The views expressed below are those of Anchor Capital Advisors, LLC (“Anchor”) as of the date written and are subject to change at any time. They are based on our proprietary research of the stated company and the following is a summary of the primary factors that support our beliefs and rationale for investing in the company. Please see additional disclosures at the end of this publication.


MVB Financial Corp., the holding company of MVB Bank, Inc., is a financial holding company formed in 2003 and headquartered in Fairmont, West Virginia. MVBF conducts a wide range of business activities, primarily commercial and retail banking (“CoRe”). The Company is also involved in new innovative strategies to provide independent banking to corporate clients throughout the United States by leveraging recent investments in technology related companies. The Company considers its primary market areas for Core banking services to be comprised of North Central West Virginia and Northern Virginia, where the Bank operates a total of 13 full-service banking branches. The Company considers its Fintech banking market to be customers located through the entire United States.[1]

Investment Thesis

MVBF is a bank with a long-term history of strong asset quality and has positioned itself in attractive markets with a forward-thinking approach to Fintech that should allow the company to deliver consistent above-average growth over the next several years. Historically, MVBF had opportunities to grow loans 10-20% per year but did not have the deposits to support that level of growth. However, in the last few years, MVBF has transformed itself from a traditional bank into an independent, creative-thinking financial holding company with a strong banking core to power its future potential.

The Company’s management team realized that while financial technology companies have done a great job of building the modern solutions that meet the consumer needs of today, those Fintech companies need a bank on the back end to hold deposits. MVBF’s Fintech sales team specializes in providing banking services to corporate Fintech clients. Managing banking relationships with clients in the payments, digital services, cryptocurrency, crowd funding, lottery and gaming industries is complex from both an operational and regulatory perspective. This complexity causes these clients to be underserved with quality banking services and provides MVBF with a significantly expanded pool of potential customers. These industries offer the bank stable, low-cost deposits and non-interest income. The Fintech business line also has the potential for fee income revenue as relationships grow.[2] We believe the Fintech aspect differentiates MVBF in an industry that is in many ways commoditized. The Company has moved away from the commodity side of banking and focused on banking-related businesses that create incremental value.

Despite this, MVBF is currently valued in line with other small cap banks despite much faster growth on both the loan and deposit sides. The Company is trading at similar valuations to banks with mid-single-digit to high-single-digit book value per share growth but we believe MVBF can conservatively grow book value per share at a low-double-digit rate. As such, we believe MVBF should be selling at a premium to other regional banks and is undervalued.

Confirmation through Research

The success MVBF is having bears itself out in the numbers. MVBF is now the 21st ranked bank in the U.S. by deposit accounts. Over the last 5 years, the Company has grown its assets at a compound annual growth rate of 13%. Growth has not come at the expense of profitability either, with net income growing at 24% annually over the same period.[3]

Deposit growth has been with a non-interest-bearing focus. In 2020, non-interest-bearing deposits increased 157% year-over-year and represented 36% of total deposits, up from just 22% in 2019 and 8% in 2015. The evolving deposit mix has been driven by the continued success of the deposit acquisition strategies discussed above, including Fintech deposits. Gaming and hospitality deposits were up 198% over the last year with overall fintech deposits up 255%.[4] MVBF owns relationships with 24 of the top 30 hospitality/gaming companies, such as DraftKings, FanDuel, Penn National, and Credit Karma. [5] As a result of the increase in non-interest-bearing deposits, MVBF’s net interest margin has expanded more than 50 bps over the last 5 years during a time when many banks have seen their NIMs compress significantly. In fact, in 2014, the spread between MVBF and its regional bank peers was -100bps. Today, the company’s NIM exceeds peers.[6] Over the last 5 years, tangible book value per share has grown at 16% CAGR, including 30% in 2020.[7]

In terms of loan quality, MVBF has had significantly better underwriting than regional bank peers with a lower percentage of net charge-offs to average loans every year for the past 10+ years. [8] Most recently, NCOs/Average Loans were 0.07% and 0.15% in 2019 and 2020, respectively.[9]

To reflect the company’s recent success, it raised its annual dividend per share by 85% last year.[10] Also notable, the Company has high inside ownership with Management and the Board owning ~14% of the shares. MVBF’s CEO, Larry Mazza, is the 2nd largest shareholder with 4.7% ownership.[11] The Company also repurchased more than $1.9m in shares in 2020 and extended its repurchase program in August 2020. [12] Over the last 5 years, MVBF has delivered a cumulative total shareholder return in excess of both the KBW Bank Index and the Russell 2000 index. [13] We believe that outperformance will continue for a number of years.

Variant Perception

MVB Financial is a small company with a market capitalization of less than $500m and very little analyst coverage. This has allowed the company to fly under the radar as just another small regional bank. However, as we’ve noted above, we feel MVBF is highly differentiated and can grow well above peers due to its forward-thinking strategy. Continued strong fundamental performance should draw increased investor interest, both of which we think will be reflected in its share price in the coming years.


In order to enhance current and prospective investor understanding of our process, approach and views, the highlighted investment summary has been selected to illustrate Anchor’s investment approach and/or market outlook. It has not been selected based on performance-related criteria. This investment summary represents a recent investment made and the strategy described may change in the future. Various portfolios actively managed by Anchor may or may not contain this security. Ultimate portfolio design recommendations will be based on in-depth analysis and considerations of factors specific to each client, including risk tolerances, liquidity parameters, return expectations, etc.

The views expressed are those of Anchor Capital Advisors, LLC (“Anchor”) as of the date written and are subject to change at any time. Anchor does not undertake any obligation to update the information contained herein as of any future date.

Certain information (including any forward-looking statements and economic and market information) has been obtained from sources we deem reliable, but is not guaranteed by Anchor, nor is it a complete summary of available data.

The information should not be considered investment advice or a recommendation to buy or to sell the security mentioned. These opinions are not intended to be a forecast of future events or a guarantee of future results. It should not be assumed that investments in such securities have been or will be profitable.

This piece is for informational purposes only and should not be construed as a research report.[/footer-note]