MVB Financial Corp FY Conference Summary Company Overview - **Company**: MVB Financial Corp (NasdaqCM: MVBF) - **Market Position**: A $3.5 billion bank with a focus on fintech and digital banking, operating in 40 states with a diverse client base including Fortune 500 companies [4][25][39] Core Business Strategy - **Purpose and Values**: MVB aims to be trusted partners on the financial frontier, emphasizing values of love, trust, commitment, and adaptivity [5][9][10] - **Business Segments**: 1. **Tech-Forward Banking**: Traditional banking services with a modern approach [10] 2. **Bankers of Choice for Fintech**: Serving major gaming companies like DraftKings and FanDuel, holding 84% of the gaming market [12][25] 3. **Builders of Fintech**: Development of proprietary technology like Victor, which enhances payment processing for clients [13][14] 4. **Backers of Fintech**: Investments in fintech companies to strengthen service offerings [15] Growth Catalysts - **Banking as a Service**: Partnership with Credit Karma, managing 6 million relationships and aiming to increase average savings rates significantly [16][17] - **Fintech-Sponsored Lending**: Collaborating with fintechs to provide loans without holding them on the balance sheet, thus minimizing credit risk [36][37] - **Payments**: Engaging in various payment modalities, including stablecoin transactions, which offer lower costs and faster processing [18][19][28] Financial Performance - **Market Capitalization**: Approximately $330 million, trading at about one times tangible book value and over 10 times forward earnings [25] - **Shareholder Returns**: A 2% dividend yield and a recent $10 million share repurchase program, indicating confidence in stock value [26][40] - **Deposit Base**: $2.8 billion in deposits, with 37% being non-interest bearing, showcasing a strong liquidity position [34] Compliance and Operational Efficiency - **Compliance Focus**: A significant investment in compliance, with a reduction in compliance staff from 160 to 117 through AI implementation, aiming for further reductions [20][41] - **Operational Excellence**: Emphasis on leveraging AI for efficiency, particularly in compliance and risk management [41] Market Dynamics - **Industry Trends**: The banking sector is experiencing consolidation, with a decrease in community banks from 6,000 to about 3,000 [22][23] - **Competitive Landscape**: MVB operates in a niche market with limited competition, focusing on fintech partnerships rather than traditional banking [45][47] Future Outlook - **Pipeline Growth**: A robust pipeline with 14 signed clients and 52 in earlier stages, indicating strong demand for MVB's services [32][33] - **Asset Quality**: Strong asset quality with low charge-offs and a solid capital foundation, positioning MVB for continued growth [38][39] Conclusion MVB Financial Corp is strategically positioned in the fintech space, leveraging technology and partnerships to drive growth while maintaining a strong focus on compliance and operational efficiency. The company's unique approach and market positioning provide a promising outlook for future performance and shareholder returns.

