MVB Financial Q3 Core Profitability Rises as Credit Metrics Weaken

MVB Financial Corp. reported stronger core profitability for the third quarter of 2026 as higher net interest income, payment-related fees and a lower expense base supported results. The gains came alongside continued loan and deposit growth, though credit metrics weakened and regulatory capital ratios declined during the quarter.

Pre-provision net revenue was $10.6 million, up 715% from the prior-year quarter after excluding a one-time subsidiary-sale gain and a securities-repositioning loss recorded in the third quarter of 2025. Noninterest expense fell 10.5% year over year to $29.8 million.

Net interest income increased 22.7% from a year earlier. The fully tax-equivalent net interest margin reached 4.02%, 47 basis points above the third quarter of 2025. For the first nine months of 2026, net interest income rose to $93.3 million from $79.0 million, while the adjusted fully tax-equivalent net interest margin was 3.88%, compared with 3.63% a year earlier. The adjusted measure excludes $2.3 million of interest income from nonrecurring items.

Fintech launches support payments growth

Payment card and service-charge income increased 39.6% from the prior-year quarter. For the first nine months, that revenue totaled $16.3 million, up from $13.4 million in the same period of 2025. MVB also reported 22% year-over-year growth in payment revenue for the year to date and $51 billion of payment volume processed over the trailing 12 months.

The company launched nine new fintech partnerships or products during the first nine months of 2026, bringing the number launched since the second quarter of 2025 to 14. Those newer relationships generated approximately $3.5 million of year-to-date revenue and about $305 million of low-cost deposits as of September 30.

MVB’s advanced-stage pipeline included two opportunities in commercial alignment, nine in implementation and one in testing. Its fintech platform spans payment services, card issuing, merchant acquiring, banking-as-a-service and gaming, with more than 40 gaming clients.

Deposit mix and lending expand

Gross loans ended the quarter at $2.52 billion, an increase of $261 million, or 12%, from a year earlier. On-balance-sheet deposits rose $312 million, or 11%, to $3.09 billion, leaving the loan-to-deposit ratio at 82%.

Noninterest-bearing balances represented 32.3% of total deposits. Certificates of deposit fell by $37 million during the quarter and by $200 million from a year earlier, including an $82 million reduction in brokered CDs. The cost of interest-bearing deposits declined to 3.12% from 3.35% in the third quarter of 2025. MVB nevertheless has $130 million of brokered CDs maturing in the first quarter of 2027 at a weighted-average rate of 4.24%.

Fintech sources accounted for 45% of on-balance-sheet deposits, with the remaining 55% coming from MVB’s commercial and retail banking operations. The company reported $3.5 billion of total assets and trailing-12-month revenue of $167 million.

Credit indicators weaken

Asset-quality measures deteriorated during the quarter. Nonperforming loans rose to 1.86% of gross loans from 1.18% in the second quarter, while net charge-offs increased to 0.41% of average loans from 0.23%. Classified loans edged up to 1.99% of gross loans from 1.90%, although criticized loans declined to 2.94% from 3.04%.

The allowance for credit losses increased to $36.2 million, or 1.44% of total loans, from $28.2 million and 1.14% in the preceding quarter. MVB reported $10.4 million of specific reserves against its nonperforming portfolio, including a $4.6 million reserve recorded in the third quarter for a nonperforming acquisition, development and construction loan. Of the nonperforming Small Business Administration loans, $3 million was government guaranteed.

Capital remained above the 8% Community Bank Leverage Ratio threshold, but the bank leverage ratio declined to 11.3% from 12.2% in the second quarter. The bank’s common equity Tier 1 ratio fell to 9.7% from 10.3%, while consolidated tangible common equity to tangible assets, a non-GAAP measure, decreased to 9.3% from 9.7%.

Tangible book value per common share was $25.26, compared with $26.17 at the end of 2025. MVB said changes in accumulated other comprehensive income since year-end reduced the measure by approximately $1.44 per share; excluding that change, tangible book value would have been $26.70.

Investment priorities and risks

Management plans to direct capital toward technology infrastructure, artificial intelligence and automation, payment-product development and data analytics while considering strategic acquisitions and partnerships. MVB also intends to expand its digital workforce to 36 automated workers across core banking, credit, BSA/AML and fintech functions during the second half of 2026, while extending access to its AI desktop assistant across the organization.

The company identified market, economic, operational, liquidity and credit risks among the factors that could affect future results. Other uncertainties include interest-rate changes, deposit flows and classifications, demand for loans, regulatory oversight, competition and the execution of fintech investment and business plans.