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 January 22, 2024 at 11:30 AM EST ALLOWANCE FOR CREDIT LOSS - LOANS BALTIMORE, MD / ACCESSWIRE / January 22, 2024 / BV Financial, Inc. ( NASDAQ:BVFL), (the "Company") the holding company for BayVanguard Bank (the "Bank"), reported net income of $13.7 million or $1.47 per diluted share compared to net income of $10.5 million or $1.32 per diluted share for the year ended December 31, 2022. Net income for the quarter ended December 31, 2023 was $3.0 million, or $0.28 per diluted share compared to net income of $2.7 million, or $0.34 per diluted share, for the quarter ended December 31, 2022. On July 31, 2023, the Company completed its conversion from the mutual holding company (M.H.C.) form of reorganization to the stock holding company form of organization (the "Conversion"). In connection with the Conversion, Bay-Vanguard M.H.C. (the "MHC") ceased to exist. Also, as part of the Conversion, the Company sold 9,798,980 shares of its common stock at a price of $10.00 per share, which resulted in net proceeds of $86.9 million. Each outstanding share of Company common stock owned by the public stockholders of the Company (stockholders other than the M.H.C.) were converted into new shares of Company common stock based on an exchange ratio of 1.5309-to-1. The Company had 11,375,803 shares of Company common stock outstanding as a result of the Conversion. Additionally, concurrently with the conversion, the Bank converted to a Maryland-chartered commercial bank. Financial Highlights Return on average assets and return on average equity for the year ended December 31, 2023 were 1.54% and 9.93%, respectively. Return on average assets and return on average equity for the three months ended December 31, 2023 were 1.34% and 6.11%, respectively. Net loans increased $37.1 million, or 5.63% to $696.2 million at December 31, 2023 compared to $659.1 million at December 31, 2022. Deposits decreased $50.5 million, or 7.38%, from $684.6 million at December 31, 2022 to $634.1 million at December 31,2023. Total equity increased by $101.3 million, or 103.64%, primarily due to the stock offering noted above and net income for the year. In the quarter ended December 31, 2023, the Company recorded a provision for credit losses of $435,000 consisting of $354,000 in the allowance for credit losses (ACL) - loans and $81,000 in the ACL -for unfunded commitments. In the year ended December 31, 2023, the Company recorded a recovery of the provision for credit losses of $45,000 as net recoveries of $467,000 exceeded the required increase in the ACL for loans. Financial Condition Total Assets. Total assets were $885.3 million at December 31, 2023, an increase of $40.3 million, or 4.8%, from $845.0 million at December 31, 2022. The increase was due primarily to a $37.1 million increasein net loans receivable to $696.2 million at December 31, 2023, a $5.1 million increase in cash and cash equivalents and a $1.7 million increase in available-for-sale securities, partially offset by a decrease of $1.8 million in foreclosed real estate. Cash and Cash Equivalents. Cash and cash equivalents increased $5.1 million, or 7.4%, to $73.7 million at December 31, 2023 from $68.7 millionat December 31, 2022 primarily due to the stock offering. Net Loans Receivable. Netloans receivable increased$37.1 million, or 5.6%, to $696.2 million at December 31, 2023 from $659.1 million at December31, 2022. Increasesin investor and owner occupied commercial real estate, construction loans and farm loans offset decreasesin owner and non-owner occupied one- to four-family loansand commercial loans.The decreases in one- to four-family loans and commercial loans were due primarily to payoffs and paydowns exceeding originations during the year ended December 31, 2023. Securities. Securities available for sale ("AFS") increased $1.7 million, or 5.3%, to $34.8 million at December 31, 2023 from $33.0 millionat December 31, 2022. This increase was primarily due to an increase of $4.0 million in agency securities, a $500,000 increase in the market value of the AFS portfolio, partially offset by decreases in mortgage-backed and corporate securities due to paydowns and maturities. Total Liabilities. Total liabilities decreased $61.0 million or 8.2%, to $686.2 million at December 31, 2023 from $747.2 million at December 31, 2022.The decrease was primarily due to a decrease in total deposits of $50.5 million, and a decrease in borrowings of $12 million slightly offset by an increase in other liabilities. Deposits. Total deposits decreased $50.5 million, or 7.4%, to $634.1 million at December 31, 2023 from $684.6 million at December 31, 2022. Interest-bearing deposits decreased $25.3 million, or 4.9%, to $492.1 million at December 31, 2023 from $517.4 million at December31, 2022. Noninterest bearing deposits decreased $25.2 million, or 15.1%, to $142.0 millionat December 31, 2023 from $167.2 million at December 31, 2022. During the fourth quarter of 2023, the Company offered reasonable rates to retain $15.0 million in certificates of deposit held by a local government entity. These certificate accounts were moved to another financial institution. The Company had no brokered deposits as of December 31, 2023. Federal Home Loan Bank Borrowings. The Company had no Federal Home Loan Bank borrowings at December 31, 2023 compared to $12.0 million in Federal Home Loan Bank borrowings at December 31, 2022. In the quarter ended December 31, 2023, the Company paid off all of the $37.5 million in borrowings that were outstanding as of September 30, 2023. Stockholders' Equity. Stockholders' equity increased $101.3 million, or 103.6%, to $199.1 millionat December 31, 2023, primarily due to the capital raise noted above and net income. Asset Quality. Non-performing assets at December 31, 2023 totaled $10.7 million consisting of $10.5 million in nonperforming loans and $170,000 in foreclosed real estate, compared to $7.9 million at December 31, 2022, consisting of $5.9 million in non-performing loans and $2.0 million in foreclosed real estate. At December 31 2023, the allowance for credit losses on loans was $8.6 million, which represented 1.21% of total loans and 82.9% 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 Twelve Months Ended December 31, 2023 and 2022 Net Interest Income. Net interest income was $8.9 million for the three months ended December 31, 2023 compared to $8.5 million in the three months ended December 31, 2022. The net interest margin for the three months ended December 31, 2023 was 4.30% compared to 4.45% for the three months ended December 31, 2022. The 61 basis point increase in the yield on interest-earning assets, a higher volume of interest earning assets and the higher level of average equity offset the 125 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 higher rates paid on deposits and a shift to higher cost certificates of deposits. Net interest income was $34.2 million for the year ended December 31, 2023, compared to $29.9 million in the year ended December 31, 2022.The net interest margin for the