BV Financial, Inc. reported net income of $2.1 million, or $0.21 per diluted share, for the first quarter ended March 31, 2025. This is a decrease from $2.6 million, or $0.24 per diluted share, reported for the first quarter of 2024. Adjusted net income, a non-GAAP metric, remained stable at $2.9 million for both periods.
Net interest income grew to $8.6 million in Q1 2025, up from $8.0 million in Q1 2024, driven by a 4.4% increase in the average balance of loans to $739.7 million and a 35 basis point rise in the weighted average loan yield to 5.89%. The net interest margin expanded to 4.12% from 3.91% year-over-year. However, total interest expense increased by $197,000, or 6.5%, to $3.2 million, primarily due to higher deposit costs.
Noninterest expense saw a substantial increase of $1.3 million, or 26.5%, reaching $6.2 million in Q1 2025. This was largely due to a $1.4 million increase in compensation and related benefits, which included a $1.2 million cost associated with equity awards granted under the 2024 Equity Incentive Plan. The provision for credit losses also increased to $297,000 from $18,000 in the prior year quarter.
Non-performing assets increased to $5.0 million at March 31, 2025, from $4.2 million at December 31, 2024, primarily due to specific loans being placed on non-accrual status. Brokered deposits significantly increased to $50.0 million from $10.0 million a year prior, indicating a shift in funding strategy. The Bank maintained its 'well capitalized' status, exceeding all regulatory requirements.
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