MVB FINANCIAL CORPMVBF
MVB FINANCIAL CORP Fair Value Disclosure
Note 18 – Fair Value Measurements
Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time of the Company's entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment, and therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not
considered financial instruments.
Assets Measured on a Recurring Basis
As required by accounting standards, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following measurements are made on a recurring basis.
Available-for-sale investment securities — Available-for-sale investment securities are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level I securities include those traded on an active exchange, such as the New York Stock Exchange and money market funds. Level II securities include mortgage-backed securities issued by government sponsored entities and private label entities, municipal bonds,
United States Treasury securities that are traded by dealers or brokers in inactive over-the-counter markets and corporate debt securities. Certain local municipal securities related to tax increment financing (“TIF”) are independently valued and classified as Level III instruments.
Loans held-for-sale — The fair value of loans held-for-sale is determined, when possible, using quoted secondary market prices or investor commitments. If no such quoted price exists, the fair value of a loan is determined using quoted prices for a similar asset or assets, adjusted for the specific attributes of that loan, which would be used by other market participants. If the fair value at the reporting date exceeds the amortized cost of a loan, the loan is reported at amortized cost. As of December 31, 2025 and December 31, 2024, there were no loans held-for-sale.
Interest rate swaps – Interest rate swaps are recorded at fair value based on third-party vendors who compile prices from various sources and may determine the fair value of identical or similar instruments by using pricing models that consider observable market data.
Fair value hedges – Treated like an interest rate swap, fair value hedges are recorded at fair value based on third-party vendors who compile prices from various sources and may determine fair value of identical or similar instruments by using pricing models that consider observable market data.
Embedded derivatives — Accounted for and recorded separately from the underlying contract as a derivative at fair value on a recurring basis. Fair values are determined using the Monte Carlo model valuation technique. The valuation methodology utilized includes significant unobservable inputs.
The following tables present the assets reported on the consolidated statements of financial condition at their fair value on a recurring basis as of December 31, 2025 and 2024 by level within the fair value hierarchy:
| December 31, 2025 | ||||||||||||||||||||||||||
| (Dollars in thousands) | Level I | Level II | Level III | Total | ||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| United States government agency securities | $ | — | $ | 22,054 | $ | — | $ | 22,054 | ||||||||||||||||||
| United States sponsored mortgage-backed securities | — | 289,493 | — | 289,493 | ||||||||||||||||||||||
| United States treasury securities | — | 4,985 | — | 4,985 | ||||||||||||||||||||||
| Municipal securities | — | 38,358 | 18,101 | 56,459 | ||||||||||||||||||||||
| Corporate debt securities | — | 30,019 | — | 30,019 | ||||||||||||||||||||||
| Interest rate swaps | — | 2,625 | — | 2,625 | ||||||||||||||||||||||
| Embedded derivative | — | — | 5,246 | 5,246 | ||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Interest rate swaps | — | 2,625 | — | 2,625 | ||||||||||||||||||||||
| Fair value hedge | — | 1,001 | — | 1,001 | ||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
| (Dollars in thousands) | Level I | Level II | Level III | Total | ||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| United States government agency securities | $ | — | $ | 39,846 | $ | — | $ | 39,846 | ||||||||||||||||||
| United States sponsored mortgage-backed securities | — | 147,580 | — | 147,580 | ||||||||||||||||||||||
| United States treasury securities | — | 103,975 | — | 103,975 | ||||||||||||||||||||||
| Municipal securities | — | 84,147 | 17,993 | 102,140 | ||||||||||||||||||||||
| Corporate debt securities | — | 9,918 | — | 9,918 | ||||||||||||||||||||||
| Interest rate swaps | — | 5,913 | — | 5,913 | ||||||||||||||||||||||
| Embedded derivative | — | — | 648 | 648 | ||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Interest rate swaps | — | 5,913 | — | 5,913 | ||||||||||||||||||||||
| Fair value hedge | — | 112 | — | 112 | ||||||||||||||||||||||
The following table represents recurring Level III assets as of the periods shown:
| (Dollars in thousands) | Municipal Securities | Embedded Derivatives | Total | |||||||||||||||||
| Balance at December 31, 2024 | $ | 17,993 | $ | 648 | $ | 18,641 | ||||||||||||||
| Realized and unrealized gains (losses) included in earnings | 1 | (466) | (465) | |||||||||||||||||
| Reclassification from other assets | — | 5,064 | 5,064 | |||||||||||||||||
| Maturities/calls | (383) | — | (383) | |||||||||||||||||
| Unrealized gains included in other comprehensive loss | 490 | — | 490 | |||||||||||||||||
| Balance at December 31, 2025 | $ | 18,101 | $ | 5,246 | $ | 23,347 | ||||||||||||||
| Balance at December 31, 2023 | $ | 18,245 | $ | 648 | $ | 18,893 | ||||||||||||||
| Realized and unrealized gains included in earnings | 6 | — | 6 | |||||||||||||||||
| Maturities/calls | (369) | — | (369) | |||||||||||||||||
| Unrealized gains included in other comprehensive loss | 111 | — | 111 | |||||||||||||||||
| Balance at December 31, 2024 | $ | 17,993 | $ | 648 | $ | 18,641 | ||||||||||||||
Assets Measured on a Nonrecurring Basis
The Company may be required, from time to time, to measure certain financial and non-financial assets and liabilities at fair value on a nonrecurring basis. These include assets that are measured at the lower of cost or market value that were recognized at fair value below cost at the end of the period. Certain non-financial assets measured at fair value on a non-recurring basis include foreclosed assets (upon initial recognition or subsequent impairment), non-financial assets and non-financial liabilities measured at fair value in the second step of a goodwill impairment test and intangible assets and other non-financial long-lived assets measured at fair value for impairment assessment.
