- Forward look: A pair of deals leading the sale of its payments subsidiary, along with a book of low-yielding securities should add as much as thirty-five cents per share to MVB Financial's annual earnings.
- Expert quote: The securities sale announced Monday "represents an attractive use of capital that enhances shareholder value, while better aligning our balance sheet with our strategic objectives," CEO Larry Mazza said.
- What's at stake: The $3.2 billion-asset MVB reported a pretax gain totaling $33 million after selling Victor Technologies to Jack Henry & Associates last week, but offset a portion of those profits by taking a $7.6 million charge linked to the securities sale.
A pair of deals announced last week and Monday are setting MVB Financial in Fairmont, West Virginia, up for significantly increased profits in 2026 and beyond, the bank hopes.
The $3.2 billion-asset MVB, holding company for MVB Bank, said Monday that it had unloaded a $73 million bundle of securities. The company expects to redeploy the proceeds into higher-yielding instruments, but reported a $7.6 million loss on the transaction.
Still, the repositioning charge should be cushioned by the $33 million pretax gain MVB generated by selling its payments processing subsidiary, Victor Technologies, to Jack Henry & Associates. MVB
According to CEO Larry Mazza, the added interest income from more profitable investments, paired with the reduction in operating expenses resulting from the Victor sale should add thirty to thirty-five cents per share to MVB's annual income. In 2024, the company reported full-year profits totaling $20.1 million or $1.56 per share.
"We believe this repositioning represents an attractive use of capital that enhances shareholder value, while better aligning our balance sheet with our strategic objectives," Mazza, who has led MVB since 2009, said Monday in a press release.
MVB shares were trading at $27.11 midday Tuesday, up about 2% since the start of the week, with analysts expecting the upward trend to continue. On Tuesday, Raymond James raised its price target for MVB by 17% to $30. Meanwhile, in a recent research note, Hovde Analyst Brett Rabatin predicted a stronger performance by MVB shares "once investors see stronger profitability improvement in the next few quarters."
Victor Technologies has grown into a major payments-as-a-service player since MVB founded the company in 2021. Victor processes billions of dollars in payments monthly, according to Mazza, who added that the sale to Jack Henry should fuel more growth.
"We've taken Victor from concept to processing billions in monthly payments," Mazza said in the release. "Now we're positioning it for strong growth through Jack Henry's resources.
An MVB spokesperson had not responded to a reporter's inquiry about the timing of the Victor and securities sales at deadline.
The securities MVB sold carried a yield of approximately 1.7% with a weighted-average life of nearly 10 years. The repositioning continues an industry-wide effort to undue damage created when a rapid spike in interest rates in 2022 and 2023 pushed the market value of hundreds of billions of dollars worth of investment securities into negative territory, leaving banks' balance sheets awash in unrealized losses.
Since then, dozens of banks have entered into transactions similar to the one MVB executed Monday, selling a book of low-yield investments — almost always at a loss — but setting the stage for expanded spread income by investing the proceeds in bonds with a higher yield.
Ally Financial, for example, reported a $495 million pretax loss in March tied to the
"We expect the repositioning to add approximately 20 basis points to our net interest margin and approximately forty-one cents to annual earnings per share," John Montgomery, the $1.5 billion-asset company's president and CEO, said in a press release.
