Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries BV Financial, Inc. Announces Financial Results By: ACCESSWIRE October 23, 2023 at 16:35 PM EDT BALTIMORE, MD / ACCESSWIRE / October 23, 2023 / BV Financial, Inc. (NASDAQ:BVFL), (the "Company") the holding company for BayVanguard Bank (the "Bank"), reported net income of $3.7 million, or $0.35 per diluted share, for the quarter ended September 30, 2023 compared to net income of $2.6 million, or $0.33 per diluted share, for the quarter ended September 30, 2022. Net income for the nine-month period ended September 30, 2023 was $10.7 million or $1.20 per diluted share compared to net income of $7.8 million or $0.98 per diluted share for the nine-month period ended September 30, 2022. Financial Highlights On July 31, 2023, Bay-Vanguard, M.H.C., Inc. (the "MHC"), the former mutual holding company of the Company completed its conversion from the mutual holding company to the stock holding company form of organization (the "Conversion"), and the Company completed its related stock offering. As a result of the Conversion, the MHC ceased to exist. After the sale of 9,798,980 shares in the offering and the exchange of new shares of common stock to the Company's then existing shareholders, 11,375,803 shares of Company common stock are outstanding. The sale of new shares raised $98.0 million before offering expenses. Return on average assets and return on average equity for the three months ended September 30, 2023 were 1.58% and 9.84%, respectively. Return on average assets and return on average equity for the nine months ended September 30, 2023 were 1.61% and 11.88%, respectively. Nets loans increased $39.8 million, or 6.0%, compared to December 31, 2022. Deposits decreased $38.1 million, or 5.6%, from $684.6 million at December 31, 2022 to $646.5 million at September 30, 2023. Total equity increased by $97.1 million, or 99.3%, primarily due to the stock offering noted above. Total loan delinquencies decreased by 71.6% to $3.0 million at September 30, 2023 or 0.43% of loans, from $10.6 million, or 1.59% of total loans, at December 31, 2022. In the quarter ended September 30, 2023, the Company recorded a credit to the provision for credit losses of $333,000. The calculated required allowance for credit losses ("ACL") decreased by $10,000 and the Company experienced net recoveries for the quarter of $255,000. Additionally, the required ACL for unfunded commitments decreased by $68,000. In the nine-months ended September 30, 2023, the Company recorded a recovery of the provision for credit losses of $480,000. Net recoveries for the period of $421,000 exceeded the required increase in the ACL for loans. Additionally, the required ACL for unfunded commitments decreased by $163,000. Financial Condition Total Assets. Total assets were $931.4 million at September 30, 2023, an increase of $86.4 million, or 10.2%, from $845.0 million at December 31, 2022. The increase was due primarily to a $45.8 million increase in cash and cash equivalents , and a $39.8 million increase in net loans receivable to $698.9 million at September 30, 2023, partially offset by decreases of $1.4 million in repossessed assets and $417,000 in the cash value of life insurance. Cash and Cash Equivalents. Cash and cash equivalents increased $45.8 million, or 67.7%, to $114.5 million at September 30, 2023 from $68.7 millionat December 31, 2022 primarily due to the stock offering and an increase in borrowings from the FHLB. Net Loans Receivable. Netloans receivable increased$39.8 million, or 6.0%, to $698.9 million at September 30, 2023 from $659.1 million at December31, 2022. Increasesin commercial real estate and construction loans offset decreasesin owner and non-owner occupied one- to four-family loansand commercial loans. The increase in construction loans was due primarily to draws on existing lines of credit. The decreases in one- to four-family loans and commercial loans were due primarily to payoffs and paydowns exceeding originations during the nine-months ended September 30, 2023. Securities. Securities available for sale ("AFS") increased $2.6 million, or 7.8%, to $35.6 million at September 30, 2023 from $33.0 millionat December 31, 2022. This increase was primarily due to an increase of $4.0 million in agency securities, partially offset by decreases in mortgage-backed and corporate securities due to paydowns and maturities and a $30,000 decrease in the market value of the AFS portfolio. Total Liabilities. Total liabilities decreased $10.7 million or 1.43%, to $736.5 million at September 30, 2023 from $747.2 million at December 31, 2022.The decrease was primarily due to a decrease in total deposits of $38.1 million, partially offset by an increase in borrowings. Deposits. Total deposits decreased $38.1 million, or 5.6%, to $646.5 million at September 30, 2023 from $684.6 million at December 31, 2022. Interest-bearing deposits decreased $14.1 million, or 2.7%, to $503.3 million at September 30, 2023 from $517.4 million at December31, 2022. Noninterest bearing deposits decreased $24.0 million, or 14.4%, to $143.2 millionat September 30, 2023 from $167.2 million at December 31, 2022. TheCompany has been adjusting interestrates paid on deposits in an attempt to retain and grow thesebalances. Federal Home Loan Bank Borrowings. The Company had$37.5 million in Federal Home Loan Bank borrowings at September 30, 2023 compared to $12.0 million in Federal Home Loan Bank borrowings at December 31, 2022. The increase was used to fund loan growth and to maintain on balance sheet liquidity. Stockholders' Equity. Stockholders' equity increased $97.3 million, or 99.6%, to $195.1 millionat September 30, 2023, primarily due to the capital raise noted above, $10.7 million in net income and a $547,000negative adjustment to retained earnings resulting from the adoption of ASC Topic 326 "Financial Instruments-Credit Losses" during the quarter ended March 31, 2023. Asset Quality. Non-performing assets at September 30, 2023 totaled $4.4 million consisting of $3.8 million in nonperforming loans and $555,000 in other real estate owned, compared to $7.9 million at December 31, 2022, consisting of $5.9 million in non-performing loans and $2.0 million in other real estate owned. At September 30 2023, the allowance for credit losses on loans was $8.2 million, which represented 1.15% of total loans and 213.5% of non-performing loans compared to $3.8 million at December 31, 2022, which represented 0.57% of total loans and 64.8% of non-performing loans. In addition, at December 31, 2022, the Bank had credit marks of $3.8 million that were not included in the Bank's allowance for loan loss estimate which is in accordance with U.S. Generally Accepted Accounting Principles. The credit marks were established for specific loans acquired in previous mergers. Comparison of Operating results for the Three and Nine Months Ended September 30, 2023 and 2022 Net Interest Income. Net interest income was $8.9 million for the three months ended September 30, 2023 compared to $7.8 million in the three months ended September 30, 2022. The net interest margin for the three months ended September 30, 2023 was 4.10% compared to 4.00% for the three months ended September 30, 2022. The 100 basis point increase in the yield on interest-earning assets and the higher level of average equity offset the 139 basis point increase in the cost of deposits and borrowed money. The increase in the yield on interest-earning assets was due to higher rates earned on cash balances and loans due to higher market interest rates. The increase in the cost of interest-bearing