Core Insights - MVB Bank has received five new awards in 2025 for its strong workplace culture and employee satisfaction [1][19] - The bank ranked sixth out of 28 banks in the $3-$10 billion assets category on American Banker's Best Banks to Work For list, marking its fifth consecutive year on the list [2][3] - MVB Bank has also achieved Great Place to Work Certification for the fourth consecutive year, indicating a commitment to employee experience [3][4] Awards and Recognition - MVB Bank was recognized as one of the Best Places to Work for Women and Best Places to Work in West Virginia, highlighting its focus on equity and retention of female talent [4] - Virginia Business ranked MVB as number 27 on its Best Places to Work list, emphasizing the bank's culture of empowerment, trust, and commitment to core values [5] Employee Satisfaction Metrics - Awards assess employee satisfaction in areas such as corporate culture, education and development opportunities, pay and benefits, company policies, and leadership satisfaction [6]

Financial Performance - Net income attributable to the parent for the three months ended September 30, 2025, was $17,136 thousand, a substantial increase from $2,080 thousand in 2024, reflecting an increase of 720.77%[16] - Earnings per common shareholder (basic) rose to $1.36 for the three months ended September 30, 2025, compared to $0.16 in 2024, an increase of 750%[16] - Net income for the nine months ended September 30, 2025, was $22,697,000, compared to $10,807,000 for the same period in 2024, representing a significant increase[22] - The company reported a net income of $17.1 million for the three months ended September 30, 2025, compared to $2.1 million for the same period in 2024[153] - For the nine months ended September 30, 2025, net income was $22.7 million, up from $10.7 million for the same period in 2024[155] Asset Growth - Total assets increased to $3,232,953 thousand as of September 30, 2025, up from $3,128,704 thousand at December 31, 2024, representing a growth of 3.33%[14] - Total stockholders' equity increased to $327,752,000 as of September 30, 2025, from $289,384,000 at December 31, 2023, reflecting a growth of approximately 13.3%[20] - Total assets increased by $104.2 million during the nine months ended September 30, 2025, with the equity to assets ratio rising to 10.1% from 9.8% at December 31, 2024[209] Deposits - Total deposits reached $2,776,078 thousand as of September 30, 2025, up from $2,693,615 thousand at December 31, 2024, indicating a growth of 3.07%[14] - Total deposits increased to $2.78 billion at September 30, 2025, from $2.69 billion at December 31, 2024, with Fintech deposits rising to $1.10 billion[200] - Off-balance sheet deposits totaled $911.6 million as of September 30, 2025, down from $1.42 billion at December 31, 2024, primarily representing the gaming and banking-as-a-service industries[205] Income and Expenses - Net interest income after provision for credit losses for the three months ended September 30, 2025, was $22,146 thousand, compared to $25,626 thousand for the same period in 2024, a decrease of 13.73%[15] - Total noninterest expenses for the three months ended September 30, 2025, were $33,331 thousand, compared to $29,485 thousand in 2024, an increase of 13.93%[15] - Total noninterest expenses for the nine months ended September 30, 2025, were $90,601, an increase from $88,606 in 2024, reflecting a rise of 2.2%[142] Credit Losses - Provision for credit losses increased to $4,427 thousand for the three months ended September 30, 2025, compared to $959 thousand in 2024, an increase of 361.66%[15] - The allowance for credit losses stood at $23,322 thousand as of September 30, 2025, up from $19,663 thousand at December 31, 2024, an increase of 18.06%[14] - The provision for credit losses for the three months ended September 30, 2025, was $3,209 thousand, compared to $5,370 thousand for the same period in 2024, indicating a decrease of about 40.2%[80] Loan Portfolio - As of September 30, 2025, total loans amounted to $2,260,041 thousand, an increase from $2,099,117 thousand as of December 31, 2024, representing a growth of approximately 7.67%[48] - The commercial loan segment reached $1,592,801 thousand as of September 30, 2025, up from $1,416,856 thousand at the end of 2024, indicating an increase of about 12.43%[48] - The total for home equity lines of credit loans was $10.476 million, with no charge-offs reported[67] Noninterest Income - Noninterest income surged to $34,612 thousand for the three months ended September 30, 2025, compared to $6,657 thousand in the same period of 2024, marking a significant increase of 