SEGMENT REPORTING
 12 Months Ended
Dec. 31, 2016
Segment Reporting [Abstract]  
SEGMENT REPORTING
SEGMENT REPORTING

The Company has identified three reportable segments: commercial and retail banking; mortgage banking; and financial holding company. Insurance services was previously identified as a reportable segment until entering into an Asset Purchase Agreement, as discussed below and in Note 23, "Discontinued Operations" of the Notes to the Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. Revenue from commercial and retail banking activities consists primarily of interest earned on loans and investment securities and service charges on deposit accounts. Revenue from financial holding company activities is mainly comprised of intercompany service income and dividends.

Revenue from the mortgage banking activities is comprised of interest earned on loans and fees received as a result of the mortgage origination process. The mortgage banking services are conducted by MVB Mortgage. Revenue from insurance services is comprised mainly of commissions on the sale of insurance products.

On June 30, 2016, the Company entered into an Asset Purchase Agreement with USI Insurance Services (“USI”), in which USI purchased substantially all of the assets and assumed certain liabilities of MVB Insurance, which resulted in a pre-tax gain of $6.9 million, as discussed in Note 23, "Discontinued Operations" of the Notes to the Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. MVB Insurance retained the assets related to, and continues to operate, its title insurance business. The title insurance business is immaterial in terms of revenue and the Company has reorganized MVB Insurance as a subsidiary of the Bank.

Information about the reportable segments and reconciliation to the consolidated financial statements for the years ended December 31, 2016, 2015, and 2014 are as follows:

 
 
2016
(Dollars in thousands)
 
Commercial & Retail Banking
 
Mortgage Banking
 
Financial Holding Company
 
Insurance
 
Intercompany Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
50,413

 
$
4,285

 
$
3

 
$
—

 
$
(578
)
 
$
54,123

Mortgage fee income
 
(252
)
 
36,960

 
—

 
—

 
(1,035
)
 
35,673

Insurance and investment services income
 
420

 
—

 
—

 
—

 
—

 
420

Other income
 
5,485

 
1,674

 
5,247

 
—

 
(5,294
)
 
7,112

     Total operating income
 
56,066

 
42,919

 
5,250

 
—

 
(6,907
)
 
97,328

Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
8,437

 
2,082

 
2,226

 
—

 
(1,613
)
 
11,132

Salaries and employee benefits
 
11,592

 
27,696

 
5,937

 
—

 
—

 
45,225

Provision for loan losses
 
3,632

 
—

 
—

 
—

 
—

 
3,632

Other expense
 
18,009

 
8,125

 
3,144

 
—

 
(5,294
)
 
23,984

     Total operating expenses
 
41,670

 
37,903

 
11,307

 
—

 
(6,907
)
 
83,973

Income (loss) from continuing operations, before income taxes
 
14,396

 
5,016

 
(6,057
)
 
—

 
—

 
13,355

Income tax expense (benefit) - continuing operations
 
4,496

 
1,954

 
(2,072
)
 
—

 
—

 
4,378

Net income (loss) from continuing operations
 
9,900

 
3,062

 
(3,985
)
 
—

 
—

 
8,977

Income (loss) from discontinued operations
 
—

 
—

 
6,926

 
(580
)
 
—

 
6,346

Income tax expense (benefit) - discontinued operations
 
$
—

 
$
—

 
$
2,629

 
$
(218
)
 
$
—

 
$
2,411

Net income (loss) from discontinued operations
 
$
—

 
$
—

 
$
4,297

 
$
(362
)
 
$
—

 
$
3,935

Net income (loss)
 
$
9,900

 
$
3,062

 
$
312

 
$
(362
)
 
$
—

 
$
12,912

Preferred stock dividends
 
—

 
—

 
1,128

 
—

 
—

 
1,128

Net income (loss) available to common shareholders
 
9,900

 
3,062

 
(816
)
 
(362
)
 
—

 
11,784

 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures for the year ended December 31, 2016
 
$
1,145

 
$
220

 
$
303

 
$
—

 
$
—

 
$
1,668

Total Assets as of December 31, 2016
 
1,415,735

 
122,242

 
180,340

 
—

 
(299,513
)
 
