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MVB Financial Corp. Announces Second Quarter 2024 Results

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 second quarter of 2024, with reported net income of $4.1 million, or $0.32 basic and $0.31 diluted earnings per share.

Second Quarter 2024 Highlights

MVB names payments industry veteran Jeremy Kuiper as Fintech President.

MVB and Intuit-Credit Karma renew partnership agreement.

Exit of digital asset program account relationships during second quarter reduced EPS by $0.08 with strong funding and liquidity profile maintained.

Noninterest bearing deposits represent 34.1% of total deposits | Loan-to-deposit ratio of 76.5%.

Noninterest expense declined 4.2% from prior quarter on easing cost pressures.

From Larry F. Mazza, Chief Executive Officer, MVB Financial:

“There were several notable developments during the second quarter that impacted our near-term financial results, while also helping to solidify our strategy, setting the stage for future growth and improved profitability.

“First, we have extended the term of our partnership agreement with Intuit-Credit Karma, the consumer technology platform with more than 120 million members in the U.S. We have been trusted partners for five years and look forward to further strengthening our relationship to benefit our clients and communities.

“Second, as previously disclosed, MVB Bank has named Jeremy Kuiper as Executive Vice President, Fintech President. Jeremy brings 25 years of payments industry experience at the executive and board level. With Jeremy’s expertise, we look forward to expanding our Fintech banking to even greater success as a key driver of deposits and fee income for MVB Bank.

“Finally, we initiated the process of winding down MVB’s digital asset program account relationships. Changing market conditions and profitability challenges contributed to an unfavorable risk/reward dynamic, prompting our decision to exit this business. This action reduced our second quarter EPS by $0.08.

“MVB’s second quarter financial results were otherwise solid, marked by improved expense control, shareholder value creation in the form of tangible book value per share growth, improved measures of capital strength and seasonal considerations, primarily related to MVB’s banking-as-a-service operations and online gaming vertical. We are pleased with the strength of our liquidity, despite the low seasonality and exit of digital asset program account relationships.”

SECOND QUARTER 2024 HIGHLIGHTS

  • Deposit trends reflect wind down of digital asset program account relationships and expected seasonal factors.
    • The Company expected a decline in total deposits upon the conclusion of the NFL, college basketball and tax seasons, in addition to electing to exit digital asset program account relationships. Total deposits declined 8.3%, or $262.5 million, to $2.9 billion compared to the prior quarter-end, primarily reflecting lower noninterest bearing (“NIB”) deposits, which decreased 29.3%, or $407.3 million, to $983.8 million. Digital asset program account balances, which are noninterest bearing, declined $307.0 million to $28.1 million as compared to the prior quarter-end.
    • The loan-to-deposit ratio was 76.5% as of June 30, 2024, compared to 72.1% as of March 31, 2024, and 78.1% as of June 30, 2023. The loan-to-deposit ratio at June 30, 2024 aligns with the Company’s liquidity management strategy.
  • Net interest income lower on margin compression, deliberate balance sheet contraction, decline in loan balances and seasonal factors.
    • Net interest income on a fully tax-equivalent basis, a non-U.S. GAAP financial measure, declined 8.6%, or $2.6 million, to $27.7 million relative to the prior quarter, reflecting net interest margin contraction and lower earning asset balances.
    • Net interest margin on a fully tax-equivalent basis was 3.75%, down eight basis points from the prior quarter, primarily reflecting lower loan yields due to the migration of a $14.6 million loan to nonperforming status, lower loan balances and slightly higher funding costs. Total cost of funds was 2.54%, up two basis points compared to the prior quarter.
    • Average earning asset balances declined 6.7% from the prior quarter, reflecting lower interest-bearing balances with banks and lower loan balances. The decline in cash balances primarily reflects the deliberate exiting of digital asset program account balances and, to a lesser extent, seasonal considerations related to tax and gaming deposits. Average total loan balances declined 2.0% from the prior quarter, reflecting slower market demand.
  • Expenses decline as cost pressures ease.
    • Noninterest expense declined 4.2% to $28.9 million relative to the prior quarter, primarily reflecting lower salaries and employee benefits costs and lower professional fees. Relative to the prior year-ago period, noninterest expense declined 4.5%.
  • Noninterest income down on seasonal considerations and the exit of digital asset program relationships; mortgage banking profitable.
    • Total noninterest income declined 8.8%, or $0.7 million, relative to the prior quarter, to $7.1 million, primarily reflecting lower payment card and service charge income and other operating income, which includes wire transfer fees. The declines were partially offset by equity method investment income from our mortgage segment, compared to a loss in the prior quarter, and higher compliance and consulting income. Relative to the prior year, which removes the seasonal component, total noninterest income grew 11.3%, or $0.7 million, reflecting higher payment card and service charge income, compliance and consulting income, combined with losses on divestiture activity, loan sales and the sale of equity securities that did not recur in the current quarter.
  • Capital strength further enhanced; tangible book value share growth evidences continued value creation.
    • The Community Bank Leverage Ratio, Tier 1 Risk-Based Capital Ratio and MVB Bank’s Total Risk-Based Capital Ratio were 10.7%, 14.6% and 15.4%, respectively, compared to 10.1%, 14.4% and 15.2%, respectively, at the prior quarter end. The tangible common equity ratio, a non-U.S. GAAP financial measure, was 8.9% as of June 30, 2024, compared to 8.1% as of March 31, 2024, and June 30, 2023.
    • Book value per share and tangible book value per share, a non-U.S. GAAP measure discussed below, were $22.94 and $22.70, respectively, increases of 0.9% and 1.0% relative to the prior quarter-end and 6.4% and 6.5% from the year-ago period.
    • Nonperforming loans increased $15.6 million, or 206.1%, to $23.1 million, or 1.0% of total loans, from $7.5 million, or 0.3% of total loans, at the prior quarter end, largely reflecting the addition of a multifamily commercial construction loan with an outstanding balance of $14.6 million. Criticized loans as a percentage of total loans were 5.7%, as compared to 5.8% at the prior quarter end. Net charge-offs were $0.9 million, or 0.2%, for the second quarter of 2024, compared to $1.3 million, or 0.2%, for the prior quarter.
    • The provision for credit losses totaled $0.3 million, compared to $2.0 million for the prior quarter. The allowance for credit losses was 1.00% of total loans, as compared to 1.01% at the prior quarter end.

INCOME STATEMENT

Net interest income on a tax-equivalent basis totaled $27.7 million for the second quarter of 2024, a decline of $2.6 million, or 8.6%, from the first quarter of 2024 and $2.1 million, or 7.1%, from the second quarter of 2023. The decline from both prior periods reflects net interest margin contraction and lower average earning asset balances.

Interest income declined $3.9 million, or 7.8%, from the first quarter of 2024 and $0.9 million, or 1.9%, from the second quarter of 2023. The decline in interest income relative to the prior quarter reflects a decline in interest income from loans, driven by lower loan balances and a lower tax-equivalent yield on loans due primarily to the migration of a $14.6 million loan to nonperforming status, and a decline in interest income from cash balances due to seasonal considerations and the exit of digital asset program accounts. The decline in interest income relative to the year-ago period reflects a decline in interest income from loans, driven by lower loan balances, partially offset by a higher tax-equivalent yield on loans.

