BALTIMORE, MD / ACCESSWIRE / October 21, 2024 / BV Financial, Inc. (NASDAQ:BVFL), the holding company for BayVanguard Bank (the "Bank"), today reported net income of $3.8 million, or $0.35 per diluted share, for the quarter ended September 30, 2024 compared to net income of $3.7 million, or $0.35 per diluted share, for the quarter ended September 30, 2023. Net income for the nine-month period ended September 30, 2024 was $9.8 million or $0.91 per diluted share compared to net income of $10.7 million or $1.20 per diluted share for the nine-month period ended September 30, 2023.

Financial Highlights

Return on average assets and return on average equity for the three months ended September 30, 2024 were 1.70% and 7.32%, respectively.
Net loans held to maturity decreased $11.0 million or 1.6% compared to December 31, 2023.
Deposits increased slightly to $634.3 million at September 30, 2024 compared to $634.1 million at December 31, 2023.
Cash and cash equivalents increased by $20.3 million or 27.6% compared to December 31, 2023.
Non-accrual loans decreased $6.6 million or 62.4% to $4.0 million at September 30, 2024 from $10.6 million at December 31, 2023. The decrease in non-accrual loans in the quarter ended September 30, 2024 compared to June 30, 2024 was $4.3 million or 51.8%.
Total delinquent loans decreased $9.6 million or 68.4% to $4.4 million at September 30, 2024 from $14.0 million at December 31, 2023. The decrease in delinquent loans in the quarter ended September 30, 2024 compared to June 30, 2024 was $2.4 million or 35.3%.
The Company recorded a recovery to the provision for credit losses of $714,000 for the three months ended September 30, 2024 and a recovery to the provision for credit losses $806,000 for the nine-months ended September 30, 2024. The primary driver of the reduction in the required allowance for credit losses ("ACL") in the period was the substantial improvement in the Company's asset quality as evidenced by the reduction in non-accrual and delinquent loans noted above.

FINANCIAL CONDITION DISCUSSION

Total Assets. Total assets were $892.7 million at September 30, 2024, an increase of $7.4 million, or 0.8%, from $885.3 million at December 31, 2023. The increase was due primarily to a $20.3 million increase in cash, which was primarily offset by decreases in loans and other non-earning assets.

Cash and Cash Equivalents. Cash and cash equivalents increased $20.3 million, or 27.7%, to $94.1 million at September 30, 2024 from $73.5 million at December 31, 2023. The increase in cash is a result of the decrease in loans and the other non-interest bearing assets.

Loans Receivable. Loans receivable decreased $11.0 million, or 1.6%, to $693.2 million at September 30, 2024 from $704.8 million at December 31, 2023. The increase in the investor commercial real estate loan category was offset by decreases in most other loan categories.

Securities. Securities available for sale increased by $4.4 million or 12.6% from December 31, 2023 as paydowns in the mortgage-backed securities were offset by purchases used primarily to secure local government deposits. The held-to-maturity portfolio decreased by $4.2 million or 40.9% due to maturities and paydowns.

Total Liabilities. Total liabilities decreased $3.2 million or 0.5%, to $683.0 million at September 30, 2024 from $686.2 million at December 31, 2023. The decrease was due primarily to the decrease in borrowings as $3.0 million in junior subordinated debt was paid off in the first quarter of 2024.

Deposits. Total deposits increased $200,000, or 0.03% to $634.3 million at September 30, 2024 from $634.1 million at December 31, 2023. Interest-bearing deposits increased $2.9 million, or 0.6%, to $495.0 million at September 30, 2024 from $492.1 million at December 31, 2023. Noninterest bearing deposits decreased $2.7 million, or 1.9%, to $139.3 million at September 30, 2024 from $142.0 million at December 31, 2023.

Stockholders' Equity. Stockholders' equity increased $10.6 million, or 5.4%, to $209.7 million at September 30, 2024 from $199.1 million at December 31, 2023 primarily due to net income during the period.

