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Section 1: 8-K (8-K)

mvbf-20200220
FALSE000127790200012779022020-02-202020-02-20

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):February 20, 2020
MVB Financial Corp.
(Exact name of registrant as specified in its charter)
West Virginia
000-50567
20-0034461
(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 February 20, 2020, MVB Financial Corp. (NASDAQ: MVBF) issued a press release announcing its financial results for the quarter ended December 31, 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 February 20, 2020




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: February 20, 2020



EXHIBIT INDEX


Exhibit NumberDescriptionExhibit Location
Press release of MVB Financial Corp. dated February 20, 2020Filed 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 - EARNINGS RELEASE)

Document
Exhibit 99.1
402899463_mvbfinanciallogoa551.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 125% Increase in Annual Earnings and a 39% Increase in Noninterest-Bearing Deposits in 2019

FAIRMONT, W.Va., February 20, 2020 – MVB Financial Corp. (the "Company") (NASDAQ: MVBF) today reported net income of $26.6 million, or $2.22 and $2.16 basic and diluted earnings per share, respectively, excluding discontinued operations, for the year ended December 31, 2019. This represents a 125% increase over the prior year. For the quarter ended December 31, 2019, the Company reported net income of $4.1 million, or $0.34 and $0.32 basic and diluted earnings per share, respectively.

QuarterlyYear-to-Date
20192019201820192018
Fourth
Quarter
Third
Quarter
Fourth
Quarter
Net income from continuing operations$4,095  $4,346  $2,999  $26,564  $12,003  
Net income (loss) from discontinued operations—  (19) —  427  —  
Net income$4,095  $4,327  $2,999  $26,991  $12,003  
Earnings per share from continuing operations - basic$0.34  $0.36  $0.25  $2.22  $1.04  
Earnings per share from discontinued operations - basic—  —  —  0.04  —  
Earnings per share - basic$0.34  $0.36  $0.25  $2.26  $1.04  
Earnings per share from continuing operations - diluted$0.32  $0.35  $0.24  $2.16  $1.00  
Earnings per share from discontinued operations - diluted—  —  —  0.04  —  
Earnings per share - diluted$0.32  $0.35  $0.24  $2.20  $1.00  

MANAGEMENT OVERVIEW
“In 2019, MVB continued to effectively execute on our MVB 3.0 Strategy of seeking ‘blue ocean’ opportunities, an approach which has been validated by our annual performance results. In 2019, we set records for MVB in net income, noninterest-bearing deposit growth and loan quality,” said Larry F. Mazza, President and CEO, MVB Financial Corp. “The successful integration of Chartwell Compliance, which MVB acquired in September 2019, has exceeded our expectations as far as cooperation between
1

Exhibit 99.1
our Team Members. We will continue to leverage this competitive advantage that helps reduce risk for our expanding Fintech vertical.”

As previously reported, on November 21, 2019, the Company entered into a Purchase and Assumption Agreement with Summit Community Bank, Inc., a subsidiary of Summit Financial Group, Inc., pursuant to which Summit will purchase certain assets and assume certain liabilities of three MVB Bank branches in Berkeley County, W.Va. and one MVB Bank branch in Jefferson County, W.Va. Summit has agreed to assume certain deposit liabilities and to acquire certain loans, as well as cash, real property, personal property, and other fixed assets associated with the branches. Of the branches held for sale, assets totaled $46.6 million and deposits totaled $188.3 million as of December 31, 2019.
As of December 31, 2019
(Dollars in thousands)Balance to be retained by MVBBalance to be assumed by SummitTotal
Commercial and non-residential real estate loans$1,063,828  $16,132  $1,079,960  
Residential real estate and home equity loans306,710  22,701  329,411  
Consumer and other loans3,697  4,083  7,780  
Deferred loan origination fees and costs, net306  —  306  
Total loans1,374,541  42,916  1,417,457  
Premises and equipment, net21,974  3,638  25,612  
Noninterest-bearing deposits$278,547  $19,251  $297,798  
Interest-bearing deposits986,495  169,019  1,155,514  
Total deposits1,265,042  188,270  1,453,312  