Interest expense declined $1.3 million, or 6.7%, from the first quarter of 2024 and increased $1.1 million, or 6.3%, from the second quarter of 2024. The cost of funds remained stable at 2.54% for the second quarter of 2024 as compared to 2.52% for the first quarter of 2024, and was up from 2.26% for the second quarter of 2023. Relative to the year-ago period, the increase reflects the impact of higher interest rates on our deposits and a shift in the mix of average deposits.

On a tax-equivalent basis, net interest margin for the second quarter of 2024 was 3.75%, a decline of eight basis points versus the first quarter of 2024 and five basis points versus the second quarter of 2023. See the table below for a reconciliation between net interest margin and net interest margin on a fully tax-equivalent basis, a non-U.S. GAAP measure. Contraction in net interest margin from the prior quarter primarily reflects lower earning asset balances, including lower cash and loan balances, and the migration of a loan to nonperforming status. Relative to the year-ago period, the contraction in net interest margin reflects higher funding costs, which have outpaced the increase in average earning asset yields, and lower earning asset balances.

Noninterest income totaled $7.1 million for the second quarter of 2024, a decline of $0.7 million from the first quarter of 2024 and an increase of $0.7 million from the second quarter of 2023. The decline compared to the prior quarter is primarily driven by declines of $1.1 million in other operating income and $1.0 million in payment card and service charge income, partially offset by equity method investment income from our mortgage segment of $0.5 million in the current quarter, as compared to a loss of $1.1 million in the prior quarter. There was also a $0.7 million gain on sale of available-for-sale investment securities during the first quarter of 2024 without a comparable gain in the second quarter of 2024. The $0.7 million increase in noninterest income from the second quarter of 2023 was primarily driven by increases of $0.3 million in payment card and service charge income and $0.3 million in compliance consulting income. Additionally, there were losses on the divestiture of Flexia Payments, LLC of $1.1 million and $1.0 million on sale of loans during the second quarter of 2023 without corresponding losses in the current quarter. These increases were partially offset by declines of $1.4 million in equity method investment income from our mortgage segment and $0.7 million in other operating income.

Noninterest expense totaled $28.9 million for the second quarter of 2024, a decline of $1.3 million, or 4.2%, from the first quarter of 2024 and $1.4 million, or 4.5%, from the second quarter of 2023. The decline from the first quarter of 2024 primarily reflects declines of $0.5 million in salaries and employee benefits, $0.5 million in professional fees and $0.2 million in other operating expense. The decline from the second quarter of 2023 primarily reflects declines of $1.9 million in other operating expense, $0.7 million in travel, entertainment, dues and subscriptions and $0.2 million in equipment depreciation and maintenance. These declines were partially offset by increases of $1.2 million in professional fees and $0.2 million in salaries and employee benefit expense.

BALANCE SHEET

Loans totaled $2.21 billion as of June 30, 2024, a decline of $60.5 million, or 2.7%, from March 31, 2024, and $105.6 million, or 4.6%, from June 30, 2023. The decline in loan balances relative to the prior quarters primarily reflects lower market demand, the impact of loan amortization and payoffs and slower loan growth based on overall market conditions and portfolio management.

Deposits totaled $2.88 billion as of June 30, 2024, a decline of $262.5 million, or 8.3%, from March 31, 2024, and $76.1 million, or 2.6%, from June 30, 2023. The decline in deposits relative to the prior quarter reflects a decline in NIB deposits, partially offset by higher CD balances of $769.8 million, representing an increase of $73.5 million, or 10.6%, driven by a $50.1 million, or 11.2%, increase in brokered CDs and a $24.1 million, or 10.1%, increase in core CDs. Relative to the year-ago period, the decline reflects the increased utilization of off-balance sheet deposit networks to generate fee income, enhance capital efficiency and manage liquidity and concentration risk.

NIB deposits totaled $983.8 million as of June 30, 2024, a decline of $407.3 million, or 29.3%, from March 31, 2024, and consistent with the balance as of June 30, 2023, representing a slight decline of $3.7 million, or 0.4%. Relative to the period ended March 31, 2024, the decline in NIB deposits reflected the exit of digital asset program accounts, utilization of off-balance sheet deposit networks and seasonal considerations. Digital asset program account balances declined $307.0 million to $28.1 million as compared to the prior quarter-end. The Company estimates that exit of digital asset program account relationships reduced current quarter earnings per share by $0.08, based on the interest income that would have been earned on the average balance of the deposits held in 2024 prior to the exit, which were held in cash, and the wire fee income during the period. NIB deposits represented 34.1% of total deposits as of June 30, 2024, compared to 44.2% of total deposits at the prior quarter-end and 33.4% for the year-ago period.

Off-balance sheet deposits totaled $1.4 billion as of June 30, 2024, a decline of $168.5 million, or 11%, compared to $1.5 billion at March 31, 2024, and up $296.2 million, or 28%, from $1.1 billion at June 30, 2023. Off-balance sheet deposit networks are utilized to generate fee income, enhance capital efficiency and manage liquidity and concentration risk.

CAPITAL

The Community Bank Leverage Ratio was 10.7% as of June 30, 2024, compared to 10.1% as of March 31, 2024, and 10.0% as of June 30, 2023. MVB’s Tier 1 Risk-Based Capital Ratio was 14.6% as of June 30, 2024, compared to 14.4% as of March 31, 2024, and 13.8% as of June 30, 2023. The Bank’s Total Risk-Based Capital Ratio was 15.4% as of June 30, 2024, compared to 15.2% as of March 31, 2024, and 14.9% as of June 30, 2023.

The tangible common equity ratio, a non-U.S. GAAP financial measure, was 8.9% as of June 30, 2024, compared to 8.1% as of March 31, 2024, and June 30, 2023. See the reconciliation of the tangible common equity ratio to its most directly comparable U.S. GAAP financial measure later in this release.

The Company issued a quarterly cash dividend of $0.17 per share for the second quarter of 2024, consistent with the first quarter of 2024 and the second quarter of 2023.

ASSET QUALITY

Nonperforming loans totaled $23.1 million, or 1.0% of total loans, as of June 30, 2024, as compared to $7.5 million, or 0.3% of total loans, as of March 31, 2024, and $13.6 million, or 0.6% of total loans, as of June 30, 2023. The increase in nonperforming loans from the prior quarters was driven by the addition of one $14.6 million commercial construction loan in the multifamily space. The Company believes the loan is properly collateralized with a loan to value of less than 70%. Criticized loans as a percentage of total loans were 5.7%, compared to 5.8% as of March 31, 2024, and 3.1% as of June 30, 2023.

Net charge-offs were $0.9 million, or 0.2% of total loans, for the second quarter of 2024, compared to $1.3 million, or 0.2% of total loans, for the first quarter of 2024 and $1.2 million, or 0.2% of total loans, for the second quarter of 2023.

