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Section 1: 8-K (8-K)

Document
FALSE000127790200012779022019-07-292019-07-29

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):July 29, 2019
MVB Financial Corp.
(Exact name of registrant as specified in its charter)
West Virginia000-5056720-0034461
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
301 Virginia Avenue, Fairmont, WV
26554-2777
(Address of principal executive offices)(Zip Code)

(304) 363-4800
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $1.00 par valueMVBFThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).  

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02. Results of Operations and Financial Condition.

On July 29, 2019, MVB Financial Corp. (NASDAQ: MVBF) issued a press release announcing its financial results for the quarter ended June 30, 2019. A copy of the release is furnished as Exhibit 99.1 to this report.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, is hereby furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, (the "Securities Act") or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Press release of MVB Financial Corp. dated July 29, 2019

        



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

MVB Financial Corp.
By:/s/ Larry F. Mazza
Larry F. Mazza
President and Chief Executive Officer

Date: July 29, 2019



EXHIBIT INDEX


Exhibit NumberDescriptionExhibit Location
Press release of MVB Financial Corp. dated July 29, 2019Filed herewith
XBRL Taxonomy Extension Schema DocumentFiled herewith
XBRL Taxonomy Extension Calculation DocumentFiled herewith
XBRL Taxonomy Extension Definition Linkbase DocumentFiled herewith
XBRL Taxonomy Extension Label Linkbase DocumentFiled herewith
XBRL Taxonomy Extension Presentation Linkbase DocumentFiled herewith


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Section 2: EX-99.1 (EX-99.1 - Q2 2019 EARNINGS RELEASE)

Document
Exhibit 99.1
398932815_image1.jpg
MEDIA CONTACT
 N E W S R E L E A S EAmy Baker
VP, Corporate Communications & Marketing
abaker@mvbbanking.com
844-682-2265

MVB Financial Corp. Reports Strong Second Quarter 2019
Driven by a 72% Increase in Core Earnings

FAIRMONT, W.Va., July 29, 2019 – MVB Financial Corp. (the “Company”) (NASDAQ: MVBF) today reported net income of $14.9 million, or $1.27 basic and $1.15 diluted earnings per share, excluding discontinued operations, for the three months ended June 30, 2019, an increase of 367.8%, compared to $3.2 million, or $0.26 basic and diluted for the three months ended March 31, 2019, and an increase of 427.4%, compared to $2.8 million, or $0.25 basic and diluted for the same time period in 2018.
QuarterlyYear-to-Date
20192019201820192018
Second QuarterFirst
Quarter
Second Quarter
Net income from continuing operations$14,931 $3,192 $2,831 $18,123 $5,425 
Net income from discontinued operations$446 $— $— $446 $— 
Net income$15,377 $3,192 $2,831 $18,569 $5,425 
Earnings per share from continuing operations - basic$1.27 $0.26 $0.25 $1.54 $0.49 
Earnings per share from discontinued operations - basic$0.04 $— $— $0.04 $— 
Earnings per share - basic$1.31 $0.26 $0.25 $1.58 $0.49 
Earnings per share from continuing operations - diluted$1.15 $0.26 $0.25 $1.41 $0.47 
Earnings per share from discontinued operations - diluted$0.03 $— $— $0.03 $— 
Earnings per share - diluted$1.18 $0.26 $0.25 $1.44 $0.47 

As previously announced on April 29, 2019, the Company recognized a $13.5 million pre-tax gain after a valuation on its fintech investment portfolio that was recognized in the second quarter of 2019. The after-tax gain was $10.1 million. Excluding discontinued operations and this fintech investment gain, second quarter 2019 core earnings increased 72.2% compared to the quarter ended June 30, 2018.

Noninterest-bearing deposits increased $34.5 million, or 14.6%, from March 31, 2019, and increased $106.6 million, or 65.0%, from June 30, 2018, to a balance of $270.6 million as of June 30, 2019. The growth in
1

Exhibit 99.1
noninterest-bearing deposits was primarily driven by MVB’s strategy to focus on Fintech and specialty deposits. As of June 30, 2019, noninterest-bearing deposits were 19.6% of total deposits, compared to 16.5% as of March 31, 2019, and 13.7% as of June 30, 2018.

