Zacks Investment Research recently initiated coverage of BV Financial, Inc. (BVFL) with a Neutral recommendation, noting that the community-focused lender presents a balanced mix of opportunities and risks as it navigates an evolving regional banking landscape.Management has underscored its confidence in BV Financial’s long-term outlook with the launch of a second stock repurchase program, covering up to 10% of outstanding shares. This initiative, following its 2023 mutual-to-stock conversion, is expected t ...

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents BV Financial, Inc.'s unaudited consolidated financial statements for Q2 2025, covering balance sheets, income, comprehensive income, equity, and cash flows, with detailed notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$908.3 million** at June 30, 2025, driven by cash reduction for FHLB repayment, while net loans and deposits increased Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $56,323 | $70,500 | -20.1% | | Net loans | $742,414 | $729,238 | +1.8% | | **Total assets** | **$908,327** | **$911,821** | **-0.4%** | | Total deposits | $658,891 | $651,491 | +1.1% | | FHLB borrowings | $0 | $15,000 | -100.0% | | **Total liabilities** | **$710,336** | **$716,322** | **-0.8%** | | **Total stockholders' equity** | **$197,991** | **$195,499** | **+1.3%** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income decreased for both Q2 and six-month periods of 2025, primarily due to increased compensation expenses and a shift to credit loss provisions Income Statement Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $9,156 | $8,909 | $17,799 | $16,872 | | Provision (Recovery) for credit losses | $178 | ($111) | $475 | ($92) | | Total noninterest income | $714 | $596 | $1,243 | $1,174 | | Total noninterest expense | $5,755 | $4,897 | $11,932 | $9,820 | | **Net income** | **$2,861** | **$3,399** | **$4,960** | **$5,973** | | **Diluted earnings per share** | **$0.29** | **$0.32** | **$0.50** | **$0.52** | - Compensation and related benefits expense increased significantly to **$4.0 million** in Q2 2025 from **$3.1 million** in Q2 2024, and to **$8.5 million** for the six months of 2025 from **$6.2 million** in the prior year period[10](index=10&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income was **$2.9 million** for Q2 2025 and **$5.2 million** for the six months, including net income and unrealized gains on securities Comprehensive Income (in thousands) | Component | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $2,861 | $3,399 | $4,960 | $5,973 | | Other comprehensive income | $75 | $119 | $269 | $121 | | **Total comprehensive income** | **$2,936** | **$3,518** | **$5,229** | **$6,094** | [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity increased to **$198.0 million** at June 30, 2025, driven by net income, partially offset by **$5.3 million** in stock repurchases - For the six months ended June 30, 2025, the company repurchased shares for a total cost of **$5.265 million**[17](index=17&type=chunk) - Net income of **$4.960 million** and other comprehensive income of **$269,000** contributed positively to equity, while stock repurchases were the primary offsetting factor[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents decreased by **$14.2 million** for the six months ended June 30, 2025, due to investing and financing activities, despite operating cash flow Net Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,148 | $6,068 | | Net cash (used in) provided by investing activities | ($10,520) | $5,353 | | Net cash (used in) provided by financing activities | ($10,805) | $5,476 | | **Net (decrease) and increase in cash** | **($14,177)** | **$16,897** | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial items, including loan and securities portfolios, credit loss allowances, deposit structure, and regulatory capital - The company's primary business is attracting public deposits to fund various loans, including one-to-four-family real estate, commercial real estate, and construction loans, mainly in the Baltimore metropolitan area and the Eastern Shore of Maryland[24](index=24&type=chunk)[28](index=28&type=chunk) - The Allowance for Credit Losses (ACL) on loans was **$9.2 million** as of June 30, 2025, up from **$8.5 million** at year-end 2024, with the methodology using historical loss rates adjusted for a 12-month GDP forecast[79](index=79&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk) - Total loans increased to **$751.6 million**, with commercial investor real estate loans comprising the largest segment at **43.67%** of the portfolio[79](index=79&type=chunk) - As of June 30, 2025, the Bank exceeded all regulatory capital requirements to be considered 'well capitalized', with a Tier 1 leverage ratio of **19.75%** and a Total Capital ratio of **25.70%**[135](index=135&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operating results, covering balance sheet changes, net interest income, credit losses, noninterest items, and asset quality [Comparison of Financial Condition at June 30, 2025 (unaudited) and December 31, 2024](index=40&type=section&id=Comparison%20of%20Financial%20Condition%20at%20June%2030%2C%202025%20(unaudited)%20and%20December%2031%2C%202024) Total assets decreased to **$908.3 million** due to cash reduction for FHLB repayment, partially offset by increased loans, deposits, and stockholders' equity - Total assets decreased by **0.4%** to **$908.3 million** at June 30, 2025[176](index=176&type=chunk) - Loans receivable increased by **1.9%** to **$751.6 million**, while cash and cash equivalents decreased by **20.1%** to **$56.3 