1,418,804

Goodwill as of December 31, 2016
 
1,598

 
16,882

 
—

 
—

 
—

 
18,480



 
 
2015
(Dollars in thousands)
 
Commercial & Retail Banking
 
Mortgage Banking
 
Financial Holding Company
 
Insurance
 
Intercompany Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
40,524

 
$
3,882

 
$
2

 
$
—

 
$
(308
)
 
$
44,100

Mortgage fee income
 
7

 
30,560

 
—

 
—

 
(1,095
)
 
29,472

Insurance and investment services income
 
338

 
—

 
—

 
—

 
—

 
338

Other income
 
3,721

 
1,673

 
4,331

 
—

 
(4,580
)
 
5,145

     Total operating income
 
44,590

 
36,115

 
4,333

 
—

 
(5,983
)
 
79,055

Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
6,776

 
1,647

 
2,204

 
—

 
(1,402
)
 
9,225

Salaries and employee benefits
 
11,049

 
20,774

 
4,250

 
—

 
—

 
36,073

Provision for loan losses
 
2,493

 
—

 
—

 
—

 
—

 
2,493

Other expense
 
16,132

 
7,471

 
2,534

 
—

 
(4,362
)
 
21,775

     Total operating expenses
 
36,450

 
29,892

 
8,988

 
—

 
(5,764
)
 
69,566

Income (loss) from continuing operations, before income taxes
 
8,140

 
6,223

 
(4,655
)
 
—

 
(219
)
 
9,489

Income tax expense (benefit) - continuing operations
 
2,176

 
2,394

 
(1,597
)
 
—

 
(87
)
 
2,886

Net income (loss) from continuing operations
 
5,964

 
3,829

 
(3,058
)
 
—

 
(132
)
 
6,603

Income (loss) from discontinued operations
 
—

 
—

 
—

 
134

 
219

 
353

Income tax expense (benefit) - discontinued operations
 
$
—

 
$
—

 
$
—

 
$
53

 
$
87

 
$
140

Net income (loss) from discontinued operations
 
$
—

 
$
—

 
$
—

 
$
81

 
$
132

 
$
213

Net income (loss)
 
$
5,964

 
$
3,829

 
$
(3,058
)
 
$
81

 
$
—

 
$
6,816

Preferred stock dividends
 
—

 
—

 
575

 
—

 
—

 
575

Net income (loss) available to common shareholders
 
5,964

 
3,829

 
(3,633
)
 
81

 
—

 
6,241

 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures for the year ended December 31, 2015
 
$
1,174

 
$
354

 
$
616

 
$
9

 
$
—

 
$
2,153

Total Assets as of December 31, 2015
 
1,378,988

 
125,227

 
148,509

 
5,017

 
(273,265
)
 
1,384,476

Goodwill as of December 31, 2015
 
1,598

 
16,882

 
—

 
—

 
—

 
18,480

 
 
2014
(Dollars in thousands)
 
Commercial & Retail Banking
 
Mortgage Banking
 
Financial Holding Company
 
Insurance
 
Intercompany Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
33,175

 
$
2,645

 
$
2

 
$
—

 
$
346

 
$
36,168

Mortgage fee income
 
64

 
18,691

 
—

 
—

 
(1,198
)
 
17,557

Insurance and investment services income
 
328

 
—

 
—

 
—

 
—

 
328

Other income
 
4,458

 
(2
)
 
4,357

 
—

 
(4,676
)
 
4,137

     Total operating income
 
38,025

 
21,334

 
4,359

 
—

 
(5,528
)
 
58,190

Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
5,663

 
1,063

 
1,703

 
—

 
(918
)
 
7,511

Salaries and employee benefits
 
9,629

 
14,487

 
3,658

 
—

 
—

 
27,774

Provision for loan losses
 
2,582

 
—

 
—

 
—

 
—

 
2,582

Other expense
 
13,994

 
5,990

 
1,970

 
—

 
(4,534
)
 
17,420

     Total operating expenses
 
31,868

 
21,540

 
7,331

 
—

 
(5,452
)
 
55,287

Income (loss) from continuing operations, before income taxes
 
6,157

 
(206
)
 
(2,972
)
 
—

 
(76
)
 
