BV Financial, Inc. Announces Financial Results

Rhea-AI Summary

BV Financial (NASDAQ:BVFL) reported Q1 2025 financial results with net income of $2.1 million ($0.21 per diluted share), compared to $2.6 million ($0.24 per diluted share) in Q1 2024. Key highlights include:

- Net loans increased 1.65% to $741.3 million
- Deposits grew 0.98% to $657.9 million
- Net interest margin improved to 4.12% from 3.91%
- Return on average assets was 0.92% vs 1.16% year-over-year
- Return on average equity decreased to 4.28% from 5.14%

The company completed its previously announced stock repurchase program in January 2025, buying back 50,038 shares at an average cost of $17.08, and announced a second repurchase program on April 4, 2025. Asset quality metrics showed non-performing assets at $5.0 million, with allowance for credit losses at 1.18% of total loans.

Positive

• Net interest margin improved to 4.12% from 3.91%
• Net loans increased by $12.0 million (1.65%)
• Deposits grew by $6.4 million (0.98%)
• Noninterest-bearing deposits increased by $6.5 million (5.0%)

Negative

• Net income decreased to $2.1 million from $2.6 million year-over-year
• Return on average assets declined to 0.92% from 1.16%
• Return on average equity decreased to 4.28% from 5.14%
• Non-performing assets increased to $5.0 million from $4.2 million in previous quarter
• Efficiency ratio worsened to 67.36% from 52.75%

Insights

Financial Analyst

BV Financial reports 19% drop in Q1 net income despite loan growth and improved net interest margin, due to higher expenses.

BV Financial's Q1 2025 results present a mixed financial picture with concerning profitability trends. While reported net income declined 19% year-over-year to $2.1 million ($0.21 per share vs. $0.24 last year), the bank maintained stable adjusted net income of $2.9 million for both periods.

The bank's core business fundamentals show modest improvement in several areas. Net loans increased by $12 million (1.65%) to $741.3 million, while deposits grew by $6.4 million (0.98%) to $657.9 million. Notably, the net interest margin expanded to 4.12% from 3.91% a year ago, reflecting improved interest rate spread management.

However, the earnings quality raises concerns. Noninterest expenses surged 25.5% to $6.2 million, driven primarily by a $1.4 million increase in compensation costs, which included $1.2 million for equity awards following approval of the 2024 Equity Incentive Plan. This expense growth outpaced revenue gains, causing the efficiency ratio to deteriorate to 67.36% from 52.75% a year earlier.

Asset quality metrics also warrant attention. Non-performing assets increased to $5 million (0.53% of total assets) from $4.2 million at year-end. While the coverage ratio of allowance to non-performing loans remains solid at 183.9%, the upward trend in problem assets during a strong economic environment raises questions.

Key profitability measures declined, with return on average assets falling to 0.92% from 1.16% and return on average equity dropping to 4.28% from 5.14%. These metrics now place BV Financial below many peer community banks, which typically target ROA above 1%.

Banking Sector Strategist

BV Financial's operational indicators show resilience, but elevated expenses and emerging credit concerns may foreshadow profitability challenges.

BV Financial's Q1 results highlight the balancing act facing many community banks in the current rate environment. Despite net income compression, the bank demonstrated positive core banking trends with its 4.12% net interest margin comparing favorably to the typical community bank range of 3.2-3.8%. This margin expansion amid an uncertain rate environment represents effective asset-liability management.

The composition of deposit growth is particularly encouraging. Noninterest-bearing deposits increased $6.5 million (5.0%) to $136.3 million, now comprising 20.7% of total deposits. This low-cost funding source provides a competitive advantage as deposit competition remains intense. The overall deposit increase of $6.4 million indicates customer retention strength despite industry-wide deposit challenges.

Loan growth of 1.65% quarterly (6.6% annualized) highlights BV Financial's continued ability to source quality lending opportunities. The strategic focus on commercial and industrial loans ($9.9 million increase) and investor commercial real estate ($4.3 million increase) suggests purposeful portfolio diversification.

However, the efficiency deterioration is significant. The 67.36% efficiency ratio exceeds the optimal range for community banks (55-60%), limiting earnings power. While some expense increase relates to one-time equity awards, this overhead structure requires careful management.