Total noninterest-bearing deposits increased $22.8 million, or 8.3%, from September 30, 2019, and increased $84.2 million, or 39.4%, from December 31, 2018, to a balance of $297.8 million as of December 31, 2019. The growth in total noninterest-bearing deposits was primarily driven by MVB's continued strategic initiatives in Fintech and specialty deposits. As of December 31, 2019, total noninterest-bearing deposits were 20.5% of total deposits, compared to 18.9% as of September 30, 2019, and 16.3% as of December 31, 2018.

MVB Mortgage had a record year and played a crucial role in overall earnings growth with net income of $5.8 million for the year ended December 31, 2019. From the year ended December 31, 2018, mortgage closed loan production volume increased $368.7 million, or 25.5%, and the volume of mortgage loans sold increased $342.9 million, or 27.0%. As a result of the increases in production and sold loan volume, mortgage fee income increased $8.7 million, or 26.9%. Even with the increase in volume, mortgage processing expense decreased $510 thousand, or 14.4%, from the year ended December 31, 2018. The
2

Exhibit 99.1
decrease in mortgage processing expense was due to increased efficiencies resulting from reduced operating costs and overhead expenses.

FOURTH QUARTER 2019 HIGHLIGHTS
Net interest margin continues to grow and was 3.52% for the quarter ended December 31, 2019, an increase of 10 basis points versus the quarter ended September 30, 2019. Net interest margin of 3.47% for the year ended December 31, 2019, increased 6 basis points versus the year ended December 31, 2018.
Loans, including loans at branches held for sale, of $1.4 billion as of December 31, 2019, increased $35.1 million, or 2.5%, from September 30, 2019, and increased $113.1 million, or 8.7%, from December 31, 2018.
Nonperforming loans decreased $2.0 million during 2019, to 0.37% of total loans as of December 31, 2019, compared to 0.41% of total loans as of September 30, 2019, and compared to 0.54% as of December 31, 2018.
Net interest income of $15.9 million for the quarter ended December 31, 2019, increased $831 thousand, or 5.5%, from the quarter ended September 30, 2019.
Service charges on deposit accounts of $424 thousand for the quarter ended December 31, 2019, increased $87 thousand, or 25.8%, from the quarter ended September 30, 2019. Service charges on deposit accounts of $1.4 million for the year ended December 31, 2019, increased $376 thousand, or 36.4%, from the year ended December 31, 2018. These increases are a result of the Company's execution on enhancing this revenue stream and Fintech relationships.

LOANS
Loans, including loans at branches held for sale, totaled $1.4 billion as of December 31, 2019, an increase of $35.1 million, or 2.5%, from September 30, 2019, and an increase of $113.1 million, or 8.7% from December 31, 2018. Total commercial loans have increased $56.1 million, or 5.5%, from September 30, 2019, and increased $138.9 million, or 14.8%, from December 31, 2018. The year-over-year growth in loans is driven by strong growth in MVB’s Northern Virginia market and consistent performance by the commercial lending team. Residential portfolio mortgage and construction loan sales totaled $24.4 million during the fourth quarter of 2019 and $84.3 million for the full year 2019. The yield on loans was 5.17% for the year ended December 31, 2019, an increase of 23 basis points from the year ended December 31, 2018. The yield on loans was 5.10% for the quarter ended December 31, 2019, a decrease of 6 basis points, from the quarter ended September 30, 2019, and a decrease of 8 basis points, from the quarter ended December 31, 2018.

3

Exhibit 99.1
Loans held for sale totaled $109.8 million as of December 31, 2019, a decrease of $50.2 million, or 31.4%, from September 30, 2019, and an increase of $34.0 million, or 44.8%, from December 31, 2018. Loans held for sale are down from a robust third quarter, but up from 2018, and MVB Mortgage continues to see strong performance.