liabilities was due higher rates paid on deposits and a shift to higher cost certificates of deposits as well as an increased reliance on advances from the Federal Home Loan Bank of Atlanta. Net interest income was $25.3 million for the nine months ended September 30, 2023, compared to $21.5 million in the nine months ended September 30, 2022.The net interest margin for the nine months ended September 30, 2023 was 4.21% compared to 3.73% for the nine months ended September 30, 2022. The 114 basis point increase in the yield on interest-earning assets offset the 95 basis point increase in the cost of deposits and borrowed money. The increase in the yield on interest-earning assets was due to higher rates earned on cash balances and loans due to higher market interest rates. The increase in the cost of interest-bearing liabilities was due to an increased reliance on advances from the Federal Home Loan Bank of Atlanta and higher rates paid on deposits and a shift to higher cost certificates of deposits. Noninterest Income. For the three months ended September 30, 2023, noninterest income totaled $882,000 compared to $681,000 in the quarter ended September 30, 2022. In the quarter ended September 30, 2023, the Company recognized a gain of $188,000 on the sale of a closed branch office. For the quarter ended September 30, 2022, the Company recognized a gain of $45,000 on the sale of a former branch building. For the nine months ended September 30, 2023, noninterest income totaled $3.1 million as compared to $3.3 million for the nine months ended September 30, 2022. In the nine-months ended September 30, 2023, the Company recognized a gain of $678,000 on the sale of foreclosed real estate and $225,000 in excess life insurance proceeds and a $188,000 gain on the sale of a closed branch office. In the nine months ended September 30, 2022, the Company recognized a $694,000 gain on bargain purchase from the acquisition of North Arundel Savings Bank and $620,000 in prepayment penalties on loans. Noninterest Expense. For the three months ended September 30, 2023, noninterest expense totaled $5.0 million compared to $4.6 million for the three months ended September 30, 2022. Compensation and benefits expenses increased by 18.1% due to increases in staffing and salary levels. Occupancy, professional fees, FDIC insurance premiums and other expenses also increased. Expenses for holding foreclosed real estate decreased $325,000 as a result of a property sale. For the nine months ended September 30, 2023, noninterest expense totaled $14.3 million as compared to $13.6 million for the nine months ended September 30, 2022. Increases in compensation and benefits, professional fees and FDIC insurance expense were partially offset by lower decreases in other categories. 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 fifteen 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. BV FINANCIAL, INC. At or For the Three Months At or For the Nine Months Ended September 30, Ended September 30, 2023 2022 2023 2022 Performance Ratios(1): Return on average assets 1.58 % 1.22 % 1.61 % 1.22 % Return on average equity 9.84 % 11.20 % 11.88 % 11.49 % Interest rate spread(2) 3.46 % 3.85 % 3.77 % 3.58 % Net interest margin(3) 4.10 % 4.00 % 4.21 % 3.73 % Non-interest expense to average assets 2.15 % 2.15 % 1.41 % 2.14 % Efficiency ratio(4) 49.63 % 55.79 % 48.13 % 56.35 % Average interest-earning assets to average interest-bearing liabilities 149.31 % 135.49 % 139.84 % 135.42 % Average equity to average assets 16.06 % 10.92 % 14.31 % 10.61 % Credit Quality Ratios:(5) Allowance for credit losses as a percentage of total loans 1.15 % 0.51 % 1.15 % 0.51 % Allowance for credit losses as a percentage of non-performing loans 213.49 % 51.14 % 213.49 % 51.14 % Net charge-offs (recoveries) to average outstanding loans during the year -0.04 % 0.00 % -0.06 % 0.00 % Non-performing loans as a percentage of total loans 0.54 % 1.00 % 0.54 % 1.00 % Non-performing loans as a percentage of total assets 0.41 % 0.78 % 0.41 % 0.78 % Total non-performing assets as a percentage of total assets 0.47 % 1.01 % 0.47 % 1.01 % Other: Number of offices 15 17 15 17 Number of full-time equivalent employees 110 105 110 105 (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.(5) The Company adopted ASC 326 on January 1, 2023. Some ratios are not comparable pre and post adoption of this accounting standard. BV FinancialConsolidated Balance Sheets September 30, 2023 December 31, 2022 (dollars in thousands, except share amounts) (unaudited) derived from audited financial statements Assets Cash $ 6,764 $ 12,704 Interest-bearing deposits in other banks 107,695 55,948 Cash and cash equivalents 114,459 68,652 Equity Investment 229 221 Securities available for sale 35,616 33,034 Securities held to maturity (fair value of $9,175 and $9,660, ACL of $7 and $0) 10,263 10,461 Loans held for maturity 707,037 662,944 Allowance for Credit Losses (8,153 ) (3,813 ) Net Loans 698,884 659,131 Foreclosed real estate 555 1,987 Premises and equipment, net 14,405 15,176 Federal Home Loan Bank of Atlanta stock, at cost 2,407 977 Investment in life insurance 19,566 19,983 Accrued interest receivable 3,450 2,952 Goodwill 14,420 14,420 Intangible assets, net 1,057 1,195 Deferred tax assets, net 9,045 9,113 Other assets 7,021 7,661 Total assets $ 931,377 $ 844,963 Liabilities and Stockholders' Equity Liabilities Noninterest-bearing deposits $ 143,203 $ 167,202 Interest-bearing deposits 503,273 517,416 Total deposits 646,476 684,618 FHLB borrowings 37,500 12,000 Subordinated Debentures 37,198 37,039 Other liabilities 15,121 13,555 Total liabilities 736,295 747,212 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 2023 and 14,000,000 authorized in 2022; 11,375,803 shares issued and 11,375,803 shares outstanding as of September 30, 2023; 7,418,575 shares issued and 7,418,575 shares outstanding as of December 31, 2022 114 74 Paid-in capital 110,364 15,406 Unearned common stock held by employee stock ownership plan (7,635 ) - Retained earnings 94,763 84,612 Accumulated other comprehensive loss (2,524 ) (2,341 ) Total stockholders' equity 195,082 97,751 Total liabilities and stockholders' equity $ 931,377 $ 844,963 BV FinancialConsolidated Statements of Income (dollars in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, Interest Income 2023 2022 2023 2022 Loans, including fees $ 9,764 $ 7,936 $ 27,863 $ 22,712 Investment securities available for sale 302 123 846 399 Investment securities held to maturity 89 53 275 143 Other interest income 1,560 458 2,958 726 Total interest income 11,715 8,570 31,942 23,980 Interest Expense Interest on deposits 1,764 297 3,694 987 Interest on FHLB borrowings 530 - 1,313 - Interest on Subordinated debentures 545 519 1,621 1,531 Total interest expense 2,839 816 6,628 2,518 Net interest income 8,876 7,754 25,314 21,462 Provision for (recovery of) credit losses (333 ) 186 (480 ) 587 Net interest income after provision for credit losses 9,209 7,568 25,794 20,875 Noninterest Income Service fees on deposits 109 110 304 344 Fees from debit cards 183 186 543 567 Income from investment in life insurance 85 89 549 310 Gain on sale of loans - - - 1 Gain on sale of repossessed assets - - 678 - Gain on sale of fixed assets 188 45 188 279 Other income 317 251 798 1,848 Total noninterest income 882 681 3,060 3,349 Noninterest Expense Compensation and related benefits 3,149 2,666 8,887 7,480 Occupancy 397 310 1,178 1,221 Data processing 345 339 1,034 1,070 Advertising 5 5 33 16 Professional fees 220 133 597 452 Equipment 105 197 319 412 Foreclosed real estate and repossessed assets holding costs 13 338 