MVB Financial Corp. Announces First Quarter 2025 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 first quarter of 2025, with reported net income of $3.6 million, or $0.28 basic and $0.27 diluted earnings per share.

First Quarter 2025 Highlights

Net interest margin up 20 bps, to 3.63%, from the prior quarter.

Net interest income up 7.1% from the prior quarter.

Noninterest expense down 14.6% from the prior quarter.

Noninterest bearing deposits represent 40.0% of total deposits.

Asset quality indicators improved, and capital strength was further enhanced.

Book value per share and tangible book value per share increased

1.4% and 2.1% to $23.94 and $23.85, respectively, from the prior quarter.

From Larry F. Mazza, Chief Executive Officer, MVB Financial:

"MVB's first quarter results reflect tangible progress following the strategic repositioning of our business model over the past year. Our best-in-class funding profile supported meaningful expansion in our net interest margin and growth in net interest income.

"We also made significant progress in managing our expense base, as we continue to right-size our cost structure. This follows infrastructure investments made to support MVB's next phase of growth. At the same time, asset quality metrics improved, our strong liquidity position was preserved and our capital base further strengthened providing the flexibility to deploy capital opportunistically.

"While we strive for continuous improvement and market conditions remain dynamic, I'm encouraged by our first quarter performance and confident in MVB's ability to adapt, execute and deliver long-term value for our clients and stakeholders."

FIRST QUARTER 2025 HIGHLIGHTS

• Net interest margin expansion driven by growth of net interest income and higher average earning asset balances.
  • Net interest margin on a fully tax-equivalent basis, a non-U.S. GAAP financial measure, was 3.66%, up 20 basis points from the prior quarter, driven primarily by increased net interest income and a lower cost of funds, partially offset by a slight decline in earning asset yields. Total cost of funds was 2.28%, down 28 basis points compared to the prior quarter, primarily reflecting a shift in deposit mix. Total earning asset yield was 5.91%, down five basis points compared to the prior quarter, primarily due to a shift in the mix of earning assets.
  • Net interest income on a fully tax-equivalent basis, a non-U.S. GAAP financial measure, increased $1.8 million, or 7.1%, to $26.9 million relative to the prior quarter, reflecting higher average earning assets balances.
  • Average earning assets balance increased $92.5 million, or 3.2%, from the prior quarter to $2.98 billion, reflecting higher interest-bearing balances with banks, partly reflecting seasonal tax volume in banking-as-a-service operations, partially offset by lower average loan balances.
  • Total loan balances declined $36.8 million, or 1.8%, from the prior quarter to $2.06 billion, reflecting elevated loan payoff activity and muted market demand. Loan payoff activity included $13.4 million in loan amortization and payoffs of classified loans, while government contracting and renewable energy loans were down $37.3 million from the prior quarter as a result of market conditions.
  • Total deposits declined $109.8 million, or 4.1%, to $2.58 billion compared to the prior quarter-end, primarily reflecting a decline in brokered certificate of deposits ("CD") balances, partially offset by an increase in noninterest bearing ("NIB") deposits. NIB deposits increased $92.1 million, or 9.8%, to $1.03 billion, and represent 40.0% of total deposits as of March 31, 2025, as compared to 34.9% as of the prior quarter-end. The loan-to-deposit ratio was 79.9% as of March 31, 2025, compared to 78.0% as of the prior quarter-end.
  • Off-balance sheet deposits totaled $1.52 billion as of March 31, 2025, an increase of $98.6 million, or 6.9%, compared to $1.42 billion at December 31, 2024.
• Noninterest expenses decline on cost rationalization efforts; Noninterest income lower on decline in asset sale gains.
  • Total noninterest expense declined $4.9 million, or 14.6%, compared to the prior quarter, primarily reflecting lower salaries expense and professional fees. Compared to the prior year-ago period, total noninterest expense declined $1.5 million, or 4.9%. Cost control initiatives reflect ongoing efforts to right-size MVB's cost structure. This follows infrastructure investments made to support MVB's next phase of growth and the transition of our business model.
  • Noninterest income totaled $7.0 million, a decline of $14.3 million from the prior quarter. Lower noninterest income reflects the $11.8 million gain on sale of assets associated with the sale-leaseback transaction that was completed in the prior quarter, $0.6 million in equity method investments income from our mortgage segment in the current quarter compared to $1.3 million in the prior quarter and a loss of $0.1 million on the sale of loans in the current quarter as compared to a gain of $1.0 million in the prior quarter. These declines were partially offset by an increase of $1.2 million, or 30.6%, in payment card and service charge income, which in part reflects seasonal considerations.
• Measures of foundational strength, including asset quality, capital, and tangible book value per share, were improved.
  • Nonperforming loans declined $4.3 million, or 17.6%, to $20.3 million, or 1.0% of total loans, from $24.6 million, or 1.2% of total loans, at the prior quarter end.
  • Net charge-offs were $0.9 million, or 0.2% of loans, for the first quarter, compared to $1.5 million, or 0.3% of loans, for the prior quarter.
  • Provision for credit losses totaled $0.2 million, compared to $0.3 million for the prior quarter. Allowance for credit losses was 0.9% of total loans, consistent with the prior quarter end.
  • The Community Bank Leverage Ratio, Tier 1 Risk-Based Capital Ratio and MVB Bank's Total Risk-Based Capital Ratio were 10.9%, 15.5% and 16.4%, respectively, compared to 11.2%, 15.1% and 15.8%, respectively, at the prior quarter end.
  • The tangible common equity ratio, a non-U.S. GAAP financial measure, was 10.2% as of March 31, 2025, up from 9.7% as of December 31, 2024 and 8.1% as of March 31, 2024.
  • Book value per share and tangible book value per share, a non-U.S. GAAP measure, were $23.94 and $23.85, respectively, which represent increases of 1.4% and 2.1% relative to the prior quarter-end and 5.3% and 6.1% from the year-ago period.