DEPOSITS
Deposits, including deposits at branches held for sale, totaled $1.5 billion as of December 31, 2019, a decrease of $3.1 million, or 0.2%, from September 30, 2019, and an increase of $144.2 million, or 11.0%, from December 31, 2018. Noninterest-bearing deposits, including noninterest-bearing deposits of branches held for sale, totaled $297.8 million as of December 31, 2019, or 20.5%, of the total deposit base, an increase of $22.8 million, or 8.3%, from September 30, 2019, and an increase of $84.2 million, or 39.4%, from December 31, 2018. The fourth quarter decline in total deposits was due, in part, to the seasonality in public funds, which decreased $24.2 million.

NET INTEREST INCOME
Net interest income for the fourth quarter of 2019 was $15.9 million, an increase of $831 thousand, or 5.5%, from September 30, 2019. Net interest income of $59.4 million for the full year 2019 increased $7.3 million, or 14.1%, from the year ended December 31, 2018. Net interest margin of 3.52% for the quarter ended December 31, 2019, increased 10 basis points versus the quarter ended September 30, 2019. Net interest margin of 3.47% for the year ended December 31, 2019, increased 6 basis points from the year ended December 31, 2018.

Interest income increased 0.9% during the fourth quarter of 2019, even with an 8-basis point decrease in the yield on earning assets, compared to the quarter ended September 30, 2019. The decrease in yield on earning assets compared to the quarter ended September 30, 2019, was the result of a 5-basis point decrease in the yield on commercial loans. Interest income increased 18.1% during 2019, compared to the year ended December 31, 2018. The increase in interest income was the result of a 23-basis point increase in the yield on earning assets, which was the result of a 32-basis point increase in the yield on commercial loans.

Interest expense decreased 10.6% during the fourth quarter of 2019, compared to the quarter ended September 30, 2019, mainly the result of a decrease of 20 basis points in the cost of interest-bearing liabilities. The decrease in the cost of interest-bearing liabilities compared to the quarter ended
4

Exhibit 99.1
September 30, 2019, was the result of a 19-basis point decrease in the cost of CDs. Interest expense increased 29.7% for the year ended December 31, 2019, compared to the same time period in 2018, based on a 31-basis point increase in the cost of interest-bearing liabilities. The increase in the cost of interest-bearing liabilities compared to the year ended December 31, 2018, was the result of a 55-basis point increase in the cost of money market accounts, a 40-basis point increase in the cost of CDs, and a 33-basis point increase in the cost of FHLB and other borrowings.

For the quarter ended December 31, 2019, compared to the quarter ended September 20, 2019, the yield on earning assets decreased 8 basis points and the cost of interest-bearing liabilities decreased 20 basis points. The decrease in cost outpaced the decrease in yield, which led to a 10-basis point increase in net interest margin.

An increase in the Company’s average noninterest-bearing balances of $25.4 million from the quarter ended September 30, 2019, helped to sustain a 35-basis point favorable spread on net interest margin for the quarter ended December 31, 2019, compared to a 37-basis point favorable spread for the quarter ended September 30, 2019.

An increase in the Company's average noninterest-bearing balances of $86.9 million from the year ended December 31, 2018, helped to grow a 34-basis point favorable spread on net interest margin for the year ended December 31, 2019, compared to a 20-basis point favorable spread for the year ended December 31, 2018.

ASSET QUALITY
Asset quality remained strong in 2019. Nonperforming loans decreased $2.0 million during 2019, to 0.37% of total loans as of December 31, 2019, compared to 0.41% as of September 30, 2019, and 0.54% as of December 31, 2018. In addition, net charge-offs for 2019 decreased $427 thousand compared to 2018, resulting in a net loan charge-offs to total loans ratio of 0.07% as of December 31, 2019, and 0.11% as of December 31, 2018.

Provision for loan losses was $232 thousand for the quarter ended December 31, 2019, a decrease of $425 thousand, or 64.7%, from the quarter ended September 30, 2019, and a decrease of $60 thousand, or 20.5%, from the quarter ended December 31, 2018. Provision was $1.8 million for the full year ended December 31, 2019, a $651 thousand decrease from the same time period in 2018.