Interest income increased $847 thousand, or 4.3%, from the quarter ended March 31, 2019, and increased $3.5 million, or 20.8%, from the quarter ended June 30, 2018. The increase from the quarter ended June 30, 2018, was primarily due to a $3.4 million increase in interest and fees on loans driven by an increase in the average balances of loans of $182.9 million, coupled with a 45-basis point increase in the yield on commercial loans.

Mortgage closed loan production volume increased $185.4 million, or 66.5%, from the quarter ended March 31, 2019, and increased $17.7 million, or 4.0%, from the quarter ended June 30, 2018. As a result of this volume increase, the volume of mortgage loans sold increased $146.0 million, or 58.1%, from the quarter ended March 31, 2019, and increased $43.1 million, or 12.2%, from the quarter ended June 30, 2018. As a result of the increases in production and sold loan volume, mortgage fee income increased $3.2 million, or 47.9%, from the quarter ended March 31, 2019, and increased $801 thousand, or 8.8%, from the quarter ended June 30, 2018. Even with these increases in volume, mortgage processing expense decreased $93 thousand, or 11.5%, from the quarter ended March 31, 2019, and decreased $276 thousand, or 27.8%, from the quarter ended June 30, 2018.

MANAGEMENT OVERVIEW
“The Second Quarter and first half of the year results very much validate our adaptive MVB 3.0 strategy. All four verticals of MVB Bank – Commercial, Fintech, Mortgage and Retail – had an outstanding quarter and are firing on all cylinders. The gain realized in the Second Quarter from our forward-thinking Fintech investment portfolio was a critical boost to earnings. Our Fintech investment portfolio is yielding more than a 200% Internal Rate of Return (IRR) since inception. MVB is positioned to finish the year in a record-setting fashion across the entire company. Our strong earnings are helping us to extinguish our subordinated debt without shareholder dilution. This year's results are from building a strong foundation to be able to provide positive impact now and in the future for our shareholders, clients, communities and teammates as our trusted partners,” said Larry F. Mazza, CEO and President, MVB Financial.

SECOND QUARTER 2019 HIGHLIGHTS
2

Exhibit 99.1
Loans of $1.3 billion as of June 30, 2019, decreased $14.5 million, or 1.1%, from March 31, 2019, and increased $111.1 million, or 9.2%, from June 30, 2018. During the quarter ended June 30, 2019, residential mortgage loans totaling $51.6 million were sold.
Assets of $1.8 billion as of June 30, 2019, increased $43.1 million, or 2.4%, from March 31, 2019, and increased $147.6 million, or 8.8%, from June 30, 2018.
Deposits of $1.4 billion as of June 30, 2019, decreased $52.9 million, or 3.7%, from March 31, 2019, and increased $181.9 million, or 15.2% from June 30, 2018. Noninterest-bearing deposits of $270.6 million as of June 30, 2019, increased $34.5 million, or 14.6%, from March 31, 2019, and increased $106.6 million, or 65.0%, from June 30, 2018.
Net interest income of $14.5 million for the quarter ended June 30, 2019, increased $557 thousand, or 4.0%, from the quarter ended March 31, 2019, and increased $1.9 million, or 14.8% from the quarter ended June 30, 2018. Net interest margin of 3.46% for the quarter ended June 30, 2019, increased 1 basis point versus the quarter ended March 31, 2019, and increased 8 basis points versus the quarter ended June 30, 2018.
Noninterest income of $26.4 million for the quarter ended June 30, 2019, increased $17.6 million, or 201.0%, from the quarter ended March 31, 2019, and increased $15.6 million, or 144.4%, from the quarter ended June 30, 2018. During the quarter ended June 30, 2019, the Company recognized a $10.1 million after-tax gain following a valuation on its fintech investment portfolio.
Noninterest expense of $20.4 million for the quarter ended June 30, 2019, increased $1.9 million, or 10.5%, from the quarter ended March 31, 2019, and increased $1.1 million, or 5.9%, from the quarter ended June 30, 2018.
During the second quarter of 2019, the Company opened an office in Salt Lake City, Utah to house a new fintech sales team.

LOANS
Loans totaled $1.3 billion as of June 30, 2019, a decrease of $14.5 million, or 1.1%, from March 31, 2019, and an increase of $111.1 million, or 9.2%, from June 30, 2018. The linked quarter decrease in loans is attributable to residential mortgage loan sales totaling $51.6 million. Commercial loans have increased $22.8 million, or 2.4%, from the quarter ended March 31, 2019, and increased $100.8 million, or 11.4%, from June 30, 2018. The year-over-year growth in loans is attributable to organic growth and the addition of commercial lenders within the Company’s primary lending areas. The yield on loans was 5.22% as of the quarter ended June 30, 2019, an increase of 2 basis points from the quarter ended March 31, 2019, and an increase of 34 basis points from the quarter ended June 30, 2018.