173 396 Amortization of intangible assets 46 46 138 137 FDIC insurance premiums 120 57 237 165 Other 608 511 1,656 2,300 Total noninterest expense 5,008 4,602 14,252 13,649 Net income before tax 5,083 3,647 14,602 10,575 Income tax expense 1,399 1,035 3,904 2,781 Net income $ 3,684 $ 2,612 $ 10,698 $ 7,794 Basic earnings per share $ 0.35 $ 0.33 $ 1.21 $ 0.98 Diluted earnings per share $ 0.35 $ 0.33 $ 1.20 $ 0.98 BV Financial, Inc.Average Balance Sheet for the Quarters ended September, 30(Dollars in thousands) For the Three Months Ended September 30, 2023 2022 (dollars in thousands) Average Outstanding Balance Interest Average Yield/Rate Average Outstanding Balance Interest Average Yield/Rate (Unaudited) Interest-earning assets: Loans $ 693,956 $ 9,764 5.58 % $ 639,340 $ 7,936 4.92 % Securities available-for-sale 35,868 302 3.35 % 35,619 123 1.37 % Securities held-to-maturity 12,493 89 2.84 % 7,985 53 2.66 % Cash, cash equivalents and other interest-earning assets 115,554 1,560 5.35 % 85,673 458 2.11 % Total interest-earning assets 857,871 11,715 5.42 % 768,617 8,570 4.42 % Noninterest-earning assets 74,240 85,757 Total assets $ 932,111 $ 854,374 Interest-bearing liabilities: Interest-bearing demand deposits $ 82,096 219 1.06 % $ 94,455 17 0.07 % Savings deposits 150,522 50 0.13 % 170,742 24 0.05 % Money market deposits 85,982 255 1.18 % 110,470 56 0.20 % Certificates of deposit 181,292 1,240 2.71 % 154,640 200 0.52 % Total interest-bearing deposits 499,892 1,764 1.40 % 530,307 297 0.22 % Federal Home Loan Bank advances 37,500 530 5.60 % - - - % Subordinated debentures 37,175 545 5.82 % 36,964 519 5.57 % Total borrowings 74,675 1,075 5.71 % 36,964 519 5.57 % Total interest-bearingliabilities 574,567 2,839 1.96 % 567,271 816 0.57 % Noninterest-bearing demand deposits 144,603 173,542 Other noninterest-bearing liabilities 63,261 20,289 Total liabilities 782,431 761,102 Equity 149,680 93,272 Total liabilities and equity $ 932,111 $ 854,374 Net interest income $ 8,876 $ 7,754 Net interest rate spread 3.46 % 3.85 % Net interest-earning assets $ 283,304 $ 201,346 Net interest margin 4.10 % 4.00 % Average interest-earning assets to interest-bearing liabilities 149.31 % 135.49 % BV Financial, Inc.Average Balance Sheet for the Nine Months ended September, 30(Dollars in thousands) 2023 2022 (dollars in thousands) Average Outstanding Balance Interest Average Yield/Rate Average Outstanding Balance Interest Average Yield/Rate (Unaudited) Interest-earning assets: Loans $ 680,436 $ 27,863 5.47 % $ 627,642 $ 22,712 4.84 % Securities available-for-sale 35,746 846 3.16 % 37,443 399 1.43 % Securities held-to-maturity 12,276 275 3.00 % 7,228 143 2.64 % Cash, cash equivalents and other interest-earning assets 76,310 2,958 5.19 % 96,272 726 1.00 % Total interest-earning assets 804,768 31,942 5.31 % 768,585 23,980 4.17 % Noninterest-earning assets 81,460 83,691 Total assets $ 886,228 $ 852,276 Interest-bearing liabilities: Interest-bearing demand deposits $ 87,159 380 0.58 % $ 94,189 46 0.07 % Savings deposits 158,324 141 0.12 % 169,997 70 0.06 % Money market deposits 92,457 491 0.71 % 108,560 151 0.18 % Certificates of deposit 167,313 2,682 2.14 % 157,887 721 0.61 % Total interest-bearing deposits 505,253 3,694 0.98 % 530,633 988 0.25 % Federal Home Loan Bank advances 33,099 1,313 5.30 % - - - Subordinated debentures 37,123 1,621 5.84 % 36,911 1,531 5.54 % Total borrowings 70,222 2,934 5.59 % 36,911 1,531 5.54 % Total interest-bearingliabilities 575,475 6,628 1.54 % 567,544 2,519 0.59 % Noninterest-bearing demand deposits 154,521 172,082 Other noninterest-bearing liabilities 36,180 22,239 Total liabilities 766,176 761,865 Equity 120,052 90,411 Total liabilities and equity $ 886,228 $ 852,276 Net interest income $ 25,314 $ 21,461 Net interest rate spread 3.77 % 3.58 % Net interest-earning assets $ 229,293 $ 201,041 Net interest margin 4.21 % 3.73 % Average interest-earning assets to interest-bearing liabilities 139.84 % 135.42 % ALLOWANCE FOR CREDIT LOSS - LOANS(Dollars in thousands) QTR YTD 9/30/2023 9/30/2023 Beginning Balance $ 8,163 $ 3,813 Provision for credit loss -loans (265 ) (313 ) CECL Transition - Gross up of PCD loans - 3,778 CECL Transition - Cumulative effect adjustment related to adoption - 454 Net Charge-offs (recoveries): Owner Occupied 1-4 (32 ) (58 ) Non-Owner Occupied 1-4 (214 ) (247 ) Investor Commercial Real Estate - - OO Commercial Real Estate - - Construction & Land (1 ) (153 ) Farm Loans - - Marine & Consumer (8 ) 39 Guaranteed by the US Gov't - - Commercial - (2 ) Net charge-offs (recoveries) (255 ) (421 ) Ending Balance- ACL for Loans $ 8,153 $ 8,153 Balance Reserve for unfunded loan commitments 194 194 Balance Reserve for HTM Securities 7 7 Total ACL $ 8,354 $ 8,354 Provision expense for Unfunded Commitments (67 ) (163 ) Provision expense for HTM Securities (1 ) (4 ) Total other provision expense $ (68 ) $ (167 ) Total provision for credit losses $ (333 ) $ (480 ) Contact: Michael J. DeeChief Financial Officer(410) 477- 5000 SOURCE: BV Financial, Inc. View source version on accesswire.com: https://www.accesswire.com/795626/bv-financial-inc-announces-financial-results Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
BV Financial, Inc. Announces Financial Results By: ACCESSWIRE October 23, 2023 at 16:35 PM EDT BALTIMORE, MD / ACCESSWIRE / October 23, 2023 / BV Financial, Inc. (NASDAQ:BVFL), (the "Company") the holding company for BayVanguard Bank (the "Bank"), reported net income of $3.7 million, or $0.35 per diluted share, for the quarter ended September 30, 2023 compared to net income of $2.6 million, or $0.33 per diluted share, for the quarter ended September 30, 2022. Net income for the nine-month period ended September 30, 2023 was $10.7 million or $1.20 per diluted share compared to net income of $7.8 million or $0.98 per diluted share for the nine-month period ended September 30, 2022. Financial Highlights On July 31, 2023, Bay-Vanguard, M.H.C., Inc. (the "MHC"), the former mutual holding company of the Company completed its conversion from the mutual holding company to the stock holding company form of organization (the "Conversion"), and the Company completed its related stock offering. As a result of the Conversion, the MHC ceased to exist. After the sale of 9,798,980 shares in the offering and the exchange of new shares of common stock to the Company's then existing shareholders, 11,375,803 shares of Company common stock are outstanding. The sale of new shares raised $98.0 million before offering expenses. Return on average assets and return on average equity for the three months ended September 30, 2023 were 1.58% and 9.84%, respectively. Return on average assets and return on average equity for the nine months ended September 30, 2023 were 1.61% and 11.88%, respectively. Nets loans increased $39.8 million, or 6.0%, compared to December 31, 2022. Deposits decreased $38.1 million, or 5.6%, from $684.6 million at December 31, 2022 to $646.5 million at September 30, 2023. Total equity increased by $97.1 million, or 99.3%, primarily due to the stock offering noted above. Total loan delinquencies decreased by 71.6% to $3.0 million at September 30, 2023 or 0.43% of loans, from $10.6 million, or 1.59% of total loans, at December 31, 2022. In the quarter ended September 30, 2023, the Company recorded a credit to the provision for credit losses of $333,000. The calculated required allowance for credit losses ("ACL") decreased by $10,000 and the Company experienced net recoveries for the quarter of $255,000. Additionally, the required ACL for unfunded commitments decreased by $68,000. In the nine-months ended September 