Shares of BV Financial, Inc. (BVFL Quick QuoteBVFL - Free Report) have declined 2% since the company reported its earnings for the quarter ended Dec. 31, 2025. This compares to the S&P 500 index’s 0.9% growth over the same time frame. Over the past month, the stock has gained 3.1% compared with the S&P 500’s 1.4% increase.

BV Financial reported a fourth-quarter 2025 net income of 56 cents per share, compared to 18 cents per share in the year-ago period. 

Net income more than doubled year over year to $4.8 million from $2 million in the year-ago period. Non-GAAP adjusted net income also saw significant growth. For the quarter, it rose to $5.6 million from $2.4 million a year ago.

Full-year net income came in at $13.5 million, or $1.43 per share, up from $11.7 million, or $1.10 per share, in 2024. Adjusted net income grew to $16.3 million from $12.9 million, reflecting adjustments for expenses related to the 2024 Equity Incentive Plan.

BV Financial, Inc. Price, Consensus and EPS Surprise

BV Financial, Inc. price-consensus-eps-surprise-chart | BV Financial, Inc. Quote

Other Key Business Metrics

BV Financial reported total assets of $912.2 million as of Dec. 31, 2025, up slightly from $911.8 million the previous year. Net loans increased by $19.2 million, or 2.6%, to $748.5 million, with growth in 1-4 family owner-occupied, construction, and commercial loans offsetting declines in other categories.

Total deposits rose by $24.6 million, or 3.8%, to $676.1 million, driven by a 6.7% increase in non-interest-bearing deposits. At the same time, the company repaid $35 million in subordinated debt and replaced it with lower-cost Federal Home Loan Bank advances.

BV Financial also executed a substantial stock buyback program, repurchasing 1.8 million shares during 2025 at an average price of $16.23, including 714,555 shares in the fourth quarter alone.

On the performance front, the bank's return on average assets (ROAA) and return on average equity (ROAE) improved meaningfully. ROAA for the fourth quarter was 2.1% versus 0.9% a year ago, while ROAE surged to 10.5% from 3.8%. The efficiency ratio improved to 51% in the fourth quarter from 64.3% in the prior-year period, indicating stronger operating leverage.

Management Commentary and Strategic Shifts

The company’s strategic decisions during the quarter reflect a focus on optimizing its capital structure and cost management. The replacement of subordinated debt with lower-cost advances and the sizable share repurchase program highlight efforts to enhance shareholder value.

Factors Influencing Earnings Upside

A key contributor to the earnings beat was a $1.9 million recovery in provision for credit losses in the fourth quarter, reversing a provision of $0.6 million in the year-ago period. For the full year, the recovery totaled $2.4 million. This reversal was attributed to enhancements in the CECL model, including the addition of the Federal Reserve’s unemployment forecast alongside GDP forecasts for credit risk assessment. This change led to a $1 million reduction in required allowance for credit losses (ACL) on loans in the fourth quarter alone.

Net interest income also played a pivotal role, rising 8.2% year-over-year in the quarter to $9.8 million, driven by a higher net interest margin of 4.52%, up from 4.34%. The improvement came as asset yields outpaced funding costs.

Noninterest income saw a modest increase to $0.8 million in the quarter from $0.6 million a year earlier. Meanwhile, noninterest expense declined 13.4% year over year to $5.4 million, largely due to a drop in compensation and benefits expenses stemming from lower equity award costs under the 2024 Equity Incentive Plan.

Other Developments

During the quarter, the company completed a key balance sheet maneuver by retiring its $35 million subordinated debt issued in 2020 in connection with the Delmarva Bancshares acquisition. The debt was replaced by an equivalent amount in lower-cost Federal Home Loan Bank borrowings, which is expected to reduce interest expense going forward.