MVB Financial sells regulatory compliance unit after tripling its size

MVB Financial in Fairmont, West Virginia has agreed to sell its Chartwell Compliance subsidiary to New York-based consulting firm Ankura for $14.4 million.

MVB, the holding company for MVB Bank, acquired Chartwell in September 2019 for $4.1 million in cash and stock. At the time, CEO Larry Mazza said MVB aimed to turn what is typically a cost center for banks into a source of profit. Founded in 2011, Chartwell provides regulatory compliance, financial crime prevention and risk management services to banks and money service businesses, as well as fintechs — a market segment in which the $3.2 billion-asset MVB has taken a keen interest. 

"Having Chartwell as a part of the MVB family the past three years has been an extremely beneficial relationship that allowed MVB to grow and scale our fintech business while we also strengthened our internal risk and compliance resources," MVB CEO Larry Mazza said in a press release Wednesday. 

One of the key strategic goals behind MVB's purchase of Chartwell was to help build out the company's in-house compliance and reporting capabilities, Don Robinson, MVB's president, said Thursday in an interview.

More than three years later, that goal has been achieved. Chartwell "really helped us get to the next level with our internal team," Robinson said.

Wednesday's sale, "does not diminish our internal [compliance] expertise in any way," Robinson added.

Chartwell more than tripled revenue and headcount as an MVB subsidiary, according to Mazza. Chartwell was included in the bank's professional services unit, which generated $22.8 million in noninterest income in 2022, up 53% year-over-year. 

In addition to Chartwell, MVB's professional services unit includes Paladin Group, a fraud-prevention firm it acquired in 2020, and software developer Trabian Technology, acquired in April 2021.

MVB currently supports millions of customer accounts as a partner to multiple sports betting sites as well as prominent fintechs like Credit Karma. MVB plans to continue its relationship with Chartwell as a client, Mazza said. 

M&A

Truist's partial sale of insurance unit paves way for growth, CEO says

February 16, 2023 6:18 PM

In acquiring Chartwell, Ankura strengthened its anti-financial crime capabilities, including Bank Security Act and anti-money laundering (BSA/AML) compliance. The deal "provides Ankura with a clear market differentiator by allowing us to offer banking and fintech compliance services uniquely complementary to our investigations, litigation, and oversight offerings," Steven Richards, leader of Ankura's Risk, Forensics and Compliance Group, said in the press release.

Ankura indicated it would retain Chartwell's senior management, as well as its approximately 60 employees. Chartwell's staff totaled 20 when MVB acquired it.

Chartwell has "built a strong business and we are confident that they will be empowered to reach even greater heights as part of Ankura," CEO Kevin Lavin said in the press release. 

Ankura is a good "culture fit" for Chartwell, Robinson said. "It's the right partner at the right time."