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MVB Financial Corp. Announces Second Quarter 2022 Results

MVB Financial Corp. (NASDAQ: MVBF) (“MVB Financial,” “MVB” or the “Company”), the holding company for MVB Bank, Inc. ("MVB Bank"), today announced financial results for the second quarter of 2022, with reported net income of $3.0 million, or $0.24 basic and $0.23 diluted earnings per share.

 

 

Quarterly

 

Year-to-Date

 

 

2022

 

2022

 

2021

 

2022

 

2021

 

 

Second Quarter

 

First Quarter

 

Second Quarter

 

 

Net income

 

$

2,956

 

$

2,864

 

$

9,247

 

$

5,820

 

$

17,332

Earnings per share - basic

 

$

0.24

 

$

0.24

 

$

0.79

 

$

0.48

 

$

1.49

Earnings per share - diluted

 

$

0.23

 

$

0.22

 

$

0.73

 

$

0.45

 

$

1.39

“We continue to implement our MVB-F1: Success Loves Speed Strategy. Despite seasonality of our niche industries, our fast track growth vehicles remained strong because of our large noninterest-bearing deposit base, while our cost of funds held relatively steady. At the same time, robust loan growth and a favorable liquidity profile helped drive significant net interest margin expansion during the second quarter, while measures of asset quality remained stable,” said Larry F. Mazza, Chief Executive Officer, MVB Financial. “Our effort to diversify our net interest income through Fintech-related fee income increases also gained grip on the track. All in all, our growth vehicles are gaining speed through significant investment, highlighting the diversification inherent in our business strategy as we continue to maneuver in wet track conditions.

“Due to strong loan growth, we reported a significant increase in provision for loan losses, creating downward pressure on the quarter, which, along with the continued slowdown in the mortgage business, contributed to masking some very positive underlying trends.”

SECOND QUARTER 2022 HIGHLIGHTS

  • Strong deposit growth despite seasonal variability
    • Total deposits were $2.61 billion as of June 30, 2022, an increase of $105.9 million, or 4.2%, from March 31, 2022 and $385.8 million, or 17.3%, from June 30, 2021.
    • Noninterest-bearing (“NIB”) deposits were $1.34 billion as of June 30, 2022, an increase of $33.9 million, or 2.6%, from March 31, 2022 and $410.3 million, or 44.0%, from June 30, 2021. NIB deposits represented 51% of total deposits as of June 30, 2022, as compared to 52% and 42% as of March 31, 2022 and June 30, 2021, respectively.
    • Growth in total deposits and NIB deposit balances was primarily attributable to the Company’s Fintech business and gaming growth vehicle. Gaming deposits totaled $1.01 billion as of June 30, 2022, up $40.4 million, or 4.2% from March 31, 2022 and $432.1 million, or 74.7%, from June 30, 2021. The pace of deposit growth slowed on a quarter over quarter basis relative to recent prior periods due to seasonal factors.
    • The cost of funds was 22 basis points for the quarter ended June 30, 2022, up one basis point compared to the quarter ended March 31, 2022 and down nine basis points compared to the quarter ended June 30, 2021. The quarter over quarter increase was driven primarily by the slight change in deposit mix, led by relatively faster growth in interest-bearing deposits as compared to NIB deposits and higher interest rates. The decline compared to the prior year period mostly reflected the relatively higher contribution of NIB deposits relative to the prior year.
  • Robust loan growth and margin expansion drive strong growth in net interest income
    • Total loan balances of $2.19 billion as of June 30, 2022 increased by $313.3 million, or 16.7%, compared to March 31, 2022 and $519.9 million, or 31.1%, compared to June 30, 2021. Loan growth during the quarter was driven primarily by the Company’s strategic lending partnerships growth vehicle, primarily within residential mortgage, subprime consumer automobile and healthcare loans.
    • Loans held-for-sale were $11.9 million as of June 30, 2022, compared to $9.2 million as of March 31, 2022 and none as of June 30, 2021, led by MVB Bank’s Small Business Administration (“SBA”) lending growth vehicle.
    • On a tax-equivalent basis, net interest margin for the quarter ended June 30, 2022 was 4.10%, an increase of 92 basis points versus the quarter ended March 31, 2022 and 86 basis points versus the quarter ended June 30, 2021. The quarter over quarter increase in net interest margin was due primarily to strong loan growth, higher loan yields, accelerated accretion of the discount on purchased credit impaired (“PCI”) loans sold during the quarter and significantly lower cash balances, partially offset by a modest increase in funding costs. Accelerated accretion of the discount on the PCI loan portfolio contributed approximately 20 basis points to net interest margin during the second quarter of 2022.
    • Net interest income on a tax-equivalent basis totaled $27.0 million for the quarter ended June 30, 2022, up $4.9 million, or 22.0%, and $7.5 million, or 38.8%, from the quarters ended March 31, 2022 and June 30, 2021, respectively.
  • Fintech fee income growth offsets continued investments and mortgage slowdown
    • Total noninterest income was $11.9 million for the quarter ended June 30, 2022 as compared to $11.9 million for the quarter ended March 31, 2022, and $13.6 million for the quarter ended June 30, 2021.
    • Payment card and service charge income for the quarter ended June 30, 2022 increased $1.4 million, or 52.0%, from the quarter ended March 31, 2022 and $2.1 million, or 108.5%, from the quarter ended June 30, 2021. The increase in payment card income was driven by growth in interchange income of $1.5 million, or 191.2%, from the quarter ended March 31, 2022 and $1.3 million, or 128.5%, from the quarter ended June 30, 2021, primarily driven by the Company’s Banking-as-a-Service relationships.
    • The Company continues to invest in the building of Fintechs to transform its business model and adapt to changing market conditions and opportunities. For the quarter ended June 30, 2022, earnings were impacted by approximately $1.3 million of net loss from its MVB Edge Ventures segment, as compared to net losses of $1.1 million and $0.2 million for the quarters ended March 31, 2022 and June 30, 2021, respectively.
    • Mortgage income was $0.7 million, down $0.5 million, or 41.4%, from the quarter ended March 31, 2022 and down $3.8 million, or 111.4%, from the quarter ended June 30, 2021. Lower mortgage income relative to both prior periods reflected the continued sharp increase in market interest rates during the second quarter of 2022.
  • Measures of asset quality were stable
    • Nonperforming loans totaled $19.3 million, or 0.9% of total loans, as of June 30, 2022, as compared to $18.0 million, or 1.0% of total loans, as of March 31, 2022. Criticized loans as a percentage of total loans were 4.0%, as compared to 5.2% as of March 31, 2022.
    • Net charge-offs were $1.9 million, or 0.21% of total loans on an annualized basis, for the quarter ended June 30, 2022, compared to $0.7 million, or 0.12% of total loans on an annualized basis, for the quarter ended March 31, 2022, and compared to net recoveries totaling $0.2 million, or 0.05% of total loans on an annualized basis, for the quarter ended June 30, 2021.
    • The provision for loan losses totaled $5.1 million for the quarter ended June 30, 2022, compared to $1.3 million for the quarter ended March 31, 2022 and a release of allowance for loan losses of $1.5 million for the quarter ended June 30, 2021. Allowance for loan losses was 1.03% of total loans as of June 30, 2022, an increase of four basis points from March 31, 2022 and a decline of 44 basis points from June 30, 2021. The increase in provision for loan losses for the quarter ended June 30, 2022 primarily reflected the strong growth in loan balances during the quarter, including the expansion of the Company’s subprime consumer automobile portfolio of loans.

