MVB FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - EARNINGS RELEASE

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8-K - FORM 8-K - Q3 2017 EARNINGS RELEASE - 11.02.17 - MVB FINANCIAL CORP	form8kq32017earningsreleas.htm

Exhibit 99.1




	MEDIA CONTACT
N E W S R E L E A S E	Amy Baker
N E W S R E L E A S E	VP, Corporate Communications
	abaker@mvbbanking.com
	844-682-2265

MVB Financial Corp. Reports Third Quarter 2017 Earnings

FAIRMONT, W.Va., November 2, 2017 – MVB Financial Corp. (OTC Markets Group OTCQB: MVBF) and its subsidiaries – MVB Bank and MVB Mortgage (collectively “MVB”) – reported net income of $2.3 million or $0.21 per share basic and $0.21 per share diluted for the three months ended September 30, 2017, compared to $2.3 million or $0.25 per share basic and $0.24 per share diluted for the three months ended September 30, 2016.

Third quarter produced solid growth, a significant rise in stock price and an historic moment for MVB Financial Corp. - application for The Nasdaq® Capital Market. If the application is approved, MVB would be the first West Virginia company in 10 years, and the first West Virginia bank in 18 years, to be listed on The Nasdaq.

“Truly positive was the significant rise in MVB’s stock price, which reached a new 52-week high during the third quarter. Without doubt, MVB is gaining notice from investors,” said Larry F. Mazza, CEO and President, MVB Financial Corp. “MVB experienced an increase of more than 3 percent in deposit growth or nearly $40 million and net income available to common shareholders grew at a 10 percent pace in the third quarter when compared to the same quarter last year. For the remainder of 2017, we are solidly focused on maximizing our performance, especially in asset growth and expense control, and in developing our priorities for 2018. The best for MVB is yet to come.”

Approximately 1.9 million shares of the Company’s common stock was issued from a capital raise completed in December 2016 and 434,783 shares of the Company’s common stock was issued from a rights offering completed in April 2017. These additional issued shares resulted in a $0.06 decrease in basic earnings per share for the three months ended September 30, 2017, compared to the same time period in 2016, while a $199 thousand increase in third quarter 2017 net income available to common shareholders versus third quarter 2016, resulted in a $0.02 increase in basic earnings per share.

Exhibit 99.1

THIRD QUARTER 2017 HIGHLIGHTS


•	Net interest income of $11.4 million increased $520 thousand, or 4.8% from June 30, 2017, and $685 thousand, or 6.4% from the third quarter ended September 30, 2016.


•	Total assets continue to steadily grow and reached $1.5 billion as of September 30, 2017.


•	Deposits of $1.2 billion as of September 30, 2017 increased $65.6 million, or 6.0% from June 30, 2017, and increased $38.4 million, or 3.4% from September 30, 2016. Noninterest bearing deposit balances have steadily improved and reached $121.5 million as of September 30, 2017, an increase of $15.7 million since September 30, 2016.


•	Strong credit quality continued with non-performing loans to total loans of 0.60% and annualized net loan charge-offs to total loans of 0.16% at September 30, 2017.

Third quarter 2017 saw two new, high technology MVB branches open in strong markets: Morgantown, West Virginia, and Leesburg, Virginia.

“MVB remains committed to high technology, high touch branch banking that does not follow the traditional legacy type branches, but instead moves toward the use of client-friendly technology and strong, positive relationships,” Mazza said.

In 2016, management focused on diversifying its lending to reduce commercial real estate concentration levels. This coupled with higher than usual loan payoffs, reflected a smaller total loan growth than anticipated for the quarter. Loans as of September 30, 2017 totaled $1.094 billion, a decrease of $7.9 million, or 0.7% when compared to loan balances at June 30, 2017. In comparison to the September 30, 2016 balance, loans increased $18.4 million, or 1.7%.

“The commercial pipeline is stronger today. A very positive factor, especially for leveraging future growth, has been MVB’s strong attention to establishing lending processes including robust monitoring of economic and other risk factors across the different types of lending done by MVB. We believe this exceeds regulatory expectations and gives us a competitive advantage,” Mazza said.

