MVB Financial(MVBF) - 2025 Q1 - Quarterly Results

Q1 2025 Financial Highlights Overview of Q1 2025 Performance MVB Financial reported a net income of $3.6 million, with improved net interest margin, reduced noninterest expenses, enhanced capital, and increased book value per share Q1 2025 Key Financial Results | Metric | Value | | :--- | :--- | | Net Income | $3.6 million | | Basic Earnings Per Share | $0.28 | | Diluted Earnings Per Share | $0.27 | Q1 2025 Key Performance Changes (vs. Q4 2024) | Metric | Value/Change | | :--- | :--- | | Net Interest Margin | 3.63% (+20 bps) | | Net Interest Income | +7.1% | | Noninterest Expense | -14.6% | | Book Value Per Share | $23.94 (+1.4%) | | Tangible Book Value Per Share | $23.85 (+2.1%) | - Noninterest bearing deposits constituted 40.0% of total deposits, indicating a strong funding profile[4] - The company reported improved asset quality indicators and further enhanced capital strength[4] CEO's Remarks CEO Larry F. Mazza highlighted Q1 results as tangible progress from strategic repositioning, noting strong funding, margin expansion, and expense management - The CEO views the Q1 results as a reflection of tangible progress following the strategic repositioning of the business model over the past year[5] - A best-in-class funding profile was credited for the meaningful expansion in net interest margin and growth in net interest income[5] - Significant progress was made in right-sizing the cost structure after prior infrastructure investments made to support the next phase of growth[6] - Asset quality metrics improved, the strong liquidity position was preserved, and the capital base was further strengthened, providing flexibility for opportunistic capital deployment[6] Detailed Financial Analysis Income Statement Analysis Net interest income rose 7.1% with margin expansion, while noninterest income declined due to a prior one-time gain, and expenses decreased 14.6% Net Interest Income and Margin (Tax-Equivalent) | Metric | Q1 2025 | Q4 2024 | Change (QoQ) | | :--- | :--- | :--- | :--- | | Net Interest Income | $26.9 million | $25.1 million | +7.1% | | Net Interest Margin | 3.66% | 3.46% | +20 bps | - The increase in net interest margin from the prior quarter was primarily driven by a decline in funding costs to 2.28% from 2.56%, reflecting a favorable shift in deposit mix[11][12] - Noninterest income declined by $14.3 million from the prior quarter, largely due to the absence of an $11.8 million gain on sale of assets that occurred in Q4 2024[13] - Noninterest expense decreased by $4.9 million (14.6%) from the prior quarter, mainly due to lower salaries and employee benefits (-$2.4 million) and professional fees (-$2.2 million)[15] Balance Sheet Analysis Total loans and deposits decreased, but noninterest-bearing deposits and off-balance sheet deposits increased, reflecting a shift in funding mix Loan and Deposit Balances (as of March 31, 2025) | Metric | Value | Change vs. Dec 31, 2024 | | :--- | :--- | :--- | | Total Loans | $2.06 billion | -1.8% | | Total Deposits | $2.58 billion | -4.1% | | Noninterest-Bearing Deposits | $1.03 billion | +9.8% | - The decline in loans included $13.4 million in amortization and payoffs of classified loans, which strengthened the portfolio's asset quality[17] - The decrease in total deposits was mainly driven by a $90.2 million (18.2%) decline in brokered CDs[18] - Off-balance sheet deposits increased by $98.6 million (6.9%) from the prior quarter to $1.52 billion, which are used to generate fee income and manage liquidity[21] Capital Adequacy MVB's capital position strengthened in Q1 2025, with improved Tangible Common Equity and regulatory capital ratios, while maintaining its dividend Capital Ratios Comparison | Ratio | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Community Bank Leverage Ratio | 10.9% | 11.2% | | Tier 1 Risk-Based Capital Ratio | 15.5% | 15.1% | | Total Risk-Based Capital Ratio | 16.4% | 15.8% | | Tangible Common Equity Ratio (Non-GAAP) | 10.2% | 9.7% | - The company issued a quarterly cash dividend of $0.17 per share, consistent with the previous quarter and the same quarter last year[23] Asset Quality Asset quality improved with a 17.6% decrease in nonperforming loans and lower net charge-offs, while the allowance for credit losses remained stable Asset Quality Indicators | Metric | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Nonperforming Loans | $20.3 million (1.0% of loans) | $24.6 million (1.2% of loans) | | Net Charge-offs | $0.9 million (0.2% of loans) | $1.5 million (0.3% of loans) | | Provision for Credit Losses | $0.2 million | $0.3 million | - Classified loans as a percentage of total loans decreased to 3.2% as of March 31, 2025, from 3.8% at the end of the prior quarter[24] - The allowance for credit losses for loans was 0.9% of total loans, consistent with the prior quarter-end[26] Financial Statements and Data Consolidated Statements of Income This table presents the unaudited consolidated income statement for Q1 2025, detailing income, expenses, and earnings per share Consolidated Statements of Income (Unaudited, in thousands, except per share data) | | 2025 First Quarter | 2024 Fourth Quarter | 2024 First Quarter | | :--- | :--- | :--- | :--- | | Net interest income | $ 26,676 | $ 24,904 | $ 30,139 | | Provision for credit losses | 177 | 331 | 1,997 | | Total noninterest income | 7,008 | 21,280 | 7,834 | | Total noninterest expenses | 28,701 | 33,620 | 30,191 | | Net income available to common shareholders | $ 3,577 | $ 9,440 | $ 4,482 | | Earnings per share - basic | $ 0.28 | $ 0.73 | $ 0.35 | | Earnings per share - diluted | $ 0.27 | $ 0.72 | $ 0.34 | Noninterest Income Breakdown This table details noninterest income components for Q1 2025 and comparative quarters, highlighting the impact of a prior asset sale gain Noninterest Income (Unaudited, in thousands) | | 2025 First Quarter | 2024 Fourth Quarter | 2024 First Quarter | | :--- | :--- | :--- | :--- | | Total payment card and service charge income | $ 4,985 | $ 3,818 | $ 4,813 | | Equity method investments income (loss) | 645 | 1,319 | (1,128) | | Gain (loss) on sale of loans | (69) | 1,012 | — | | Gain on divestiture activity | 608 | — | — | | Gain (loss) on sale of assets | (342) | 11,771 | — | | Total noninterest income | $ 7,008 | $ 21,280 | $ 7,834 | Condensed Consolidated Balance Sheets This table presents the condensed consolidated balance sheet as of March 31, 2025, detailing key asset, liability, and equity accounts Condensed Consolidated Balance Sheets (Unaudited, in thousands) | | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :--- | :--- | :--- | :--- | | Total assets | $ 3,019,687 | $ 3,128,704 | $ 3,547,390 | | Loans receivable, net | 2,044,131 | 2,080,468 | 2,244,506 | | Total deposits | 2,583,798 | 2,693,615 | 3,145,329 | | Noninterest-bearing deposits | 1,033,056 | 940,994 | 1,391,070 | | Stockholders' equity | 310,054 | 305,791 | 291,828 | | Total liabilities and stockholders' equity | $ 3,019,687 | $ 3,128,704 | $ 3,547,390 | Average Balances and Interest Rates This table details average balances, interest income/expense, and yields/costs for earning assets and interest-bearing liabilities Average Balances and Rates Highlights (Q1 2025, in thousands) | Category | Average Balance | Yield/Cost | | :--- | :--- | :--- | | Total earning assets | $2,979,992 | 5.91% | | Total loans | $2,104,126 | 6.76% | | Total interest-bearing liabilities | $1,811,603 | 3.71% | | Net interest spread (tax equivalent) | - | 2.20% | | Net interest margin (tax equivalent) | - | 3.66% | Selected Financial Data This table summarizes key performance ratios, per-share data, and asset quality metrics for Q1 2025 and comparative quarters Selected Performance Ratios (Q1 2025) | Ratio | Value | | :--- | :--- | | Return on average assets | 0.4% | | Return on average equity | 4.7% | | Net interest margin (tax-equivalent) | 3.66% | | Efficiency ratio | 85.2% | | Equity to assets | 10.3% | | Nonperforming loans to total loans | 1.0% | Non-U.S. GAAP Reconciliations These tables reconcile non-U.S. GAAP financial measures, including net interest margin and tangible common equity, to their U.S. GAAP equivalents Reconciliation of Net Interest Margin (Q1 2025) | Metric | Value | | :--- | :--- | | Net interest margin (U.S. GAAP) | 3.63% | | Impact of fully tax-equivalent adjustment | +0.03% | | Net interest margin (Non-U.S. GAAP) | 3.66% | Reconciliation of Tangible Common Equity (March 31, 2025) | Metric | Value | | :--- | :--- | | Total equity attributable to parent | $310,054 thousand | | Less: Total intangibles | ($1,200) thousand | | Tangible common equity | $308,854 thousand | | Tangible book value per common share | $23.85 | | Tangible common equity ratio | 10.2% | Supplementary Information About MVB Financial Corp. MVB Financial Corp. is a publicly traded financial holding company providing services through MVB Bank in the Mid-Atlantic region - MVB Financial Corp. is the holding company for MVB Bank and is publicly traded on Nasdaq under the ticker "MVBF"[27] - The company is headquartered in Fairmont, West Virginia, and serves clients in the Mid-Atlantic region and beyond[27] Forward-looking Statements This section cautions that forward-looking statements are subject to risks and uncertainties, advising reliance on SEC filings for details - The press release contains forward-looking statements regarding possible future results of operations, which are protected under the Private Securities Litigation Reform Act of 1995[30] - Numerous factors could cause actual results to differ materially from those expressed in forward-looking statements, including market, economic, operational, liquidity, and credit risks[31] - The company disclaims any obligation to update forward-looking statements and directs readers to its Annual Report on Form 10-K for additional risk factors[31] Non-U.S. GAAP Financial Measures Explanation This section explains the use of non-U.S. GAAP financial measures for supplemental analysis, noting they are not substitutes for U.S. GAAP - The document uses non-U.S. GAAP financial measures which management believes provide useful supplemental information for understanding the company's financial condition and results[34] - These measures are not substitutes for U.S. GAAP basis measures and are presented to assist investors in comparing financial conditions, consistent with industry practice[34]