INCOME STATEMENT

Net interest income on a tax-equivalent basis totaled $27.0 million for the quarter ended June 30, 2022, up $4.9 million, or 22.0%, from the quarter ended March 31, 2022 and $7.5 million, or 38.8%, from the quarter ended June 30, 2021. The increase in net interest income compared to both periods generally reflects strong loan growth and higher loan yields, particularly driven by the consumer loan portfolio and by accelerated accretion of the discount on PCI loans sold during the quarter of $1.0 million.

Interest income increased $4.8 million, or 20.8%, to $51.4 million from the quarter ended March 31, 2022 and $7.3 million, or 34.8%, from the quarter ended June 30, 2021. The tax-equivalent yield on loans was 5.06% for the quarter ended June 30, 2022, compared to 4.71% for the quarter ended March 31, 2022 and 4.31% for the quarter ended June 30, 2021. Higher loan yields generally reflect new loan production at favorable interest rates and the changing mix of MVB Bank’s loan portfolio, including the expansion of its consumer subprime auto loan portfolio and the accelerated accretion on PCI loans.

Interest expense remained consistent from the quarter ended March 31, 2022 and decreased $0.3 million, or 19.6%, from the quarter ended June 30, 2021. The cost of funds was 22 basis points for the quarter ended June 30, 2022, up one basis point compared to the quarter ended March 31, 2022 and down nine basis points compared to the quarter ended June 30, 2021. The increase in cost of funds relative to the quarter ended March 31, 2022 reflects an increase in interest rates driving the cost of interest-bearing deposits, and a faster pace of growth in interest-bearing deposits as compared to NIB deposits for the quarter. The decrease in cost of funds relative to the comparable prior year quarter reflects a shift in the overall mix of deposit funding due to the growth in NIB deposits and a lessening focus on higher-cost deposits. The cost of interest-bearing liabilities increased by eight basis points as compared to the quarter ended March 31, 2022, primarily reflecting a six basis point increase in the cost of negotiable order of withdrawal (“NOW”) accounts and a four basis point increase in the overall cost of deposits. The cost of interest-bearing liabilities remained flat as compared to the quarter ended June 30, 2021, primarily driven by a 20 basis point decline in the cost of NOW accounts and a 12 basis point decrease in the overall cost of deposits, offset by the decrease in the average balance of NOW accounts and overall interest-bearing deposits of 18.5% and 8.7%, respectively.

On a tax-equivalent basis, net interest margin for the quarter ended June 30, 2022 was 4.10%, an increase of 92 basis points versus the quarter ended March 31, 2022 and 86 basis points versus the quarter ended June 30, 2021. Excluding accretion from the sale of PCI loans during the quarter, net interest margin for the quarter ended June 30, 2022, was 3.94%. Please see the table below for a reconciliation between net interest margin and net interest margin on a fully tax-equivalent basis, a non-GAAP measure. The increase in net interest margin from the quarter ended March 31, 2022 reflected the impact of strong loan growth and the impact of lower cash balances, partially offset by an increase in deposit costs. The average loan-to-deposit ratio during the quarter ended June 30, 2022 was 82.9%, compared to 69.7% for the quarter ended March 31, 2022. The increase in net interest margin relative to the quarter ended June 30, 2021 reflected strong loan growth and an improving deposit mix.

Noninterest income totaled $11.9 million for the quarter ended June 30, 2022, which is consistent with the quarter ended March 31, 2022 and a decrease of $1.7 million, or 12.7%, from the quarter ended June 30, 2021.

Noninterest income was unchanged from the prior quarter due to increases in payment card and service charge income of $1.4 million, or 52.0%, other operating income of $1.3 million, or 272.9%, and gain on sale of loans of $0.3 million, or 29.7%. Partially offsetting these increases were decreases in gain on sale of available-sale securities of $0.7 million, or 100.0%, and equity method investment income of $0.6 million, or 51.8%. Additionally, the Company experienced a decrease in equity method investment gain as compared to the preceding quarter. The decrease is due to a $1.8 million gain recognized in the first quarter related to a strategic investment within the Fintech investment portfolio, with no comparable gain in the current quarter. A sale of mortgaging servicing rights in June 2022 resulted in $1.2 million of the increase in other operating income. The increase in payment card and service charge income is driven by increased interchange income. Equity method investment income was lower by 51.8%, primarily due to lower mortgage banking revenue. Further disaggregation of the Company’s noninterest income is available below.

Noninterest expense totaled $29.8 million for the quarter ended June 30, 2022, an increase of $1.0 million, or 3.3%, from the quarter ended March 31, 2022 and an increase of $6.4 million, or 27.4%, from the quarter ended June 30, 2021. The increase from the quarter ended March 31, 2022 in expenses primarily reflects an increase in salaries and employee benefits of $1.0 million, or 5.7%. The increase relative to the prior year period primarily reflects higher salaries and employee benefits costs of $5.3 million, or 39.0%. The increases in salaries and employee benefits were due to continued hiring during the second quarter that resulted in a 35% increase in average full time equivalent employees for the first half of 2022 as compared to the first half of 2021, including front-line revenue producers and enhanced risk management infrastructure, amidst the transformation of the Company’s business model, mitigated in part by a focused reallocation of resources, including lower infrastructure costs related to a reduction in branch count.

BALANCE SHEET

Loans totaled $2.19 billion at June 30, 2022, an increase of $313.3 million, or 16.7%, and $519.9 million, or 31.1%, as compared to March 31, 2022 and June 30, 2021, respectively, and included outstanding paycheck protection program (“PPP”) loans of $22.3 million at June 30, 2022. Adjusted for the removal of PPP loans from all periods, loan balances increased by 18.1% from the quarter ended March 31, 2022 and by 47.2% from the quarter ended June 30, 2021. Loan growth for both periods was driven primarily by the Company’s strategic lending partnerships growth vehicle. Loans held-for-sale were $11.9 million as of June 30, 2022, compared to $9.2 million at March 31, 2022 and $0 at June 30, 2021, led by MVB Bank’s SBA lending growth vehicle.

Deposits totaled $2.61 billion as of June 30, 2022, an increase of $105.9 million, or 4.2%, from March 31, 2022 and $385.8 million, or 17.3%, from June 30, 2021. NIB deposits totaled $1.34 billion as of June 30, 2022, an increase $33.9 million, or 2.6%, from March 31, 2022 and $410.3 million, or 44.0%, from June 30, 2021. Growth in total and NIB deposit balances primarily reflects the Company’s Fintech business and gaming growth vehicle. Slower deposit growth is mostly attributable to seasonal variability, particularly in gaming deposits. At 51% of total deposits, NIB deposits continue to exceed all other deposits combined.

