Business Combination

9 Months Ended

Sep. 30, 2019

Note 16 – Business Combination

On September 13, 2019 the Bank purchased full equity rights of Chartwell Compliance headquartered in Bethesda, Maryland. Purchase consideration for the acquisition totaled $4.1 million, including a cash payment of $3.1 million and the delivery $1.0 million of MVB common stock. Additionally, contingent consideration will be given to the previous owners if outlined future financial conditions of the company are met. Management estimated the fair value of the earnout utilizing the Black-Scholes option pricing model.

Chartwell Compliance provides integrated regulatory compliance, state licensing, financial crimes prevention and enterprise risk management services that include consulting, outsourcing, testing and training solutions. As a stand-alone subsidiary of MVB Bank, Inc., Chartwell Compliance will expand its services to both Fintech and bank clients. Chartwell will coordinate with MVB Bank’s current compliance officers and be charged to help create and implement strategy and provide expert compliance resources to aid MVB in carrying out stringent and faster new client due diligence. Chartwell also will conduct enhanced monitoring and testing of clients.

The Company has accounted for the purchases under the acquisition method of accounting in accordance with FASB ASC topic 805, “Business Combinations,” whereby the acquired assets and liabilities were recorded by the Bank at their estimated fair values as of their acquisition date. The acquired assets and assumed liabilities of Chartwell Compliance were measured at estimated fair value. Management made significant estimates and exercised significant judgment in accounting for the acquisition of Chartwell Compliance.

The following table provides the purchase price as of the acquisition date, the identifiable assets acquired and liabilities assumed at their estimated fair values, and the resulting goodwill of $1.2 million recorded from the acquisition.


(Dollars in thousands)	As of September 13, 2019
Purchase Price Consideration:
Cash consideration	$	3,077
Closing MVB shares	1,033
Total purchase consideration	$	4,110
Assets acquired at fair value:
Cash and cash equivalents	$	426
Accounts receivable	165
Furniture and equipment, net	4
Intangibles, net	3,220
Total fair value of assets acquired	$	3,815
Liabilities assumed at fair value:
Other liabilities	$	855
Total fair value of liabilities acquired	$	855
Net assets acquired at fair value:	$	2,960
Amount of goodwill resulting from acquisition	$	1,150