MVB FINANCIAL CORP

Previous wording

We continue to adapt our business model due to challenging market conditions, primarily due to the current interest rate environment and economy, as well as consideration of regulatory and geopolitical environments, among others. Interest rates have remained at an elevated level through June 30, 2025, as the Federal Reserve has maintained its federal funds interest rate range of 4.25% to 4.5%. However, we have seen an increase in loan balances compared to the prior quarter, which primarily reflects the Bank's execution of its asset generation strategies that include the diversification of risk among loans with relatively smaller loan balances, as well as a focus on loans with fixed interest rates. We remain committed to the gaming, payments and banking-as-a-service industries. We continue to expand the Bank's treasury services function to support the banking needs of financial and emerging technology companies, which we believe will further enhance CoRe deposits, notably through the expansion of deposit acquisition and fee income strategies through the Fintech division. Additionally, we have expanded our compliance and risk management team to support the growth in these lines of business.

Current wording

We continue to adapt our business model due to challenging market conditions, primarily due to the current interest rate environment and economy, as well as consideration of regulatory and geopolitical environments, among others. The Federal Reserve has lowered its federal funds interest rate range to 4.00% to 4.25% as of September 30, 2025. We have seen an increase in loan balances compared to the second quarter of 2025, which primarily reflects the Bank's execution of its asset generation strategies that include the diversification of risk among loans with relatively smaller loan balances, as well as a focus on loans with fixed interest rates. We remain committed to the gaming, payments and banking-as-a-service industries. We continue to expand the Bank's treasury services function to support the banking needs of financial and emerging technology companies, which we believe will further enhance CoRe deposits, notably through the expansion of deposit acquisition and fee income strategies through the Fintech division. Additionally, we have expanded our compliance and risk management team to support the growth in these lines of business.

Previous wording

During the three months ended June 30, 2025, net interest income declined $1.8 million, noninterest income increased $0.8 million and noninterest expense declined $0.4 million compared to the three months ended June 30, 2024. Our tax-equivalent yield on earning assets for the three months ended June 30, 2025 was 6.04% compared to 6.26% for the three months ended June 30, 2024. Loans receivable increased $90.0 million to $2.15 billion during the three months ended June 30, 2025. Our overall cost of interest-bearing liabilities was 3.55% for the three months ended June 30, 2025 compared to 4.15% for the three months ended June 30, 2024. This cost of interest-bearing liabilities, combined with the earning asset yield, resulted in a tax-equivalent net interest margin of 3.69% in the three months ended June 30, 2025, compared to 3.75% in the three months ended June 30, 2024.

Current wording

During the three months ended September 30, 2025, net interest income remained consistent at $26.6 million, noninterest income increased $28.0 million and noninterest expense increased $3.8 million compared to the three months ended September 30, 2024. Our tax-equivalent yield on earning assets for the three months ended September 30, 2025 was 5.90% compared to 6.32% for the three months ended September 30, 2024. Loans receivable increased $106.1 million to $2.26 billion during the three months ended September 30, 2025. Our overall cost of interest-bearing liabilities was 3.38% for the three months ended September 30, 2025 compared to 4.04% at September 30, 2024. This cost of interest-bearing liabilities, combined with the earning asset yield, resulted in a tax-equivalent net interest margin of 3.55% for the three months ended September 30, 2025, compared to 3.61% in the three months ended September 30, 2024.

Previous wording

Our net income for the three months ended June 30, 2025 was $2.0 million compared to $4.1 million for the three months ended June 30, 2024. Earnings for the three months ended June 30, 2025 equated to a return on average assets of 0.3% and a return on average equity of 2.6%, compared to the three months ended June 30, 2024 results of 0.5% and 5.7%, respectively. Basic and diluted earnings per share were $0.16 and $0.15 for the three months ended June 30, 2025, respectively, compared to $0.32 and $0.31, respectively, for the three months ended June 30, 2024. Our results for the three months ended June 30, 2025 included a $2.0 million provision for credit losses primarily due to loan growth during the quarter, compared to a $0.3 million provision for credit losses for the three months ended June 30, 2024. Our loan growth during the three months ended June 30, 2025 occurred late in the quarter, resulting in provisioning without the benefit of corresponding interest income.

Current wording

Our net income for the three months ended September 30, 2025 was $17.1 million compared to $2.1 million for the three months ended September 30, 2024. Earnings for the three months ended September 30, 2025 equated to a return on average assets of 2.1% and a return on average equity of 22.9%, compared to the three months ended September 30, 2024 results of 0.3% and 2.8%, respectively. Basic and diluted earnings per share were $1.36 and $1.32, respectively, for the three months ended September 30, 2025, compared to $0.16 for both basic and diluted earnings per share for the three months ended September 30, 2024. Our results for the three months ended September 30, 2025 included a $4.4 million provision for credit losses that includes specific reserves of $1.2 million associated with one credit that was downgraded, a $1.0 million write-down of a Fintech investment that had been classified as an available-for-sale security, enhancements to the qualitative adjustments used in our credit loss model, and loan growth during the quarter, compared to a $1.0 million provision for credit losses for the three months ended September 30, 2024 that included a $0.5 million write-down of a Fintech investment that had been classified as an available-for-sale security. Our results for the three months ended September 30, 2025 also included a $34.1 million pre-tax gain on the sale of Victor and a $7.6 million loss on the sale of available-for-sale securities associated with a strategic repositioning of our investment portfolio.