Deposits as of September 30, 2017 totaled $1.165 billion, an increase of $65.6 million, or 6.0% when compared to deposit balances at June 30, 2017. In comparison to the September 30, 2016 deposit balance of $1.127 billion, deposits increased $38.4 million, or 3.4%. Noninterest bearing deposit balances have

Exhibit 99.1

steadily improved and reached $121.5 million as of September 30, 2017, an increase of $15.7 million since September 30, 2016.

Net interest income for the third quarter of 2017 was $11.4 million, an increase of $520 thousand, or 4.8% from June 30, 2017 and $685 thousand, or 6.4% from the third quarter ended September 30, 2016. Net interest margin for the third quarter of 2017 was 3.37%, an increase of 6 basis points from June 30, 2017 and 20 basis points from the quarter ended September 30, 2016. Increased interest rates and an emphasis on loan yields helped to increase net interest income, despite higher than anticipated loan payoffs in 2017 and an ongoing focus on maintaining an appropriate level of commercial real estate concentration.

Provision for loan losses for the third quarter of 2017 was $96 thousand, a decrease of $427 thousand, or 81.6% from June 30, 2017 and a decrease of $979 thousand, or 91.1% from the third quarter ended September 30, 2016. The decrease in provision for loan loss is most attributable to historical loss rates that have declined substantially, which is the result of a significantly lower level of charge-offs in the current year versus the prior year, as well as the use of updated peer historical loan loss rates within the allowance for loan loss methodology. Meanwhile, the overall decrease was also impacted by decreased loan volume.

Through continued effective collection and successful workout efforts, the Company’s nonperforming loans to total loans continues to be low and was 0.60% as of September 30, 2017, an increase of 14 basis points from June 30, 2017 and a decrease of 33 basis points from September 30, 2016. In addition, the Company’s annualized net loan charge-offs to total loans was 0.16% as of September 30, 2017, an increase of 11 basis points from June 30, 2017 and a decrease of 21 basis points from September 30, 2016.

Noninterest income for the third quarter of 2017 was $10.2 million, a decrease of $1.4 million, or 12.2% from June 30, 2017 and a decrease of $2.4 million, or 18.9% from the third quarter ended September 30, 2016. The linked quarter decrease was primarily the result of a $2.3 million decrease in gain on derivatives. The year over year decrease was primarily the result of a $1.3 million decrease in gain on derivatives, a $374 thousand decrease in gain on sale of securities, and a $650 thousand decrease in mortgage fee income. Both decreases in the gain on derivatives was primarily attributable to a decrease in closed loan volume. MVB Mortgage noninterest income for the third quarter of 2017 was $8.8 million, a decrease of $1.3 million, or 13.0% from June 30, 2017 and a decrease of $2.2 million, or 20.1% from the third quarter ended September 30, 2016.

Exhibit 99.1

Noninterest expense for the third quarter of 2017 was $18.0 million, a decrease of $537 thousand, or 2.9% from June 30, 2017 and $773 thousand, or 4.1% from the third quarter ended September 30, 2016. The linked quarter and year over year decrease was primarily the result of a decrease in salaries and employee benefits related to closed mortgage loan volume, which decreased by 8.8% and 11.2%, respectively. Both the linked quarter and year over year decreases were also the result of decreased data processing fees related to the core system conversion that the bank implemented in the second quarter of 2017.

As previously announced, on August 16, 2017, MVB Financial Corp. declared a quarterly cash dividend of $0.025 per share to shareholders of record at the close of business on September 1, 2017, payable September 15, 2017. This was the third quarterly dividend for 2017 and was equal to the March and June 2017 payouts of $0.025 per share. The cash dividend of $0.075 through the nine months ended September 30, 2017, increased $0.015, or 25% compared to the nine months ended September 30, 2016.

About MVB Financial Corp.

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

The OTCQB is a market tier operated by the OTC Market Group Inc., for over-the-counter traded companies that are current in their reporting with a U.S. regulator.