CAPITAL

The Community Bank Leverage Ratio was 11.6% as of June 30, 2022, compared to 10.8% as of March 31, 2022 and 11.0% as of June 30, 2021. MVB’s Tier 1 Risk-Based Capital Ratio was 13.7% as of June 30, 2022, compared to 15.0% as of March 31, 2022 and 14.8% as of June 30, 2021. The Bank’s Total Risk-Based Capital Ratio was 14.7% as of June 30, 2022, compared to 15.9% as of March 31, 2022 and 16.0% as of June 30, 2021.

The Company issued a quarterly cash dividend of $0.17 per share for the quarter ended June 30, 2022, consistent with the quarter ended March 31, 2022 and up $0.05, or 42%, from the quarter ended June 30, 2021.

ASSET QUALITY

Nonperforming loans totaled $19.3 million, or 0.9% of total loans, as of June 30, 2022, as compared to $18.0 million, or 1.0% of total loans, as of March 31, 2022. There were no notable changes in the composition of nonperforming loans relative to March 31, 2022. Criticized loans as a percentage of total loans were 4.0%, as compared to 5.2% as of March 31, 2022.

Net charge-offs were $1.9 million, or 0.21% of total loans on an annualized basis, for the quarter ended June 30, 2022, compared to $0.7 million, or 0.12% of total loans on an annualized basis, for the quarter ended March 31, 2022 and compared to net recoveries totaling $0.2 million, or 0.05% of total loans on an annualized basis, for the quarter ended June 30, 2021.

Changes to the outstanding balances of the loan portfolios, the level of recognized charge-offs and the resulting historical loss rates and adjustments to the risk grading of loans within the portfolio are all contributing factors in the provision for loan losses. The provision for loan losses totaled $5.1 million for the quarter ended June 30, 2022, compared to $1.3 million for the quarter ended March 31, 2022 and a release of allowance for loan losses of $1.5 million for the quarter ended June 30, 2021. Allowance for loan losses to total loans was 1.03% as June 30, 2022, as compared to 0.99% as of March 31, 2022 and 1.47% as of June 30, 2021.

About MVB Financial Corp.

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

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

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

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

Forward-looking Statements

MVB Financial has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in this press release that are intended to be covered by the protections provided under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations about the future and are subject to risks and uncertainties. Forward-looking statements include, without limitation, information concerning possible or assumed future results of operations of the Company and its subsidiaries. Forward-looking statements can be identified by the use of words such as “may,” “could,” “should,” “would,” “will,” “plans,” “believes,” “estimates,” “expects,” “anticipates,” “intends,” “continues” or the negative of those terms or similar expressions. Note that many factors could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in forward-looking statements. Therefore, undue reliance should not be placed upon any forward-looking statements. Those factors include but are not limited to: market, economic, operational, liquidity and credit risk; changes in market interest rates; inability to achieve anticipated synergies and successfully integrate recent mergers and acquisitions; inability to successfully execute business plans, including strategies related to investments in Fintech companies; competition; length and severity of the COVID-19 pandemic and its impact on the Company’s business and financial condition; changes in economic, business and political conditions; changes in demand for loan products and deposit flow; operational risks and risk management failures; and government regulation and supervision. Additional factors that may cause actual results to differ materially from those described in the forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as well as its other filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. Except as required by law, the Company disclaims any obligation to update, revise or correct any forward-looking statements.

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

MVB Financial Corp.

Financial Highlights

 

Consolidated Statements of Income

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

 

 

Quarterly

 

Year-to-Date

 

 

2022

 

2022

 

2021

 

 

2022

 

 

2021

 

 

 

Second Quarter

 

First Quarter

 

Second Quarter

 

 

Interest income

 

$

28,090

 

$

23,262

 

$

20,833

 

 

$

51,352

 

$

39,896

 

Interest expense

 

 

1,430

 

 

1,414

 

 

1,778

 

 

 

2,844

 

 

3,336

 

Net interest income

 

 

26,660

 

 

21,848

 

 

19,055

 

 

 

48,508

 

 

36,560

 

Provision (release of allowance) for loan losses

 

 

5,100

 

 

1,280

 

 

(1,540

)

 

 

6,380

 

 

(922

)

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

 

 

21,560

 

 

20,568

 

 

20,595

 

 

 

42,128

 

 

37,482

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

 

 

11,909

 

 

11,870

 

 

13,644

 

 

 

23,779

 

 

26,102

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

18,983

 

 

17,961

 

 

13,661

 

 

 

36,944

 

 

25,572

 

Other expense

 

 

10,836

 

 

10,901

 

 

9,742

 

 

 

21,737

 

 

16,949

 

Total noninterest expenses

 

 

29,819

 

 

28,862

 

 

23,403

 

 

 

58,681

 

 

42,521

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

3,650

 

 

3,576

 

 

10,836

 

 

 

7,226

 

 

21,063

 

Income tax expense

 

 

859

 

 

905

 

 

1,673

 

 

 

1,764

 

 

3,842

 

Net income before noncontrolling interest

 

 

2,791

 

 

2,671

 

 

9,163

 

 

 

5,462

 

 

17,221

 

Net loss attributable to noncontrolling interest

 

 

165

 

 

193

 

 

84

 

 

 

358

 

 

111

 

Net income attributable to parent

 

 

2,956

 

 

2,864

 

 

9,247

 

 

 

5,820

 

 

17,332

 

Preferred dividends

 

 

 

 

 

 

 

 

 

 

 

35

 

Net income available to common shareholders

 

$

2,956

 

$

2,864

 

$

9,247

 

 

$

5,820

 

$

17,297

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - basic

 

$

0.24

 

$

0.24

 

$

0.79

 

 

$

0.48

 

$

1.49

 

Earnings per share - diluted

 

$

0.23

 

$

0.22

 

$

0.73

 

 

$

0.45

 

$

1.39

 

Noninterest Income

(Unaudited) (Dollars in thousands)

 

 

 

Quarterly

 

Year-to-Date

 

 

 

2022

 

 

 

2022

 

 

 

2021

 

 

2022

 

 

 

2021

 

 

Second Quarter

 

First Quarter

 

Second Quarter

 

 

Card acquiring income

 

$

750

 

 

$

983

 

 

$

810

 

$

1,733

 

 

$

1,412

Service charges on deposits

 

 

973

 

 

 

872

 

 

 

113

 

 

1,845

 

 

 

361

Interchange income

 

 

2,292

 

 

 

787

 

 

 

1,003

 

 

3,079

 

 

 

1,646

Total payment card and service charge income

 

 

4,015

 

 

 

2,642

 

 

 

1,926

 

 

6,657

 

 

 

3,419

 

 

 

 

 

 

 

 

 

 

 

Income from ICM equity method investment 1

 

 

732

 

 

 

1,250

 

 

 

4,528

 

 

1,982

 

 

 

10,997

Loss from other equity method investments

 

 

(183

)

 

 

(112

)

 

 

 

 

(295

)

 

 

Total equity method investment income

 

 

549

 

 

 

1,138

 

 

 

4,528

 

 

1,687

 

 

 

10,997

 

 

 

 

 

 

 

 

 

 

 

Compliance and consulting income

 

 

3,750

 

 

 

3,869

 

 

 

1,868

 

 

7,619

 

 

 