DEPOSITS
Deposits totaled $1.4 billion as of June 30, 2019, and decreased $52.9 million, or 3.7%, from March 31,
3

Exhibit 99.1
2019, while increasing $181.9 million, or 15.2%, from June 30, 2018. As a result of the Company's efforts to improve net interest margin, high-cost deposits have been allowed to mature. The primary driver of the decrease in deposits from March 31, 2019, was a decrease of $95.9 million in brokered certificates of deposit. Noninterest-bearing deposits totaled $270.6 million as of June 30, 2019, or 19.6%, of the total deposit base, an increase of $34.5 million, or 14.6%, from March 31, 2019, and an increase of $106.6 million, or 65.0%, from June 30, 2018. Noninterest-bearing deposits remain a core funding source for the Company. Of the $270.6 million in noninterest-bearing deposits, balances of $89.7 million are related to Fintech opportunities and balances of $37.0 million are related to Title business opportunities. Total Fintech deposits are $106.3 million and total Title business deposits are $51.9 million as of June 30, 2019.

NET INTEREST INCOME
Net interest income for the quarter ended June 30, 2019, was $14.5 million, an increase of $557 thousand, or 4.0%, from the quarter ended March 31, 2019, and an increase of $1.9 million, or 14.8%, from the quarter ended June 30, 2018. Net interest margin for the quarter ended June 30, 2019 was 3.46%, an increase of 1 basis point versus the quarter ended March 31, 2019, and an increase of 8 basis points versus the quarter ended June 30, 2018.

Interest income increased 4.3% during the quarter ended June 30, 2019, compared to the quarter ended March 31, 2019, a result of an increase of 3 basis points in the yield on earning assets, and increased 20.8% compared to the quarter ended June 30, 2018, due to an increase of 36 basis points in the yield on earning assets. The increase in the yield on earning assets compared to the quarter ended March 31, 2019, was the result of a 6-basis point increase in commercial loans. The increase in the yield on earning assets compared to the quarter ended June 30, 2018, was the result of a 45-basis point increase in commercial loans.

Interest expense increased 5.1% during the quarter ended June 30, 2019, compared to the quarter ended March 31, 2019, due to an increase of 7 basis points in the cost of interest-bearing liabilities, and increased 38.5% compared to the quarter ended June 30, 2018, due to an increase of 45 basis points in the cost of interest-bearing liabilities. The increase in the cost of interest-bearing liabilities compared to the quarter ended March 31, 2019, was the result of a 15-basis point increase in money market checking, a 11-basis point increase in CDs, a 9-basis point increase in NOW accounts, and an 8-basis point increase in IRAs. The increase in the cost of interest-bearing liabilities compared to the quarter ended June 30, 2018, was the result of a 73-basis point increase in FHLB and other borrowings, a 72-basis point increase in money market checking, a 62-basis point increase in CDs, a 34-basis point increase in IRAs, and an 18-basis point increase in NOW accounts.

4

Exhibit 99.1
An increase in the Company's average noninterest-bearing balances of $36.1 million from the quarter ended March 31, 2019, helped to grow a a 35-basis point favorable spread on net interest margin for the quarter ended June 30, 2019, compared to a 30-basis point favorable spread for the quarter ended March 31, 2019.

An increase in the Company’s average noninterest-bearing balances of $104.5 million from the quarter ended June 30, 2018, helped to grow a 35-basis point favorable spread on net interest margin in 2019 compared to an 18-basis point favorable spread in 2018.

ASSET QUALITY
Provision for loan losses totaled $600 thousand for the quarter ended June 30, 2019, an increase of $300 thousand, or 100.0%, increase from the quarter ended March 31, 2019, and a decrease of $5 thousand, or 0.8%, from the quarter ended June 30, 2018.

The $300 thousand increase from the quarter ended March 31, 2019 was primarily the result of an increase in net charge-offs of $677 thousand and an increase in certain average historical loss rates.

The $5 thousand decrease from the quarter ended June 30, 2018 was the result of the net impact of decreased loan volume in the second quarter of 2019 versus the same time period in 2018, a decrease in the specific loan loss allocations in the second quarter of 2019 versus the second quarter of 2018, and a decrease in the commercial historical loss rates in the second quarter of 2019 versus the same time period in 2018.

