Item 8.01 Other Events.
As previously announced, onAugust 12, 2022 ,MVB Financial Corp. , aWest Virginia corporation ("MVB"), andIntegrated Financial Holdings, Inc. , aNorth Carolina corporation ("IFHI"), entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement"). The Merger Agreement provides that, upon the terms and conditions therein, IFHI will merge with and into MVB (the "Merger"), with MVB continuing as the surviving corporation in the Merger. Following the Merger,West Town Bank & Trust ("West Town Bank "), a state bank chartered under the laws ofIllinois and wholly owned subsidiary of IFHI, will merge with and intoMVB Bank, Inc. , aWest Virginia state chartered bank and wholly owned subsidiary of MVB, withMVB Bank as the surviving bank. The Merger Agreement was unanimously approved by the board of directors of MVB and IFHI. The Merger is described in the joint proxy statement/prospectus that was filed by MVB with theSecurities and Exchange Commission (the "SEC") onNovember 1, 2022 and amended onDecember 8, 2022 (the "joint proxy statement/prospectus"). On or aboutDecember 15, 2022 , MVB mailed the joint proxy statement/prospectus to MVB's shareholders in connection with the special meeting of its shareholders scheduled to be held onJanuary 25, 2023 , at which its shareholders will consider and vote upon, among other things, a proposal to approve the Merger Agreement and the transactions contemplated thereby, including the Merger and the issuance of shares of MVB common stock as merger consideration. Similarly, on or aboutDecember 15, 2022 , IFHI mailed the joint proxy statement/prospectus to IFHI's shareholders in connection with the special meeting of its shareholders scheduled to be held onJanuary 24, 2023 , at which its shareholders will consider and vote upon, among other things, a proposal to approve the Merger Agreement and the transactions contemplated thereby, including the Merger. This Current Report on Form 8-K provides certain additional information regarding the Merger. OnNovember 21, 2022 , a law firm representing a purported IFHI shareholder sent a demand letter (the "IFHI Demand Letter") toWyrick Robbins Yates & Ponton LLP andSquire Patton Boggs LLP ("SPB"), legal counsel for IFHI and MVB, respectively. The IFHI Demand Letter alleges that the joint proxy statement/prospectus omitted material information with respect to the Merger and seeks corrective disclosures in an amendment or supplement to the joint proxy statement/prospectus. OnDecember 29, 2022 , a law firm representing a purported MVB shareholder sent a demand letter (the "MVB Demand Letter") to SPB alleging disclosure deficiencies in the joint proxy statement/prospectus and seeking corrective disclosures in an amendment or supplement to the joint proxy statement/prospectus. The parties to the Merger continue to believe that the demands for supplemental corrective disclosure are entirely without merit and that no further disclosure is required by applicable rule, statute, regulation or law beyond that already contained in the joint proxy statement/prospectus. However, to avoid the risk that the IFHI Demand Letter, the MVB Demand Letter and the demands therein may delay or otherwise adversely affect the consummation of the Merger and to minimize the expense of defending any potential lawsuit that may arise as a result of the IFHI Demand Letter or the MVB Demand Letter, the parties to the Merger have determined that they will voluntarily make certain supplemental disclosures in the joint proxy statement/prospectus related to the proposed Merger set forth below (the "Supplemental Disclosures"). Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the Supplemental Disclosures set forth herein. The information contained herein and in the Supplemental Disclosures supplement and should be read in conjunction with the joint proxy statement/prospectus, which should be read in its entirety, along with periodic reports and other information MVB has filed with theSEC . To the extent that the information set forth herein differs from or updates information contained in the joint proxy statement/prospectus, the information set forth herein shall supersede or supplement the information in the joint proxy statement/prospectus. All page references below are to pages in the joint proxy statement/prospectus, and terms used below, unless otherwise defined herein, have the meanings given to such terms in the joint proxy statement/prospectus.