year ended December 31, 2023 was 4.23% compared to 3.91% for the year ended December 31, 2022. The 101 basis point increase in the yield on interest-earning assets and the higher level of average equity offset the 101- 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, higher rates paid on deposits and a shift to higher cost certificates of deposits. Noninterest Income. For the three months ended December 31, 2023, noninterest income totaled $698,000 compared to $2.3 million in the quarter ended December 31, 2022. In the quarter ended December 31, 2023, the Company recognized a gain of $31,000 on the sale of a foreclosed real estate property. For the quarter ended December 31, 2022, the Company recognized a gain on bargain purchase related to the North Arundel Savings Bank merger of $646,000 and $1.1 million in excess insurance proceeds. For the year ended December 31, 2023, noninterest income totaled $3.7 million as compared to $5.7 million for the year ended December 31, 2022. In the year ended December 31, 2023, the Company recognized a gain of $709,000 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 year ended December 31, 2022, the Company recognized a $1.3 million gain on bargain purchase from the acquisition of North Arundel Savings Bank and $1.4 million in excess insurance proceeds. Noninterest Expense. For the three months ended December 31, 2023, noninterest expense totaled $5.1 million compared to $6.3 million for the three months ended December 31, 2022. Compensation and benefits expenses increased by 27.2% due to increases in staffing and salary levels. Professional fees and FDIC insurance premiums also increased. Expenses for holding foreclosed real estate expenses decreased $555,000 as a result of property sales. The quarter ended December 31, 2022 included $1.8 million in merger expenses. For the year ended December 31, 2023 noninterest expense totaled $19.4 million compared to $20.0 million in the year ended December 31, 2022. Compensation and benefits increased by 21.0% due to increases staffing and salary levels. Professional fees and FDIC insurance premiums also increased year over year. Decreases in merger expenses of $2.5 million and foreclosed real estate holding costs of $779,000 contributed to the net decline in operating expenses. 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 fourteen 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 Year At or For the Three Months Ended December 31, Ended December 31, 2023 2022 2023 2022 Performance Ratios(1): Return on average assets 1.54 % 1.24 % 1.34 % 1.29 % Return on average equity 9.93 % 11.49 % 6.11 % 11.46 % Interest rate spread(2) 3.74 % 3.75 % 3.64 % 4.28 % Net interest margin(3) 4.23 % 3.91 % 4.30 % 4.45 % Non-interest expense to average assets 2.19 % 2.35 % 2.29 % 3.00 % Efficiency ratio(4) 51.03 % 57.88 % 56.19 % 61.47 % Average interest-earning assets to average interest-bearing liabilities 142.89 % 135.36 % 153.30 % 135.16 % Average equity to average assets 15.55 % 10.78 % 21.87 % 11.28 % Credit Quality Ratios:(6) Allowance for credit losses as a percentage of total loans 1.21 % 0.57 % 1.21 % 0.57 % Allowance for credit losses as a percentage of non-performing loans 82.94 % 64.80 % 82.94 % 64.80 % Net charge-offs (recoveries) to average outstanding loans during the year -0.07 % 0.00 % 0.00 % 0.00 % Non-performing loans as a percentage of total loans 1.46 % 0.88 % 1.46 % 0.88 % Non-performing loans as a percentage of total assets 1.17 % 0.70 % 1.17 % 0.70 % Total non-performing assets as a percentage of total assets 1.19 % 0.93 % 1.19 % 0.93 % Other: Number of offices 14 15 14 15 Number of full-time equivalent employees 107 110 107 110 (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 Financial, Inc.Consolidated Balance Sheets December 31, 2023 December 31, 2022 (dollars in thousands, except share amounts) (unaudited) derived from audited financial statements Assets Cash $ 9,260 $ 12,704 Interest-bearing deposits in other banks 64,482 55,948 Cash and cash equivalents 73,742 68,652 Equity Investment 256 221 Securities available for sale 34,781 33,034 Securities held to maturity (fair value of $9,212 and $9,660, ACL of $6 and $0) 10,209 10,461 Loans held for maturity 704,802 662,944 Allowance for Credit Losses (8,554 ) (3,813 ) Net Loans 696,248 659,131 Foreclosed real estate 170 1,987 Premises and equipment, net 14,250 15,176 Federal Home Loan Bank of Atlanta stock, at cost 626 977 Investment in life insurance 19,657 19,983 Accrued interest receivable 3,279 2,952 Goodwill 14,420 14,420 Intangible assets, net 1,012 1,195 Deferred tax assets, net 8,969 9,113 Other assets 7,635 7,661 Total assets $ 885,254 $ 844,963 Liabilities and Stockholders' Equity Liabilities Noninterest-bearing deposits $ 142,030 $ 167,202 Interest-bearing deposits 492,090 517,416 Total deposits 634,120 684,618 FHLB borrowings - 12,000 Subordinated Debentures 37,251 37,039 Other liabilities 14,818 13,555 Total liabilities 686,189 747,212 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 in 2023 and 14,000,000 authorized in 2022; 11,375,803 shares issued and 11,375,803 shares outstanding as of December 31, 2023; 7,418,575 shares issued and 7,418,575 shares outstanding as of December 31, 2022 114 74 Paid-in capital 110,465 15,406 Unearned common stock held by employee stock ownership plan (7,328 ) - Retained earnings 97,772 84,612 Accumulated other comprehensive loss (1,958 ) (2,341 ) Total stockholders' equity 199,065 97,751 Total liabilities and stockholders' equity $ 885,254 $ 844,963 BV FINANCIAL, INC. Consolidated Statements of Income (dollars in thousands, except per share amounts) Three Months Ended December 31, Years Ended December 31, Interest Income 2023 2022 2023 2022 Loans, including fees $ 9,878 $ 8,547 $ 37,742 $ 31,259 Investment securities available for sale 311 211 1,156 610 Investment securities held to maturity 92 102 367 245 Other interest income 1,196 509 4,154 1,236 Total interest income 11,477 9,369 43,419 33,350 Interest Expense Interest on deposits 1,920 369 5,614 1,357 Interest on FHLB borrowings 99 11 1,411 11 Interest on Subordinated debentures 543 532 2,165 2,062 Total interest expense 2,562 912 9,190 3,430 Net interest income 8,915 8,457 34,229 29,920 Provision for (recovery of) credit losses 435 451 (45 ) 1,038 Net interest income after provision for (recovery of) credit losses 8,480 8,006 34,274 28,882 Noninterest Income Service fees on deposits 109 116 413 460 Fees from debit cards 181 188 724 755 Income from investment in life insurance 92 1,182 641 1,492 Gain on sale of loans - - - 1 Gain(loss) on sale of repossessed assets 31 (33 ) 709 246 Gain on sale of fixed assets - - 188 - Other income 285 862 1,082 2,711 Total noninterest income 698 2,315 3,757 5,665 Noninterest Expense Compensation and related benefits 3,371 2,649 12,257 10,130 Occupancy 426 440 1,604 1,661 Data processing 339 349 1,373 1,419 Advertising 11 6 43 23 Professional fees 290 155 886 607 Equipment 106 24 425 436 Foreclosed real estate and repossessed assets holding costs 13 568 186 965 Amortization of intangible assets 45 46 183 