EX-99.1 2 bvfl-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1

Contact:

Michael J. Dee

Chief Financial Officer

(410) 477- 5000

BV FINANCIAL, INC. ANNOUNCES FINANCIAL RESULTS

Baltimore, Maryland, April 22, 2024– BV Financial, Inc. (NASDAQ: BVFL), (the “Company”) the holding company for BayVanguard Bank (the “Bank”), reported net income of $2.6 million or $0.24 per diluted share for the quarter ended March 31, 2024 compared to net income of $3.1 million or $0.39 per diluted share for the quarter ended March 31, 2023.

Financial Highlights

•
During the quarter ended March 31, 2024, the Company paid off $3.0 million in junior subordinated debt assumed via previous acquisition that had an interest rate in the most recent quarter of 8.49%. This resulted in the write-off (increase in interest expense) of the remaining purchase accounting fair market value adjustment of $566,000. This write-off was the primary contributor to the decrease in net income in the quarter ended March 31, 2024 when compared to the quarter ended March 31, 2023.
•
Return on average assets and return on average equity for the quarter ended March 31, 2024 were 1.16% and 5.14%, respectively. Return on average assets and return on average equity for the three months ended March 31, 2023 were 1.46% and 12.57%, respectively.
•
Loans increased $3.9 million, or 0.56% to $708.7 million at March 31, 2024 compared to $704.8 million at December 31, 2023.
•
Deposits increased $5.4 million, or 0.85%, from $634.1 million at March 31, 2023 to $639.5 million at March 31, 2024.
•
In the quarter ended March 31, 2024, the Company recorded a provision for credit losses of $18,000 consisting of a $133,000 benefit to the provision for credit losses – loans, a $152,000 provision for credit losses for unfunded commitments and a $1,000 credit to the provision for credit losses for held-to-maturity securities. In the quarter ended December 31, 2023, the Company recorded a provision for credit losses of $435,000 consisting of $354,000 in the provision for credit losses – loans and $81,000 in the provision for credit losses for unfunded commitments.

 

Financial Condition

Total Assets. Total assets were $892.5 million at March 31, 2024, an increase of $7.2 million, or 0.82%, from $885.3 million at December31, 2023. The increase was due primarily to a $5.1 million increasein cash and a $3.9 million increase in loans receivable funded by an increase in deposits and quarterly net income. The increase in deposits included the issuance of $10 million in brokered deposits during the period.

Cash and Cash Equivalents. Cash and cash equivalents increased $5.1 million, or 6.9%, to $78.8 million at March 31, 2024 from $73. 7millionat December 31, 2023 primarily due to the increase in deposits.

 

Net Loans Receivable. Loans receivable increased$3.9 million, or 0.56%, to $708.7 million at March 31,2024 from $704.8 million at December31, 2023. Increasesin commercial and industrial loans of $7.0 million and investor commercial real estate loans of $4.9 million offset decreases in owner andnon-owner occupied one- to four-family loans and owner occupied commercial real estate loans.

Securities. Securities available for sale (“AFS”) decreased $1.0 million, or 3.0%, to $33.8 million at March 31, 2024 from $34.8 millionat December 31, 2023. The decrease was due to new purchases not fully replacing maturities and paydowns in the portfolio. Securities held-to-maturity were relatively unchanged at $10.2 million.

Total Liabilities. Total liabilities increased $4.6 million or 0.7%, to $690.8 million at March 31, 2024 from $686.2 million at December 31, 2023. The increase was primarily due to an increase in total deposits of $5.4 million, and an increase in escrow accounts and other accrued balances offsetting the pay-off of the junior subordinated debt.