Previous wording

During the six months ended June 30, 2025, net interest income decreased $5.2 million, noninterest income remained consistent at $15.0 million and noninterest expense decreased by $1.8 million compared to the six months ended June 30, 2024. The decrease in our net interest income for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 can primarily be attributed to a decrease in average loans with the loan growth during the six months ended June 30, 2025 occurring late in the second quarter. Our yield on tax-equivalent earning assets for the six months ended June 30, 2025 was 5.98% compared to 6.30% for the six months ended June 30, 2024. Loans receivable increased by $53.2 million to $2.15 billion during the six months ended June 30, 2025. Our overall cost of interest-bearing liabilities was 3.59% for the six months ended June 30, 2025 compared to 4.19% for the six months ended June 30, 2024. This cost of interest-bearing liabilities, combined with the earning asset yield, resulted in a tax-equivalent net interest margin of 3.67% in the six months ended June 30, 2025, compared to 3.79% in the six months ended June 30, 2024.

Current wording

During the nine months ended September 30, 2025, net interest income declined $5.3 million, noninterest income increased $27.9 million and noninterest expense increased by $2.0 million compared to the nine months ended September 30, 2024. Our yield on tax-equivalent earning assets for the nine months ended September 30, 2025 was 5.95% compared to 6.31% for the nine months ended September 30, 2024. Loans receivable increased by $159.3 million to $2.26 billion during the nine months ended September 30, 2025. Our overall cost of interest-bearing liabilities was 3.51% for the nine months ended September 30, 2025 compared to 4.14% at September 30, 2024. This cost of interest-bearing liabilities, combined with the earning asset yield, resulted in a tax-equivalent net interest margin of 3.63% in the nine months ended September 30, 2025, compared to 3.73% in the nine months ended September 30, 2024.

Previous wording

The following tables present information regarding (i) average balances, the total dollar amount of interest income from interest earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) the interest rate spread; (iv) net interest income and margin; and (v) net interest income and margin (on a tax-equivalent basis) as of and for the periods shown. The average balances presented are derived from daily average balances.

Current wording

The following tables present information regarding (i) average balances, the total dollar amount of interest income from interest earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) the interest rate spread, income and margin (tax-equivalent); (iv) net interest spread, income and margin as of and for the periods shown. The average balances presented are derived from daily average balances.

Previous wording

1 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a federal tax rate of 21% for the six months ended June 30, 2025 and 2024, which is a non-U.S. GAAP financial measure. See the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable U.S. GAAP financial measure following this table.

Current wording

1 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a federal tax rate of 21% for the nine months ended September 30, 2025 and 2024, which is a non-U.S. GAAP financial measure. See the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable U.S. GAAP financial measure following this table.

Previous wording

Tangible book value (“TBV”) per common share was $23.68 and $22.70 as of June 30, 2025 and June 30, 2024, respectively. TBV per common share is a non-U.S. GAAP measure that we believe is helpful to interpreting financial results. A reconciliation of TBV per common share is included below.

Current wording

Tangible book value (“TBV”) per common share was $25.98 and $23.20 as of September 30, 2025 and September 30, 2024, respectively. TBV per common share is a non-U.S. GAAP measure that we believe is helpful to interpreting financial results. A reconciliation of TBV per common share is included below.

Previous wording

Net interest margin is calculated by dividing net interest income by average interest-earning assets and measures the net revenue stream generated by the Bank’s balance sheet. Net interest spread is calculated by taking the difference between interest earned on earning assets and interest paid on interest-bearing liabilities in an effort to maximize net interest income, while maintaining an appropriate level of interest rate risk.

Current wording

Net interest margin is calculated by dividing net interest income by average interest-earning assets and measures the net revenue stream generated by the Bank’s balance sheet. Net interest spread is calculated by taking the difference between interest earned on earning assets and interest paid on interest-bearing liabilities in an effort to maximize net interest income, while maintaining an appropriate level of interest rate risk. We continually analyze methods to deploy assets into an earning asset mix to generate a stronger net interest margin.

Previous wording

Net interest margin on a tax-equivalent basis was 3.69% for the three months ended June 30, 2025 compared to 3.75% for the three months ended June 30, 2024. The decline in net interest margin on a tax-equivalent basis primarily reflects a decline in earning asset yields, partially offset by lower funding costs. Tax-equivalent net interest spread was 2.49% for the three months ended June 30, 2025 compared to 2.11% for the three months ended June 30, 2024. The difference between the tax-equivalent net interest margin and tax-equivalent net interest spread was 120 basis points in the three months ended June 30, 2025 compared to 164 basis points in the three months ended June 30, 2024, driven by the decline in average assets.