The provision for credit losses totaled $0.3 million, compared to $2.0 million for the prior quarter ended March 31, 2024, and a release of allowance of $4.2 million for the quarter ended June 30, 2023. The allowance for credit losses was 1.00% of total loans at June 30, 2024, compared to 1.01% at March 31, 2024, and 1.31% at June 30, 2023.

About MVB Financial Corp.

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

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

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

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

Forward-looking Statements

MVB Financial has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in this press release that are intended to be covered by the protections provided under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations about the future and are subject to risks and uncertainties. Forward-looking statements include, without limitation, information concerning possible or assumed future results of operations of the Company and its subsidiaries. Forward-looking statements can be identified by the use of words such as “may,” “could,” “should,” “would,” “will,” “plans,” “believes,” “estimates,” “expects,” “anticipates,” “intends,” “continues” or the negative of those terms or similar expressions. Note that many factors could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in forward-looking statements. Therefore, undue reliance should not be placed upon any forward-looking statements. Those factors include but are not limited to: market, economic, operational, liquidity and credit risk; changes in market interest rates; impacts related to or resulting from recent turmoil in the banking industry; inability to successfully execute business plans, including strategies related to investments in Fintech companies; competition; unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; changes in economic, business and political conditions; changes in demand for loan products and deposit flow; changes in deposit classifications; 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, 2023, 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.

Non-U.S. GAAP Financial Measures

This document contains supplemental financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management uses these non-U.S. GAAP measures in its analysis of the Company’s performance. These measures should not be considered a substitute for U.S. GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with U.S. GAAP. Management believes the presentation of non-U.S. GAAP financial measures that exclude the impact of specified items provide useful supplemental information that is essential to a proper understanding of the Company’s financial condition and results. Non-U.S. GAAP measures are not formally defined under U.S. GAAP, and other entities may use calculation methods that differ from those used by us. As a complement to U.S. GAAP financial measures, our management believes these non-U.S. GAAP financial measures assist investors in comparing the financial condition and results of operations of financial institutions due to the industry prevalence of such non-U.S. GAAP measures. See the tables below for a reconciliation of these non-U.S. GAAP measures to the most directly comparable U.S. GAAP financial measures.

MVB Financial Corp.

Financial Highlights

Consolidated Statements of Income

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

 

 

 

Quarterly

 

Year-to-Date

 

 

 

2024

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

Second

Quarter

 

First

Quarter

 

Second

Quarter

 

 

Interest income

 

$

46,127

 

 

$

50,030

 

 

$

47,031

 

 

$

96,157

 

 

$

91,794

Interest expense

 

 

18,557

 

 

 

19,891

 

 

 

17,449

 

 

 

38,448

 

 

 

29,483

Net interest income

 

 

27,570

 

 

 

30,139

 

 

 

29,582

 

 

 

57,709

 

 

 

62,311

Provision (release of allowance) for credit losses

 

 

254

 

 

 

1,997

 

 

 

(4,235

)

 

 

2,251

 

 

 

341

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

 

 

27,316

 

 

 

28,142

 

 

 

33,817

 

 

 

55,458

 

 

 

61,970

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

 

 

7,142

 

 

 

7,834

 

 

 

6,419

 

 

 

14,976

 

 

 

9,486

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

15,949

 

 

 

16,489

 

 

 

15,746

 

 

 

32,438

 

 

 

32,492

Other expense

 

 

12,981

 

 

 

13,702

 

 

 

14,536

 

 

 

26,683

 

 

 

26,107

Total noninterest expenses

 

 

28,930

 

 

 

30,191

 

 

 

30,282

 

 

 

59,121

 

 

 

58,599

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

5,528

 

 

 

5,785

 

 

 

9,954

 

 

 

11,313

 

 

 

12,857

Income taxes

 

 

1,379

 

 

 

1,283

 

 

 

1,956

 

 

 

2,662

 

 

 

2,421

Net income from continuing operations, before noncontrolling interest

 

 

4,149

 

 

 

4,502

 

 

 

7,998

 

 

 

8,651

 

 

 

10,436

Income from discontinued operations, before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,831

Income taxes - discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,049

Net income from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,782

Net Income, before noncontrolling interest

 

 

4,149

 

 

 

4,502

 

 

 

7,998

 

 

 

8,651

 

 

 

19,218

Net (income) loss attributable to noncontrolling interest

 

 

(60

)

 

 

(20

)

 

 

114

 

 

 

(80

)

 

 

236

Net income available to common shareholders

 

$

4,089

 

 

$

4,482

 

 

$

8,112

 

 

$

8,571

 

 

$

19,454

 

 

 

 

 

 

 

 

 

 

 

Earnings per share from continuing operations - basic

 

$

0.32

 

 

$

0.35

 

 

$

0.64

 

 

$

0.67

 

 

$

0.84

Earnings per share from discontinued operations - basic

 

$

 

 

$

 

 

$

 

 

$

 

 

$

0.69

Earnings per share - basic

 

$

0.32

 

 

$

0.35

 

 

$

0.64

 

 

$

0.67

 

 

$

1.54

Earnings per share from continuing operations - diluted

 

$

0.31

 

 

$

0.34

 

 

$

0.63

 

 

$

0.66

 

 

$

0.82

Earnings per share from discontinued operations - diluted

 

$

 

 

$

 

 

$

 

 

$

 

 

$

0.68

Earnings per share - diluted

 

$

0.31

 

 

$

0.34

 

 

$

0.63

 

 

$

0.66

 

 

$

1.50

Noninterest Income

(Unaudited) (Dollars in thousands)

 

 

 

Quarterly

 

Year-to-Date

 

 

2024

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

Second

Quarter

 

First

Quarter

 

Second

Quarter

 

 

Card acquiring income

 

$

337

 

$

251

 

 

$

788

 

 

$

588

 

 

$

1,410

 

Service charges on deposits

 

 

1,103

 

 

1,523

 

 

 

1,060

 

 

 

2,626

 

 

 

2,186

 

Interchange income

 

 

2,377

 

 

3,039

 

 

 

1,655

 

 

 

5,416

 

 

 

3,517

 

Total payment card and service charge income

 

 

3,817

 

 

4,813

 

 

 

3,503

 

 

 

8,630

 

 

 

7,113

 

 

 

 

 

 

 

 

 

 

 

 

Equity method investments gain (loss)

 

 

484

 

 

(1,128

)

 

 

1,873

 

 

 

(644

)

 

 

680

 

Compliance and consulting income

 

 

1,274

 

 

1,000

 

 

 

996

 

 

 

2,274

 

 

 

2,012

 

Loss on sale of loans

 

 

 

 

 

 

 

(989

)

 

 

 

 

 

(1,345

)

Investment portfolio gains (losses)

 

 

117

 

 

609

 

 

 

(134

)

 

 

726

 

 

 

(1,978

)

Loss on acquisition and divestiture activity

 

 

 

 

 

 

 

(986

)

 

 

 

 

 

(986

)

Other noninterest income

 

 

1,450

 

 

2,540

 

 

 

2,156

 

 

 

3,990

 

