MVB Financial(MVBF) - 2025 Q2 - Quarterly Results

MVB Financial Corp. Announces Second Quarter 2025 Results Executive Summary & CEO Commentary The company reported net income of $2.0 million, highlighting accelerated loan growth and improved asset quality despite earnings falling short of expectations Second Quarter 2025 Key Financials | Metric | Q2 2025 | | :----- | :------ | | Net Income | $2.0 million | | Basic EPS | $0.16 | | Diluted EPS | $0.15 | Second Quarter 2025 Performance Highlights (vs. Q1 2025) | Metric | Change | | :----- | :----- | | Pre-tax, pre-provision income | +3.5% | | Net interest margin | +3 bps (to 3.66%) | | Noninterest income | +13.4% | | Loan growth | +4.4% | | Deposit growth | +8.5% | - The Company repurchased 314,580 shares for $6.4 million at an average cost of $20.28 per share, reflecting a commitment to shareholder value[3][5] - Loan growth accelerated after five consecutive quarters of contraction, with a strong pipeline for the second half of the year[4] - Reported earnings fell short of expectations primarily due to the timing of loan growth, which occurred late in the quarter, resulting in provisioning without corresponding interest income[6] Second Quarter 2025 Key Highlights Operating Performance & Leverage The company achieved positive operating leverage driven by cost stabilization and a 13.4% increase in noninterest income - Positive operating leverage was driven by cost stabilization[8] Noninterest Income & Expense (QoQ) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :----- | :------ | :------ | :----------- | | Total Noninterest Income | $7.9 million | $7.0 million | +13.4% (+$0.9 million) | | Total Noninterest Expense | $28.6 million | $28.7 million | -0.5% (-$0.1 million) | - The increase in noninterest income was primarily due to an increase in equity method investment income from the mortgage segment, partially offset by declines in other income categories[8] - Noninterest expense remained relatively flat, consistent with recently-instituted cost control initiatives[8] Net Interest Margin & Earning Assets Net interest margin expanded by three basis points to 3.69% on a fully tax-equivalent basis, driven by an improved earning asset mix Net Interest Margin & Earning Assets (QoQ) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :----- | :------ | :------ | :----------- | | Net Interest Margin (FTE) | 3.69% | 3.66% | +3 bps | | Average Earning Assets | $2.82 billion | $2.97 billion | -5.2% (-$155.0 million) | | Yield on Interest Earning Assets | 6.04% | 5.91% | +13 bps | | Total Cost of Funds | 2.41% | 2.28% | +13 bps | - Net interest margin expansion was powered by an improved earning asset mix and higher yields[8] - The decline in average earning assets primarily reflected seasonal considerations related to banking-as-a-service operations, resulting in a significant decline in average cash balances[8] - The increase in total cost of funds primarily reflected seasonal considerations, which resulted in a change in deposit mix and a lower balance of average noninterest bearing deposits[8] Loan & Deposit Growth Total loan balances increased by 4.4% and total deposits grew by 8.5% quarter-over-quarter, with noninterest-bearing deposits representing 37.4% of total deposits Loan & Deposit Growth (QoQ) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :----- | :------ | :------ | :----------- | | Total Loan Balances | $2.15 billion | $2.06 billion | +4.4% (+$90.0 million) | | Total Deposits | $2.80 billion | $2.58 billion | +8.5% (+$220.6 million) | | Noninterest-Bearing (NIB) Deposits | $1.05 billion | $1.03 billion | +1.7% (+$17.0 million) | | NIB Deposits as % of Total Deposits | 37.4% | 40.0% | -2.6 percentage points | | Loan-to-Deposit Ratio | 76.8% | 79.9% | -3.1 percentage points | - Loan growth was primarily due to increased loan demand and improved market conditions[8] Capital & Asset Quality The company maintained a strong capital foundation with improved asset quality, evidenced by a decline in criticized loans and lower net charge-offs - The company is maintaining a strong and resilient foundation[11] Asset Quality Metrics (QoQ) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :----- | :------ | :------ | :----------- | | Criticized Loans | $112.9 million | $135.5 million | -16.6% (-$22.5 million) | | Criticized Loans as % of Total Loans | 5.2% | 6.6% | -1.4 percentage points | | Net Charge-offs (annualized) | $0.2 million (0.04%) | $0.9 million (0.2%) | -77.8% (-$0.7 million) | | Provision for Credit Losses | $2.0 million | $0.2 million | +$1.8 million | | Allowance for Credit Losses as % of Total Loans | 1.0% | 0.9% | +0.1 percentage points | Capital Ratios (QoQ) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | | :----- | :------ | :------ | :----------- | | Community Bank Leverage Ratio | 11.4% | 10.9% | +0.5 percentage points | | Tier 1 Risk-Based Capital Ratio | 14.6% | 15.5% | -0.9 percentage points | | Total Risk-Based Capital Ratio | 15.5% | 16.4% | -0.9 percentage points | | Tangible Common Equity Ratio (non-GAAP) | 9.3% | 10.2% | -0.9 percentage points | - The increase in provision for credit losses was primarily attributable to loan growth[11] Shareholder Value Initiatives The company actively repurchased shares under a $10 million authorization, reflecting its ongoing commitment to shareholder value - The company actively repurchased stock following the authorization of a $10 million share repurchase plan in late May[5] Share Repurchase Activity (Q2 2025) | Metric | Value | | :----- | :---- | | Shares Repurchased | 314,580 | | Total Cost | $6.4 million | | Average Cost per Share | $20.28 | Income Statement Analysis Net Interest Income Net interest income declined due to lower average earning assets, partially offset by a higher net interest margin Net Interest Income (FTE) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Change (QoQ) | Change (YoY) | | :----- | :------ | :------ | :------ | :----------- | :----------- | | Net Interest Income (FTE) | $26.0 million | $26.9 million | $27.7 million | -3.4% (-$0.9 million) | -6.4% (-$1.8 million) | - The decline from both prior periods reflects a lower balance of total average earning assets, partially offset by a higher net interest margin[9] Interest Income & Expense | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Change (QoQ) | Change (YoY) | | :----- | :------ | :------ | :------ | :----------- | :----------- | | Interest Income | $42,384 | $43,229 | $46,127 | -2.0% (-$0.8 million) | -8.1% (-$3.7 million) | | Interest Expense | $16,604 | $16,553 | $18,557 | +0.3% (+$0.1 million) | -10.5% (-$2.0 million) | | Cost of Funds | 2.41% | 2.28% | 2.54% | +13 bps | -13 bps | - The QoQ decline in interest income reflects declines in interest income from cash balances, while the YoY decline reflects lower interest income from loans and cash[10][12] - The higher cost of funds QoQ reflects a shift in the mix of average deposits due to typical seasonal considerations related to banking-as-a-service operations[13] Noninterest Income Noninterest income increased significantly, driven by higher equity method investment income from the mortgage segment Total Noninterest Income | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Change (QoQ) | Change (YoY) | | :----- | :------ | :------ | :------ | :----------- | :----------- | | Total Noninterest Income | $7.9 million | $7.0 million | $7.1 million | +$0.9 million | +$0.8 million | - The QoQ increase is primarily attributable to a $1.7 million increase in equity method investment income from the mortgage segment, partially offset by declines in other income categories[14] - The YoY increase was primarily driven by a $1.8 million increase in equity method investment income from the mortgage segment, partially offset by a decline in compliance consulting income[14] Noninterest Expense Total noninterest expense saw a slight decline quarter-over-quarter and year-over-year, reflecting cost control initiatives Total Noninterest Expense | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Change (QoQ) | Change (YoY) | | :----- | :------ | :------ | :------ | :----------- | :----------- | | Total Noninterest Expense | $28.6 million | $28.7 million | $28.9 million | -$0.1 million | -$0.4 million | - The QoQ decline primarily reflects a $0.6 million decrease in salaries and employee benefits, partially offset by increases in other expense categories[16] - The YoY decline primarily reflects a $1.7 million decrease in professional fees, partially offset by increases in other operating expenses[16] Balance Sheet Analysis Loans Total loans increased by 4.4% quarter-over-quarter due to stronger demand, but declined by 2.4% year-over-year due to portfolio management Total Loans | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Change (QoQ) | Change (YoY) | | :----- | :------------ | :------------- | :------------ | :----------- | :----------- | | Total Loans | $2.15 billion | $2.06 billion | $2.21 billion | +4.4% (+$90.0 million) | -2.4% (-$53.5 million) | - The increase in loan balances relative to the prior quarter primarily reflects stronger