BV Financial, Inc. (BVFL)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 diluted EPS was $0.32 and net income was $3.399M, down year over year due to nonrecurring gains in Q2 2023, but up sequentially from Q1 2024 EPS of $0.24 and net income of $2.574M .
• Net interest margin expanded to 4.33% (vs. 3.91% in Q1 2024 and 4.19% in Q2 2023), driven by higher average interest-earning assets and yields that offset higher deposit costs .
• Asset quality improved: non-accrual loans fell to $8.2M from $10.6M at year-end, aided by a $3.0M cash payment on the largest non-accrual that fully paid off in July; NPLs/loans declined to 1.17% from 1.52% in Q1 2024, though still above 0.65% in Q2 2023 .
• Deposits increased to $640.3M from $634.1M at year-end and $639.5M in Q1 2024; liquidity strengthened with cash and equivalents rising to $90.6M .
• No formal quantitative guidance or Q2 earnings call transcript located; near-term stock narrative likely hinges on sustained NIM expansion and confirmed payoff of the largest non-accrual in July .

What Went Well and What Went Wrong

What Went Well

• Net interest income grew to $8.909M (+8.2% YoY; +11.9% QoQ), with NIM up to 4.33% as higher balances and yields on interest-earning assets outweighed higher deposit costs .
• Asset quality improved: non-accrual loans declined by $2.5M versus year-end, and the largest non-accrual ($6.8M) was reduced by a $3.0M cash payment and paid off in July (“During the quarter, our largest loan on non-accrual… reduced by a $3.0 million cash payment. In July, the remaining $3.8 million balance paid off.”) .
• Deposits rose to $640.3M (+$6.2M YTD), and cash/cash equivalents increased by $16.9M, supporting balance sheet liquidity .

What Went Wrong

• EPS declined YoY to $0.32 from $0.49; prior-year quarter benefited from a $678K gain on sale of foreclosed real estate, and noninterest income fell YoY to $596K vs. $1.370M .
• Noninterest expense increased YoY to $4.897M (from $4.544M), driven by compensation/benefits (+8.1%), occupancy (+11.7%), and data processing (+10.0%), plus professional fees tied to public company costs .
• NPLs/loans remained above prior-year levels (1.17% vs. 0.65%), despite improving sequentially; coverage of NPLs rose to 103.88% from 79.16% in Q1 2024, reflecting mix changes and resolutions .

Financial Results

Earnings and Profitability

Margins and Efficiency

Balance Sheet

Asset Quality KPIs

Note: Q2 2023 non-accrual loan dollar amount not explicitly tabulated in the Q2 2023 section of the press release; NPL ratios provided .

Guidance Changes

No formal quantitative guidance was disclosed in the Q1 or Q2 2024 press releases.

Earnings Call Themes & Trends

No Q2 2024 earnings call transcript was located via the document catalog. The narrative below reflects themes evident in Q1/Q2 press releases.

Management Commentary

• “The increase in net interest income was due to higher average balances of interest earning assets and higher yields on these assets offsetting the increase in interest expense due to higher rates paid on deposits.” (Results of Operations discussion) .
• “During the quarter, our largest loan on non-accrual, a $6.8 million investor commercial real estate loan, was reduced by a $3.0 million cash payment. In July, the remaining $3.8 million balance paid off.” (Asset Quality) .
• “Total deposits increased $6.2 million, or 1.0%… Interest-bearing deposits increased $7.2 million… Noninterest bearing deposits decreased $1.0 million.” (Financial Condition) .
• “In the three months ended June 30, 2023, the Company recognized a gain on the sale of foreclosed real estate of $678,000.” (Results of Operations) .
• Q1 context: “This write-off [of $566,000] was the primary contributor to the decrease in net income in the quarter ended March 31, 2024 when compared to the quarter ended March 31, 2023.” .

Q&A Highlights

No Q2 2024 earnings call transcript was found in the document catalog; Q&A highlights and any clarifications from a call are unavailable.

Estimates Context

• Wall Street consensus (S&P Global) for Q2 2024 EPS and revenue was unavailable via our SPGI data access at this time due to request limit errors; therefore, beat/miss versus consensus cannot be determined.
• Without consensus, investors should note the sequential improvements: NIM expansion to 4.33% and net income recovery to $3.399M from $2.574M in Q1 2024, with YoY EPS down due largely to the absence of prior-year nonrecurring gains .

Key Takeaways for Investors

• Sequential earnings recovery with EPS rising to $0.32 and NIM expanding to 4.33% suggests improving core spread dynamics despite elevated deposit costs .
• Asset quality de-risking is a notable catalyst: the largest non-accrual paid down and fully resolved in July; NPLs/loans fell to 1.17% sequentially, improving coverage metrics .
• Liquidity strengthened: cash/equivalents rose to $90.6M and deposits climbed to $640.3M; balance sheet positioned to support earnings stability .
• Operating expense pressure persists (compensation, occupancy, data processing, public company costs); watch for efficiency ratio improvement from 51.53% as asset quality and funding mix normalize .
• Q1’s interest expense headwind from the $566K junior sub debt write-off is nonrecurring; run-rate interest expense profile cleaner in Q2 and beyond .
• With no formal guidance or accessible call transcript, monitoring quarterly press releases for deposit mix, NIM trajectory, and residual credit costs will be key to the near-term trading setup .
• Medium-term, sustaining NIM at or above 4.3% while controlling OpEx and maintaining improved credit quality underpins the thesis for margin-led EPS stabilization .