Nonperforming loans decreased $307 thousand, to 0.51%, of total loans as of June 30, 2019, compared to 0.53% of total loans as of March 31, 2019, and compared to 0.78% of total loans as of June 30, 2018. In addition, net charge-offs for the quarter ended June 30, 2019, increased $677 thousand compared to the quarter ended March 31, 2019, and increased $653 thousand compared to the quarter ended June 30, 2018.

NONINTEREST INCOME
Noninterest income totaled $26.4 million for the quarter ended June 30, 2019, an increase of $17.6 million, or 201.0%, from the quarter ended March 31, 2019, and an increase of $15.6 million, or 144.4%, from the quarter ended June 30, 2018.

5

Exhibit 99.1
The $17.6 million increase in noninterest income from the quarter ended March 31, 2019, was due to an increase of $13.4 million in the holding gain on equity securities, an increase of $3.2 million in mortgage fee income, an increase of $681 thousand in the gain on derivatives, and an increase of $358 thousand in commercial swap fee income. The increase in mortgage fee income of $3.2 million was the result of an increase of $146.0 million, or 58.1%, in the volume of mortgage loans sold which was driven by an increase of $185.4 million, or 66.5%, in mortgage closed production volume. The increase in the gain on derivatives of $681 thousand was the result of an increase of $40 thousand in the valuation of the open trades used to hedge the locked pipeline, as well as a 37.5% increase in the locked mortgage pipeline during the quarter ended June 30, 2019.

The $15.6 million increase in noninterest income from the quarter ended June 30, 2018, was primarily due to an increase of $13.6 million in the holding gain on equity securities, an increase of $801 thousand in mortgage fee income, an increase of $478 thousand in the gain on derivative, an increase of $438 thousand in commercial swap fee income, and an increase of $123 thousand in the gain on sale of portfolio loans. The increase in mortgage fee income was largely the result of an increase of $43.1 million, or 12.2%, in the volume of mortgage loans sold which was driven by an increase of $17.7 million, or 4.0%, in mortgage closed production volume. The increase in gain on derivatives of $478 thousand was largely the result of an increase of 37.5% in the locked mortgage pipeline during the three months ended June 30, 2019, compared to a decrease of 0.5% in the locked mortgage pipeline during the three months ended June 30, 2018.

NONINTEREST EXPENSE
Noninterest expense totaled $20.4 million for the quarter ended June 30, 2019, an increase of $1.9 million, or 10.5%, from the quarter ended March 31, 2019, and an increase of $1.1 million, or 5.9%, from the quarter ended June 30, 2018.

The $1.9 million increase in noninterest expense from the quarter ended March 31, 2019, was primarily due to an increase of $1.5 million in salaries and employee benefits and an increase of $214 thousand in travel, entertainment, dues, and subscriptions. The increase in salaries and employee benefits was primarily driven by increased mortgage closed production volume.

The $1.1 million increase in noninterest expense from the quarter ended June 30, 2018, was primarily due to an increase of $786 thousand in salaries and employee benefits, an increase of $273 thousand in travel, entertainment, dues, and subscriptions, and an increase of $169 thousand in occupancy and equipment
6

Exhibit 99.1
expense. These increases were partially offset by a decrease of $276 thousand in mortgage processing expense.

DISCONTINUED OPERATIONS
On June 30, 2016, the Company entered into an Asset Purchase Agreement with USI Insurance Services, in which USI purchased substantially all of the assets and assumed certain liabilities of MVB Insurance. Based on a measurement period that ended June 30, 2019, the Company has earned and is reasonably assured to receive an earn-out payment related to the Asset Purchase Agreement with USI Services. The Company expects to receive the earn-out payment during the third quarter 2019 and as of June 30, 2019, have estimated and recorded the earn-out payment as contingent consideration from discontinued operations. The estimate of the earn-out payment is $446 thousand, net of income taxes.

SUBSEQUENT EVENT
On June 30, 2014, the Company issued its Convertible Subordinated Promissory Notes Due 2024 (the “Notes”) to various investors, of which as of June 30, 2019, $12.4 million remained outstanding. The proceeds from the Notes constitute Tier 2 capital for bank regulatory capital purposes. The Notes are redeemable by the Company at least five years after the original issuance date upon prior approval from the Federal Reserve Board.

