BV Financial Inc.

11/13/2026 | Press release | Distributed by Public on 11/13/2026 11:13

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

General

Management's discussion and analysis is intended to enhance your understanding of our financial condition and results of operations. The financial information in this section is derived from the accompanying financial statements. You should read the financial information in this section in conjunction with the business and financial information contained in this Quarterly Report on Form 10-Q and in the Company's 2025 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 27, 2026.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which can be identified by the use of words such as "estimate," "project," "believe," "intend," "anticipate," "assume," "plan," "seek," "expect," "will," "may," "should," "indicate," "would," "contemplate," "continue," "target" and words of similar meaning. These forward-looking statements include, but are not limited to:

•
statements of our goals, financial condition and performance, intentions and expectations;
•
statements regarding our business plans, prospects, growth and operating strategies;
•
statements regarding the quality of our loan and investment portfolios; and
•
estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not undertake any obligation to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

•
general economic conditions, either nationally or in our market areas, that are worse than expected, including as a result of unemployment levels and labor shortages, and any potential recession or slowed economic growth;
•
changes in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the ACL;
•
changes in the economic assumptions and methodology used to calculate the ACL;
•
our ability to access cost-effective funding;
•
changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio;
•
fluctuations in real estate values and both residential and commercial real estate market conditions;
•
our continued ability to originate loans outside of our market area;
•
our ability to update and implement our business strategies;
•
competition among depository and other financial institutions;
•
inflation and changes in the interest rate environment and the shape of the yield curve that reduce our margins and yields, the fair value of financial instruments or our level of loan originations or prepayments on loans we have made and make;
•
adverse changes in the securities markets;

BV FINANCIAL, INC. AND SUBSIDIARIES

•
changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements and insurance premiums;
•
the imposition of tariffs or other domestic or international governmental policies, trade restrictions and retaliatory measures impacting our borrowers and the broader economy;
•
the impact of a potential government shutdown, debt ceiling impasses or fiscal uncertainty;
•
the current or anticipated impact of military conflict, terrorism or other geopolitical events;
•
changes in the quality or composition of our loan or investment portfolios;
•
technological changes that may be more difficult or expensive than expected;
•
risks associated with cybersecurity threats, data breaches, ransomware attacks, or other failures in our operational or security systems and infrastructure, including the risks arising from our dependence on third-party service providers and vendors;
•
the failure to maintain current technologies and/or successfully implement future information technology enhancements and the operational risks associated with the adoption of artificial intelligence and other emerging technologies;
•
the inability of third-party providers to perform as expected;
•
our ability to manage market risk, credit risk and operational risk in the current economic environment;
•
our ability to enter new markets successfully and capitalize on growth opportunities;
•
our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire, and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto;
•
changes in investor sentiment and consumer spending, borrowing and savings habits;
•
changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;
•
our ability to attract and retain key employees;
•
the compensation expense associated with equity allocated or awarded to our employees; and
•
changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Except as required by law or regulation, we do not undertake, and we specifically disclaim any obligation to release publicly the results of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Critical Accounting Policies and Use of Critical Accounting Estimates

Our accounting policies are integral to understanding the results reported. We consider accounting policies that require management to exercise significant judgment or discretion or to make significant assumptions that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies.

Allowance for Credit Losses

The ACL is an estimate of the expected credit losses for loans held for investment and for off-balance sheet exposures. ASC 326, "Financial Instruments-Credit Losses," requires an immediate recognition of the credit losses expected to occur over the lifetime of a financial asset whether originated or purchased. Charge-offs are recorded to the ACL when management believes a loan is uncollectible. Subsequent recoveries, if any, are credited to the ACL. Management believes the ACL is maintained in accordance with GAAP and in compliance with appropriate regulatory guidelines. The ACL includes

