Definitive Proxy Statement

You are cordially invited to attend the annual meeting of stockholders of BV Financial, Inc. The meeting will be held at the Courtyard Marriott Hotel, 1671 West Nursery Road, Linthicum, Maryland on Tuesday, November 8, 2005 at 2:00 p.m., local time.

The notice of annual meeting and proxy statement appearing on the following pages describe the formal business to be transacted at the meeting. Directors and officers of the Company, as well as a representative of Beard Miller Company, LLP, the Company’s independent auditors, will be present to respond to appropriate questions of stockholders.

It is important that your shares are represented at this meeting, whether or not you attend the meeting in person and regardless of the number of shares you own. To make sure your shares are represented, we urge you to complete and mail the enclosed proxy card. If you attend the meeting, you may vote in person even if you have previously mailed a proxy card.

On Tuesday, November 8, 2005, BV Financial, Inc. (the “Company”) will hold its annual meeting of stockholders at the Courtyard Marriott Hotel, 1671 West Nursery Road, Linthicum, Maryland. The meeting will begin at 2:00 p.m., local time. At the meeting, stockholders will consider and act on the following:

NOTE: The Board of Directors is not aware of any other business scheduled to come before the meeting.

Only stockholders of record as of the close of business on September 23, 2005 are entitled to receive notice of and to vote at the meeting and any adjournment or postponement of the meeting.

Please complete and sign the enclosed proxy card, which is solicited by the Board of Directors, and mail it promptly in the enclosed envelope. The proxy will not be used if you attend the meeting and vote in person.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Robert R. Kern, Jr.

Robert R. Kern, Jr.

Corporate Secretary

IMPORTANT: The prompt return of proxies will save the Company the expense of further requests for proxies to ensure a quorum. A self-addressed envelope is enclosed for your convenience. No postage is required if mailed in the United States.

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of BV Financial, Inc. (“BV Financial” or the “Company”) to be used at the annual meeting of stockholders of the Company. The Company is the holding company for Bay-Vanguard Federal Savings Bank (“Bay-Vanguard Federal” or the “Bank”) and the majority-owned subsidiary of Bay-Vanguard, M.H.C. The annual meeting will be held at the Courtyard Marriott Hotel, 1671 West Nursery Road, Linthicum, Maryland on Tuesday, November 8, 2005 at 2:00 p.m., local time. This proxy statement and the enclosed proxy card are being mailed to stockholders of record on or about October 4, 2005.

You are entitled to vote your shares of BV Financial common stock if the records of the Company show that you held your shares as of the close of business on September 23, 2005. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by your broker, bank or nominee. As the beneficial owner, you have the right to direct your broker on how to vote your shares. Your broker, bank or nominee has enclosed a voting instruction card for this purpose.

As of the close of business on September 23, 2005, a total of 2,645,000 shares of BV Financial common stock were outstanding. Each share of common stock has one vote. The Company’s charter provides that record owners of the Company’s common stock (other than Bay-Vanguard, M.H.C.) who beneficially own, either directly or indirectly, in excess of 10% of the Company’s outstanding shares are not entitled to any vote in respect of the shares held in excess of that 10% limit.

If you were a stockholder as of the close of business on September 23, 2005, you may attend the meeting. However, if you held your shares in street name, you will need proof of ownership to be admitted to the meeting. A recent brokerage statement or letter from a bank, broker or other nominee are examples of proof of ownership. If you want to vote your shares of BV Financial common stock held in street name in person at the meeting, you will need a written proxy in your name from the broker, bank or other nominee who holds your shares.

Bay-Vanguard, M.H.C., the mutual holding company for the Company, owned 55% of the outstanding shares of common stock of the Company as of September 23, 2005. All shares of common stock owned by Bay-Vanguard, M.H.C. will be voted in accordance with the instructions of the Board of Directors of Bay-Vanguard, M.H.C., the members of which are identical to the members of the Board of Directors of the Company. Bay-Vanguard, M.H.C. is expected to vote such shares “FOR” all three proposals.

The annual meeting will be held only if there is a quorum. A majority of the outstanding shares of BV Financial common stock entitled to vote, represented in person or by proxy, constitutes a quorum. If you return valid proxy instructions or attend the meeting in person, your shares will be counted for purposes of determining whether there is a quorum, even if you abstain from voting. Broker non-votes also will be counted for purposes of determining the existence of a quorum. A broker non-vote occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker, bank or other nominee does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner.

In voting on the election of directors, you may vote in favor of all nominees, withhold votes as to all nominees or withhold votes as to specific nominees. There is no cumulative voting for the election of directors. Directors are elected by a plurality of the votes cast at the annual meeting. “Plurality” means that the nominees receiving the greatest number of votes cast will be elected. Votes that are withheld and broker non-votes will have no effect on the outcome of the election.