3,149

Gain on sale of loans

 

 

1,405

 

 

 

1,083

 

 

 

1,447

 

 

2,488

 

 

 

2,217

Investment portfolio gains

 

 

145

 

 

 

2,394

 

 

 

2,412

 

 

2,539

 

 

 

4,070

Other noninterest income

 

 

2,045

 

 

 

744

 

 

 

1,463

 

 

2,789

 

 

 

2,250

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

 

$

11,909

 

 

$

11,870

 

 

$

13,644

 

$

23,779

 

 

$

26,102

 

1 Intercoastal Mortgage Company, LLC (“ICM”)

Condensed Consolidated Balance Sheets

(Unaudited) (Dollars in thousands)

 

 

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

Cash and cash equivalents

 

$

161,761

 

 

$

353,972

 

 

$

332,771

 

Certificates of deposit with banks

 

 

496

 

 

 

2,229

 

 

 

11,803

 

Securities available-for-sale, at fair value

 

 

376,737

 

 

 

395,301

 

 

 

450,772

 

Equity securities

 

 

34,250

 

 

 

34,447

 

 

 

32,215

 

Loans held-for-sale

 

 

11,856

 

 

 

9,161

 

 

 

 

Loans receivable

 

 

2,215,114

 

 

 

1,897,853

 

 

 

1,697,326

 

Less: Allowance for loan losses

 

 

(22,734

)

 

 

(18,808

)

 

 

(24,882

)

Loans receivable, net

 

 

2,192,380

 

 

 

1,879,045

 

 

 

1,672,444

 

Premises and equipment, net

 

 

25,272

 

 

 

25,357

 

 

 

21,033

 

Goodwill

 

 

3,988

 

 

 

3,988

 

 

 

4,119

 

Assets of branches held-for-sale

 

 

 

 

 

 

 

 

59,488

 

Other assets

 

 

177,688

 

 

 

189,964

 

 

 

149,895

 

Total assets

 

$

2,984,428

 

 

$

2,893,464

 

 

$

2,734,540

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

1,342,916

 

 

$

1,308,998

 

 

$

932,660

 

Interest-bearing deposits

 

 

1,272,054

 

 

 

1,200,081

 

 

 

1,296,515

 

Liabilities of branches held-for-sale

 

 

 

 

 

 

 

 

165,750

 

FHLB and other borrowings

 

 

 

 

 

 

 

 

100

 

Subordinated debt

 

 

73,158

 

 

 

73,094

 

 

 

43,480

 

Other liabilities

 

 

43,390

 

 

 

47,429

 

 

 

46,635

 

Stockholders' equity, including noncontrolling interest

 

 

252,910

 

 

 

263,862

 

 

 

249,400

 

Total liabilities and stockholders' equity

 

$

2,984,428

 

 

$

2,893,464

 

 

$

2,734,540

 

Reportable Segments

(Unaudited)

 

Three Months Ended June 30, 2022

 

CoRe Banking

 

Mortgage Banking

 

Professional Services

 

Edge Ventures

 

Financial Holding Company

 

Intercompany Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

 

Interest income

 

$

27,910

 

$

103

 

$

 

 

$

 

 

$

87

 

 

$

(10

)

 

$

28,090

Interest expense

 

 

672

 

 

 

 

8

 

 

 

 

 

 

760

 

 

 

(10

)

 

 

1,430

Net interest income (expense)

 

 

27,238

 

 

103

 

 

(8

)

 

 

 

 

 

(673

)

 

 

 

 

 

26,660

Provision for loan losses

 

 

5,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,100

Net interest income (expense) after provision for loan losses

 

 

22,138

 

 

103

 

 

(8

)

 

 

 

 

 

(673

)

 

 

 

 

 

21,560

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

 

 

7,093

 

 

787

 

 

5,686

 

 

 

110

 

 

 

3,228

 

 

 

(4,995

)

 

 

11,909

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,948

 

 

 

 

3,872

 

 

 

724

 

 

 

4,439

 

 

 

 

 

 

18,983

Other expenses

 

 

10,913

 

 

94

 

 

1,407

 

 

 

1,170

 

 

 

2,247

 

 

 

(4,995

)

 

 

10,836

Total noninterest expenses

 

 

20,861

 

 

94

 

 

5,279

 

 

 

1,894

 

 

 

6,686

 

 

 

(4,995

)

 

 

29,819

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

8,370

 

 

796

 

 

399

 

 

 

(1,784

)

 

 

(4,131

)

 

 

 

 

 

3,650

Income taxes

 

 

1,771

 

 

207

 

 

95

 

 

 

(399

)

 

 

(815

)

 

 

 

 

 

859

Net income (loss)

 

 

6,599

 

 

589

 

 

304

 

 

 

(1,385

)

 

 

(3,316

)

 

 

 

 

 

2,791

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

63

 

 

 

102

 

 

 

 

 

 

 

 

 

165

Net income (loss) available to common shareholders

 

$

6,599

 

$

589

 

$

367

 

 

$

(1,283

)

 

$

(3,316

)

 

$

 

 

$

2,956

Three Months Ended March 31, 2022

 

CoRe Banking

 

Mortgage Banking

 

Professional Services

 

Edge Ventures

 

Financial Holding Company

 

Intercompany Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

 

Interest income

 

$

23,171

 

$

103

 

$

 

 

$

 

 

$

(7

)

 

$

(5

)

 

$

23,262

Interest expense

 

 

659

 

 

 

 

7

 

 

 

 

 

 

753

 

 

 

(5

)

 

 

1,414

Net interest income (expense)

 

 

22,512

 

 

103

 

 

(7

)

 

 

 

 

 

(760

)

 

 

 

 

 

21,848

Provision for loan losses

 

 

1,280

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,280

Net interest income (expense) after provision for loan losses

 

 

21,232

 

 

103

 

 

(7

)

 

 

 

 

 

(760

)

 

 

 

 

 

20,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

 

 

6,898

 

 

1,223

 

 

5,557

 

 

 

75

 

 

 

2,671

 

 

 

(4,554

)

 

 

11,870

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,508

 

 

 

 

3,798

 

 

 

599

 

 

 

4,056

 

 

 

 

 

 

17,961

Other expenses

 

 

11,048

 

 

 

 

1,155

 

 

 

1,047

 

 

 

2,205

 

 

 

(4,554

)

 

 

10,901

Total noninterest expenses

 

 

20,556

 

 

 

 

4,953

 

 

 

1,646

 

 

 

6,261

 

 

 

(4,554

)

 

 

28,862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

7,574

 

 

1,326

 

 

597

 

 

 

(1,571

)

 

 

(4,350

)

 

 

 

 

 

3,576

Income taxes

 

 

1,631

 

 

341

 

 

164

 

 

 

(362

)

 

 

(869

)

 

 

 

 

 

905

Net income (loss)

 

 

5,943

 

 

985

 

 

433

 

 

 

(1,209

)

 

 

(3,481

)

 

 

 

 

 

2,671

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

95

 

 

 

98

 

 

 

 

 

 

 

 

 

193

Net income (loss) available to common shareholders

 

$

5,943

 

$

985

 

$

528

 

 

$

(1,111

)

 

$

(3,481

)

