Mvb Financial Q2 Earnings Call Highlights

Mvb Financial (NASDAQ:MVBF) reported second-quarter 2026 net income of $12.3 million, or $0.93 per diluted share, as expanding net interest margin, loan growth and fintech-related revenue supported results. The company also recorded a $10 million pre-tax gain on an existing fintech investment during the quarter.

President and CEO Larry F. Mazza said the company’s results reflected “continued expansion of our net interest margin, disciplined loan and deposit growth, cost management, and momentum across our payment platform and fintech business.” He described MVB as a fintech-enabled bank with operations spanning core banking, payments, banking-as-a-service and gaming.

Margin Expansion and Balance-Sheet Growth

Net interest income rose 13% sequentially to $32.3 million. Fully tax-equivalent net interest margin expanded 43 basis points from the first quarter to 4.16%. CFO Mike Sumbs said the quarterly result included about $2.3 million in non-recurring net interest income, primarily tied to the repayment of the company’s largest non-performing loan.

Excluding that item, core net interest income increased approximately 5.5% from the first quarter, while core fully tax-equivalent net interest margin rose 14 basis points to 3.87%.

Sumbs said MVB expects core margin expansion to continue through the rest of 2026, though at a slower pace. He attributed the expected improvement to further growth in higher-yielding loans, a larger share of earning assets allocated to loans, and lower funding costs.

Loans increased 3% during the quarter, or 12% on an annualized basis, marking the company’s fifth consecutive quarter of loan growth. Management expects growth to continue at a roughly similar pace in the second half, which Sumbs described during the question-and-answer session as approximately $60 million to $70 million per quarter.

Deposits rose 7.4%, including a 5.7% increase in non-interest-bearing deposits, driven primarily by payments-related deposit growth. MVB ended the quarter with a loan-to-deposit ratio just below 80%, while non-interest-bearing deposits accounted for 34.4% of total deposits.

Fintech Revenue, Client Launches and Investment Gain

Non-interest income increased to $18.8 million, reflecting the $10 million gain on the existing fintech investment. Excluding the gain, core fee revenue increased 7% from the first quarter. Payment card and service charge income rose 18% sequentially and 29% from the prior-year second quarter.

Mazza said MVB launched three new fintech partners and products in the second quarter across issuing and money-movement services. The company has launched five partners year to date, matching the total number of partnerships it launched in all of 2025.

During the call, management said the 10 fintech launches completed since the second quarter of 2025 have generated about $2 million in revenue and $158 million in low-cost deposits. Mazza estimated that those partners are currently contributing about 25% of their anticipated longer-term earnings contribution.

Sumbs said approximately 60% of the $2 million in new fee revenue from those new clients was generated in the second quarter, compared with roughly $800,000 in the first quarter. He said MVB expects to begin realizing more of the benefit from fintech clients launched beginning in the fourth quarter of 2025 and the first quarter of 2026 during late 2026 and early 2027.

Management said the company has more than 50 potential fintech clients in its pipeline and could potentially onboard another 15 during the second half of 2026. Mazza noted that onboarding capacity depends on the needs of individual clients, while the company prioritizes prospective clients based on risk, effort, value and opportunity cost.

Credit Metrics Improve Despite Higher Provision

Credit quality metrics improved in several areas after MVB’s largest non-performing loan, approximately $12 million, was repaid in full with no loss. Non-performing loans declined $5.5 million sequentially to $29.2 million, with the large resolution partly offset by smaller loans entering non-performing status.

Sumbs said the newly non-performing credits were primarily smaller loans in the company’s commercial and SBA portfolios, along with part of a tax-refund portfolio where repayments have been delayed by factors affecting tax refund timing. Criticized and classified loans both declined from the first quarter, while net charge-offs were 23 basis points on an annualized basis, down three basis points sequentially.

Provision expense increased to $4.7 million. Management attributed the increase to reserve needs associated with loan growth, specific reserves on a small number of credits, and updates to qualitative allowance-model factors reflecting higher interest rates and inflationary pressures related to geopolitical events.

About $3.3 million of the provision was tied to specific reserves, primarily involving legacy SBA loans originated in 2021 and early 2022, as well as several smaller commercial loans, Sumbs said. MVB has not originated new SBA credits for some time. The allowance for credit losses rose to 1.14% of loans from 0.94% in the first quarter, and management said it believes the portfolio is appropriately reserved.

Expenses, AI Investment and Capital

Expenses increased by slightly more than $2 million from the first quarter, including about $600,000 of non-recurring expense. The company cited annual salary adjustments, higher incentive compensation, revenue-generating hires, and investments in fintech onboarding, technology and artificial intelligence initiatives.

Mazza said MVB had 31 internal AI “digies,” or digital assistants, either built or in development, with particular use in risk and compliance functions. Sumbs said the company has made its heavier AI-related investments and expects future benefits through operating leverage and cost management. He said expenses are expected to remain at or slightly below second-quarter levels for the next several quarters.

Tangible book value per share increased to $26.52, while the tangible common equity ratio remained at 9.7%. MVB repurchased approximately 48,000 shares, or about $1.2 million of stock, during the quarter. Management said its capital priorities include supporting organic balance-sheet growth, investing in higher-return business lines and pursuing opportunistic repurchases based on the share price.

About Mvb Financial (NASDAQ:MVBF)

MVB Financial Corp is a bank holding company based in Fairmont, West Virginia, serving individuals and businesses through its subsidiary, MVB Bank, Inc The company operates under a “Local First Banking” philosophy, emphasizing personalized service across its branch network. Its core business activities include deposit-taking, commercial lending, residential mortgage origination, and wealth management services.

On the deposit side, MVB Bank offers a range of products such as checking and savings accounts, money market accounts, and certificates of deposit.

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