million**[177](index=177&type=chunk)[178](index=178&type=chunk) - Total liabilities decreased by **0.8%** to **$710.3 million**, primarily due to the repayment of FHLB borrowings, while total deposits increased by **1.1%**[180](index=180&type=chunk)[181](index=181&type=chunk) - Stockholders' equity increased by **1.3%** to **$198.0 million**, reflecting net income partially offset by **$4.3 million** in stock repurchases[182](index=182&type=chunk) [Comparison of Operating Results for the Three and Six Months Ended June 30, 2025 and 2024](index=41&type=section&id=Comparison%20of%20Operating%20Results%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Net income decreased for both Q2 and six-month periods of 2025, primarily due to increased credit loss provisions and higher non-interest expenses, despite net interest income growth Net Income and EPS Comparison | Period | Net Income (2025) | Net Income (2024) | Diluted EPS (2025) | Diluted EPS (2024) | | :--- | :--- | :--- | :--- | :--- | | **Three Months** | $2.9M | $3.4M | $0.29 | $0.32 | | **Six Months** | $5.0M | $6.0M | $0.50 | $0.52 | - Net interest income for Q2 2025 increased to **$9.2 million** from **$8.9 million** in Q2 2024, with the net interest margin rising slightly to **4.36%** from **4.33%**[204](index=204&type=chunk) - A provision for credit losses of **$178,000** was recorded in Q2 2025, compared to a recovery of **$111,000** in Q2 2024[206](index=206&type=chunk) - Non-interest expense for Q2 2025 rose to **$5.8 million** from **$4.9 million** in Q2 2024, primarily due to a **$927,000** increase in compensation and benefits, which included **$1.1 million** in costs for the 2024 Equity Incentive Plan[208](index=208&type=chunk) [Asset Quality](index=46&type=section&id=Asset%20Quality) Asset quality slightly deteriorated, with non-performing assets increasing to **$4.5 million**, and the allowance for credit losses rising to **$9.2 million** Asset Quality Metrics | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-performing assets | $4.5 million | $4.2 million | | Non-performing loans | $4.4 million | $4.0 million | | Allowance for credit losses (ACL) | $9.2 million | $8.5 million | | ACL to total loans | 1.22% | 1.15% | | ACL to non-performing loans | 208.6% | 212.5% | [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity and capital, with primary sources including deposits and FHLB borrowing capacity, exceeding all regulatory capital requirements - Primary sources of funds are deposits, loan and security payments, and FHLB borrowings[213](index=213&type=chunk) - At June 30, 2025, the company had a **$165.5 million** line of credit with the FHLB and a **$20.0 million** short-term unsecured facility from a correspondent bank[213](index=213&type=chunk) - Uninsured deposits were **$171.5 million** (**24.9%** of total deposits), of which **$53.2 million** were secured by collateral or FHLB letters of credit[215](index=215&type=chunk) - The Bank was categorized as **'well capitalized'** at June 30, 2025, exceeding all regulatory capital requirements[216](index=216&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the Company qualifies as a smaller reporting company - The company, as a smaller reporting company, is not required to provide these disclosures[217](index=217&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[218](index=218&type=chunk) - No material changes were identified in the company's internal controls over financial reporting during the quarter ended June 30, 2025[219](index=219&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal actions, with management expecting no material adverse effect on financial condition or results - The company is subject to routine legal actions but does not expect them to have a material financial impact[222](index=222&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - Risk factors remain consistent with those disclosed in the 2024 Annual Report on Form 10-K[223](index=223&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity) The company actively repurchases stock, completing one program in January 2025 and announcing a new 10% repurchase program in April 2025 - On April 4, 2025, the Company announced a new stock repurchase program for up to **10%** of its outstanding common stock (approximately **1,059,404 shares**)[224](index=224&type=chunk) Share Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2025 | 40,700 | $15.33 | | May 2025 | 116,300 | $15.85 | | June 2025 | 120,080 | $14.73 | | **Total** | **277,080** | **$15.29** | [Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable - There were no defaults upon senior securities[227](index=227&type=chunk) [Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - This item is not applicable to the company[228](index=228&type=chunk) [Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during Q2 2025 - No directors or executive officers adopted or terminated a Rule 10b5-1 trading plan during the quarter[229](index=229&type=chunk) [Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - Exhibits include CEO and CFO certifications (302 and 906) and Inline XBRL financial data[231](index=231&type=chunk)

BV FINANCIAL, INC. ANNOUNCES FINANCIAL RESULTS Exhibit 99.1 Contact: Michael J. Dee Chief Financial Officer (410) 477- 5000 FINANCIAL CONDITION DISCUSSION Total Assets. Total assets were $908.3 million at June 30, 2025, a decrease of $3.5 million, or -0.4%, from $911.8 million at December 31, 2024. The decrease was due primarily to the Company utilizing cash on-hand to repay $15.0 million in borrowings from the FHLB. • Return on average assets and return on average equity for the three months ended June 30, ...