 

 

3,990

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

 

$

7,142

 

$

7,834

 

 

$

6,419

 

 

$

14,976

 

 

$

9,486

 

Condensed Consolidated Balance Sheets

(Unaudited) (Dollars in thousands)

 

 

 

June 30, 2024

 

March 31, 2024

 

June 30, 2023

Cash and cash equivalents

 

$

455,517

 

 

$

640,426

 

 

$

455,835

 

Securities available-for-sale, at fair value

 

 

361,254

 

 

 

349,678

 

 

 

329,137

 

Equity securities

 

 

41,261

 

 

 

41,037

 

 

 

41,082

 

Loans held-for-sale

 

 

 

 

 

 

 

 

7,009

 

Loans receivable

 

 

2,206,793

 

 

 

2,267,310

 

 

 

2,312,387

 

Less: Allowance for credit losses

 

 

(22,084

)

 

 

(22,804

)

 

 

(30,294

)

Loans receivable, net

 

 

2,184,709

 

 

 

2,244,506

 

 

 

2,282,093

 

Premises and equipment, net

 

 

19,540

 

 

 

19,968

 

 

 

22,407

 

Other assets

 

 

225,723

 

 

 

251,775

 

 

214,284

 

Total assets

 

$

3,288,004

 

 

$

3,547,390

 

 

$

3,351,847

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

983,809

 

 

$

1,391,070

 

 

$

987,555

 

Interest-bearing deposits

 

 

1,899,043

 

 

 

1,754,259

 

 

 

1,971,384

 

Senior term loan

 

 

 

 

 

6,549

 

 

 

8,835

 

Subordinated debt

 

 

73,663

 

 

 

73,602

 

 

 

73,414

 

Other liabilities

 

 

34,826

 

 

 

30,082

 

 

36,362

 

Stockholders' equity

 

 

296,663

 

 

 

291,828

 

 

 

274,297

 

Total liabilities and stockholders' equity

 

$

3,288,004

 

 

$

3,547,390

 

 

$

3,351,847

 

Reportable Segments

(Unaudited)

 

Three Months Ended June 30, 2024

 

CoRe

Banking

 

Mortgage

Banking

 

Financial

Holding

Company

 

Other

 

Intercompany

Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

Interest income

 

$

46,038

 

$

103

 

$

3

 

 

$

 

 

$

(17

)

 

$

46,127

 

Interest expense

 

 

17,635

 

 

 

 

922

 

 

 

17

 

 

 

(17

)

 

 

18,557

 

Net interest income (expense)

 

 

28,403

 

 

103

 

 

(919

)

 

 

(17

)

 

 

 

 

 

27,570

 

Provision for credit losses

 

 

254

 

 

 

 

 

 

 

 

 

 

 

 

 

254

 

Net interest income (expense) after provision for credit losses

 

 

28,149

 

 

103

 

 

(919

)

 

 

(17

)

 

 

 

 

 

27,316

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

4,898

 

 

485

 

 

2,769

 

 

 

3,128

 

 

 

(4,138

)

 

 

7,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,359

 

 

 

 

4,473

 

 

 

2,117

 

 

 

 

 

 

15,949

 

Other expenses

 

 

13,257

 

 

 

 

2,080

 

 

 

1,782

 

 

 

(4,138

)

 

 

12,981

 

Total noninterest expenses

 

 

22,616

 

 

 

 

6,553

 

 

 

3,899

 

 

 

(4,138

)

 

 

28,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss), before income taxes

 

 

10,431

 

 

588

 

 

(4,703

)

 

 

(788

)

 

 

 

 

 

5,528

 

Income taxes

 

 

2,438

 

 

145

 

 

(1,016

)

 

 

(188

)

 

 

 

 

 

1,379

 

Net income (loss), before noncontrolling interest

 

 

7,993

 

 

443

 

 

(3,687

)

 

 

(600

)

 

 

 

 

 

4,149

 

Net income attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

(60

)

 

 

 

 

 

(60

)

Net income (loss) available to common shareholders

 

$

7,993

 

$

443

 

$

(3,687

)

 

$

(660

)

 

$

 

 

$

4,089

 

Three Months Ended March 31, 2024

 

CoRe

Banking

 

Mortgage

Banking

 

Financial

Holding

Company

 

Other

 

Intercompany

Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

Interest income

 

$

49,942

 

$

103

 

 

$

2

 

 

$

 

 

$

(17

)

 

$

50,030

 

Interest expense

 

 

18,927

 

 

 

 

 

959

 

 

 

22

 

 

 

(17

)

 

 

19,891

 

Net interest income (expense)

 

 

31,015

 

 

103

 

 

 

(957

)

 

 

(22

)

 

 

 

 

 

30,139

 

Provision for credit losses

 

 

1,997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,997

 

Net interest income (expense) after provision for credit losses

 

 

29,018

 

 

103

 

 

 

(957

)

 

 

(22

)

 

 

 

 

 

28,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

7,521

 

 

(1,129

)

 

 

2,265

 

 

 

3,264

 

 

 

(4,087

)

 

 

7,834

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,823

 

 

 

 

 

4,678

 

 

 

1,988

 

 

 

 

 

 

16,489

 

Other expenses

 

 

13,821

 

 

 

 

 

1,841

 

 

 

2,127

 

 

 

(4,087

)

 

 

13,702

 

Total noninterest expenses

 

 

23,644

 

 

 

 

 

6,519

 

 

 

4,115

 

 

 

(4,087

)

 

 

30,191

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

12,895

 

 

(1,026

)

 

 

(5,211

)

 

 

(873

)

 

 

 

 

 

5,785

 

Income taxes

 

 

2,878

 

 

(229

)

 

 

(1,157

)

 

 

(209

)

 

 

 

 

 

1,283

 

Net income (loss), before noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

(20

)

 

 

 

 

 

(20

)

Net income (loss) available to common shareholders

 

$

10,017

 

$

(797

)

 

$

(4,054

)

 

$

(684

)

 

$

 

 

$

4,482

 

Three Months Ended June 30, 2023

 

CoRe

Banking

 

Mortgage

Banking

 

Financial

Holding

Company

 

Other

 

Intercompany

Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

Interest income

 

$

46,929

 

 

$

105

 

$

3

 

 

$

6

 

 

$

(12

)

 

$

47,031

 

Interest expense

 

 

16,439

 

 

 

 

 

999

 

 

 

23

 

 

 

(12

)

 

 

17,449

 

Net interest income (expense)

 

 

30,490

 

 

 

105

 

 

(996

)

 

 

(17

)

 

 

 

 

 

29,582

 

Release of allowance for credit losses

 

 

(4,235

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,235

)

Net interest income (expense) after release of allowance for credit losses

 

 

34,725

 

 

 

105

 

 

(996

)

 

 

(17

)

 

 

 

 

 

33,817

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

4,113

 

 

 

1,872

 

 

3,116

 

 

 

1,051

 

 

 

(3,733

)

 

 

6,419

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,053

 

 

 

7

 

 

4,623

 

 

 

2,063

 

 

 

 

 

 

15,746

 