5

Exhibit 99.1
NONINTEREST INCOME
Noninterest income for the fourth quarter of 2019 was $14.8 million, an increase of $60 thousand, or 0.4%, from the quarter ended September 30, 2019. Noninterest income of $64.6 million for the full year 2019 increased $26.0 million, or 67.2%, from the year ended December 31, 2018.

The increase from the quarter ended September 30, 2019, was the result of an increase of $1.5 million in mortgage fee income, an increase of $871 thousand in compliance consulting income, and an increase of $242 thousand in the gain on sale of portfolio loans. These increases were offset by a decrease of $2.5 million in the gain on derivative. The increase in mortgage fee income was largely the result of an increase of $34.0 million, or 7.3%, in the volume of mortgage loans sold which was driven by a decrease in the balance of mortgage loans held for sale of $50.2 million, or 31.4%. The increase in compliance consulting income is a direct result of the acquisition of Chartwell Compliance in the third quarter of 2019.

The year-over-year increase was primarily the result of an increase of $13.2 million in the holding gain on equity securities from a Fintech investment, an increase of $8.7 million in mortgage fee income, an increase of $1.5 million on the gain on derivative, and an increase of $1.2 million in commercial swap fee income. As previously reported, the Company recognized a $13.6 million holding gain on an equity investment in its Fintech portfolio during the second quarter of 2019. The increase in mortgage fee income was largely the result of an increase of $342.9 million, or 27.0%, in the volume of mortgage loans sold which was driven by an increase of $368.7 million, or 25.5%, in mortgage closed loan production volume. The increase in the gain on derivatives was largely the result of an increase of 23.39% in the locked mortgage pipeline related to the derivative during the year ended December 31, 2019, compared to a decrease of 3.15% in the locked mortgage pipeline related to the derivative during the year ended December 31, 2018. The increase in commercial swap fee income was largely the result of an increase in swap volume from $38.5 million in 2018 to $58.3 million in 2019.

NONINTEREST EXPENSE
Noninterest expense for the fourth quarter of 2019 was $25.0 million, an increase of $1.6 million, or 6.9%, from the quarter ended September 30, 2019. Noninterest expense for the full year 2019 was $87.2 million, an increase of $14.3 million, or 19.7%, from the year ended December 31, 2018. Even with the year-over-year increase in noninterest expense, the Company's efficiency ratio decreased from 80.36%, at December 31, 2018, to 70.32%, at December 31, 2019.

6

Exhibit 99.1
The increase from the quarter ended September 30, 2019 was mainly due to an increase of $658 thousand in professional fees, an increase of $320 thousand in other operating expenses, an increase of $307 thousand in travel expense, and an increase of $285 thousand in salaries and employee benefits. The increase in professional fees is related to Fintech product and technology development. The increase in salaries and employee benefits was largely driven by an increase of $558 thousand related to additional team members acquired as a result of the Chartwell acquisition during the third quarter of 2019 and an increase of $260 thousand related to the build-out of the Fintech team.

The year-over-year increase was primarily the result of an increase of $10.0 million in salaries and employee benefits, an increase of $1.4 million in professional fees, and an increase of $1.3 million in travel expense. The increase in salaries and employee benefits was largely driven by a $4.5 million increase related to increased mortgage production, an increase of $2.0 million related to the build-out of other Company administration, an increase of $1.4 million related to the build-out of the Fintech team, an increase of $1.3 million related to increased incentive and stock-based compensation, and an increase of $623 thousand related to additional team members acquired as a result of the Chartwell acquisition during the third quarter of 2019. The increase in professional fees is related to special projects and Fintech product and technology development. The increase in travel, entertainment, dues, and subscriptions is primarily related to the Fintech team.

DIVIDEND
As previously announced, on November 20, 2019, MVB issued its fourth quarterly dividend for 2019 including a 40% increase compared to the previous quarter dividend payout. The Company declared a quarterly cash dividend of $0.07 per share payable on December 15, 2019, to shareholders of record at the close of business on December 1, 2019.