Current wording

Net interest margin on a tax-equivalent basis was 3.55% for the three months ended September 30, 2025 compared to 3.61% for the three months ended September 30, 2024. The decline in net interest margin on a tax-equivalent basis primarily reflects a decline in earning asset yields, partially offset by lower funding costs. Tax-equivalent net interest spread was 2.52% for the three months ended September 30, 2025 compared to 2.28% for the three months ended September 30, 2024. The difference between the tax-equivalent net interest margin and tax-equivalent net interest spread was 103 basis points for the three months ended September 30, 2025 compared to 133 basis points for the three months ended September 30, 2024.

Previous wording

During the three months ended June 30, 2025, net interest income declined $1.8 million, or 6.5%, to $25.8 million from $27.6 million during the three months ended June 30, 2024. Average total earning assets were $2.82 billion as of June 30, 2025, compared to $2.97 billion as of June 30, 2024. Total interest income declined by $3.7 million, or 8.1%, to $42.4 million in the three months ended June 30, 2025 from $46.1 million in the three months ended June 30, 2024, primarily reflecting lower interest income from decreased interest rates and balances of loans and cash, partially offset by higher interest income on investment securities balances due to higher rates earned on these investments and a higher overall balance of investment securities. Average total loans declined to $2.09 billion as of June 30, 2025 from $2.24 billion as of June 30, 2024, primarily as the result of a $108.7 million decline in average commercial loans, a $24.4 million decline in average real estate loans and a $12.5 million decline in average consumer loans. As previously discussed, our loan growth during the three months ended June 30, 2025 occurred later in the quarter.

Current wording

During the three months ended September 30, 2025, net interest income remained consistent at $26.6 million compared to the three months ended September 30, 2024. Average total earning assets were $2.99 billion as of September 30, 2025, compared to $2.95 billion as of September 30, 2024. Total interest income declined by $2.4 million, or 5.2%, to $44.2 million for the three months ended September 30, 2025 from $46.6 million for the three months ended September 30, 2024, primarily reflecting lower interest income from lower yields and balances of loans and cash, partially offset by higher interest income on investment securities balances due to higher rates earned on these investments and a higher overall balance of investment securities. Average total loans remained consistent at $2.18 billion as of September 30, 2025 compared to September 30, 2024.

Previous wording

Average investment securities increased $46.0 million as the result of an $52.6 million increase in taxable investments, partially offset by a $6.7 million decline in tax-exempt investments during the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The yield on taxable securities increased 68 basis points, and the yield on tax-exempt securities increased 74 basis points.

Current wording

Average investment securities increased $30.9 million as the result of a $41.6 million increase in taxable investments, partially offset by a $10.7 million decline in tax-exempt investments during the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The yield on taxable securities increased 132 basis points and the yield on tax-exempt securities increased 18 basis points.

Previous wording

Average interest-bearing liabilities increased $80.2 million, which was primarily the result of average balance increases of $192.9 million in negotiable order of withdrawal accounts and $4.9 million in savings accounts, partially offset by an decrease of $74.0 million in certificates of deposit and $41.2 million in money market checking accounts.

Current wording

Average interest-bearing liabilities increased $99.0 million, which was primarily the result of average balance increases of $212.2 million in negotiable order of withdrawal accounts, $52.5 million in money market checking accounts and $34.9 million in savings accounts, partially offset by a decrease of $200.0 million in certificates of deposit.

Previous wording

Average interest-bearing deposits were $1.80 billion for the three months ended June 30, 2025 and $1.72 billion for the three months ended June 30, 2024. Total interest expense declined $2.0 million, primarily driven by lower interest rates. The cost of interest-bearing liabilities declined to 3.55% for the three months ended June 30, 2025 from 4.15% for the three months ended June 30, 2024.

Current wording

Average interest-bearing deposits were $1.99 billion for the three months ended September 30, 2025 and $1.89 billion for the three months ended September 30, 2024. Total interest expense declined $2.4 million, primarily driven by lower interest rates. The cost of interest-bearing liabilities declined to 3.38% for the three months ended September 30, 2025 from 4.04% for the three months ended September 30, 2024.

Previous wording

Net interest margin on a tax-equivalent basis was 3.67% for the six months ended June 30, 2025 compared to 3.79% for the six months ended June 30, 2024. The decrease in net interest margin on a tax-equivalent basis primarily reflects a decline in earning asset yields, partially offset by lower funding costs. Tax-equivalent net interest spread was 2.39% for the six months ended June 30, 2025 compared to 2.11% for the six months ended June 30, 2024. The difference between the tax-equivalent net interest margin and tax-equivalent net interest spread was 128 basis points in the six months ended June 30, 2025 compared to 168 basis points in the six months ended June 30, 2024. This difference was driven by the decrease in interest expense and the decline in average assets.

Current wording

Net interest margin on a tax-equivalent basis was 3.63% for the nine months ended September 30, 2025 compared to 3.73% for the nine months ended September 30, 2024. The decrease in net interest margin on a tax-equivalent basis primarily reflects a decline in earning asset yields, partially offset by lower funding costs. Tax-equivalent net interest spread was 2.44% for the nine months ended September 30, 2025 compared to 2.17% for the nine months ended September 30, 2024. The difference between the tax-equivalent net interest margin and tax-equivalent net interest spread was 119 basis points in the nine months ended September 30, 2025 compared to 156 basis points in the nine months ended September 30, 2024. This difference was driven by the decrease in interest rates.