The uptick in non-performing assets to $5 million (0.53% of assets) warrants monitoring. Though still below problematic levels, the 19% increase from year-end introduces potential future earnings drag from problem loan management and provisioning. The $297,000 provision expense, significantly higher than the $18,000 year earlier, suggests management recognizes emerging credit quality concerns.

BALTIMORE, MD / ACCESS Newswire / April 17, 2025 / BV Financial, Inc. (NASDAQ:BVFL), (the "Company") the holding company for BayVanguard Bank (the "Bank"), reported net income of $2.1 million or $0.21 per diluted share for the quarter ended March 31, 2025 compared to net income of $2.6 million or $0.24 per diluted share for the quarter ended March 31, 2024.

Adjusted net income, a Non-GAAP financial metric, was $2.9 million for both quarters ended March 31, 2025 and 2024. For a reconciliation of net income as reported and Non-GAAP adjusted net income, see the table below.

Financial Highlights

• Return on average assets and return on average equity for the quarter ended March 31, 2025 were 0.92% and 4.28%, respectively. Return on average assets and return on average equity for the three months ended March 31, 2024 were 1.16% and 5.14%, respectively.

• Net Loans increased $12.0 million, or 1.65% to $741.3 million at March 31, 2025 compared to $729.2 million at December 31, 2024.

• Deposits increased $6.4 million, or 0.98%, from $651.5 million at December 31, 2024 to $657.9 million at March 31, 2025.

• In the quarter ended March 31, 2025, the Company recorded a provision for credit losses of $297,000 consisting of a $351,000 provision to the allowance for credit losses (ACL) - loans, a $53,000 recovery to the ACL-unfunded commitments and a $1,000 recovery to the ACL - for held-to-maturity securities. In the quarter ended March 31, 2024, the Company recorded a provision for credit losses of $18,000 consisting of ($133,000) in the ACL - loans, $152,000 in the ACL-unfunded commitments and ($1,000) in the ACL - HTM Securities.

• The Company completed the stock repurchase program previously announced on July 30, 2024 with the repurchase of 50,038 shares in January 2025 at an average cost of $17.08. The Company announced the adoption of a second stock repurchase program on April 4, 2025.

Financial Condition

Total Assets. Total assets were $921.9 million at March 31, 2025, an increase of $10.1 million, or 1.11%, from $911.8 million at December 31, 2024. The increase was due primarily to a $12.0 million increase in loans receivable partially offset by a decrease of $2.1 million in securities available for sale. The loan growth in the quarter was funded by an increase in deposits and quarterly net income.

Cash and Cash Equivalents. Cash and cash equivalents increased $320,000 or 0.5%, to $70.8 million at March 31, 2025 from $70.5 million at December 31, 2024.

Net Loans Receivable. Net loans receivable increased $12.0 million, or 1.65%, to $741.3 million at March 31, 2025 from $729.2 million at December 31, 2024. Increases in commercial and industrial loans of $9.9 million, investor commercial real estate loans of $4.3 million and owner occupied one-to four-family loans of $3.0 million offset decreases in non-owner occupied one- to four-family loans.

Securities. Securities available for sale ("AFS") decreased $2.1 million, or 5.6%, to $35.2 million at March 31, 2025 from $37.3 million at December 31, 2024. The decrease was due to new purchases not fully replacing maturities and paydowns in the portfolio. Securities held-to-maturity were relatively unchanged at $5.9 million.

Total Liabilities. Total liabilities increased $7.6 million or 1.1%, to $723.9 million at March 31, 2025 from $716.3 million at December 31, 2024. The increase was primarily due to an increase in total deposits of $6.4 million, and an increase in escrow accounts and other accrued balances.

Deposits. Total deposits increased $6.4 million, or 0.98%, to $657.9 million at March 31, 2025 from $651.5 million at December 31, 2024. Noninterest bearing deposits increased $6.5 million, or 5.0%, to $136.3 million at March 31, 2025 from $129.7 million at December 31, 2024. Interest-bearing deposits were relatively unchanged at $521.6 million.

Federal Home Loan Bank Borrowings. The Company had $15 million in Federal Home Loan Bank borrowings at March 31, 2025 and December 31, 2024.