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

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, MVB Community Development Corporation and Chartwell Compliance, the company provides financial services to individuals and corporate clients in the Mid-Atlantic region and beyond. Chartwell Compliance is a specialty compliance firm providing regulatory compliance and market entry facilitation for firms entering into or expanding in North America within the Fintech industry.

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

8

Exhibit 99.1
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.

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

Condensed Consolidated Statements of Income
(Unaudited) (Dollars in thousands, except per share data)

QuarterlyYear-to-Date
20192019201820192018
Fourth QuarterThird
Quarter
Fourth
Quarter
Interest income$21,230  $21,038  $19,586  $82,361  $69,760  
Interest expense5,365  6,004  5,176  22,961  17,706  
Net interest income15,865  15,034  14,410  59,400  52,054  
Provision for loan losses232  657  292  1,789  2,440  
Net interest income after provision for loan losses15,633  14,377  14,118  57,611  49,614  
Noninterest income:
Mortgage fee income13,015  11,496  7,703  41,045  32,337  
Other income1,741  3,200  592  23,559  6,303  
Total noninterest income14,756  14,696  8,295  64,604  38,640  
Noninterest expense:
Salaries and employee benefits15,723  15,438  11,737  56,175  46,224  
Other expense9,260  7,942  6,736  31,026  26,654  
Total noninterest expenses24,983  23,380  18,473  87,201  72,878  
Income from continuing operations, before income taxes5,406  5,693  3,940  35,014  15,376  
Income tax expense - continuing operations1,311  1,347  941  8,450  3,373  
Net income from continuing operations4,095  4,346  2,999  26,564  12,003  
Income (loss) from discontinued operations, before income taxes—  (25) —  575  —  
Income tax expense (benefit) - discontinued operations—  (6) —  148  —  
Net income (loss) from discontinued operations—  (19) —  427  —  
Net income$4,095  $4,327  $2,999  $26,991  $12,003  
Preferred dividends115  121  123  479  489  
Net income available to common shareholders$3,980  $4,206  $2,876  $26,512  $11,514  
Earnings per share from continuing operations - basic$0.34  $0.36  $0.25  $2.22  $1.04  
Earnings per share from discontinued operations - basic—  —  —  0.04  —  
Earnings per share - basic$0.34  $0.36  $0.25  $2.26  $1.04  
Earnings per share from continuing operations - diluted$0.32  $0.35  $0.24  $2.16  $1.00  
Earnings per share from discontinued operations - diluted—  —  —  0.04  —  
Earnings per share - diluted$0.32  $0.35  $0.24  $2.20  $1.00  


10

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

December 31, 2019September 30, 2019December 31, 2018
Cash and cash equivalents28,002  36,568  22,221  
Certificates of deposit with other banks12,549  13,541  14,778  
Securities available-for-sale, at fair value235,821  226,064  221,614  
Equity securities18,514  18,414  9,599  
Loans held for sale109,788  159,961  75,807  
Loans1,374,541  1,382,375  1,304,366  
Less: Allowance for loan losses(11,775) (11,874) (10,939) 
Net loans1,362,766  1,370,501  1,293,427  
Premises and equipment, net21,974  25,446  26,545  
Assets of branches held for sale46,554  —  —  
Goodwill19,630  19,630  18,480  
Other assets88,516  91,827  68,498  
     Total assets1,944,114  1,961,952  1,750,969  
Noninterest-bearing deposits$278,547  $274,970  $213,597  
Interest-bearing deposits986,495  1,181,434  1,095,557  
Deposits of branches held for sale188,270  —  —  
Borrowed funds222,885  241,641  214,887  
Other liabilities55,981  57,667  50,155  
Stockholders' equity211,936  206,240  176,773  
     Total liabilities and stockholders' equity$1,944,114  $1,961,952  $1,750,969  

11

Exhibit 99.1
Reportable Segments
(Unaudited)