Deposits. Total deposits increased $5.4 million, or 0.85%, to $639.5 million at March 31, 2024 from $634.1 million at December 31, 2023. Interest-bearing deposits increased $8.3 million, or 1.7%, to $500.4 million at March 31,2024 from $492.1 million at December31, 2023. Noninterest bearing deposits decreased $2.9 million, or 2.1%, to $139.1 millionat March 31, 2024 from $142.0 million at December 31, 2023. During the first quarter of 2024, the Company replaced $10.0 million in retail certificates of deposits with $10 million of brokered deposits at a cost lower than that would have been required to retain the retail certificates.

Federal Home Loan Bank Borrowings. The Company had no Federal Home Loan Bank borrowings at March 31, 2024 or December31, 2023.

Stockholders’ Equity. Stockholders’ equity increased $2.7 million, or 1.3%, to $201.8 millionat March 31, 2024, primarily due to net income.

Asset Quality. Non-performing assets at March 31, 2024 totaled $10.9 million consisting of $10.7 million in nonperforming loans and $170,000 in foreclosed real estate, compared to $10.7 million at December 31, 2023, consisting of $10.5 million in non-performing loans and $170,000 in foreclosed real estate. At March 31 2024, the allowance for credit losses on loans was $8.5 million, which represented 1.20% of total loans and 79.2% of non-performing loans compared to $8.6 million at December 31, 2023, which represented 1.21% of total loans and 82.9% of non-performing loans.

 

Comparison of Operating Results for the Three Ended March 31, 2024 and 2023

 

Net Interest Income. Net interest income was $8.0 million for the three months ended March 31, 2024 compared to $8.2 million in the three months ended March 31, 2023. The net interest margin for the three months ended March 31, 2024 was 3.91% compared to 4.34% for the three months ended March 31, 2023. The 125 basis point increase in the cost of interest-bearing

 

liabilities offset the higher average balances and rates earned on loans and short-term investments. Included in interest expense is the above-mentioned write-off of the $566,000 remaining fair market value adjustment on the pay-off the $3.0 million junior subordinated debt. Additionally, the cost of interest-bearing deposits increased by 109 basis points to 1.62% in the quarter ended March 31, 2024 compared to the quarter ended March 31, 2023.

 

Noninterest Income. For the three months ended March 31, 2024, noninterest income totaled $578,000 compared to $807,000 in the quarter ended March 31, 2023. The decrease is almost entirely due to lower income on insurance policies. In the quarter ended March 31, 2023, the Company received a $235,000 death benefit on the policies.

 

Noninterest Expense. For the three months ended March 31, 2024, noninterest expense totaled $4.9 million compared to $4.7 million for the three months ended March 31, 2023. Compensation and benefits expenses increased by 8.7% due to increases in staffing and salary levels. Other expenses increased $116,000 or 22.7% primarily due to higher fraud losses. Professional fees decreased by $88,000 or 44.0% due to the recovery of previously expensed legal fees of $109,000 on the disposition of a problem loan. Foreclosed real estate expenses decreased by $122,000 or 96.1% due to the sale of large foreclosed real estate properties in 2023.

 

Income taxes. For the three months ended March 31, 2024, income tax expense was $1.0 million for an effective tax rate of 28.5%. In the quarter ended March 31, 2023, income tax expense was $1.2 million for an effective tax rate of 27.65%. The lower tax rate in the quarter ended March 31, 2023 was due to a higher level of income from life insurance in that 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, 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, 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.

 

 

 

 

 

 

 

 

 

 

 

 

At or For the Three Months

 

 

Ended March 31,

 

 

2024

 

2023

 

 

 

 

 

 

Performance Ratios(1):

 

 

 

 

Return on average assets

 

1.16

%

 

1.46

%

Return on average equity

 

5.14

%

 

12.57

%

Interest rate spread(2)

 

3.10

%

 

4.06

%

Net interest margin(3)

 

3.91

%

 

4.34

%

Non-interest expense to average assets

 

2.23

%

 

2.21

%

Efficiency ratio(4)

 

52.75

%

 

52.19

%

Average interest-earning assets to average interest-bearing liabilities

 

154.58

%

 

134.59

%

Average equity to average assets

 

22.61

%

 