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

Exhibit 99.1

Forward-looking Statements

MVB Financial Corp. has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in this Earnings Release. These forward-looking statements are based on current expectations about the future and subject to risks and uncertainties. Forward-looking statements include information concerning possible or assumed future results of operations of the Company and its subsidiaries. When words such as “believes,” “expects,” “anticipates,” “may,” or similar expressions occur in this Earnings Release, the Company is making forward-looking statements. Note that many factors could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in the forward-looking statements contained in this Earnings Release. Those factors include, but are not limited to: credit risk, changes in market interest rates, inability to achieve merger-related synergies, competition, economic downturn or recession, and government regulation and supervision. Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as well as its other filings with the SEC, which are available on the SEC website at www.sec.gov. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements.

Accounting standards require the consideration of subsequent events occurring after the balance sheet date for matters that require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s financial statements when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information in this announcement is subject to change.

Questions or comments concerning this Earnings Release should be directed to:

MVB Financial Corp.

Donald T. Robinson, Executive Vice President and CFO

(304) 598-3500

drobinson@mvbbanking.com

Exhibit 99.1

MVB Financial Corp.

Financial Highlights

Condensed Consolidated Statements of Income (Unaudited) (Dollars in thousands, except per share data)

	Nine Months Ended September 30,				Three Months Ended September 30,		Three Months Ended June 30,		Three Months Ended September 30,
	2017		2016		2017		2017		2016
Interest income	$	41,512	$	40,485	$	14,630	$	13,814	$	13,523
Interest expense	8,898		8,319		3,216		2,920		2,794
Net interest income	32,614		32,166		11,414		10,894		10,729
Provision for loan losses	1,137		2,975		96		523		1,075
Noninterest income	30,549		33,139		10,158		11,567		12,526
Noninterest expense	52,786		52,395		17,966		18,503		18,739
Income from continuing operations, before income taxes	9,240		9,935		3,510		3,435		3,441
Income tax expense - continuing operations	3,088		3,265		1,192		1,175		1,131
Net income from continuing operations	6,152		6,670		2,318		2,260		2,310
Income from discontinued operations, before income taxes	—		6,346		—		—		—
Income tax benefit - discontinued operations	—		2,411		—		—		—
Net income from discontinued operations	—		3,935		—		—		—
Net income	$	6,152	$	10,605	$	2,318	$	2,260	$	2,310
Preferred dividends	374		814		123		122		314
Net income available to common shareholders	$	5,778	$	9,791	$	2,195	$	2,138	$	1,996

Earnings per share from continuing operations - basic	$	0.56	$	0.73	$	0.21	$	0.21	$	0.25
Earnings per share from discontinued operations - basic	$	—	$	0.49	$	—	$	—	$	—
Earnings per common shareholder - basic	$	0.56	$	1.22	$	0.21	$	0.21	$	0.25

Earnings per share from continuing operations - diluted	$	0.56	$	0.68	$	0.21	$	0.20	$	0.24
Earnings per share from discontinued operations - diluted	$	—	$	0.40	$	—	$	—	$	—
Earnings per common shareholder - diluted	$	0.56	$	1.08	$	0.21	$	0.20	$	0.24

Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands)

	September 30, 2017			June 30, 2017			December 31, 2016			September 30, 2016
Cash and cash equivalents	$	20,272		$	17,805		$	17,340		$	28,804
Certificates of deposit with other banks	14,778			14,527			14,527			7,174
Investment securities	187,348			175,110			162,368			152,171
Loans held for sale	69,057			107,825			90,174			123,109
Loans	1,094,467			1,102,378			1,052,865			1,076,073
Allowance for loan losses	(9,396		)	(9,748		)	(9,101		)	(9,150		)
Net loans	1,092,630			1,092,630			1,043,764			1,066,923
Premises and equipment	27,189			27,462			25,081			25,440
Goodwill	18,480			18,480			18,480			18,480
Other assets	41,836			53,214			47,070			46,494
Total assets	$	1,471,590		$	1,507,053		$	1,418,804		$	1,468,595

Deposits	$	1,165,199		$	1,099,608		$	1,107,017		$	1,126,790
Borrowed funds	84,403			189,384			90,921			136,112
Other liabilities	73,011			71,227			75,241			80,316
Shareholders' equity	148,977			146,834			145,625			125,377
Total liabilities and shareholders' equity	$	1,471,590		$	1,507,053		$	1,418,804		$	1,468,595