Twelve Months Ended December 31, 2019Commercial & Retail BankingMortgage BankingFinancial Holding CompanyIntercompany EliminationsConsolidated
(Dollars in thousands)
Interest income$75,874  $8,342  $13  $(1,868) $82,361  
Interest expense18,698  6,014  769  (2,520) 22,961  
Net interest income57,176  2,328  (756) 652  59,400  
Provision for loan losses1,622  167  —  —  1,789  
Net interest income after provision for loan losses55,554  2,161  (756) 652  57,611  
Noninterest Income:
Mortgage fee income657  41,040  —  (652) 41,045  
Other income23,033  1,289  6,268  (7,031) 23,559  
Total noninterest income23,690  42,329  6,268  (7,683) 64,604  
Noninterest Expenses:
Salaries and employee benefits19,067  28,432  8,676  —  56,175  
Other expense25,070  8,136  4,851  (7,031) 31,026  
Total noninterest expenses44,137  36,568  13,527  (7,031) 87,201  
Income (loss) from continuing operations, before income taxes35,107  7,922  (8,015) —  35,014  
Income tax expense (benefit) - continuing operations8,175  2,155  (1,880) —  8,450  
Net income (loss) from continuing operations26,932  5,767  (6,135) —  26,564  
Income from discontinued operations—  —  575  —  575  
Income tax expense - discontinued operations—  —  148  —  148  
Net income from discontinued operations—  —  427  —  427  
Net income (loss)$26,932  $5,767  $(5,708) $—  $26,991  
Preferred stock dividends—  —  479  —  479  
Net income (loss) available to common shareholders$26,932  $5,767  $(6,187) $—  $26,512  

12

Exhibit 99.1
Reportable Segments
(Unaudited)

Twelve Months Ended December 31, 2018Commercial & Retail BankingMortgage BankingFinancial Holding CompanyIntercompany EliminationsConsolidated
(Dollars in thousands)
Interest income$63,762  $6,667  $ $(674) $69,760  
Interest expense13,667  4,085  1,756  (1,802) 17,706  
Net interest income50,095  2,582  (1,751) 1,128  52,054  
Provision for loan losses2,386  54  —  —  2,440  
Net interest income after provision for loan losses47,709  2,528  (1,751) 1,128  49,614  
Noninterest Income:
Mortgage fee income585  32,880  —  (1,128) 32,337  
Other income6,479  (243) 6,411  (6,344) 6,303  
Total noninterest income7,064  32,637  6,411  (7,472) 38,640  
Noninterest Expenses:
Salaries and employee benefits14,924  23,927  7,373  —  46,224  
Other expense20,081  8,608  4,309  (6,344) 26,654  
Total noninterest expenses35,005  32,535  11,682  (6,344) 72,878  
Income (loss) before income taxes19,768  2,630  (7,022) —  15,376  
Income tax expense (benefit)4,265  677  (1,569) —  3,373  
Net income (loss)$15,503  $1,953  $(5,453) $—  $12,003  
Preferred stock dividends—  —  489  —  489  
Net income (loss) available to common shareholders$15,503  $1,953  $(5,942) $—  $11,514  