 

$

 

 

$

2,864

Three Months Ended June 30, 2021

 

CoRe Banking

 

Mortgage Banking

 

Professional Services

 

Edge Ventures

 

Financial Holding Company

 

Intercompany Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

 

Interest income

 

$

20,736

 

 

$

98

 

$

 

 

$

 

 

$

 

 

$

(1

)

 

$

20,833

 

Interest expense

 

 

1,287

 

 

 

 

 

3

 

 

 

 

 

 

490

 

 

 

(2

)

 

 

1,778

 

Net interest income (expense)

 

 

19,449

 

 

 

98

 

 

(3

)

 

 

 

 

 

(490

)

 

 

1

 

 

 

19,055

 

Release of allowance for loan losses

 

 

(1,540

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,540

)

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

 

 

20,989

 

 

 

98

 

 

(3

)

 

 

 

 

 

(490

)

 

 

1

 

 

 

20,595

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

 

 

6,700

 

 

 

4,546

 

 

3,286

 

 

 

 

 

 

2,309

 

 

 

(3,197

)

 

 

13,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

8,038

 

 

 

 

 

2,212

 

 

 

134

 

 

 

3,277

 

 

 

 

 

 

13,661

 

Other expenses

 

 

10,289

 

 

 

23

 

 

1,167

 

 

 

122

 

 

 

1,337

 

 

 

(3,196

)

 

 

9,742

 

Total noninterest expenses

 

 

18,327

 

 

 

23

 

 

3,379

 

 

 

256

 

 

 

4,614

 

 

 

(3,196

)

 

 

23,403

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

9,362

 

 

 

4,621

 

 

(96

)

 

 

(256

)

 

 

(2,795

)

 

 

 

 

 

10,836

 

Income taxes

 

 

1,266

 

 

 

1,120

 

 

(32

)

 

 

(66

)

 

 

(615

)

 

 

 

 

 

1,673

 

Net income (loss)

 

 

8,096

 

 

 

3,501

 

 

(64

)

 

 

(190

)

 

 

(2,180

)

 

 

 

 

 

9,163

 

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

 

46

 

 

 

38

 

 

 

 

 

 

 

 

 

84

 

Net income (loss) available to common shareholders

 

$

8,096

 

 

$

3,501

 

$

(18

)

 

$

(152

)

 

$

(2,180

)

 

$

 

 

$

9,247

 

Six Months Ended June 30, 2022

 

CoRe Banking

 

Mortgage Banking

 

Professional Services

 

Edge Ventures

 

Financial Holding Company

 

Intercompany Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

 

Interest income

 

$

51,081

 

$

206

 

$

 

 

$

 

 

$

80

 

 

$

(15

)

 

$

51,352

Interest expense

 

 

1,331

 

 

 

 

15

 

 

 

 

 

 

1,513

 

 

 

(15

)

 

 

2,844

Net interest income (expense)

 

 

49,750

 

 

206

 

 

(15

)

 

 

 

 

 

(1,433

)

 

 

 

 

 

48,508

Provision for loan losses

 

 

6,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,380

Net interest income (expense) after provision for loan losses

 

 

43,370

 

 

206

 

 

(15

)

 

 

 

 

 

(1,433

)

 

 

 

 

 

42,128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

 

 

13,991

 

 

2,010

 

 

11,243

 

 

 

185

 

 

 

5,899

 

 

 

(9,549

)

 

 

23,779

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

19,456

 

 

 

 

7,670

 

 

 

1,323

 

 

 

8,495

 

 

 

 

 

 

36,944

Other expenses

 

 

21,961

 

 

94

 

 

2,562

 

 

 

2,217

 

 

 

4,452

 

 

 

(9,549

)

 

 

21,737

Total noninterest expenses

 

 

41,417

 

 

94

 

 

10,232

 

 

 

3,540

 

 

 

12,947

 

 

 

(9,549

)

 

 

58,681

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

15,944

 

 

2,122

 

 

996

 

 

 

(3,355

)

 

 

(8,481

)

 

 

 

 

 

7,226

Income taxes

 

 

3,402

 

 

548

 

 

259

 

 

 

(761

)

 

 

(1,684

)

 

 

 

 

 

1,764

Net income (loss)

 

 

12,542

 

 

1,574

 

 

737

 

 

 

(2,594

)

 

 

(6,797

)

 

 

 

 

 

5,462

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

158

 

 

 

200

 

 

 

 

 

 

 

 

 

358

Net income (loss) available to common shareholders

 

$

12,542

 

$

1,574

 

$

895

 

 

$

(2,394

)

 

$

(6,797

)

 

$

 

 

$

5,820

Six Months Ended June 30, 2021

 

CoRe Banking

 

Mortgage Banking

 

Professional Services

 

Edge Ventures

 

Financial Holding Company

 

Intercompany Eliminations

 

Consolidated

(Dollars in thousands)

 

 

 

 

 

 

 

Interest income

 

$

39,695

 

 

$

202

 

 

$

 

 

$

 

 

$

1

 

 

$

(2

)

 

$

39,896

 

Interest expense

 

 

2,379

 

 

 

 

 

 

3

 

 

 

 

 

 

956

 

 

 

(2

)

 

 

3,336

 

Net interest income (expense)

 

 

37,316

 

 

 

202

 

 

 

(3

)

 

 

 

 

 

(955

)

 

 

 

 

 

36,560

 

Release of allowance for loan losses

 

 

(920

)

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(922

)

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

 

 

38,236

 

 

 

204

 

 

 

(3

)

 

 

 

 

 

(955

)

 

 

 

 

 

37,482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest income

 

 

11,445

 

 

 

10,953

 

 

 

4,978

 

 

 

 

 

 

3,890

 

 

 

(5,164

)

 

 

26,102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

15,874

 

 

 

 

 

 

3,106

 

 

 

246

 

 

 

6,346

 

 

 

 

 

 

25,572

 

Other expenses

 

 

17,729

 

 

 

86

 

 

 

1,685

 

 

 

193

 

 

 

2,420

 

 

 

(5,164

)

 

 

16,949

 

Total noninterest expenses

 

 

33,603

 

 

 

86

 

 

 

4,791

 

 

 

439

 

 

 

8,766

 

 

 

(5,164

)

 

 

42,521

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

16,078

 

 

 

11,071

 

 

 

184

 

 

 

(439

)

 

 

(5,831

)

 

 

 

 

 

21,063

 

Income taxes

 

 

2,403

 

 

 

2,684

 

 

 

27

 

 

 

(113

)

 

 

(1,159

)

 

 

 

 

 

3,842

 

Net income (loss)

 

 

13,675

 

 

 

8,387

 

 

 

157

 

 

 

(326

)

 

 

(4,672

)

 

 

 

 

 

17,221

 

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

 

 

46

 

 

 

65

 

 

 

 

 

 

 

 

 

111

 

Net income (loss) attributable to parent

 

 

13,675

 

 

 

8,387

 

 

 

203

 

 

 

(261

)

 

 

(4,672

)

 

 

 

 

 

17,332

 

Preferred stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35

 

 

 

 

 

 

35

 

Net income (loss) available to common shareholders

 

$

13,675

 

 

$

8,387

 