Other expenses

 

 

14,148

 

 

 

18

 

 

2,163

 

 

 

1,940

 

 

 

(3,733

)

 

 

14,536

 

Total noninterest expenses

 

 

23,201

 

 

 

25

 

 

6,786

 

 

 

4,003

 

 

 

(3,733

)

 

 

30,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss), before income taxes

 

 

15,637

 

 

 

1,952

 

 

(4,666

)

 

 

(2,969

)

 

 

 

 

 

9,954

 

Income taxes

 

 

3,237

 

 

 

643

 

 

(1,207

)

 

 

(717

)

 

 

 

 

 

1,956

 

Net income (loss), before noncontrolling interest

 

 

12,400

 

 

 

1,309

 

 

(3,459

)

 

 

(2,252

)

 

 

 

 

 

7,998

 

Net income attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

114

 

 

 

 

 

 

114

 

Net income (loss) available to common shareholders

 

$

12,400

 

 

$

1,309

 

$

(3,459

)

 

$

(2,138

)

 

$

 

 

$

8,112

 

Six Months Ended June 30, 2024

 

CoRe

Banking

 

Mortgage

Banking

 

Financial

Holding

Company

 

Other

 

Intercompany

Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

Interest income

 

$

95,980

 

$

206

 

 

$

5

 

 

$

 

 

$

(34

)

 

$

96,157

 

Interest expense

 

 

36,562

 

 

 

 

 

1,881

 

 

 

39

 

 

 

(34

)

 

 

38,448

 

Net interest income (expense)

 

 

59,418

 

 

206

 

 

 

(1,876

)

 

 

(39

)

 

 

 

 

 

57,709

 

Provision for credit losses

 

 

2,251

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,251

 

Net interest income (expense) after provision for credit losses

 

 

57,167

 

 

206

 

 

 

(1,876

)

 

 

(39

)

 

 

 

 

 

55,458

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

12,419

 

 

(644

)

 

 

5,034

 

 

 

6,392

 

 

 

(8,225

)

 

 

14,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

19,182

 

 

 

 

 

9,151

 

 

 

4,105

 

 

 

 

 

 

32,438

 

Other expenses

 

 

27,078

 

 

 

 

 

3,921

 

 

 

3,909

 

 

 

(8,225

)

 

 

26,683

 

Total noninterest expenses

 

 

46,260

 

 

 

 

 

13,072

 

 

 

8,014

 

 

 

(8,225

)

 

 

59,121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss), before income taxes

 

 

23,326

 

 

(438

)

 

 

(9,914

)

 

 

(1,661

)

 

 

 

 

 

11,313

 

Income taxes

 

 

5,316

 

 

(84

)

 

 

(2,173

)

 

 

(397

)

 

 

 

 

 

2,662

 

Net income (loss), before noncontrolling interest

 

 

18,010

 

 

(354

)

 

 

(7,741

)

 

 

(1,264

)

 

 

 

 

 

8,651

 

Net income attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

(80

)

 

 

 

 

 

(80

)

Net income (loss) available to common shareholders

 

$

18,010

 

$

(354

)

 

$

(7,741

)

 

$

(1,344

)

 

$

 

 

$

8,571

 

Six Months Ended June 30, 2023

 

CoRe

Banking

 

Mortgage

Banking

 

Financial

Holding

Company

 

Other

 

Intercompany

Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

Interest income

 

$

91,591

 

$

210

 

$

36

 

 

$

 

 

$

(43

)

 

$

91,794

Interest expense

 

 

27,480

 

 

 

 

1,992

 

 

 

54

 

 

 

(43

)

 

 

29,483

Net interest income (expense)

 

 

64,111

 

 

210

 

 

(1,956

)

 

 

(54

)

 

 

 

 

 

62,311

Provision for credit losses

 

 

341

 

 

 

 

 

 

 

 

 

 

 

 

 

341

Net interest income (expense) after provision for credit losses

 

 

63,770

 

 

210

 

 

(1,956

)

 

 

(54

)

 

 

 

 

 

61,970

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

7,131

 

 

686

 

 

5,526

 

 

 

2,835

 

 

 

(6,692

)

 

 

9,486

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

18,104

 

 

7

 

 

9,573

 

 

 

4,808

 

 

 

 

 

 

32,492

Other expenses

 

 

25,202

 

 

52

 

 

4,080

 

 

 

3,465

 

 

 

(6,692

)

 

 

26,107

Total noninterest expenses

 

 

43,306

 

 

59

 

 

13,653

 

 

 

8,273

 

 

 

(6,692

)

 

 

58,599

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss), before income taxes

 

 

27,595

 

 

837

 

 

(10,083

)

 

 

(5,492

)

 

 

 

 

 

12,857

Income taxes

 

 

5,752

 

 

139

 

 

(2,149

)

 

 

(1,321

)

 

 

 

 

 

2,421

Net income (loss) from continuing operations

 

 

21,843

 

 

698

 

 

(7,934

)

 

 

(4,171

)

 

 

 

 

 

10,436

Income from discontinued operations, before income taxes

 

 

 

 

 

 

 

 

 

11,831

 

 

 

 

 

 

11,831

Income tax expense - discontinued operations

 

 

 

 

 

 

 

 

 

3,049

 

 

 

 

 

 

3,049

Net income from discontinued operations

 

 

 

 

 

 

 

 

 

8,782

 

 

 

 

 

 

8,782

Net income (loss), before noncontrolling interest

 

 

21,843

 

 

698

 

 

(7,934

)

 

 

4,611

 

 

 

 

 

 

19,218

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

236

 

 

 

 

 

 

236

Net income (loss) available to common shareholders

 

$

21,843

 

$

698

 

$

(7,934

)

 

$

4,847

 

 

$

 

 

$

19,454

Average Balances and Interest Rates

(Unaudited) (Dollars in thousands)

 

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

 

June 30, 2024

 

March 31, 2024

 

June 30, 2023

 

 

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

 

$

380,278

 

 

$

5,065

 

 

5.36

%

 

$

549,894

 

 

$

7,341

 

 

5.37

%

 

$

444,600

 

 

$

5,542

 

 

5.00

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

252,963

 

 

 

1,905

 

 

3.03

 

 

 

246,091

 

 

 

1,743

 

 

2.85

 

 

 

220,687

 

 

 

1,229

 

 

2.23

 

Tax-exempt 1

 

 

102,785

 

 

 

684

 

 

2.68

 

 

 

106,309

 

 

 

887

 

 

3.36

 

 

 

123,497

 

 

 

1,147

 

 

3.73

 

Loans and loans held-for-sale: 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

1,597,359

 

 

 

30,824

 

 

7.76

 

 

 

1,626,286

 

 

 

32,152

 

 

7.95

 

 

 

1,635,438

 

 

 

30,534

 

 

7.49

 

Tax-exempt 1

 

 

3,261

 

 

 

35

 

 

4.32

 

 

 

3,373

 

 

 

37

 

 

4.41

 

 

 

3,822

 

 

 

42

 

 

4.41

 

Real estate

 

 

563,011

 

