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MVB Financial (MVBF) to Buy 38% Interest in Warp for $48 Million
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MVB Financial Corp. (MVBF - Free Report) announces the execution of an agreement to acquire a 38% interest in Warp Speed Holdings LLC for $48 million. Closing of the investment, expected in mid-2022, is subject to the receipt of required regulatory approvals and other customary closing conditions.
MVB Financial is the parent holding company for MVB Bank.
Larry F. Mazza, the CEO of MVB Financial and MVB Bank, stated, “This investment is a continued extension of our partnership model with leading financial service providers that focus on using technology to deliver a superior customer experience and attractive financial results. We are impressed with what founders Josh Erskine and Shane Erskine and their team have built to date and believe Warp is just beginning to scratch the surface of its potential.”
The total investment value will comprise $38.4 million in cash and $9.6 million in MVB Financial’s common stock. The number of shares issued will be based on the volume weighted average closing price of MVBF common stock for 20 trading days ending the day prior to the closing date.
Notably, Warp is the holding company for CalCon Mutual Mortgage, dba OneTrust Home Loans, One Trust International and Warp Speed Mortgage, collectively referred to as OneTrust. OneTrust has developed a premier independent loan origination platform through superior customer service and execution driven by leading technology.
Warp represents a horizontally integrated financial services platform focused on residential and commercial loan origination and servicing, title insurance services, business and personal insurance brokerage, and data analytics to optimize business decisions in real-time.
The investment in Warp is anticipated to meaningfully increase MVBF’s fee income, and drive strong commercial and residential loan growth. MVBF expects the transaction to be accretive to earnings in double digits (excluding expected synergies with MVBF’s existing commercial banking businesses).
Also, OneTrust’s focus on traditional retail and commercial lending, along with its recently developed direct-to-consumer channel, is expected to complement MVBF’s existing commercial banking franchise.
The chairman and CEO of Warp, Josh Erskine, said, “MVB has established itself as a leading technology-forward bank serving middle market retail and commercial customers. We are extremely excited about the significant growth potential having MVB as a partner. The synergies and joint value created by this partnership are substantial and will speed up the profit focused growth path that Warp is already on.”
Over the past year, shares of MVB Financial have rallied 11.9% against the 3.4% decline of the industry.
While the rampant political and regulatory scrutiny of mergers and acquisitions has aggravated the execution risk for future deals, it is not discouraging banks from consolidation activities.
Recently, First Horizon Corporation (FHN - Free Report) and TD Bank Group (TD - Free Report) signed a definitive agreement, wherein the latter will acquire FHN in an all-cash deal valued at $13.4 billion or $25 for each FHN common share.
TD anticipates the FHN acquisition to close by Nov 1, 2022. The buyout is subject to customary closing conditions, including approvals from First Horizon's shareholders, and the United States and Canada regulatory authorities.
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MVB Financial (MVBF) to Buy 38% Interest in Warp for $48 Million
MVB Financial Corp. (MVBF - Free Report) announces the execution of an agreement to acquire a 38% interest in Warp Speed Holdings LLC for $48 million. Closing of the investment, expected in mid-2022, is subject to the receipt of required regulatory approvals and other customary closing conditions.
MVB Financial is the parent holding company for MVB Bank.
Larry F. Mazza, the CEO of MVB Financial and MVB Bank, stated, “This investment is a continued extension of our partnership model with leading financial service providers that focus on using technology to deliver a superior customer experience and attractive financial results. We are impressed with what founders Josh Erskine and Shane Erskine and their team have built to date and believe Warp is just beginning to scratch the surface of its potential.”
The total investment value will comprise $38.4 million in cash and $9.6 million in MVB Financial’s common stock. The number of shares issued will be based on the volume weighted average closing price of MVBF common stock for 20 trading days ending the day prior to the closing date.
Notably, Warp is the holding company for CalCon Mutual Mortgage, dba OneTrust Home Loans, One Trust International and Warp Speed Mortgage, collectively referred to as OneTrust. OneTrust has developed a premier independent loan origination platform through superior customer service and execution driven by leading technology.
Warp represents a horizontally integrated financial services platform focused on residential and commercial loan origination and servicing, title insurance services, business and personal insurance brokerage, and data analytics to optimize business decisions in real-time.
The investment in Warp is anticipated to meaningfully increase MVBF’s fee income, and drive strong commercial and residential loan growth. MVBF expects the transaction to be accretive to earnings in double digits (excluding expected synergies with MVBF’s existing commercial banking businesses).
Also, OneTrust’s focus on traditional retail and commercial lending, along with its recently developed direct-to-consumer channel, is expected to complement MVBF’s existing commercial banking franchise.
The chairman and CEO of Warp, Josh Erskine, said, “MVB has established itself as a leading technology-forward bank serving middle market retail and commercial customers. We are extremely excited about the significant growth potential having MVB as a partner. The synergies and joint value created by this partnership are substantial and will speed up the profit focused growth path that Warp is already on.”
Over the past year, shares of MVB Financial have rallied 11.9% against the 3.4% decline of the industry.
Image Source: Zacks Investment Research
Currently, MVB Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Efforts Made by Finance Companies for Growth
While the rampant political and regulatory scrutiny of mergers and acquisitions has aggravated the execution risk for future deals, it is not discouraging banks from consolidation activities.
Recently, First Horizon Corporation (FHN - Free Report) and TD Bank Group (TD - Free Report) signed a definitive agreement, wherein the latter will acquire FHN in an all-cash deal valued at $13.4 billion or $25 for each FHN common share.
TD anticipates the FHN acquisition to close by Nov 1, 2022. The buyout is subject to customary closing conditions, including approvals from First Horizon's shareholders, and the United States and Canada regulatory authorities.