On July 10, 2019, the Company received a notice of non-objection from the Federal Reserve for the Company to redeem all of the outstanding Notes. The Company intends to provide notice to the holders of the outstanding Notes and redeem the outstanding Notes.

DIVIDEND
As previously announced on May 20, 2019, the Company declared a quarterly cash dividend of $0.04 per share to shareholders of record at the close of business on June 1, 2019, payable June 15, 2019. This was the second quarterly dividend for 2019 and includes a one-half cent, or 14.3% increase per share, compared to the previous quarter dividend of $0.035 per share.

About MVB Financial Corp.

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

7

Exhibit 99.1
MVB is a financial holding company headquartered in Fairmont, W.Va. Through its subsidiary, MVB Bank, Inc., and the bank’s subsidiaries, MVB Mortgage and MVB Community Development Corporation, the company provides financial services to individuals and corporate clients in the Mid-Atlantic region.

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 Corp. has made forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in this Earnings Release. These forward-looking statements are based on current expectations about the future and subject to risks and uncertainties. Forward-looking statements include information concerning possible or assumed future results of operations of the Company and its subsidiaries. When words such as “believes,” “expects,” “anticipates,” “may,” or similar expressions occur in this Earnings Release, the Company is making forward-looking statements. Note that many factors could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in the forward-looking statements contained in this Earnings Release. Those factors include, but are not limited to: credit risk, changes in market interest rates, inability to achieve merger-related synergies, competition, economic downturn or recession and government regulation and supervision. Additional factors that may cause our actual results to differ materially from those described in our forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as well as its other filings with the SEC, which are available on the SEC website at www.sec.gov. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements.

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

8

Exhibit 99.1
Questions or comments concerning this Earnings Release should be directed to:

MVB Financial Corp.
Donald T. Robinson, Executive Vice President and CFO
(304) 598-3500
drobinson@mvbbanking.com
9

Exhibit 99.1
MVB Financial Corp.
Financial Highlights
Consolidated Statements of Income
(Unaudited) (Dollars in thousands, except per share data)
QuarterlyYear-to-Date
2019 2019 2018 20192018
Second
Quarter
First
Quarter
Second
Quarter
Interest income $20,470 $19,623 $16,944 $40,093 $31,998 
Interest expense5,941 5,651 4,289 11,592 7,878 
Net interest income14,529 13,972 12,655 28,501 24,120 
Provision for loan losses600 300 605 900 1,079 
Net interest income after provision for loan losses13,929 13,672 12,050 27,601 23,041 
Noninterest income:
Mortgage fee income9,864 6,670 9,063 16,534 15,626 
Other income16,523 2,095 1,732 18,618 4,208 
Total noninterest income26,387 8,765 10,795 35,152 19,834 
Noninterest expense:
Salaries and employee benefits13,280 11,734 12,494 25,014 22,967 
Other expense7,110 6,714 6,755 13,824 13,021 
Total noninterest expenses20,390 18,448 19,249 38,838 35,988 
Income from continuing operations, before income taxes19,926 3,989 3,596 23,915 6,887 
Income tax expense - continuing operations4,995 797 765 5,792 1,462 
Net income from continuing operations14,931 3,192 2,831 18,123 5,425 
Income from discontinued operations, before income taxes600 — — 600 — 
Income tax expense - discontinued operations154 — — 154 — 
Net income from discontinued operations446 — — 446 — 
Net income $15,377 $3,192 $2,831 $18,569 $5,425 
Preferred dividends122 121 122 243 243 
Net income available to common shareholders $15,255 $3,071 $2,709 $18,326 $5,182 
Earnings per share from continuing operations - basic$1.27 $0.26 $0.25 $1.54 $0.49 
Earnings per share from discontinued operations - basic0.04 — — 0.04 — 
Earnings per share - basic$1.31 $0.26 $0.25 $1.58 $0.49 
Earnings per share from continuing operations - diluted$1.15 $0.26 $0.25 $1.41 $0.47 
Earnings per share from discontinued operations - diluted0.03 — — 0.03 — 
Earnings per share - diluted$1.18 $0.26 $0.25 $1.44 $0.47 


10

Exhibit 99.1
Condensed Consolidated Balance Sheets
(Unaudited) (Dollars in thousands)