183 FDIC insurance premiums 98 55 336 219 Other expense 458 2,052 2,116 4,351 Total noninterest expense 5,157 6,344 19,409 19,994 Net income before tax 4,021 3,977 18,622 14,553 Income tax expense 1,012 1,247 4,915 4,029 Net income $ 3,009 $ 2,730 $ 13,707 $ 10,524 Basic earnings per share $ 0.28 $ 0.34 $ 1.47 $ 1.32 Diluted earnings per share $ 0.28 $ 0.34 $ 1.47 $ 1.32 BV FINANCIAL, INC. Average Balance Sheet for the Quarters ended December 31 (Dollars in thousands) For the Three Months Ended December 31, 2023 2022 (dollars in thousands) Average Outstanding Balance Interest Average Yield/Rate Average Outstanding Balance Interest Average Yield/Rate (Unaudited) Interest-earning assets: Loans $ 693,217 $ 9,878 5.65 % $ 653,469 $ 8,547 5.19 % Securities available-for-sale 35,194 311 3.51 % 33,905 211 2.47 % Securities held-to-maturity 11,193 92 3.26 % 11,165 102 3.64 % Cash, cash equivalents and other interest-earning assets 82,482 1,196 5.65 % 54,959 509 3.69 % Total interest-earning assets 822,086 11,477 5.54 % 753,498 9,369 4.93 % Noninterest-earning assets 78,694 91,296 Total assets $ 900,780 $ 844,794 Interest-bearing liabilities: Interest-bearing demand deposits $ 83,014 234 1.12 % $ 98,441 19 0.08 % Savings deposits 143,666 61 0.17 % 168,729 26 0.06 % Money market deposits 88,671 312 1.40 % 108,293 80 0.29 % Certificates of deposit 176,738 1,313 2.95 % 143,837 244 0.67 % Total interest-bearing deposits 492,089 1,920 1.55 % 519,300 369 0.28 % Federal Home Loan Bank advances 6,929 99 5.61 % 1,174 11 3.72 % Subordinated debentures 37,228 543 5.81 % 37,017 532 5.71 % Total borrowings 44,157 642 5.78 % 38,191 543 5.64 % Total interest-bearingliabilities 536,246 2,562 1.90 % 557,491 912 0.65 % Noninterest-bearing demand deposits 144,330 167,302 Other noninterest-bearing liabilities 23,207 24,750 Total liabilities 703,783 749,543 Equity 196,997 95,251 Total liabilities and equity $ 900,780 $ 844,794 Net interest income $ 8,915 $ 8,457 Net interest rate spread 3.64 % 4.28 % Net interest-earning assets $ 285,840 $ 196,007 Net interest margin 4.30 % 4.45 % Average interest-earning assets to interest-bearing liabilities 153.30 % 135.16 % BV FINANCIAL, INC. Average Balance Sheet for the Year ended December, 31 (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 $ 683,657 $ 37,742 5.52 % $ 634,152 $ 31,259 4.93 % Securities available-for-sale 35,607 1,156 3.25 % 36,551 610 1.67 % Securities held-to-maturity 12,003 367 3.06 % 8,220 245 2.98 % Cash, cash equivalents and other interest-earning assets 77,865 4,154 5.34 % 85,859 1,236 1.44 % Total interest-earning assets 809,132 43,419 5.37 % 764,782 33,350 4.36 % Noninterest-earning assets 78,100 87,128 Total assets $ 887,232 $ 851,910 Interest-bearing liabilities: Interest-bearing demand deposits $ 86,114 614 0.71 % $ 95,261 65 0.07 % Savings deposits 154,629 202 0.13 % 169,678 97 0.06 % Money market deposits 91,573 803 0.88 % 108,492 231 0.21 % Certificates of deposit 170,299 3,995 2.35 % 154,346 964 0.63 % Total interest-bearing deposits 502,615 5,614 1.12 % 527,777 1,357 0.26 % Federal Home Loan Bank advances 26,503 1,411 5.32 % 296 11 3.79 % Subordinated debentures 37,149 2,165 5.83 % 36,938 2,062 5.58 % Total borrowings 63,652 3,576 5.62 % 37,234 2,073 5.57 % Total interest-bearingliabilities 566,267 9,190 1.62 % 565,011 3,430 0.61 % Noninterest-bearing demand deposits 149,630 169,722 Other noninterest-bearing liabilities 33,363 24,870 Total liabilities 749,260 759,603 Equity 137,972 92,307 Total liabilities and equity $ 887,232 $ 851,910 Net interest income $ 34,229 $ 29,920 Net interest rate spread 3.74 % 3.75 % Net interest-earning assets $ 242,865 $ 199,772 Net interest margin 4.23 % 3.91 % Average interest-earning assets to interest-bearing liabilities 142.89 % 135.37 % ALLOWANCE FOR CREDIT LOSS - LOANS(Dollars in thousands) QTR YTD 12/31/2023 12/31/2023 Beginning Balance $ 8,153 $ 3,813 Provision for credit loss -loans 354 42 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 (4 ) (62 ) Non-Owner Occupied 1-4 (60 ) (305 ) Investor Commercial Real Estate - - OO Commercial Real Estate 3 3 Construction & Land (1 ) (154 ) Farm Loans - - Marine & Consumer 15 54 Guaranteed by the US Gov't - - Commercial - (3 ) Net charge-offs (recoveries) (47 ) (467 ) Ending Balance- ACL for Loans $ 8,554 $ 8,554 Balance Reserve for unfunded loan commitments 207 207 Balance Reserve for HTM Securities 6 6 Total ACL $ 8,767 $ 8,767 Provision expense for Unfunded Commitments 81 (82 ) Provision expense for HTM Securities - (5 ) Total other provision expense $ 81 $ (87 ) Total provision for (recovery of )credit losses $ 435 $ (45 ) Contact: Michael J. Dee Chief Financial Officer (410) 477-5000 SOURCE: BV Financial, Inc. View the original press release on accesswire.com 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 January 22, 2024 at 11:30 AM EST ALLOWANCE FOR CREDIT LOSS - LOANS BALTIMORE, MD / ACCESSWIRE / January 22, 2024 / BV Financial, Inc. ( NASDAQ:BVFL), (the "Company") the holding company for BayVanguard Bank (the "Bank"), reported net income of $13.7 million or $1.47 per diluted share compared to net income of $10.5 million or $1.32 per diluted share for the year ended December 31, 2022. Net income for the quarter ended December 31, 2023 was $3.0 million, or $0.28 per diluted share compared to net income of $2.7 million, or $0.34 per diluted share, for the quarter ended December 31, 2022. On July 31, 2023, the Company completed its conversion from the mutual holding company (M.H.C.) form of reorganization to the stock holding company form of organization (the "Conversion"). In connection with the Conversion, Bay-Vanguard M.H.C. (the "MHC") ceased to exist. Also, as part of the Conversion, the Company sold 9,798,980 shares of its common stock at a price of $10.00 per share, which resulted in net proceeds of $86.9 million. Each outstanding share of Company common stock owned by the public stockholders of the Company (stockholders other than the M.H.C.) were converted into new shares of Company common stock based on an exchange ratio of 1.5309-to-1. The Company had 11,375,803 shares of Company common stock outstanding as a result of the Conversion. Additionally, concurrently with the conversion, the Bank converted to a Maryland-chartered commercial bank. Financial Highlights Return on average assets and return on average equity for the year ended December 31, 2023 were 1.54% and 9.93%, respectively. Return on average assets and return on average equity for the three months ended December 31, 2023 were 1.34% and 6.11%, respectively. Net loans increased $37.1 million, or 5.63% to $696.2 million at December 31, 2023 compared to $659.1 million at December 31, 2022. Deposits decreased $50.5 million, or 7.38%, from $684.6 million at December 31, 2022 to $634.1 million at December 31,2023. Total equity increased by $101.3 million, or 103.64%, primarily due to the stock offering noted above and net income for the year. In the quarter ended December 31, 2023, the Company recorded a provision for credit losses of $435,000 consisting of $354,000 in the allowance for