KBRA Affirms Ratings for MVB Financial Corp.

KBRA affirms the senior unsecured debt rating of BBB, the subordinated debt rating of BBB-, and the short-term debt rating of K3 for Fairmont, WV-based MVB Financial Corp. (NASDAQ: MVBF) ("the company"). Additionally, KBRA affirms the deposit and senior unsecured debt ratings of BBB+, the subordinated debt rating of BBB, and the short-term deposit and debt ratings of K2 for lead subsidiary, MVB Bank, Inc. The Outlook for all long-term ratings is Stable.

Key Credit Considerations

The ratings are supported by MVBF’s differentiated fintech-focused business model, which benefits from strong competitive positioning. Its scalable payments and gaming segments are expected to drive an improved earnings profile over the medium term. Growth in payments revenue supported by a robust fintech pipeline across debit card issuing, merchant acquiring, money movement, and broader payments solutions is expected to sustain fee income generation and bring noninterest income back toward the high-20% range of total revenue. This shift should result in a more diversified revenue mix that compares favorably with rated peers.

A key rating strength for MVBF is its consistently strong capital position, with its TCE ratio maintained above peer averages over a multi-year period (10.0% at 4Q25). As a CBLR bank, MVBF does not disclose risk-based capital ratios. Capital levels are expected to remain robust over the near to medium term, supported by solid internal capital generation and prudent capital management practices.

MVBF’s funding profile includes a mix of durable, low-cost deposits sourced through fintech partnerships, alongside a higher concentration of retail time and brokered deposits, contributing to a somewhat elevated cost of funds (2.29% in 4Q25). Over time, KBRA expects growth in fintech and gaming-related deposits to support a reduction in brokered deposits (11% of total deposits at 4Q25), with funding costs becoming more reflective of the bank’s meaningful proportion of noninterest-bearing deposits (40% of total deposits).

Profitability relative to peers remains constrained by elevated operating expenses, which were approximately 3.7% of average assets in 2025. Historically, expense levels have ranged between ~3.4% and 3.8%, reflecting ongoing investments in strategic initiatives and the build-out of risk management and compliance functions. However, MVBF appears to be approaching an inflection point, with a greater focus on earnings generation expected to drive positive operating leverage. Revenue growth driven by expansion in payments and gaming income, as well as increased NII from continued loan growth supported by a stable deposit base is expected to outpace expense growth. As a result, profitability metrics are projected to improve meaningfully in 2026 and beyond, with efficiency ratios trending favorably.

Asset quality has shown some deterioration, with elevated NPAs; however, full-year net charge-offs were largely in line with the prior year. NCOs increased to 0.68% in 4Q25, reflecting a proactive cleanup of select C&I and SBA credits with established reserves, and are expected to normalize. Approximately two-thirds of NPLs are concentrated in CRE and residential mortgage portfolios, which have a weighted-average LTV of 55.5%, supporting expectations that credit losses will remain manageable.

Rating Sensitivities

Sustained improvement in earnings capacity, driven by multiple growth catalysts that align profitability trends more closely with higher-rated peers, along with continued growth in stable core deposits through fintech channels and core banking, could support positive rating momentum over time. This would be further reinforced by conservative capital management, increased geographic diversification, and ongoing revenue diversification, with no material rise in credit costs stemming from asset quality deterioration. Rating pressure could arise from profitability challenges driven by higher-than-expected credit costs associated with weakening asset quality, particularly if this erodes capital levels. Additionally, the loss of a strategically important partner relationship that materially impacts deposit levels and fee income generation could also result in rating pressure.

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