Mvb Financial Q1 Earnings Call Highlights

Key Points

• Strong Q1 results: Net income rose 45% year-over-year to $5.2 million with diluted EPS of $0.39, driven by net interest income up 7%, non‑interest income up 17% and a NIM of 3.71% (up 8 bps) while non‑interest expense declined 2%.
• Fintech momentum: MVB’s fintech-enabled model remains a growth engine — its payments platform processes about $48 billion annually, payment card and service-charge income increased 13.5% sequentially, and the company added two new partners with a strong pipeline.
• Efficiency and capital moves: management is expanding AI “Digis” to automate risk/compliance (targeting 32 by year‑end and cutting related headcount toward ~90), repaid $40 million of higher‑cost subordinated debt to save an estimated $1.8 million annually, recorded a post‑quarter ~$10 million pre‑tax fintech gain (boosting tangible book by ≈$0.59), and launched a new $10 million buyback program.

Mvb Financial NASDAQ: MVBF opened fiscal 2026 with first-quarter earnings growth driven by higher revenue and lower expenses, while management emphasized momentum across both its core banking franchise and fintech-related businesses. The company also hosted its “first-ever earnings call as a public company,” according to host Amy Baker.

First-quarter results show revenue growth and positive operating leverage

President and CEO Larry F. Mazza said the company was “pleased to kick off the year with strong first quarter results,” highlighting that net income rose 45% year-over-year. CFO Mike Sumbs reported net income of $5.2 million and diluted earnings per share of $0.39, up 45% and 44% year-over-year, respectively.

Sumbs said performance reflected “strong revenue growth,” with net interest income up 7% year-over-year and non-interest income up 17% year-over-year, while non-interest expense declined 2% year-over-year. Mazza also pointed to operating leverage, noting that revenues increased 8.8% while non-interest expense fell year-over-year.

Net interest margin was 3.71% for the quarter, up 8 basis points from the prior-year period. Sumbs said the improvement was “primarily driven by favorable changes in the balance sheet mix,” partially offset by lower earning asset yields. Mazza added that the company’s deposit mix supported a “low 2.17% cost of funds.”

Fintech-enabled model and partner activity highlighted

Mazza described MVB as a “fintech-enabled bank” combining a traditional banking foundation with “scaled fintech capabilities in payments, banking-as-a-service, and digital gaming.” He cited approximately $3.3 billion in assets and $2.9 billion in deposits, and said the company’s payments platform processes about $48 billion annually.

Mazza outlined a “dual-engine business model” that generates revenue from net interest income and what he called a growing base of fee-driven revenue. He described four operating “lanes”:

• Core banking platform supporting lending and deposit activities, including commercial real estate, C&I, and specialty lending
• Fintech partnerships across payments, banking-as-a-service, and gaming (with “over 40 gaming clients”)
• Building fintech solutions internally, including Victor Technologies, which Mazza said was sold last year for a $34 million gain
• Investing in fintech businesses

In the fintech platform, Mazza said payment card and service charge income increased 13.5% sequentially, aided by “seasonal factors and partner activity.” He said the company launched two new fintech partners during the first quarter and continues to see a “strong pipeline” of partnership opportunities.

During Q&A, Sumbs said the ramp in revenue from new partners “can be choppy and hard to predict,” but he told analysts they “should see incremental improvement and growth” in payment card and service charge income as partners scale and new clients are onboarded through 2026.

Loan and deposit trends; seasonal patterns discussed

Mazza said the core banking business posted loan growth of 2.6% from the prior quarter, or about 10% annualized, marking the “fourth consecutive quarter of expansion.” Sumbs reported total loans reached $2.4 billion, up 10% on an annualized basis from the prior quarter, and noted that “a significant portion of the growth occurred toward the end of the quarter, primarily in March.” He added that the provision was recorded in the quarter, while the full net interest income benefit was not reflected in first-quarter results.

Deposits were another key focus. Mazza said non-interest-bearing deposits were 35% of total deposits at quarter end. Responding to questions from KBW’s Catherine Mealor, Sumbs described two seasonal patterns:

• Gaming-related deposits tend to swell in the fourth quarter with NFL season and persist into early first quarter around the Super Bowl and March Madness, then decline toward the end of the first quarter and “trail off over the summer months.”
• Banking-as-a-service deposits, specifically the Credit Karma relationship, typically rise in the first quarter due to tax season.

Sumbs said average deposits were up during the quarter due to seasonal strength in the BaaS relationship. He also said deposits increased about $60 million quarter-over-quarter “point to point,” despite running off about $90 million of CDs, with much of that activity occurring in March.

Looking ahead, Sumbs said the company has additional CDs maturing and plans to “run off and reprice that down,” which he said should help reduce cost of funds and support margin.

Expense efficiency and AI “digital workers” initiative

Management emphasized operational efficiency initiatives, including automation, data infrastructure, and artificial intelligence. Mazza said MVB has built “a data and AI infrastructure that supports automation across risk, compliance, and operational workflows.” He pointed to headcount reductions in risk and compliance functions over recent quarters, saying personnel declined from about 160 at a peak in the second quarter of 2024 to 111 in the fourth quarter of 2025, with further reductions underway.

TD Cowen’s Janet Lee asked about “digital worker” growth. Mazza said the bank expects to have 32 “Digis” by year-end, clarifying that six are already in place and that the company is building 26 additional Digis during 2026. He said newer Digis will cost about one-third as much as the first six, which were more expensive due to early learning and implementation.

Mazza said the initial focus was risk and compliance, where seasonal volumes have historically required outsourced support. He cited one new Digi, “Evelyn,” saying she can handle “1 million transactions a day,” compared with “anywhere between 10 and 30 transactions” for a human in that process. He said the company expects risk and compliance staffing to move “closer to 90 people from 160 down to 90” over time, while keeping “humans in the loop” with AI.

More broadly, Mazza said the company has “a little over 400 people today” and hopes to keep staffing relatively stable while growing the business, with revenue per employee as an important metric.

Credit, capital actions, and post-quarter gain

On credit, Sumbs said asset quality was “broadly stable,” with net charge-offs and provision both down sequentially. Non-performing assets increased slightly from the prior quarter, driven by “a small number of commercial and single-family residential loans.” He said the increase did not reflect material industry concentrations and that exposures are believed to be well secured.

Sumbs added that about one-third of total non-performing assets at quarter end, or about $12.2 million, related to a single credit previously discussed, which the company expects to resolve “over time with no loss.”

The company also repaid $40 million of higher-cost subordinated debt as part of balance sheet optimization. Sumbs said the action is expected to reduce funding costs and enhance net interest income, with estimated annual savings of about $1.8 million beginning in the second quarter of 2026.

Tangible book value per share was $25.98, down slightly sequentially due to higher unrealized losses in the securities portfolio and a higher share count from option exercises, according to Sumbs. He also noted that subsequent to quarter end, MVB recorded a pre-tax gain of about $10 million related to an existing fintech investment, expected to be reported in the second quarter and to increase tangible book value per share by approximately $0.59.

On capital returns, Sumbs said the company has repurchased $10 million of shares since the first quarter of the prior year, representing about 4% of outstanding shares, and announced a new $10 million share repurchase program in October 2025. He said MVB intends to remain “disciplined and opportunistic” in capital deployment.

In closing remarks, Mazza said management is “energized by the opportunities ahead,” focusing on growing the fintech platform while strengthening the core banking foundation. He told analysts that after a strong start to the year, “the trend is our friend right now,” and said the company is looking for “a very strong 2026” in core performance.

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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