419.57%[15] - For the nine months ended September 30, 2025, noninterest income totaled $49.6 million, an increase of $27.9 million from $21.6 million in the prior year, driven by a $34.7 million gain on divestitures and a $5.3 million increase in equity method investment income[181] Market and Economic Conditions - The bank expects potential economic volatility over the next one to two years, impacting credit loss estimates[72] - The company is preparing to adopt new accounting standards related to income tax disclosures effective after December 15, 2024, which may impact footnote disclosures but not the consolidated financial statements materially[37] Stockholder Activities - The company executed a stock buyback program, repurchasing common stock worth $10,018,000 during the nine months ended September 30, 2025[22] - The company plans to repurchase up to $10 million of its common stock starting in November 2025[147] Risk Management - The Bank engages an external consultant to conduct independent loan reviews annually, targeting 35% to 40% of the Bank's commercial outstanding loan balances for review[65] - The company is actively monitoring the performance and credit quality of its loan portfolio by analyzing the past due status of the portfolio[70]

Group 1: Company Performance - MVB Financial reported a quarterly loss of $0.24 per share, missing the Zacks Consensus Estimate of $0.29, compared to earnings of $0.16 per share a year ago [1] - The company posted revenues of $27.1 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 24.93%, and down from $33.24 million year-over-year [2] - MVB Financial shares have increased approximately 30.6% since the beginning of the year, outperforming the S&P 500's gain of 17.2% [3] Group 2: Future Outlook - The company's earnings outlook is crucial for investors, including current consensus earnings expectations for upcoming quarters [4] - The current consensus EPS estimate for the next quarter is $0.45 on revenues of $37.7 million, and for the current fiscal year, it is $1.08 on revenues of $141 million [7] - The estimate revisions trend for MVB Financial was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Group 3: Industry Context - The Banks - Northeast industry, to which MVB Financial belongs, is currently in the top 14% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Insights - MVB Financial (MVBF) reported a quarterly loss of $0.75 per share, significantly missing the Zacks Consensus Estimate of $0.29, and compared to earnings of $0.16 per share a year ago, representing an earnings surprise of -358.62% [1] - The company posted revenues of $27.1 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 24.93%, and down from $33.24 million year-over-year [2] - MVB Financial shares have increased by approximately 30.6% since the beginning of the year, outperforming the S&P 500's gain of 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.45 on revenues of $37.7 million, and for the current fiscal year, it is $1.08 on revenues of $141 million [7] - The estimate revisions trend for MVB Financial was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Banks - Northeast industry, to which MVB Financial belongs, is currently in the top 14% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8] - Another company in the same industry, HarborOne Bancorp (HONE), is expected to report quarterly earnings of $0.21 per share, reflecting a year-over-year change of +110% [9]

Financial Performance - MVB Financial reported a net income of $17.1 million for Q3 2025, translating to $1.36 and $1.32 per basic and diluted share, respectively[2]. - Net interest income increased by 3.1% to $26.8 million, driven by robust loan growth of 4.9%, with total loan balances reaching $2.26 billion[9][17]. - Total noninterest income surged by 335.6% to $34.6 million, primarily due to the gain from the sale of Victor, despite a $7.6 million loss from securities repositioning[9][14]. - Net interest income for Q3 2025 was $26,573,000, compared to $25,780,000 in Q2 2025, reflecting a growth of 3.1%[49]. - Earnings per share (basic) for the third quarter of 2025 was $1.36, compared to $0.16 in the second quarter of 2025[37]. - Earnings per share (diluted) increased to $1.32 in Q3 2025 from $0.16 in Q3 2024, reflecting strong performance[48]. - The efficiency ratio improved to 54.5% in Q3 2025 from 88.7% in Q3 2024, indicating better cost management[48]. Asset and Liability Management - Total assets as of September 30, 2025, were $3,232,953, a slight increase from $3,224,008 in June 30, 2025, but a decrease from $3,418,756 in September 30, 2024[41]. - Total liabilities decreased to $2,905,201 as of