 

$

203

 

 

$

(261

)

 

$

(4,707

)

 

$

 

 

$

17,297

 

Average Balances and Interest Rates

(Unaudited) (Dollars in thousands)

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing balances with banks

 

$

197,613

 

 

$

304

 

 

0.62

%

 

$

595,574

 

 

$

214

 

 

0.15

%

 

$

178,792

 

 

$

40

 

 

0.09

%

CDs with banks

 

 

1,582

 

 

 

9

 

 

2.28

 

 

 

2,352

 

 

 

13

 

 

2.24

 

 

 

11,803

 

 

 

58

 

 

1.97

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

237,745

 

 

 

838

 

 

1.41

 

 

 

241,974

 

 

 

648

 

 

1.09

 

 

 

254,536

 

 

 

625

 

 

0.98

 

Tax-exempt 2

 

 

147,646

 

 

 

1,342

 

 

3.65

 

 

 

128,588

 

 

 

1,137

 

 

3.59

 

 

 

207,830

 

 

 

1,640

 

 

3.17

 

Loans and loans held-for-sale: 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial 3

 

 

1,564,266

 

 

 

20,021

 

 

5.13

 

 

 

1,453,262

 

 

 

16,979

 

 

4.74

 

 

 

1,416,669

 

 

 

15,884

 

 

4.50

 

Tax-exempt 2

 

 

4,930

 

 

 

52

 

 

4.23

 

 

 

5,066

 

 

 

52

 

 

4.16

 

 

 

6,905

 

 

 

78

 

 

4.53

 

Real estate

 

 

393,983

 

 

 

2,674

 

 

2.72

 

 

 

338,826

 

 

 

2,340

 

 

2.80

 

 

 

320,528

 

 

 

2,747

 

 

3.44

 

Consumer

 

 

88,366

 

 

 

3,142

 

 

14.26

 

 

 

54,623

 

 

 

2,128

 

 

15.80

 

 

 

6,550

 

 

 

122

 

 

7.47

 

Total loans

 

 

2,051,545

 

 

 

25,889

 

 

5.06

 

 

 

1,851,777

 

 

 

21,499

 

 

4.71

 

 

 

1,750,652

 

 

 

18,831

 

 

4.31

 

Total earning assets

 

 

2,636,131

 

 

 

28,382

 

 

4.32

 

 

 

2,820,265

 

 

 

23,511

 

 

3.38

 

 

 

2,403,613

 

 

 

21,194

 

 

3.54

 

Less: Allowance for loan losses

 

 

(19,927

)

 

 

 

 

 

 

(18,343

)

 

 

 

 

 

 

(26,625

)

 

 

 

 

Cash and due from banks

 

 

5,579

 

 

 

 

 

 

 

6,067

 

 

 

 

 

 

 

22,141

 

 

 

 

 

Other assets

 

 

237,016

 

 

 

 

 

 

 

248,803

 

 

 

 

 

 

 

193,165

 

 

 

 

 

Total assets

 

$

2,858,799

 

 

 

 

 

 

$

3,056,792

 

 

 

 

 

 

$

2,592,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

654,781

 

 

$

256

 

 

0.16

%

 

$

785,108

 

 

$

193

 

 

0.10

%

 

$

716,924

 

 

$

643

 

 

0.36

%

Money market checking

 

 

380,295

 

 

 

184

 

 

0.19

 

 

 

466,287

 

 

 

202

 

 

0.18

 

 

 

466,091

 

 

 

221

 

 

0.19

 

Savings

 

 

27,496

 

 

 

1

 

 

0.01

 

 

 

50,041

 

 

 

1

 

 

0.01

 

 

 

52,992

 

 

 

 

 

 

IRAs

 

 

6,314

 

 

 

17

 

 

1.08

 

 

 

6,370

 

 

 

17

 

 

1.08

 

 

 

12,358

 

 

 

40

 

 

1.30

 

CDs

 

 

75,487

 

 

 

203

 

 

1.08

 

 

 

87,237

 

 

 

243

 

 

1.13

 

 

 

156,507

 

 

 

332

 

 

0.85

 

Repurchase agreements and federal funds sold

 

 

11,566

 

 

 

1

 

 

0.03

 

 

 

11,823

 

 

 

5

 

 

0.17

 

 

 

10,833

 

 

 

3

 

 

0.11

 

FHLB and other borrowings

 

 

2,312

 

 

 

8

 

 

1.39

 

 

 

 

 

 

 

 

 

 

 

55,402

 

 

 

49

 

 

0.35

 

Subordinated debt

 

 

73,126

 

 

 

760

 

 

4.17

 

 

 

73,062

 

 

 

753

 

 

4.18

 

 

 

43,462

 

 

 

490

 

 

4.52

 

Total interest-bearing liabilities

 

 

1,231,377

 

 

 

1,430

 

 

0.47

 

 

 

1,479,928

 

 

 

1,414

 

 

0.39

 

 

 

1,514,569

 

 

 

1,778

 

 

0.47

 

Noninterest-bearing demand deposits

 

 

1,331,357

 

 

 

 

 

 

 

1,260,965

 

 

 

 

 

 

 

810,298

 

 

 

 

 

Other liabilities

 

 

40,900

 

 

 

 

 

 

 

46,318

 

 

 

 

 

 

 

28,688

 

 

 

 

 

Total liabilities

 

 

2,603,634

 

 

 

 

 

 

 

2,787,211

 

 

 

 

 

 

 

2,353,555

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

13,289

 

 

 

 

 

 

 

13,458

 

 

 

 

 

 

 

12,487

 

 

 

 

 

Paid-in capital

 

 

145,014

 

 

 

 

 

 

 

143,795

 

 

 

 

 

 

 

141,782

 

 

 

 

 

Treasury stock

 

 

(16,741

)

 

 

 

 

 

 

(16,741

)

 

 

 

 

 

 

(16,741

)

 

 

 

 

Retained earnings

 

 

137,989

 

 

 

 

 

 

 

137,633

 

 

 

 

 

 

 

98,413

 

 

 

 

 

Accumulated other comprehensive income (loss)

 

 

(25,097

)

 

 

 

 

 

 

(9,466

)

 

 

 

 

 

 

2,194

 

 

 

 

 

Total stockholders’ equity attributable to parent

 

 

254,454

 

 

 

 

 

 

 

268,679

 

 

 

 

 

 

 

238,135

 

 

 

 

 

Noncontrolling interest

 

 

711

 

 

 

 

 

 

 

902

 

 

 

 

 

 

 

604

 

 

 

 

 

Total stockholders’ equity

 

 

255,165

 

 

 

 

 

 

 

269,581

 

 

 

 

 

 

 

238,739

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

2,858,799

 

 

 

 

 

 

$

3,056,792

 

 

 

 

 

 

$

2,592,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (tax-equivalent)

 

 

 

 

 

3.85

%

 

 

 

 

 

2.99

%

 

 

 

 

 

3.07

%

Net interest income and margin (tax-equivalent)2

 

 

 

$

26,952

 

 

4.10

%

 

 

 

$

22,097

 

 

3.18

%

 

 

 

$

19,416

 

 

3.24

%

Less: Tax-equivalent adjustments

 

 

 

$

(292

)

 

 

 

 

 

$

(249

)

 

 

 

 

 

$

(361

)

 

 

Net interest spread

 

 

 

 

 

3.80

%

 

 

 

 

 

2.96

%

 

 

 

 

 

3.01

%

Net interest income and margin

 

 

 

$

26,660

 

 

4.06

%

 

 

 

$

21,848

 

 

3.14

%

 

 

 

$

19,055

 

 

3.18

%

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

2 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a Federal tax rate of 21% for the periods presented, which is a non-GAAP financial measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure following this table.