2,903

Income tax expense (benefit) - continuing operations
 
1,326

 
(57
)
 
(993
)
 
—

 
(28
)
 
248

Net income (loss) from continuing operations
 
4,831

 
(149
)
 
(1,979
)
 
—

 
(48
)
 
2,655

Income (loss) from discontinued operations
 
—

 
—

 
—

 
(996
)
 
76

 
(920
)
Income tax expense (benefit) - discontinued operations
 
$
—

 
$
—

 
$
—

 
$
(372
)
 
$
28

 
$
(344
)
Net income (loss) from discontinued operations
 
$
—

 
$
—

 
$
—

 
$
(624
)
 
$
48

 
$
(576
)
Net income (loss)
 
$
4,831

 
$
(149
)
 
$
(1,979
)
 
$
(624
)
 
$
—

 
$
2,079

Preferred stock dividends
 
—

 
—

 
332

 
—

 
—

 
332

Net income (loss) available to common shareholders
 
4,831

 
(149
)
 
(2,311
)
 
(624
)
 
—

 
1,747

 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures for the year ended December 31, 2014
 
$
9,072

 
$
333

 
$
40

 
$
353

 
$
—

 
$
9,798

Total Assets as of December 31, 2014
 
1,048,101

 
101,791

 
146,137

 
4,031

 
(189,601
)
 
1,110,459

Goodwill as of December 31, 2014
 
897

 
16,882

 
—

 
—

 
—

 
17,779



Commercial & Retail Banking

For the year ended December 31, 2016, the Commercial & Retail Banking segment earned $9.9 million compared to $6.0 million in 2015. Net interest income increased by $8.2 million, primarily the result of average loan balances increasing by $179.0 million. Noninterest income increased by $1.6 million, mainly the result of the following: $818 thousand improvement in performance of the interest rate cap, $882 thousand increase in gain on sale of securities, $133 thousand increase in other operating income, and $199 thousand increase in Visa debit card and interchange income, which was offset by $371 thousand decrease in gain on sale of portfolio loans and $259 thousand decrease in mortgage fee income. Noninterest expense increased by $2.4 million, primarily the result of the following: $543 thousand increase in salaries and employee benefits expense, $494 thousand increase in occupancy and equipment expense, and $832 thousand increase in data processing and communications expense, which was offset by $776 thousand decrease in professional fees. In addition, provision expense increased by $1.1 million.

Mortgage Banking

For the year ended December 31, 2016, the Mortgage Banking segment earned $3.1 million compared to $3.8 million in 2015. Net interest income decreased $32 thousand, noninterest income increased by $6.4 million and noninterest expense increased by $7.6 million. The $6.4 million increase in noninterest income was all related to mortgage fee income and was offset by the $7.6 million increase in noninterest expense. The increase in noninterest expense was primarily the result of the following: $6.9 million increase in salaries and employee benefits expense, which was primarily due to a 26.4% increase in origination volume as well as a $1.8 million increase in the earn out paid to management of the mortgage company related to the 2012 acquisition. Other items that impacted noninterest expense were as follows: $197 thousand increase in mortgage processing expense, $98 thousand increase in data processing and communications expense, $117 thousand in occupancy and equipment expense, $133 thousand increase in travel, entertainment, dues, and subscriptions expense, and $134 thousand in other operating expense, of which an increase of $55 thousand was related to loan expenses, which was offset by a $115 thousand decrease in marketing expense.

Financial Holding Company

Excluding discontinued operations, for the year ended December 31, 2016, the Financial Holding Company segment lost $4.0 million compared to a loss of $3.1 million in 2015. Interest expense increased $22 thousand, noninterest income increased $916 thousand and noninterest expense increased $2.3 million. In addition, the income tax benefit increased $475 thousand. The increase in noninterest expense was primarily due to a $1.7 million increase in salaries and employee benefits expense, a $220 thousand increase in professional fees, a $259 thousand increase in occupancy and equipment expense, and a $66 thousand increase in other operating expense.

Insurance

For the year ended December 31, 2016, the Insurance segment lost $362 thousand compared to a loss of $81 thousand in 2015. In June 2016, primarily all the assets of the Insurance segment were sold and the segment was reorganized as a subsidiary of the Bank.