Executive Summary

Q1 2024 EPS was $0.24, down 14% sequentially from $0.28 (Q4 2023) and down 38% year over year from $0.39 (Q1 2023), as a $566k purchase accounting fair value adjustment write-off tied to the payoff of $3.0M junior subordinated debt elevated interest expense in the quarter .
Net interest margin compressed to 3.91% from 4.30% in Q4 2023 and 4.34% in Q1 2023, driven by a 109 bp YoY increase in the cost of interest-bearing deposits (to 1.62%) and the debt-related write-off, partially offset by higher loan and cash yields .
Deposits rose $5.4M Q/Q to $639.5M; the company replaced $10.0M in retail CDs with $10.0M in brokered deposits at a lower cost, while non-interest-bearing deposits fell $2.9M; FHLB borrowings remained $0 following full payoff in Q4 2023 .
Asset quality remained elevated versus mid-2023: NPLs were 1.52% of loans (vs. 1.46% in Q4 2023 and 0.54% in Q3 2023); ACL coverage of NPLs was 79.2% (vs. 82.9% in Q4, 213.5% in Q3) .
No formal guidance or earnings call transcript was found in the company’s Q1 2024 materials; consensus estimates from S&P Global were unavailable, so we cannot assess beats/misses this quarter.

What Went Well and What Went Wrong

What Went Well

Deposit stabilization and lower-cost funding mix: total deposits increased $5.4M Q/Q to $639.5M, with $10.0M brokered deposits issued to replace $10.0M retail CDs at a lower cost .
Balance sheet growth with no FHLB dependence: loans grew $3.9M Q/Q to $708.7M; FHLB borrowings were $0 (also $0 at year-end) .
Operating efficiency held stable: the efficiency ratio was 52.75% in Q1 (vs. 52.19% in Q1 2023), indicating continued cost discipline amid revenue pressure .

Quote (Press Release): “During the quarter ended March 31, 2024, the Company paid off $3.0 million in junior subordinated debt... This write-off was the primary contributor to the decrease in net income...” .

What Went Wrong

Earnings pressure from one-time debt item and funding costs: the $566k write-off and a 109 bp YoY increase in deposit costs reduced NIM to 3.91% and net income to $2.6M .
Noninterest income step-down YoY: $0.58M vs. $0.81M, primarily due to lower life insurance income; last year’s quarter included a $235k death benefit .
Asset quality weaker vs. mid-2023: NPLs at 1.52% of loans and coverage at 79.2% reflect a higher problem loan base vs. Q3 2023 levels; coverage declined from Q3/Q4 2023 .

Financial Results

Income and profitability (oldest → newest):

Metric	Q3 2023	Q4 2023	Q1 2024
Net Income ($USD Millions)	$3.684	$3.009	$2.574
Diluted EPS ($)	$0.35	$0.28	$0.24
Net Interest Income ($USD Millions)	$8.876	$8.915	$7.963
Noninterest Income ($USD Millions)	$0.882	$0.698	$0.578
Net Interest Margin (%)	4.10%	4.30%	3.91%

Funding costs and spreads:

Metric	Q3 2023	Q4 2023	Q1 2024
Cost of Interest-Bearing Deposits (%)	1.40%	1.55%	1.62%
Net Interest Rate Spread (%)	3.46%	3.64%	3.10%
Efficiency Ratio (%)	49.63%	56.19%	52.75%
ROAA (%)	1.58%	1.34%	1.16%
ROAE (%)	9.84%	6.11%	5.14%

Balance sheet (quarter-end):

Metric ($USD Millions)	Q3 2023	Q4 2023	Q1 2024
Total Assets	$931.4	$885.3	$892.5
Loans Held for Maturity (Gross)	$707.0	$704.8	$708.7
Total Deposits	$646.5	$634.1	$639.5
Noninterest-Bearing Deposits	$143.2	$142.0	$139.1
Interest-Bearing Deposits	$503.3	$492.1	$500.4
FHLB Borrowings	$37.5	$0.0	$0.0
Subordinated Debentures	$37.2	$37.3	$34.8

Credit quality:

Metric	Q3 2023	Q4 2023	Q1 2024
NPLs ($USD Millions)	$3.8	$10.5	$10.7
NPLs / Total Loans (%)	0.54%	1.46%	1.52%
ACL on Loans ($USD Millions)	$8.153	$8.554	$8.506
ACL / NPLs (%)	213.49%	82.94%	79.16%
Net Charge-offs (Recoveries) to Avg Loans (%)	-0.04%	-0.01%	-0.01%
Provision for Credit Losses ($USD Millions)	-$0.333	$0.435	$0.018

Notes:

Q1 2024 interest expense includes a $566k write-off related to payoff of $3.0M junior subordinated debt (non-recurring) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company financial guidance	Q2/Q3 2024 and FY	Not provided in prior releases	Not provided in Q1 press release	Maintained: No formal guidance disclosed

No dividend or segment-specific guidance was disclosed in the Q1 2024 press release .

Earnings Call Themes & Trends

No Q1 2024 earnings call transcript was available in the company’s filings set. Thematically, press releases indicate:

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q1 2024)	Trend
Funding mix & liquidity	Q3 2023: FHLB borrowings at $37.5M to fund growth and liquidity; deposits -$38.1M YTD . Q4 2023: FHLB fully repaid; deposits ended $634.1M .	FHLB borrowings $0; deposits +$5.4M Q/Q to $639.5M; $10M brokered replacing retail CDs at lower cost .	Improving funding mix; deposit stabilization.
Deposit costs/NIM	Q3 NIM 4.10%, cost of deposits 1.40% . Q4 NIM 4.30%, cost 1.55% .	NIM 3.91%; cost 1.62%; debt payoff write-off added to interest expense .	Sequential NIM compression; structural deposit cost pressure.
Asset quality	Q3 NPLs 0.54% loans; coverage 213.5% . Q4 NPLs 1.46%; coverage 82.9% .	NPLs 1.52%; coverage 79.2% .	Elevated vs. Q3; relatively stable vs. Q4.
Balance sheet growth	Loans +$39.8M since 12/22 by Q3; +$37.1M by Q4 .	Loans +$3.9M Q/Q to $708.7M .	Modest growth.
Capital	Equity stepped up post conversion; average equity/asset 16.06% (Q3), 21.87% (Q4) .	Average equity/asset 22.61% .	Strong capital maintained.

Management Commentary

“During the quarter ended March 31, 2024, the Company paid off $3.0 million in junior subordinated debt... This resulted in the write-off... of $566,000. This write-off was the primary contributor to the decrease in net income...” — Company press release (CFO contact listed), April 22, 2024 .
“Total deposits increased $5.4 million... Interest-bearing deposits increased $8.3 million... Noninterest bearing deposits decreased $2.9 million... the Company replaced $10.0 million in retail certificates of deposits with $10 million of brokered deposits at a cost lower than... retail certificates.” — Company press release .
“The net interest margin... was 3.91%... The 125 basis point increase in the cost of interest-bearing liabilities offset the higher average balances and rates earned on loans and short-term investments.” — Company press release .

Q&A Highlights

No Q1 2024 earnings call transcript or Q&A was available in the filing set for review.

Estimates Context

Wall Street consensus (S&P Global) for Q1 2024 EPS and revenue was unavailable at the time of analysis; therefore, we cannot quantify beats/misses versus estimates this quarter.

Key Takeaways for Investors

Core profitability was impacted by a non-recurring $566k interest expense write-off from paying off $3.0M junior subordinated debt; absent this, earnings power would have been higher in Q1 .
Structural deposit cost pressure continues: cost of interest-bearing deposits rose to 1.62% (up 109 bps YoY), compressing NIM to 3.91% despite higher asset yields .
Funding mix improved: zero FHLB borrowings and a proactive shift to $10.0M brokered deposits at lower cost than retail CDs; total deposits stabilized/sequentially improved .
Credit remains a watch item: NPLs at 1.52% of loans with ACL/NPL coverage at 79.2% vs. 213% in Q3 2023; monitor resolution pace and any migration .
Expense discipline intact: efficiency ratio ~53% while maintaining loan growth and stable noninterest expense levels .
Capital remains strong post-conversion (average equity/assets 22.61%), providing flexibility to manage through margin pressure and credit normalization .
Near-term focus: trajectory of deposit mix and costs, potential margin recovery as the non-recurring debt item rolls off, and stabilization/improvement in asset quality metrics .

BV Financial, Inc. (BVFL)·Q1 2024 Earnings Summary