 

 

6,391

 

 

4.57

 

 

 

576,148

 

 

 

6,612

 

 

4.62

 

 

 

593,767

 

 

 

5,691

 

 

3.84

 

Consumer

 

 

73,531

 

 

 

1,374

 

 

7.52

 

 

 

77,300

 

 

 

1,452

 

 

7.55

 

 

 

128,113

 

 

 

3,096

 

 

9.69

 

Total loans

 

 

2,237,162

 

 

 

38,624

 

 

6.94

 

 

 

2,283,107

 

 

 

40,253

 

 

7.09

 

 

 

2,361,140

 

 

 

39,363

 

 

6.69

 

Total earning assets

 

 

2,973,188

 

 

 

46,278

 

 

6.26

 

 

 

3,185,401

 

 

 

50,224

 

 

6.34

 

 

 

3,149,924

 

 

 

47,281

 

 

6.02

 

Less: Allowance for credit losses

 

 

(22,596

)

 

 

 

 

 

 

(22,258

)

 

 

 

 

 

 

(35,143

)

 

 

 

 

Cash and due from banks

 

 

4,528

 

 

 

 

 

 

 

5,405

 

 

 

 

 

 

 

5,756

 

 

 

 

 

Other assets

 

 

305,644

 

 

 

 

 

 

 

335,029

 

 

 

 

 

 

 

289,161

 

 

 

 

 

Total assets

 

$

3,260,764

 

 

 

 

 

 

$

3,503,577

 

 

 

 

 

 

$

3,409,698

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

465,587

 

 

$

4,139

 

 

3.58

%

 

$

555,530

 

 

$

4,929

 

 

3.57

%

 

$

682,277

 

 

$

4,816

 

 

2.83

%

Money market checking

 

 

400,205

 

 

 

3,337

 

 

3.35

 

 

 

408,764

 

 

 

3,759

 

 

3.70

 

 

 

615,962

 

 

 

2,439

 

 

1.59

 

Savings

 

 

112,225

 

 

 

944

 

 

3.38

 

 

 

163,611

 

 

 

1,640

 

 

4.03

 

 

 

72,289

 

 

 

351

 

 

1.95

 

IRAs

 

 

7,948

 

 

 

81

 

 

4.10

 

 

 

7,762

 

 

 

74

 

 

3.83

 

 

 

6,401

 

 

 

45

 

 

2.82

 

CDs

 

 

731,337

 

 

 

9,130

 

 

5.02

 

 

 

674,611

 

 

 

8,529

 

 

5.08

 

 

 

662,753

 

 

 

8,799

 

 

5.33

 

Repurchase agreements and federal funds sold

 

 

3,459

 

 

 

4

 

 

0.47

 

 

 

2,951

 

 

 

 

 

 

 

 

5,428

 

 

 

 

 

 

FHLB and other borrowings

 

 

 

 

 

 

 

 

 

 

44

 

 

 

1

 

 

9.14

 

 

 

158

 

 

 

 

 

 

Senior term loan 3

 

 

2,736

 

 

 

114

 

 

16.76

 

 

 

6,736

 

 

 

150

 

 

8.96

 

 

 

9,351

 

 

 

198

 

 

8.49

 

Subordinated debt

 

 

73,629

 

 

 

808

 

 

4.41

 

 

 

73,571

 

 

 

809

 

 

4.42

 

 

 

73,382

 

 

 

801

 

 

4.38

 

Total interest-bearing liabilities

 

 

1,797,126

 

 

 

18,557

 

 

4.15

 

 

 

1,893,580

 

 

 

19,891

 

 

4.22

 

 

 

2,128,001

 

 

 

17,449

 

 

3.29

 

Noninterest-bearing demand deposits

 

 

1,139,070

 

 

 

 

 

 

 

1,279,194

 

 

 

 

 

 

 

971,436

 

 

 

 

 

Other liabilities

 

 

36,101

 

 

 

 

 

 

 

42,017

 

 

 

 

 

 

 

38,842

 

 

 

 

 

Total liabilities

 

 

2,972,297

 

 

 

 

 

 

 

3,214,791

 

 

 

 

 

 

 

3,138,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

13,731

 

 

 

 

 

 

 

13,659

 

 

 

 

 

 

 

13,533

 

 

 

 

 

Paid-in capital

 

 

162,518

 

 

 

 

 

 

 

161,532

 

 

 

 

 

 

 

158,601

 

 

 

 

 

Treasury stock

 

 

(16,741

)

 

 

 

 

 

 

(16,741

)

 

 

 

 

 

 

(16,741

)

 

 

 

 

Retained earnings

 

 

161,709

 

 

 

 

 

 

 

160,933

 

 

 

 

 

 

 

148,600

 

 

 

 

 

Accumulated other comprehensive loss

 

 

(32,299

)

 

 

 

 

 

 

(30,559

)

 

 

 

 

 

 

(32,714

)

 

 

 

 

Total stockholders’ equity attributable to parent

 

 

288,918

 

 

 

 

 

 

 

288,824

 

 

 

 

 

 

 

271,279

 

 

 

 

 

Noncontrolling interest

 

 

(451

)

 

 

 

 

 

 

(38

)

 

 

 

 

 

 

140

 

 

 

 

 

Total stockholders’ equity

 

 

288,467

 

 

 

 

 

 

 

288,786

 

 

 

 

 

 

 

271,419

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

3,260,764

 

 

 

 

 

 

$

3,503,577

 

 

 

 

 

 

$

3,409,698

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (tax-equivalent)

 

 

 

 

 

2.11

%

 

 

 

 

 

2.12

%

 

 

 

 

 

2.73

%

Net interest income and margin (tax-equivalent)1

 

 

 

$

27,721

 

 

3.75

%

 

 

 

$

30,333

 

 

3.83

%

 

 

 

$

29,832

 

 

3.80

%

Less: Tax-equivalent adjustments

 

 

 

$

(151

)

 

 

 

 

 

$

(194

)

 

 

 

 

 

$

(250

)

 

 

Net interest spread

 

 

 

 

 

2.09

%

 

 

 

 

 

2.10

%

 

 

 

 

 

2.70

%

Net interest income and margin

 

 

 

$

27,570

 

 

3.73

%

 

 

 

$

30,139

 

 

3.81

%

 

 

 

$

29,582

 

 

3.77

%

 

1In 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-U.S. GAAP financial measure. See the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 19.

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

3 The senior term loan was paid off in May 2024, and the unamortized debt issuance costs were recorded as interest expense upon the repayment.