-------------------------------------------------------------------------------- SUPPLEMENTAL DISCLOSURES TO THE JOINT PROXY STATEMENT/PROSPECTUS
1. The disclosure under the heading "The Merger-Opinion of MVB's Financial Advisor-Relevant Public Companies Analysis - IFH" is hereby amended by deleting the table of financial metrics on page 93 of the joint proxy statement/prospectus and replacing it with the following:
Total TCE / Loans / NPAs / LTM GAAP LTM Core LTM GAAP Market Price / Dividend Assets TA Deposits
Assets(1) ROAA ROAA(2) ROATCE Cap. TBV LTM EPS MRQ EPS
Ticker ($M) (%) (%) (%) (%) (%) (%) ($M) (x) (x) (x) (%) Quaint Oak Bancorp Inc. QNTO$ 752 4.8 93.9 0.23 1.72 1.37 24.9 50 1.39 6.6 7.4 2.1Ledyard Financial Group Inc. LFGP$ 734 6.4 62.2 0.36 1.09 1.07 12.6 68 1.44 8.2 8.0 4.1 United Bancorp Inc. UBCP$ 718 9.9 75.8 0.59 1.83 1.15 16.0 87 1.57 9.4 12.4 4.1 InsCorp Inc. IBTN$ 717 11.0 105.4 0.33 1.45 1.17 13.9 58 0.00 6.6 4.2 1.5 Century Next Financial Corp. CTUY$ 620 10.5 94.7 0.28 1.06 1.06 9.5 53 0.96 8.9 8.9 1.0 Muncy Bank Financial MYBF$ 607 7.7 83.6 0.14 1.11 1.13 12.6 69 1.48 10.2 10.3 3.5 University Bancorp Inc. UNIB$ 559 11.5 95.4 3.26 2.91 4.38 23.3 86 1.16 3.6 15.2 10.3 U & I Financial Corp. UNIF$ 523 12.8 99.7 0.06 2.15 2.15 14.2 61 0.90 6.5 5.7 0.0 SVB & T Corp. SVBT$ 519 10.8 96.2 1.35 1.23 1.39 10.4 53 0.96 7.7 7.4 1.3 First Resource Bancorp FRSB$ 477 7.8 100.7 0.05 1.05 1.10 13.9 36 0.96 7.3 6.5 0.0OptimumBank Holdings Inc. OPHC$ 465 9.8 102.8 0.00 1.78 1.99 16.4 25 0.74 2.5 5.5 0.0First Bancshares Inc. FBSI$ 460 9.4 93.7 0.13 1.15 1.18 12.4 43 0.99 8.7 7.7 1.7High Country Bancorp Inc. HCBC$ 456 8.5 72.3 0.33 1.05 1.03 11.6 41 1.07 9.3 12.5 5.1 Northeast Indiana Bancorp NIDB$ 413 10.1 81.6 0.54 1.65 1.65 15.1 53 1.27 7.7 8.1 2.7 FinWise Bancorp FINW$ 366 35.7 91.3 0.16 9.02 9.02 0.0 137 1.05 3.6 6.1 0.0 Infinity Bank INFT$ 315 8.5 54.6 1.63 1.19 1.26 12.7 29 1.08 8.2 15.7 0.0 The Farmers Bank Appomattox FBPA$ 313 9.2 77.9 0.47 1.06 1.06 9.4 32 1.10 9.6 10.3 4.5 Logansport Financial Corp. LOGN$ 242 8.8 65.6 0.15 1.29 1.29 12.1 26 1.21 8.1 7.8 3.8 75th Percentile$ 616 10.7 96.0 0.14 1.76 1.58 15.1 66 1.27 8.9 10.3 4.0 Median$ 498 9.6 92.5 0.31 1.26 1.22 12.7 53 1.08 7.9 7.9 1.9 25th Percentile$ 424 8.5 76.3 0.53 1.10 1.11 12.1 37 0.96 6.6 6.7 0.3 Integrated Financial Holdings, Inc. IFHI$ 435 17.6 79.8 1.07 2.07 1.41 12.9 60 0.82 6.5 10.6 - Source:S&P Global Market Intelligence , FactSet. Note: Dollars in millions. LTM=Last Twelve Months reported. MRQ=Most Recent Quarter reported. Market data as ofAugust 10th, 2022 . "--" indicates data not applicable or data not available. (1) NPAs / Assets excludes restructured loans from nonperforming assets. (2) As defined byS&P Global Market Intelligence .