In voting to approve the BV Financial, Inc. 2005 Equity Incentive Plan (the “2005 Plan”), you may vote in favor of the proposal, against the proposal or abstain from voting. To be approved, this matter requires the affirmative vote of a majority of the votes eligible to be cast at the annual meeting, including the shares held by Bay-Vanguard, M.H.C. (“Vote Standard A”), and by the affirmative vote of a majority of the votes cast at the annual meeting, excluding the shares held by Bay-Vanguard, M.H.C. (“Vote Standard B”). For Vote Standard A, abstentions and broker non-votes will have the same effect as a negative vote. For Vote Standard B, abstentions and broker non-votes will have no effect on the voting.

In voting to ratify the appointment of Beard Miller Company, LLP as independent auditors, you may vote in favor of the proposal, against the proposal or abstain from voting. To be approved, this matter requires the affirmative vote of a majority of the votes present in person or by proxy at the annual meeting and entitled to vote. Abstentions will have the same effect as a negative vote, while broker non-votes will have no effect on the voting.

Because Bay-Vanguard, M.H.C. owns in excess of 50% of the outstanding shares of BV Financial common stock, the votes it casts will ensure the presence of a quorum and determine the outcome of Proposal 1 (Election of Directors) and Proposal 3 (Appointment of Independent Auditors).

This proxy statement is being sent to you by the Board of Directors of BV Financial to request that you allow your shares of BV Financial common stock to be represented at the annual meeting by the persons named in the enclosed proxy card. All shares of BV Financial common stock represented at the meeting by properly executed and dated proxies will be voted according to the instructions indicated on the proxy card. If you sign, date and return a proxy card without giving voting instructions, your shares will be voted as recommended by the Company’s Board of Directors. The Board of Directors recommends that you vote “FOR” each of the nominees for director, “FOR” approval of the BV Financial, Inc. 2005 Equity Incentive Plan and “FOR” ratification of the appointment of Beard Miller Company, LLP as the Company’s independent auditors.

If any matter not described in this proxy statement is properly presented at the annual meeting, the persons named in the proxy card will use their judgment to determine how to vote your shares. This includes a motion to adjourn or postpone the meeting to solicit additional proxies. If the annual meeting is postponed or adjourned, your shares of BV Financial common stock may also be voted by the persons named in the proxy card on the new meeting date, unless you have revoked your proxy. The Company does not know of any other matters to be presented at the meeting.

You may revoke your proxy at any time before the vote is taken at the meeting. To revoke your proxy, you must either advise the Secretary of the Company in writing before your BV Financial common stock has been voted at the annual meeting, deliver a later-dated valid proxy or attend the meeting and vote your shares in person. Attendance at the annual meeting will not in itself constitute revocation of your proxy.

If your BV Financial common stock is held in street name, you will receive instructions from your broker, bank or other nominee that you must follow to have your shares voted. Your broker, bank or other nominee may allow you to deliver your voting instructions by telephone or by the Internet. Please see the instruction form provided by your broker, bank or other nominee that accompanies this proxy statement. If you wish to change your voting instructions after you have returned your voting instruction form to your broker, bank or other nominee, you must contact your broker, bank or other nominee.

If you have any questions about voting, please contact our proxy solicitor, Regan & Associates, at (800) 737-3426.

If you participate in the Bay-Vanguard Federal Savings Bank Employee Stock Ownership Plan (the “ESOP”) or if you hold BV Financial common stock through the Bank’s 401(k) Profit Sharing Plan (the “401(k) Plan”), you will receive a vote authorization form for each plan reflecting all the shares that you may direct the trustees to vote on your behalf under the plans. Under the terms of the ESOP, all shares held by the ESOP are voted by the ESOP trustee, but each participant in the ESOP may direct the trustee how to vote the shares of Company common stock allocated to his or her account. Unallocated shares of common stock held by the ESOP and allocated shares for which no timely voting instructions are received will be voted by the ESOP trustee in the same proportion as shares for which the trustee has received voting instructions, subject to the exercise of its fiduciary duties. Under the terms of the
401(k) Plan, you are entitled to direct the trustee how to vote the shares of BV Financial common stock credited to your account in the 401(k) Plan. The trustee will vote all shares for which it does not receive timely instructions from participants in the same proportion as the instructions the trustee receives from participants. The deadline for returning your voting instructions to each plan’s trustee is October 28, 2005.

The Company periodically reviews its corporate governance policies and procedures to ensure that the Company meets the highest standards of ethical conduct, reports results with accuracy and transparency and maintains full compliance with the laws, rules and regulations that govern the Company’s operations. As part of this periodic corporate governance review, the Board of Directors reviews and adopts best corporate governance policies and practices for the Company.

