Mvb Financial Corp. · NASDAQ:MVBF
Mvb Financial — Investor Presentation (July 2020)
48 slides from Mvb Financial's investor presentation, Jul 28, 2020
Slide 1: July 2020
July 2020
Slide 2: Forward Looking Statements
Forward Looking Statements MVB Financial Corp. (the “Company") has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21£ of the Securities Exchange Act of 1934, as amended, in this Presentation. These forward-looking statements
Slide 3: TINA
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Slide 4: Our Purpose & Values
Our Purpose & Values “Trusted Partners on the Financial Frontier — Committed to Your Success!” @ GL @ 9g XS TRUST COMMITMENT RESPECT, LOVE, & TEAMWORK ADAPTIVE lam reliable and act | take ownership of my CARING | effectively and | easily respond to with integrity. | can be responsibilities in lam re
Slide 5: MVB Today
MVB Today The Financial Frontier MVB is an innovative financial holding company that provides banking services to individuals and corporate clients in the Mid-Atlantic region, as well as Payment and Fintech Deposit clients throughout the United States. = NASDAQ: MVBF "Consistent Growth = Market Cap:
Slide 6: MVB Portfolio
MVB Portfolio Complementary Business Lines — Regional Lending with National Fintech Deposits @ = Client presence CoRe Fintech Treasury & Deposit Services = 1Obanking centers in West Virginia and 3 in Northern Virginia = Sales team basedin Salt Lake City = CoRe Banking Structure launched in Q4 2019("
Slide 7: Protect the Core & Stimulate Growth
Protect the Core & Stimulate Growth Intercoastal Mortgage, LLC Fintech Vertical
Slide 8: Analyst Commentary on MVB Story
Analyst Commentary on MVB Story en 7, 2020 ~ Aside from the meaningful EPS accretion, the most apparent N-T benefit of the transaction will be the boost to TBV from the recorded gain...lore importantly, all of this is occurring at a time when there is greater importance being placed on TBV resilienc
Slide 9: Second Quarter 2020 Overview
TINA WAVY, may \/\/\ DAALY Second Quarter 2020 Overview
Slide 10: Highlights from Q2 2020 vs. Q1 2020
Highlights from Q2 2020 vs. Q1 2020 Net interest margin, ona fully tax- equivalent basis, was 3.78%, an increase of 12 basis points Net interest income of $18.5M increased $2.3M, or 14.1% Mortgage fee income of $14.9M, increased Deposits’ of $1.9B, increased $77.9M, or $3.7M, or 33.2% 4L% Noninteres
Slide 11: Significant Transactions
Significant Transactions FDIC-Assisted Acquisition of The First State Bank, Barboursville, WV Preliminary bargain purchase gain of $4.7M | Completed on April 3, 2020 nge asthe day 1 fairvalues Paladin, LLC Acquisition Enhances the Fintech vertical withits commitment to fraud prevention Completed on
Slide 12: Strong Record of Organic Growth
Strong Record of Organic Growth Growth with an Emphasis of Profitability Total Assets 2020 vs. 2019 Growth Highlights Area Percent Increase $2,500 $1944 $2,215 Noninterest-bearing Deposits 95.3% $2,000 $1,534 $1,751 “ Sisoo 52384 $1,419 ALLL/Total Loans 41.7% $1,000 Net Interest Income 21.5% $500 ‘
Slide 13: Growth in Book Value & Tangible Book Value
Growth in Book Value & Tangible Book Value $20.00 _ $18.48 0f $18.00 pv cAGR 8% ; a - $16.65 GR 10% $16.00 eS = tev Ch = $15.20 7 $14.55 $14.00 $13.63 $12.93 $12.92 $12.20 $12.00 $11.80 $1L01 $10.00 $9.81 $8.00 2015 2016 2017 2018 2019 a2 2020 Book Value mi Tangible Book Value 13
Slide 14: Deposit Growth with NIB Focus