3 MVB Bank’s PPP loans totaling $22.3 million, $41.7 million and $207.3 million are included in this amount as of June 30, 2022, March 31, 2022 and June 30, 2021, respectively.

 

 

Six Months Ended

 

Six Months Ended

 

 

June 30, 2022

 

June 30, 2021

 

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing balances with banks

 

$

395,494

 

 

$

518

 

 

0.26

%

 

$

218,919

 

 

$

105

 

 

0.10

%

CDs with banks

 

 

1,964

 

 

 

22

 

 

2.26

 

 

 

11,803

 

 

 

115

 

 

1.96

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

239,849

 

 

 

1,486

 

 

1.25

 

 

 

213,944

 

 

 

1,256

 

 

1.18

 

Tax-exempt 2

 

 

138,170

 

 

 

2,478

 

 

3.62

 

 

 

210,146

 

 

 

3,354

 

 

3.22

 

Loans and loans held-for-sale: 1

 

 

 

 

 

 

 

 

 

 

 

 

Commercial 3

 

 

1,509,071

 

 

 

37,000

 

 

4.94

 

 

 

1,339,983

 

 

 

30,055

 

 

4.52

 

Tax-exempt 2

 

 

4,998

 

 

 

105

 

 

4.24

 

 

 

7,055

 

 

 

159

 

 

4.54

 

Real estate

 

 

366,557

 

 

 

5,014

 

 

2.76

 

 

 

306,878

 

 

 

5,430

 

 

3.57

 

Consumer

 

 

71,588

 

 

 

5,271

 

 

14.85

 

 

 

7,120

 

 

 

160

 

 

4.53

 

Total loans

 

 

1,952,214

 

 

 

47,390

 

 

4.90

 

 

 

1,661,036

 

 

 

35,804

 

 

4.35

 

Total earning assets

 

 

2,727,691

 

 

 

51,894

 

 

3.84

 

 

 

2,315,848

 

 

 

40,634

 

 

3.54

 

Less: Allowance for loan losses

 

 

(19,139

)

 

 

 

 

 

 

(26,399

)

 

 

 

 

Cash and due from banks

 

 

5,822

 

 

 

 

 

 

 

21,549

 

 

 

 

 

Other assets

 

 

242,875

 

 

 

 

 

 

 

201,533

 

 

 

 

 

Total assets

 

$

2,957,249

 

 

 

 

 

 

$

2,512,531

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

NOW

 

$

650,903

 

 

$

449

 

 

0.14

%

 

$

618,478

 

 

$

987

 

 

0.32

%

Money market checking

 

 

423,053

 

 

 

386

 

 

0.18

 

 

 

476,628

 

 

 

452

 

 

0.19

 

Savings

 

 

38,706

 

 

 

2

 

 

0.01

 

 

 

46,366

 

 

 

5

 

 

0.02

 

IRAs

 

 

6,341

 

 

 

34

 

 

1.08

 

 

 

12,525

 

 

 

82

 

 

1.32

 

CDs

 

 

81,329

 

 

 

446

 

 

1.11

 

 

 

162,694

 

 

 

758

 

 

0.94

 

Repurchase agreements and federal funds sold

 

 

11,693

 

 

 

3

 

 

0.05

 

 

 

10,542

 

 

 

8

 

 

0.15

 

FHLB and other borrowings

 

 

1,163

 

 

 

11

 

 

1.91

 

 

 

50,901

 

 

 

88

 

 

0.35

 

Subordinated debt

 

 

73,094

 

 

 

1,513

 

 

4.17

 

 

 

43,444

 

 

 

956

 

 

4.44

 

Total interest-bearing liabilities

 

 

1,286,282

 

 

 

2,844

 

 

0.45

 

 

 

1,421,578

 

 

 

3,336

 

 

0.47

 

Noninterest-bearing demand deposits

 

 

1,365,037

 

 

 

 

 

 

 

816,078

 

 

 

 

 

Other liabilities

 

 

43,594

 

 

 

 

 

 

 

36,960

 

 

 

 

 

Total liabilities

 

 

2,694,913

 

 

 

 

 

 

 

2,274,616

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

 

 

 

1,168

 

 

 

 

 

Common stock

 

 

13,373

 

 

 

 

 

 

 

12,433

 

 

 

 

 

Paid-in capital

 

 

144,408

 

 

 

 

 

 

 

139,330

 

 

 

 

 

Treasury stock

 

 

(16,741

)

 

 

 

 

 

 

(16,741

)

 

 

 

 

Retained earnings

 

 

137,815

 

 

 

 

 

 

 

99,336

 

 

 

 

 

Accumulated other comprehensive income (loss)

 

 

(17,325

)

 

 

 

 

 

 

2,083

 

 

 

 

 

Total stockholders’ equity attributable to parent

 

 

261,530

 

 

 

 

 

 

 

237,609

 

 

 

 

 

Noncontrolling interest

 

 

806

 

 

 

 

 

 

 

306

 

 

 

 

 

Total stockholders’ equity

 

 

262,336

 

 

 

 

 

 

 

237,915

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

2,957,249

 

 

 

 

 

 

$

2,512,531

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (tax-equivalent)

 

 

 

 

 

3.39

%

 

 

 

 

 

3.07

%

Net interest income and margin (tax-equivalent)2

 

 

 

$

49,050

 

 

3.63

%

 

 

 

$

37,298

 

 

3.25

%

Less: Tax-equivalent adjustments

 

 

 

$

(542

)

 

 

 

 

 

$

(738

)

 

 

Net interest spread

 

 

 

 

 

3.35

%

 

 

 

 

 

3.00

%

Net interest income and margin

 

 

 

$

48,508

 

 

3.59

%

 

 

 

$

36,560

 

 

3.18

%

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

2 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a Federal tax rate of 21% for the periods presented, which is a non-GAAP financial measure. See the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure following this table.

3 MVB Bank’s PPP loans totaling $22.3 million and $207.3 million are included in this amount as of June 30, 2022 and June 30, 2021, respectively.