June 30, 2019March 31, 2019December 31, 2018June 30, 2018
Cash and cash equivalents $21,209 $17,958 $22,221 $23,950 
Certificates of deposit with other banks14,530 14,778 14,778 14,778 
Securities available-for-sale, at fair value215,587 224,741 221,614 222,085 
Equity securities18,364 9,841 9,599 6,969 
Loans held for sale119,906 65,955 75,807 98,799 
Loans1,326,682 1,341,218 1,304,366 1,215,072 
Less: Allowance for loan losses(11,168)(11,242)(10,939)(10,651)
Net Loans1,315,514 1,329,976 1,293,427 1,204,421 
Premises and equipment25,691 25,922 26,545 26,418 
Goodwill18,480 18,480 18,480 18,480 
Other assets83,737 82,257 68,498 69,519 
Total assets $1,833,018 $1,789,908 $1,750,969 $1,685,419 
Noninterest-bearing deposits$270,592 $236,086 $213,597 $163,986 
Interest-bearing deposits1,107,145 1,194,573 1,095,557 1,031,882 
Borrowed funds186,900 114,884 214,887 266,830 
Other liabilities67,705 63,493 50,155 56,926 
Stockholders' equity200,676 180,872 176,773 165,795 
Total liabilities and stockholders' equity $1,833,018 $1,789,908 $1,750,969 $1,685,419 

11

Exhibit 99.1
Reportable Segments
(Unaudited)

Three Months Ended June 30, 2019Commercial & Retail BankingMortgage BankingFinancial Holding CompanyIntercompany EliminationsConsolidated
(Dollars in thousands)
Interest income$18,820 $2,032 $$(383)$20,470 
Interest expense4,743 1,499 287 (588)5,941 
Net interest income14,077 533 (286)205 14,529 
Provision for loan losses625 (25)— — 600 
Net interest income after provision for loan losses13,452 558 (286)205 13,929 
Noninterest Income:
Mortgage fee income277 9,792 — (205)9,864 
Other income15,464 1,135 1,495 (1,571)16,523 
Total noninterest income15,741 10,927 1,495 (1,776)26,387 
Noninterest Expenses:
Salaries and employee benefits4,220 7,038 2,022 — 13,280 
Other expense5,493 1,842 1,346 (1,571)7,110 
Total noninterest expenses9,713 8,880 3,368 (1,571)20,390 
Income (loss) from continuing operations, before income taxes19,480 2,605 (2,159)— 19,926 
Income tax expense (benefit) - continuing operations4,785 703 (493)— 4,995 
Net income (loss) from continuing operations$14,695 $1,902 $(1,666)$— $14,931 
Income from discontinued operations, before income taxes$— $— $600 $— $600 
Income tax expense - discontinued operations$— $— $154 $— $154 
Net income from discontinued operations$— $— $446 $— $446 
Net income (loss)$14,695 $1,902 $(1,220)$— $15,377 
Preferred stock dividends— — 122 — 122 
Net income (loss) available to common shareholders$14,695 $1,902 $(1,342)$— $15,255 

12

Exhibit 99.1
Three Months Ended March 31, 2019Commercial & Retail BankingMortgage BankingFinancial Holding CompanyIntercompany EliminationsConsolidated
(Dollars in thousands)
Interest income$18,327 $1,538 $$(243)$19,623 
Interest expense4,754 993 285 (381)5,651 
Net interest income13,573 545 (284)138 13,972 
Provision for loan losses247 53 — — 300 
Net interest income after provision for loan losses13,326 492 (284)138 13,672 
Noninterest Income:
Mortgage fee income109 6,697 — (136)6,670 
Other income1,566 476 1,779 (1,726)2,095 
Total noninterest income1,675 7,173 1,779 (1,862)8,765 
Noninterest Expenses:
Salaries and employee benefits4,395 5,159 2,180 — 11,734 
Other expense5,352 2,025 1,061 (1,724)6,714 
Total noninterest expenses9,747 7,184 3,241 (1,724)18,448 
Income (loss) from continuing operations, before income taxes5,254 481 (1,746)— 3,989 
Income tax expense (benefit) - continuing operations1,054 146 (403)— 797 
Net income (loss) from continuing operations$4,200 $335 $(1,343)$— $3,192 
Net income (loss)$4,200 $335 $(1,343)$— $3,192 
Preferred stock dividends— — 121 — 121 
Net income (loss) available to common shareholders$4,200 $335 $(1,464)$— $3,071 