The Company has adopted a Code of Ethics and Business Conduct that is designed to ensure that the Company’s directors, executive officers and employees meet the highest standards of ethical conduct. The Code of Ethics and Business Conduct requires that the Company’s directors, executive officers and employees avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner and otherwise act with integrity and in the Company’s best interest. Under the terms of the Code of Ethics and Business Conduct, directors, executive officers and employees are required to report any conduct that they believe in good faith to be an actual or apparent violation of the Code of Ethics and Business Conduct.

As a mechanism to encourage compliance with the Code of Ethics and Business Conduct, the Company has established procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls or auditing matters. These procedures ensure that individuals may submit concerns regarding questionable accounting or auditing matters in a confidential and anonymous manner. The Code of Ethics and Business Conduct also prohibits the Company from retaliating against any director, executive officer or employee who reports actual or apparent violations of the Code of Ethics and Business Conduct.

The Company and the Bank conduct business through meetings of their Boards of Directors and their committees. Due to the formation of the Company on January 12, 2005, the Board of Directors of the Company met twice during the year ended June 30, 2005. The Board of Directors of the Bank met 14 times during the year ended June 30, 2005. No director attended fewer than 75% of the total meetings of the Boards of Directors and committees on which such director served.

The Company has standing Audit, Compensation, and Nominating and Governance Committees.

Audit Committee. The Audit Committee, consisting of Michael J. Birmingham III (Chairman), Edmund J. Kowalewski and Catherine M. Staszak is responsible for ensuring that the Company maintains reliable accounting policies and financial reporting processes and reviewing the work of the Company’s independent accountants to review their effectiveness. The Audit Committee selects the outside auditors and meets with them to discuss the results of the annual audit and any related matters. Each member of the Audit Committee is independent in accordance with the listing standards of the Nasdaq Stock Market. The Board of Directors has determined that the Audit Committee does not have a member who is an “audit committee financial expert.” While the board recognizes that no individual board member meets the qualifications required of an “audit committee financial expert,” the

board believes that appointment of a new director to the board and to the Audit Committee at this time is not necessary as the level of financial knowledge and experience of the current members of the Audit Committee, including the ability to read and understand fundamental financial statements, is cumulatively sufficient to discharge adequately the Audit Committee’s responsibilities. This committee met twice during the year ended June 30, 2005. The Audit Committee acts under a written charter adopted by the Board of Directors, a copy of which is included as Appendix A to this proxy statement. The report of the Audit Committee required by the rules of the Securities and Exchange Commission is included in this proxy statement. See “Audit Committee Report.”

Compensation Committee. The Compensation Committee, consisting of Robert R. Kern, Jr. (Chairman), Anthony J. Narutowicz and Jerry S. Sopher, determines annual grade and salary levels for employees and establishes personnel policies. Each member of the Compensation Committee is independent in accordance with the listing standards of the Nasdaq Stock Market. This committee met once during the year ended June 30, 2005. The Compensation Committee operates under a written charter.

Nominating and Governance Committee. The Nominating and Governance Committee, consisting of Messrs. Kern (Chairman), Birmingham and Brian K. McHale, is responsible for the annual selection of management’s nominees for election as directors and for developing and implementing a set of policies and practices relating to corporate governance, including implementation of and monitoring adherence to the Company’s corporate governance policy. Each member of the Nominating and Governance Committee is independent in accordance with the listing standards of the Nasdaq Stock Market. This committee met once during the year ended June 30, 2005. The Nominating and Governance Committee acts under a written charter adopted by the Board of Directors. The charter is not available on the Company’s website, but a copy of such charter is included as Appendix B to this proxy statement. The procedures of the Nominating and Governance Committee required to be disclosed by the rules of the Securities and Exchange Commission are included in this proxy statement. See “Nominating and Governance Committee Procedures.”

The Board of Directors encourages directors to attend the annual meeting of stockholders. Due to the timing of the Company’s minority stock offering on January 12, 2005, this will be the Company’s first annual meeting of stockholders.

Fees. Each non-employee director of Bay-Vanguard Federal receives $500 for each regular or special meeting attended and $400 for each committee meeting attended. Directors do not receive any compensation for their service on the Board of Directors of BV Financial or Bay-Vanguard, M.H.C.

Directors’ Supplemental Retirement Plan. Bay-Vanguard Federal maintains the Bay-Vanguard Federal Directors’ Supplemental Retirement Plan to provide certain payments to directors upon retirement or to a director’s beneficiary if a director dies while there are funds credited to his or her pre-retirement account. Upon the attainment of age 70, each participating director is entitled to a retirement benefit equal to the excess (if any) of the Index (as defined in the plan) for the plan year in which the director retires over the Cost of Funds Expense (as defined in the plan) for the plan year in which the director retires, divided by a factor equal to 1.20 minus the marginal tax rate. The index