Exhibit 99.1

Reportable Segments (Unaudited)

Three Months Ended September 30, 2017	Commercial & Retail Banking		Mortgage Banking			Financial Holding Company			Intercompany Eliminations			Consolidated
(Dollars in thousands)	Commercial & Retail Banking		Mortgage Banking			Financial Holding Company			Intercompany Eliminations			Consolidated
Revenues:
Interest income	$	13,432	$	1,352		$	1		$	(155	)	$	14,630
Mortgage fee income	200		10,042			—			(224		)	10,018
Insurance and investment services income	147		—			—			—			147
Other income	1,319		(1,279		)	1,250			(1,297		)	(7		)
Total operating income	15,098		10,115			1,251			(1,676		)	24,788
Expenses:
Interest expense	2,347		684			565			(380		)	3,216
Salaries and employee benefits	3,107		6,768			1,374			—			11,249
Provision for loan losses	—		96			—			—			96
Other expense	4,822		2,100			1,091			(1,296		)	6,717
Total operating expenses	10,276		9,648			3,030			(1,676		)	21,278
Income (loss) from continuing operations, before income taxes	4,822		467			(1,779		)	—			3,510
Income tax expense (benefit) - continuing operations	1,605		191			(604		)	—			1,192
Net income (loss) from continuing operations	3,217		276			(1,175		)	—			2,318
Net income (loss)	$	3,217	$	276		$	(1,175	)	$	—		$	2,318
Preferred stock dividends	—		—			123			—			123
Net income (loss) available to common shareholders	$	3,217	$	276		$	(1,298	)	$	—		$	2,195

Exhibit 99.1

Reportable Segments (Unaudited)

Three Months Ended June 30, 2017	Commercial & Retail Banking		Mortgage Banking		Financial Holding Company			Intercompany Eliminations			Consolidated
(Dollars in thousands)	Commercial & Retail Banking		Mortgage Banking		Financial Holding Company			Intercompany Eliminations			Consolidated
Revenues:
Interest income	$	12,907	$	1,073	$	1		$	(167	)	$	13,814
Mortgage fee income	188		8,937		—			(173		)	8,952
Insurance and investment services income	124		—		—			—			124
Other income	1,405		1,137		1,307			(1,358		)	2,491
Total operating income	14,624		11,147		1,308			(1,698		)	25,381
Expenses:
Interest expense	2,168		534		558			(340		)	2,920
Salaries and employee benefits	3,267		7,147		1,384			—			11,798
Provision for loan losses	467		56		—			—			523
Other expense	5,065		2,044		954			(1,358		)	6,705
Total operating expenses	10,967		9,781		2,896			(1,698		)	21,946
Income (loss) from continuing operations, before income taxes	3,657		1,366		(1,588		)	—			3,435
Income tax expense (benefit) - continuing operations	1,165		540		(530		)	—			1,175
Net income (loss) from continuing operations	2,492		826		(1,058		)	—			2,260
Net income (loss)	$	2,492	$	826	$	(1,058	)	$	—		$	2,260
Preferred stock dividends	—		—		122			—			122
Net income (loss) available to common shareholders	$	2,492	$	826	$	(1,180	)	$	—		$	2,138

Exhibit 99.1

Reportable Segments (Unaudited)