13

Exhibit 99.1
Three Months Ended June 30, 2018Commercial & Retail BankingMortgage BankingFinancial Holding CompanyIntercompany EliminationsConsolidated
(Dollars in thousands)
Interest income$15,426 $1,772 $$(255)$16,944 
Interest expense3,164 1,081 542 (498)4,289 
Net interest income12,262 691 (541)243 12,655 
Provision for loan losses625 (20)— — 605 
Net interest income after provision for loan losses11,637 711 (541)243 12,050 
Noninterest Income:
Mortgage fee income154 9,152 — (243)9,063 
Other income1,068 706 1,489 (1,531)1,732 
Total noninterest income1,222 9,858 1,489 (1,774)10,795 
Noninterest Expenses:
Salaries and employee benefits3,884 6,826 1,784 — 12,494 
Other expense4,968 2,296 1,022 (1,531)6,755 
Total noninterest expenses8,852 9,122 2,806 (1,531)19,249 
Income (loss) from continuing operations, before income taxes4,007 1,447 (1,858)— 3,596 
Income tax expense (benefit) - continuing operations832 373 (440)— 765 
Net income (loss) from continuing operations$3,175 $1,074 $(1,418)$— $2,831 
Net income (loss)$3,175 $1,074 $(1,418)$— $2,831 
Preferred stock dividends— — 122 — 122 
Net income (loss) available to common shareholders$3,175 $1,074 $(1,540)$— $2,709 

14

Exhibit 99.1
Six Months Ended June 30, 2019Commercial & Retail BankingMortgage BankingFinancial Holding CompanyIntercompany EliminationsConsolidated
(Dollars in thousands)
Interest income$37,147 $3,570 $$(627)$40,093 
Interest expense9,497 2,492 572 (969)11,592 
Net interest income27,650 1,078 (569)342 28,501 
Provision for loan losses872 28 — — 900 
Net interest income after provision for loan losses26,778 1,050 (569)342 27,601 
Noninterest Income:
Mortgage fee income386 16,489 — (341)16,534 
Other income17,030 1,611 3,274 (3,297)18,618 
Total noninterest income17,416 18,100 3,274 (3,638)35,152 
Noninterest Expenses:
Salaries and employee benefits8,615 12,197 4,202 — 25,014 
Other expense10,845 3,867 2,408 (3,296)13,824 
Total noninterest expenses19,460 16,064 6,610 (3,296)38,838 
Income (loss) from continuing operations, before income taxes24,734 3,086 (3,905)— 23,915 
Income tax expense (benefit) - continuing operations5,839 849 (896)— 5,792 
Net income (loss) from continuing operations18,895 2,237 (3,009)— 18,123 
Income from discontinued operations, before income taxes— — 600 — 600 
Income tax expense - discontinued operations— — 154 — 154 
Net income from discontinued operations— — 446 — 446 
Net income (loss) $18,895 $2,237 $(2,563)$— $18,569 
Preferred stock dividends— — 243 — 243 
Net income (loss) available to common shareholders$18,895 $2,237 $(2,806)$— $18,326 


15

Exhibit 99.1
Six Months Ended June 30, 2018Commercial & Retail BankingMortgage BankingFinancial Holding CompanyIntercompany EliminationsConsolidated
(Dollars in thousands)
Interest income$29,265 $3,107 $$(376)$31,998 
Interest expense5,838 1,808 1,100 (868)7,878 
Net interest income23,427 1,299 (1,098)492 24,120 
Provision for loan losses1,042 37 — — 1,079 
Net interest income after provision for loan losses22,385 1,262 (1,098)492 23,041 
Noninterest Income:
Mortgage fee income292 15,825 — (491)15,626 
Other income2,848 1,223 3,043 (2,906)4,208 
Total noninterest income3,140 17,048 3,043 (3,397)19,834 
Noninterest Expenses:
Salaries and employee benefits7,453 12,242 3,272 — 22,967 
Other expense9,527 4,418 1,981 (2,905)13,021 
Total noninterest expenses16,980 16,660 5,253 (2,905)35,988 
Income (loss) from continuing operations, before income taxes8,545 1,650 (3,308)— 6,887 
Income tax expense (benefit) - continuing operations1,810 426 (774)— 1,462 
Net income (loss) from continuing operations6,735 1,224 (2,534)— 5,425 
Net income (loss)$6,735 $1,224 $(2,534)$— $5,425 
Preferred stock dividends— — 243 — 243 
Net income (loss) available to common shareholders$6,735 $1,224 $(2,777)$— $5,182 

