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BV Financial, Inc. Announces Financial Results

Monday, 21 October 2024 04:15 PM

BV Financial, Inc.

Topic:
Earnings

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.

Topic:
Earnings
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