RESULTS OF OPERATION DISCUSSION

Net Income. Net income was $3.8 million or $0.35 per diluted share for the three months ended September 30, 2024 compared to $3.7 million or $0.35 per diluted share for the three months ended September 30, 2023. In the quarter ended September 30, 2024, the provision for credit losses was a credit of $714,000 as a result of the improvement in the asset quality of the Company's loan portfolio. In the quarter ended September 30, 2023, the Company recognized a provision for credit loss recovery of $333,000. Net income was $9.8 million or $0.91 per diluted share for the nine-months ended September 30, 2024 compared to $10.7 million or $1.20 per diluted share for the nine-months ended September 30, 2023. The higher net income in the nine-months ended September 30, 2023 compared to the same period in 2024 is due to , the Company recognized in 2023 a gain on the sale of foreclosed real estate of $678,000, a gain on the sale of fixed assets of $188,000 and received $225,000 in life insurance death benefits.

Net Interest Income. Net interest income was $9.3 million for the three months ended September 30, 2024 compared to $8.9 million in the three months ended September 30, 2023. The net interest margin for the three months ended September 30, 2024 was 4.49% compared to 4.10% for the three months ended September 30, 2023. The increase in net interest income was due to higher yields on interest earning assets, and lower balances of interest-bearing liabilities offsetting higher rates paid on deposits.

Net interest income was $26.2 million for the nine-months ended September 30, 2024, compared to $25.3 million in the nine-months ended September 30, 2023. The net interest margin for the nine-months ended September 30, 2024 was 4.25% compared to 4.21% for the nine-months ended September 30, 2023. The increase in net interest income was due to higher yields on interest earning assets, and lower balances of interest-bearing liabilities offsetting higher rates paid on deposits.

Noninterest Income. For the three months ended September 30, 2024, noninterest income totaled $696,000 compared to $882,000 for the quarter ended September 30, 2023. For the quarter ended September 30, 2023, the Company recognized a gain of $188,000 on the sale of a former branch building.

For the nine-months ended September 30, 2024, noninterest income totaled $1.9 million as compared to $3.1 million for the nine-months ended September 30, 2023. In the nine-months ended September 30, 2023, the Company recognized a gain of $678,000 on the sale of foreclosed real estate, a gain of $188,000 on the sale of a former branch building and $225,000 in life insurance death benefits.

Noninterest Expense. For the three months ended September 30, 2024, noninterest expense totaled $5.5 million compared to $5.0 million in the three months ended September 30, 2023. Compensation and benefits increased $345,000 or 11.0% due to increases in salary and benefits. Professional fees increased by $180,000 or 81.8% due to legal and accounting costs and data processing expense increased by $21,000 or 6.1%.

For the nine-months ended September 30, 2024, noninterest expense totaled $15.3 million as compared to $14.2 million in the nine-months ended September 30, 2023. Compensation and benefits increased $827,000 or 9.3% due to increases in staffing and salaries and benefits. Professional fees increased $160,000 or 26.8% due to legal, accounting and consulting expenses. Expenses also increased in the occupancy, data processing and other expense categories while decreases occurred in foreclosed real estate costs, equipment and advertising expenses.

Asset Quality. Non-performing assets at September 30, 2024 totaled $4.1 million consisting of $3.9 million in nonperforming loans and $160,000 in other real estate owned, compared to $10.7 million at December 31, 2023, consisting of $10.6 million in non-performing loans and $170,000 in other real estate owned. During the quarter, our largest loan on non-accrual, a $3.8 million investor commercial real estate loan paid off. At September 30, 2024, the ACL was $8.0 million, which represented 1.15% of total loans and 201.6% of non-performing loans compared to $8.6 million at December 31, 2023, which represented 1.21% of total loans and 81.1% of non-performing loans.

Forward-Looking Statements

This press release may contain certain forward-looking statements that are based on management's current expectations regarding economic, legislative and regulatory issues that may impact the Company's earnings in future periods. Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, changes in interest rates, increased competitive pressures, the effects of inflation, potential recessionary conditions, general economic conditions or conditions within the securities markets, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, changes in the quality, size and composition of our loan and securities portfolios, changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio, changes in demand for our products and services, accounting and tax changes, deposit flows, real estate values and competition, changes in accounting and tax principles, policies or guidelines, changes in legislation or regulation and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services, a failure in or breach of our operational or security systems or infrastructure, including cyberattacks that could adversely affect the Company's financial condition and results of operations and the business in which the Company and the Bank are engaged and the failure to maintain current technologies, the failure to retain or attract employees.