Deposit Growth with NIB Focus NIB CAGR of 37% Over Five-and-a Half Years Average Deposit Balances $1,800,000 $1,680,451 30% $1,600,000 is) $1,400,000 $1,227,269 23%, $ s120000 0 Ee 20% 2 a $1,000,000 $879,196 $922,492 S 3 15% 2 zg $800,000 $729,707 5 3 4 x = $600,000 8% 10% © & $400,000 2 é 5% $200,
Slide 15: NIM Expansion - Outpacing Peers
NIM Expansion - Outpacing Peers Active Focus on NIM & Upward Trend 4.20% 4.00% 3.80% 3.60% 3.40% 3.20% 3.00% 2014 2015 2016 2017 2018 2019 YTD 2020 ——MVBF = @Regional Peers Source: Company documents, SEC flings, and S&P Global Market intelligence. NIM is shown on a fully-tax equivalent basis, Region
Slide 16: Mortgage Operations
Mortgage Operations YTD 2020 Net Income of $9.8M 4 > 9 PIPER SANDLER “Given the move down in longer-term rates and broadening of the $2,000 $1,816 potential refinance pool, industry data has demonstrated a heavily $1541 $1447 $1,403 upward bias to mortgage production with the MBA forecasting a $1,50
Slide 17: Mortgage Combination
Mortgage Combination Combination with Intercoastal Mortgage Completed on July 1, 2020 MVB will recognize ownership in the new company as an equity method investment, initially recorded at fair value = Allows MVB to benefit from mortgage profits, while simplifying financials to core business = Total
Slide 18: Acquisition of The First State Bank
Acquisition of The First State Bank FDIC-Assisted Deal closed on April 34, 2020 = Acquired $83.5M in gross loans, $22.7M in OREO, and $140.0M in deposits = 46.5% mark on OREO and a 27.4% mark on loans = OREO acquired reduced to $7.7M in three months; frees up capital for MVB and reduces carrying cos
Slide 19: Divestiture of Eastern Panhandle Branches
Divestiture of Eastern Panhandle Branches Sale of 4 branches closed on April 24'", 2020 = Sale of 4 branches in the Eastern panhandle of WV for an 8% premium = Focuses our CoRe strategy on key growth markets = Reallocates resources to Fintech vertical = Deposits of these branches totaled $188.1M and
Slide 20: TINA
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Slide 21: COVID-19 Executive Summary
COVID-19 Executive Summary Proudly supporting our Trusted Partners Managing disruption from a position of strength and soundness Being “Defensively Offensive” Selected COVID-19 impacts e: Company documents,
Slide 22: Commercial Loan Modifications
Commercial Loan Modifications Interest-Only Payments $ 27,148,390 2.4% Payment Deferral then Interest-Only Payments S$ 61,898,564 5.5% Payment Deferral S$ 134,898,315 12.0% Interest-Only Payments $ 4,423,985 Payment Deferral then Interest-Only Payments $ 1,157,991 Payment Deferral $ 57,773,626 5.1%
Slide 23: Paycheck Protection Program Participation
Paycheck Protection Program Participation a S BA U.S. Small Business Administration LJ | # of Loans Current Balance Average Balance Fee Income Tranche #1 $68.4M $291K $2.2M Tranche #2 220 $21.4M :
Slide 24: Diversified Loan Portfolio
Diversified Loan Portfolio Growth & Active Management of Concentration Limits ans (includi ans of branches held for sale) an Portfoli position $1,500 gaan 480% ‘SBA Paycheck 3 Protection Residential 400% rogram ae $1,400 8 Acquistion & i Development Hone. $1,200 350% 2 HVCRE 2% 3 am FSB loans = 300%
Slide 25: Commercial Real Estate Portfolio
Commercial Real Estate Portfolio Diversification within CRE Concentration CRE Loans Apartments- Wiatlet ‘orage Units 1% a Apartments- Low Income 5% FSB 4% Office 22% 2% Hotels 10% Source: Company documents. ADEC chartexcludes ADC loans acquired from The First State Bank. 1-4 Family Residential Owner