 

 

Six Months Ended

 

Six Months Ended

 

 

June 30, 2024

 

June 30, 2023

 

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing balances with banks

 

$

465,086

 

 

$

12,406

 

 

5.36

%

 

$

365,291

 

 

$

8,695

 

 

4.80

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

249,527

 

 

 

3,648

 

 

2.94

 

 

 

228,587

 

 

 

3,077

 

 

2.71

 

Tax-exempt 1

 

 

104,547

 

 

 

1,570

 

 

3.02

 

 

 

130,609

 

 

 

2,456

 

 

3.79

 

Loans and loans held-for-sale: 2

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

1,611,822

 

 

 

62,975

 

 

7.86

 

 

 

1,628,015

 

 

 

59,065

 

 

7.32

 

Tax-exempt 1

 

 

3,317

 

 

 

72

 

 

4.37

 

 

 

3,882

 

 

 

85

 

 

4.42

 

Real estate

 

 

569,579

 

 

 

13,004

 

 

4.59

 

 

 

607,501

 

 

 

11,992

 

 

3.98

 

Consumer

 

 

75,416

 

 

 

2,827

 

 

7.54

 

 

 

132,804

 

 

 

6,959

 

 

10.57

 

Total loans

 

 

2,260,134

 

 

 

78,878

 

 

7.02

 

 

 

2,372,202

 

 

 

78,101

 

 

6.64

 

Total earning assets

 

 

3,079,294

 

 

 

96,502

 

 

6.30

 

 

 

3,096,689

 

 

 

92,329

 

 

6.01

 

Less: Allowance for credit losses

 

 

(22,427

)

 

 

 

 

 

 

(32,653

)

 

 

 

 

Cash and due from banks

 

 

4,967

 

 

 

 

 

 

 

3,015

 

 

 

 

 

Other assets

 

 

320,338

 

 

 

 

 

 

 

314,279

 

 

 

 

 

Total assets

 

$

3,382,172

 

 

 

 

 

 

$

3,381,330

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

510,558

 

 

$

9,068

 

 

3.57

%

 

$

739,273

 

 

$

9,478

 

 

2.59

%

Money market checking

 

 

404,484

 

 

 

7,096

 

 

3.53

 

 

 

413,718

 

 

 

3,367

 

 

1.64

 

Savings

 

 

137,918

 

 

 

2,585

 

 

3.77

 

 

 

82,735

 

 

 

991

 

 

2.42

 

IRAs

 

 

7,856

 

 

 

155

 

 

3.97

 

 

 

6,276

 

 

 

72

 

 

2.31

 

CDs

 

 

702,974

 

 

 

17,657

 

 

5.05

 

 

 

525,213

 

 

 

12,695

 

 

4.87

 

Repurchase agreements and federal funds sold

 

 

3,205

 

 

 

5

 

 

0.31

 

 

 

6,514

 

 

 

 

 

 

FHLB and other borrowings

 

 

22

 

 

 

1

 

 

9.14

 

 

 

35,347

 

 

 

888

 

 

5.07

 

Senior term loan 3

 

 

4,736

 

 

 

264

 

 

11.21

 

 

 

9,557

 

 

 

392

 

 

8.27

 

Subordinated debt

 

 

73,600

 

 

 

1,617

 

 

4.42

 

 

 

73,350

 

 

 

1,600

 

 

4.40

 

Total interest-bearing liabilities

 

 

1,845,353

 

 

 

38,448

 

 

4.19

 

 

 

1,891,983

 

 

 

29,483

 

 

3.14

 

Noninterest-bearing demand deposits

 

 

1,209,132

 

 

 

 

 

 

 

1,174,965

 

 

 

 

 

Other liabilities

 

 

39,059

 

 

 

 

 

 

 

37,969

 

 

 

 

 

Total liabilities

 

 

3,093,544

 

 

 

 

 

 

 

3,104,917

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

13,695

 

 

 

 

 

 

 

13,502

 

 

 

 

 

Paid-in capital

 

 

162,025

 

 

 

 

 

 

 

156,009

 

 

 

 

 

Treasury stock

 

 

(16,741

)

 

 

 

 

 

 

(16,741

)

 

 

 

 

Retained earnings

 

 

161,322

 

 

 

 

 

 

 

157,464

 

 

 

 

 

Accumulated other comprehensive income loss

 

 

(31,429

)

 

 

 

 

 

 

(34,022

)

 

 

 

 

Total stockholders’ equity attributable to parent

 

 

288,872

 

 

 

 

 

 

 

276,212

 

 

 

 

 

Noncontrolling interest

 

 

(244

)

 

 

 

 

 

 

201

 

 

 

 

 

Total stockholders’ equity

 

 

288,628

 

 

 

 

 

 

 

276,413

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

3,382,172

 

 

 

 

 

 

$

3,381,330

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (tax-equivalent)

 

 

 

 

 

2.11

%

 

 

 

 

 

2.87

%

Net interest income and margin (tax-equivalent)1

 

 

 

$

58,054

 

 

3.79

%

 

 

 

$

62,846

 

 

4.09

%

Less: Tax-equivalent adjustments

 

 

 

$

(345

)

 

 

 

 

 

$

(535

)

 

 

Net interest spread

 

 

 

 

 

2.09

%

 

 

 

 

 

2.84

%

Net interest income and margin

 

 

 

$

57,709

 

 

3.77

%

 

 

 

$

62,311

 

 

4.06

%

 

1 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-U.S. GAAP financial measure. See the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 19.

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

3 The senior term loan was paid off in May 2024, and the unamortized debt issuance costs were recorded as interest expense upon the repayment.

Selected Financial Data

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

 

 

 

Quarterly

 

Year-to-Date

 

 

 

2024

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

Second Quarter

 

First Quarter

 

Second Quarter

 

 

Earnings and Per Share Data:

 

 

 

 

 

 

 

 

 

 

Net income

 

$

4,089

 

 

$

4,482

 

 

$

8,112

 

 

$

8,571

 

 

$

19,454

 

Earnings per share from continuing operations - basic

 

$

0.32

 

 

$

0.35

 

 

$

0.64

 

 

$

0.67

 

 

$

0.84

 

Earnings per share from discontinued operations - basic

 

$

 

 

$

 

 

$

 

 

$

 

 

$

0.69

 

Earnings per share - basic

 

$

0.32

 

 

$

0.35

 

 

$

0.64

 

 

$

0.67

 

 

$

1.54

 

Earnings per share from continuing operations - diluted

 

$

0.31

 

 

$

0.34

 

 

$

0.63

 

 

$

0.66

 

 

$

0.82

 

Earnings per share from discontinued operations - diluted

 

$

 

 

$

 

 

$

 

 

$

 

 

$

0.68

 

Earnings per share - diluted

 

$

0.31

 

 

$

0.34

 

 

$

0.63

 

 

$

0.66

 

 

$

1.50

 

Cash dividends paid per common share

 

$

0.17

 

 

$

0.17

 

 

$

0.17

 

 

$

0.34

 

 

$

0.34

 

Book value per common share

 

$

22.94

 

 

$

22.73

 

 

$

21.57

 

 

$

22.94

 

 

$

21.57

 

Tangible book value per common share 1

 

$

22.70

 

 

$

22.48

 

 

$

21.31

 

 

$

22.70

 

 

$

21.31

 

Weighted-average shares outstanding - basic

 

 

12,883,426

 

 

 

12,810,956

 

 

 

12,689,669

 

 

 

12,847,191

 

 

 

12,656,698

 

Weighted-average shares outstanding - diluted

 

 

13,045,660

 

 

 

13,119,292

 

 

 