About BV Financial. BV Financial, Inc. is the parent company of BayVanguard Bank. BayVanguard Bank is headquartered in Baltimore, Maryland with thirteen branches in the Baltimore metropolitan area and the eastern shore of Maryland. The Bank is a full-service community-oriented financial institution dedicated to serving the financial service needs of consumers and businesses.

Contact:

Michael J. Dee
Chief Financial Officer
(410) 477- 5000

	At or For the Three Months						At or For the Nine Months
	Ended September 30,						Ended September 30,
	2024			2023			2024			2023
Performance Ratios⁽¹⁾:
Return on average assets		1.70	%		1.58	%		1.46	%		1.61	%
Return on average equity		7.32	%		9.84	%		6.39	%		11.88	%
Interest rate spread⁽²⁾		3.71	%		3.46	%		3.48	%		3.77	%
Net interest margin⁽³⁾		4.49	%		4.10	%		4.25	%		4.21	%
Non-interest expense to average assets		2.46	%		2.15	%		2.29	%		1.41	%
Efficiency ratio⁽⁴⁾		54.73	%		49.63	%		54.53	%		48.13	%
Average interest-earning assets to average interest-bearing liabilities		156.49	%		149.31	%		155.24	%		139.84	%
Average equity to average assets		23.29	%		16.06	%		22.90	%		14.31	%
Credit Quality Ratios:
Allowance for credit losses as a percentage of total loans		1.15	%		1.15	%		1.15	%		1.15	%
Allowance for credit losses as a percentage of non-performing loans		201.60	%		213.49	%		201.60	%		213.49	%
Net charge-offs (recoveries) to average outstanding loans during the year		-0.04	%		-0.04	%		-0.04	%		-0.06	%
Non-performing loans as a percentage of total loans		0.57	%		0.54	%		0.57	%		0.54	%
Non-performing loans as a percentage of total assets		0.44	%		0.41	%		0.44	%		0.41	%
Total non-performing assets as a percentage of total assets		0.46	%		0.47	%		0.46	%		0.47	%

Other:
Number of offices		13			15			13			15
Number of full-time equivalent employees		111			110			111			110

BV FINANCIAL, INC.

Consolidated Balance Sheets

	September 30, 2024			December 31, 2023
(dollars in thousands, except share amounts)	(unaudited)			(audited)

Assets
Cash	$	7,207		$	9,260
Interest-bearing deposits in other banks		86,858			64,482
Cash and cash equivalents		94,065			73,742
Equity Investment		254			256
Securities available for sale		39,162			34,781
Securities held to maturity (fair value of $5,214 and $9,206, ACL of $4 and $6)		6,029			10,209
Loans held to maturity		693,231			704,802
Allowance for Credit Losses		(8,001	)		(8,554	)
Net Loans		685,230			696,248
Foreclosed real estate		160			170
Premises and equipment, net		13,404			14,250
Federal Home Loan Bank of Atlanta stock, at cost		654			626
Investment in life insurance		19,947			19,657
Accrued interest receivable		2,922			3,279
Goodwill		14,420			14,420
Intangible assets, net		876			1,012
Deferred tax assets, net		8,442			8,969
Other assets		7,144			7,635
Total assets	$	892,709		$	885,254
Liabilities and Stockholders' Equity
Liabilities
Noninterest-bearing deposits	$	139,302		$	142,030
Interest-bearing deposits		495,011			492,090
Total deposits		634,313			634,120

Subordinated Debentures		34,845			37,251
Other liabilities		13,817			14,818
Total liabilities		682,975			686,189
Stockholders' equity
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued or outstanding		-			-
Common stock, $0.01 par value; 45,000,000 shares authorized at September 30, 2024 and December 31, 2023; 11,701,785 shares issued and outstanding as of September 30, 2024 and 11,375,803 shares issued and outstanding as of December 31, 2023		117			114
Paid-in capital		110,697			110,465
Unearned common stock held by employee stock ownership plan		(7,202	)		(7,328	)
Retained earnings		107,543			97,772
Accumulated other comprehensive loss		(1,421	)		(1,958	)
Total stockholders' equity		209,734			199,065
Total liabilities and stockholders' equity	$	892,709		$	885,254

BV FINANCIAL, INC.