Previous wording

During the six months ended June 30, 2025, net interest income decreased by $5.3 million, or 9.1%, to $52.5 million from $57.7 million during the six months ended June 30, 2024. This decrease is largely due to lower yields on earning assets, partially offset by a decrease in the cost of funds. Average total earning assets were $2.90 billion in the six months ended June 30, 2025 compared to $3.08 billion in the six months ended June 30, 2024. Total interest income declined by $10.5 million, or 11.0%, to $85.6 million in the six months ended June 30, 2025 from $96.2 million in the six months ended June 30, 2024, primarily reflecting lower interest income from decreased interest rates and balances of loans and cash, partially offset by higher interest income on investment securities balances due to higher rates earned on these investments and a higher overall balance of investment securities. Average total loans decreased to $2.10 billion in the six months ended June 30, 2025 from $2.26 billion in the six months ended June 30, 2024, primarily as the result of a $121.4 million decrease in average commercial loans, a $27.2 million decrease in average real estate loans and a $13.4 million decrease in average consumer loans.

Current wording

During the nine months ended September 30, 2025, net interest income declined by $5.3 million, or 6.2%, to $79.0 million from $84.3 million during the nine months ended September 30, 2024. This decrease is largely due to lower yields on earning assets, partially offset by a decrease in the cost of funds. Average total earning assets were $2.93 billion in the nine months ended September 30, 2025 compared to $3.04 billion in the nine months ended September 30, 2024. Total interest income declined by $13.0 million, or 9.1%, to $129.8 million in the nine months ended September 30, 2025 from $142.8 million in the nine months ended September 30, 2024, primarily reflecting lower interest income from decreased interest rates and balances of loans and cash, partially offset by higher interest income on investment securities balances due to higher rates earned on these investments and a higher overall balance of investment securities. Average total loans decreased to $2.13 billion in the nine months ended September 30, 2025 from $2.23 billion in the nine months ended September 30, 2024, primarily as the result of a $68.3 million decrease in average commercial loans, a $28.6 million decrease in average real estate loans and a $11.2 million decrease in average consumer loans.

Previous wording

Average investment securities increased $61.6 million as the result of a $67.1 million increase in taxable investments, partially offset by a $5.5 million decrease in tax-exempt investments during the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The yield on taxable securities increased 62 basis points and the tax-exempt securities yield increased 39 basis points.

Current wording

Average investment securities increased $51.2 million as the result of a $58.5 million increase in taxable investments, partially offset by a $7.2 million decrease in tax-exempt investments during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The yield on taxable securities increased 84 basis points and the tax-exempt securities yield increased 32 basis points.

Previous wording

Average interest-bearing liabilities increased by $18.3 million for the six months ended June 30, 2025 from the six months ended June 30, 2024. The increase was primarily the result of average balance increases of $78.8 million in negotiable order of withdrawal accounts and $32.7 million in certificates of deposit, partially offset by declines of $57.1 million in money market checking accounts and $34.3 million in saving accounts.

Current wording

Average interest-bearing liabilities increased by $45.6 million for the nine months ended September 30, 2025 from the nine months ended September 30, 2024. The increase was primarily the result of average balance increases of $123.8 million in negotiable order of withdrawal accounts, partially offset by declines of $45.6 million in certificates of deposit, $20.1 million in money market checking accounts and $11.0 million in saving accounts.

Previous wording

Average interest-bearing deposits were $1.78 billion for the six months ended June 30, 2025 and $1.76 billion for the six months ended June 30, 2024. Total interest expense decreased by $5.3 million, primarily driven by decreases in interest rates. The cost of interest-bearing liabilities decreased to 3.59% in the six months ended June 30, 2025 from 4.19% in the six months ended June 30, 2024.

Current wording

Average interest-bearing deposits were $1.85 billion for the nine months ended September 30, 2025 and $1.81 billion for the nine months ended September 30, 2024. Total interest expense decreased by $7.7 million, primarily driven by decreases in interest rates. The cost of interest-bearing liabilities decreased to 3.51% in the nine months ended September 30, 2025 from 4.14% in the nine months ended September 30, 2024.

Previous wording

Noninterest income totaled $15.0 million for the six months ended June 30, 2025, consistent with the six months ended June 30, 2024. The $3.6 million increase in equity method investment income from our mortgage segment, $1.0 million increase in payment card and service charge income and $0.6 million gain on divestiture activity were offset by a $1.9 million decline in other operating income, a $1.8 million decline in compliance consulting income, a $0.6 million decline in gain on sale of available-for-sale investment securities and a $0.6 million holding loss on equity securities.

Current wording

Noninterest income totaled $34.6 million for the three months ended September 30, 2025, an increase of $28.0 million from $6.7 million for the three months ended September 30, 2024. The increase was primarily the result of a $34.1 million gain on divestiture activity related to the sale of Victor and a $1.6 million increase in equity method investment income from our mortgage segment, partially offset by a net loss of $7.5 million related to sales of available-for-sale investment securities and a $1.2 million decline in compliance and consulting income, primarily due to the sale of Trabian during the quarter ended March 31, 2025.

