
— |
— |
3,265 |
||||||||||||||||||
| Net income (loss) from continuing |
7,053 |
2,794 |
(3,177) |
— |
— |
6,670 |
||||||||||||||||||
| Income (loss) from discontinued operations |
— |
6,926 |
(580) |
6,346 |
||||||||||||||||||||
| Income tax expense (benefit) - discontinued |
$ |
— |
$ |
— |
$ |
2,629 |
$ |
(218) |
$ |
— |
$ |
2,411 |
||||||||||||
| Net income (loss) from discontinued |
$ |
— |
$ |
— |
$ |
4,297 |
$ |
(362) |
$ |
— |
$ |
3,935 |
||||||||||||
| Net income (loss) |
$ |
7,053 |
$ |
2,794 |
$ |
1,120 |
$ |
(362) |
$ |
— |
$ |
10,605 |
||||||||||||
| Preferred stock dividends |
814 |
814 |
||||||||||||||||||||||
| Net income (loss) available to common |
$ |
7,053 |
$ |
2,794 |
$ |
306 |
$ |
(362) |
$ |
— |
$ |
9,791 |
||||||||||||
| Average Balances and Interest Rates (Unaudited) (Dollars in thousands) |
|||||||||||||||||||||||||||||||||
| Three Months Ended |
Three Months Ended June 30, 2017 |
Three Months Ended |
|||||||||||||||||||||||||||||||
| Average |
Interest |
Yield/ |
Average |
Interest |
Yield/ |
Average |
Interest |
Yield/ |
|||||||||||||||||||||||||
| Assets |
|||||||||||||||||||||||||||||||||
| Interest-bearing deposits in banks |
$ |
4,484 |
$ |
15 |
1.33 |
% |
$ |
3,277 |
$ |
12 |
1.47 |
% |
$ |
18,567 |
$ |
28 |
0.60 |
% |
|||||||||||||||
| CDs with other banks |
14,711 |
74 |
2.00 |
% |
14,456 |
70 |
1.94 |
% |
10,893 |
53 |
1.95 |
% |
|||||||||||||||||||||
| Investment securities: |
|||||||||||||||||||||||||||||||||
| Taxable |
126,880 |
693 |
2.17 |
% |
119,553 |
645 |
2.16 |
% |
78,943 |
342 |
1.73 |
% |
|||||||||||||||||||||
| Tax-exempt |
56,264 |
443 |
3.12 |
% |
53,733 |
418 |
3.12 |
% |
67,033 |
476 |
2.84 |
% |
|||||||||||||||||||||
| Loans and loans held for sale: 1 |
|||||||||||||||||||||||||||||||||
| Commercial |
762,650 |
8,742 |
4.55 |
% |
725,707 |
8,170 |
4.52 |
% |
737,134 |
7,916 |
4.30 |
% |
|||||||||||||||||||||
| Tax exempt |
14,991 |
130 |
3.44 |
% |
15,263 |
131 |
3.44 |
% |
16,170 |
140 |
3.46 |
% |
|||||||||||||||||||||
| Real estate |
349,459 |
4,346 |
4.93 |
% |
373,353 |
4,201 |
4.51 |
% |
409,074 |
4,370 |
4.27 |
% |
|||||||||||||||||||||
| Consumer |
13,462 |
187 |
5.51 |
% |
13,817 |
167 |
4.85 |
% |
16,003 |
198 |
4.95 |
% |
|||||||||||||||||||||
| Total loans |
1,140,562 |
13,405 |
4.66 |
% |
1,128,140 |
12,669 |
4.50 |
% |
1,178,381 |
12,624 |
4.29 |
% |
|||||||||||||||||||||
| Total earning assets |
1,342,901 |
14,630 |
4.32 |
% |
1,319,159 |
13,814 |
4.20 |
% |
1,353,817 |
13,523 |
4.00 |
% |
|||||||||||||||||||||
| Less: Allowance for loan losses |
(9,760) |
(9,734) |
(9,337) |
||||||||||||||||||||||||||||||
| Cash and due from banks |
17,501 |
15,407 |