Consolidated Statements of Income

(dollars in thousands, except per share amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
Interest Income	2024			2023			2024			2023
Loans, including fees	$	10,522		$	9,764		$	30,481		$	27,863
Investment securities available for sale		353			302			966			846
Investment securities held to maturity		83			89			266			275
Other interest income		1,192			1,560			3,058			2,958
Total interest income		12,150			11,715			34,771			31,942
Interest Expense
Interest on deposits		2,381			1,764			6,610			3,694
Interest on FHLB borrowings		-			530			-			1,313
Interest on Subordinated debentures		466			545			1,985			1,621
Total interest expense		2,847			2,839			8,595			6,628
Net interest income		9,303			8,876			26,176			25,314
Provision for (recovery of) credit losses		(714	)		(333	)		(806	)		(480	)
Net interest income after provision for (recovery of) credit losses		10,017			9,209			26,982			25,794
Noninterest Income
Service fees on deposits		103			109			303			304
Fees from debit cards		175			183			529			543
Income from investment in life insurance		91			85			290			549
Gain on sale of fixed assets		-			188			-			188
Gain on sale of foreclosed real estate		-			-			-			678
Other income		327			317			747			798
Total noninterest income		696			882			1,869			3,060
Noninterest Expense
Compensation and related benefits		3,494			3,149			9,714			8,887
Occupancy		396			397			1,242			1,178
Data processing		366			345			1,117			1,034
Advertising		6			5			16			33
Professional fees		400			220			757			597
Equipment		97			105			301			319
Foreclosed real estate holding costs		(3	)		13			13			173
Amortization of intangible assets		45			46			135			138
FDIC insurance premiums		82			120			246			237
Other expense		590			608			1,751			1,656
Total noninterest expense		5,473			5,008			15,292			14,252
Net income before tax		5,240			5,083			13,559			14,602
Income tax expense		1,442			1,399			3,788			3,904
Net income	$	3,798		$	3,684		$	9,771		$	10,698
Basic earnings per share	$	0.35		$	0.35		$	0.91		$	1.21
Diluted earnings per share	$	0.35		$	0.35		$	0.91		$	1.20

BV FINANCIAL, INC.

Average Balance Sheet for the Three Months ended September 30,

(Dollars in thousands)

	For the Three Months Ended September 30,
	2024								2023
(dollars in thousands)	Average Outstanding Balance			Interest		Average Yield/Rate			Average Outstanding Balance			Interest		Average Yield/Rate
	(Unaudited)
Interest-earning assets:
Loans	$	690,170		$	10,522		6.05	%	$	693,956		$	9,764		5.58	%
Securities available-for-sale		36,201			353		3.87	%		35,868			302		3.35	%
Securities held-to-maturity		9,937			83		3.31	%		12,493			89		2.84	%
Cash, cash equivalents and other interest-earning assets		86,322			1,192		5.48	%		115,554			1,560		5.35	%
Total interest-earning assets		822,630			12,150		5.86	%		857,871			11,715		5.42	%
Noninterest-earning assets		68,767								74,240
Total assets	$	891,397							$	932,111

Interest-bearing liabilities:
Interest-bearing demand deposits	$	79,652			207		1.03	%	$	82,096			219		1.06	%
Savings deposits		128,918			89		0.27	%		150,522			50		0.13	%
Money market deposits		108,518			669		2.45	%		85,982			255		1.18	%
Certificates of deposit		173,751			1,416		3.23	%		181,292			1,240		2.71	%
Total interest-bearing deposits		490,839			2,381		1.92	%		499,892			1,764		1.40	%
Federal Home Loan Bank advances		-			-		-			37,500			530		5.60	%
Subordinated debentures		34,827			466		5.30	%		37,175			545		5.82	%
Total borrowings		34,827			466		5.30	%		74,675			1,075		5.71	%
Total interest-bearing liabilities		525,666			2,847		2.15	%		574,567			2,839		1.96	%
Noninterest-bearing demand deposits		140,039								144,603
Other noninterest-bearing liabilities		18,101								63,261
Total liabilities		683,806								782,431
Equity		207,591								149,680
Total liabilities and equity	$	891,397							$	932,111
Net interest income				$	9,303							$	8,876
Net interest rate spread							3.71	%							3.46	%
Net interest-earning assets	$	296,964							$	283,304
Net interest margin							4.49	%							4.10	%
Average interest-earning assets to interest-bearing liabilities		156.49	%							149.31	%

BV FINANCIAL, INC.