30, 2023, the Company recorded a recovery of the provision for credit losses of $480,000. Net recoveries for the period of $421,000 exceeded the required increase in the ACL for loans. Additionally, the required ACL for unfunded commitments decreased by $163,000. Financial Condition Total Assets. Total assets were $931.4 million at September 30, 2023, an increase of $86.4 million, or 10.2%, from $845.0 million at December 31, 2022. The increase was due primarily to a $45.8 million increase in cash and cash equivalents , and a $39.8 million increase in net loans receivable to $698.9 million at September 30, 2023, partially offset by decreases of $1.4 million in repossessed assets and $417,000 in the cash value of life insurance. Cash and Cash Equivalents. Cash and cash equivalents increased $45.8 million, or 67.7%, to $114.5 million at September 30, 2023 from $68.7 millionat December 31, 2022 primarily due to the stock offering and an increase in borrowings from the FHLB. Net Loans Receivable. Netloans receivable increased$39.8 million, or 6.0%, to $698.9 million at September 30, 2023 from $659.1 million at December31, 2022. Increasesin commercial real estate and construction loans offset decreasesin owner and non-owner occupied one- to four-family loansand commercial loans. The increase in construction loans was due primarily to draws on existing lines of credit. The decreases in one- to four-family loans and commercial loans were due primarily to payoffs and paydowns exceeding originations during the nine-months ended September 30, 2023. Securities. Securities available for sale ("AFS") increased $2.6 million, or 7.8%, to $35.6 million at September 30, 2023 from $33.0 millionat December 31, 2022. This increase was primarily due to an increase of $4.0 million in agency securities, partially offset by decreases in mortgage-backed and corporate securities due to paydowns and maturities and a $30,000 decrease in the market value of the AFS portfolio. Total Liabilities. Total liabilities decreased $10.7 million or 1.43%, to $736.5 million at September 30, 2023 from $747.2 million at December 31, 2022.The decrease was primarily due to a decrease in total deposits of $38.1 million, partially offset by an increase in borrowings. Deposits. Total deposits decreased $38.1 million, or 5.6%, to $646.5 million at September 30, 2023 from $684.6 million at December 31, 2022. Interest-bearing deposits decreased $14.1 million, or 2.7%, to $503.3 million at September 30, 2023 from $517.4 million at December31, 2022. Noninterest bearing deposits decreased $24.0 million, or 14.4%, to $143.2 millionat September 30, 2023 from $167.2 million at December 31, 2022. TheCompany has been adjusting interestrates paid on deposits in an attempt to retain and grow thesebalances. Federal Home Loan Bank Borrowings. The Company had$37.5 million in Federal Home Loan Bank borrowings at September 30, 2023 compared to $12.0 million in Federal Home Loan Bank borrowings at December 31, 2022. The increase was used to fund loan growth and to maintain on balance sheet liquidity. Stockholders' Equity. Stockholders' equity increased $97.3 million, or 99.6%, to $195.1 millionat September 30, 2023, primarily due to the capital raise noted above, $10.7 million in net income and a $547,000negative adjustment to retained earnings resulting from the adoption of ASC Topic 326 "Financial Instruments-Credit Losses" during the quarter ended March 31, 2023. Asset Quality. Non-performing assets at September 30, 2023 totaled $4.4 million consisting of $3.8 million in nonperforming loans and $555,000 in other real estate owned, compared to $7.9 million at December 31, 2022, consisting of $5.9 million in non-performing loans and $2.0 million in other real estate owned. At September 30 2023, the allowance for credit losses on loans was $8.2 million, which represented 1.15% of total loans and 213.5% of non-performing loans compared to $3.8 million at December 31, 2022, which represented 0.57% of total loans and 64.8% of non-performing loans. In addition, at December 31, 2022, the Bank had credit marks of $3.8 million that were not included in the Bank's allowance for loan loss estimate which is in accordance with U.S. Generally Accepted Accounting Principles. The credit marks were established for specific loans acquired in previous mergers. Comparison of Operating results for the Three and Nine Months Ended September 30, 2023 and 2022 Net Interest Income. Net interest income was $8.9 million for the three months ended September 30, 2023 compared to $7.8 million in the three months ended September 30, 2022. The net interest margin for the three months ended September 30, 2023 was 4.10% compared to 4.00% for the three months ended September 30, 2022. The 100 basis point increase in the yield on interest-earning assets and the higher level of average equity offset the 139 basis point increase in the cost of deposits and borrowed money. The increase in the yield on interest-earning assets was due to higher rates earned on cash balances and loans due to higher market interest rates. The increase in the cost of interest-bearing liabilities was due higher rates paid on deposits and a shift to higher cost certificates of deposits as well as an increased reliance on advances from the Federal Home Loan Bank of Atlanta. Net interest income was $25.3 million for the nine months ended September 30, 2023, compared to $21.5 million in the nine months ended September 30, 2022.The net interest margin for the nine months ended September 30, 2023 was 4.21% compared to 3.73% for the nine months ended September 30, 2022. The 114 basis point increase in the yield on interest-earning assets offset the 95 basis point increase in the cost of deposits and borrowed money. The increase in the yield on interest-earning assets was due to higher rates earned on cash balances and loans due to higher market interest rates. The increase in the cost of interest-bearing liabilities was due to an increased reliance on advances from the Federal Home Loan Bank of Atlanta and higher rates paid on deposits and a shift to higher cost certificates of deposits. Noninterest Income. For the three months ended September 30, 2023, noninterest income totaled $882,000 compared to $681,000 in the quarter ended September 30, 2022. In the quarter ended September 30, 2023, the Company recognized a gain of $188,000 on the sale of a closed branch office. For the quarter ended September 30, 2022, the Company recognized a gain of $45,000 on the sale of a former branch building. For the nine months ended September 30, 2023, noninterest income totaled $3.1 million as compared to $3.3 million for the nine months ended September 30, 2022. In the nine-months ended September 30, 2023, the Company recognized a gain of $678,000 on the sale of foreclosed real estate and $225,000 in excess life insurance proceeds and a $188,000 gain on the sale of a closed branch office. In the nine months ended September 30, 2022, the Company recognized a $694,000 gain on bargain purchase from the acquisition of North Arundel Savings Bank and $620,000 in prepayment penalties on loans. Noninterest Expense. For the three months ended September 30, 2023, noninterest expense totaled $5.0 million compared to $4.6 million for the three months ended September 30, 2022. Compensation and benefits expenses increased by 18.1% due to increases in staffing and salary levels. Occupancy, professional fees, FDIC insurance premiums and other expenses also increased. Expenses for holding foreclosed real estate decreased $325,000 as a result of a property sale. For the nine months ended September 30, 2023, noninterest expense totaled $14.3 million as compared to $13.6 million for the nine months ended September 30, 2022. Increases in compensation and benefits, professional fees and FDIC insurance expense were partially offset by lower decreases in other categories. 