Financial Position - Total assets increased by $10.1 million, or 1.1%, to $921.9 million at March 31, 2025, from $911.8 million at December 31, 2024[168]. - Total liabilities increased by $7.6 million, or 1.1%, to $723.9 million at March 31, 2025, primarily due to a $6.4 million increase in total deposits[173]. - Stockholders' equity increased by $2.6 million, or 1.3%, to $198.1 million at March 31, 2025, primarily due to $2.1 million net income[175]. - Cash and cash equivalents increased by $320,000, or 0.5%, to $70.8 million at March 31, 2025[169]. - At March 31, 2025, the company had a $165.6 million line of credit with the FHLB of Atlanta, with $15.0 million in advances outstanding against this line[195]. - As of March 31, 2025, the Company had $50.0 million in brokered deposits, an increase from $10.0 million at March 31, 2024[197]. - The Company had $57.0 million in municipal deposits, representing 8.7% of total deposits as of March 31, 2025[197]. - Uninsured deposits totaled $179.1 million, or 26.0% of total deposits, with $50.1 million secured by collateral or letters of credit[197]. - The Bank exceeded all regulatory capital requirements and was categorized as well capitalized as of March 31, 2025[198]. Loan and Credit Quality - Net loans receivable rose by $12.0 million, or 1.65%, to $741.3 million at March 31, 2025, driven by increases in commercial loans and investor commercial real estate loans[170]. - The allowance for credit losses increased by $366,000 to $8.9 million at March 31, 2025, with a ratio of 1.18% to total loans[171]. - The ratio of allowance for credit losses to non-performing loans was 183.87% at March 31, 2025, down from 212.51% at December 31, 2024[171]. - Provision for credit losses was $297,000 for the three months ended March 31, 2025, compared to $18,000 in 2024, with an allowance for credit losses of $8.9 million[190]. - Non-performing assets totaled $5.0 million at March 31, 2025, compared to $4.2 million at December 31, 2024, with an increase in non-performing loans[194]. Income Statement Highlights - Net income for the three months ended March 31, 2025, was $2.1 million, or $0.21 per diluted share, compared to $2.6 million, or $0.24 per diluted share, for the same period in 2024[183]. - Interest income increased by $877,000, or 8.0%, to $11.9 million for the three months ended March 31, 2025, from $11.0 million in 2024, primarily due to a $959,000 increase in loan interest income[184]. - Net interest income was $8.6 million for the three months ended March 31, 2025, compared to $8.0 million in the same period in 2024, with a net interest margin of 4.12% compared to 3.91%[189]. - Non-interest income totaled $530,000 for the three months ended March 31, 2025, down from $578,000 in the same period in 2024[191]. - Non-interest expense increased to $6.2 million for the three months ended March 31, 2025, from $4.9 million in 2024, with compensation and benefits expenses rising by $1.4 million, or 44.6%[192]. - The effective tax rate for the three months ended March 31, 2025, was 22.2%, down from 28.5% in 2024, due to an accrual adjustment[193]. Asset Management - Securities available for sale decreased by $2.1 million, or 5.6%, to $35.2 million at March 31, 2025, due to new purchases not fully replacing maturities[172]. - The average balance of loans increased by $31.3 million, or 4.4%, to $739.7 million for the three months ended March 31, 2025, compared to $708.4 million in 2024[184]. - The company performed its 2024 goodwill impairment qualitative assessment and determined its goodwill was not considered impaired[166].

