Business Context and Reporting Period
MVB Financial Corp. (MVB) filed this Form 8-K on April 3, 2020, to report a material definitive agreement entered into by its wholly owned subsidiary, MVB Bank, Inc. The agreement involves the acquisition of assets and assumption of liabilities from The First State Bank, Barboursville, West Virginia, which was placed into receivership by the Federal Deposit Insurance Corporation (FDIC).
Key Financial Metrics and Transaction Details
- Deposits Assumed: Approximately $139.5 million (as of December 31, 2019).
- Assets Purchased: Approximately $147.2 million (as of December 31, 2019).
- Asset Acquisition Discount: Assets were acquired at a discount to book value of approximately $28.2 million.
- Branch Consideration: $1.5 million for three branch locations in Barboursville, Teays Valley, and Huntington, West Virginia.
- Real Estate Owned (OREO): Acquired at 47.5% of book value.
- Deposit Premium: No deposit premium was paid.
Material Changes and Transaction Scope
The transaction results in the automatic transfer of First State Bank depositors to MVB Bank, with FDIC insurance continuing without interruption. The agreement is limited to the assets and liabilities of First State Bank; the assets, liabilities, and capital stock of the former parent company, First Bankshares, Inc., were not purchased or assumed. This acquisition expands MVB's footprint in West Virginia through the addition of three new branches.
Outlook, Risks, and Management Commentary
Management highlighted the strategic expansion into new markets and the accretive nature of the transaction due to the significant discount on assets and lack of deposit premium. The filing notes that the description of the agreement is qualified by reference to the full Purchase and Assumption Agreement filed as Exhibit 2.1. No specific forward-looking financial guidance or updated risk factors beyond the standard acquisition risks were detailed in this specific filing text.
Investor Verification Checklist
- Review the full Purchase and Assumption Agreement (Exhibit 2.1) for specific terms regarding asset quality and liability assumptions.
- Verify the integration timeline for the three new branch locations.
- Assess the impact of the $28.2 million asset discount on future earnings accretion.
- Confirm that no liabilities from First Bankshares, Inc. were inadvertently assumed.
- Monitor the quality of the acquired loan portfolio and OREO assets post-acquisition.