12,995 |
||||||||||||||||||||||||||||||
| Other assets |
123,898 |
100,205 |
89,586 |
||||||||||||||||||||||||||||||
| Total assets |
$ |
1,474,540 |
$ |
1,425,037 |
$ |
1,447,061 |
|||||||||||||||||||||||||||
| Liabilities |
|||||||||||||||||||||||||||||||||
| Deposits: |
|||||||||||||||||||||||||||||||||
| NOW |
$ |
436,493 |
$ |
675 |
0.61 |
% |
$ |
432,729 |
$ |
603 |
0.56 |
% |
$ |
426,096 |
$ |
530 |
0.50 |
% |
|||||||||||||||
| Money market checking |
246,160 |
458 |
0.74 |
% |
237,173 |
432 |
0.73 |
% |
178,579 |
359 |
0.80 |
% |
|||||||||||||||||||||
| Savings |
46,807 |
20 |
0.17 |
% |
48,590 |
20 |
0.17 |
% |
42,811 |
19 |
0.18 |
% |
|||||||||||||||||||||
| IRAs |
16,649 |
56 |
1.33 |
% |
16,282 |
53 |
1.31 |
% |
16,701 |
53 |
1.27 |
% |
|||||||||||||||||||||
| CDs |
249,698 |
874 |
1.39 |
% |
256,887 |
855 |
1.33 |
% |
305,259 |
941 |
1.23 |
% |
|||||||||||||||||||||
| Repurchase agreements and federal funds |
25,093 |
20 |
0.32 |
% |
21,268 |
19 |
0.36 |
% |
26,238 |
17 |
0.26 |
% |
|||||||||||||||||||||
| FHLB and other borrowings |
149,313 |
548 |
1.46 |
% |
112,385 |
380 |
1.36 |
% |
170,946 |
316 |
0.74 |
% |
|||||||||||||||||||||
| Subordinated debt |
33,524 |
565 |
6.69 |
% |
33,524 |
558 |
6.68 |
% |
33,524 |
559 |
6.67 |
% |
|||||||||||||||||||||
| Total interest-bearing liabilities |
1,203,737 |
3,216 |
1.06 |
% |
1,158,838 |
2,920 |
1.01 |
% |
1,200,154 |
2,794 |
0.93 |
% |
|||||||||||||||||||||
| Noninterest bearing demand deposits |
115,343 |
114,974 |
106,097 |
||||||||||||||||||||||||||||||
| Other liabilities |
7,703 |
7,698 |
14,530 |
||||||||||||||||||||||||||||||
| Total liabilities |
1,326,783 |
1,281,510 |
1,320,781 |
||||||||||||||||||||||||||||||
| Stockholders' equity |
|||||||||||||||||||||||||||||||||
| Preferred stock |
7,834 |
7,834 |
16,334 |
||||||||||||||||||||||||||||||
| Common stock |
10,495 |
10,375 |
8,132 |
||||||||||||||||||||||||||||||
| Paid-in capital |
98,289 |
96,986 |
74,439 |
||||||||||||||||||||||||||||||
| Treasury stock |
(1,084) |
(1,084) |
(1,084) |
||||||||||||||||||||||||||||||
| Retained earnings |
35,152 |
32,764 |
30,070 |
||||||||||||||||||||||||||||||
| Accumulated other comprehensive income |
(2,929) |
(3,348) |
(1,611) |
||||||||||||||||||||||||||||||
| Total stockholders' equity |
147,757 |
143,527 |
126,280 |
||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity |
$ |
1,474,540 |
1,425,037 |
$ |
1,447,061 |
||||||||||||||||||||||||||||
| Net interest spread |
3.26 |
% |
3.19 |
% |
3.07 |
% |
|||||||||||||||||||||||||||
| Net interest income-margin |
$ |
11,414 |
3.37 |
% |
10,894 |
3.31 |
% |
$ |
10,729 |
3.17 |
% |
||||||||||||||||||||||