Financial Performance - BV Financial, Inc. reported net income of $2.1 million or $0.21 per diluted share for Q1 2025, a decrease from $2.6 million or $0.24 per diluted share in Q1 2024[2]. - Net income for Q1 2025 was $2,099,000, down 18.43% from $2,574,000 in Q1 2024[26]. - Basic earnings per share decreased to $0.21 in Q1 2025 from $0.24 in Q1 2024, a decline of 12.50%[26]. Asset and Loan Growth - Total assets increased by $10.1 million, or 1.11%, to $921.9 million at March 31, 2025, primarily due to a $12.0 million increase in loans receivable[5]. - Net loans increased by $12.0 million, or 1.65%, to $741.3 million at March 31, 2025, driven by growth in commercial and industrial loans[6]. - The average balance of loans increased to $739,666,000 in Q1 2025, up from $708,367,000 in Q1 2024, reflecting a growth of 4.66%[28]. - Total assets grew to $915,713,000 in Q1 2025, compared to $883,368,000 in Q1 2024, an increase of 3.65%[28]. Deposits and Equity - Total deposits rose by $6.4 million, or 0.98%, to $657.9 million at March 31, 2025, with noninterest-bearing deposits increasing by $6.5 million, or 5.0%[11]. - Stockholders' equity increased by $2.6 million, or 1.3%, to $198.1 million at March 31, 2025, mainly due to net income[12]. Interest and Noninterest Income - Total interest income for Q1 2025 was $11,881,000, an increase of 7.97% from $11,004,000 in Q1 2024[26]. - Net interest income after provision for credit losses was $8,346,000, compared to $7,945,000 in the same period last year, reflecting a 5.04% increase[26]. - Noninterest income decreased to $530,000 in Q1 2025 from $578,000 in Q1 2024, a decline of 8.30%[26]. Expenses and Credit Losses - Noninterest expense increased to $6.2 million in Q1 2025, up from $4.9 million in Q1 2024, primarily due to a 44.6% rise in compensation and benefits expenses[16]. - Total noninterest expense rose to $6,178,000, up 25.54% from $4,923,000 in Q1 2024[26]. - The provision for credit losses was $297,000 in Q1 2025, compared to $18,000 in Q1 2024, reflecting a more cautious approach to credit risk[6]. - The allowance for credit losses on loans increased to $9,190,000 from $8,871,000 year-over-year[30]. Asset Quality and Tax Rate - Non-performing assets totaled $5.0 million at March 31, 2025, an increase from $4.2 million at December 31, 2024, indicating a slight deterioration in asset quality[13]. - The effective tax rate decreased to 22.2% in Q1 2025 from 28.5% in Q1 2024, attributed to an accrual adjustment made in the current quarter[17]. Interest Margin - The net interest margin improved to 4.12% in Q1 2025 from 3.91% in Q1 2024, indicating better efficiency in earning interest[14]. - The net interest margin improved to 4.12% in Q1 2025 from 3.91% in Q1 2024[28].

Loan Portfolio - As of December 31, 2024, commercial real estate loans totaled $411.3 million, representing 55.8% of the total loan portfolio[186]. - The non-owner occupied commercial loan portfolio amounted to $328.7 million, or 44.6% of the total loan portfolio[186]. - At December 31, 2024, $241.7 million, or 32.8% of the loan portfolio, was secured by one- to four-family real estate loans[188]. - Total loans increased to $737.76 million as of December 31, 2024, up from $704.80 million in 2023, representing a growth of 4.65%[428]. - Real estate loans accounted for 94.20% of total loans in 2024, slightly down from 94.30% in 2023[428]. - Commercial investor loans rose to $328.68 million, making up 44.56% of real estate loans, compared to 40.76% in 2023[428]. - The total real estate loans reached $694,892,000 in 2024, up from $664,564,000 in 2023, indicating a year-over-year increase of about 4.56%[446]. - Total one to four family owner-occupied loans amounted to $141,867 thousand, with a pass rate of 24,477 thousand[439]. - Total one to four family non-owner occupied loans reached $99,824 thousand, with a pass rate of 5,483 thousand[439]. - Total commercial owner-occupied loans were $82,614 thousand, with a pass rate of 4,433 thousand[439]. - Total commercial investor loans stood at $328,680 thousand, with a pass rate of 41,332 thousand[439]. - Total construction and land loans amounted to $30,578 thousand, with a pass rate of 26,399 thousand[439]. - Total farm loans reached $11,329 thousand, with a pass rate of 315 thousand[439]. - Total marine and other consumer loans were $16,772 thousand, with a pass rate of 2,236 thousand[439]. - Total guaranteed by U.S. Government loans amounted to $2,902 thousand, with a pass rate of 20 thousand[439]. - Total commercial loans reached $23,194 thousand, with a pass rate of 5,847 thousand[439]. - Total loans as of December 31, 2024, amounted to $737,760 thousand, with pass loans at $730,323 thousand, representing a slight increase from $704,802 thousand in 2023[440]. - The total number of loans classified as substandard decreased from $18,991 thousand in 2023 to $7,437 thousand in 2024, reflecting a reduction of approximately 61%[440]. - The company maintained a strong pass loan ratio, with pass loans constituting approximately 99.0% of total loans as of December 31, 2024[440]. Credit Quality - At December 31, 2024, the allowance for credit losses was 1.15% of total loans and 212.55% of non-performing loans[193]. - A significant portion of loans originated by the investment real estate group are secured by collateral located outside of Maryland, which may lead to additional provisions or charge-offs[190]. - The company faces risks related to economic conditions, including potential increases in non-performing loans