Slide 26: CRE Concentration
CRE Concentration Balance as of 06/30/2020 CRE Total Amount % of Cay Hotels $42,022,917 19% Office $92,465,993 A1% Retail $58,237,241 26% ‘Apartments Low Income $19,587,215 9% Apartments— Market $43,938,726 20% ‘Storage Units $5,213,916 2% Nursing Homes $129,463,551 58% Other $7,530,392 3% FSB CRE l
Slide 27: CRE Loan Concentration Characteristics
CRE Loan Concentration Characteristics Nur: ig Homes ™ Geographic diversity among 11 states in the US =S$129M in loan balances among 13 borrowers = 83.09% occupancy = Weighted Average ™ Risk Grade of 4.00 = Star Rating of 2.89 * No delinquency = 1 COVID-19 Modification request of SoM Source: Company
Slide 28: AD&C Portfolio Characteristics
AD&C Portfolio Characteristics AD&C Mortgage Construction = $126M in loan balances (70% in VA and 30% in $131M in loan balances with 508 borrowers wv) = Geographically-distributed among 12 states: = 1-4 Family/ADC - $59M or 46% of total AD&C 36% in VA, 34% in NC, 10% in SC, 6% MD, 5% = §57M in loan
Slide 29: Consistent, Top Tier Asset Quality Through Cycles
Consistent, Top Tier Asset Quality Through Cycles 4 eal ao azn °8* 3.26% 180% 174% 4 cose 2.90% 20% 1.80% 159% 148% 1.3086 134% 1.26% 1908 EN 08 1.30% 116% 100% 1.04% pgpeg 21% 108% gary 0.94% = 090% 080% 096% 000% Ain, 088% gral ose 0.88% 0.88% ue 088% ogi °° o70% orem aren 086% OF onan 086% -o10%
Slide 30: Bank Capital Position
Bank Capital Position Tangible Common Equity / Tangible Assets (%) @) jer 1 Leverage Ri (%) 10.00% 8.66% 9.45% 9.08% 11.00% 10.88% — 49 Ego 7.86% 8.13% 8.00% 10.50% 10.24% 5.79% 9.94% 6.00% 10.00% 9.50% 9.50% 4.00% 9.50% 2.00% 9.00% 0.00% 8.50% 2015 2016 2017 2018 2019 022020 2015 2016 2017 2018 201
Slide 31: MVBF Stock
MVBFE Stock Insider Holdings Reaffirm that We Believe in MVB! Top Holders as of June 30, 2020 | Position | EJF Capital LLC 1.1M PIPER SANDLER The Vanguard Group, Inc. 571K BlackRock Institutional Trust Company, N.A. 474K Wellington Management Company, LLP 419K Larry Mazza, President & CEO 352K Durin
Slide 32: TINA
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Slide 33: Gen-Z Banking Survey
Gen-Z Banking Survey MANOLE CAPITAL MCM | MANAGEMENT
Slide 34: Fintech Strategy Execution
Fintech Strategy Execution Keep Up Get Ahead 1. Offer Solutions to Strengthen Client Relationships 3. Make Investments in Fintech Companies GOAL Increa Positive Exposure to Fintech trend drivers Common in Most Banks Less Commonin Banks 4. Become Trusted Banking Partner for Fintech Companies 2. Utili
Slide 35: MVB Fintech Thesis
MVB Fintech Thesis Fintech Bank 1. Identify a niche 1. Access to payment rails 2. Build a solution to meet the needs of 2. FDIC insured deposits users in niche 3. All Fintech companies need a banking 3. Generate revenue with a highly relationship profitable business model 4. Scale quickly Technology
Slide 36: Fintech Investment Portfolio Performance
Fintech Investment Portfolio Performance oe % coon He) BILLGO" ALLIED sig00 ti (tti(i(‘;SS NR paren eT WORK 3 con PaFinClusive £% interchecks 3 510,000 Esc AA Stronghold / 2/4 Commerce $6,000 ib 8 a\R Ventures: zon GRAND : 2016 2017 2018 2019 YTD 2020 Cash Investment =Fair Value
Slide 37: Fintech Differentiators - "Distinct, Not Extinct"