Previous wording

Noninterest income totaled $7.9 million for the three months ended June 30, 2025, an increase of $0.8 million from $7.1 million for the three months ended June 30, 2024. The increase was primarily the result of a $1.8 million increase in equity method investment income from our mortgage segment and a $0.8 million increase in payment card and service charge income, partially offset by declines of $1.3 million in compliance and consulting income, $0.4 million in holding gain on equity securities and $0.2 million in other operating income.

Current wording

Noninterest income totaled $49.6 million for the nine months ended September 30, 2025, an increase of $27.9 million from $21.6 million for the nine months ended September 30, 2024. The increase was primarily the result of a $34.7 million gain on divestiture activity related to the sales of Victor and Trabian, a $5.3 million increase in equity method investment income from our mortgage segment and a $0.9 million increase in payment card and service charge income. These increases were offset by a loss of $7.4 million related to sales of available-for-sale investment securities compared to a gain of $0.7 million in the prior year period, a $3.0 million decline in compliance and consulting income and a $1.1 million decline in other operating income.

Previous wording

Noninterest expense was $28.6 million and $28.9 million in the three months ended June 30, 2025 and 2024, respectively. The decline from the prior period primarily reflects declines of $1.7 million in professional fees, $0.3 million in equipment depreciation and maintenance and $0.1 million in salaries and employee benefits. These declines were partially offset by increases of $0.7 million in other operating expenses, $0.8 million in travel, entertainment, dues and subscriptions and $0.4 million in occupancy expenses. Approximately 55.3% and 55.1% of noninterest expense for the three months ended June 30, 2025 and 2024, respectively, was related to personnel costs. Personnel costs are a significant part of our noninterest expense as such costs are critical to financial services organizations.

Current wording

Noninterest expense was $33.3 million and $29.5 million in the three months ended September 30, 2025 and 2024, respectively. The increase from the prior period primarily reflects increases of $4.7 million in salaries and employee benefits, $0.8 million in other operating expense, $0.3 million in software subscriptions and $0.2 million in occupancy expense. These increases were partially offset by decreases of $1.7 million in professional fees, $0.3 million in equipment depreciation and maintenance expense and $0.2 million in travel, entertainment, dues and subscriptions. Approximately 64.2% and 56.7% of noninterest expense for the three months ended September 30, 2025 and 2024, respectively, was related to personnel costs. Personnel costs are a significant part of our noninterest expense as such costs are critical to financial services organizations.

Previous wording

Noninterest expense was $57.3 million and $59.1 million for the six months ended June 30, 2025 and 2024, respectively. The decline from the prior year period primarily reflects declines of $3.9 million in professional fees, $0.6 million in equipment depreciation and maintenance expense and $0.2 million in salaries and employee benefits. These declines were partially offset by increases of $1.3 million in other operating expenses, $0.8 million in occupancy expense and $0.7 million in travel, entertainment, dues and subscriptions. Approximately 56.2% and 54.9% of noninterest expense for the six months ended June 30, 2025 and 2024, respectively, was related to personnel costs. Personnel costs are a significant part of our noninterest expense, as such costs are critical to financial services organizations.

Current wording

The increase from the prior year period primarily reflects increases of $4.5 million in salaries and employee benefits, $2.1 million in other operating expense, $1.1 million in software costs and $1.0 million in occupancy expense. These increases were partially offset by declines of $5.6 million in professional fees, $0.9 million in equipment depreciation and maintenance expense and $0.2 million in travel, entertainment, dues and subscriptions. Approximately 59.2% and 55.5% of noninterest expense for the nine months ended September 30, 2025 and 2024, respectively, was related to personnel costs. Personnel costs are a significant part of our noninterest expense, as such costs are critical to financial services organizations.

Previous wording

Our return on average assets was 0.3% for the three months ended June 30, 2025, compared to 0.5% for the three months ended June 30, 2024. The lower return for the three months ended June 30, 2025 is the result of a $2.1 million decline in earnings and a decline in average total assets of $146.7 million, which was primarily the result of a $108.7 million decline in average commercial loans, $48.0 million decline in average interest-bearing balances with banks, a $24.4 million decline in average real estate loans and a $12.5 million decline in average consumer loans, partially offset by a $46.0 million increase in average investment securities.

Current wording

Our return on average assets was 2.1% for the three months ended September 30, 2025, compared to 0.3% for the three months ended September 30, 2024. The higher return for the three months ended September 30, 2025 is the result of a $15.1 million increase in earnings, primarily due to the $34.1 million gain on the sale of Victor, partially offset by the $7.6 million loss on the sale of available-for-sale securities associated with a strategic repositioning of our investment securities portfolio during the three months ended September 30, 2025. The increase in earnings was partially offset by an increase in average total assets of $61.8 million, which was primarily the result of a $36.3 million increase in average commercial loans, $30.9 million increase in average investment securities and $10.6 million increase in average interest-bearing balances with banks, partially offset by a $31.3 million decline in average real estate loans.

