BV Financial(BVFL) - 2023 Q3 - Quarterly Report

Financial Performance - Net income for the three months ended September 30, 2023, was $3.684 million, compared to$2.612 million for the same period in 2022[285]. - Basic earnings per share for the three months ended September 30, 2023, was $0.35, compared to$0.33 for the same period in 2022[284]. - Interest income rose by $3.1 million, or 36.6$11.7 million for the three months ended September 30, 2023, driven by a $1.8 million increase in loan interest income[318]. - Interest income for the nine months ended September 30, 2023, increased by$7.9 million, or 33.2%, to $31.9 million compared to$24.0 million for the same period in 2022[331]. - Noninterest income totaled $3.1 million for the nine months ended September 30, 2023, a slight decrease from$3.3 million in the same period of 2022[322]. Loan and Deposit Activity - Net loans receivable increased by $39.8 million, or 6.0$698.9 million at September 30, 2023, from $659.1 million at December 31, 2022[301]. - Total deposits decreased by$38.1 million, or 5.6%, to $646.5 million at September 30, 2023, from$684.6 million at December 31, 2022[303]. - Interest-bearing deposits decreased by $14.1 million, or 2.7$503.3 million at September 30, 2023, from $517.4 million at December 31, 2022[303]. - Noninterest bearing deposits decreased by$24.0 million, or 14.4%, to $143.2 million at September 30, 2023, from$167.2 million at December 31, 2022[303]. - The company reported a decrease in total deposits primarily due to a $76.7 million, or 14.3$54.6 million, or 8.5%, to $694.0 million for the three months ended September 30, 2023[318]. Expenses and Taxation - The company recorded total current income tax expense of$1.399 million for the three months ended September 30, 2023, compared to $1.035 million for the same period in 2022[286]. - Income tax expense for the three months ended September 30, 2023, was$1.4 million, with an effective tax rate of 27.5%[324]. - Noninterest expense increased to $14.3 million for the nine months ended September 30, 2023, compared to$13.6 million for the same period in 2022[323]. - For the three months ended September 30, 2023, non-interest expense totaled $5.0 million, an increase from$4.6 million for the same period in 2022, reflecting an increase of 8.7%[335]. - Compensation and benefits expenses rose by 18.1% due to increases in staffing and salary levels[335]. Asset Quality - Non-performing assets decreased to $4.4 million as of September 30, 2023, from$7.9 million at December 31, 2022, with non-performing loans at $3.8 million[305]. - The allowance for credit losses on loans increased to$8.2 million, representing 1.15% of total loans and 213.5% of non-performing loans, compared to $3.8 million (0.57$10.9 million, or 1.4%, to $736.3 million at September 30, 2023, from$747.2 million at December 31, 2022[302]. - The Bank exceeded all regulatory capital requirements as of September 30, 2023, and is categorized as well capitalized[336]. - The company had $178.5 million available under a line of credit with the FHLB of Atlanta as of September 30, 2023[325]. Interest Rates and Deposit Strategy - The company has been increasing interest rates paid on deposits to retain and grow these balances[304]. - Interest expense surged by$4.1 million, or 163.1%, to $6.6 million for the nine months ended September 30, 2023, primarily due to increased rates on deposits[319]. Internal Controls - There have been no changes in the Company's internal controls over financial reporting that materially affected its internal control[338].