credit losses (ACL) - loans and $81,000 in the ACL -for unfunded commitments. In the year ended December 31, 2023, the Company recorded a recovery of the provision for credit losses of $45,000 as net recoveries of $467,000 exceeded the required increase in the ACL for loans. Financial Condition Total Assets. Total assets were $885.3 million at December 31, 2023, an increase of $40.3 million, or 4.8%, from $845.0 million at December 31, 2022. The increase was due primarily to a $37.1 million increasein net loans receivable to $696.2 million at December 31, 2023, a $5.1 million increase in cash and cash equivalents and a $1.7 million increase in available-for-sale securities, partially offset by a decrease of $1.8 million in foreclosed real estate. Cash and Cash Equivalents. Cash and cash equivalents increased $5.1 million, or 7.4%, to $73.7 million at December 31, 2023 from $68.7 millionat December 31, 2022 primarily due to the stock offering. Net Loans Receivable. Netloans receivable increased$37.1 million, or 5.6%, to $696.2 million at December 31, 2023 from $659.1 million at December31, 2022. Increasesin investor and owner occupied commercial real estate, construction loans and farm loans offset decreasesin owner and non-owner occupied one- to four-family loansand commercial loans.The decreases in one- to four-family loans and commercial loans were due primarily to payoffs and paydowns exceeding originations during the year ended December 31, 2023. Securities. Securities available for sale ("AFS") increased $1.7 million, or 5.3%, to $34.8 million at December 31, 2023 from $33.0 millionat December 31, 2022. This increase was primarily due to an increase of $4.0 million in agency securities, a $500,000 increase in the market value of the AFS portfolio, partially offset by decreases in mortgage-backed and corporate securities due to paydowns and maturities. Total Liabilities. Total liabilities decreased $61.0 million or 8.2%, to $686.2 million at December 31, 2023 from $747.2 million at December 31, 2022.The decrease was primarily due to a decrease in total deposits of $50.5 million, and a decrease in borrowings of $12 million slightly offset by an increase in other liabilities. Deposits. Total deposits decreased $50.5 million, or 7.4%, to $634.1 million at December 31, 2023 from $684.6 million at December 31, 2022. Interest-bearing deposits decreased $25.3 million, or 4.9%, to $492.1 million at December 31, 2023 from $517.4 million at December31, 2022. Noninterest bearing deposits decreased $25.2 million, or 15.1%, to $142.0 millionat December 31, 2023 from $167.2 million at December 31, 2022. During the fourth quarter of 2023, the Company offered reasonable rates to retain $15.0 million in certificates of deposit held by a local government entity. These certificate accounts were moved to another financial institution. The Company had no brokered deposits as of December 31, 2023. Federal Home Loan Bank Borrowings. The Company had no Federal Home Loan Bank borrowings at December 31, 2023 compared to $12.0 million in Federal Home Loan Bank borrowings at December 31, 2022. In the quarter ended December 31, 2023, the Company paid off all of the $37.5 million in borrowings that were outstanding as of September 30, 2023. Stockholders' Equity. Stockholders' equity increased $101.3 million, or 103.6%, to $199.1 millionat December 31, 2023, primarily due to the capital raise noted above and net income. Asset Quality. Non-performing assets at December 31, 2023 totaled $10.7 million consisting of $10.5 million in nonperforming loans and $170,000 in foreclosed real estate, compared to $7.9 million at December 31, 2022, consisting of $5.9 million in non-performing loans and $2.0 million in foreclosed real estate. At December 31 2023, the allowance for credit losses on loans was $8.6 million, which represented 1.21% of total loans and 82.9% 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 Twelve Months Ended December 31, 2023 and 2022 Net Interest Income. Net interest income was $8.9 million for the three months ended December 31, 2023 compared to $8.5 million in the three months ended December 31, 2022. The net interest margin for the three months ended December 31, 2023 was 4.30% compared to 4.45% for the three months ended December 31, 2022. The 61 basis point increase in the yield on interest-earning assets, a higher volume of interest earning assets and the higher level of average equity offset the 125 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 higher rates paid on deposits and a shift to higher cost certificates of deposits. Net interest income was $34.2 million for the year ended December 31, 2023, compared to $29.9 million in the year ended December 31, 2022.The net interest margin for the year ended December 31, 2023 was 4.23% compared to 3.91% for the year ended December 31, 2022. The 101 basis point increase in the yield on interest-earning assets and the higher level of average equity offset the 101- 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, higher rates paid on deposits and a shift to higher cost certificates of deposits. Noninterest Income. For the three months ended December 31, 2023, noninterest income totaled $698,000 compared to $2.3 million in the quarter ended December 31, 2022. In the quarter ended December 31, 2023, the Company recognized a gain of $31,000 on the sale of a foreclosed real estate property. For the quarter ended December 31, 2022, the Company recognized a gain on bargain purchase related to the North Arundel Savings Bank merger of $646,000 and $1.1 million in excess insurance proceeds. For the year ended December 31, 2023, noninterest income totaled $3.7 million as compared to $5.7 million for the year ended December 31, 2022. In the year ended December 31, 2023, the Company recognized a gain of $709,000 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 year ended December 31, 2022, the Company recognized a $1.3 million gain on bargain purchase from the acquisition of North Arundel Savings Bank and $1.4 million in excess insurance proceeds. Noninterest Expense. For the three months ended December 31, 2023, noninterest expense totaled $5.1 million compared to $6.3 million for the three months ended December 31, 2022. Compensation and benefits expenses increased by 27.2% due to increases in staffing and salary levels. Professional fees and FDIC insurance premiums also increased. Expenses for holding foreclosed real estate expenses decreased $555,000 as a result of property sales. The quarter ended December 31, 2022 included $1.8 million in merger expenses. For the year ended December 31, 2023 noninterest expense totaled $19.4 million compared to $20.0 million in the year ended December 31, 2022. Compensation and benefits increased by 21.0% due to increases staffing and salary levels. Professional fees and FDIC insurance premiums also increased year over year. Decreases in merger expenses of $2.5 million and foreclosed real estate holding costs of $779,000 contributed to the net decline in operating expenses. 