Three Months Ended September 30, 2016	Commercial & Retail Banking			Mortgage Banking			Financial Holding Company			Insurance		Intercompany Eliminations			Consolidated
(Dollars in thousands)	Commercial & Retail Banking			Mortgage Banking			Financial Holding Company			Insurance		Intercompany Eliminations			Consolidated
Revenues:
Interest income	$	12,528		$	1,183		$	1		$	—	$	(189	)	$	13,523
Mortgage fee income	(95		)	11,003			—			—		(240		)	10,668
Insurance and investment services income	128			—			—			—		—			128
Other income	1,687			(31		)	1,444			—		(1,370		)	1,730
Total operating income	14,248			12,155			1,445			—		(1,799		)	26,049
Expenses:
Interest expense	2,113			552			560			—		(431		)	2,794
Salaries and employee benefits	2,924			7,724			1,735			—		—			12,383
Provision for loan losses	1,075			—			—			—		—			1,075
Other expense	4,782			2,054			888			—		(1,368		)	6,356
Total operating expenses	10,894			10,330			3,183			—		(1,799		)	22,608
Income (loss) from continuing operations, before income taxes	3,354			1,825			(1,738		)	—		—			3,441
Income tax expense (benefit) - continuing operations	1,027			704			(600		)	—		—			1,131
Net income (loss) from continuing operations	2,327			1,121			(1,138		)	—		—			2,310
Income (loss) from discontinued operations	—			—			—			—		—			—
Income tax expense (benefit) - discontinued operations	$	—		$	—		$	—		$	—	$	—		$	—
Net income (loss) from discontinued operations	$	—		$	—		$	—		$	—	$	—		$	—
Net income (loss)	$	2,327		$	1,121		$	(1,138	)	$	—	$	—		$	2,310
Preferred stock dividends	—			—			314			—		—			314
Net income (loss) available to common shareholders	$	2,327		$	1,121		$	(1,452	)	$	—	$	—		$	1,996

Exhibit 99.1

Reportable Segments (Unaudited)

Nine Months Ended September 30, 2017	Commercial & Retail Banking		Mortgage Banking			Financial Holding Company			Intercompany Eliminations			Consolidated
(Dollars in thousands)	Commercial & Retail Banking		Mortgage Banking			Financial Holding Company			Intercompany Eliminations			Consolidated
Revenues:
Interest income	$	38,651	$	3,206		$	3		$	(348	)	$	41,512
Mortgage fee income	573		28,616			—			(585		)	28,604
Insurance and investment services income	395		—			—			—			395
Other income	3,679		(1,973		)	3,768			(3,924		)	1,550
Total operating income	43,298		29,849			3,771			(4,857		)	72,061
Expenses:
Interest expense	6,635		1,521			1,674			(932		)	8,898
Salaries and employee benefits	9,030		19,870			4,109			—			33,009
Provision for loan losses	966		171			—			—			1,137
Other expense	14,539		6,244			2,919			(3,925		)	19,777
Total operating expenses	31,170		27,806			8,702			(4,857		)	62,821
Income (loss) from continuing operations, before income taxes	12,128		2,043			(4,931		)	—			9,240
Income tax expense (benefit) - continuing operations	3,931		827			(1,670		)	—			3,088
Net income (loss) from continuing operations	8,197		1,216			(3,261		)	—			6,152
Income (loss) from discontinued operations	—		—			—			—			—
Income tax expense (benefit) - discontinued operations	$	—	$	—		$	—		$	—		$	—
Net income (loss) from discontinued operations	$	—	$	—		$	—		$	—		$	—
Net income (loss)	$	8,197	$	1,216		$	(3,261	)	$	—		$	6,152
Preferred stock dividends	—		—			374			—			374
Net income (loss) available to common shareholders	$	8,197	$	1,216		$	(3,635	)	$	—		$	5,778

Exhibit 99.1

Reportable Segments (Unaudited)