16

Exhibit 99.1
Average Balances and Interest Rates
(Unaudited) (Dollars in thousands)

Three Months Ended
June 30, 2019
Three Months Ended
March 31, 2019
Three Months Ended
June 30, 2018
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Assets
Interest-bearing deposits in banks$9,582 $52 2.18 %$7,546 $49 2.63 %$3,473 $17 1.96 %
CDs with other banks14,579 73 2.01  14,778 73 2.00  14,778 74 2.02  
Investment securities:
     Taxable123,803 768 2.49  139,692 879 2.55  151,224 891 2.36  
     Tax-exempt99,664 894 3.60  92,417 837 3.67  81,164 717 3.54  
Loans and loans held for sale: 1
     Commercial965,652 13,065 5.43  951,836 12,594 5.37  831,118 10,318 4.98  
     Tax exempt13,047 114 3.50  14,251 123 3.50  14,260 123 3.46  
     Real estate446,825 5,363 4.81  411,639 4,941 4.87  394,814 4,656 4.73  
     Consumer9,396 141 6.02  9,654 127 5.34  11,850 148 5.00  
Total loans1,434,920 18,683 5.22  1,387,380 17,785 5.20  1,252,042 15,245 4.88  
Total earning assets1,682,548 20,470 4.88  1,641,813 19,623 4.85  1,502,681 16,944 4.52  
Less: Allowance for loan losses(11,216)(11,071)(10,132)
Cash and due from banks15,982 16,088 16,792 
Other assets138,299 112,301 107,421 
     Total assets$1,825,613 $1,759,131 $1,616,762 
Liabilities
Deposits:
     NOW$363,837 $839 0.92  $357,005 $729 0.83  $459,784 $846 0.74  
     Money market checking327,904 1,287 1.57  297,607 1,044 1.42  229,763 484 0.85  
     Savings39,661 0.01  40,235 0.01  46,478 0.06  
     IRAs17,718 83 1.88  17,826 79 1.80  17,997 69 1.54  
     CDs415,201 2,338 2.26  428,610 2,270 2.15  275,004 1,124 1.64  
Repurchase agreements and federal funds sold11,644 11 0.38  14,206 14 0.40  20,118 20 0.39  
FHLB and other borrowings153,926 1,095 2.85  175,222 1,229 2.84  226,487 1,197 2.12  
Subordinated debt17,491 287 6.58  17,524 285 6.60  32,015 542 6.79  
     Total interest-bearing liabilities1,347,382 5,941 1.77  1,348,235 5,651 1.70  1,307,646 4,289 1.32  
Noninterest bearing demand deposits250,658 214,541 146,135 
Other liabilities36,729 18,450 9,890 
     Total liabilities1,634,769 1,581,226 1,463,671 
Stockholders’ equity
Preferred stock7,834 7,834 7,834 
Common stock11,695 11,659 10,686 
Paid-in capital117,648 116,925 101,577 
Treasury stock(1,084)(1,084)(1,084)
Retained earnings59,512 49,161 41,277 
Accumulated other comprehensive income(4,761)(6,590)(7,199)
     Total stockholders’ equity190,844 177,905 153,091 
     Total liabilities and stockholders’ equity$1,825,613 $1,759,131 $1,616,762 
Net interest spread3.11  3.15  3.20  
Net interest income-margin$14,529 3.46 %$13,972 3.45 %$12,655 3.38 %
1 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.

17

Exhibit 99.1
Average Balances and Interest Rates
(Unaudited) (Dollars in thousands)
Six Months Ended June 30, 2019Six Months Ended June 30, 2018
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Assets
Interest-bearing deposits in banks$8,570 $102 2.40 %$3,677 $35 1.94 %
CDs with other banks14,678 145 1.99  14,778 146 1.99  
Investment securities:
     Taxable130,164 1,647 2.55  152,818 1,786 2.36  
     Tax-exempt96,060 1,731 3.63  78,375 1,372 3.53  
Loans and loans held for sale: 1
     Commercial958,782 25,659 5.40  803,593 19,261 4.83  
     Tax exempt13,646 237 3.50  14,362 246 3.46  
     Real estate429,278 10,304 4.84  378,095 8,846 4.72  
     Consumer9,524 268 5.67  12,182 306 5.07  
Total loans1,411,230 36,468 5.21  1,208,232 28,659 4.78  
Total earning assets1,660,702