INCOME STATEMENT

Net interest income on a fully tax-equivalent basis totaled $26.9 million for the first quarter of 2025, an increase of $1.8 million, or 7.1%, from the fourth quarter of 2024 and a decline of $3.5 million, or 11.4%, from the first quarter of 2024. The increase from the prior quarter reflects a higher net interest margin and higher average earning asset balances, while the decline from the first quarter of 2024 reflects net interest margin contraction and lower earning asset balances.

Interest income increased $0.2 million, or 0.4%, from the fourth quarter of 2024 and declined $6.8 million, or 13.6%, from the first quarter of 2024. The increase in interest income relative to the prior quarter reflects an increase in cash balances due to seasonal tax volume in banking-as-a-service operations and higher investment security balances, partially offset by a decline in loans. The decline in interest income relative to the year-ago period reflects declines in cash balances, driven by the exit of digital asset program accounts, and loan balances, partially offset by higher investment securities balances.

Interest expense declined $1.6 million, or 8.8%, from the fourth quarter of 2024 and $3.3 million, or 16.8%, from the first quarter of 2024. The cost of funds declined to 2.28% for the first quarter of 2025, as compared to 2.56% for the fourth quarter of 2024 and 2.52% for the first quarter of 2024. The lower cost of funds compared to the prior quarter reflects a shift in the mix of average deposits, primarily reflecting an increase in the ratio of average noninterest-bearing deposits to total deposits and the repricing of CDs. Relative to the year-ago period, the decline reflects the impact of lower interest rates on our deposits and a shift in the mix of average deposits.

On a tax-equivalent basis, net interest margin for the first quarter of 2025 was 3.66%, an increase of 20 basis points versus the fourth quarter of 2024 and a decline of 17 basis points versus the first quarter of 2024. The increase in net interest margin relative to the prior quarter primarily reflects a decline in funding costs, partially offset by a slight decline in earning asset yields. The decline in net interest margin relative to the prior year-ago period primarily reflects a decline in earning asset yields, partially offset by lower funding costs. See the table below for a reconciliation between net interest margin and net interest margin on a fully tax-equivalent basis, a non-U.S. GAAP measure.