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 fifteen 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. BV FINANCIAL, INC. At or For the Three Months At or For the Nine Months Ended September 30, Ended September 30, 2023 2022 2023 2022 Performance Ratios(1): Return on average assets 1.58 % 1.22 % 1.61 % 1.22 % Return on average equity 9.84 % 11.20 % 11.88 % 11.49 % Interest rate spread(2) 3.46 % 3.85 % 3.77 % 3.58 % Net interest margin(3) 4.10 % 4.00 % 4.21 % 3.73 % Non-interest expense to average assets 2.15 % 2.15 % 1.41 % 2.14 % Efficiency ratio(4) 49.63 % 55.79 % 48.13 % 56.35 % Average interest-earning assets to average interest-bearing liabilities 149.31 % 135.49 % 139.84 % 135.42 % Average equity to average assets 16.06 % 10.92 % 14.31 % 10.61 % Credit Quality Ratios:(5) Allowance for credit losses as a percentage of total loans 1.15 % 0.51 % 1.15 % 0.51 % Allowance for credit losses as a percentage of non-performing loans 213.49 % 51.14 % 213.49 % 51.14 % Net charge-offs (recoveries) to average outstanding loans during the year -0.04 % 0.00 % -0.06 % 0.00 % Non-performing loans as a percentage of total loans 0.54 % 1.00 % 0.54 % 1.00 % Non-performing loans as a percentage of total assets 0.41 % 0.78 % 0.41 % 0.78 % Total non-performing assets as a percentage of total assets 0.47 % 1.01 % 0.47 % 1.01 % Other: Number of offices 15 17 15 17 Number of full-time equivalent employees 110 105 110 105 (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.(5) The Company adopted ASC 326 on January 1, 2023. Some ratios are not comparable pre and post adoption of this accounting standard. BV FinancialConsolidated Balance Sheets September 30, 2023 December 31, 2022 (dollars in thousands, except share amounts) (unaudited) derived from audited financial statements Assets Cash $ 6,764 $ 12,704 Interest-bearing deposits in other banks 107,695 55,948 Cash and cash equivalents 114,459 68,652 Equity Investment 229 221 Securities available for sale 35,616 33,034 Securities held to maturity (fair value of $9,175 and $9,660, ACL of $7 and $0) 10,263 10,461 Loans held for maturity 707,037 662,944 Allowance for Credit Losses (8,153 ) (3,813 ) Net Loans 698,884 659,131 Foreclosed real estate 555 1,987 Premises and equipment, net 14,405 15,176 Federal Home Loan Bank of Atlanta stock, at cost 2,407 977 Investment in life insurance 19,566 19,983 Accrued interest receivable 3,450 2,952 Goodwill 14,420 14,420 Intangible assets, net 1,057 1,195 Deferred tax assets, net 9,045 9,113 Other assets 7,021 7,661 Total assets $ 931,377 $ 844,963 Liabilities and Stockholders' Equity Liabilities Noninterest-bearing deposits $ 143,203 $ 167,202 Interest-bearing deposits 503,273 517,416 Total deposits 646,476 684,618 FHLB borrowings 37,500 12,000 Subordinated Debentures 37,198 37,039 Other liabilities 15,121 13,555 Total liabilities 736,295 747,212 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 2023 and 14,000,000 authorized in 2022; 11,375,803 shares issued and 11,375,803 shares outstanding as of September 30, 2023; 7,418,575 shares issued and 7,418,575 shares outstanding as of December 31, 2022 114 74 Paid-in capital 110,364 15,406 Unearned common stock held by employee stock ownership plan (7,635 ) - Retained earnings 94,763 84,612 Accumulated other comprehensive loss (2,524 ) (2,341 ) Total stockholders' equity 195,082 97,751 Total liabilities and stockholders' equity $ 931,377 $ 844,963 BV FinancialConsolidated Statements of Income (dollars in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, Interest Income 2023 2022 2023 2022 Loans, including fees $ 9,764 $ 7,936 $ 27,863 $ 22,712 Investment securities available for sale 302 123 846 399 Investment securities held to maturity 89 53 275 143 Other interest income 1,560 458 2,958 726 Total interest income 11,715 8,570 31,942 23,980 Interest Expense Interest on deposits 1,764 297 3,694 987 Interest on FHLB borrowings 530 - 1,313 - Interest on Subordinated debentures 545 519 1,621 1,531 Total interest expense 2,839 816 6,628 2,518 Net interest income 8,876 7,754 25,314 21,462 Provision for (recovery of) credit losses (333 ) 186 (480 ) 587 Net interest income after provision for credit losses 9,209 7,568 25,794 20,875 Noninterest Income Service fees on deposits 109 110 304 344 Fees from debit cards 183 186 543 567 Income from investment in life insurance 85 89 549 310 Gain on sale of loans - - - 1 Gain on sale of repossessed assets - - 678 - Gain on sale of fixed assets 188 45 188 279 Other income 317 251 798 1,848 Total noninterest income 882 681 3,060 3,349 Noninterest Expense Compensation and related benefits 3,149 2,666 8,887 7,480 Occupancy 397 310 1,178 1,221 Data processing 345 339 1,034 1,070 Advertising 5 5 33 16 Professional fees 220 133 597 452 Equipment 105 197 319 412 Foreclosed real estate and repossessed assets holding costs 13 338 173 396 Amortization of intangible assets 46 46 138 137 FDIC insurance premiums 120 57 237 165 Other 608 511 1,656 2,300 Total noninterest expense 5,008 4,602 14,252 13,649 Net income before tax 5,083 3,647 14,602 10,575 Income tax expense 1,399 1,035 3,904 2,781 Net income $ 3,684 $ 2,612 $ 10,698 $ 7,794 Basic earnings per share $ 0.35 $ 0.33 $ 1.21 $ 0.98 Diluted earnings per share $ 0.35 $ 0.33 $ 1.20 $ 0.98 BV Financial, Inc.Average Balance Sheet for the Quarters ended September, 30(Dollars in thousands) For the Three Months Ended September 30, 2023 2022 (dollars in thousands) Average Outstanding Balance Interest Average Yield/Rate Average Outstanding Balance Interest Average Yield/Rate (Unaudited) Interest-earning assets: Loans $ 693,956 $ 9,764 5.58 % $ 639,340 $ 7,936 4.92 % Securities available-for-sale 35,868 302 3.35 % 35,619 123 1.37 % Securities held-to-maturity 12,493 89 2.84 % 7,985 53 2.66 % Cash, cash equivalents and other interest-earning assets 115,554 1,560 5.35 % 85,673 458 2.11 % Total interest-earning assets 857,871 11,715 5.42 % 768,617 8,570 4.42 % Noninterest-earning assets 74,240 85,757 Total assets $ 932,111 $ 854,374 Interest-bearing liabilities: Interest-bearing demand deposits $ 82,096 219 1.06 % $ 94,455 17 0.07 % Savings deposits 150,522 50 0.13 % 170,742 24 0.05 % Money market deposits 85,982 255 1.18 % 110,470 56 0.20 % Certificates of deposit 181,292 1,240 2.71 % 154,640 200 0.52 % Total interest-bearing deposits 499,892 1,764 1.40 % 530,307 297 0.22 % Federal Home Loan Bank advances 37,500 530 5.60 % - - - % Subordinated debentures 37,175 545 5.82 % 36,964 519 5.57 % Total borrowings 74,675 1,075 5.71 % 36,964 519 5.57 % Total interest-bearingliabilities 574,567 2,839 1.96 % 567,271 816 0.57 % Noninterest-bearing demand deposits 144,603 173,542 Other noninterest-bearing liabilities 63,261 20,289 Total liabilities 782,431 761,102 Equity 149,680 93,272 Total liabilities and equity $ 932,111 $ 854,374 Net interest income $ 8,876 $ 7,754 Net interest rate spread 3.46 % 3.85 % Net interest-earning assets $ 283,304 $ 201,346 Net interest margin 4.10 % 4.00 % Average interest-earning assets to interest-bearing liabilities 149.31 % 135.49 % BV Financial, Inc.Average Balance Sheet for the Nine Months ended September, 30(Dollars in thousands) 2023 2022 (dollars in thousands) Average Outstanding Balance Interest Average Yield/Rate Average Outstanding Balance Interest Average Yield/Rate (Unaudited) Interest-earning assets: Loans $ 680,436 $ 27,863 5.47 % $ 627,642 $ 22,712 4.84 % Securities available-for-sale 35,746 846 3.16 % 37,443 399 1.43 % Securities held-to-maturity 12,276 275 3.00 % 7,228 143 2.64 % Cash, cash equivalents and other interest-earning assets 76,310 2,958 5.19 % 96,272 726 1.00 % Total interest-earning assets 804,768 31,942 5.31 % 768,585 23,980 4.17 % Noninterest-earning assets 81,460 83,691 Total assets $ 886,228 $ 852,276 Interest-bearing liabilities: Interest-bearing demand deposits $ 87,159 380 0.58 % $ 94,189 46 0.07 % Savings deposits 158,324 141 0.12 % 169,997 70 0.06 % Money market deposits 92,457 491 0.71 % 108,560 151 0.18 % Certificates of deposit 167,313 2,682 2.14 % 157,887 721 0.61 % Total interest-bearing deposits 505,253 3,694 0.98 % 530,633 988 0.25 % Federal Home Loan Bank advances 33,099 1,313 5.30 % - - - Subordinated debentures 37,123 1,621 5.84 % 36,911 1,531 5.54 % Total borrowings 70,222 2,934 5.59 % 36,911 1,531 5.54 % Total interest-bearingliabilities 575,475 6,628 1.54 % 567,544 2,519 0.59 % Noninterest-bearing demand deposits 154,521 172,082 Other noninterest-bearing liabilities 36,180 22,239 Total liabilities 766,176 761,865 Equity 120,052 90,411 Total liabilities and equity $ 886,228 $ 852,276 Net interest income $ 25,314 $ 21,461 Net interest rate spread 3.77 % 3.58 % Net interest-earning assets $ 229,293 $ 201,041 Net interest margin 4.21 % 3.73 % Average interest-earning assets to interest-bearing liabilities 139.84 % 135.42 % ALLOWANCE FOR CREDIT LOSS - LOANS(Dollars in thousands) QTR YTD 9/30/2023 9/30/2023 Beginning Balance $ 8,163 $ 3,813 Provision for credit loss -loans (265 ) (313 ) CECL Transition - Gross up of PCD loans - 3,778 CECL Transition - Cumulative effect adjustment related to adoption - 454 Net Charge-offs (recoveries): Owner Occupied 1-4 (32 ) (58 ) Non-Owner Occupied 1-4 (214 ) (247 ) Investor Commercial Real Estate - - OO Commercial Real Estate - - Construction & Land (1 ) (153 ) Farm Loans - - Marine & Consumer (8 ) 39 Guaranteed by the US Gov't - - Commercial - (2 ) Net charge-offs (recoveries) (255 ) (421 ) Ending Balance- ACL for Loans $ 8,153 $ 8,153 Balance Reserve for unfunded loan commitments 194 194 Balance Reserve for HTM Securities 7 7 Total ACL $ 8,354 $ 8,354 Provision expense for Unfunded Commitments (67 ) (163 ) Provision expense for HTM Securities (1 ) (4 ) Total other provision expense $ (68 ) $ (167 ) Total provision for credit losses $ (333 ) $ (480 ) Contact: Michael J. DeeChief Financial Officer(410) 477- 5000 SOURCE: BV Financial, Inc. View source version on accesswire.com: https://www.accesswire.com/795626/bv-financial-inc-announces-financial-results
BALTIMORE, MD / ACCESSWIRE / October 23, 2023 / BV Financial, Inc. (NASDAQ:BVFL), (the "Company") the holding company for BayVanguard Bank (the "Bank"), reported net income of $3.7 million, or $0.35 per diluted share, for the quarter ended September 30, 2023 compared to net income of $2.6 million, or $0.33 per diluted share, for the quarter ended September 30, 2022. Net income for the nine-month period ended September 30, 2023 was $10.7 million or $1.20 per diluted share compared to net income of $7.8 million or $0.98 per diluted share for the nine-month period ended September 30, 2022. Financial Highlights On July 31, 2023, Bay-Vanguard, M.H.C., Inc. (the "MHC"), the former mutual holding company of the Company completed its conversion from the mutual holding company to the stock holding company form of organization (the "Conversion"), and the Company completed its related stock offering. As a result of the Conversion, the MHC ceased to exist. After the sale of 9,798,980 shares in the offering and the exchange of new shares of common stock to the Company's then existing shareholders, 11,375,803 shares of Company common stock are outstanding. The sale of new shares raised $98.0 million before offering expenses. Return on average assets and return on average equity for the three months ended September 30, 2023 were 1.58% and 9.84%, respectively. Return on average assets and return on average equity for the nine months ended September 30, 2023 were 1.61% and 11.88%, respectively. Nets loans increased $39.8 million, or 6.0%, compared to December 31, 2022. Deposits decreased $38.1 million, or 5.6%, from $684.6 million at December 31, 2022 to $646.5 million at September 30, 2023. Total equity increased by $97.1 million, or 99.3%, primarily due to the stock offering noted above. Total loan delinquencies decreased by 71.6% to $3.0 million at September 30, 2023 or 0.43% of loans, from $10.6 million, or 1.59% of total loans, at December 31, 2022. In the quarter ended September 30, 2023, the Company recorded a credit to the provision for credit losses of $333,000. The calculated required allowance for credit losses ("ACL") decreased by $10,000 and the Company experienced net recoveries for the quarter of $255,000. Additionally, the required ACL for unfunded commitments decreased by $68,000. In the nine-months ended September 30, 2023, the Company recorded a recovery of the provision for credit losses of $480,000. Net recoveries for the period of $421,000 exceeded the required increase in the ACL for loans. Additionally, the required ACL for unfunded commitments decreased by $163,000. Financial Condition Total Assets. Total assets were $931.4 million at September 30, 2023, an increase of $86.4 million, or 10.2%, from $845.0 million at December 31, 2022. The increase was due primarily to a $45.8 million increase in cash and cash equivalents , and a $39.8 million increase in net loans receivable to $698.9 million at September 30, 2023, partially offset by decreases of $1.4 million in repossessed assets and $417,000 in the cash value of life insurance. Cash and Cash Equivalents. Cash and cash equivalents increased $45.8 million, or 67.7%, to $114.5 million at September 30, 2023 from $68.7 millionat December 31, 2022 primarily due to the stock offering and an increase in borrowings from the FHLB. Net Loans Receivable. Netloans receivable increased$39.8 million, or 6.0%, to $698.9 million at September 30, 2023 from $659.1 million at December31, 2022. Increasesin commercial real estate and construction loans offset decreasesin owner and non-owner occupied one- to four-family loansand commercial loans. The increase in construction loans was due primarily to draws on existing lines of credit. The decreases in one- to four-family loans and commercial loans were due primarily to payoffs and paydowns exceeding originations during the nine-months ended September 30, 2023. Securities. Securities available for sale ("AFS") increased $2.6 million, or 7.8%, to $35.6 million at September 30, 2023 from $33.0 millionat December 31, 2022. This increase was primarily due to an increase of $4.0 million in agency securities, partially offset by decreases in mortgage-backed and corporate securities due to paydowns and maturities and a $30,000 decrease in the market value of the AFS portfolio. Total Liabilities. Total liabilities decreased $10.7 million or 1.43%, to $736.5 million at September 30, 2023 from $747.2 million at December 31, 2022.The decrease was primarily due to a decrease in total deposits of $38.1 million, partially offset by an increase in borrowings. Deposits. Total deposits decreased $38.1 million, or 5.6%, to $646.5 million at September 30, 2023 from $684.6 million at December 31, 2022. Interest-bearing deposits decreased $14.1 million, or 2.7%, to $503.3 million at September 30, 2023 from $517.4 million at December31, 2022. Noninterest bearing deposits decreased $24.0 million, or 14.4%, to $143.2 millionat September 30, 2023 from $167.2 