BV FINANCIAL, INC. AND SUBSIDIARIES

quantitative estimates of losses for collectively and individually evaluated loans. The quantitative estimate for collectively evaluated loans (other than investor commercial real estate loans) is determined using the average charge-off method that utilizes historical losses for all Maryland banks with assets less than $1 billion beginning in March 2000. The investor commercial real estate portfolio utilizes the national loss history for banks with assets less than $1 billion over the same time period. Investor commercial real estate loans are made nationwide, therefore, management deems it appropriate to utilize national loss rates when evaluating this portfolio. Adjustments are made to the historical loss factors under each scenario for economic conditions, portfolio concentrations, collateral values, the level and trend of delinquent and non-accrual loans and internal changes in staffing, loan policies and monitoring of the portfolio. Loans are selected for individual evaluation primarily based on their payment status and whether the loan has been placed on non-accrual status. Loans on non-accrual status include all loans greater than 90 days delinquent and other loans with weaknesses sufficient for management to place these loans on non-accrual status. The ACL is measured on a collective basis when similar risk factors exist as determined by internal loan coding and assignment to a portfolio segment. The Company utilizes reasonable and supportable forecasts of future economic conditions when estimating the ACL on loans. The model's calculation uses an adjustment for a 12-month forecast period utilizing the most recent 12-month economic forecast from the Federal Reserve Board for national gross domestic product ("GDP") and the national unemployment rate. The model compares the average history of loss rates described above to the forecasted GDP and unemployment to determine the necessity and amount of any forward-looking adjustment. The establishment of the ACL is significantly affected by management's judgment and by economic and other uncertainties, and different amounts may be reported under different conditions or assumptions. The Federal Deposit Insurance Corporation and the Maryland Office of the Commissioner of Financial Regulation, as an integral part of their examination process, periodically review the ACL for reasonableness and, as a result of such reviews, we may be required to increase our ACL or recognize loan charge-offs. The calculation of ACL excludes accrued interest receivable balances because these balances are reversed in a timely manner against previously recognized interest income when a loan is placed on non-accrual.

Goodwill

The excess purchase price over the fair value of net assets from acquisitions, or goodwill, is evaluated for impairment at least annually and on an interim basis if an event or circumstance indicates it is likely impairment has occurred. Goodwill impairment is determined by comparing the fair value of a reporting unit to its carrying amount. In any given year, the Company may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is in excess of its carrying value. If it is not more likely than not that the fair value of the reporting unit is in excess of the carrying value, or if the Company elects to bypass the qualitative assessment, a quantitative impairment test is performed. In performing a quantitative test for impairment, the fair value of net assets is estimated based on analyses of the Company's market value, discounted cash flows, and peer values. The determination of goodwill impairment is sensitive to market conditions and other key assumptions used in determining or allocating fair value. Variability in the market and changes in assumptions or subjective measurements used to estimate fair value are reasonably possible and may have a material impact on our consolidated financial statements or results of operations. Our annual goodwill impairment test is performed each year as of September 30. The Company performed its 2026 goodwill impairment qualitative assessment and determined its goodwill was not considered impaired.

Deferred Income Taxes

At September 30, 2026, our net deferred tax asset totaled $7.5 million. In accordance with ASC Topic 740 "Income Taxes," we use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. If currently available information raises doubt as to the realization of the deferred tax asset, a valuation allowance is established. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We exercise significant judgment in evaluating the amount and timing of recognition of the resulting deferred tax asset and liabilities. These judgments require us to make projections of future taxable income. The judgments and estimates we make in determining our deferred tax assets are subjective and are reviewed on a regular basis as regulatory, economic or business factors change. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax asset. A valuation allowance results in additional income tax expense in the period in which it is recognized, which would negatively affect income. Management believes, based upon current

BV FINANCIAL, INC. AND SUBSIDIARIES

facts, that it is more likely than not that there will be sufficient taxable income in future years to realize its federal and state deferred tax asset.

BV FINANCIAL, INC. AND SUBSIDIARIES

Comparison of Financial Condition at September 30, 2026 (unaudited) and December 31, 2025

Assets. Total assets were $878.0 million at September 30, 2026, a decrease of $34.2 million, or 3.8%, from $912.2 million at December 31, 2025. The decrease was due primarily to decreases of $22.2 million in loans, $5.7 million in cash and cash equivalents, and $3.9 million in investment securities.

Cash and Cash Equivalents. Cash and cash equivalents decreased $5.7 million, or 10.2%, to $50.0 million at September 30, 2026 from $55.7 million at December 31, 2025. The decrease in cash was primarily a result of the decrease in FHLB borrowings of $30.0 million, partially offset by increased cash due to the decrease in loans of $22.2 million and securities of $3.9 million.

Loans. Loans receivable decreased $22.2 million, or 2.9%, to $732.7 million at September 30, 2026 from $754.9 million at December 31, 2025. Real estate loans decreased $8.1 million while consumer and commercial loans decreased $14.2 million.