13

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

Three Months Ended
December 31, 2019
Three Months Ended
September 30, 2019
Three Months Ended
December 31, 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$10,332  $46  1.77 %$9,562  $61  2.53 %$8,123  $45  2.17 %
CDs with other banks12,908  64  1.97  14,143  71  1.99  14,778  74  1.99  
Investment securities:
     Taxable134,990  719  2.11  122,648  689  2.23  146,488  924  2.50  
     Tax-exempt111,262  910  3.24  109,324  879  3.19  79,906  723  3.59  
Loans and loans held for sale: 1
     Commercial1,029,592  13,830  5.33  1,002,595  13,599  5.38  924,547  12,518  5.37  
     Tax exempt11,709  106  3.59  11,229  100  3.53  14,454  128  3.51  
     Real estate467,633  5,425  4.60  464,769  5,490  4.69  415,502  5,039  4.81  
     Consumer8,148  130  6.33  8,612  149  6.86  10,215  135  5.24  
Total loans1,517,082  19,491  5.10  1,487,205  19,338  5.16  1,364,718  17,820  5.18  
Total earning assets1,786,574  21,230  4.71  1,742,882  21,038  4.79  1,614,013  19,586  4.81  
Less: Allowance for loan losses(11,747) (11,232) (11,268) 
Cash and due from banks20,014  18,366  16,515  
Other assets136,650  134,871  109,146  
     Total assets$1,931,491  $1,884,887  $1,728,406  
Liabilities
Deposits:
     NOW$417,838  $1,076  1.02  $384,977  $942  0.97  $414,997  $865  0.83  
     Money market checking366,402  1,424  1.54  333,849  1,391  1.65  261,928  852  1.29  
     Savings36,120   0.01  37,335   0.01  40,494   0.01  
     IRAs16,786  81  1.91  17,342  84  1.92  17,937  78  1.73  
     CDs341,270  1,733  2.01  366,749  2,035  2.20  384,540  1,902  1.96  
Repurchase agreements and federal funds sold9,733  11  0.45  9,493  12  0.50  15,573   0.15  
FHLB and other borrowings193,487  997  2.04  212,102  1,383  2.59  173,110  1,150  2.64  
Subordinated debt4,124  42  4.04  9,535  156  6.49  17,861  322  7.15  
     Total interest-bearing liabilities1,385,760  5,365  1.54  1,371,382  6,004  1.74  1,326,440  5,176  1.55  
Noninterest bearing demand deposits296,651  271,294  217,527  
Other liabilities41,244  38,618  11,903  
     Total liabilities1,723,655  1,681,294  1,555,870  
Stockholders’ equity
Preferred stock7,334  7,644  7,834  
Common stock11,920  11,773  11,633  
Paid-in capital121,549  119,166  116,254  
Treasury stock(1,084) (1,084) (1,084) 
Retained earnings70,570  67,312  46,852  
Accumulated other comprehensive income(2,453) (1,218) (8,953) 
     Total stockholders’ equity207,836  203,593  172,536  
     Total liabilities and stockholders’ equity$1,931,491  $1,884,887  $1,728,406  
Net interest spread3.17  3.05  3.26  
Net interest income-margin$15,865  3.52 %$15,034  3.42 %$14,410  3.54 %
1 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.


14

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

Twelve Months Ended
December 31, 2019
Twelve Months Ended
December 31, 2018
Twelve Months Ended
December 31, 2017
(Dollars in thousands)Average BalanceInterest Income/ExpenseYield/CostAverage BalanceInterest Income/ExpenseYield/CostAverage BalanceInterest Income/ExpenseYield/Cost
Assets
Interest-bearing deposits in banks$9,264  $209  2.26 %$5,176  $108  2.09 %$3,790  $52  1.37 %
CDs with other banks14,097  280  1.99  14,778  295  2.00  14,619  288  1.97  
Investment securities:
     Taxable129,486  3,055  2.36  150,134  3,580  2.38  125,797  2,658  2.11  
     Tax-exempt103,235  3,520  3.41  79,161  2,810  3.55  58,786  1,863  3.17  
Loans and loans held for sale: 1
     Commercial987,674  53,087  5.37  854,108  43,099  5.05  751,444  33,896  4.51  
     Tax exempt12,549  443  3.53  14,352  499  3.48  15,064  520  3.45  
     Real estate447,891  21,220  4.74  395,302  18,794  4.75  373,360  16,612  4.45  
     Consumer8,948  547  6.11  11,349  575  5.07  13,660  709  5.19  
Total loans1,457,062  75,297  5.17  1,275,111  62,967  4.94  1,153,528  51,737  4.49  
Total earning assets1,713,144  82,361  4.81  1,524,360  69,760  4.58  1,356,520  56,598  4.17  
Less: Allowance for loan losses(11,318) (10,530) (9,626) 
Cash and due from banks17,625  16,828  16,287  
Other assets131,370  106,600  90,585  
     Total assets$1,850,821  $1,637,258  $1,453,766  
Liabilities