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

 

 

Three Months Ended

 

Six Months Ended

(Dollars in thousands)

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

June 30, 2022

 

June 30, 2021

Net interest margin - U.S. GAAP basis

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

26,660

 

 

$

21,848

 

 

$

19,055

 

 

$

48,508

 

 

$

36,560

 

Average interest-earning assets

 

$

2,636,131

 

 

$

2,820,265

 

 

$

2,403,613

 

 

 

2,727,691

 

 

 

2,315,848

 

Net interest margin

 

 

4.06

%

 

 

3.14

%

 

 

3.18

%

 

 

3.59

%

 

 

3.18

%

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

26,660

 

 

$

21,848

 

 

$

19,055

 

 

$

48,508

 

 

$

36,560

 

Impact of fully tax-equivalent adjustment

 

 

292

 

 

 

249

 

 

 

361

 

 

 

542

 

 

 

738

 

Net interest income on a fully tax-equivalent basis

 

$

26,952

 

 

$

22,097

 

 

$

19,416

 

 

 

49,050

 

 

 

37,298

 

Average interest-earning assets

 

$

2,636,131

 

 

$

2,820,265

 

 

$

2,403,613

 

 

$

2,727,691

 

 

$

2,315,848

 

Net interest margin on a fully tax-equivalent basis

 

 

4.10

%

 

 

3.18

%

 

 

3.24

%

 

 

3.63

%

 

 

3.25

%

Selected Financial Data

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

 

 

Quarterly

 

Year-to-Date

 

 

 

2022

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

Second Quarter

 

First Quarter

 

Second Quarter

 

 

Earnings and Per Share Data:

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,956

 

 

$

2,864

 

 

$

9,247

 

 

$

5,820

 

 

$

17,332

 

Net income available to common shareholders

 

$

2,956

 

 

$

2,864

 

 

$

9,247

 

 

$

5,820

 

 

$

17,297

 

Earnings per share - basic

 

$

0.24

 

 

$

0.24

 

 

$

0.79

 

 

$

0.48

 

 

$

1.49

 

Earnings per share - diluted

 

$

0.23

 

 

$

0.22

 

 

$

0.73

 

 

$

0.45

 

 

$

1.39

 

Cash dividends paid per common share

 

$

0.17

 

 

$

0.17

 

 

$

0.12

 

 

$

0.34

 

 

$

0.22

 

Book value per common share

 

$

20.63

 

 

$

21.66

 

 

$

21.12

 

 

$

20.63

 

 

$

21.12

 

Tangible book value per common share 1

 

$

20.14

 

 

$

21.16

 

 

$

20.54

 

 

$

20.14

 

 

$

20.54

 

Weighted-average shares outstanding - basic

 

 

12,176,805

 

 

 

12,093,179

 

 

 

11,639,237

 

 

 

12,135,223

 

 

 

11,585,059

 

Weighted-average shares outstanding - diluted

 

 

12,895,581

 

 

 

12,927,811

 

 

 

12,612,030

 

 

 

12,870,892

 

 

 

12,449,973

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

Return on average assets 2

 

 

0.4

%

 

 

0.4

%

 

 

1.4

%

 

 

0.4

%

 

 

1.4

%

Return on average equity 2

 

 

4.6

%

 

 

4.2

%

 

 

15.5

%

 

 

4.4

%

 

 

14.6

%

Net interest margin 3 4

 

 

4.10

%

 

 

3.18

%

 

 

3.24

%

 

 

3.63

%

 

 

3.25

%

Efficiency ratio 5

 

 

77.3

%

 

 

85.6

%

 

 

71.6

%

 

 

81.2

%

 

 

67.9

%

Overhead ratio 2 6

 

 

4.2

%

 

 

3.8

%

 

 

3.6

%

 

 

4.0

%

 

 

3.4

%

Equity to assets

 

 

8.5

%

 

 

9.1

%

 

 

9.1

%

 

 

8.5

%

 

 

9.1

%

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Data and Ratios:

 

 

 

 

 

 

 

 

 

 

Charge-offs

 

$

2,529

 

 

$

1,124

 

 

$

 

 

$

3,652

 

 

$

265

 

Recoveries

 

$

1,355

 

 

$

386

 

 

$

208

 

 

$

1,741

 

 

$

225

 

Net loan charge-offs to total loans 2 7

 

 

0.2

%

 

 

0.2

%

 

 

(0.1

) %

 

 

0.2

%

 

 

%

Allowance for loan losses

 

$

22,734

 

 

$

18,808

 

 

$

24,882

 

 

$

22,734

 

 

$

24,882

 

Allowance for loan losses to total loans 8

 

 

1.03

%

 

 

0.99

%

 

 

1.47

%

 

 

1.03

%

 

 

1.47

%

Nonperforming loans

 

$

19,295

 

 

$

18,048

 

 

$

15,501

 

 

$

19,295

 

 

$

15,501

 

Nonperforming loans to total loans

 

 

0.9

%

 

 

1.0

%

 

 

0.9

%

 

 

0.9

%

 

 

0.9

%

 

 

 

 

 

 

 

 

 

 

 

Intercoastal Mortgage Company, LLC Production Data9:

 

 

 

 

 

 

 

 

 

 

Mortgage pipeline

 

$

1,114,061

 

 

$

1,092,006

 

 

$

1,238,935

 

 

$

1,114,061

 

 

$

1,238,935

 

Loans originated

 

$

976,004

 

 

$

1,130,698

 

 

$

1,677,431

 

 

$

2,106,702

 

 

$

3,765,806

 

Loans closed

 

$

843,305

 

 

$

780,842

 

 

$

1,490,965

 

 

$

1,624,147

 

 

$

3,396,991

 

Loans sold

 

$

692,553

 

 

$

688,094

 

 

$

1,493,198

 

 

$

1,380,646

 

 

$

3,271,288

 

1 common equity less total goodwill and intangibles per common share, a non-U.S. GAAP measure

2 annualized for the quarterly periods presented

3 net interest income as a percentage of average interest-earning assets

4 presented on a fully tax-equivalent basis

5 noninterest expense as a percentage of net interest income and noninterest income, a non-U.S. GAAP measure

6 noninterest expense as a percentage of average assets, a non-U.S. GAAP measure

7 charge-offs less recoveries

8 excludes loans held-for-sale

9 information is related to ICM, an entity in which we have a 40% ownership interest that we account for as an equity method investment

Non-GAAP Reconciliation: Tangible Book Value per Common Share

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

 

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

Goodwill

 

$

3,988

 

 

$

3,988

 

 

$

4,119

 

Intangibles

 

 

1,981

 

 

 

2,155

 

 

 

2,692

 

Total intangibles

 

 

5,969

 

 

 

6,143

 

 

 

6,811

 

 

 

 

 

 

 

 

Total equity attributable to parent

 

 

252,300

 

 

 

263,080

 

 

 

248,611

 

Less: Preferred equity

 

 

 

 

 

 

 

 

 

Less: Total intangibles

 

 

(5,969

)

 

 

(6,143

)

 

 

(6,811

)

Tangible common equity

 

$

246,331

 

 

$

256,937

 

 

$

241,800

 

 

 

 

 

 

 

 

Tangible common equity

 

$

246,331

 

 

$

256,937

 

 

$

241,800

 

Common shares outstanding (000s)

 

 

12,229

 

 

 

12,143

 

 

 

11,774

 

Tangible book value per common share

 

$

20.14

 

 

$

21.16

 

 

$

20.54

 

 

Contacts

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

MVB Financial Corp.

Donald T. Robinson, President and Chief Financial Officer

(304) 598-3500

drobinson@mvbbanking.com

Amy Baker, VP, Corporate Communications and Marketing

(844) 682-2265

abaker@mvbbanking.com

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