Allowance for Credit Losses. The allowance for credit losses - loans decreased $106,000 to $6.3 million at September 30, 2026 compared to $6.4 million at December 31, 2025. The ratio of our allowance for credit losses to total loans was 0.86% at September 30, 2026 compared to 0.85% at December 31, 2025, while the allowance for credit losses to non-performing loans was 197.11% at September 30, 2026 compared to 284.70% at December 31, 2025.

Securities. Securities available for sale decreased by $2.3 million, or 7.1%, from December 31, 2025 as paydowns and maturities were not fully replaced with new purchases. The held-to-maturity portfolio decreased $1.6 million, or 27.7% due to paydowns.

Liabilities. Total liabilities decreased $34.6 million, or 4.8%, to $693.8 million at September 30, 2026 from $728.4 million at December 31, 2025. The decrease was due primarily to the decrease in FHLB borrowings of $30.0 million.

Deposits. Total deposits decreased $2.1 million, or 0.32% to $674.0 million at September 30, 2026 from $676.1 million at December 31, 2025. Interest-bearing deposits decreased $3.2 million, or 0.6%, to $534.5 million at September 30, 2026 from $537.7 million at December 31, 2025, while noninterest bearing deposits increased $1.1 million, or 0.8%, to $139.5 million at September 30, 2026 from $138.4 million at December 31, 2025.

Stockholders' Equity. Stockholders' equity increased $425,000, or 0.2%, to $184.2 million at September 30, 2026 from $183.8 million at December 31, 2025 primarily due to net income of $8.0 million and stock-based compensation of $2.0 million, partially offset by stock repurchases of $9.4 million.

BV FINANCIAL, INC. AND SUBSIDIARIES

Comparison of Operating Results for the Three Months Ended September 30, 2026 and 2025

Average Balances and Yields. The following tables sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans are included in the computation of average balances only. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Average balances exclude loans held for sale, if applicable. Net deferred loan origination fees totaled $2.2 million and $2.3 million at September 30, 2026 and 2025, respectively.

For the Three Months Ended September 30,

2026

2025

(dollars in thousands)

Average Outstanding Balance

Interest

Average Yield/Rate(1)

Average Outstanding Balance

Interest

Average Yield/Rate(1)

(Unaudited)

Interest-earning assets:

Loans

$

717,546

$

11,163

6.17%

$

743,119

$

11,519

6.15

%

Securities available-for-sale

31,476

292

3.68%

35,107

329

3.72

%

Securities held-to-maturity

5,428

40

2.92%

6,465

46

2.82

%

Cash, cash equivalents and other interest-earning assets

53,132

468

3.52%

57,784

633

4.38

%

Total interest-earning assets

807,582

11,963

5.88%

842,475

12,527

5.90

%

Noninterest-earning assets

65,533

63,948

Total assets

$

873,115

$

906,423

Interest-bearing liabilities:

Interest-bearing demand deposits

$

66,753

133

0.79%

$

75,302

151

0.80

%

Savings deposits

109,602

146

0.53%

117,422

136

0.46

%

Money market deposits

131,640

771

2.32%

128,265

787

2.43

%

Certificates of deposit

226,950

1,835

3.21%

205,022

1,638

3.17

%

Total interest-bearing deposits

534,945

2,885

2.14%

526,011

2,712

2.05

%

Federal Home Loan Bank advances

54

1

4.18%

-

-

-

Subordinated debentures

-

-

-

34,983

465

5.27

%

Total borrowings

54

1

4.18%

34,983

465

5.27

%

Total interest-bearing
liabilities

534,999

2,886

2.14%

560,994

3,177

2.25

%

Noninterest-bearing demand deposits

138,658

137,179

Other noninterest-bearing liabilities

16,140

16,191

Total liabilities

689,797

714,364

Equity

183,318

192,059

Total liabilities and equity

$

873,115

$

906,423

Net interest income

$

9,077

$

9,350

Net interest rate spread(2)

3.74%

3.65

%

Net interest-earning assets(3)

$

272,583

$

281,481

Net interest margin(4)

4.46%

4.40

%

Average interest-earning assets to interest-bearing liabilities

150.95

%

150.18

%

(1)
Annualized.
(2)
Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(3)
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4)
Net interest margin represents net interest income divided by average total interest-earning assets.

