MVB bulks up on SBA, USDA lending with $98M acquisition

Dive Brief:

Fairmont, West Virginia-based MVB Financial will acquire Raleigh, North Carolina-based Integrated Financial Holdings in an all-stock deal worth roughly $98 million, the companies announced Friday.
The transaction, set to close in the first quarter of 2023, aims to ramp up MVB’s government guaranteed lending business.
“Even in wet-track market conditions, MVB continues to be opportunistic and look for deals that make sense to our business model,” MVB CEO Larry Mazza said in a statement. The car-racing reference ties in to MVB’s growth strategy, tagged “Success Loves Speed.” “Both strong companies on our own, together we become a national leader in government-guaranteed lending, specifically [Small Business Administration] and [U.S. Department of Agriculture] lending,” Mazza added.

Dive Insight:

Integrated Financial counts West Town Bank & Trust and Windsor Advantage among its five subsidiaries. West Town’s government guaranteed lending team has originated more than $1 billion in loans since 2018, MVB said in a press release Friday. Windsor, meanwhile, offers financial institutions an outsourced SBA and USDA lending platform and services approximately $2.1 billion in loans.

MVB, in its own right, launched an SBA lending operation in 2021. The bank reported SBA loan production of $101 million over the first six months of 2022, a threefold increase from the same period a year earlier, American Banker reported.

Once the transaction closes, Integrated Financial CEO Eric Bergevin will join MVB’s executive leadership team and report to Mazza. Riddick Skinner and Michael Breckheimer, Integrated Financial’s executive vice presidents of government lending and corporate strategy, respectively, will also join MVB but continue to report to Bergevin.

“We are excited to embark on this strategic alliance with MVB to create what we believe will be an industry-leading juggernaut in government guaranteed lending,” Bergevin said. “The merger represents two organizations with shared entrepreneurial-minded philosophies around the idea of synergy.”

West Town would also bulk up $3 billion-asset MVB’s balance sheet, with roughly $435 million in assets, $326 million in loans and $334 million in deposits as of June 30.

As part of the transaction, Integrated Financial shareholders will receive 1.21 shares of MVB common stock for each share they own. That adds up to $41.79 per share based on MVB’s closing price of $34.54 from Thursday — making up the approximate $98 million deal value.

The deal should be accretive to tangible book value per share by approximately 15% in 2023, MVB said.