retirement benefit is payable for each plan year subsequent to the director’s retirement (including the remaining portion of the year following retirement) until the director’s death. In addition to the index retirement benefit, directors who retire from the Board of Directors after attaining age 70 will also be entitled to the balance in their pre-retirement accounts that will be payable in 120 monthly installments commencing 30 days after the director’s termination of service for reasons other than cause. If a director terminates service with Bay-Vanguard Federal before age 70 for reasons other than cause, the director is entitled to receive ten percent of the product of the number of full years of service on the Board of Directors and the balance in the pre-retirement account payable to the director in 120 monthly installments commencing 30 days following the director’s attainment of age 70. In no event will any benefit payable to a director under the plan exceed $6,100 per year. If a director dies while there is a balance in the director’s pre-retirement account, the director’s unpaid balance will be paid in a lump sum to the director’s beneficiaries. If a director becomes disabled before terminating service with Bay-Vanguard Federal and the director’s service with Bay-Vanguard Federal is terminated because of the disability or the director is terminated in connection with a Change in Control (as defined in the plan), the director will immediately begin to receive benefits under the plan as if he or she had retired from Bay-Vanguard Federal upon attainment of age 70.

Bay-Vanguard Federal has elected to fund its obligations under the plan through the purchase of life insurance. All but two participating directors have entered into life insurance endorsement method split-dollar plan agreements in connection with the plan funding.

The following table provides information as of September 23, 2005 with respect to persons and entities known to the Company to be the beneficial owner of more than 5% of the Company’s outstanding common stock. A person or entity may be considered to beneficially own any shares of common stock over which the person or entity has, directly or indirectly, sole or shared voting or investing power.

The following table provides information as of September 23, 2005 about the shares of BV Financial common stock that may be considered to be owned by each director of the Company, by those officers of the Company named in the Summary Compensation Table on page 14, and by all directors and executive officers of the Company as a group. Unless otherwise indicated, each of the named individuals has sole voting power and sole investment power with respect to the shares shown.

The three nominees for election as director were unanimously nominated by the Nominating and Governance Committee of the Board of Directors. None of the nominees were nominated according to any agreement or understanding between the nominee and the Company.

The BV Financial, Inc. 2005 Equity Incentive Plan is being presented to stockholders for approval. See “Proposal 2—Approval of the BV Financial, Inc. 2005 Equity Incentive Plan” for more information. Directors, officers and employees of the Company and the Bank may be granted stock awards and options under the 2005 Plan.

The Company’s Board of Directors consists of ten members. Because the Company is not listed on a national securities exchange or a national securities association, there is no independence requirement for its directors. However, if the Company was to apply the current listing standards of the Nasdaq Stock Market, all of the directors would be independent except for Edmund T. Leonard, Carolyn M. Mroz and Daniel J. Gallagher, Jr., each of whom is an employee of the Bank. The board is divided into three classes with three-year staggered terms, with approximately one-third of the directors elected each year. Three directors will be elected at the annual meeting to serve for a three-year term or until their respective successors have been elected and qualified. The nominees for election are Brian K. McHale, Anthony J. Narutowicz and Jerry S. Sopher.

It is intended that the proxies solicited by the Board of Directors will be voted for the election of the nominees named above. If any nominee is unable to serve, the persons named in the proxy card would vote your shares to approve the election of any substitute nominee proposed by the Board of Directors. Alternatively, the Board of Directors may adopt a resolution to reduce the size of the board. At this time, the Board of Directors knows of no reason why any nominee might be unable to serve.

The Board of Directors recommends a vote “FOR” the election of all of the nominees.

Information regarding the nominees and the directors continuing in office is provided below. Unless otherwise stated, each individual has held his or her current occupation for the last five years. The age indicated in each nominee’s biography is as of June 30, 2005. There are no family relationships among the directors or executive officers. The indicated period for service as a director includes service as a director of either Bay Federal Savings and Loan Association or Vanguard Federal Savings and Loan Association, which merged to form Bay-Vanguard Federal in April 1996.

Brian K. McHale is a steamship clerk with International Longshoremen’s Association Local 953 located in Baltimore, Maryland and a state delegate to the Maryland General Assembly. Age 50. Director since 1987.

Anthony J. Narutowicz serves on the Board of Directors of F&M Enterprises, Inc., a company located in Edgemere, Maryland. F&M Enterprises, Inc. owns various retail establishments and several rental properties. Mr. Narutowicz also serves on the Board of Directors of Navrad Corp., a gas station located in Edgemere, Maryland. Age 72. Director since 1985.

Jerry S. Sopher is a self-employed attorney located in Baltimore, Maryland. Age 64. Director since 1985.

Michael J. Birmingham III is the owner of MJ Birmingham Company, a construction company located in Baltimore, Maryland. He was also the owner of Bay Shore Bar from 1996 to 2002. Age 52. Director since 1985.

Daniel J. Gallagher, Jr. has served as the Senior Vice President of Bay-Vanguard Federal since August 2002. He was the Executive Vice President and a director of Heritage Federal Savings Bank from January 1997 until July 2002. Age 48. Director since 2003.