Previous wording

Our return on average assets was 0.3% for the six months ended June 30, 2025, compared to 0.5% for the six months ended June 30, 2024. The increased return for the six months ended June 30, 2025 is primarily the result of a decrease of $178.0 million in average total assets, mainly the result of a a $121.4 million decrease in average commercial loans, a $76.5 million decrease in average interest-bearing deposits with banks, a $27.2 million decrease in average real estate loans and a $13.4 million decrease in average consumer loans, partially offset by $61.6 million increase in average investment securities. This decrease in average total assets was offset by a $3.0 million decrease in earnings.

Current wording

Our return on average assets was 0.9% for the nine months ended September 30, 2025, compared to 0.4% for the nine months ended September 30, 2024. The higher return for the nine months ended September 30, 2025 is the result of a $12.1 million increase in earnings, primarily due to the previously mentioned gain on sale of Victor and loss associated with the strategic repositioning of our investment securities portfolio during the three months ended September 30, 2025, and a decrease of $97.5 million in average total assets, mainly the result of a a $68.3 million decrease in average commercial loans, a $47.4 million decrease in average interest-bearing deposits with banks, a $28.6 million decrease in average real estate loans and a $11.2 million decrease in average consumer loans, partially offset by $51.2 million increase in average investment securities.

Previous wording

Our return on average stockholders’ equity was 2.6% for the three months ended June 30, 2025, compared to 5.7% for the three months ended June 30, 2024. The lower return for the three months ended June 30, 2025 is a result of a $2.1 million decline in earnings, while average equity increased by $17.6 million.

Current wording

Our return on average stockholders’ equity was 22.9% for the three months ended September 30, 2025, compared to 2.8% for the three months ended September 30, 2024. The higher return for the three months ended September 30, 2025 is a result of the previously discussed $15.1 million increase in earnings, while average equity increased by $5.6 million.

Previous wording

Our return on average stockholders’ equity was 3.7% for the six months ended June 30, 2025, compared to 5.9% for the six months ended June 30, 2024. The lower return for the six months ended June 30, 2025 is a result of a $3.0 million decrease in earnings, while average equity increased by $16.5 million.

Current wording

Our return on average stockholders’ equity was 10.0% for the nine months ended September 30, 2025, compared to 4.9% for the nine months ended September 30, 2024. The higher return for the nine months ended September 30, 2025 is a result of the previously discussed $12.1 million increase in earnings, while average equity increased by $12.8 million.

Previous wording

Cash and cash equivalents totaled $399.4 million at June 30, 2025, compared to $317.9 million at December 31, 2024. We believe the current balance of cash and cash equivalents adequately serves our liquidity and performance needs. Total cash and cash equivalents fluctuate daily due to transactions in process and other liquidity demands.

Current wording

Cash and cash equivalents totaled $300.0 million at September 30, 2025, compared to $317.9 million at December 31, 2024. We believe the current balance of cash and cash equivalents adequately serves our liquidity and performance needs. Total cash and cash equivalents fluctuate daily due to transactions in process and other liquidity demands.

Previous wording

Investment securities, including equity securities, totaled $440.5 million at June 30, 2025, compared to $453.5 million at December 31, 2024. The following table presents a summary of the investment securities portfolio as of the periods shown. The available-for-sale securities are reported at estimated fair value.

Current wording

Investment securities, including equity securities, totaled $368.9 million at September 30, 2025, compared to $453.5 million at December 31, 2024. The following table presents a summary of the investment securities portfolio as of the periods shown. The available-for-sale securities are reported at estimated fair value.

Previous wording

Our loan portfolio totaled $2.15 billion as of June 30, 2025 and $2.10 billion as of December 31, 2024. The Bank’s lending is primarily focused in North Central West Virginia, Northern Virginia, North Carolina and South Carolina. The portfolio consists principally of commercial lending, retail lending, which includes single-family residential mortgages, and consumer lending.

Current wording

Our loan portfolio totaled $2.26 billion as of September 30, 2025 and $2.10 billion as of December 31, 2024. The Bank’s lending is primarily focused in North Central West Virginia, Northern Virginia, North Carolina and South Carolina. The portfolio consists principally of commercial lending, retail lending, which includes single-family residential mortgages, and consumer lending.

Previous wording

At June 30, 2025 and December 31, 2024, commercial and non-residential real estate loans comprised the largest component of the loan portfolio. A large portion of commercial loans are secured by real estate and are diverse in terms of geographical location and industry. Loans that are not secured by real estate are typically secured by accounts receivable, mortgages or equipment. While the loan concentration is in commercial loans, the commercial portfolio is comprised of loans to many different borrowers in numerous different industries, generally located in our primary market areas. Additionally, within the commercial portfolio, loans within the healthcare industry, which include loans to physicians, nursing homes and pharmacies, represent 22% of our total loan portfolio as of June 30, 2025.