Nine Months Ended September 30, 2016	Commercial & Retail Banking			Mortgage Banking		Financial Holding Company			Insurance			Intercompany Eliminations			Consolidated
(Dollars in thousands)	Commercial & Retail Banking			Mortgage Banking		Financial Holding Company			Insurance			Intercompany Eliminations			Consolidated
Revenues:
Interest income	$	37,583		$	3,278	$	2		$	—		$	(378	)	$	40,485
Mortgage fee income	(190		)	27,862		—			—			(822		)	26,850
Insurance and investment services income	303			—		—			—			—			303
Other income	4,161			1,804		4,310			—			(4,289		)	5,986
Total operating income	41,857			32,944		4,312			—			(5,489		)	73,624
Expenses:
Interest expense	6,312			1,543		1,665			—			(1,201		)	8,319
Salaries and employee benefits	8,654			20,866		4,907			—			—			34,427
Provision for loan losses	2,975			—		—			—			—			2,975
Other expense	13,686			5,979		2,591			—			(4,288		)	17,968
Total operating expenses	31,627			28,388		9,163			—			(5,489		)	63,689
Income (loss) from continuing operations, before income taxes	10,230			4,556		(4,851		)	—			—			9,935
Income tax expense (benefit) - continuing operations	3,177			1,762		(1,674		)	—			—			3,265
Net income (loss) from continuing operations	7,053			2,794		(3,177		)	—			—			6,670
Income (loss) from discontinued operations				—		6,926			(580		)				6,346
Income tax expense (benefit) - discontinued operations	$	—		$	—	$	2,629		$	(218	)	$	—		$	2,411
Net income (loss) from discontinued operations	$	—		$	—	$	4,297		$	(362	)	$	—		$	3,935
Net income (loss)	$	7,053		$	2,794	$	1,120		$	(362	)	$	—		$	10,605
Preferred stock dividends						814									814
Net income (loss) available to common shareholders	$	7,053		$	2,794	$	306		$	(362	)	$	—		$	9,791

Exhibit 99.1

Average Balances and Interest Rates (Unaudited) (Dollars in thousands)

	Three Months Ended September 30, 2017							Three Months Ended June 30, 2017							Three Months Ended September 30, 2016
	Average Balance			Interest Income/ Expense		Yield/ Cost		Average Balance			Interest Income/ Expense		Yield/ Cost		Average Balance			Interest Income/ Expense		Yield/ Cost
Assets
Interest-bearing deposits in banks	$	4,484		$	15	1.33	%	$	3,277		$	12	1.47	%	$	18,567		$	28	0.60	%
CDs with other banks	14,711			74		2.00	%	14,456			70		1.94	%	10,893			53		1.95	%
Investment securities:
Taxable	126,880			693		2.17	%	119,553			645		2.16	%	78,943			342		1.73	%
Tax-exempt	56,264			443		3.12	%	53,733			418		3.12	%	67,033			476		2.84	%
Loans and loans held for sale: ¹
Commercial	762,650			8,742		4.55	%	725,707			8,170		4.52	%	737,134			7,916		4.30	%
Tax exempt	14,991			130		3.44	%	15,263			131		3.44	%	16,170			140		3.46	%
Real estate	349,459			4,346		4.93	%	373,353			4,201		4.51	%	409,074			4,370		4.27	%
Consumer	13,462			187		5.51	%	13,817			167		4.85	%	16,003			198		4.95	%
Total loans	1,140,562			13,405		4.66	%	1,128,140			12,669		4.50	%	1,178,381			12,624		4.29	%
Total earning assets	1,342,901			14,630		4.32	%	1,319,159			13,814		4.20	%	1,353,817			13,523		4.00	%
Less: Allowance for loan losses	(9,760		)					(9,734		)					(9,337		)
Cash and due from banks	17,501							15,407							12,995
Other assets	123,898							100,205							89,586
Total assets	$	1,474,540						$	1,425,037						$	1,447,061

Liabilities
Deposits:
NOW	$	436,493		$	675	0.61	%	$	432,729		$	603	0.56	%	$	426,096		$	530	0.50	%
Money market checking	246,160			458		0.74	%	237,173			432		0.73	%	178,579			359		0.80	%
Savings	46,807			20		0.17	%	48,590			20		0.17	%	42,811			19		0.18	%
IRAs	16,649			56		1.33	%	16,282			53		1.31	%	16,701			53		1.27	%
CDs	249,698			874		1.39	%	256,887			855		1.33	%	305,259			941		1.23	%
Repurchase agreements and federal funds sold	25,093			20		0.32	%	21,268			19		0.36	%	26,238			17		0.26	%
FHLB and other borrowings	149,313			548		1.46	%	112,385			380		1.36	%	170,946			316		0.74	%
Subordinated debt	33,524			565		6.69	%	33,524			558		6.68%		33,524			559		6.67	%
Total interest-bearing liabilities	1,203,737			3,216		1.06	%	1,158,838			2,920		1.01	%	1,200,154			2,794		0.93	%
Noninterest bearing demand deposits	115,343							114,974							106,097
Other liabilities	7,703							7,698							14,530
Total liabilities	1,326,783							1,281,510							1,320,781