due to adverse local economic factors[199]. - The allowance for credit losses decreased to $8.52 million in 2024 from $8.55 million in 2023, indicating a slight improvement in credit quality[435]. - The company recorded a recovery of provision for credit losses of $347,000 in 2024, compared to a provision of $203,000 in the previous year[437]. - One to four family owner-occupied loans saw an increase in allowance for credit losses to $1.86 million in 2024 from $1.73 million in 2023[435]. - Non-accrual loans totaled $4,010,000 as of December 31, 2024, compared to $10,554,000 in 2023, reflecting a significant reduction of approximately 62%[448]. - The total past due loans (30-89 days) amounted to $6,489,000 in 2024, compared to $14,019,000 in 2023, indicating a decrease of about 53.76%[448]. - The company’s allowance for credit losses on held-to-maturity debt securities decreased from $6,000 in 2023 to $4,000 in 2024, indicating improved credit quality[427]. Financial Performance - Net income for the year ended December 31, 2024, was $11,723 thousand, a decrease of 14.5% compared to $13,707 thousand in 2023[353]. - Total interest income rose to $46,682 thousand in 2024, an increase of 7.2% from $43,419 thousand in 2023[353]. - Net interest income after provision for credit losses was $35,390 thousand for 2024, up from $34,274 thousand in 2023, reflecting a growth of 3.3%[353]. - Noninterest expense increased to $21,498 thousand in 2024, up from $19,409 thousand in 2023, indicating a rise of 10.7%[353]. - Basic earnings per share decreased to $1.10 in 2024 from $1.47 in 2023, a decline of 25.2%[353]. - Retained earnings increased to $109,495 thousand as of December 31, 2024, compared to $97,772 thousand in 2023, reflecting a growth of 12%[358]. - Other comprehensive income for 2024 was $337 thousand, down from $383 thousand in 2023, a decrease of 12%[355]. - Total stockholders' equity decreased to $195,499 thousand in 2024 from $199,065 thousand in 2023, a decline of 1.8%[350]. - Net cash provided by operating activities increased to $16,063,000 in 2024, compared to $15,194,000 in 2023, reflecting a growth of 5.7%[361]. - The company reported a net cash used in investing activities of $32,497,000 in 2024, slightly improved from $35,173,000 in 2023[361]. - The company’s cash and cash equivalents at the end of the period were $70,500,000, down from $73,742,000 in 2023, marking a decrease of 4.5%[361]. - Interest paid increased to $11,342,000 in 2024 from $9,190,000 in 2023, representing a rise of 23.4%[361]. Regulatory and Economic Environment - The company is vulnerable to a downturn in the local economy and real estate markets, particularly in Baltimore City and surrounding counties[192]. - Inflation has remained elevated through 2024, impacting the cost of goods and services and potentially affecting borrowers' ability to repay loans[202]. - Changes in interest rates could reduce profits and asset values, with the company being asset sensitive, which may affect net interest margins in a falling rate environment[195]. - The fiscal and monetary policies of the federal government could adversely affect the Company's financial condition and results of operations[214]. - The Company is subject to extensive regulation, which may increase operational costs and limit business opportunities[212]. - Federal regulations establish minimum capital requirements, including a common equity Tier 1 capital ratio of 4.5% and a total capital ratio of 8%[217]. - The Company faces intense competition in the banking sector, which may limit growth and profitability[225]. Cybersecurity and Operational Risks - Operational risks include reliance on technology, with potential vulnerabilities to security breaches and system failures[226]. - The company continues to face heightened risks related to cyber-attacks and information security breaches due to evolving threats and an expanded geographic footprint[228]. - The Board of Directors actively monitors cybersecurity risk tolerance and receives annual training and reports on cybersecurity issues[230]. - The company has outsourced critical operations to third-party service providers, which exposes it to risks if these vendors fail to perform as per contractual agreements[232]. Capital and Stockholder Information - The Company had $15.0 million of outstanding advances from the Federal Home Loan Bank and $50.0 million in brokered deposits as of December 31, 2024[207]. - Significant deposit withdrawals could materially reduce liquidity, potentially requiring the Company to replace such deposits with higher-cost borrowings[208]. - The Company issued $35.0 million in Fixed-to-Floating Rate Subordinated Notes due 2030, with a fixed interest rate of 4.875% for the first five years[465]. - The Company recognized $667,000 in compensation expense related to stock options granted during the year ended December 31, 2024, compared to $0 in 2023[478]. - The intrinsic value of stock options outstanding as of December 31, 2024, was $2,879,696, reflecting a significant increase from $474,677 in 2023[478]. - The Company granted 343,562 shares of restricted stock in 2024, resulting in a compensation expense of $986,000, compared to $255,000 for 18,784 shares in 2023[480]. - The accrued liabilities for executive retirement agreements were $2.2 million in 2024, slightly down from $2.3 million in 2023[473]. - As of December 31, 2024, the future compensation expense associated with restricted stock was $4.2 million, compared to $151,150 as of December 31, 2023[481].