-------------------------------------------------------------------------------- 2. The disclosure under the heading "The Merger-Opinion ofMVB's Financial Advisor-Relevant Nationwide Bank & Thrift Transactions Analysis - IFH" is hereby amended by deleting the table of transaction metrics on page 94 of the joint proxy statement/prospectus and replacing it with the following: Target Target Target Target Price / Price / Core Deal Total TCE / NPA / NPA / Tangible LTM Deposit Announce
Value Assets TA Assets Assets Book Value Earnings Premium Acquirer
Target Date ($M) ($M) (%) (%) (%) (x) (x)
(%)
Bank First Corporation Hometown Bancorp Ltd. 7/26/2022 124 645 11.1 0.2 1.4 2.11 14.3 12.1 Somerset Savings Bank SLA Regal Bancorp Inc. 7/25/2022 58 544 10.2 0.0 0.6 1.28 20.2 - HomeTrust Bancshares Inc. Quantum Capital Corp. 7/25/2022 68 660 10.2 0.0 3.2 1.58
4.2 4.5
Liberty Bancshares Middlefield Banc Corp. (Ada OH) 5/26/2022 64 437 12.4 0.2 1.0 1.19 13.5 - Cambridge Bancorp Northmark Bank 5/23/2022 63 442 12.1 0.0 0.8 1.18 17.9 3.2 The First Bancshares Beach Bancorp Inc. 4/26/2022 117 620 13.1 1.8 0.4 1.54 - 9.6 Denmark Bancshares Bank First Corporation Inc. 1/19/2022 118 688 9.9 0.4 1.0 1.75 18.3 8.9 Civista Bancshares Inc. Comunibanc Corp. 1/10/2022 50 329 9.9 1.1 0.6 1.53 27.6 7.9 Alerus Financial Corp. MPB BHC INC. 12/8/2021 89 411 10.0 0.0 1.8 1.97 13.5 14.6 InBankshares Corp Legacy Bank 11/30/2021 56 497 12.9 2.0 1.8 1.33 8.8 3.9 Texas Citizens Bancorp Bus.First Bancshares Inc. Inc. 10/21/2021 54 538 10.6 4.1 0.9 1.57
16.6 4.8
First Community Eagle Bancorp Montana Inc. Bancorp Inc. 10/1/2021 41 377 10.9 0.3 1.6 1.40 7.2 4.1 Pacific Enterprise BayCom Corp Bancorp 9/7/2021 53 647 9.4 0.0 0.9 0.88 10.2 (3.0) Merchants Financial SouthPoint Bancshares Inc. Svcs Inc 8/25/2021 45 389 9.3 1.0 1.0 1.50
13.0 4.9
Sabal Palm Bancorp Seacoast Banking Corp. of FL Inc. 8/23/2021 55 412 8.0 0.0 1.7 1.84 9.0 7.0 First Mid BancsharesDelta Bancshares Co. 7/29/2021 107 697 10.8 0.1 0.3 1.42 - 7.0 Finward Bancorp Royal Financial Inc. 7/29/2021 53 534 8.6 0.4 1.0 1.13 10.1 2.3 Teton Financial First Western Financial Inc. Services Inc. 7/22/2021 48 421 9.8 0.0 0.7 1.27 17.6 3.0 Farmers National Banc Corp. Cortland Bancorp 6/23/2021 124 792 10.2 1.0 1.2 1.51
12.6 6.8
Aquesta Financial United Community Banks Inc. Holdings 5/27/2021 131 752 6.2 0.8 1.0 2.17
18.1 11.8
American State Equity Bancshares Inc. Bancshares Inc. 5/17/2021 77 777 10.4 0.6 0.6 1.13 21.6 1.5 Southern California Bancorp Bank of Santa Clarita 4/27/2021 56 421 10.0 0.4 1.0 1.25 15.6 5.2 SouthCrest Financial Colony Bankcorp Inc. Group Inc 4/22/2021 84 707 7.1 0.5 1.1 1.46 11.9 4.8 Sevier County SmartFinancial Inc. Bancshares Inc. 4/14/2021 38 424 7.0 0.8 0.6 1.28 17.1 2.8 Seacoast Banking Corp. of FL Legacy Bank of Florida 3/23/2021 107 533 10.7 0.3 1.2 1.87 18.1 16.2 Fidelity D & D Bancorp Inc. Landmark Bancorp Inc. 2/26/2021 44 354 10.2 0.4 0.4 1.21 32.4 3.0 BancorpSouth Bank FNS Bancshares Inc. 1/13/2021 108 786 9.1 0.8 0.8 1.54 19.4 6.5 75th Percentile$ 107 $ 674 10.7 0.1 1.18 1.58 18.1 7.9 Median$ 63 $ 534 10.2 0.4 0.98 1.46 15.6 4.9 25th Percentile$ 53 $ 421 9.3 0.8 0.67 1.26 11.9 3.2 Integrated Financial MVB Financial Corp. Holdings, Inc.$ 97 $ 435 17.6 1.1 2.07 1.27 10.1 9.4
Source:
-------------------------------------------------------------------------------- 3. The disclosure under the heading "The Merger-Opinion ofMVB's Financial Advisor-Relevant Regional Bank & Thrift Transactions Analysis - IFH" is hereby amended by deleting the table of transaction metrics on page 95 of the joint proxy statement/prospectus and replacing it with the following: Target Target Target Target Price / Price / Core Deal Total TCE / NPA / LTM Tangible LTM Deposit Announce Value Assets TA Assets ROAA Book Value Earnings Premium Acquirer Target Date ($M) ($M) (%) (%) (%) (x) (x) (%) HomeTrust Bancshares Inc. Quantum Capital Corp. 7/25/2022 68 660 10.2 0.0 3.15 1.58 4.2 4.5 First Citrus Bancorp. DFCU Financial Inc. 5/12/2022 105 689 7.1 0.0 1.01 2.11 15.3 9.3 The First Bancshares Beach Bancorp Inc. 4/26/2022 117 620 13.1 1.8 0.40 1.54 NM 9.6 FCB Financial Services Southern Bancorp Inc. Inc 1/31/2022 28 227 12.3 0.1 1.06 0.98 17.1 (0.3) BankFirst Capital Corp. Citizens Bank of Fayette 10/14/2021 26 222 20.6 0.6 0.90 1.46 15.5 - Merchants Financial Svcs SouthPoint Bancshares Inc. Inc 8/25/2021 45 389 9.3 1.0 0.99 1.50 13 4.9 Seacoast Banking Corp. of FL Sabal Palm Bancorp Inc. 8/23/2021 55 412 8.0 0.0 1.72 1.84 9.0 7.0 Lake Michigan CU Pilot Bancshares Inc. 6/16/2021 100 656 8.1 0.3 1.36 1.87 12.3 9.8 Aquesta Financial United Community Banks Inc. Holdings 5/27/2021
131 752 6.2 0.8 1.01 2.17 18.1
11.8
SouthCrest Financial Colony Bankcorp Inc. Group Inc 4/22/2021
84 707 7.1 0.5 1.08 1.46 11.9
4.8
Sevier County Bancshares SmartFinancial Inc. Inc. 4/14/2021
38 424 7.0 0.8 0.59 1.28 17.1
2.8
Seacoast Banking Corp. of FL Legacy Bank of Florida 3/23/2021 107 533 10.7 0.3 1.15 1.87 18.1 16.2 First National Corp. Bank of Fincastle 2/18/2021 32 256 11.8 1.4 0.68 1.04 19.3 0.7 Cheaha Financial Group Investar Holding Corp. Inc. 1/25/2021 41 235 13.3 0.3 1.47 1.44 13.6 10.3 BancorpSouth Bank FNS Bancshares Inc. 1/13/2021 108 786 9.1 0.8 0.77 1.54 19.4 6.5 75th Percentile$ 106 $ 675 12.1 0.2 1.26 1.85 17.8 9.8 Median$ 68 $ 533 9.3 0.5 1.01 1.54 15.4 6.7 25th Percentile$ 40 $ 323 7.6 0.8 0.84 1.45 12.5 4.6 Integrated Financial MVB Financial Corp. Holdings, Inc.$ 97 $ 434 17.6 1.1 2.07 1.27 10.1 9.4
Source:
Note: Dollars in millions. LTM = Last Twelve Months reported. Transaction data
as of deal announcement date. Screen as of
-------------------------------------------------------------------------------- 4. The disclosure under the heading of "The Merger-Opinion of MVB's Financial Advisor-Relative Contribution Analysis - MVB" is hereby amended by deleting the contribution analysis table on page 96 of the joint proxy statement/prospectus and replacing it with the following: ($ in millions) Contribution % MVB IFH Combined MVB IFH Ownership: Pro Forma Ownership at 1.210x Exchange Ratio 82 % 18 %
Balance Sheet:
Total Assets (excl. PPP Loans)
87 % 13 % Net Loans (excl. PPP Loans) 2,163 319 2,482 87 % 13 % Total Deposits 2,615 334 2,949 89 % 11 % Tangible Common Equity 246 73 320 77 % 23 % Litigation Adjusted Tangible Common Equity(1) 246 66 312 79 % 21 %
Profitability:
Earnings Reported for the Year Ended 2021$ 39 $ 12 $ 51 76 % 24 % Est. Net Earnings for the Year Ended 2022(2) 19 8 27 70 % 30 % Est. Net Earnings for the Year Ended 2023 38 6 44 86 % 14 % Market Data: Market Capitalization$ 422 $ 60 $ 482 88 % 12 %
Source:
(1) Counterparty adjusted for($7.4) million of net after-tax expenses related to the estimated litigation settlement. (2) Counterparty 2022 estimated earnings exclude($7.4) million of net after-tax expenses related to the estimated litigation settlement.