Stockholders' Equity. Stockholders' equity increased $2.6 million, or 1.3%, to $198.1 million at March 31, 2025, primarily due to net income and somewhat offset by share repurchases.

Asset Quality. Non-performing assets at March 31, 2025 totaled $5.0 million consisting of $4.8 million in nonperforming loans and $158,000 in foreclosed real estate, compared to $4.2 million at December 31, 2024, consisting of $4.0 million in non-performing loans and $159,000 in foreclosed real estate. At March 31 2025, the allowance for credit losses on loans was $8.9 million, which represented 1.18% of total loans and 183.9% of non-performing loans compared to $8.5 million at December 31, 2024, which represented 1.15% of total loans and 212.5% of non-performing loans.

Comparison of Operating Results for the Three Ended March 31, 2025 and 2024

Net Interest Income. Net interest income was $8.6 million for the three months ended March 31, 2025 compared to $8.0 million in the three months ended March 31, 2024. The net interest margin for the three months ended March 31, 2025 was 4.12% compared to 3.91% for the three months ended March 31, 2024.

Noninterest Income. For the three months ended March 31, 2025, noninterest income totaled $530,000 compared to $578,000 in the quarter ended March 31, 2024.

Noninterest Expense. For the three months ended March 31, 2025, noninterest expense totaled $6.2 million compared to $4.9 million for the three months ended March 31, 2024. Compensation and benefits expenses increased $1.4 million, or 44.6% due to increases in salaries and the $1.2 million cost of the equity awards granted after the stockholders approved the 2024 Equity Incentive Plan. Professional fees increased $119,000 or 106.3% primarily due to a recovery in 2024 of previously expensed legal fees of $109,000 on the disposition of a problem loan. Other expenses decreased $271,000 or 43.2%.

Income taxes. For the three months ended March 31, 2025, income tax expense was $599,000 for an effective tax rate of 22.2%. In the quarter ended March 31, 2024, income tax expense was $1.0 million for an effective tax rate of 28.5%. The lower rate is due to an accrual adjustment made in the current quarter.

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, the imposition of tariffs or other domestic or international governmental policies, 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 FRB, 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, including 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 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 potential government shutdown, 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, our ability to enter into new markets successfully and capitalize on growth opportunities and the failure to retain or attract employees.

BV Financial, Inc.

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

BV FINANCIAL, INC.
Consolidated Financial Ratios

		At or For the Three Months
		Ended March 31,
		2025				2024
Performance Ratios(1):
Return on average assets			0.92	%			1.16	%
Return on average equity			4.28	%			5.14	%
Interest rate spread(2)			3.37	%			3.10	%
Net interest margin(3)			4.12	%			3.91	%
Non-interest expense to average assets			2.70	%			2.23	%
Efficiency ratio(4)			67.36	%			52.75	%
Average interest-earning assets to average interest-bearing liabilities			148.50	%			154.58	%
Average equity to average assets			21.40	%			22.61	%
Credit Quality Ratios:
Allowance for credit losses as a percentage of total loans			1.18	%			1.20	%
Allowance for credit losses as a percentage of non-performing loans			183.87	%			79.16	%
Net charge-offs (recoveries) to average outstanding loans during the year			0.00	%			-0.01	%
Non-performing loans as a percentage of total loans			0.64	%			1.52	%
Non-performing loans as a percentage of total assets			0.52	%			1.20	%
Total non-performing assets as a percentage of total assets			0.53	%			1.22	%

Other:
Number of offices			13				13
Number of full-time equivalent employees			109				112
(1) Performance ratios are annualized.
(2) Represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(3) Represents net interest income as a percentage of average interest-earning assets.
(4) Represents non-interest expenses divided by the sum of net interest income and non-interest income.