September 30, 2025, from $2,921,693 in June 30, 2025, and $3,115,556 in September 30, 2024[41]. - Total stockholders' equity increased to $327,752 as of September 30, 2025, compared to $302,315 in June 30, 2025, and $303,200 in September 30, 2024[41]. Loan and Credit Quality - Nonperforming loans totaled $26.2 million, or 1.2% of total loans, reflecting an increase from the previous quarter due to one specific credit downgrade[10]. - The provision for credit losses totaled $4.4 million for the third quarter of 2025, up from $2.0 million in the prior quarter[26]. - The allowance for credit losses for loans was 1.03% of total loans at September 30, 2025, compared to 0.97% at June 30, 2025[27]. - Criticized loans as a percentage of total loans decreased to 4.1% as of September 30, 2025, from 5.2% as of June 30, 2025[24]. - Nonperforming loans increased to $26,214,000, up from $21,055,000 in the previous year, suggesting potential asset quality concerns[48]. - The allowance for credit losses was $23,322,000, compared to $21,499,000 in the same period last year, reflecting increased provisions for potential loan losses[48]. Shareholder Returns - The company completed a $10.0 million share repurchase program, buying back 473,584 shares at an average price of $21.15 per share[4]. - The Company issued a quarterly cash dividend of $0.17 per share during the third quarter of 2025, consistent with previous quarters[22]. - Cash dividends paid per common share remained stable at $0.17 for both Q3 2025 and Q3 2024[48]. Capital Ratios - The Community Bank Leverage Ratio was 11.1%, while the Tier 1 Risk-Based Capital Ratio stood at 14.1% as of September 30, 2025[21]. - The Total Risk-Based Capital Ratio was 15.0% as of September 30, 2025, down from 15.5% as of June 30, 2025[22]. - Tangible common equity ratio improved to 10.1% in Q3 2025, up from 9.3% in Q2 2025[51]. Other Financial Metrics - The average yield on loans for the three months ended September 30, 2025, was 6.55%, down from 6.78% in June 30, 2025, and 7.08% in September 30, 2024[43]. - Total interest-bearing liabilities were $2,071,007 for the three months ended September 30, 2025, with an average cost of 3.38%[43]. - Noninterest-bearing deposits were $862,124 as of September 30, 2025, compared to $886,657 in June 30, 2025, and $910,787 in September 30, 2024[43]. - The net interest margin (tax-equivalent) for Q3 2025 was 3.55%, slightly down from 3.61% in Q3 2024[48]. - The impact of fully tax-equivalent adjustment on net interest income was $180,000 in Q3 2025, compared to $177,000 in Q2 2025[49].

Group 1: Swift's Distributed Ledger Initiative - Swift has formed a consortium to develop a distributed ledger aimed at supporting real-time international payments and accommodating digital assets [1] - The consortium is collaborating with Consensys to create a prototype for the ledger, leveraging Swift's extensive network of over 11,000 banks across 200 countries [2] - The initial focus will be on enhancing real-time payments, addressing interoperability issues that currently hinder cross-border transactions [3] Group 2: Features of the Distributed Ledger - The ledger will utilize smart contracts to automate payment triggers based on specific conditions, facilitating the use of various digital currencies including stablecoins and cryptocurrencies [4] - Swift's CEO emphasized the rapid development of infrastructure to support future payment solutions [5] Group 3: Ripple's Cross-Border Payment Solutions - Ripple has signed an agreement with i-payout to enable real-time payments to recipients in the U.S. and Canada, targeting banks and payment firms [7] - The collaboration aims to expand to recipients outside the U.S. by the end of 2025, utilizing Ripple's USD-backed stablecoin [8] - Ripple's initiatives are part of a broader effort to modernize global money movement, enhancing payment speed and infrastructure [9] Group 4: PayPal's Investment in EMEA - PayPal plans to invest $100 million in the Middle East and Africa over the coming years, focusing on technology launches and partnerships [13][14] - This investment follows the establishment of a regional hub in Dubai, aiming to support local entrepreneurs and businesses [14] Group 5: Mobile Wallet Adoption in the U.K. - Mobile wallet usage in the U.K. has surged, with 57% of adults using them in 2024, up from 42% in 2023 [15] - The increase in mobile wallet adoption correlates with a rise in online and contactless payments, with 61% of card payments being contactless [16] - Predictions indicate that cash usage will decline to 4% of payments by 2034, while card payments will account for about 67% [17] Group 6: BBVA's Virtual