Financial Performance - Net income for the year ended December 31, 2024, was $11.7 million, or $1.10 per diluted share, a decrease from $13.7 million, or $1.47 per diluted share for 2023[1] - Adjusted net income for the year remained stable at $12.9 million for both 2024 and 2023, while for the fourth quarter, it decreased to $2.7 million from $3.0 million[2] - Noninterest income for the year fell to $2.5 million from $3.8 million in 2023, impacted by the absence of significant gains from asset sales[17] - Noninterest expense for the year increased to $21.5 million, up from $19.4 million in 2023, with compensation and benefits rising by 14.3% due to salary increases and equity awards[19] - The company reported a net income (GAAP) of $11,723 thousand for the year ended December 31, 2024, down from $13,707 thousand in 2023, a decrease of 14.5%[37] - Non-GAAP adjusted net income for the year ended December 31, 2024, was $12,956 thousand, slightly up from $12,897 thousand in 2023, indicating stable operational performance[37] Asset and Liability Management - Total assets increased by $26.5 million, or 3.00%, to $911.8 million at December 31, 2024, primarily due to a $33.0 million increase in net loans[4] - Total assets as of December 31, 2024, were $890,458 thousand, a marginal increase from $887,232 thousand in 2023[32] - The company’s total liabilities decreased to $687,334 thousand in 2024 from $749,260 thousand in 2023, showing improved financial leverage[32] Loan and Deposit Growth - Net loans receivable rose by $33.0 million, or 4.74%, to $729.2 million at December 31, 2024, driven by increases in various loan categories[6] - Total deposits increased by $17.4 million, or 2.74%, to $651.5 million at December 31, 2024, with interest-bearing deposits rising by $36.3 million, or 7.5%[9] - Total deposits increased to $651,491 thousand in 2024, up from $634,120 thousand in 2023, an increase of 2.8%[26] Interest Income and Margin - Net interest income for the year was $35.2 million, an increase from $34.2 million in 2023, with a net interest margin of 4.27% compared to 4.23%[15] - Total interest income for the year ended December 31, 2024, was $46,682 thousand, up 7.2% from $43,419 thousand in 2023[28] - The net interest margin improved to 4.27% in 2024 from 4.23% in 2023, indicating a positive trend in interest income generation[32] - The average yield on loans increased to 5.81% in 2024 from 5.52% in 2023, reflecting better pricing on loan products[32] Credit Quality and Risk Management - Non-performing assets decreased to $4.2 million at December 31, 2024, down from $10.7 million a year earlier, reflecting improved asset quality[12] - The allowance for credit losses on loans at the end of 2024 was $8,522 thousand, up from $8,001 thousand at the beginning of the year, reflecting a proactive approach to credit risk management[34] - The provision for credit losses was $604 thousand for the three months ended December 31, 2024, compared to $435 thousand in 2023, indicating a rise of 38.8%[28] - The total provision for credit losses for the year was $604 thousand, compared to a recovery of $203 thousand in 2023, indicating a shift in credit quality outlook[34]

Financial Position - Total assets increased by $7.4 million, or 0.8%, to $892.7 million at September 30, 2024, from $885.3 million at December 31, 2023[155] - Total liabilities decreased by $3.2 million, or 0.5%, to $683.0 million at September 30, 2024, primarily due to a decrease in borrowings[155] - Stockholders' equity increased by $10.6 million, or 5.4%, to $209.7 million at September 30, 2024, primarily due to net income of $9.8 million[155] - Total assets as of September 30, 2023, amounted to $891,397, compared to $932,111 in the previous period[158] - Total liabilities were reported at $683,806, while equity stood at $207,591[158] Cash and Deposits - Cash and cash equivalents rose by $20.3 million, or 27.7%, to $93.8 million at September 30, 2024, primarily due to decreases in loans and other non-interest earning assets[155] - Total deposits increased by $193,000, or 0.03%, to $634.3 million at September 30, 2024, with interest-bearing deposits rising by $2.9 million, or 0.6%[155] - Municipal deposits totaled $57.7 million, representing 9.1% of total deposits as of September 30, 2024[169] - Uninsured deposits amounted to $204.6 million, or 30.1% of total deposits, with $51.6 million secured using pledged collateral or letters of credit[169] - The company had $10.0 million in brokered deposits as of September 30, 2024, compared to no brokered deposits at September 30, 2023[169] Loans and Credit - Loans receivable decreased by $11.6 million, or 1.6%, to $693.2 million at September 30, 2024, with significant decreases in one- to four-family real estate loans and owner-occupied commercial real estate loans[155] - The allowance for credit losses decreased by $553,000 to $8.0 million at September 30, 2024, resulting in a ratio of allowance for credit losses to total loans of 1.15%[155] - The ratio of allowance for credit losses to non-performing loans was 201.60% at September 