BV FINANCIAL, INC.
Consolidated Balance Sheets

		March 31, 2025				December 31, 2024
(dollars in thousands, except share amounts)		(unaudited)
Assets
Cash		$	8,568			$	5,842
Interest-bearing deposits in other banks			62,252				64,658
Cash and cash equivalents			70,820				70,500
Equity Investment			408				391
Securities available for sale			35,185				37,259
Securities held to maturity (fair value of $5,191 and $5,171, ACL of $3 and $4)			5,909				5,979
Loans held for maturity			750,174				737,760
Allowance for Credit Losses			(8,888	)			(8,522	)
Net Loans			741,286				729,238
Foreclosed real estate			158				159
Premises and equipment, net			13,243				13,224
Federal Home Loan Bank of Atlanta stock, at cost			1,385				1,366
Investment in life insurance			20,145				20,058
Accrued interest receivable			3,121				3,161
Goodwill			14,420				14,420
Intangible assets, net			786				831
Deferred tax assets, net			8,989				8,899
Other assets			6,083				6,336
Total assets		$	921,938			$	911,821
Liabilities and Stockholders' Equity
Liabilities
Noninterest-bearing deposits		$	136,261			$	129,724
Interest-bearing deposits			521,635				521,767
Total deposits			657,896				651,491
FHLB borrowings			15,000				15,000
Subordinated debentures			34,922				34,883
Other liabilities			16,047				14,948
Total liabilities			723,865				716,322
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 in 2025 and 2024; 10,594,044 shares issued and outstanding as of March 31, 2025; 10,645,284 shares issued and outstanding as of December 31, 2024			106				106
Paid-in capital			94,915				94,679
Unearned common stock held by employee stock ownership plan			(7,115	)			(7,160	)
Retained earnings			111,594				109,495
Accumulated other comprehensive loss			(1,427	)			(1,621	)
Total stockholders' equity			198,073				195,499
Total liabilities and stockholders' equity		$	921,938			$	911,821

BV FINANCIAL, INC.
Consolidated Statements of Income

(dollars in thousands, except per share amounts)		Three Months Ended March 31,
Interest Income		2025				2024
Loans, including fees		$	10,741			$	9,782
Investment securities available for sale			350				306
Investment securities held to maturity			47				92
Other interest income			743				824
Total interest income			11,881				11,004
Interest Expense
Interest on deposits			2,601				1,986
Interest on FHLB borrowings			171				-
Interest on Subordinated debentures			466				1,055
Total interest expense			3,238				3,041
Net interest income			8,643				7,963
Provision for (recovery of) credit losses			297				18
Net interest income after provision for (recovery of) credit losses			8,346				7,945
Noninterest Income
Service fees on deposits			103				103
Fees from debit cards			164				171
Income from investment in life insurance			87				87
Other income			176				217
Total noninterest income			530				578
Noninterest Expense
Compensation and related benefits			4,524				3,129
Occupancy			444				438
Data processing			397				377
Advertising			6				5
Professional fees			231				112
Equipment			91				102
Foreclosed real estate and repossessed assets holding costs			3				5
Amortization of intangible assets			45				45
FDIC insurance premiums			81				83
Other expense			356				627
Total noninterest expense			6,178				4,923
Net income before tax			2,698				3,600
Income tax expense			599				1,026
Net income		$	2,099			$	2,574
Basic earnings per share		$	0.21			$	0.24
Diluted earnings per share		$	0.21			$	0.24

BV FINANCIAL, INC.
Average Balance Sheet for the Quarters ended March 31,
'(Dollars in thousands)