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 fourteen 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 Year At or For the Three Months Ended December 31, Ended December 31, 2023 2022 2023 2022 Performance Ratios(1): Return on average assets 1.54 % 1.24 % 1.34 % 1.29 % Return on average equity 9.93 % 11.49 % 6.11 % 11.46 % Interest rate spread(2) 3.74 % 3.75 % 3.64 % 4.28 % Net interest margin(3) 4.23 % 3.91 % 4.30 % 4.45 % Non-interest expense to average assets 2.19 % 2.35 % 2.29 % 3.00 % Efficiency ratio(4) 51.03 % 57.88 % 56.19 % 61.47 % Average interest-earning assets to average interest-bearing liabilities 142.89 % 135.36 % 153.30 % 135.16 % Average equity to average assets 15.55 % 10.78 % 21.87 % 11.28 % Credit Quality Ratios:(6) Allowance for credit losses as a percentage of total loans 1.21 % 0.57 % 1.21 % 0.57 % Allowance for credit losses as a percentage of non-performing loans 82.94 % 64.80 % 82.94 % 64.80 % Net charge-offs (recoveries) to average outstanding loans during the year -0.07 % 0.00 % 0.00 % 0.00 % Non-performing loans as a percentage of total loans 1.46 % 0.88 % 1.46 % 0.88 % Non-performing loans as a percentage of total assets 1.17 % 0.70 % 1.17 % 0.70 % Total non-performing assets as a percentage of total assets 1.19 % 0.93 % 1.19 % 0.93 % Other: Number of offices 14 15 14 15 Number of full-time equivalent employees 107 110 107 110 (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 Financial, Inc.Consolidated Balance Sheets December 31, 2023 December 31, 2022 (dollars in thousands, except share amounts) (unaudited) derived from audited financial statements Assets Cash $ 9,260 $ 12,704 Interest-bearing deposits in other banks 64,482 55,948 Cash and cash equivalents 73,742 68,652 Equity Investment 256 221 Securities available for sale 34,781 33,034 Securities held to maturity (fair value of $9,212 and $9,660, ACL of $6 and $0) 10,209 10,461 Loans held for maturity 704,802 662,944 Allowance for Credit Losses (8,554 ) (3,813 ) Net Loans 696,248 659,131 Foreclosed real estate 170 1,987 Premises and equipment, net 14,250 15,176 Federal Home Loan Bank of Atlanta stock, at cost 626 977 Investment in life insurance 19,657 19,983 Accrued interest receivable 3,279 2,952 Goodwill 14,420 14,420 Intangible assets, net 1,012 1,195 Deferred tax assets, net 8,969 9,113 Other assets 7,635 7,661 Total assets $ 885,254 $ 844,963 Liabilities and Stockholders' Equity Liabilities Noninterest-bearing deposits $ 142,030 $ 167,202 Interest-bearing deposits 492,090 517,416 Total deposits 634,120 684,618 FHLB borrowings - 12,000 Subordinated Debentures 37,251 37,039 Other liabilities 14,818 13,555 Total liabilities 686,189 747,212 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 in 2023 and 14,000,000 authorized in 2022; 11,375,803 shares issued and 11,375,803 shares outstanding as of December 31, 2023; 7,418,575 shares issued and 7,418,575 shares outstanding as of December 31, 2022 114 74 Paid-in capital 110,465 15,406 Unearned common stock held by employee stock ownership plan (7,328 ) - Retained earnings 97,772 84,612 Accumulated other comprehensive loss (1,958 ) (2,341 ) Total stockholders' equity 199,065 97,751 Total liabilities and stockholders' equity $ 885,254 $ 844,963 BV FINANCIAL, INC. Consolidated Statements of Income (dollars in thousands, except per share amounts) Three Months Ended December 31, Years Ended December 31, Interest Income 2023 2022 2023 2022 Loans, including fees $ 9,878 $ 8,547 $ 37,742 $ 31,259 Investment securities available for sale 311 211 1,156 610 Investment securities held to maturity 92 102 367 245 Other interest income 1,196 509 4,154 1,236 Total interest income 11,477 9,369 43,419 33,350 Interest Expense Interest on deposits 1,920 369 5,614 1,357 Interest on FHLB borrowings 99 11 1,411 11 Interest on Subordinated debentures 543 532 2,165 2,062 Total interest expense 2,562 912 9,190 3,430 Net interest income 8,915 8,457 34,229 29,920 Provision for (recovery of) credit losses 435 451 (45 ) 1,038 Net interest income after provision for (recovery of) credit losses 8,480 8,006 34,274 28,882 Noninterest Income Service fees on deposits 109 116 413 460 Fees from debit cards 181 188 724 755 Income from investment in life insurance 92 1,182 641 1,492 Gain on sale of loans - - - 1 Gain(loss) on sale of repossessed assets 31 (33 ) 709 246 Gain on sale of fixed assets - - 188 - Other income 285 862 1,082 2,711 Total noninterest income 698 2,315 3,757 5,665 Noninterest Expense Compensation and related benefits 3,371 2,649 12,257 10,130 Occupancy 426 440 1,604 1,661 Data processing 339 349 1,373 1,419 Advertising 11 6 43 23 Professional fees 290 155 886 607 Equipment 106 24 425 436 Foreclosed real estate and repossessed assets holding costs 13 568 186 965 Amortization of intangible assets 45 46 183 183 FDIC insurance premiums 98 55 336 219 Other expense 458 2,052 2,116 4,351 Total noninterest expense 5,157 6,344 19,409 19,994 Net income before tax 4,021 3,977 18,622 14,553 Income tax expense 1,012 1,247 4,915 4,029 Net income $ 3,009 $ 2,730 $ 13,707 $ 10,524 Basic earnings per share $ 0.28 $ 0.34 $ 1.47 $ 1.32 Diluted earnings per share $ 0.28 $ 0.34 $ 1.47 $ 1.32 BV FINANCIAL, INC. Average Balance Sheet for the Quarters ended December 31 (Dollars in thousands) For the Three Months Ended December 31, 2023 2022 (dollars in thousands) Average Outstanding Balance Interest Average Yield/Rate Average Outstanding Balance Interest Average Yield/Rate (Unaudited) Interest-earning assets: Loans $ 693,217 $ 9,878 5.65 % $ 653,469 $ 8,547 5.19 % Securities available-for-sale 35,194 311 3.51 % 33,905 211 2.47 % Securities held-to-maturity 11,193 92 3.26 % 11,165 102 3.64 % Cash, cash equivalents and other interest-earning assets 82,482 1,196 5.65 % 54,959 509 3.69 % Total interest-earning assets 822,086 11,477 5.54 % 753,498 9,369 4.93 % Noninterest-earning assets 78,694 91,296 Total assets $ 900,780 $ 844,794 Interest-bearing liabilities: Interest-bearing demand deposits $ 83,014 234 1.12 % $ 98,441 19 0.08 % Savings deposits 143,666 61 0.17 % 168,729 26 0.06 % Money market deposits 88,671 312 1.40 % 108,293 80 0.29 % Certificates of deposit 176,738 1,313 2.95 % 143,837 244 0.67 % Total interest-bearing deposits 492,089 1,920 1.55 % 519,300 369 0.28 % Federal Home Loan Bank advances 6,929 99 5.61 % 1,174 11 3.72 % Subordinated debentures 37,228 543 5.81 % 37,017 532 5.71 % Total borrowings 44,157 642 5.78 % 38,191 543 5.64 % Total interest-bearingliabilities 536,246 2,562 1.90 % 557,491 912 0.65 % Noninterest-bearing demand deposits 144,330 167,302 Other noninterest-bearing liabilities 23,207 24,750 Total liabilities 703,783 749,543 Equity 196,997 95,251 Total liabilities and equity $ 900,780 $ 844,794 Net interest income $ 8,915 $ 8,457 Net interest rate spread 3.64 % 4.28 % Net interest-earning assets $ 285,840 $ 196,007 Net interest margin 4.30 % 4.45 % Average interest-earning assets to interest-bearing liabilities 153.30 % 135.16 % BV FINANCIAL, INC. Average Balance Sheet for the Year ended December, 31 (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 $ 683,657 $ 37,742 5.52 % $ 634,152 $ 31,259 4.93 % Securities available-for-sale 35,607 1,156 3.25 % 36,551 610 1.67 % Securities held-to-maturity 12,003 367 3.06 % 8,220 245 2.98 % Cash, cash equivalents and other interest-earning assets 77,865 4,154 5.34 % 85,859 1,236 1.44 % Total interest-earning assets 809,132 43,419 5.37 % 764,782 33,350 4.36 % Noninterest-earning assets 78,100 87,128 Total assets $ 887,232 $ 851,910 Interest-bearing liabilities: Interest-bearing demand deposits $ 86,114 614 0.71 % $ 95,261 65 0.07 % Savings deposits 154,629 202 0.13 % 169,678 97 0.06 % Money market deposits 91,573 803 0.88 % 108,492 231 0.21 % Certificates of deposit 170,299 3,995 2.35 % 154,346 964 0.63 % Total interest-bearing deposits 502,615 5,614 1.12 % 527,777 1,357 0.26 % Federal Home Loan Bank advances 26,503 1,411 5.32 % 296 11 3.79 % Subordinated debentures 37,149 2,165 5.83 % 36,938 2,062 5.58 % Total borrowings 63,652 3,576 5.62 % 37,234 2,073 5.57 % Total interest-bearingliabilities 566,267 9,190 1.62 % 565,011 3,430 0.61 % Noninterest-bearing demand deposits 149,630 169,722 Other noninterest-bearing liabilities 33,363 24,870 Total liabilities 749,260 759,603 Equity 137,972 92,307 Total liabilities and equity $ 887,232 $ 851,910 Net interest income $ 34,229 $ 29,920 Net interest rate spread 3.74 % 3.75 % Net interest-earning assets $ 242,865 $ 199,772 Net interest margin 4.23 % 3.91 % Average interest-earning assets to interest-bearing liabilities 142.89 % 135.37 % ALLOWANCE FOR CREDIT LOSS - LOANS(Dollars in thousands) QTR YTD 12/31/2023 12/31/2023 Beginning Balance $ 8,153 $ 3,813 Provision for credit loss -loans 354 42 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 (4 ) (62 ) Non-Owner Occupied 1-4 (60 ) (305 ) Investor Commercial Real Estate - - OO Commercial Real Estate 3 3 Construction & Land (1 ) (154 ) Farm Loans - - Marine & Consumer 15 54 Guaranteed by the US Gov't - - Commercial - (3 ) Net charge-offs (recoveries) (47 ) (467 ) Ending Balance- ACL for Loans $ 8,554 $ 8,554 Balance Reserve for unfunded loan commitments 207 207 Balance Reserve for HTM Securities 6 6 Total ACL $ 8,767 $ 8,767 Provision expense for Unfunded Commitments 81 (82 ) Provision expense for HTM Securities - (5 ) Total other provision expense $ 81 $ (87 ) Total provision for (recovery of )credit losses $ 435 $ (45 ) Contact: Michael J. Dee Chief Financial Officer (410) 477-5000 SOURCE: BV Financial, Inc. View the original press release on accesswire.com
ALLOWANCE FOR CREDIT LOSS - LOANS BALTIMORE, MD / ACCESSWIRE / January 22, 2024 / BV Financial, Inc. ( NASDAQ:BVFL), (the "Company") the holding company for BayVanguard Bank (the "Bank"), reported net income of $13.7 million or $1.47 per diluted share compared to net income of $10.5 million or $1.32 per diluted share for the year ended December 31, 2022. Net income for the quarter ended December 31, 2023 was $3.0 million, or $0.28 per diluted share compared to net income of $2.7 million, or $0.34 per diluted share, for the quarter ended December 31, 2022. On July 31, 2023, the Company completed its conversion from the mutual holding company (M.H.C.) form of reorganization to the stock holding company form of organization (the "Conversion"). In connection with the Conversion, Bay-Vanguard M.H.C. (the "MHC") ceased to exist. Also, as part of the Conversion, the Company sold 9,798,980 shares of its common stock at a price of $10.00 per share, which resulted in net proceeds of $86.9 million. Each outstanding share of Company common stock owned by the public stockholders of the Company (stockholders other than the M.H.C.) were converted into new shares of Company common stock based on an exchange ratio of 1.5309-to-1. The Company had 11,375,803 shares of Company common stock outstanding as a result of the Conversion. Additionally, concurrently with the conversion, the Bank converted to a Maryland-chartered commercial bank. Financial Highlights Return on average assets and return on average equity for the year ended December 31, 2023 were 1.54% and 9.93%, respectively. Return on average assets and return on average equity for the three months ended December 31, 2023 were 1.34% and 6.11%, respectively. Net loans increased $37.1 million, or 5.63% to $696.2 million at December 31, 2023 compared to $659.1 million at December 31, 2022. Deposits decreased $50.5 million, or 7.38%, from $684.6 million at December 31, 2022 to $634.1 million at December 31,2023. Total equity increased by $101.3 million, or 103.64%, primarily due to the stock offering noted above and net income for the year. In the quarter ended December 31, 2023, the Company recorded a provision for credit losses of $435,000 consisting of $354,000 in the allowance for credit losses (ACL) - loans and $81,000 in the ACL -for unfunded commitments. In the year ended December 31, 2023, the Company recorded a recovery of the provision for credit losses of $45,000 as net recoveries of $467,000 exceeded the required increase in the ACL for loans. Financial Condition Total Assets. Total assets were $885.3 million at December 31, 2023, an increase of $40.3 million, or 4.8%, from $845.0 million at December 31, 2022. The increase was due primarily to a $37.1 million increasein net loans receivable to $696.2 million at December 31, 2023, a $5.1 million increase in cash and cash equivalents and a $1.7 million increase in available-for-sale securities, partially offset by a decrease of $1.8 million in foreclosed real estate. Cash and Cash Equivalents. Cash and cash equivalents increased $5.1 million, or 7.4%, to $73.7 million at December 31, 2023 from $68.7 millionat December 31, 2022 primarily due to the stock offering. Net Loans Receivable. Netloans receivable increased$37.1 million, or 5.6%, to $696.2 million at December 31, 2023 from $659.1 million at December31, 2022. Increasesin investor and owner occupied commercial real estate, construction loans and farm loans offset decreasesin owner and non-owner occupied one- to four-family loansand commercial loans.The decreases in one- to four-family loans and commercial loans were due primarily to payoffs and paydowns exceeding originations during the year ended December 31, 2023. Securities. Securities available for sale ("AFS") increased $1.7 million, or 5.3%, to $34.8 million at December 31, 2023 from $33.0 millionat December 31, 2022. This increase was primarily due to an increase of $4.0 million in agency securities, a $500,000 increase in the market value of the AFS portfolio, partially offset by decreases in mortgage-backed and corporate securities due to paydowns and maturities. Total Liabilities. Total liabilities decreased $61.0 million or 8.2%, to $686.2 million at December 31, 2023 from $747.2 million at December 31, 2022.The decrease was primarily due to a decrease in total deposits of $50.5 million, and a decrease in borrowings of $12 million slightly offset by an increase in other liabilities. Deposits. Total deposits decreased $50.5 million, or 7.4%, to $634.1 million at December 31, 2023 from $684.6 million at December 31, 2022. Interest-bearing deposits decreased $25.3 million, or 4.9%, to $492.1 million at