loan demand and improved market conditions[17] - The decline relative to the same period a year ago reflects portfolio management and the impact of loan amortization and payoffs[17] Deposits Total deposits grew 8.5% QoQ driven by the Fintech space, while noninterest-bearing deposits also increased Total Deposits | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Change (QoQ) | Change (YoY) | | :----- | :------------ | :------------- | :------------ | :----------- | :----------- | | Total Deposits | $2.80 billion | $2.58 billion | $2.88 billion | +8.5% (+$220.6 million) | -2.7% (-$78.4 million) | | Noninterest-Bearing (NIB) Deposits | $1.05 billion | $1.03 billion | $0.98 billion | +1.7% (+$17.0 million) | +6.7% (+$66.3 million) | | NIB Deposits as % of Total Deposits | 37.4% | 40.0% | 34.1% | -2.6 percentage points | +3.3 percentage points | - The increase in deposits relative to the prior quarter primarily reflects an increased volume in the Fintech banking space[18] - Relative to the same period a year ago, the decline in total deposits primarily reflects a $193.1 million decline in brokered certificates of deposit[18] Off-Balance Sheet Deposits Off-balance sheet deposits declined significantly both quarter-over-quarter and year-over-year, primarily due to seasonal factors and lower deposit balances Off-Balance Sheet Deposits | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Change (QoQ) | Change (YoY) | | :----- | :------------ | :------------- | :------------ | :----------- | :----------- | | Off-Balance Sheet Deposits | $1.11 billion | $1.52 billion | $1.36 billion | -27.5% (-$418.4 million) | -18.7% (-$253.4 million) | - The decline in off-balance sheet deposits relative to the prior quarter primarily reflects typical seasonality in certain deposit relationships[20] - Off-balance sheet deposit networks are utilized to generate fee income, enhance capital efficiency and manage liquidity and concentration risk[20] Capital Management Capital Ratios MVB maintained strong capital ratios, with the Community Bank Leverage Ratio increasing both quarter-over-quarter and year-over-year Capital Ratios | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Change (QoQ) | Change (YoY) | | :----- | :------------ | :------------- | :------------ | :----------- | :----------- | | Community Bank Leverage Ratio | 11.4% | 10.9% | 10.7% | +0.5 pp | +0.7 pp | | Tier 1 Risk-Based Capital Ratio | 14.6% | 15.5% | 14.6% | -0.9 pp | 0.0 pp | | Total Risk-Based Capital Ratio | 15.5% | 16.4% | 15.4% | -0.9 pp | +0.1 pp | | Tangible Common Equity Ratio (non-GAAP) | 9.3% | 10.2% | 8.9% | -0.9 pp | +0.4 pp | Dividends & Share Repurchases The company maintained its quarterly cash dividend and continued its share repurchase program, buying back 314,580 shares for $6.4 million Shareholder Returns | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----- | :------ | :------ | :------ | | Quarterly Cash Dividend per Share | $0.17 | $0.17 | $0.17 | Share Repurchase Activity (Q2 2025) | Metric | Value | | :----- | :---- | | Shares Repurchased | 314,580 | | Total Cost | $6.4 million | | Average Cost per Share | $20.28 | | Authorized Program | Up to $10 million | Asset Quality Review Loan Quality Metrics Nonperforming loans remained stable at 1.0% of total loans, while criticized loans significantly declined quarter-over-quarter due to payoffs and upgrades Loan Quality Metrics | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | Change (QoQ) | Change (YoY) | | :----- | :------------ | :------------- | :------------ | :----------- | :----------- | | Nonperforming Loans | $21.1 million | $20.3 million | $23.1 million | +$0.8 million | -$2.0 million | | Nonperforming Loans as % of Total Loans | 1.0% | 1.0% | 1.0% | 0.0 pp | 0.0 pp | | Criticized Loans | $112.9 million | $135.5 million | $125.8 million | -$22.5 million | -$12.9 million | | Criticized Loans as % of Total Loans | 5.2% | 6.6% | 5.7% | -1.4 pp | -0.5 pp | | Classified Loans as % of Total Loans | 3.0% | 3.2% | 2.2% | -0.2 pp | +0.8 pp | | Net Charge-offs (annualized) | $0.2 million (0.04%) | $0.9 million (0.2%) | $0.9 million (0.2%) | -$0.7 million | -$0.7 million | - The decline in criticized loans from the prior periods primarily reflects two commercial loans that were paid off and risk grade upgrades on certain loans[24] Provision for Credit Losses The provision for credit losses increased significantly quarter-over-quarter, primarily driven by the growth in total loans Provision for Credit Losses & ACL | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Change (QoQ) | Change (YoY) | | :----- | :------ | :------ | :------ | :----------- | :----------- | | Provision for Credit Losses | $2.0 million | $0.2 million | $0.3 million | +$1.8 million | +$1.7 million | | Allowance for Credit Losses as % of Total Loans | 1.0% | 0.9% | 1.0% | +0.1 pp | 0.0 pp | - The $2.0 million provision for credit losses recorded during the quarter was primarily due to an increase in total loans[26] Company Information About MVB Financial Corp. MVB Financial Corp. is a publicly traded financial holding company providing services through its subsidiary MVB Bank in the Mid-Atlantic region and beyond - MVB Financial, the holding company of MVB Bank, is publicly traded on The Nasdaq Capital Market® under the ticker 'MVBF'[27] - Headquartered in Fairmont, West Virginia, MVB Financial provides financial services to individuals and corporate clients through MVB Bank and its subsidiaries[27] Forward-Looking Statements The release contains forward-looking statements subject to various risks and uncertainties, and investors are cautioned not to place undue reliance on them - Forward-looking statements are subject to risks including market, economic, operational, liquidity and credit risk, changes in interest rates, and government regulation[30] - The Company disclaims any obligation to update, revise or correct any forward-looking statements, except as required by law[31] Non-U.S. GAAP Financial Measures The document includes supplemental non-U.S. GAAP financial information which management uses for performance analysis and to assist investors - This document contains supplemental financial information determined by methods other than in accordance with U.S. GAAP[33] - 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[33] - Management believes the presentation of non-U.S. GAAP financial measures provides useful supplemental information that is essential to a proper understanding of the Company's financial condition[33] Consolidated Financial Statements Consolidated Statements of Income Net income was $2.0 million for Q2 2025, a decrease from prior periods due to a higher provision for credit losses and lower net interest income Consolidated Statements of Income (Unaudited, Dollars in thousands, except per share data) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Interest income | $42,384 | $43,229 | $46,127 | $85,613 | $96,157 | | Interest expense | $16,604 | $16,553 | $18,557 | $33,157 | $38,448 | | Net interest income | $25,780 | $26,676 | $27,570 | $52,456 | $57,709 | | Provision for credit losses | $1,990 | $177 | $254 | $2,167 | $2,251 | | Total noninterest income | $7,945 | $7,008 | $7,142 | $14,953 | $14,976 | | Total noninterest expenses | $28,569 | $28,701 | $28,930 | $57,270 | $59,121 | | Income before income taxes | $3,166 | $4,806 | $5,528 | $7,972 | $11,313 | | Net income available to common shareholders | $2,002 | $3,577 | $4,089 | $5,579 | $8,571 | | Earnings per share - basic | $0.16 | $0.28 | $0.32 | $0.43 | $0.67 | | Earnings per share - diluted | $0.15 | $0.27 | $0.31 | $0.42 | $0.66 | Noninterest Income Details A detailed breakdown of noninterest income shows a significant increase in equity method investments income, partially offset by declines in other areas Noninterest Income Breakdown (Unaudited, Dollars in thousands) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Total payment card and service charge income | $4,653 | $4,985 | $3,817 | $9,638 | $8,630 | | Equity method investments income (loss) | $2,315 | $645 | $484 | $2,960 | -$644 | | Compliance and consulting income | $6 | $501 | $1,274 | $507 | $2,274 | | Gain on divestiture activity | $0 | $608 | $0 | $608 | $0 | | Loss on disposal of assets | -$15 | -$342 | -$12 | -$357 | -$66 | | Other noninterest income | $1,232 | $988 | $1,462 | $2,220 | $4,056 | | Total noninterest income | $7,945 | $7,008 | $7,142 | $14,953 | $14,976 | Condensed Consolidated Balance Sheets Total assets were $3.22 billion as of June 30, 2025, an increase from the prior quarter, driven by growth in loans and deposits Condensed Consolidated Balance Sheets (Unaudited, Dollars in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Cash and cash equivalents | $399,379 | $251,450 | $455,517 | | Loans receivable, net | $2,132,524 | $2,044,131 | $2,184,709 | | Total assets | $3,224,008 | $3,019,687 | $3,288,004 | | Noninterest-bearing deposits | $1,050,104 | $1,033,056 | $983,809 | | Interest-bearing deposits | $1,754,319 | $1,550,742 | $1,899,043 | | Total liabilities | $2,921,693 | $2,709,633 | $2,991,341 | | Total Stockholders' equity | $302,315 | $310,054 | $296,663 | Average Balances and Interest Rates This section provides detailed average balances, interest income/expense, and yields/costs for assets and liabilities Average Balances and Interest Rates (Three Months Ended June 30, 2025, Unaudited, Dollars in thousands) | Metric | Average Balance | Interest Income/Expense | Yield/Cost | | :-------------------------------- | :-------------- | :---------------------- | :--------- | | Total earning assets | $2,824,946 | $42,561 | 6.04% | | Total loans | $2,090,946 | $35,322 | 6.78% | | Total interest-bearing liabilities | $1,877,341 | $16,604 | 3.55% | | Net interest spread (tax equivalent) | N/A | N/A | 2.49% | | Net interest income and margin (tax-equivalent) | N/A | $25,957 | 3.69% | Average Balances and Interest Rates (Six Months Ended June 30, 2025, Unaudited, Dollars in thousands) | Metric | Average Balance | Interest Income/Expense | Yield/Cost | | :-------------------------------- | :-------------- | :---------------------- | :--------- | | Total earning assets | $2,901,701 | $85,977 | 5.98% | | Total loans | $2,097,500 | $70,389 | 6.77% | | Total interest-bearing liabilities | $1,863,619 | $33,157 | 3.59% | | Net interest spread (tax-equivalent) | N/A | N/A | 2.39% | | Net interest income and margin (tax-equivalent) | N/A | $52,820 | 3.67% | Selected Financial Data This section provides a summary of key financial and performance ratios for quarterly and year-to-date periods Selected Financial Data (Unaudited, Dollars in thousands, except share and per share data) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Net income | $2,002 | $3,577 | $4,089 | $5,579 | $8,571 | | Earnings per share - basic | $0.16 | $0.28 | $0.32 | $0.43 | $0.67 | | Cash dividends paid per common share | $0.17 | $0.17 | $0.17 | $0.34 | $0.34 | | Book value per common share | $23.78 | $23.94 | $22.94 | $23.78 | $22.94 | | Tangible book value per common share (non-GAAP) | $23.68 | $23.85 | $22.70 | $23.68 | $22.70 | | Return on average assets | 0.3% | 0.4% | 0.5% | 0.3% | 0.5% | | Return on average equity | 2.6% | 4.7% | 5.7% | 3.7% | 5.9% | | Net interest margin (FTE) | 3.69% | 3.66% | 3.75% | 3.67% | 3.79% | | Efficiency ratio (non-GAAP) | 84.7% | 85.2% | 83.3% | 85.0% | 81.3% | | Nonperforming loans to total loans | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% | | Allowance for credit losses to total loans | 0.97% | 0.93% | 1.00% | 0.97% | 1.00% | Mortgage Company Equity Method Investees Production Data (in thousands) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :---------------- | :------ | :------ | :------ | :------- | :------- | | Mortgage pipeline | $1,128,738 | $1,078,835 | $927,875 | $1,128,738 | $927,875 | | Loans originated | $1,352,603 | $1,310,702 | $1,383,405 | $2,663,305 | $2,433,494 | | Loans closed | $882,361 | $888,022 | $828,849 | $1,770,383 | $1,482,155 | | Loans sold | $699,036 | $644,683 | $639,035 | $1,343,718 | $1,555,150 | Non-U.S. GAAP Reconciliations This section provides reconciliations for non-U.S. GAAP financial measures to their most directly comparable U.S. GAAP measures Net Interest Income and Net Interest Margin on a Fully Tax-Equivalent Basis Reconciliation (Dollars in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | YTD June 30, 2025 | YTD June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | :---------------- | :---------------- | | Net interest income (U.S. GAAP) | $25,780 | $26,676 | $27,570 | $52,456 | $57,709 | | Net interest margin (U.S. GAAP) | 3.66% | 3.63% | 3.73% | 3.65% | 3.77% | | Impact of fully tax-equivalent adjustment | 177 | 186 | 151 | 364 | 345 | | Net interest income on a fully tax equivalent basis | $25,957 | $26,862 | $27,721 | $52,820 | $58,054 | | Net interest margin on a fully tax equivalent basis | 3.69% | 3.66% | 3.75% | 3.67% | 3.79% | Tangible Book Value per Common Share and Tangible Common Equity Ratio Reconciliation (Unaudited, Dollars in thousands, except per share data) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Total equity attributable to parent | $302,315 | $310,054 | $296,625 | | Less: Total intangibles | -$1,200 | -$1,200 | -$3,145 | | Tangible common equity | $301,115 | $308,854 | $293,480 | | Common shares outstanding (000s) | 12,715 | 12,950 | 12,928 | | Tangible book value per common share | $23.68 | $23.85 | $22.70 | | Total assets | $3,224,008 | $3,019,687 | $3,288,004 | | Less: Total intangibles | -$1,200 | -$1,200 | -$3,145 | | Tangible assets | $3,222,808 | $3,018,487 | $3,284,859 | | Tangible common equity ratio | 9.3% | 10.2% | 8.9% |