Card Launch - BBVA has partnered with Mastercard to launch a virtual card in Mexico, aimed at enhancing security and processing speed for travel agencies [18][19] - The virtual card technology will allow BBVA to issue unique virtual numbers for each transaction, improving control for corporate users [19] Group 7: Coinbase's Support for Stablecoins - Coinbase is integrating StraitsX's Singapore dollar-backed stablecoin, XSGD, to facilitate cross-border payments and local currency conversions [21][22] - This move is part of Coinbase's broader strategy to expand its stablecoin offerings and support AI-driven commerce [23] Group 8: Banco Santander's BNPL Service - Banco Santander's Zinia pay-over-time service is now available on Amazon in Spain, allowing installment payments for purchases between 60 euros and 3,000 euros [24][25] - Despite BNPL being used for only 5% of online purchases in Spain, there is significant consumer interest in such options [26]

Core Insights - MVB Bank has partnered with Aeropay to develop compliant bank-to-bank payment solutions, enhancing Aeropay's payment infrastructure with MVB's expertise in ACH and Real-Time Payments [1][2] - The collaboration aims to expand Aeropay's real-time payment capabilities and simplify payment experiences for customers [2] - MVB Bank is committed to working with fintech innovators like Aeropay to shape the future of payments, particularly in regulated industries such as gaming and daily fantasy sports [3][4] Company Overview - MVB Bank, a subsidiary of MVB Financial, provides a range of financial services tailored for individuals and corporate clients in the Mid-Atlantic region [3] - The bank offers account structures and operational flexibility to manage complex money movements in regulated and high-growth sectors [2] Partnership Details - The partnership with Aeropay is expected to strengthen the foundation of Aeropay's payments infrastructure, with a focus on smarter, faster, and fully bank-connected money movement [3] - Earlier in the year, Aeropay also partnered with Regent Bank to expand its banking network for secure transactions [4] - Aeropay launched an in-house bank aggregator called Aerosync to increase customer conversions while lowering risk [5]

Financial Performance - Net income attributable to the parent was $2,002 thousand for the three months ended June 30, 2025, a decline of 51.8% from $4,089 thousand in the same period of 2024[17]. - Earnings per common shareholder (basic) decreased to $0.16 for the three months ended June 30, 2025, compared to $0.32 in the same quarter of 2024[17]. - Comprehensive income for the three months ended June 30, 2025, was $252 thousand, significantly lower than $6,502 thousand in the same period of 2024[18]. - Net income for the six months ended June 30, 2025, was $5,561,000, compared to $8,651,000 for the same period in 2024, reflecting a decrease of approximately 35.5%[20]. - The net income available to common shareholders for the three months ended June 30, 2025, was $2.002 million, compared to $4.089 million for the same period in 2024, representing a decline of approximately 51.0%[123]. - Net income for the three months ended June 30, 2025 was $2.0 million, a decrease from $4.1 million for the same period in 2024[140]. Asset and Liability Management - Total assets increased to $3,224,008 thousand as of June 30, 2025, up from $3,128,704 thousand at December 31, 2024, representing a growth of 3.06%[15]. - Total liabilities as of June 30, 2025, were $2,899,096 thousand, down from $3,093,544 thousand in 2024, indicating a reduction in leverage[145]. - Total stockholders' equity increased to $310,054,000 as of March 31, 2025, up from $305,791,000 at the end of 2024, representing a growth of about 0.9%[19]. - The equity to assets ratio decreased from 9.8% at December 31, 2024, to 9.4% at June 30, 2025[197]. - Liquid assets totaled $472.9 million as of June 30, 2025, supporting the Bank's ability to meet cash obligations[202]. Loan Portfolio - Net loans receivable rose to $2,132,524 thousand, an increase of 2.18% from $2,080,468 thousand at the end of 2024[15]. - Total loans amounted to $2,153,396 thousand, an increase of 2.6% from $2,099,117 thousand on December 31, 2024[40]. - Commercial loans totaled $1,485,924 thousand, up 4.9% from $1,416,856 thousand at the end of 2024[40]. - Residential real estate loans decreased to $639,771 thousand, down 1.4% from $650,708 thousand[40]. - The Bank's loan portfolio totaled $2.15 billion as of June 30, 2025, up from $2.10 billion as of December 31, 2024, indicating a growth of approximately 2.4%[181]. Income and Expenses - Net interest income after provision