Stockholders’ equity
Preferred stock	7,834							7,834							16,334
Common stock	10,495							10,375							8,132
Paid-in capital	98,289							96,986							74,439
Treasury stock	(1,084		)					(1,084		)					(1,084		)
Retained earnings	35,152							32,764							30,070
Accumulated other comprehensive income	(2,929		)					(3,348		)					(1,611		)
Total stockholders’ equity	147,757							143,527							126,280
Total liabilities and stockholders’ equity	$	1,474,540						1,425,037							$	1,447,061

Net interest spread						3.26	%						3.19	%						3.07	%
Net interest income-margin				$	11,414	3.37	%				10,894		3.31	%				$	10,729	3.17	%

¹Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.

Exhibit 99.1

Average Balances and Interest Rates (Unaudited) (Dollars in thousands)

	Nine Months Ended September 30, 2017							Nine Months Ended September 30, 2016
(Dollars in thousands)	Average Balance			Interest Income/Expense		Yield/Cost		Average Balance			Interest Income/Expense		Yield/Cost
Assets
Interest-bearing deposits in banks	$	3,504		$	37	1.41	%	$	17,859		$	73	0.55	%
CDs with other banks	14,566			213		1.96		12,392			178		1.92
Investment securities:
Taxable	118,497			1,884		2.13		73,987			984		1.77
Tax-exempt	55,426			1,291		3.11		61,682			1,320		2.85
Loans and loans held for sale: ¹
Commercial	744,967			24,854		4.46		734,924			24,394		4.43
Tax exempt	15,193			392		3.45		16,491			428		3.46
Real estate	358,309			12,312		4.59		398,213			12,489		4.18
Consumer	13,880			529		5.10		17,441			619		4.73
Total loans	1,132,349			38,087		4.50		1,167,069			37,930		4.33
Total earning assets	1,324,342			41,512		4.19		1,332,989			40,485		4.05
Less: Allowance for loan losses	(9,641		)					(8,758		)
Cash and due from banks	16,060							13,206
Other assets	103,576							88,061
Total assets	$	1,434,337						$	1,425,498

Liabilities
Deposits:
NOW	$	428,359		$	1,802	0.56		$	457,945		$	1,865	0.54	%
Money market checking	240,094			1,349		0.75		146,467			833		0.76
Savings	47,825			59		0.16		43,870			70		0.21
IRAs	16,501			159		1.29		16,252			155		1.27
CDs	257,015			2,583		1.34		318,740			2,816		1.18
Repurchase agreements and federal funds sold	23,165			56		0.32		27,169			55		0.27
FHLB and other borrowings	122,062			1,216		1.33		153,687			861		0.75
Subordinated debt	33,524			1,674		6.68		33,524			1,664		6.62
Total interest-bearing liabilities	1,168,545			8,898		1.02		1,197,654			8,319		0.93
Noninterest bearing demand deposits	114,455							96,615
Other liabilities	8,204							11,271
Total liabilities	1,291,204							1,305,540

Stockholders’ equity
Preferred stock	7,959							16,334
Common stock	10,307							8,124
Paid-in capital	96,268							74,355
Treasury stock	(1,084		)					(1,084		)
Retained earnings	33,202							24,294
Accumulated other comprehensive income	(3,519		)					(2,065		)
Total stockholders’ equity	143,133							119,958
Total liabilities and stockholders’ equity	$	1,434,337						$	1,425,498

Net interest spread						3.17							3.12
Net interest income-margin				$	32,614	3.29	%				$	32,166	3.22	%

¹Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.