		For the Three Months Ended March 31,
		2025												2024
(dollars in thousands)		Average Outstanding Balance				Interest				Average Yield/Rate				Average Outstanding Balance				Interest				Average Yield/Rate
		(Unaudited)
Interest-earning assets:
Loans		$	739,666			$	10,741				5.89	%		$	708,367			$	9,782				5.54	%
Securities available-for-sale			36,884				350				3.85	%			34,045				306				3.61	%
Securities held-to-maturity			7,323				47				2.60	%			10,815				92				3.41	%
Cash, cash equivalents and other interest-earning assets			66,832				743				4.51	%			62,681				824				5.28	%
Total interest-earning assets			850,705				11,881				5.66	%			815,908				11,004				5.41	%
Noninterest-earning assets			65,008												67,460
Total assets		$	915,713											$	883,368
Interest-bearing liabilities:
Interest-bearing demand deposits		$	80,149				171				0.87	%		$	84,550				236				1.12	%
Savings deposits			122,458				99				0.33	%			146,629				65				0.18	%
Money market deposits			124,962				764				2.48	%			87,738				352				1.61	%
Certificates of deposit			195,379				1,567				3.52	%			173,093				1,333				3.09	%
Total interest-bearing deposits			522,948				2,601				2.02	%			492,010				1,986				1.62	%
Federal Home Loan Bank advances			15,000				171				4.62	%			-				-				-
Subordinated debentures			34,905				466				5.41	%			35,805				1,055				11.82	%
Total borrowings			49,905				637				5.18	%			35,805				1,055				11.82	%
Total interest-bearing liabilities			572,853				3,238				2.29	%			527,815				3,041				2.31	%
Noninterest-bearing demand deposits			131,981												139,691
Other noninterest-bearing liabilities			14,941												16,142
Total liabilities			719,775												683,648
Equity			195,938												199,720
Total liabilities and equity		$	915,713											$	883,368
Net interest income						$	8,643											$	7,963
Net interest rate spread											3.37	%											3.10	%
Net interest-earning assets		$	277,852											$	288,093
Net interest margin											4.12	%											3.91	%
Average interest-earning assets to interest-bearing liabilities			148.50	%											154.58	%

ALLOWANCE FOR CREDIT LOSS - LOANS
'(Dollars in thousands)

		QTR				QTR
		3/31/2025				3/31/2024
Beginning Balance		$	8,522			$	8,554
Provision for credit loss -loans			351				(133	)
Net Charge-offs (recoveries):
Owner Occupied 1-4			(3	)			(52	)
Non-Owner Occupied 1-4			(16	)			(29	)
Investor Commercial Real Estate			-				-
OO Commercial Real Estate			-				(2	)
Construction & Land			(1	)			(1	)
Farm Loans			-				-
Marine & Consumer			5				(1	)
Guaranteed by the US Gov't			-				-
Commercial			-				-
Net charge-offs (recoveries)			(15	)			(85	)
Ending Balance- ACL for Loans		$	8,888			$	8,506
Balance Reserve for unfunded loan commitments			299				360
Balance Reserve for HTM Securities			3				5
Total ACL		$	9,190			$	8,871
Provision expense for Unfunded Commitments			(53	)			152
Provision expense for HTM Securities			(1	)			(1	)
Total other provision expense		$	(54	)		$	151
Total provision for (recovery of ) credit losses		$	297			$	18

RECONCILIATION TABLE (UNAUDITED)
NON-GAAP ADJUSTED NET INCOME

Non-GAAP Reconciliation

In addition to results presented in accordance with generally accepted accounting principles utilized in the Unites States ("GAAP"), this earnings release contains a non-GAAP financial measure, Non-GAAP adjusted net income. The Company believes this non-GAAP financial measure is useful for both investors and management to understand the effects of certain items and provide an alternative view of its performance over time. Non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for total stockholders' equity or operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

		Three Months ended March 31,
		2025				2024
Net Income (GAAP)		$	2,099			$	2,574
Plus(minus) tax adjusted items:
Write-off of FMV adjustment on pay-off of acquired junior subordinated debt - tax adjusted			-				404
2024 Equity Plan Expenses - tax adjusted			857				-
Non GAAP adjusted net income		$	2,956			$	2,978

SOURCE: BV Financial, Inc.

View the original press release on ACCESS Newswire

FAQ

What were BV Financial's (BVFL) Q1 2025 earnings per share?

BVFL reported earnings of $0.21 per diluted share for Q1 2025, down from $0.24 per share in Q1 2024.

How much did BVFL's loan portfolio grow in Q1 2025?

Net loans increased by $12.0 million or 1.65% to $741.3 million compared to December 31, 2024.

What is BVFL's deposit growth for Q1 2025?

Total deposits increased by $6.4 million or 0.98% to $657.9 million, with noninterest-bearing deposits growing by $6.5 million.

How did BVFL's net interest margin perform in Q1 2025?

Net interest margin improved to 4.12% in Q1 2025 from 3.91% in Q1 2024.

What is the status of BVFL's stock repurchase program?

BVFL completed its previous stock repurchase program in January 2025 and announced a new program on April 4, 2025.