11.65

%

Credit Quality Ratios:

 

 

 

 

Allowance for credit losses as a percentage of total loans

 

1.20

%

 

1.19

%

Allowance for credit losses as a percentage of non-performing loans

 

79.16

%

 

176.47

%

Net charge-offs (recoveries) to average outstanding loans during the year

 

-0.01

%

 

0.01

%

Non-performing loans as a percentage of total loans

 

1.52

%

 

0.67

%

Non-performing loans as a percentage of total assets

 

1.20

%

 

0.53

%

Total non-performing assets as a percentage of total assets

 

1.22

%

 

0.77

%

 

 

 

 

 

Other:

 

 

 

 

Number of offices

13

 

15

 

Number of full-time equivalent employees

112

 

117

 

 

 

 

 

 

(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, 2024

 

 

December 31, 2023

 

(dollars in thousands, except share amounts)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Cash

 

$

8,520

 

 

$

9,260

 

Interest-bearing deposits in other banks

 

 

70,317

 

 

 

64,482

 

Cash and cash equivalents

 

 

78,837

 

 

 

73,742

 

Equity Investment

 

 

246

 

 

 

256

 

Securities available for sale

 

 

33,752

 

 

 

34,781

 

Securities held to maturity (fair value of $9,154 and $9,206, ACL of $6 and $5)

 

 

10,153

 

 

 

10,209

 

Loans held for maturity

 

 

708,736

 

 

 

704,802

 

Allowance for Credit Losses

 

 

(8,506

)

 

 

(8,554

)

Net Loans

 

 

700,230

 

 

 

696,248

 

Foreclosed real estate

 

 

170

 

 

 

170

 

Premises and equipment, net

 

 

14,473

 

 

 

14,250

 

Federal Home Loan Bank of Atlanta stock, at cost

 

 

654

 

 

 

626

 

Investment in life insurance

 

 

19,744

 

 

 

19,657

 

Accrued interest receivable

 

 

3,147

 

 

 

3,279

 

Goodwill

 

 

14,420

 

 

 

14,420

 

Intangible assets, net

 

 

967

 

 

 

1,012

 

Deferred tax assets, net

 

 

8,699

 

 

 

8,969

 

Other assets

 

 

7,053

 

 

 

7,635

 

Total assets

 

$

892,545

 

 

$

885,254

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

139,107

 

 

$

142,030

 

Interest-bearing deposits

 

 

500,381

 

 

 

492,090

 

Total deposits

 

 

639,488

 

 

 

634,120

 

 

 

 

 

 

 

 

FHLB borrowings

 

 

—

 

 

 

—

 

Subordinated Debentures

 

 

34,767

 

 

 

37,251

 

Other liabilities

 

 

16,538

 

 

 

14,818

 

Total liabilities

 

 

690,793

 

 

 

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 in 2024 and 14,000,000 authorized in 2023; 11,375,803 shares issued and 11,375,803 shares outstanding as of March 31, 2024; 11,375,803 shares issued and 11,375,803 shares outstanding as of December 31, 2023

 

 

114

 

 

 

114

 

Paid-in capital

 

 

110,534

 

 

 

110,465

 

Unearned common stock held by employee stock ownership plan

 

 

(7,286

)

 

 

(7,328

)

Retained earnings

 

 

100,346

 

 

 

97,772

 

Accumulated other comprehensive loss

 

 

(1,956

)

 

 

(1,958

)

Total stockholders' equity

 

 

201,752

 

 

 

199,065

 

Total liabilities and stockholders' equity

 

$

892,545

 

 

$

885,254

 

 

 

BV FINANCIAL, INC.