| 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 |
Nine Months Ended |
|||||||||||||||||||||
| (Dollars in thousands) |
Average |
Interest |
Yield/Cost |
Average |
Interest |
Yield/Cost |
||||||||||||||||
| Assets |
||||||||||||||||||||||
| Interest-bearing deposits in banks |
$ |
3,504 |
$ |
37 |
1.41 |
% |
$ |
17,859 |
$ |
73 |
0.55 |
% |
||||||||||
| CDs with other banks |
14,566 |
213 |
1.96 |
12,392 |
178 |
1.92 |
||||||||||||||||
| Investment securities: |
||||||||||||||||||||||
| Taxable |
118,497 |
1,884 |
2.13 |
73,987 |
984 |
1.77 |
||||||||||||||||
| Tax-exempt |
55,426 |
1,291 |
3.11 |
61,682 |
1,320 |
2.85 |
||||||||||||||||
| Loans and loans held for sale: 1 |
||||||||||||||||||||||
| Commercial |
744,967 |
24,854 |
4.46 |
734,924 |
24,394 |
4.43 |
||||||||||||||||
| Tax exempt |
15,193 |
392 |
3.45 |
16,491 |
428 |
3.46 |
||||||||||||||||
| Real estate |
358,309 |
12,312 |
4.59 |
398,213 |
12,489 |
4.18 |
||||||||||||||||
| Consumer |
13,880 |
529 |
5.10 |
17,441 |
619 |
4.73 |
||||||||||||||||
| Total loans |
1,132,349 |
38,087 |
4.50 |
1,167,069 |
37,930 |
4.33 |
||||||||||||||||
| Total earning assets |
1,324,342 |
41,512 |
4.19 |
1,332,989 |
40,485 |
4.05 |
||||||||||||||||
| Less: Allowance for loan losses |
(9,641) |
(8,758) |
||||||||||||||||||||
| Cash and due from banks |
16,060 |
13,206 |
||||||||||||||||||||
| Other assets |
103,576 |
88,061 |
||||||||||||||||||||
| Total assets |
$ |
1,434,337 |
$ |
1,425,498 |
||||||||||||||||||
| Liabilities |
||||||||||||||||||||||
| Deposits: |
||||||||||||||||||||||
| NOW |
$ |
428,359 |
$ |
1,802 |
0.56 |
$ |
457,945 |
$ |
1,865 |
0.54 |
% |
|||||||||||
| Money market checking |
240,094 |
1,349 |
0.75 |
146,467 |
833 |
0.76 |
||||||||||||||||
| Savings |
47,825 |
59 |
0.16 |
43,870 |
70 |
0.21 |
||||||||||||||||
| IRAs |
16,501 |
159 |
1.29 |
16,252 |
155 |
1.27 |
||||||||||||||||
| CDs |
257,015 |
2,583 |
1.34 |
318,740 |
2,816 |
1.18 |
||||||||||||||||
| Repurchase agreements and federal funds sold |
23,165 |
56 |
0.32 |
27,169 |
55 |
0.27 |
||||||||||||||||
| FHLB and other borrowings |
122,062 |
1,216 |
1.33 |
153,687 |
861 |
0.75 |
||||||||||||||||
| Subordinated debt |
33,524 |
1,674 |
6.68 |
33,524 |
1,664 |
6.62 |
||||||||||||||||
| Total interest-bearing liabilities |
1,168,545 |
8,898 |
1.02 |
1,197,654 |
8,319 |
0.93 |
||||||||||||||||
| Noninterest bearing demand deposits |
114,455 |
96,615 |
||||||||||||||||||||
| Other liabilities |
8,204 |
11,271 |
||||||||||||||||||||
| Total liabilities |
1,291,204 |
1,305,540 |
||||||||||||||||||||
| Stockholders' equity |
||||||||||||||||||||||
| Preferred stock |
7,959 |
16,334 |
||||||||||||||||||||