Exhibit 99.1

Selected Financial Data (Unaudited) (Dollars in thousands, except per share data)

	Quarterly															Year-to-Date
	2017			2017			2017			2016			2016			2017			2016
	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter
Earnings and Per Share Data:
Net income from continuing operations	$	2,318		$	2,260		$	1,574		$	2,307		$	2,310		$	6,152		$	6,670
Net income from discontinued operations	—			—			—			—			—			—			3,935
Net income	2,318			2,260			1,574			2,307			6,499			6,152			10,605
Net income available to common shareholders	2,195			2,138			1,445			1,993			1,996			5,778			9,791
Earnings per share from continuing operations - basic	0.21			0.21			0.14			0.23			0.25			0.56			0.73
Earnings per share from discontinued operations - basic	—			—			—			—			—			—			0.49
Earnings per common shareholder - basic	0.21			0.21			0.14			0.23			0.77			0.56			1.22
Earnings per share from continuing operations - diluted	0.21			0.20			0.14			0.22			0.24			0.56			0.68
Earnings per share from discontinued operations - diluted	—			—			—			—			—			—			0.40
Earnings per common shareholder - diluted	0.21			0.20			0.14			0.22			0.63			0.56			1.08
Cash dividends paid per common share	0.025			0.025			0.025			0.02			0.02			0.08			0.06
Book value per common share	13.51			13.31			13.09			12.93			13.49			13.51			13.49
Weighted average shares outstanding - basic	10,443,443			10,343,933			9,996,544			8,212,021			8,080,690			10,262,944			8,073,644
Weighted average shares outstanding - diluted	12,410,070			12,181,433			10,009,341			10,068,733			10,434,344			10,288,534			9,935,209

Performance Ratios:
Return on average assets - continuing operations ¹	0.63		%	0.63		%	0.45		%	0.64		%	0.64		%	0.57		%	0.62		%
Return on average assets - discontinued operations¹	—		%	—		%	—		%	—		%	—		%	—		%	0.37		%
Return on average equity - continuing operations ¹	6.28		%	6.30		%	4.56		%	7.02		%	7.32		%	5.73		%	7.41		%
Return on average equity - discontinued operations ¹	—		%	—		%	—		%	—		%	—		%	—		%	4.37		%
Net interest margin ²	3.37		%	3.31		%	3.19		%	3.23		%	3.17		%	3.29		%	3.22		%
Efficiency ratio ³	83.28		%	82.38		%	85.30		%	80.48		%	80.58		%	83.57		%	80.23		%
Overhead ratio ^{1 4}	4.87		%	5.19		%	4.65		%	4.69		%	5.18		%	4.91		%	4.90		%

Asset Quality Data and Ratios:
Charge-offs	$	472		$	163		$	290		$	713		$	1,018		$	925		$	1,844
Recoveries	24			16			43			8			2			83			13
Net loan charge-offs to total loans ¹ ⁵	0.16		%	0.05		%	0.09		%	0.27		%	0.38		%	0.10		%	0.23		%
Allowance for loan losses	9,396			9,748			9,372			9,101			9,150			9,396			9,150
Allowance for loan losses to total loans ⁶	0.86		%	0.88		%	0.87		%	0.86		%	0.85		%	0.86		%	0.85		%
Nonperforming loans	6,559			5,103			6,575			6,229			10,201			6,559			10,201
Nonperforming loans to total loans	0.60		%	0.46		%	0.61		%	0.59		%	0.95		%	0.60		%	0.95		%

Capital Ratios:
Equity to assets	10.12		%	9.74		%	9.67		%	10.26		%	8.54		%	10.12		%	8.54		%
Leverage ratio	9.41		%	9.59		%	9.24		%	9.54		%	7.88		%	9.41		%	7.88		%
Common equity Tier 1 capital ratio	10.76		%	10.32		%	10.15		%	10.11		%	7.78		%	10.76		%	7.78		%
Tier 1 risk-based capital ratio	11.79		%	11.33		%	11.19		%	11.92		%	9.51		%	11.79		%	9.51		%
Total risk-based capital ratio	15.18		%	14.66		%	14.63		%	15.36		%	12.76		%	15.18		%	12.76		%

¹ annualized for the quarterly periods presented

² net interest income as a percentage of average interest earning assets

³ noninterest expense as a percentage of net interest income and noninterest income

⁴ noninterest expense as a percentage of average assets

⁵ charge-offs less recoveries

⁶ excludes loans held for sale

MVB FINANCIAL CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - EARNINGS RELEASE - November 2, 2017

Attached files

MVB FINANCIAL CORP Reports