Average Balance Sheet for the Nine Months ended September 30

(Dollars in thousands)

	For the Nine Months Ended September 30,
	2024								2023
(dollars in thousands)	Average Outstanding Balance			Interest		Average Yield/Rate			Average Outstanding Balance			Interest		Average Yield/Rate
	(Unaudited)
Interest-earning assets:
Loans	$	701,310		$	30,481		5.79	%	$	680,436		$	27,863		5.47	%
Securities available-for-sale		34,569			966		3.72	%		35,746			846		3.16	%
Securities held-to-maturity		10,507			266		3.37	%		12,276			275		3.00	%
Cash, cash equivalents and other interest-earning assets		74,720			3,058		5.46	%		76,310			2,958		5.19	%
Total interest-earning assets		821,106			34,771		5.64	%		804,768			31,942		5.31	%
Noninterest-earning assets		68,985								81,460
Total assets	$	890,091							$	886,228

Interest-bearing liabilities:
Interest-bearing demand deposits	$	83,683			681		1.08	%	$	87,159			380		0.58	%
Savings deposits		138,474			250		0.24	%		158,324			141		0.12	%
Money market deposits		96,724			1,496		2.06	%		92,457			491		0.71	%
Certificates of deposit		174,896			4,183		3.19	%		167,313			2,682		2.14	%
Total interest-bearing deposits		493,777			6,610		1.78	%		505,253			3,694		0.98	%
Federal Home Loan Bank advances		-			-		-			33,099			1,313		5.30	%
Subordinated debentures		35,139			1,985		7.53	%		37,123			1,621		5.84	%
Total borrowings		35,139			1,985		7.53	%		70,222			2,934		5.59	%
Total interest-bearing liabilities		528,916			8,595		2.16	%		575,475			6,628		1.54	%
Noninterest-bearing demand deposits		139,642								154,521
Other noninterest-bearing liabilities		17,676								36,180
Total liabilities		686,234								766,176
Equity		203,857								120,052
Total liabilities and equity	$	890,091							$	886,228
Net interest income				$	26,176							$	25,314
Net interest rate spread							3.48	%							3.77	%
Net interest-earning assets	$	292,190							$	229,293
Net interest margin							4.25	%							4.21	%
Average interest-earning assets to interest-bearing liabilities		155.24	%							139.84	%

ALLOWANCE FOR CREDIT LOSS - LOANS

(Dollars in thousands)

	QTR			YTD
	9/30/2024			9/30/2024

Beginning Balance	$	8,547		$	8,554

Provision for credit losses -loans		(678	)		(837	)

Net Charge-offs (recoveries):
Owner Occupied 1-4		(3	)		(112	)
Non-Owner Occupied 1-4		(128	)		(168	)
Investor Commercial Real Estate		-			-
OO Commercial Real Estate		-			(3	)
Construction & Land		(1	)		(3	)
Farm Loans		-			-
Marine & Consumer		-			2
Guaranteed by the US Gov't		-			-
Commercial		-			-
Net charge-offs (recoveries)		(132	)		(284	)

Ending Balance- ACL for Loans	$	8,001		$	8,001

Balance Reserve for unfunded loan commitments		239			239
Balance Reserve for HTM Securities		4			4
Total ACL	$	8,244		$	8,244

Provision expense (recovery of) for Unfunded Commitments		(36	)		33
Provision expense for HTM Securities		-			(2	)
Total other provision expense (recovery of)	$	(36	)	$	31
Total provision for (recovery of ) credit losses	$	(714	)	$	(806	)

SOURCE: BV Financial, Inc.

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BV Financial, Inc. Announces Financial Results