December 31, 2023 from $517.4 million at December31, 2022. Noninterest bearing deposits decreased $25.2 million, or 15.1%, to $142.0 millionat December 31, 2023 from $167.2 million at December 31, 2022. During the fourth quarter of 2023, the Company offered reasonable rates to retain $15.0 million in certificates of deposit held by a local government entity. These certificate accounts were moved to another financial institution. The Company had no brokered deposits as of December 31, 2023. Federal Home Loan Bank Borrowings. The Company had no Federal Home Loan Bank borrowings at December 31, 2023 compared to $12.0 million in Federal Home Loan Bank borrowings at December 31, 2022. In the quarter ended December 31, 2023, the Company paid off all of the $37.5 million in borrowings that were outstanding as of September 30, 2023. Stockholders' Equity. Stockholders' equity increased $101.3 million, or 103.6%, to $199.1 millionat December 31, 2023, primarily due to the capital raise noted above and net income. Asset Quality. Non-performing assets at December 31, 2023 totaled $10.7 million consisting of $10.5 million in nonperforming loans and $170,000 in foreclosed real estate, compared to $7.9 million at December 31, 2022, consisting of $5.9 million in non-performing loans and $2.0 million in foreclosed real estate. At December 31 2023, the allowance for credit losses on loans was $8.6 million, which represented 1.21% of total loans and 82.9% 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 Twelve Months Ended December 31, 2023 and 2022 Net Interest Income. Net interest income was $8.9 million for the three months ended December 31, 2023 compared to $8.5 million in the three months ended December 31, 2022. The net interest margin for the three months ended December 31, 2023 was 4.30% compared to 4.45% for the three months ended December 31, 2022. The 61 basis point increase in the yield on interest-earning assets, a higher volume of interest earning assets and the higher level of average equity offset the 125 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 higher rates paid on deposits and a shift to higher cost certificates of deposits. Net interest income was $34.2 million for the year ended December 31, 2023, compared to $29.9 million in the year ended December 31, 2022.The net interest margin for the year ended December 31, 2023 was 4.23% compared to 3.91% for the year ended December 31, 2022. The 101 basis point increase in the yield on interest-earning assets and the higher level of average equity offset the 101- 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, higher rates paid on deposits and a shift to higher cost certificates of deposits. Noninterest Income. For the three months ended December 31, 2023, noninterest income totaled $698,000 compared to $2.3 million in the quarter ended December 31, 2022. In the quarter ended December 31, 2023, the Company recognized a gain of $31,000 on the sale of a foreclosed real estate property. For the quarter ended December 31, 2022, the Company recognized a gain on bargain purchase related to the North Arundel Savings Bank merger of $646,000 and $1.1 million in excess insurance proceeds. For the year ended December 31, 2023, noninterest income totaled $3.7 million as compared to $5.7 million for the year ended December 31, 2022. In the year ended December 31, 2023, the Company recognized a gain of $709,000 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 year ended December 31, 2022, the Company recognized a $1.3 million gain on bargain purchase from the acquisition of North Arundel Savings Bank and $1.4 million in excess insurance proceeds. Noninterest Expense. For the three months ended December 31, 2023, noninterest expense totaled $5.1 million compared to $6.3 million for the three months ended December 31, 2022. Compensation and benefits expenses increased by 27.2% due to increases in staffing and salary levels. Professional fees and FDIC insurance premiums also increased. Expenses for holding foreclosed real estate expenses decreased $555,000 as a result of property sales. The quarter ended December 31, 2022 included $1.8 million in merger expenses. For the year ended December 31, 2023 noninterest expense totaled $19.4 million compared to $20.0 million in the year ended December 31, 2022. Compensation and benefits increased by 21.0% due to increases staffing and salary levels. Professional fees and FDIC insurance premiums also increased year over year. Decreases in merger expenses of $2.5 million and foreclosed real estate holding costs of $779,000 contributed to the net decline in operating expenses. 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 fourteen 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 Year At or For the Three Months Ended December 31, Ended December 31, 2023 2022 2023 2022 Performance Ratios(1): Return on average assets 1.54 % 1.24 % 1.34 % 1.29 % Return on average equity 9.93 % 11.49 % 6.11 % 11.46 % Interest rate spread(2) 3.74 % 3.75 % 3.64 % 4.28 % Net interest margin(3) 4.23 % 3.91 % 4.30 % 4.45 % Non-interest expense to average assets 2.19 % 2.35 % 2.29 % 3.00 % Efficiency ratio(4) 51.03 % 57.88 % 56.19 % 61.47 % Average interest-earning assets to average interest-bearing liabilities 142.89 % 135.36 % 153.30 % 135.16 % Average equity to average assets 15.55 % 10.78 % 21.87 % 11.28 % Credit Quality Ratios:(6) Allowance for credit losses as a percentage of total loans 1.21 % 0.57 % 1.21 % 0.57 % Allowance for credit losses as a percentage of non-performing loans 82.94 % 64.80 % 82.94 % 64.80 % Net charge-offs (recoveries) to average outstanding loans during the year -0.07 % 0.00 % 0.00 % 0.00 % Non-performing loans as a percentage of total loans 1.46 % 0.88 % 1.46 % 0.88 % Non-performing loans as a percentage of total assets 1.17 % 0.70 % 1.17 % 0.70 % Total non-performing assets as a percentage of total assets 1.19 % 0.93 % 1.19 % 0.93 % Other: Number of offices 14 15 14 15 Number of full-time equivalent employees 107 110 107 110 (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 Financial, Inc.Consolidated Balance Sheets December 31, 2023 December 31, 2022 (dollars in thousands, except share amounts) (unaudited) derived from audited financial statements Assets Cash $ 9,260 $ 12,704 Interest-bearing deposits in other banks 64,482 55,948 Cash and cash equivalents 73,742 68,652 Equity Investment 256 221 Securities available for sale 34,781 33,034 Securities held to maturity (fair value of $9,212 and $9,660, ACL of $6 and $0) 10,209 10,461 Loans held for maturity 704,802 662,944 Allowance for Credit Losses (8,554 ) (3,813 ) Net Loans 696,248 659,131 Foreclosed real estate 170 1,987 Premises and equipment, net 14,250 15,176 Federal Home Loan Bank of Atlanta stock, at cost 626 977 Investment in life insurance 19,657 19,983 Accrued interest receivable 3,279 2,952 Goodwill 14,420 14,420 Intangible assets, net 1,012 1,195 Deferred tax assets, net 8,969 9,113 Other assets 7,635 7,661 Total assets $ 885,254 $ 844,963 Liabilities and Stockholders' Equity Liabilities Noninterest-bearing deposits $ 142,030 $ 167,202 Interest-bearing deposits 492,090 517,416 Total deposits 634,120 684,618 FHLB borrowings - 12,000 Subordinated Debentures 37,251 37,039 Other liabilities 14,818 13,555 Total liabilities 686,189 747,212 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 in 2023 and 14,000,000 authorized in 2022; 11,375,803 shares issued and 11,375,803 shares outstanding as of December 31, 2023; 7,418,575 shares issued and 7,418,575 shares outstanding as of December 31, 2022 114 74 Paid-in capital 110,465 15,406 Unearned common stock held by employee stock ownership plan (7,328 ) - Retained earnings 97,772 84,612 Accumulated other comprehensive loss (1,958 ) (2,341 ) Total stockholders' equity 199,065 97,751 Total liabilities and stockholders' equity $ 885,254 $ 844,963 BV FINANCIAL, INC. Consolidated Statements of Income (dollars in thousands, except per share amounts) Three Months Ended December 31, Years Ended December 31, Interest Income 2023 2022 2023 2022 Loans, including fees $ 9,878 $ 8,547 $ 37,742 $ 31,259 Investment securities available for sale 311 211 1,156 610 Investment securities held to maturity 92 102 367 245 Other interest income 1,196 509 4,154 1,236 Total interest income 11,477 9,369 43,419 33,350 Interest Expense Interest on deposits 1,920 369 5,614 1,357 Interest on FHLB borrowings 99 11 1,411 11 Interest on Subordinated debentures 543 532 2,165 2,062 Total interest expense 2,562 912 9,190 3,430 Net interest income 8,915 8,457 34,229 29,920 Provision for (recovery of) credit losses 435 451 (45 ) 1,038 Net interest income after provision for (recovery of) credit losses 8,480 8,006 34,274 28,882 Noninterest Income Service fees on deposits 109 116 413 460 Fees from debit cards 181 188 724 755 Income from investment in life insurance 92 1,182 641 1,492 Gain on sale of loans - - - 1 Gain(loss) on sale of repossessed assets 31 (33 ) 709 246 Gain on sale of fixed assets - - 188 - Other income 285 862 1,082 2,711 Total noninterest income 698 2,315 3,757 5,665 Noninterest Expense Compensation and related benefits 3,371 2,649 12,257 10,130 Occupancy 426 440 1,604 1,661 Data processing 339 349 1,373 1,419 Advertising 11 6 43 23 Professional fees 290 155 886 607 Equipment 106 24 425 436 Foreclosed real estate and repossessed assets holding costs 13 568 186 965 Amortization of intangible assets 45 46 183 183 FDIC insurance premiums 98 55 336 219 Other expense 458 2,052 2,116 4,351 Total noninterest expense 5,157 6,344 19,409 19,994 Net income before tax 4,021 3,977 18,622 14,553 Income tax expense 1,012 1,247 4,915 4,029 Net income $ 3,009 $ 2,730 $ 13,707 $ 10,524 Basic earnings per share $ 0.28 $ 0.34 $ 1.47 $ 1.32 Diluted earnings per share $ 0.28 $ 0.34 $ 1.47 $ 1.32 BV FINANCIAL, INC. Average Balance Sheet for the Quarters ended December 31 (Dollars in thousands) For the Three Months Ended December 31, 2023 2022 (dollars in thousands) Average Outstanding Balance Interest Average Yield/Rate Average Outstanding Balance Interest Average Yield/Rate (Unaudited) Interest-earning assets: Loans $ 693,217 $ 9,878 5.65 % $ 653,469 $ 8,547 5.19 % Securities available-for-sale 35,194 311 3.51 % 33,905 211 2.47 % Securities held-to-maturity 11,193 92 3.26 % 11,165 102 3.64 % Cash, cash equivalents and other interest-earning assets 82,482 1,196 5.65 % 54,959 509 3.69 % Total interest-earning assets 822,086 11,477 5.54 % 753,498 9,369 4.93 % Noninterest-earning assets 78,694 91,296 Total assets $ 900,780 $ 844,794 Interest-bearing liabilities: Interest-bearing demand deposits $ 83,014 234 1.12 % $ 98,441 19 0.08 % Savings deposits 143,666 61 0.17 % 168,729 26 0.06 % Money market deposits 88,671 312 1.40 % 108,293 80 0.29 % Certificates of deposit 176,738 1,313 2.95 % 143,837 244 0.67 % Total interest-bearing deposits 492,089 1,920 1.55 % 519,300 369 0.28 % Federal Home Loan Bank advances 6,929 99 5.61 % 1,174 11 3.72 % Subordinated debentures 37,228 543 5.81 % 37,017 532 5.71 % Total borrowings 44,157 642 5.78 % 38,191 543 5.64 % Total interest-bearingliabilities 536,246 2,562 1.90 % 557,491 912 0.65 % Noninterest-bearing demand deposits 144,330 167,302 Other noninterest-bearing liabilities 23,207 24,750 Total liabilities 703,783 749,543 Equity 196,997 95,251 Total liabilities and equity $ 900,780 $ 844,794 Net interest income $ 8,915 $ 8,457 Net interest rate spread 3.64 % 4.28 % Net interest-earning assets $ 285,840 $ 196,007 Net interest margin 4.30 % 4.45 % Average interest-earning assets to interest-bearing liabilities 153.30 % 135.16 % BV FINANCIAL, INC. Average Balance Sheet for the Year ended December, 31 (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 $ 683,657 $ 37,742 5.52 % $ 634,152 $ 31,259 4.93 % Securities available-for-sale 35,607 1,156 3.25 % 36,551 610 1.67 % Securities held-to-maturity 12,003 367 3.06 % 8,220 245 2.98 % Cash, cash equivalents and other interest-earning assets 77,865 4,154 5.34 % 85,859 1,236 1.44 % Total interest-earning assets 809,132 43,419 5.37 % 764,782 33,350 4.36 % Noninterest-earning assets 78,100 87,128 Total assets $ 887,232 $ 851,910 Interest-bearing liabilities: Interest-bearing demand deposits $ 86,114 614 0.71 % $ 95,261 65 0.07 % Savings deposits 154,629 202 0.13 % 169,678 97 0.06 % Money market deposits 91,573 803 0.88 % 108,492 231 0.21 % Certificates of deposit 170,299 3,995 2.35 % 154,346 964 0.63 % Total interest-bearing deposits 502,615 5,614 1.12 % 527,777 1,357 0.26 % Federal Home Loan Bank advances 26,503 1,411 5.32 % 296 11 3.79 % Subordinated debentures 37,149 2,165 5.83 % 36,938 2,062 5.58 % Total borrowings 63,652 3,576 5.62 % 37,234 2,073 5.57 % Total interest-bearingliabilities 566,267 9,190 1.62 % 565,011 3,430 0.61 % Noninterest-bearing demand deposits 149,630 169,722 Other noninterest-bearing liabilities 33,363 24,870 Total liabilities 749,260 759,603 Equity 137,972 92,307 Total liabilities and equity $ 887,232 $ 851,910 Net interest income $ 34,229 $ 29,920 Net interest rate spread 3.74 % 3.75 % Net interest-earning assets $ 242,865 $ 199,772 Net interest margin 4.23 % 3.91 % Average interest-earning assets to interest-bearing liabilities 142.89 % 135.37 % ALLOWANCE FOR CREDIT LOSS - LOANS(Dollars in thousands) QTR YTD 12/31/2023 12/31/2023 Beginning Balance $ 8,153 $ 3,813 Provision for credit loss -loans 354 42 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 (4 ) (62 ) Non-Owner Occupied 1-4 (60 ) (305 ) Investor Commercial Real Estate - - OO Commercial Real Estate 3 3 Construction & Land (1 ) (154 ) Farm Loans - - Marine & Consumer 15 54 Guaranteed by the US Gov't - - Commercial - (3 ) Net charge-offs (recoveries) (47 ) (467 ) Ending Balance- ACL for Loans $ 8,554 $ 8,554 Balance Reserve for unfunded loan commitments 207 207 Balance Reserve for HTM Securities 6 6 Total ACL $ 8,767 $ 8,767 Provision expense for Unfunded Commitments 81 (82 ) Provision expense for HTM Securities - (5 ) Total other provision expense $ 81 $ (87 ) Total provision for (recovery of )credit losses $ 435 $ (45 ) Contact: Michael J. Dee Chief Financial Officer (410) 477-5000 SOURCE: BV Financial, Inc. View the original press release on accesswire.com