Edmund J. Kowalewski has been retired since December 1991. Before he retired, Mr. Kowalewski was the purchasing manager for Maryland Casualty Company, a Baltimore insurance company. Age 74. Director since 1990.

Catherine M. Staszak is a realtor for Coldwell Banker in Baltimore, Maryland and the owner of Full House Saloon, a tavern in Edgemere, Maryland. Age 62. Director since 1986.

Robert R. Kern, Jr. is a partner at the law firm of Gallagher Evelius & Jones LLP, located in Baltimore, Maryland. Age 56. Director since 1974.

Edmund T. Leonard serves as the Chairman and Chief Financial Officer of Bay-Vanguard Federal. Mr. Leonard was President of Bay Federal Savings and Loan Association before its merger with Vanguard Federal Savings Bank in April 1996. Age 61. Director since 1991.

Carolyn M. Mroz serves as the President and Chief Executive Officer of Bay-Vanguard Federal. Ms. Mroz was President of Vanguard Federal Savings and Loan Association prior to April 1996. Age 59. Director since 1969.

On August 9, 2005, the Board of Directors adopted, subject to stockholder approval at the annual meeting, the BV Financial Inc. 2005 Equity Incentive Plan (the “2005 Plan”). The 2005 Plan will become effective as of the date it is approved by the stockholders.

The board has reserved 181,447 shares of common stock for issuance upon the grant or exercise of awards pursuant to the 2005 Plan. All of the Company’s employees, officers and directors are eligible to participate in the 2005 Plan. A summary of the 2005 Plan is set forth below. This summary is qualified in its entirety by the full text of the 2005 Plan, which is attached to this proxy statement as Appendix C.

Purpose. The purpose of the 2005 Plan is to promote the Company’s success by linking the financial and economic interests of its employees, officers and directors to those of the Company’s stockholders, and by providing participants with an incentive for outstanding performance. The 2005 Plan is further intended to provide flexibility to the Company in its ability to motivate, attract and retain the services of employees, officers and directors upon whose judgment, interest and special effort the successful conduct of the Company’s operation is largely dependent.

Shares Available for Awards. Subject to adjustment as provided in the plan, the aggregate number of shares of common stock reserved and available for issuance pursuant to awards granted under the 2005 Plan is 181,447. Except for shares retained or surrendered to satisfy tax withholding obligations, only shares actually issued under the 2005 Plan count against the total number of shares available under the 2005 Plan. Under the 2005 Plan, 129,605 options to purchase shares and 51,842 shares of restricted stock may be issued.

Administration. The 2005 Plan will be administered by a committee of the Board of Directors appointed by the Board of Directors (which committee shall consist of at least two disinterested directors) (the “Committee”) or, at the discretion of the board from time to time, the 2005 Plan may be administered by the Board of Directors. The Committee will have the following authority: designate participants; determine the type(s) of awards to be granted to each participant and the number, terms and conditions thereof; establish, adopt or revise any rules and regulations as it may deem advisable to administer the 2005 Plan; and make all other decisions and determinations that may be required under the 2005 Plan.

Limitations on Transfer; Beneficiaries. No unexercised or restricted award will be assignable or transferable by a participant other than by will or the laws of descent and distribution or (except in the case of an incentive stock option) pursuant to a qualified domestic relations order. The Committee may permit other transfers where it concludes that such transferability does not result in accelerated taxation, does not cause any option intended to be an incentive stock option to fail to qualify as such, and is otherwise appropriate and desirable, taking into account any factors deemed relevant, including without limitation, any state or federal tax or securities laws or regulations applicable to transferable awards. A participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the participant and to receive any distribution with respect to any award upon the participant’s death.

Acceleration Upon Certain Events. Unless otherwise provided in an award agreement, if a participant’s service terminates by reason of death or disability, all of such participant’s outstanding

options and other awards will become fully vested and exercisable and all time-based vesting restrictions will lapse. The vesting of awards will also occur upon a change in control of the Company.

Adjustments. In the event of a stock split, a dividend payable in shares of Company common stock, or a combination or consolidation of the Company’s common stock into a lesser number of shares, the share authorization limits under the 2005 Plan will automatically be adjusted proportionately, and the shares then subject to each award will automatically be adjusted proportionately without any change in the aggregate purchase price for such award. If the Company is involved in another corporate transaction or event that affects its common stock, such as a recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares, the share authorization limits under the 2005 Plan will be adjusted proportionately, and the Committee may adjust the 2005 Plan and outstanding awards to preserve the benefits or potential benefits of the awards.

