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MVB Announces 2018 Earnings 2/27/2018

RED BLUFF, CA -- MVB (OTCBB:MIVB) today announced that its 2018 profits were $363,000, compared to $1,805,000 for 2018. Earnings for year represented $.34 per diluted share versus $1.63 per diluted share in 2018. The decline in earnings was attributed to a substantial increase in the bank's reserves for problem loans and a decline in net interest margin due to the rapid drop in interest rates last year.

At December 31, 2018, net loans topped $115 million, up 9.4% over 2018 and total deposits were up 8.2% to $160 million. Total Assets were up 7.4% to a record $173 million at year-end.

John B. Dickerson, President & CEO of MVB stated, "2018 was a very challenging year for the bank, in spite of good growth in both loans and deposits. The rapid drop in interest rates caused our net interest margin to erode as loans repriced lower and faster than our core deposits. In addition, higher energy costs, the economic recession, poor commodity prices and water supply issues severely affected a number of our business and agricultural borrowers."

"Our net interest margin has now begun to recover," continued Dickerson, "and although the effects of the recession will continue to cloud the business climate for much of this year, we are confident that the steps we have taken to address loan quality issues in certain sectors of our portfolio will result in improved financial performance in 2018."

Net interest income for the year totaled $6.7 million compared to $7.2 million in 2018, a decrease of almost 7%. The net interest margin fell to 4.4% at yearend from 5.5% in 2018. Reserves for loan losses totaled $3.1 million or 2.6% of total loans, up from $1.7 million or 1.6% in December of 2018. The bank added $2.6 million to loan loss reserves during the year compared to $310,000 in 2018. Net loan losses for the year were 1.09% of gross average loans.

MVB's return on average equity for the year was 2.8% compared to 15.9% in 2018. Return on average assets was .2%, down from 1.2% in the prior year. Noninterest expenses were 3.2% of total assets, a decline from 3.6% reported last year, reflecting an increased focus on managing controllable expenses. Tier 1 leverage, tier 1 risk-based capital, and total risk-based capital ratios at year-end all fell within the regulatory guidelines for "Well Capitalized" institutions at December 31, 2018.

During the fourth quarter, MVB opened a new office in Chico, California, to service the Butte County marketplace. According to Dickerson, the new office has already enjoyed significant success in attracting new residential construction customers. Subsequent to yearend, the bank announced a 10% stock dividend to be paid March 1, 2018 to shareholders of record on February 13, 2018.

MVB is a locally owned, community bank serving upstate California from five full service offices in Red Bluff, Redding, Corning and Chico. The bank focuses on real estate lending, agricultural loans and commercial lending to the business and professional community. Consumer financial services, as well as various investment and insurance products are also available. More information about the bank can be obtained at its website, www.midvalleybank.com. MVB stock is listed on the OTCBB under the stock symbol MIVB.

This news release includes forward-looking statements about MVB's financial condition, results of operations, plans, objectives and future performance. A number of factors, many of which are beyond the control of MVB, could cause actual results to differ materially from those in the forward-looking statements.

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