Fintech Differentiators - “Distinct, Not Extinct” Future Growth Coming from Mix of NIB & Reasonably Priced IB Deposits Current Portfolio M Pipeline Mix Future Portfolio Mix Specialty Escrow Specialty Escrow Payments — Hospitality & ‘ ae Pree Cryptocurrency Payments Gaming 74% id 15% Processing 37% 4
Slide 38: Gaming Deposits
Gaming Deposits Major Player in a Growing Industry Growth in Gaming Deposits Bullish Market for =e Stocks $150 suis $1203 sixty: 0,000,000 100 s $73 S768 49,000,000 sig $85.2 30,000,000 = $50 20,000,000 | 10,000 000 = 42018 qi 2019 © a22019 32019» a42019 © a4 2020» 22020 June 7, 2019 ~ “Sports betti
Slide 39: Compliance & Fraud Coverage
Compliance & Fraud Coverage CHARTWELLA= REGULATORY COMPLIANCE & RISK MANAGEMENT = Over 150 fintech companies served, ranging from the unicorns to the Fortune 50 = Industry-leading hyper-specialization to fintech state and federal compliance = Well-recognized brand across the industry = Nearly all st
Slide 40: Strategic & Opportunistic Talent Acquisition
Strategic & Opportunistic Talent Acquisition An Independent Bank Mindset that Embraces a, “Yes, if” Culture BB&qT Branches Chartwell Compliance [| The First State Bank Acquisitions . Recent NoVa M&A Lift Outs Wells Fargo Insurance Disruption 2013 2017/2018 23 Team Members Sold in 2016 BB&T 2005 12 T
Slide 41: Strategic Opportunities Creating Value
Strategic Opportunities Creating Value Capital generation through opportunistic transactions 2020: 2019: Eastern 2005: Fintech Panhandle, WV Acquired 2013: investment banking centers banking center MV6 Insurance 2016: holding gain of sold for a pre- in Eastern lift out of 23 First Fintech $13.5M (pr
Slide 42: Addressing Risk Management
Addressing Risk Management Cost of Investing in the Future & Scalability Risk = Diversified geographic portfolio. = Overhead management = High quality loans = Purchased loan focus Mortgage Volatility = Diverse portfolio Asset Quality = Increased ALLL = strongmarkets ‘= Investmentin team through Char
Slide 43: Contact Us
Contact Us MVB Financial Corp. _> 301 Virginia Avenue Fairmont, WV 26554 (304) 363-4800 Investor Relations Lisa McCormick MVB Financial Corp. (304) 367-8697
Slide 44: TINA
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Slide 45: Management team
+30 years of experience in the bankingindustry, including community banks and BB&T ‘*Member of the WV Board of Bankingand Financial institutions “Served on the Board of Directors for PDC Energy ‘Serves on the Board of Directors for Bill¢O Big 4 experience Co-owner of Football Talk, LLC TOM BROWN'S.
Slide 46: Experienced Board of Directors
Experienced Board of Directors Larry F. Mazza Year Appointed: 2005 0 David B. Alvarez (c) Shee ‘Year Appointed: 2013 Chairman of the Board | President, Energy Transportation (1) Dr. Kelly R. Nelson Year Appointed: 2005 ni / * B (c] Independent Chairman Managing Member, Cava & Banko, PLLC Committees:
Slide 47: Appendix: Financial Comparisons
Appendix: Financial Comparisons $ in thousands, except per share Q2 2020 Qi 2020 Q22019 © TD 2020» YTD 2019 Balance Sheet Total Assets $2,215,157 $2,099,680 $1,833,018 $2,215,157 $1,833,018 Gross Loans HFI!! $1,494,672 $1,396,577 $1,326,682 $1,494,672 $1,326,682 Total Deposits !! $1,863,963 $1,598,2
Slide 48: Appendix: Non-GAAP Reconciliation
Appendix: Non-GAAP Reconciliation TANGIBLE BOOK VALUE PER COMMON SHARE For the quarter ended, (Dollars in Thousands) 06/30/2020 Goodwill $ 19,232 Plus: Intangibles 2,708 Total Intangibles $21,940 Total Equity $ 228,500 Less: Preferred equity (7,334) Less: Total Intangibles (21,940) Tangible Common E