million at December 31, 2022. TheCompany has been adjusting interestrates paid on deposits in an attempt to retain and grow thesebalances. Federal Home Loan Bank Borrowings. The Company had$37.5 million in Federal Home Loan Bank borrowings at September 30, 2023 compared to $12.0 million in Federal Home Loan Bank borrowings at December 31, 2022. The increase was used to fund loan growth and to maintain on balance sheet liquidity. Stockholders' Equity. Stockholders' equity increased $97.3 million, or 99.6%, to $195.1 millionat September 30, 2023, primarily due to the capital raise noted above, $10.7 million in net income and a $547,000negative adjustment to retained earnings resulting from the adoption of ASC Topic 326 "Financial Instruments-Credit Losses" during the quarter ended March 31, 2023. Asset Quality. Non-performing assets at September 30, 2023 totaled $4.4 million consisting of $3.8 million in nonperforming loans and $555,000 in other real estate owned, compared to $7.9 million at December 31, 2022, consisting of $5.9 million in non-performing loans and $2.0 million in other real estate owned. At September 30 2023, the allowance for credit losses on loans was $8.2 million, which represented 1.15% of total loans and 213.5% of non-performing loans compared to $3.8 million at December 31, 2022, which represented 0.57% of total loans and 64.8% of non-performing loans. In addition, at December 31, 2022, the Bank had credit marks of $3.8 million that were not included in the Bank's allowance for loan loss estimate which is in accordance with U.S. Generally Accepted Accounting Principles. The credit marks were established for specific loans acquired in previous mergers. Comparison of Operating results for the Three and Nine Months Ended September 30, 2023 and 2022 Net Interest Income. Net interest income was $8.9 million for the three months ended September 30, 2023 compared to $7.8 million in the three months ended September 30, 2022. The net interest margin for the three months ended September 30, 2023 was 4.10% compared to 4.00% for the three months ended September 30, 2022. The 100 basis point increase in the yield on interest-earning assets and the higher level of average equity offset the 139 basis point increase in the cost of deposits and borrowed money. The increase in the yield on interest-earning assets was due to higher rates earned on cash balances and loans due to higher market interest rates. The increase in the cost of interest-bearing liabilities was due higher rates paid on deposits and a shift to higher cost certificates of deposits as well as an increased reliance on advances from the Federal Home Loan Bank of Atlanta. Net interest income was $25.3 million for the nine months ended September 30, 2023, compared to $21.5 million in the nine months ended September 30, 2022.The net interest margin for the nine months ended September 30, 2023 was 4.21% compared to 3.73% for the nine months ended September 30, 2022. The 114 basis point increase in the yield on interest-earning assets offset the 95 basis point increase in the cost of deposits and borrowed money. The increase in the yield on interest-earning assets was due to higher rates earned on cash balances and loans due to higher market interest rates. The increase in the cost of interest-bearing liabilities was due to an increased reliance on advances from the Federal Home Loan Bank of Atlanta and higher rates paid on deposits and a shift to higher cost certificates of deposits. Noninterest Income. For the three months ended September 30, 2023, noninterest income totaled $882,000 compared to $681,000 in the quarter ended September 30, 2022. In the quarter ended September 30, 2023, the Company recognized a gain of $188,000 on the sale of a closed branch office. For the quarter ended September 30, 2022, the Company recognized a gain of $45,000 on the sale of a former branch building. For the nine months ended September 30, 2023, noninterest income totaled $3.1 million as compared to $3.3 million for the nine months ended September 30, 2022. In the nine-months ended September 30, 2023, the Company recognized a gain of $678,000 on the sale of foreclosed real estate and $225,000 in excess life insurance proceeds and a $188,000 gain on the sale of a closed branch office. In the nine months ended September 30, 2022, the Company recognized a $694,000 gain on bargain purchase from the acquisition of North Arundel Savings Bank and $620,000 in prepayment penalties on loans. Noninterest Expense. For the three months ended September 30, 2023, noninterest expense totaled $5.0 million compared to $4.6 million for the three months ended September 30, 2022. Compensation and benefits expenses increased by 18.1% due to increases in staffing and salary levels. Occupancy, professional fees, FDIC insurance premiums and other expenses also increased. Expenses for holding foreclosed real estate decreased $325,000 as a result of a property sale. For the nine months ended September 30, 2023, noninterest expense totaled $14.3 million as compared to $13.6 million for the nine months ended September 30, 2022. Increases in compensation and benefits, professional fees and FDIC insurance expense were partially offset by lower decreases in other categories. 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 fifteen 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. BV FINANCIAL, INC. At or For the Three Months At or For the Nine Months Ended September 30, Ended September 30, 2023 2022 2023 2022 Performance Ratios(1): Return on average assets 1.58 % 1.22 % 1.61 % 1.22 % Return on average equity 9.84 % 11.20 % 11.88 % 11.49 % Interest rate spread(2) 3.46 % 3.85 % 3.77 % 3.58 % Net interest margin(3) 4.10 % 4.00 % 4.21 % 3.73 % Non-interest expense to average assets 2.15 % 2.15 % 1.41 % 2.14 % Efficiency ratio(4) 49.63 % 55.79 % 48.13 % 56.35 % Average interest-earning assets to average interest-bearing liabilities 149.31 % 135.49 % 139.84 % 135.42 % Average equity to average assets 16.06 % 10.92 % 14.31 % 10.61 % Credit Quality Ratios:(5) Allowance for credit losses as a percentage of total loans 1.15 % 0.51 % 1.15 % 0.51 % Allowance for credit losses as a percentage of non-performing loans 213.49 % 51.14 % 213.49 % 51.14 % Net charge-offs (recoveries) to average outstanding loans during the year -0.04 % 0.00 % -0.06 % 0.00 % Non-performing loans as a percentage of total loans 0.54 % 1.00 % 0.54 % 1.00 % Non-performing loans as a percentage of total assets 0.41 % 0.78 % 0.41 % 0.78 % Total non-performing assets as a percentage of total assets 0.47 % 1.01 % 0.47 % 1.01 % Other: Number of offices 15 17 15 17 Number of full-time equivalent employees 110 105 110 105 (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.