Collateral-dependent loans – Certain loans receivable are evaluated individually for credit loss when the borrower is experiencing financial difficulties and repayment is expected to be provided substantially through the operation or sale of collateral. Estimated credit losses are based on the fair value of the collateral, adjusted for costs to sell. Collateral values are estimated using Level II inputs based on observable market data or Level III inputs based on customized discounting criteria. For a majority of collateral-dependent real estate related loans, the Company obtains a current external appraisal. Other valuation techniques are used as well, including internal valuations, comparable property analysis and contractual sales information.
Other real estate owned – Other real estate owned, which is obtained through the Bank’s foreclosure process, is valued utilizing the appraised collateral value. Collateral values are estimated using Level II inputs based on observable market data or Level III inputs based on customized discounting criteria. At the time the foreclosure is completed, the Company obtains an external appraisal.
Assets measured at fair value on a nonrecurring basis as of December 31, 2025 and 2024 are included in the table below:
| December 31, 2025 | ||||||||||||||||||||||||||
| (Dollars in thousands) | Level I | Level II | Level III | Total | ||||||||||||||||||||||
| Collateral-dependent loans | — | — | 25,053 | 25,053 | ||||||||||||||||||||||
| Other real estate owned | — | — | 580 | 580 | ||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
| (Dollars in thousands) | Level I | Level II | Level III | Total | ||||||||||||||||||||||
| Collateral-dependent loans | $ | — | $ | — | $ | 37,895 | $ | 37,895 | ||||||||||||||||||
| Other real estate owned | — | — | 2,827 | 2,827 | ||||||||||||||||||||||
The following tables presents quantitative information about the Level III significant unobservable inputs for assets and liabilities measured at fair value at December 31, 2025 and 2024:
| Quantitative Information about Level III Fair Value Measurements | ||||||||||||||||||||||||||
| (Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range | ||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
| Nonrecurring measurements: | ||||||||||||||||||||||||||
| Collateral-dependent loans | $ | 25,053 | Appraisal of collateral 1 | Appraisal adjustments 2 | 0% - 20% | |||||||||||||||||||||
Liquidation expense 2 | 6% | |||||||||||||||||||||||||
| Other real estate owned | $ | 580 | Appraisal of collateral 1 | Appraisal adjustments 2 | 0% - 20% | |||||||||||||||||||||
Liquidation expense 2 | 6% | |||||||||||||||||||||||||
| Recurring measurements: | ||||||||||||||||||||||||||
Municipal securities 3 | $ | 18,101 | Appraisal of bond 4 | Bond appraisal adjustment 5 | 5% - 15% | |||||||||||||||||||||
| Embedded Derivatives | $ | 5,246 | Monte Carlo pricing model | Deferred payment | $0 - $16.6 million | |||||||||||||||||||||
| Volatility | 35% | |||||||||||||||||||||||||
| Term | 2 years | |||||||||||||||||||||||||
| Risk free rate | 3.58% | |||||||||||||||||||||||||
| Quantitative Information about Level III Fair Value Measurements | ||||||||||||||||||||||||||
| (Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range | ||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
| Nonrecurring measurements: | ||||||||||||||||||||||||||
| Collateral-dependent loans | $ | 37,895 | Appraisal of collateral 1 | Appraisal adjustments 2 | 0% - 20% | |||||||||||||||||||||
Liquidation expense 2 | 6% | |||||||||||||||||||||||||
| Other real estate owned | $ | 2,827 | Appraisal of collateral 1 | Appraisal adjustments 2 | 0% - 20% | |||||||||||||||||||||
Liquidation expense 2 | 6% | |||||||||||||||||||||||||
| Recurring measurements: | ||||||||||||||||||||||||||
Municipal securities 3 | $ | 17,993 | Appraisal of bond 4 | Bond appraisal adjustment 5 | 5% - 15% | |||||||||||||||||||||
| Embedded Derivative | $ | 648 | Monte Carlo pricing model | Deferred payment | $0 - $49.1 million | |||||||||||||||||||||
| Volatility | 59% | |||||||||||||||||||||||||
| Term | 4.75 years | |||||||||||||||||||||||||
| Risk free rate | 3.59% | |||||||||||||||||||||||||
1 Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level III inputs which are not identifiable.
2 Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted-average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.
3 Municipal securities classified as Level III instruments are comprised of TIF bonds related to certain local municipal securities.
4 Fair value determined through independent analysis of liquidity, rating, yield and duration.
5 Appraisals may be adjusted for qualitative factors, such as local economic conditions, liquidity, marketability and legal structure.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Mar 13, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 10, 2022 | |
| 2020 | Mar 9, 2021 | |
| 2019 | Mar 13, 2020 | |
| 2018 | Mar 8, 2019 | |
| 2017 | Mar 8, 2018 | |
| 2016 | Mar 10, 2017 | |
| 2015 | Mar 9, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.