The Board of Directors may, at any time and from time to time, terminate or amend the 2005 Plan, but if an amendment to the 2005 Plan would materially increase the number of shares of stock issuable under the 2005 Plan, expand the types of awards provided under the 2005 Plan, materially expand the class of participants eligible to participate in the 2005 Plan, materially extend the term of the 2005 Plan or otherwise constitute a material amendment requiring stockholder approval under applicable stock market or stock exchange listing requirements, laws, policies or regulations, then such amendment will be subject to stockholder approval. In addition, the Board of Directors or the Committee may condition any amendment on the approval of the stockholders for any other reason. No termination or amendment of the 2005 Plan may adversely affect any award previously granted under the 2005 Plan without the written consent of the participant.

The Committee may amend or terminate outstanding awards; however, such amendments may require the consent of the participant and, unless approved by the stockholders or otherwise permitted by the anti-dilution provisions of the 2005 Plan, the exercise price of an outstanding option may not be reduced, directly or indirectly, and the original term of an option may not be extended.

As discussed above under “Termination, Modification and Amendment,” outstanding stock options cannot be repriced, directly or indirectly, without the prior consent of the Company’s stockholders. The exchange of an “underwater” option (i.e., an option having an exercise price in excess of the current market value of the underling stock) for another award would be considered an indirect repricing and would, therefore, require the prior consent of the Company’s stockholders.

Under the 2005 Plan, the Committee may not grant options and restricted stock to any one individual in an amount that would exceed 25% of the shares reserved for each type of award. The Committee may not grant options and restricted stock to any non-employee director in an amount that would exceed 5% of the shares reserved for each type of award. The Committee may not grant, in the aggregate, to non-employee directors options and restricted stock that would exceed 30% of the shares reserved for each type of award. All awards must vest over a period of time no more rapidly than 20% per year commencing on the first anniversary of the date of grant; however, awards may fully vest upon

the death or disability of an award recipient or upon a change in control. These provisions comply with the rules and regulations issued by the Office of Thrift Supervision.

Non-statutory Stock Options. There will be no federal income tax consequences to the optionee or to the Company upon the grant of a non-statutory stock option under the 2005 Plan. However, when the optionee exercises a non-statutory option, he or she will recognize ordinary income equal to the excess of the fair market value of the common stock received upon exercise of the option at the time of exercise over the exercise price, and the Company will be allowed a corresponding deduction, subject to any applicable limitations under Code Section 162(m). Any gain that the optionee realizes when he or she later sells or disposes of the option shares will be short-term or long-term capital gain, depending on how long the shares were held.

Incentive Stock Options. There typically will be no federal income tax consequences to the optionee or to the Company upon the grant or exercise of an incentive stock option. If the optionee holds the option shares for at least two years after the date the option was granted or for one year after exercise, the difference between the exercise price and the amount realized upon sale or disposition of the option shares will be long-term capital gain or loss, and the Company will not be entitled to a federal income tax deduction. If the optionee disposes of the option shares in a sale, exchange or other disqualifying disposition before the required holding period ends, he or she will recognize taxable ordinary income equal to the excess of the fair market value of the option shares at the time of exercise over the exercise price, and the Company will be allowed a federal income tax deduction equal to such amount. While the exercise of an incentive stock option does not result in current taxable income, the excess of the fair market value of the option shares at the time of exercise over the exercise price will be an item of adjustment for purposes of determining the optionee’s alternative minimum taxable income.

Restricted Stock. Unless a participant makes an election to accelerate recognition of the income to the date of grant as described below, a participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a restricted stock award is granted, provided that the award is subject to restrictions on transfer and is subject to a substantial risk of forfeiture. When the restrictions lapse, the participant will recognize ordinary income equal to the fair market value of the common stock as of that date (less any amount he or she paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m). If the participant files an election under Code Section 83(b) within 30 days after the date of grant of the restricted stock, he or she will recognize ordinary income as of the date of grant equal to the fair market value of the stock as of that date (less any amount paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m). Any future appreciation in the stock will be taxable to the participant at capital gains rates. However, if the stock is later forfeited, the participant will not be able to recover the tax previously paid pursuant to the Code Section 83(b) election.

Awards, if any, will be granted under the 2005 Plan only after the 2005 Plan is approved by stockholders. All awards under the 2005 Plan will be made at the discretion of the Committee or under delegated authority. Therefore, it is not possible to determine the benefits or amounts that will be received by any individuals or groups pursuant to the 2005 Plan in the future, or the benefits or amounts

that would have been received by any individuals or groups for the last completed fiscal year if the 2005 Plan had been in effect.

BV Financial did not maintain any equity compensation plans under which its common stock may be issued upon exercise of options, warrants and rights as of June 30, 2005.

The Board of Directors recommends that you vote “FOR” approval of the BV Financial Inc. 2005 Equity Incentive Plan.

Beard Miller Company, LLP was the Company’s independent auditor for the 2005 fiscal year. The Audit Committee of the Board of Directors has appointed Beard Miller to be the Company’s independent auditors for the June 30, 2006 fiscal year, subject to ratification by stockholders. A representative of Beard Miller is expected to be present at the annual meeting to respond to appropriate questions from stockholders and will have the opportunity to make a statement should he or she desire to do so.