| Common stock |
10,307 |
8,124 |
||||||||||||||||||||
| Paid-in capital |
96,268 |
74,355 |
||||||||||||||||||||
| Treasury stock |
(1,084) |
(1,084) |
||||||||||||||||||||
| Retained earnings |
33,202 |
24,294 |
||||||||||||||||||||
| Accumulated other comprehensive income |
(3,519) |
(2,065) |
||||||||||||||||||||
| Total stockholders' equity |
143,133 |
119,958 |
||||||||||||||||||||
| Total liabilities and stockholders' equity |
$ |
1,434,337 |
$ |
1,425,498 |
||||||||||||||||||
| Net interest spread |
3.17 |
3.12 |
||||||||||||||||||||
| Net interest income-margin |
$ |
32,614 |
3.29 |
% |
$ |
32,166 |
3.22 |
% |
||||||||||||||
| 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 |
|||||||||||||||||||||||||||
| 2017 |
2017 |
2017 |
2016 |
2016 |
2017 |
2016 |
||||||||||||||||||||||
| Third |
Second |
First |
Fourth |
Third |
||||||||||||||||||||||||
| Earnings and Per Share Data: |
||||||||||||||||||||||||||||
| Net income from continuing operations |
$ |
2,318 |
$ |
2,260 |
$ |
1,574 |
$ |
2,307 |
$ |
2,310 |
$ |
6,152 |
$ |
6,670 |
||||||||||||||
| Net income from discontinued operations |
— |
— |
— |
— |
— |
— |
3,935 |
|||||||||||||||||||||
| Net income |
2,318 |
2,260 |
1,574 |
2,307 |
6,499 |
6,152 |
10,605 |
|||||||||||||||||||||
| Net income available to common shareholders |
2,195 |
2,138 |
1,445 |
1,993 |
1,996 |
5,778 |
9,791 |
|||||||||||||||||||||
| Earnings per share from continuing operations - basic |
0.21 |
0.21 |
0.14 |
0.23 |
0.25 |
0.56 |
0.73 |
|||||||||||||||||||||
| Earnings per share from discontinued operations - basic |
— |
— |
— |
— |
— |
— |
0.49 |
|||||||||||||||||||||
| Earnings per common shareholder - basic |
0.21 |
0.21 |
0.14 |
0.23 |
0.77 |
0.56 |
1.22 |
|||||||||||||||||||||
| Earnings per share from continuing operations - diluted |
0.21 |
0.20 |
0.14 |
0.22 |
0.24 |
0.56 |
0.68 |
|||||||||||||||||||||
| Earnings per share from discontinued operations - diluted |
— |
— |
— |
— |
— |
— |
0.40 |
|||||||||||||||||||||
| Earnings per common shareholder - diluted |
0.21 |
0.20 |
0.14 |
0.22 |
0.63 |
0.56 |
1.08 |
|||||||||||||||||||||
| Cash dividends paid per common share |
0.025 |
0.025 |
0.025 |
0.02 |
0.02 |
0.08 |
0.06 |
|||||||||||||||||||||
| Book value per common share |
13.51 |
13.31 |
13.09 |
12.93 |
13.49 |
13.51 |
13.49 |
|||||||||||||||||||||
| Weighted average shares outstanding - basic |
10,443,443 |
10,343,933 |
9,996,544 |
8,212,021 |
8,080,690 |
10,262,944 |
8,073,644 |
|||||||||||||||||||||
| Weighted average shares outstanding - diluted |
12,410,070 |
12,181,433 |
10,009,341 |
10,068,733 |
10,434,344 |
10,288,534 |
9,935,209 |
|||||||||||||||||||||