Noninterest income totaled $7.0 million for the first quarter of 2025, a decline of $14.3 million from the fourth quarter of 2024 and $0.8 million from the first quarter of 2024. The decline compared to the prior quarter is primarily attributable to the $11.8 million gain on sale of assets associated with the sale-leaseback transaction that was completed in the fourth quarter of 2024. Additionally, there was equity method investments income from our mortgage segment of $1.3 million in the fourth quarter of 2024, compared to $0.6 million in the current quarter, and a gain on sale of loans in the fourth quarter of 2024 of $1.0 million, compared to a loss of $0.1 million in the current quarter. These declines were partially offset by an increase of $1.2 million in payment card and service charge income and a $0.6 million gain on divestiture activity related to the sale of Trabian Technology, Inc ("Trabian") during the first quarter of 2025. The $0.8 million decline in noninterest income from the first quarter of 2024 was primarily driven by declines of $1.6 million in other operating income and $0.7 million in gain on sale of available-for-sale securities. These declines were partially offset by equity method investments income of $0.6 million from our mortgage segment, compared to a $1.1 million loss in the first quarter of 2024, and a $0.6 million gain on divestiture activity related to the sale of Trabian during the first quarter of 2025.

Noninterest expense totaled $28.7 million for the first quarter of 2025, a decline of $4.9 million from the fourth quarter of 2024 and $1.5 million from the first quarter of 2024. The decline from the fourth quarter of 2024 primarily reflects declines of $2.4 million in salaries and employee benefits and $2.2 million in professional fees. The decline from the first quarter of 2024 primarily reflects a decline of $2.2 million in professional fees, partially offset by an increase of $0.6 million in other operating expense.

Basic and diluted earnings per share were $0.28 and $0.27, respectively, for the first quarter of 2025, compared to $0.73 and $0.72, respectively, for the fourth quarter of 2024. Earnings for the fourth quarter of 2024 included an $11.8 million pre-tax gain on sale of assets associated with a sale-leaseback transaction.

BALANCE SHEET

Loans totaled $2.06 billion as of March 31, 2025, a decline of $36.8 million, or 1.8%, from December 31, 2024, and $204.0 million, or 9.0%, from March 31, 2024. The decline in loan balances relative to the prior quarters primarily reflects slower loan growth based on overall market conditions and the impact of loan amortization and payoffs. Of the $36.8 million decline from December 31, 2024, $13.4 million represented loan amortization and payoffs of classified loans, which strengthened the asset quality of our loan portfolio. Loan production during the first quarter of 2025 totaled $99.7 million, which was comprised of $65.6 million in loans that were originated and funded during the quarter and $34.1 million of previous commitments that were funded.

Deposits totaled $2.58 billion as of March 31, 2025, a decline of $109.8 million, or 4.1%, from December 31, 2024, and $561.5 million, or 17.9%, from March 31, 2024. The decline in deposits relative to the prior quarter primarily reflects a $90.2 million, or 18.2%, decline in brokered CDs, as well as utilization of off-balance sheet deposit networks. Relative to the year-ago period, the decline in total deposits reflects a $42.8 million, or 9.5%, decline in brokered CDs, as well as lower NIB deposits.

NIB deposits totaled $1.03 billion as of March 31, 2025, an increase of $92.1 million, or 9.8%, from December 31, 2024 and a decline of $358.0 million, or 25.7%, from March 31, 2024. Relative to the prior quarter-end, the increase in NIB reflects seasonal tax volume in banking-as-a-service operations. Relative to the prior year period, the decline in NIB deposits reflected the exit of digital asset program accounts. NIB deposits represented 40.0% of total deposits as of March 31, 2025, compared to 34.9% of total deposits at the prior quarter-end and 44.2% for the year-ago period.