If the ratification of the appointment of the auditors is not approved by a majority of the votes present in person or by proxy at the annual meeting and entitled to vote, the Audit Committee of the Board of Directors may consider other independent auditors.

The Board of Directors recommends a vote “FOR” the ratification of the appointment of independent auditors.

The following table sets forth the fees Beard Miller billed to the Company and Bay-Vanguard Federal for the fiscal years ended June 30, 2005 and 2004, respectively:

The Audit Committee has adopted a policy for pre-approval of audit and permitted non-audit services by the Company’s independent auditor. The Audit Committee will consider annually and

approve the provision of audit services by its external auditor and, if appropriate, pre-approve the provision of certain defined audit and non-audit services. The Audit Committee also will consider on a case-by-case basis and, if appropriate, approve specific engagements.

Any proposed specific engagement may be presented to the Audit Committee for consideration at its next regular meeting or, if earlier consideration is required, to the Audit Committee or one or more of its members. The member(s) to whom such authority is delegated shall report any specific approval of services at the next regular meeting of the Audit Committee. The Audit Committee will regularly review summary reports detailing all services being provided to the Company by its external auditor.

During the year ended June 30, 2005, the Audit Committee approved all Audit-Related Fees and Tax Fees set forth above.

The following information is furnished for the executive officers who received a salary and bonus of $100,000 or more during the year ended June 30, 2005. The table does not include certain additional benefits, the aggregate amounts of which did not exceed $50,000 or 10% of salary and bonus for the named executive officers.

Employment Agreements. BV Financial and Bay-Vanguard Federal each maintain employment agreements with Mr. Leonard and Ms. Mroz. Bay-Vanguard Federal maintains an employment agreement with Mr. Gallagher. Mr. Leonard’s and Ms. Mroz’s employment agreements provide for a three-year term. Mr. Gallagher’s employment agreement provides for a two-year term. The term of the employment agreement is subject to annual renewal by the Board of Directors until the Board of Directors or the executive provides written notice of non-renewal. The Board of Directors will review

the executives’ base salaries annually. The current annual base salary is $125,000 for Ms. Mroz and Mr. Leonard and is $105,000 for Mr. Gallagher. In addition to base salary, the employment agreements provide for, among other things, the executives’ participation in stock-based benefit plans and the provision of certain fringe benefits applicable to executive personnel. The employment agreements also provide for termination of the executives for just cause, as defined in the respective employment agreements, at any time. Upon a termination for just cause, neither BV Financial nor Bay-Vanguard Federal will make any further payments under the employment agreements. However, if the executive is terminated for reasons other than just cause, as defined in the respective employment agreements, or if they resign under specified circumstances that constitute constructive termination, the executives, or if they should die, their beneficiaries, will receive base salary and contributions to any employee benefit plans that would have been paid or contributed on their behalf for the remaining term of the employment agreement. The executives’ health and welfare benefits will also continue for the remaining term of the agreement. Upon a termination of employment for reasons other than cause or a change in control, the agreements will require the executive to adhere to a one-year non-competition provision. The three-year employment agreements also provide for continued medical coverage for five years following Mr. Leonard’s and Ms. Mroz’s retirement and reimbursement of all out-of-pocket medical expenses related to the executives’ annual medical physicals. Mr. Gallagher’s employment agreement provides that, in addition to his personal medical coverage, Bay-Vanguard Federal will provide him with family medical coverage.

If the executive is involuntarily terminated in connection with a change in control, or if he or she voluntarily terminates employment following a change in control under certain circumstances specified in the employment agreements, his or her beneficiaries will receive a severance payment equal to 2.99 times his or her average (two times in the case of Mr. Gallagher) annual compensation over the five preceding tax years (or if he or she is employed less than five years, the years of employment). The executives’ health and welfare benefit coverage will continue for 36 months (24 months in the case of Mr. Gallagher).

Under applicable law, the Internal Revenue Service may impose an excise tax on change in control-related payments that equal or exceed three times each executive’s average annual compensation over the five years preceding the change in control. This excise tax would equal 20% of the amount that exceeds one times the executive’s average compensation over the preceding five tax years. To prevent the imposition of the excise tax, each employment agreement limits payments to the executive to an amount that is one dollar less than three times the executive’s average annual compensation.

BV Financial and Bay-Vanguard Federal will be jointly responsible for payments made to the executives under the employment agreements, although BV Financial will guarantee any payments not made by Bay-Vanguard Federal. BV Financial or Bay-Vanguard Federal will also pay or reimburse all reasonable costs and legal fees incurred by the executives in relation to any dispute or question of interpretation involving their employment agreements, if they succeed on the merits in a legal judgment, arbitration or settlement proceeding. The employment agreements provide further that BV Financial or Bay-Vanguard Federal will indemnify the executives to the fullest extent legally permissible for all expenses and liabilities they incur in connection with any legal proceedings related to their roles as officers or directors.