BV FINANCIAL, INC. AND SUBSIDIARIES

The following table sets forth the effects of changing rates and volumes on our net interest income for the three months ended September 30, 2026 and 2025. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by current rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume which cannot be segregated have been allocated proportionately based on the changes due to rate and volume.

For the three months ended September 30, 2026

Interest Income Increase (Decrease) Due to

(In thousands)

Volume

Rate

Total

Interest income:

Loans receivable

$

(398

)

$

42

$

(356

)

Investment securities AFS

(34

)

(3

)

(37

)

Investment securities HTM

(8

)

2

(6

)

Total Investment securities

(42

)

(1

)

(43

)

Equity Investments

-

-

-

Short-term investments and other

interest-earning assets

(41

)

(124

)

(165

)

Total interest-earning assets

$

(481

)

$

(83

)

$

(564

)

Interest expense:

Deposits

$

48

$

125

$

173

FHLB Borrowings

1

-

1

Subordinated Debentures

(465

)

-

(465

)

Total Borrowings

(464

)

-

(464

)

Total interest-bearing liabilities

(416

)

125

(291

)

Change in net interest income

$

(65

)

$

(208

)

$

(273

)

BV FINANCIAL, INC. AND SUBSIDIARIES

For the nine months ended September 30,

2026

2025

(dollars in thousands)

Average Outstanding Balance

Interest

Average Yield/Rate(1)

Average Outstanding Balance

Interest

Average Yield/Rate(1)

(Unaudited)

Interest-earning assets:

Loans

$

726,162

$

33,471

6.16%

$

745,001

$

33,594

6.03%

Securities available-for-sale

32,534

863

3.55%

35,580

1,003

3.77%

Securities held-to-maturity

6,944

130

2.50%

6,801

139

2.73%

Cash, cash equivalents and other interest-earning assets

63,889

1,786

3.76%

57,988

1,938

4.49%

Total interest-earning assets

829,529

36,250

5.84%

845,370

36,674

5.80%

Noninterest-earning assets

65,506

64,424

Total assets

$

895,035

$

909,794

Interest-bearing liabilities:

Interest-bearing demand deposits

$

70,845

454

0.86%

$

77,365

482

0.83%

Savings deposits

113,560

439

0.52%

120,136

342

0.38%

Money market deposits

128,833

2,200

2.28%

126,316

2,318

2.45%

Certificates of deposit

222,525

5,215

3.13%

199,332

4,793

3.21%

Total interest-bearing deposits

535,763

8,308

2.07%

523,149

7,935

2.03%

Federal Home Loan Bank advances

19,029

216

1.52%

5,604

194

4.63%

Subordinated debentures

-

-

-

34,944

1,396

5.34%

Total borrowings

19,029

216

1.52%

40,548

1,590

5.24%

Total interest-bearing
liabilities

554,792

8,524

2.05%

563,697

9,525

2.26%

Noninterest-bearing demand deposits

139,439

134,686

Other noninterest-bearing liabilities

17,608

16,027

Total liabilities

711,839

714,410

Equity

183,196

195,384

Total liabilities and equity

$

895,035

$

909,794

Net interest income

$

27,726

$

27,149

Net interest rate spread(2)

3.79%

3.54%

Net interest-earning assets(3)

$

274,737

$

281,673

Net interest margin(4)

4.47%

4.29%

Average interest-earning assets to interest-bearing liabilities

149.52

%

149.97

%

(1) Annualized.

(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing

liabilities.

(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average total interest-earning assets.

BV FINANCIAL, INC. AND SUBSIDIARIES

The following table sets forth the effects of changing rates and volumes on our net interest income for the nine months ended September 30, 2026 and 2025. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by current rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume which cannot be segregated have been allocated proportionately based on the changes due to rate and volume.