| Performance Ratios: |
||||||||||||||||||||||||||||
| Return on average assets - continuing operations 1 |
0.63 |
% |
0.63 |
% |
0.45 |
% |
0.64 |
% |
0.64 |
% |
0.57 |
% |
0.62 |
% |
||||||||||||||
| Return on average assets - discontinued operations 1 |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
0.37 |
% |
||||||||||||||
| Return on average equity - continuing operations 1 |
6.28 |
% |
6.30 |
% |
4.56 |
% |
7.02 |
% |
7.32 |
% |
5.73 |
% |
7.41 |
% |
||||||||||||||
| Return on average equity - discontinued operations 1 |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
4.37 |
% |
||||||||||||||
| Net interest margin 2 |
3.37 |
% |
3.31 |
% |
3.19 |
% |
3.23 |
% |
3.17 |
% |
3.29 |
% |
3.22 |
% |
||||||||||||||
| Efficiency ratio 3 |
83.28 |
% |
82.38 |
% |
85.30 |
% |
80.48 |
% |
80.58 |
% |
83.57 |
% |
80.23 |
% |
||||||||||||||
| Overhead ratio 1 4 |
4.87 |
% |
5.19 |
% |
4.65 |
% |
4.69 |
% |
5.18 |
% |
4.91 |
% |
4.90 |
% |
||||||||||||||
| Asset Quality Data and Ratios: |
||||||||||||||||||||||||||||
| Charge-offs |
$ |
472 |
$ |
163 |
$ |
290 |
$ |
713 |
$ |
1,018 |
$ |
925 |
$ |
1,844 |
||||||||||||||
| Recoveries |
24 |
16 |
43 |
8 |
2 |
83 |
13 |
|||||||||||||||||||||
| Net loan charge-offs to total loans 1 5 |
0.16 |
% |
0.05 |
% |
0.09 |
% |
0.27 |
% |
0.38 |
% |
0.10 |
% |
0.23 |
% |
||||||||||||||
| Allowance for loan losses |
9,396 |
9,748 |
9,372 |
9,101 |
9,150 |
9,396 |
9,150 |
|||||||||||||||||||||
| Allowance for loan losses to total loans 6 |
0.86 |
% |
0.88 |
% |
0.87 |
% |
0.86 |
% |
0.85 |
% |
0.86 |
% |
0.85 |
% |
||||||||||||||
| Nonperforming loans |
6,559 |
5,103 |
6,575 |
6,229 |
10,201 |
6,559 |
10,201 |
|||||||||||||||||||||
| Nonperforming loans to total loans |
0.60 |
% |
0.46 |
% |
0.61 |
% |
0.59 |
% |
0.95 |
% |
0.60 |
% |
0.95 |
% |
||||||||||||||
| Capital Ratios: |
||||||||||||||||||||||||||||
| Equity to assets |
10.12 |
% |
9.74 |
% |
9.67 |
% |
10.26 |
% |
8.54 |
% |
10.12 |
% |
8.54 |
% |
||||||||||||||
| Leverage ratio |
9.41 |
% |
9.59 |
% |
9.24 |
% |
9.54 |
% |
7.88 |
% |
9.41 |
% |
7.88 |
% |
||||||||||||||
| Common equity Tier 1 capital ratio |
10.76 |
% |
10.32 |
% |
10.15 |
% |
10.11 |
% |
7.78 |
% |
10.76 |
% |
7.78 |
% |
||||||||||||||
| Tier 1 risk-based capital ratio |
11.79 |
% |
11.33 |
% |
11.19 |
% |
11.92 |
% |
9.51 |
% |
11.79 |
% |
9.51 |
% |
||||||||||||||
| Total risk-based capital ratio |
15.18 |
% |
14.66 |
% |
14.63 |
% |
15.36 |
% |
12.76 |
% |
15.18 |
% |
12.76 |
% |
||||||||||||||
| 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 |
||||||||||||||||||||||||||||
SOURCE MVB Financial Corp.
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