Current wording

At September 30, 2025 and December 31, 2024, commercial and non-residential real estate loans comprised the largest component of the loan portfolio. A large portion of commercial loans are secured by real estate and are diverse in terms of geographical location and industry. Loans that are not secured by real estate are typically secured by accounts receivable, mortgages or equipment. While the loan concentration is in commercial loans, the commercial portfolio is comprised of loans to many different borrowers in numerous industries, generally located in our primary market areas. Additionally, within the commercial portfolio, loans within the healthcare industry, which include loans to physicians, nursing homes and pharmacies, represent 22% and 23% of our total loan portfolio as of September 30, 2025 and December 31, 2024, respectively.

Previous wording

The ACL was $20.8 million, or 0.97% of loans receivable, at June 30, 2025, compared to $19.7 million, or 0.94% of loans receivable, at December 31, 2024. Over the six months ended June 30, 2025, changes to the loan portfolio balances, qualitative factor adjustments and expected loss forecasts within the expected credit loss calculations resulted in allowances increases of $1.1 million to the commercial business, commercial real estate and commercial acquisition, development and construction segments. There was a further increase of $0.9 million in provision needed by the individually analyzed segment. These increases were partially offset by a decrease of $0.6 million in allowance required by the residential, home equity lines of credit and consumer segments and reduction of $0.3 million in the unallocated segment. Bank management expects the markets in which it operates will experience potential economic viability over the next one to two years and for the six months ended June 30, 2025 has observed overall increases to both loan balances and allocation rates within the pooled loan portfolio.

Current wording

The ACL was $23.3 million, or 1.03% of loans receivable, at September 30, 2025, compared to $19.7 million, or 0.94% of loans receivable, at December 31, 2024. Over the nine months ended September 30, 2025, changes to the loan portfolio balances, qualitative factor adjustments and expected loss forecasts within the expected credit loss calculations resulted in allowances increases of $1.6 million to the commercial business, commercial real estate and commercial acquisition, development and construction segments. There was a further increase of $1.8 million in provision related to the individually analyzed segment, as well as an increase of $0.6 million in allowance required by the residential, home equity lines of credit and consumer segments and provision reduction of $0.3 million in the unallocated segment. Bank management expects the markets in which it operates will experience potential economic viability over the next one to two years and for the nine months ended September 30, 2025 has observed overall increases to both loan balances and allocation rates within the pooled loan portfolio.

Previous wording

Deposits remain the most significant source of funds, totaling $2.80 billion, or 97.2% of funding sources at June 30, 2025. This same information at December 31, 2024 reflected $2.69 billion in deposits representing 97.2% of funding sources. Of these amounts, Fintech deposits totaled $1.16 billion and $964.1 million at June 30, 2025 and December 31, 2024, respectively. The increase in Fintech deposits is primarily attributable to increases in banking-as-a-service and digital asset deposits from $208.1 million and $22.6 million at December 31, 2024, respectively, to $308.3 million and $216.2 million at June 30, 2025, respectively. The increase in banking-as-a-service is primarily the result of on-balance sheet deposit management, while the increase in digital asset deposits to due to the acquisition of a new client.

Current wording

Deposits remain the most significant source of funds, totaling $2.78 billion, or 97.3% of funding sources at September 30, 2025. This same information at December 31, 2024 reflected $2.69 billion in deposits representing 97.2% of funding sources. Of these amounts, Fintech deposits totaled $1.10 billion and $964.1 million at September 30, 2025 and December 31, 2024, respectively. The increase in Fintech deposits is primarily attributable to increases in banking-as-a-service and digital asset deposits to $288.9 million and $79.0 million at September 30, 2025, respectively, from $208.1 million and $22.6 million at December 31, 2024, respectively. The increase in banking-as-a-service is primarily the result of on-balance sheet deposit management, while the increase in digital asset deposits was primarily due to the acquisition of a new client during the three months ended September 30, 2025. Certificates of deposit (“CDs”) have decreased to $592.4 million at September 30, 2025, compared to $834.2 million at December 31, 2024, primarily driven by a decrease of $190.4 million of brokered CDs.

Previous wording

Borrowings represented 2.6% of funding sources at June 30, 2025, versus 2.7% at December 31, 2024. Repurchase agreements, which are available to large corporate customers, represented 0.1% of funding sources at June 30, 2025 and December 31, 2024.

Current wording

Borrowings represented 2.6% of funding sources at September 30, 2025, versus 2.7% at December 31, 2024. Repurchase agreements, which are available to large corporate customers, represented 0.1% of funding sources at both September 30, 2025 and December 31, 2024.

Previous wording

At June 30, 2025, noninterest-bearing balances totaled $1.05 billion, compared to $941.0 million at December 31, 2024, or 37.4% and 34.9%, respectively, of total deposits. Interest-bearing deposits totaled $1.75 billion at June 30, 2025, compared to $1.75 billion at December 31, 2024.

Current wording

At September 30, 2025, noninterest-bearing balances totaled $1.03 billion, compared to $941.0 million at December 31, 2024, or 37.0% and 34.9%, respectively, of total deposits. Interest-bearing deposits totaled $1.75 billion at September 30, 2025, compared to $1.75 billion at December 31, 2024.

Previous wording

Average interest-bearing deposits were $1.80 billion during the three months ended June 30, 2025, compared to $1.72 billion during the same time period in 2024 and average noninterest-bearing deposits were $886.7 million during the three months ended June 30, 2025 compared to $1.14 billion during the same time period in 2024.