For the nine months ended September 30, 2026

Interest Income Increase (Decrease) Due to

(In thousands)

Volume

Rate

Total

Interest income:

Loans receivable

$

(868

)

$

745

$

(123

)

Investment securities AFS

(81

)

(59

)

(140

)

Investment securities HTM

3

(12

)

(9

)

Total Investment securities

(78

)

(71

)

(149

)

Equity Investments

-

(3

)

(3

)

Short-term investments and other

interest-earning assets

166

(315

)

(149

)

Total interest-earning assets

$

(780

)

$

356

$

(424

)

Interest expense:

Deposits

$

196

$

177

$

373

FHLB Borrowings

152

(130

)

22

Subordinated Debentures

(1,396

)

-

(1,396

)

Total Borrowings

(1,244

)

(130

)

(1,374

)

Total interest-bearing liabilities

(1,048

)

47

(1,001

)

Change in net interest income

$

268

$

309

$

577

Net Income. Net income was $3.4 million, or $0.42 per diluted share, for the three months ended September 30, 2026 compared to $3.7 million, or $0.41 per diluted share, for the three months ended September 30, 2025. Net income was $8.0 million or $0.97 per diluted share, for the nine months ended September 30, 2026 compared to $8.7 million, or $0.88 per diluted share, for the nine months ended September 30, 2025. The decrease in income for the nine months ended September 30, 2026 was primarily due to the $2.2 million first quarter executive transition expense and the related tax impact as well as changes in the provision for credit losses. The decrease in net income in the three months ended September 30, 2026 is primarily due to the $1.0 million credit to the ACL in September 2025 compared to the $0.2 million provision expense in September 2026.

Interest Income. Interest income decreased $564,000, or 4.5%, to $12.0 million for the three months ended September 30, 2026 from $12.5 million for the three months ended September 30, 2025. The decrease was due primarily to a decrease in interest income on loans as well as in cash and cash equivalents. Interest income on loans decreased $356,000, or 3.1%, to $11.2 million for the three months ended September 30, 2026 from $11.5 million for the three months ended September 30, 2025 due primarily to a decrease in the average balance of $25.6 million. The weighted average yield on loans increased two basis points to 6.17% for the three months ended September 30, 2026 compared to 6.15% for the three months ended September 30, 2025, as variable rate loans reset to higher interest rates and the rates on new loans exceeded the rates on paid off loans due to the higher interest rate environment. Interest income on cash and cash equivalents decreased $165,000 to $468,000 for the three months ended September 30, 2026 from $633,000 for the three months ended September 30, 2025 primarily due to a decrease in the yield of 86 basis points from 4.38% for the three months ended September 30, 2025 to 3.52% for the three months ended September 30, 2026.

Interest income decreased $424,000 or 1.2%, to $36.3 million for the nine months ended September 30, 2026 from $36.7 million for the nine months ended September 30, 2025. The decrease was due to decreases in interest income on loans, investment securities, and cash and cash equivalents. Interest income on loans decreased $123,000, or 0.4%, to $33.5 million for the nine months ended September 30, 2026 from $33.6 million for the nine months ended September 30, 2025 due primarily to a decrease in the average balances, partially offset by an increase in the yield. The weighted average yield on loans increased 13 basis points to 6.16% for the nine months ended September 30, 2026 compared to 6.03% for the nine months ended September 30, 2025, as

BV FINANCIAL, INC. AND SUBSIDIARIES

variable rate loans reset to higher interest rates and the rates on new loans exceeded the rates on paid off loans due to the higher interest rate environment.

Interest Expense. Interest expense decreased $291,000 or 9.2% to $2.9 million for the three months ended September 30, 2026 from $3.2 million for the three months ended September 30, 2025. The decrease in interest expense was primarily due to the pay-off of the subordinated debentures in December 2025, offset by an increase in the cost and average balance of deposits..

Interest expense decreased $1.0 million or 10.5% to $8.5 million for the nine months ended September 30, 2026 from $9.5 million at September 30, 2025. The decrease was primarily due to the pay-off of the subordinated debentures in December 2025 and the pay-off of the FHLB advances in June 2026, partially offset by an increase in deposit expenses due primarily to higher cost and average balances.

Net Interest Income. Net interest income was $9.1 million for the three months ended September 30, 2026 compared to $9.4 million for the three months ended September 30, 2025. The net interest margin for the three months ended September 30, 2026 was 4.46% compared to 4.40% for the three months ended September 30, 2025. The decrease in net interest income was primarily due to the lower average balance of loans outstanding in the period, the decrease in the yield on cash and cash equivalents and the increased cost of deposits.

Net interest income was $27.7 million for the nine months ended September 30, 2026, compared to $27.1 million in the nine months ended September 30, 2025. The net interest margin for the nine months ended September 30, 2026 was 4.47% compared to 4.29% for the nine months ended September 30, 2025. The increase in net interest income was primarily due to the lower borrowing costs in the period due to the pay-off of FHLB borrowings in 2026 and the pay-off of the subordinated debentures in December 2025.