Consolidated Statements of Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands, except per share amounts)

 

Three Months Ended March 31,

 

 

Interest Income

 

2024

 

 

2023

 

 

Loans, including fees

 

$

9,782

 

 

$

8,773

 

 

Investment securities available for sale

 

 

306

 

 

 

266

 

 

Investment securities held to maturity

 

 

92

 

 

 

93

 

 

Other interest income

 

 

824

 

 

 

556

 

 

Total interest income

 

 

11,004

 

 

 

9,688

 

 

Interest Expense

 

 

 

 

 

 

 

Interest on deposits

 

 

1,986

 

 

 

665

 

 

Interest on FHLB borrowings

 

 

-

 

 

 

289

 

 

Interest on Subordinated debentures

 

 

1,055

 

 

 

534

 

 

Total interest expense

 

 

3,041

 

 

 

1,488

 

 

Net interest income

 

 

7,963

 

 

 

8,200

 

 

Provision for (recovery of) credit losses

 

 

18

 

 

 

2

 

 

Net interest income after provision for (recovery of) credit losses

 

 

7,945

 

 

 

8,198

 

 

Noninterest Income

 

 

 

 

 

 

 

Service fees on deposits

 

 

103

 

 

 

94

 

 

Fees from debit cards

 

 

171

 

 

 

173

 

 

Income from investment in life insurance

 

 

87

 

 

 

318

 

 

Other income

 

 

217

 

 

 

222

 

 

Total noninterest income

 

 

578

 

 

 

807

 

 

Noninterest Expense

 

 

 

 

 

 

 

Compensation and related benefits

 

 

3,129

 

 

 

2,879

 

 

Occupancy

 

 

438

 

 

 

416

 

 

Data processing

 

 

377

 

 

 

349

 

 

Advertising

 

 

5

 

 

 

13

 

 

Professional fees

 

 

112

 

 

 

200

 

 

Equipment

 

 

102

 

 

 

105

 

 

Foreclosed real estate and repossessed assets holding costs

 

 

5

 

 

 

127

 

 

Amortization of intangible assets

 

 

45

 

 

 

46

 

 

FDIC insurance premiums

 

 

83

 

 

 

54

 

 

Other expense

 

 

627

 

 

 

511

 

 

Total noninterest expense

 

 

4,923

 

 

 

4,700

 

 

Net income before tax

 

 

3,600

 

 

 

4,305

 

 

Income tax expense

 

 

1,026

 

 

 

1,190

 

 

Net income

 

$

2,574

 

 

$

3,115

 

 

Basic earnings per share

 

$

0.24

 

 

$

0.39

 

 

Diluted earnings per share

 

$

0.24

 

 

$

0.39

 

 

 

 

 

 

 

 

 

 

 

 

BV FINANCIAL, INC.

 

Average Balance Sheet for the Quarters ended March 31

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended March 31,

 

 

2024

 

 

2023

 

(dollars in thousands)

 

Average Outstanding Balance

 

 

Interest

 

 

Average Yield/Rate

 

 

Average Outstanding Balance

 

 

Interest

 

 

Average Yield/Rate

 

 

(Unaudited)

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

708,367

 

 

$

9,782

 

 

 

5.54

%

 

$

667,888

 

 

$

8,773

 

 

 

5.33

%

Securities available-for-sale

 

 

34,045

 

 

 

306

 

 

 

3.61

%

 

 

36,134

 

 

 

266

 

 

 

2.99

%

Securities held-to-maturity

 

 

10,815

 

 

 

92

 

 

 

3.41

%

 

 

11,915

 

 

 

93

 

 

 

3.18

%

Cash, cash equivalents and other interest-earning assets

 

 

62,681

 

 

 

824

 

 

 

5.28

%

 

 

50,883

 

 

 

556

 

 

 

4.43

%

Total interest-earning assets

 

 

815,908

 

 

 

11,004

 

 

 

5.41

%

 

 

766,820

 

 

 

9,688

 

 

 

5.12

%

Noninterest-earning assets

 

 

67,460

 

 

 

 

 

 

 

 

 

81,403

 

 

 

 

 

 

 

Total assets

 

$

883,368

 

 

 

 

 

 

 

 

$

848,223

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

84,550

 

