BV Financial, Inc. (OTCBB: BVFL), the holding company for Bay-Vanguard Federal Savings Bank, today reported net income of $257,000, or $0.11 per diluted share, for the six-month period ended December 31, 2010 compared to net income of $95,000, or $0.04 per diluted share, for the six-month period ended December 31, 2009. In addition, the Company reported net income of $203,000, or $0.09 per diluted share, for the quarter ended December 31, 2010, compared to net income of $22,000, or $0.01 per diluted share, for the quarter ended December 31, 2009.

The income for the six months ended December 31, 2010 was attributed largely to an increase in net interest income, due to a decrease in interest expense, and a decrease in non-interest expense due to decreases in compensation expense and FDIC insurance premiums. The provision for loan losses was $256,000 for the six months ended December 31, 2010 compared to $126,000 for the six months ended December 31, 2009. The increase in the provision for loan losses was primarily due to an increase in non-performing loans, offset by a decrease in the loan portfolio. Non-performing loans increased to $3.9 million at December 31, 2010 compared to $921,000 at June 30, 2010 mainly due to an increase in non-performing one- to four- family residential loans. At December 31, 2010, the loan loss allowance was $1.8 million, which represented 1.69% of total loans and 46.2% of non-performing loans compared to $855,000 at June 30, 2010, which represented 0.71% of total loans and 92.83% of non-performing loans.

Deposits decreased $10.3 million for the six-month period ended December 31, 2010, primarily as maturing certificate of deposit accounts were not reinvested in the Bank. The investment portfolio increased $2.8 million as excess funds from liquid cash accounts were used to purchase government agency securities in an effort to increase the return on assets. The mortgage portfolio decreased by $9.0 million due to payoffs and amortizations. Weak loan demand continues to hinder our ability to originate new loans.

Bay-Vanguard's Tier 1 capital ratio was 6.90% at December 31, 2010 compared to 6.24% at June 30, 2010. This ratio and the Bank's other capital measurements continue to exceed all regulatory standards for ?well-capitalized? financial institutions.

This press release may contain certain forward-looking statements that are based on management's current expectations regarding economic, legislative and regulatory issues that may impact the Company's earnings in future periods. Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, real estate values and competition, changes in accounting principles, policies or guidelines, changes in legislation or regulation and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services.

BV Financial, Inc. is the parent company of Bay-Vanguard Federal Savings Bank. Bay-Vanguard Federal Savings Bank is headquartered in Baltimore, Maryland with four other branches in the Baltimore metropolitan area. The Bank is a full service community-oriented financial institution dedicated to serving the financial service needs of consumers and businesses within its market area.

 
BV Financial, Inc.
Consolidated Financial Highlights
(in thousands)
 
 
  12/31/2010   6/30/2010    
 
Selected Balance Sheet Data: (unaudited)
Total assets $ 149,782 $ 160,379
Investment securities 21,598 18,785
Loans receivable, net 105,906 114,963
Total deposits 132,925 143,192
Stockholders' equity 14,109 13,828
 
 
Three months Six months
ended December 31,

ended December 31,

2010 2009 2010 2009
Operating Results: (unaudited) (unaudited) (unaudited) (unaudited)
Interest income $ 1,775 $ 1,962 $ 3,541 $ 3,924
Interest expense 513 789 1,139 1,616

 

 

 

 

Net interest income 1,262 1,173 2,402 2,308
Provision for loan losses 89 70 256 126

 

 

 

 

Net interest income after provision

1,173 1,103 2,146 2,182
Non-interest income 74 82 188 189
Non-interest expense 934 1,146 1,945 2,217

 

 

 

 

Income before income taxes

313 39 389 154
 
Income taxes 110 17 132 59

 

 

 

 

 
Net income $ 203 $ 22 $ 257 $ 95
 
Diluted income per share $ 0.09 $ 0.01 $ 0.11 $ 0.04

BV Financial, Inc.
Edmund T. Leonard, 410-547-1088
Chairman of the Board