Provision for Credit Losses. The Company recorded a provision for credit losses of $213,000 for the three months ended September 30, 2026 compared to a recovery of credit losses of $1.0 million for the three months ended September 30, 2025. Our allowance for credit losses - loans was $6.3 million at September 30, 2026 and $6.4 million at December 31, 2025. The ratio of our allowance for credit losses - loans to total loans was 0.86% at September 30, 2026 compared to 0.85% at December 31, 2025, while the allowance for credit losses - loans to non-performing loans was 197.1% at September 30, 2026 compared to 284.7% at December 31, 2025.

Noninterest Income. For the three months ended September 30, 2026 and 2025, noninterest income totaled $681,000 and $684,000, respectively.

For the nine months ended September 30, 2026, noninterest income totaled $1.7 million compared to $1.9 million for the nine months ended September 30, 2025. The decrease is due to lower miscellaneous loan and deposit fees and the write-down of a former branch location.

Noninterest Expense. For the three months ended September 30, 2026, noninterest expense totaled $5.1 million compared to $5.9 million in the three months ended September 30, 2025. Decreases in compensation and benefits of $652,000 due to lower staffing and lower expenses of the 2024 Equity Plan as well as a decrease in other expense of $106,000, primarily due to lower fraud losses, were the primary drivers of the overall decrease.

For the nine months ended September 30, 2026, noninterest expense totaled $18.1 million as compared to $17.8 million for the nine months ended September 30, 2025. Compensation and benefits expense increased $98,000 due to the $2.2 million cost of the executive transition in the first quarter mostly offset by lower staffing levels and lower costs of the 2024 Equity Plan. Data processing expenses increased $81,000 due to the cost of new product implementation.

Income Tax Expense. For the three months ended September 30, 2026, income tax expense was $1.1 million for an effective tax rate of 23.5%. For the three months ended September 30, 2025, income tax expense was $1.4 million for an effective tax rate of 27.9%.

For the nine months ended September 30, 2026, income tax expense was $3.3 million for an effective tax rate of 29.1%. For the nine months ended September 30, 2025, income tax expense was $3.1 million for an effective tax rate of 26.4%. The increase in the effective tax rate was primarily attributable to the non-deductible portion of the executive transition payment.

BV FINANCIAL, INC. AND SUBSIDIARIES

Asset Quality. Non-performing assets at September 30, 2026 totaled $3.2 million, all nonperforming loans, compared to $2.3 million at December 31, 2025, also all nonperforming loans. At September 30, 2026, the allowance for credit losses on loans was $6.3 million, which represented 0.86% of total loans and 197.1% of non-performing loans compared to $6.4 million at December 31, 2025, which represented 0.85% of total loans and 284.7% of non-performing loans.

Liquidity and Capital Resources

Liquidity. Liquidity describes our ability to meet financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities and proceeds from maturities of securities. We also have the ability to borrow from the FHLB. At September 30, 2026, we had a $165.7 million secured line of credit with $131.7 million remaining available after the $5.0 million borrowing outstanding and $29.0 million in outstanding lines of credit that are used to secure the deposits of local government entities. The Company also has a $20.0 million short-term unsecured facility from a correspondent bank.

While maturities and scheduled amortization of loans and securities can be predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments, including interest-bearing demand deposits. The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period. We are committed to maintaining a strong liquidity position.

We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained. However, if a substantial portion of these deposits is not retained, we may utilize FHLB advances, brokered deposits or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense. At September 30, 2026, we had $51.0 million in brokered deposits compared to $50.3 million in brokered deposits at September 30, 2025. In addition, we had $57.1 million of municipal deposits at September 30, 2026, which represented 8.5% of total deposits. The Bank's uninsured deposits totaled $143.9 million, or 21.3% of total deposits, of which $52.4 million were secured using the market value of pledged collateral or letters of credit issued by FHLB, and an additional $1.8 million were deposits of the Company at the Bank.

Capital Resources. At September 30, 2026, the Bank exceeded all of its regulatory capital requirements and was categorized as well capitalized. Management is not aware of any conditions or events since the most recent notification that would change our category.

BV FINANCIAL, INC. AND SUBSIDIARIES

BV Financial Inc. published this content on November 13, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 13, 2026 at 17:13 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]