 

 

236

 

 

 

1.12

%

 

$

91,842

 

 

 

18

 

 

 

0.08

%

Savings deposits

 

 

146,629

 

 

 

65

 

 

 

0.18

%

 

 

164,817

 

 

 

40

 

 

 

0.10

%

Money market deposits

 

 

87,738

 

 

 

352

 

 

 

1.61

%

 

 

99,583

 

 

 

97

 

 

 

0.39

%

Certificates of deposit

 

 

173,093

 

 

 

1,333

 

 

 

3.09

%

 

 

152,264

 

 

 

510

 

 

 

1.36

%

Total interest-bearing deposits

 

 

492,010

 

 

 

1,986

 

 

 

1.62

%

 

 

508,506

 

 

 

665

 

 

 

0.53

%

Federal Home Loan Bank advances

 

 

—

 

 

 

—

 

 

 

—

 

 

 

24,150

 

 

 

289

 

 

 

4.85

%

Subordinated debentures

 

 

35,805

 

 

 

1,055

 

 

 

11.82

%

 

 

37,069

 

 

 

534

 

 

 

5.84

%

Total borrowings

 

 

35,805

 

 

 

1,055

 

 

 

11.82

%

 

 

61,219

 

 

 

823

 

 

 

5.45

%

Total interest-bearing
liabilities

 

 

527,815

 

 

 

3,041

 

 

 

2.31

%

 

 

569,725

 

 

 

1,488

 

 

 

1.06

%

Noninterest-bearing demand deposits

 

 

139,691

 

 

 

 

 

 

 

 

 

158,807

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

16,142

 

 

 

 

 

 

 

 

 

22,042

 

 

 

 

 

 

 

Total liabilities

 

 

683,648

 

 

 

 

 

 

 

 

 

750,574

 

 

 

 

 

 

 

Equity

 

 

199,720

 

 

 

 

 

 

 

 

 

97,649

 

 

 

 

 

 

 

Total liabilities and equity

 

$

883,368

 

 

 

 

 

 

 

 

$

848,223

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

7,963

 

 

 

 

 

 

 

 

$

8,200

 

 

 

 

Net interest rate spread

 

 

 

 

 

 

 

 

3.10

%

 

 

 

 

 

 

 

 

4.06

%

Net interest-earning assets

 

$

288,093

 

 

 

 

 

 

 

 

$

197,095

 

 

 

 

 

 

 

Net interest margin

 

 

 

 

 

 

 

 

3.91

%

 

 

 

 

 

 

 

 

4.34

%

Average interest-earning assets to interest-bearing liabilities

 

 

154.58

%

 

 

 

 

 

 

 

 

135.16

%

 

 

 

 

 

 

 

 

 

ALLOWANCE FOR CREDIT LOSS - LOANS

 

(Dollars in thousands)

 

 

QTR

 

 

3/31/2024

 

 

 

 

Beginning Balance

$

8,554

 

 

 

 

Provision for credit loss -loans

 

(133

)

 

 

 

  Net Charge-offs (recoveries):

 

 

Owner Occupied 1-4

 

(52

)

Non-Owner Occupied 1-4

 

(29

)

Investor Commercial Real Estate

 

—

 

OO Commercial Real Estate

 

(2

)

Construction & Land

 

(1

)

Farm Loans

 

—

 

Marine & Consumer

 

(1

)

Guaranteed by the US Gov't

 

—

 

Commercial

 

—

 

Net charge-offs (recoveries)

 

(85

)

 

 

 

Ending Balance- ACL for Loans

$

8,506

 

 

 

 

Balance Reserve for unfunded loan commitments

 

360

 

Balance Reserve for HTM Securities

 

5

 

Total ACL

$

8,871

 

 

 

 

Provision expense for Unfunded Commitments

 

152

 

Provision expense for HTM Securities

 

(1

)

Total other provision expense

$

151

 

Total provision for (recovery of )credit losses

$

18