for credit losses was $23,790 thousand for the three months ended June 30, 2025, down 12.5% from $27,316 thousand in the same period of 2024[16]. - Noninterest income totaled $7,945 thousand for the three months ended June 30, 2025, a 11.23% increase from $7,142 thousand in the prior year[16]. - Total noninterest expenses decreased slightly to $28,569 thousand, down from $28,930 thousand in the same quarter of 2024[16]. - Interest income for the three months ended June 30, 2025, was $42,384 thousand, a decrease of 8.8% from $46,127 thousand in the same period of 2024[132]. - Total interest income decreased by $3.7 million, or 8.1%, to $42.4 million for the three months ended June 30, 2025, from $46.1 million for the same period in 2024[155]. Credit Losses and Provisions - The allowance for credit losses increased to $20,785 thousand as of June 30, 2025, compared to $19,663 thousand at December 31, 2024, indicating a proactive approach to potential credit risks[15]. - The provision for credit losses for the three months ended June 30, 2025, was $2,031,000, compared to a release of $1,803,000 for the same period in 2024[73]. - Charge-offs for the six months ended June 30, 2025, totaled $2,000,000, with $1,000,000 related to commercial notes secured by business assets and $1,000,000 related to the subprime automotive segment[74]. - The total allowance for credit losses (ACL) was $20,785,000, an increase from $19,165,000 at March 31, 2025[73]. - The ACL methodology includes a discounted cash flow approach with a one-year reasonable forecast period[64]. Deposits and Funding - Total deposits grew to $2,804,423 thousand, reflecting an increase of 4.12% compared to $2,693,615 thousand at December 31, 2024[15]. - The company experienced a net change in deposits of $109,606,000 during the six months ended June 30, 2025, contrasting with a decrease of $18,624,000 in the same period of 2024[20]. - Fintech deposits rose to $1.16 billion as of June 30, 2025, up from $964.1 million at December 31, 2024, driven by increases in banking-as-a-service and digital asset deposits[188]. Investments and Securities - As of June 30, 2025, the fair value of available-for-sale investment securities was $396.6 million, down from $410.9 million as of December 31, 2024, reflecting a decrease of approximately 3.4%[35]. - The company reported unrealized losses of $34.4 million on available-for-sale debt securities as of June 30, 2025, with no intent to sell these securities at such fair values[38]. - The total amortized cost of available-for-sale debt securities was $430.5 million as of June 30, 2025, with a fair value of $396.6 million, indicating a loss of approximately 7.9%[35]. - The carrying value of the investment in ICM was $24.1 million as of June 30, 2025[85]. - The carrying value of the investment in Warp Speed was $55.8 million as of June 30, 2025[86]. Operational Efficiency - The efficiency ratio for the six months ended June 30, 2025, was 85.0%, compared to 81.3% in 2024, indicating a deterioration in operational efficiency[147]. - Noninterest expense was $28.6 million for the three months ended June 30, 2025, a slight decrease from $28.9 million for the same period in 2024, with personnel costs comprising approximately 55.3% of total noninterest expense[170]. Market and Economic Conditions - The unemployment rate in the United States was 4.4% for June 2025, reflecting the economic conditions in the Bank's primary market areas[206]. - As of June 30, 2025, the Bank expects potential economic volatility over the next one to two years, impacting credit loss rates[65].

Group 1: Earnings Performance - MVB Financial reported quarterly earnings of $0.15 per share, missing the Zacks Consensus Estimate of $0.31 per share, representing an earnings surprise of -51.61% [1] - The company posted revenues of $33.73 million for the quarter, missing the Zacks Consensus Estimate by 6.06%, compared to revenues of $34.71 million a year ago [2] - Over the last four quarters, MVB Financial has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Group 2: Stock Performance and Outlook - MVB Financial shares have increased by approximately 14.1% since the beginning of the year, outperforming the S&P 500's gain of 8.6% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.39 for the coming quarter and $1.41 for the current fiscal year [7] - The estimate revisions trend for MVB Financial was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Group 3: Industry Context - The Banks - Northeast industry, to which MVB Financial belongs, is currently in the top 15% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact MVB Financial's stock performance [5]