5. The disclosure under the heading "The Merger-Opinion of MVB's Financial Advisor-Discounted Cash Flow Analysis - IFH" on page 96 of the joint proxy statement/prospectus is hereby amended by deleting this section in its entirety and replacing it with the following:
Stephens performed a standalone discounted cash flow analysis using projections developed by the executive management team of MVB, and then calculated a range of implied equity values for IFH based upon the discounted net present value of the projected after-tax free cash flows for the projected period. Stephens determined the amount of cash flow assuming (i) unaudited prospective financial information provided to Stephens by MVB, (ii) a terminal earnings multiple of 9.0x, and (iii) dividend payments for earnings and excess capital above a tangible common equity to tangible asset ratio of 9.0% from 2023 to 2027, both excluding and including net after-tax cash merger adjustments. See the section below entitled "Certain Unaudited Prospective Financial Information" for additional information regarding unaudited prospective financial information. In selecting a terminal earnings multiple, Stephens considered a range of 8.0x to 10.0x NTM EPS derived from the Price / Next Twelve Months (NTM) EPS multiple of companies included in MVB's peer group identified in MVB's 2022 proxy statement. The following table summarizes the terminal value of IFH that Stephens calculated by applying the selected terminal earnings multiple to IFH's 2028 projected adjusted net income, excluding net after-tax cash merger adjustments: ($ in thousands) IFH's 2028 Adjusted Net Income$ 9,627 Terminal Earnings Multiple 9.0x IFH Terminal Value$ 86,647
-------------------------------------------------------------------------------- The following table summarizes the terminal value of IFH that Stephens calculated by applying the selected terminal earnings multiple to IFH's 2028 projected adjusted net income, including net after-tax cash merger adjustments as estimated by the executive management team of MVB: ($ in thousands) IFH's 2028 Adjusted Net Income$ 20,115 Terminal Earnings Multiple 9.0x IFH Terminal Value$ 181,032
The following table summarizes the forecasted free cash flows for IFH calculated by Stephens, excluding net after-tax cash merger adjustments:
12 Months Ended ($in thousands) 12/31/2022 12/31/2023 12/31/2024 12/31/2025 12/31/2026 12/31/2027 12/31/2028 IFH Net Income to Common$ 6,109 $ 7,176 $ 7,893 $ 8,682 $ 9,551 $ 10,506 After-tax Interest on Distributed Cash Flows(1) (573) (620) (678) (739) (806) (878) Adjusted Net Income$ 5,535 $ 6,556 $ 7,215 $ 7,943 $ 8,745 $ 9,627 Capital Outflows / (Contributions) forEarnings and Excess Capital Above a Tangible Common Equity to Tangible Asset Ratio of 9.0%$ 30,996 $ 2,503 $ 3,131 $ 3,328 $ 3,606 $ 3,913 Terminal Value$ 86,647 Free Cash Flows$ 30,996 $ 2,503 $ 3,131 $ 3,328 $ 3,606 $ 90,560
Source:
(1) 2.50% pre-tax cost of cash assumed on dividends deployed from excess capital.
The following table summarizes the forecasted free cash flows for IFH calculated by Stephens, including net after-tax cash merger adjustments as estimated by the executive management team of MVB: 12 Months Ended ($in thousands) 12/31/2022 12/31/2023
$ 6,109 $
7,176
6,311
9,204 9,771 10,272 10,788 11,182 After-tax Interest on Distributed Cash Flows(2)
(425)
(591) (820) (1,059) (1,310) (1,573) . . .
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