(5) The Company adopted ASC 326 on January 1, 2023. Some ratios are not comparable pre and post adoption of this accounting standard. BV FinancialConsolidated Balance Sheets September 30, 2023 December 31, 2022 (dollars in thousands, except share amounts) (unaudited) derived from audited financial statements Assets Cash $ 6,764 $ 12,704 Interest-bearing deposits in other banks 107,695 55,948 Cash and cash equivalents 114,459 68,652 Equity Investment 229 221 Securities available for sale 35,616 33,034 Securities held to maturity (fair value of $9,175 and $9,660, ACL of $7 and $0) 10,263 10,461 Loans held for maturity 707,037 662,944 Allowance for Credit Losses (8,153 ) (3,813 ) Net Loans 698,884 659,131 Foreclosed real estate 555 1,987 Premises and equipment, net 14,405 15,176 Federal Home Loan Bank of Atlanta stock, at cost 2,407 977 Investment in life insurance 19,566 19,983 Accrued interest receivable 3,450 2,952 Goodwill 14,420 14,420 Intangible assets, net 1,057 1,195 Deferred tax assets, net 9,045 9,113 Other assets 7,021 7,661 Total assets $ 931,377 $ 844,963 Liabilities and Stockholders' Equity Liabilities Noninterest-bearing deposits $ 143,203 $ 167,202 Interest-bearing deposits 503,273 517,416 Total deposits 646,476 684,618 FHLB borrowings 37,500 12,000 Subordinated Debentures 37,198 37,039 Other liabilities 15,121 13,555 Total liabilities 736,295 747,212 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 2023 and 14,000,000 authorized in 2022; 11,375,803 shares issued and 11,375,803 shares outstanding as of September 30, 2023; 7,418,575 shares issued and 7,418,575 shares outstanding as of December 31, 2022 114 74 Paid-in capital 110,364 15,406 Unearned common stock held by employee stock ownership plan (7,635 ) - Retained earnings 94,763 84,612 Accumulated other comprehensive loss (2,524 ) (2,341 ) Total stockholders' equity 195,082 97,751 Total liabilities and stockholders' equity $ 931,377 $ 844,963 BV FinancialConsolidated Statements of Income (dollars in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, Interest Income 2023 2022 2023 2022 Loans, including fees $ 9,764 $ 7,936 $ 27,863 $ 22,712 Investment securities available for sale 302 123 846 399 Investment securities held to maturity 89 53 275 143 Other interest income 1,560 458 2,958 726 Total interest income 11,715 8,570 31,942 23,980 Interest Expense Interest on deposits 1,764 297 3,694 987 Interest on FHLB borrowings 530 - 1,313 - Interest on Subordinated debentures 545 519 1,621 1,531 Total interest expense 2,839 816 6,628 2,518 Net interest income 8,876 7,754 25,314 21,462 Provision for (recovery of) credit losses (333 ) 186 (480 ) 587 Net interest income after provision for credit losses 9,209 7,568 25,794 20,875 Noninterest Income Service fees on deposits 109 110 304 344 Fees from debit cards 183 186 543 567 Income from investment in life insurance 85 89 549 310 Gain on sale of loans - - - 1 Gain on sale of repossessed assets - - 678 - Gain on sale of fixed assets 188 45 188 279 Other income 317 251 798 1,848 Total noninterest income 882 681 3,060 3,349 Noninterest Expense Compensation and related benefits 3,149 2,666 8,887 7,480 Occupancy 397 310 1,178 1,221 Data processing 345 339 1,034 1,070 Advertising 5 5 33 16 Professional fees 220 133 597 452 Equipment 105 197 319 412 Foreclosed real estate and repossessed assets holding costs 13 338 173 396 Amortization of intangible assets 46 46 138 137 FDIC insurance premiums 120 57 237 165 Other 608 511 1,656 2,300 Total noninterest expense 5,008 4,602 14,252 13,649 Net income before tax 5,083 3,647 14,602 10,575 Income tax expense 1,399 1,035 3,904 2,781 Net income $ 3,684 $ 2,612 $ 10,698 $ 7,794 Basic earnings per share $ 0.35 $ 0.33 $ 1.21 $ 0.98 Diluted earnings per share $ 0.35 $ 0.33 $ 1.20 $ 0.98 BV Financial, Inc.Average Balance Sheet for the Quarters ended September, 30(Dollars in thousands) For the Three Months Ended September 30, 2023 2022 (dollars in thousands) Average Outstanding Balance Interest Average Yield/Rate Average Outstanding Balance Interest Average Yield/Rate (Unaudited) Interest-earning assets: Loans $ 693,956 $ 9,764 5.58 % $ 639,340 $ 7,936 4.92 % Securities available-for-sale 35,868 302 3.35 % 35,619 123 1.37 % Securities held-to-maturity 12,493 89 2.84 % 7,985 53 2.66 % Cash, cash equivalents and other interest-earning assets 115,554 1,560 5.35 % 85,673 458 2.11 % Total interest-earning assets 857,871 11,715 5.42 % 768,617 8,570 4.42 % Noninterest-earning assets 74,240 85,757 Total assets $ 932,111 $ 854,374 Interest-bearing liabilities: Interest-bearing demand deposits $ 82,096 219 1.06 % $ 94,455 17 0.07 % Savings deposits 150,522 50 0.13 % 170,742 24 0.05 % Money market deposits 85,982 255 1.18 % 110,470 56 0.20 % Certificates of deposit 181,292 1,240 2.71 % 154,640 200 0.52 % Total interest-bearing deposits 499,892 1,764 1.40 % 530,307 297 0.22 % Federal Home Loan Bank advances 37,500 530 5.60 % - - - % Subordinated debentures 37,175 545 5.82 % 36,964 519 5.57 % Total borrowings 74,675 1,075 5.71 % 36,964 519 5.57 % Total interest-bearingliabilities 574,567 2,839 1.96 % 567,271 816 0.57 % Noninterest-bearing demand deposits 144,603 173,542 Other noninterest-bearing liabilities 63,261 20,289 Total liabilities 782,431 761,102 Equity 149,680 93,272 Total liabilities and equity $ 932,111 $ 854,374 Net interest income $ 8,876 $ 7,754 Net interest rate spread 3.46 % 3.85 % Net interest-earning assets $ 283,304 $ 201,346 Net interest margin 4.10 % 4.00 % Average interest-earning assets to interest-bearing liabilities 149.31 % 135.49 % BV Financial, Inc.Average Balance Sheet for the Nine Months ended September, 30(Dollars in thousands) 2023 2022 (dollars in thousands) Average Outstanding Balance Interest Average Yield/Rate Average Outstanding Balance Interest Average Yield/Rate (Unaudited) Interest-earning assets: Loans $ 680,436 $ 27,863 5.47 % $ 627,642 $ 22,712 4.84 % Securities available-for-sale 35,746 846 3.16 % 37,443 399 1.43 % Securities held-to-maturity 12,276 275 3.00 % 7,228 143 2.64 % Cash, cash equivalents and other interest-earning assets 76,310 2,958 5.19 % 96,272 726 1.00 % Total interest-earning assets 804,768 31,942 5.31 % 768,585 23,980 4.17 % Noninterest-earning assets 81,460 83,691 Total assets $ 886,228 $ 852,276 Interest-bearing liabilities: Interest-bearing demand deposits $ 87,159 380 0.58 % $ 94,189 46 0.07 % Savings deposits 158,324 141 0.12 % 169,997 70 0.06 % Money market deposits 92,457 491 0.71 % 108,560 151 0.18 % Certificates of deposit 167,313 2,682 2.14 % 157,887 721 0.61 % Total interest-bearing deposits 505,253 3,694 0.98 % 530,633 988 0.25 % Federal Home Loan Bank advances 33,099 1,313 5.30 % - - - Subordinated debentures 37,123 1,621 5.84 % 36,911 1,531 5.54 % Total borrowings 70,222 2,934 5.59 % 36,911 1,531 5.54 % Total interest-bearingliabilities 575,475 6,628 1.54 % 567,544 2,519 0.59 % Noninterest-bearing demand deposits 154,521 172,082 Other noninterest-bearing liabilities 36,180 22,239 Total liabilities 766,176 761,865 Equity 120,052 90,411 Total liabilities and equity $ 886,228 $ 852,276 Net interest income $ 25,314 $ 21,461 Net interest rate spread 3.77 % 3.58 % Net interest-earning assets $ 229,293 $ 201,041 Net interest margin 4.21 % 3.73 % Average interest-earning assets to interest-bearing liabilities 139.84 % 135.42 % ALLOWANCE FOR CREDIT LOSS - LOANS(Dollars in thousands) QTR YTD 9/30/2023 9/30/2023 Beginning Balance $ 8,163 $ 3,813 Provision for credit loss -loans (265 ) (313 ) CECL Transition - Gross up of PCD loans - 3,778 CECL Transition - Cumulative effect adjustment related to adoption - 454 Net Charge-offs (recoveries): Owner Occupied 1-4 (32 ) (58 ) Non-Owner Occupied 1-4 (214 ) (247 ) Investor Commercial Real Estate - - OO Commercial Real Estate - - Construction & Land (1 ) (153 ) Farm Loans - - Marine & Consumer (8 ) 39 Guaranteed by the US Gov't - - Commercial - (2 ) Net charge-offs (recoveries) (255 ) (421 ) Ending Balance- ACL for Loans $ 8,153 $ 8,153 Balance Reserve for unfunded loan commitments 194 194 Balance Reserve for HTM Securities 7 7 Total ACL $ 8,354 $ 8,354 Provision expense for Unfunded Commitments (67 ) (163 ) Provision expense for HTM Securities (1 ) (4 ) Total other provision expense $ (68 ) $ (167 ) Total provision for credit losses $ (333 ) $ (480 ) Contact: Michael J. DeeChief Financial Officer(410) 477- 5000 SOURCE: BV Financial, Inc. View source version on accesswire.com: https://www.accesswire.com/795626/bv-financial-inc-announces-financial-results