Off-balance sheet deposits totaled $1.52 billion as of March 31, 2025, an increase of $98.6 million, or 6.9%, compared to $1.42 billion at December 31, 2024, and a decline of $3.4 million, or 0.2%, from $1.53 billion at March 31, 2024. Off-balance sheet deposit networks are utilized to generate fee income, enhance capital efficiency and manage liquidity and concentration risk.

CAPITAL

The Community Bank Leverage Ratio was 10.9% as of March 31, 2025, compared to 11.2% as of December 31, 2024, and 10.1% as of March 31, 2024. MVB's Tier 1 Risk-Based Capital Ratio was 15.5% as of March 31, 2025, compared to 15.1% as of December 31, 2024 and 14.4% as of March 31, 2024. The Bank's Total Risk-Based Capital Ratio was 16.4% as of March 31, 2025, compared to 15.8% as of December 31, 2024 and 15.2% as of March 31, 2024.

The tangible common equity ratio, a non-U.S. GAAP financial measure, was 10.2% as of March 31, 2025, up from 9.7% as of December 31, 2024 and 8.1% as of March 31, 2024. See the reconciliation of the tangible common equity ratio to its most directly comparable U.S. GAAP financial measure later in this release.

The Company issued a quarterly cash dividend of $0.17 per share for the first quarter of 2025, consistent with the fourth quarter of 2024 and the first quarter of 2024.

ASSET QUALITY

Nonperforming loans totaled $20.3 million, or 1.0% of total loans, as of March 31, 2025, as compared to $24.6 million, or 1.2% of total loans, as of December 31, 2024, and $7.5 million, or 0.3% of total loans, as of March 31, 2024. Criticized loans as a percentage of total loans were 6.6% as of March 31, 2025, compared to 6.2% as of December 31, 2024 and 5.8% as of March 31, 2024. Classified loans as a percentage of total loans were 3.2% as of March 31, 2025, compared to 3.8% as of December 31, 2024 and 2.1% as of March 31, 2024.

Net charge-offs were $0.9 million, or 0.2% of total loans, for the first quarter of 2025, compared to $1.5 million, or 0.3% of total loans, for the fourth quarter of 2024 and $1.3 million, or 0.2% of total loans, for the first quarter of 2024.

The provision for credit losses totaled $0.2 million, compared to $0.3 million for the prior quarter ended December 31, 2024 and $2.0 million for the quarter ended March 31, 2024. The allowance for credit losses for loans was 0.9% of total loans at March 31, 2025, consistent with December 31, 2024 and down from 1.0% at March 31, 2024.

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, West Virginia. Through its subsidiary, MVB Bank, and MVB Bank's subsidiaries, MVB Financial 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 Financial, 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 successfully execute business plans, including strategies related to investments in Fintech companies; competition; unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; changes in economic, business and political conditions; changes in demand for loan products and deposit flow; changes in deposit classifications; 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, 2024, 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.

Non-U.S. GAAP Financial Measures

This document contains supplemental financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Management uses these non-U.S. GAAP measures in its analysis of the Company's performance. 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. Management believes the presentation of non-U.S. GAAP financial measures that exclude the impact of specified items provide useful supplemental information that is essential to a proper understanding of the Company's financial condition and results. Non-U.S. GAAP measures are not formally defined under U.S. GAAP, and other entities may use calculation methods that differ from those used by us. As a complement to U.S. GAAP financial measures, our management believes these non-U.S. GAAP financial measures assist investors in comparing the financial condition and results of operations of financial institutions due to the industry prevalence of such non-U.S. GAAP measures. See the tables below for a reconciliation of these non-U.S. GAAP measures to the most directly comparable U.S. GAAP financial measures.

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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

[email protected]

Amy Baker, VP, Corporate Communications and Marketing

(844) 682-2265

[email protected]