30, 2024, compared to 81.05% at December 31, 2023[155] - The allowance for credit losses was $8.0 million at September 30, 2024, representing 1.15% of total loans, unchanged from the previous year[167] - Non-performing assets decreased to $4.1 million at September 30, 2024, down from $10.7 million at December 31, 2023[168] Income and Expenses - Net interest income for the period was $9,303, reflecting an increase compared to $8,877 in the previous period[158] - Net interest income for Q3 2024 was $9.3 million, up from $8.9 million in Q3 2023, with a net interest margin increase to 4.49% from 4.07%[167] - Interest income increased by $435,000, or 3.7%, to $12.1 million in Q3 2024, driven by a $759,000 increase in loan interest income, which rose by 7.8%[165] - Non-interest income for Q3 2024 totaled $696,000, down from $882,000 in Q3 2023, primarily due to a lack of gains from asset sales[168] - Non-interest expense increased to $5.5 million in Q3 2024 from $5.0 million in Q3 2023, with compensation and benefits rising by 10.9%[168] Asset Management - Securities available for sale increased by $4.4 million, or 12.6%, to $39.2 million at September 30, 2024, due to purchases for local government deposits[155] - The average yield on securities available-for-sale was 3.72%, with total securities held at $34,569[162] - Total interest-earning assets for the three months ended September 30, 2023, were $822,630, with an average yield of 5.86%[158] - Total interest-earning assets decreased by $407,000, or 1.4%, to $2.422 billion in Q3 2024 compared to $2.829 billion in Q3 2023[164] Regulatory Compliance - The company exceeded all regulatory capital requirements and was categorized as well capitalized as of September 30, 2024[169] - The company performed its 2024 goodwill impairment qualitative assessment and determined that goodwill was not considered impaired[153]

Financial Position - Total assets increased by $11.9 million, or 1.4%, to $897.2 million at June 30, 2024, from $885.3 million at December 31, 2023[148] - Total liabilities increased by $5.5 million, or 0.8%, to $691.7 million at June 30, 2024, primarily due to a $6.2 million increase in deposits[151] - Stockholders' equity increased by $6.4 million, or 3.2%, to $205.5 million at June 30, 2024, primarily due to net income of $7.0 million[152] - Total assets rose to $891,857 thousand in 2024, up from $876,605 thousand in 2023, marking a growth of 1.4%[154] - Equity increased to $202,853 thousand in 2024, compared to $102,366 thousand in 2023, indicating significant growth in shareholder value[154] Cash and Deposits - Cash and cash equivalents rose by $16.9 million, or 22.9%, to $90.6 million at June 30, 2024, primarily due to increased deposits and lower loan originations[148] - Total deposits increased by $6.2 million, or 1.0%, to $640.3 million at June 30, 2024, with interest-bearing deposits rising by $7.2 million, or 1.5%[152] - The company replaced $10.0 million in retail certificates of deposit with brokered deposits at a lower cost during the first quarter of 2024[152] - The company had $10.0 million in brokered deposits at June 30, 2024, compared to none at June 30, 2023[178] - The company had $57.4 million in municipal deposits at June 30, 2024, representing 9.0% of total deposits[178] - Uninsured deposits totaled $198.3 million, or 29.0% of total deposits, with $50.6 million secured using pledged collateral or letters of credit issued by FHLB[178] Loans and Credit Quality - Loans receivable decreased by $2.4 million, or 0.34%, to $702.4 million at June 30, 2024, with significant decreases in one- to four-family real estate loans and owner-occupied commercial real estate loans[149] - The allowance for credit losses remained relatively unchanged at $8.5 million, with a ratio of allowance for credit losses to total loans at 1.22% at June 30, 2024, compared to 1.16% at June 30, 2023[150] - Non-performing assets decreased to $8.4 million at June 30, 2024, down from $10.9 million at December 31, 2023, reflecting improved asset quality[175] Income and Expenses - Net income for the three months ended June 30, 2024 was $3.4 million, or $0.32 per diluted share, a decrease from $3.9 million, or $0.49 per diluted share, for the same period in 2023[162] - Interest income increased by $1.1 million, or 10.2%, to $11.6 million for the three months ended June 30, 2024, primarily due to increases in interest income on loans and cash equivalents[163] - Interest income on loans rose by $850,000, or 9.1%, to $10.2 million for the three months ended June 30, 2024, driven by a 3.9% increase in the average balance of loans[163] - Interest expense increased by $406,000, or 17.7%, to $2.7 million for the three months ended June 30, 2024, mainly due to a $976,000 increase in interest expense on deposits[165] - Non-interest income totaled $596,000 for the three months ended June 30, 2024, a significant decrease from $1.4 million for the same period in 2023 due to the absence of gains from the sale of foreclosed real estate[170] - Non-interest expense increased to $4.9 million for the three months