12,915,294

 

 

 

13,058,791

 

 

 

12,959,725

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

Return on average assets 2

 

 

0.5

%

 

 

0.5

%

 

 

1.0

%

 

 

0.5

%

 

 

1.2

%

Return on average equity 2

 

 

5.7

%

 

 

6.2

%

 

 

12.0

%

 

 

5.9

%

 

 

14.1

%

Net interest margin 3 4

 

 

3.75

%

 

 

3.83

%

 

 

3.80

%

 

 

3.79

%

 

 

4.09

%

Efficiency ratio 5

 

 

83.3

%

 

 

79.5

%

 

 

84.1

%

 

 

81.3

%

 

 

70.9

%

Overhead ratio 2 6

 

 

3.5

%

 

 

3.4

%

 

 

3.6

%

 

 

3.5

%

 

 

3.5

%

Equity to assets

 

 

9.0

%

 

 

8.2

%

 

 

8.2

%

 

 

9.0

%

 

 

8.2

%

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Data and Ratios:

 

 

 

 

 

 

 

 

 

 

Charge-offs

 

$

1,538

 

 

$

2,150

 

 

$

3,700

 

 

$

3,688

 

 

$

8,547

 

Recoveries

 

$

688

 

 

$

835

 

 

$

2,468

 

 

$

1,523

 

 

$

5,637

 

Net loan charge-offs to total loans 2 7

 

 

0.2

%

 

 

0.2

%

 

 

0.2

%

 

 

0.2

%

 

 

0.3

%

Allowance for credit losses

 

$

22,084

 

 

$

22,084

 

 

$

30,294

 

 

$

22,084

 

 

$

30,294

 

Allowance for credit losses to total loans 8

 

 

1.00

%

 

 

1.01

%

 

 

1.31

%

 

 

1.00

%

 

 

1.31

%

Nonperforming loans

 

$

23,099

 

 

$

7,546

 

 

$

13,646

 

 

$

23,099

 

 

$

13,646

 

Nonperforming loans to total loans

 

 

1.0

%

 

 

0.3

%

 

 

0.6

%

 

 

1.0

%

 

 

0.6

%

 

 

 

 

 

 

 

 

 

 

 

Mortgage Company Equity Method Investees Production Data9:

 

 

 

 

 

 

 

 

 

 

Mortgage pipeline

 

$

927,875

 

 

$

790,771

 

 

$

748,756

 

 

$

927,875

 

 

$

748,756

 

Loans originated

 

$

1,383,405

 

 

$

1,050,089

 

 

$

1,167,596

 

 

$

2,433,494

 

 

$

2,167,711

 

Loans closed

 

$

828,849

 

 

$

653,306

 

 

$

820,665

 

 

$

1,482,155

 

 

$

1,495,882

 

Loans sold

 

$

639,035

 

 

$

916,115

 

 

$

786,469

 

 

$

1,555,150

 

 

$

1,221,723

 

 

1 Common equity less total goodwill and intangibles per common share, a non-U.S. GAAP measure. See the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable GAAP financial measure included in the tables on page 19.

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, a non-U.S. GAAP financial measure.

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 and Warp Speed Holdings LLC, entities in which MVB has an ownership interest that are accounted for as equity method investments.

Non-U.S. GAAP Reconciliation: Net Interest Margin on a Fully Tax-Equivalent Basis

 

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

 

 

 

Three Months Ended

 

Six Months Ended

(Dollars in thousands)

 

June 30, 2024

 

March 31, 2024

 

June 30, 2023

 

June 30, 2024

 

June 30, 2023

Net interest margin - U.S. GAAP basis

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

27,570

 

 

$

30,139

 

 

$

29,582

 

 

$

57,709

 

 

$

62,311

 

Average interest-earning assets

 

$

2,973,188

 

 

$

3,185,401

 

 

$

3,149,924

 

 

 

3,079,294

 

 

 

3,096,689

 

Net interest margin

 

 

3.73

%

 

 

3.81

%

 

 

3.77

%

 

 

3.77

%

 

 

4.06

%

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

27,570

 

 

$

30,139

 

 

$

29,582

 

 

$

57,709

 

 

$

62,311

 

Impact of fully tax-equivalent adjustment

 

 

151

 

 

 

194

 

 

 

250

 

 

 

345

 

 

 

535

 

Net interest income on a fully tax-equivalent basis

 

$

27,721

 

 

$

30,333

 

 

$

29,832

 

 

 

58,054

 

 

 

62,846

 

Average interest-earning assets

 

$

2,973,188

 

 

$

3,185,401

 

 

$

3,149,924

 

 

$

3,079,294

 

 

$

3,096,689

 

Net interest margin on a fully tax-equivalent basis

 

 

3.75

%

 

 

3.83

%

 

 

3.80

%

 

 

3.79

%

 

 

4.09

%

Non-U.S. GAAP Reconciliation: Tangible Book Value per Common Share and Tangible Common Equity Ratio

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

 

 

 

June 30, 2024

 

March 31, 2024

 

June 30, 2023

Tangible Book Value per Common Share

 

 

 

 

 

 

Goodwill

 

$

2,838

 

 

$

2,838

 

 

$

2,838

 

Intangibles

 

 

307

 

 

 

330

 

 

 

397

 

Total intangibles

 

$

3,145

 

 

 

3,168

 

 

 

3,235

 

 

 

 

 

 

 

 

Total equity attributable to parent

 

$

296,625

 

 

 

291,850

 

 

 

274,349

 

Less: Total intangibles

 

 

(3,145

)

 

 

(3,168

)

 

 

(3,235

)

Tangible common equity

 

$

293,480

 

 

$

288,682

 

 

$

271,114

 

 

 

 

 

 

 

 

Tangible common equity

 

$

293,480

 

 

$

288,682

 

 

$

271,114

 

Common shares outstanding (000s)

 

 

12,928

 

 

 

12,841

 

 

 

12,720

 

Tangible book value per common share

 

$

22.70

 

 

$

22.48

 

 

$

21.31

 

 

 

 

 

 

 

 

Tangible Common Equity Ratio

 

 

 

 

 

 

Total assets

 

$

3,288,004

 

 

$

3,547,390

 

 

$

3,351,847

 

Less: Total intangibles

 

 

(3,145

)

 

 

(3,168

)

 

 

(3,235

)

Tangible assets

 

$

3,284,859

 

 

$

3,544,222

 

 

$

3,348,612

 

 

 

 

 

 

 

 

Tangible assets

 

$

3,284,859

 

 

$

3,544,222

 

 

$

3,348,612

 

Tangible common equity

 

$

293,480

 

 

$

288,682

 

 

$

271,114

 

Tangible common equity ratio

 

 

8.9

%

 

 

8.1

%

 

 

8.1

%

 

Contacts

Questions or comments concerning this earnings release should be directed to:

MVB Financial Corp.

Donald T. Robinson, President and Chief Financial Officer

(304) 598-3500

drobinson@mvbbanking.com

Amy Baker, VP, Corporate Communications and Marketing

(844) 682-2265

abaker@mvbbanking.com

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