Current wording

Average interest-bearing deposits were $1.99 billion during the three months ended September 30, 2025, compared to $1.89 billion during the same time period in 2024 and average noninterest-bearing deposits were $862.1 million during the three months ended September 30, 2025 compared to $910.8 million during the same time period in 2024.

Previous wording

Average interest-bearing deposits were $1.78 billion during the six months ended June 30, 2025 compared to $1.76 billion during the same time period in 2024 and average noninterest-bearing deposits were $0.99 billion during the six months ended June 30, 2025 compared to $1.21 billion during the same time period in 2024.

Current wording

Average interest-bearing deposits were $1.85 billion during the nine months ended September 30, 2025 compared to $1.81 billion during the same time period in 2024 and average noninterest-bearing deposits were $946.3 million during the nine months ended September 30, 2025 compared to $1.11 billion during the same time period in 2024.

Previous wording

We utilize a custodial deposit transference structure for certain deposit programs whereby we, acting as custodian of account holder funds, place a portion of such account holder funds that are not needed to support near term settlement at one or more third-party banks insured by the FDIC (each, a program bank). Accounts opened at program banks are established in our name as custodian, for the benefit of our account holders. We remain the issuer of all accounts under the applicable account holder agreements and have sole custodial control and transaction authority over the accounts opened at program banks. We maintain the records of each account holder's deposits maintained at program banks. Program banks undergo robust due diligence prior to becoming a program bank and are also subject to continuous monitoring. These off-balance sheet deposits totaled $1.11 billion at June 30, 2025 and $1.42 billion at December 31, 2024 and primarily represent the gaming and banking-as-a-service industries.

Current wording

We utilize a custodial deposit transference structure for certain deposit programs whereby we, acting as custodian of account holder funds, place a portion of such account holder funds that are not needed to support near term settlement at one or more third-party banks insured by the FDIC (each, a program bank). Accounts opened at program banks are established in our name as custodian, for the benefit of our account holders. We remain the issuer of all accounts under the applicable account holder agreements and have sole custodial control and transaction authority over the accounts opened at program banks. We maintain the records of each account holder's deposits maintained at program banks. Program banks undergo robust due diligence prior to becoming a program bank and are also subject to continuous monitoring. These off-balance sheet deposits totaled $911.6 million at September 30, 2025 and $1.42 billion at December 31, 2024 and primarily represent the gaming and banking-as-a-service industries.

Previous wording

Three of our primary deposit verticals are payments, banking-as-a-service and gaming, with such deposits totaling $437.4 million, $308.3 million and $193.2 million as of June 30, 2025, respectively, compared to $505.8 million, $208.1 million and $227.6 million as of December 31, 2024, respectively. Of the gaming deposits, $183.4 million is with our three largest gaming clients at June 30, 2025.

Current wording

Three of our primary deposit verticals are payments, banking-as-a-service and gaming, with such deposits totaling $492.8 million, $288.9 million and $234.6 million as of September 30, 2025, respectively, compared to $505.8 million, $208.1 million and $227.6 million as of December 31, 2024, respectively. Of the gaming deposits, $244.0 million is with our three largest gaming clients at September 30, 2025.

Previous wording

During the six months ended June 30, 2025, stockholders’ equity declined $3.4 million to $302.3 million. This decline primarily consists of the stock repurchase of 314,580 shares for $6.4 million and cash dividends paid of $4.4 million, partially offset by net income of $5.6 million, stock based compensation of $1.8 million and other comprehensive income of $0.4 million.

Current wording

During the nine months ended September 30, 2025, stockholders’ equity increased $22.1 million to $327.8 million. This increase primarily consists of net income of $22.7 million, stock based compensation expense of $2.9 million and other comprehensive income of $13.0 million, partially offset by the repurchase of 473,584 shares of common stock for a total of $10.0 million and cash dividends paid of $6.5 million.

Previous wording

During the six months ended June 30, 2025, total assets increased $95.3 million. The equity to assets ratio declined from 9.8% at December 31, 2024 to 9.4% at June 30, 2025 due to the decline in stockholders’ equity. We paid dividends to common shareholders of $4.4 million during the six months ended June 30, 2025 and 2024, compared to earnings of $5.6 million and $8.6 million during the six months ended June 30, 2025 and 2024, respectively, resulting in the dividend payout ratio increasing to 79.1% for the six months ended June 30, 2025 from 51.0% for the six months ended June 30, 2024.

Current wording

During the nine months ended September 30, 2025, total assets increased $104.2 million. The equity to assets ratio increased to 10.1% at September 30, 2025 from 9.8% at December 31, 2024 due to the increase in stockholders’ equity. We paid dividends to common shareholders of $6.5 million during the nine months ended September 30, 2025 and 2024, compared to earnings of $22.7 million and $10.7 million during the nine months ended September 30, 2025 and 2024, respectively, resulting in the dividend payout ratio decreasing to 28.8% for the nine months ended September 30, 2025 from 61.7% for the nine months ended September 30, 2024.