ended June 30, 2024, up from $4.5 million in the same period in 2023, driven by higher compensation and benefits[171] Interest and Margins - Net interest income for the three months ended June 30, 2024, was $8,909 thousand, compared to $8,237 thousand for the same period in 2023, representing an increase of 8.2%[154] - The net interest margin improved to 4.33% in 2024 from 4.19% in 2023, indicating enhanced profitability on interest-earning assets[154] - The company reported a net interest rate spread of 3.61% for the three months ended June 30, 2024, compared to 3.77% in 2023[154] Regulatory Compliance - The bank exceeded all regulatory capital requirements and was categorized as well capitalized as of June 30, 2024[179] - As of June 30, 2024, the company had $162.5 million available under a line of credit with the FHLB of Atlanta, with an additional borrowing availability of $137.5 million[176] Securities - Securities available for sale decreased by $1.9 million, or 5.5%, to $32.9 million at June 30, 2024, due to new purchases not fully replacing maturities[150]

Financial Position - Cash and cash equivalents increased by $16.9 million, or 23.0%, to $90.4 million at June 30, 2024, from $73.5 million at December 31, 2023[1] - Loans receivable decreased by $2.4 million, or 0.3%, to $702.4 million at June 30, 2024, from $704.8 million at December 31, 2023[2] - Total liabilities increased by $5.5 million, or 0.8%, to $691.7 million at June 30, 2024, from $686.2 million at December 31, 2023[4] - Total deposits increased by $6.2 million, or 1.0%, to $640.3 million at June 30, 2024, from $634.1 million at December 31, 2023[5] - Stockholders' equity increased by $6.4 million, or 3.2%, to $205.5 million at June 30, 2024, from $199.1 million at December 31, 2023[6] - Total assets increased by $11.9 million, or 1.4%, to $897.2 million at June 30, 2024, from $885.3 million at December 31, 2023[14] - Total assets reached $891,857 thousand as of June 30, 2024, compared to $876,605 thousand at the end of June 30, 2023, marking a year-over-year increase of 1.4%[28] - Total liabilities decreased to $689,004 thousand as of June 30, 2024, from $774,239 thousand a year earlier, showing a reduction of 11%[28] - The total equity increased to $202,853 thousand as of June 30, 2024, compared to $102,366 thousand a year earlier, reflecting strong capital growth[28] Income and Earnings - Net income for the three months ended June 30, 2024, was $3.4 million, or $0.32 per diluted share, compared to $3.9 million, or $0.49 per diluted share, for the same period in 2023[7] - Net income decreased to $3,399 thousand for the three months ended June 30, 2024, down from $3,899 thousand in the same period in 2023[27] - Basic earnings per share decreased to $0.32 for the three months ended June 30, 2024, compared to $0.49 in the same period last year[27] Interest Income and Expenses - Net interest income for the six months ended June 30, 2024, was $16.9 million, compared to $16.4 million for the same period in 2023[15] - Net interest income increased to $8,909 thousand for the three months ended June 30, 2024, from $8,237 thousand in the same period last year[27] - Total interest income increased to $11,617 thousand for the three months ended June 30, 2024, from $10,539 thousand in the same period last year[27] - Total noninterest expense increased to $4,897 thousand for the three months ended June 30, 2024, from $4,544 thousand in the same period last year[27] - The net interest margin improved to 4.33% for the quarter ended June 30, 2024, compared to 4.19% for the same quarter in 2023, indicating a positive trend in interest income generation[28] - The average yield on loans for the quarter ended June 30, 2024, was 5.79%, up from 5.51% in the same quarter of 2023, reflecting improved loan pricing[28] - The net interest rate spread for the quarter ended June 30, 2024, was 3.61%, compared to 3.77% for the same quarter in 2023, indicating a slight compression in margins[28] Loan Performance - Non-accrual loans decreased by $2.5 million, or 22.0%, to $8.2 million at June 30, 2024, from $10.6 million at December 31, 2023[13] - Non-performing loans as a percentage of total loans rose to 1.17% for the three months ended June 30, 2024, compared to 0.65% in the prior year[25] - Allowance for credit losses as a percentage of total loans was 1.22% for the three months ended June 30, 2024, consistent with the prior year[25] - The allowance for credit losses on loans at the end of June 30, 2024, was $8,547 thousand, slightly down from $8,554 thousand year-to-date[31] - The provision for credit losses for loans was $(25) thousand for the quarter ended June 30, 2024, compared to $(159) thousand year-to-date, indicating a decrease in expected credit losses[31] Noninterest Income - Noninterest income totaled approximately $600,000 for the three months ended June 30, 2024, compared to $1.4 million for the same period in 2023[21] - Total noninterest income for the three months ended June 30, 2024, was $1,370 thousand, compared to $1,174 thousand in the same period last year[27]