Executive Supplemental Retirement Plan. Bay-Vanguard Federal maintains the Bay-Vanguard Federal Executive Supplemental Retirement Plan to provide certain payments to Mr. Leonard and Ms. Mroz upon retirement or to their respective beneficiaries if they die while there are funds

credited to their pre-retirement account. If Mr. Leonard or Ms. Mroz remains in the employ of Bay-Vanguard Federal until he or she attains age 65, Mr. Leonard or Ms. Mroz is entitled to a retirement benefit equal to the excess (if any) of the Index (as defined in the plan) for the plan year in which Mr. Leonard or Ms. Mroz retires over the Cost of Funds Expense (as defined in the plan) for the plan year in which Mr. Leonard or Ms. Mroz retires, minus the marginal tax rate. The index retirement benefit is payable for each plan year subsequent to Mr. Leonard’s or Ms. Mroz’s retirement (including the remaining portion of the year following retirement) until Mr. Leonard’s or Ms. Mroz’s death. In addition to the index retirement benefit, Mr. Leonard and Ms. Mroz are also entitled to the balance in their pre-retirement accounts that will be payable in 180 monthly installments commencing 30 days after their termination of employment for reasons other than cause. If Mr. Leonard or Ms. Mroz terminates service with Bay-Vanguard Federal before age 65, for reasons other than cause or early retirement, they are entitled to receive the balance in their pre-retirement account in 180 monthly installments commencing 30 days following attainment of age 65. If Mr. Leonard or Ms. Mroz dies while there is a balance in their pre-retirement account, the unpaid balance will be paid in a lump sum to their respective beneficiaries. If Mr. Leonard or Ms. Mroz becomes disabled before terminating employment with Bay-Vanguard Federal and their service with Bay-Vanguard Federal is terminated because of the disability or Mr. Leonard or Ms. Mroz is terminated in connection with a Change in Control (as defined in the plan), they will immediately begin to receive benefits under the plan as if they had retired from Bay-Vanguard Federal at age 65 (or in the case of a change in control, immediately or upon attaining age 60, whichever is last to occur).

Bay-Vanguard Federal is funding its obligations under the plan through the purchase of life insurance. Each participating executive has entered into life insurance endorsement method split-dollar plan agreements in connection with the plan funding.

Supplemental Executive Retirement Plan. Bay-Vanguard Federal maintains a supplemental executive retirement plan that provides participating executives with benefits otherwise limited by certain provisions of the Code or the terms of the employee stock ownership plan. Specifically, the plan provides benefits to eligible officers (those designated by the Board of Directors of Bay-Vanguard Federal) that cannot be provided under the 401(k) Profit Sharing Plan or the employee stock ownership plan as a result of limitations imposed by the Code, but that would have been provided under the plans, but for these Code limitations. In addition to providing for benefits lost under tax-qualified plans as a result of the Code limitations, the plan also provides supplemental benefits upon a change of control before the scheduled repayment of the employee stock ownership plan loan. Generally, upon a change in control, the supplemental executive retirement plan provides participants with a benefit equal to what they would have received under the employee stock ownership plan had they remained employed throughout the term of the loan, less the benefits actually provided under the plan on the participant’s behalf. A participant’s benefits generally become payable upon a change in control of Bay-Vanguard Federal and BV Financial. The board has designated Mr. Leonard, Ms. Mroz and Mr. Gallagher as participants in the plan.

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s executive officers and directors, and persons who own more than 10% of any registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Executive officers, directors and greater than 10% stockholders are required by regulation to furnish the Company with copies of all Section 16(a) reports they file.

Based solely on its review of the copies of the reports it has received and written representations provided to the Company from the individuals required to file the reports, the Company believes that each of its executive officers and directors has complied with applicable reporting requirements for transactions in BV Financial common stock during the fiscal year ended June 30, 2005, except for one late report filed by Mr. Gallagher regarding the purchase of Company common stock.

Loans and Extensions of Credit. The Sarbanes-Oxley Act generally prohibits loans by BV Financial to its executive officers and directors. However, the Sarbanes-Oxley Act contains a specific exemption from such prohibition for loans by Bay-Vanguard Federal to its executive officers and directors in compliance with federal banking regulations. Federal regulations require that all loans or extensions of credit to executive officers and directors of insured financial institutions must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, except for loans made under programs generally available to all employees, and must not involve more than the normal risk of repayment or present other unfavorable features. Bay-Vanguard Federal is therefore prohibited from making any new loans or extensions of credit to executive officers and directors at different rates or terms than those offered to the general public, except for loans made pursuant to programs generally available to all employees, and has adopted a policy to this effect. In addition, loans made to a director or executive officer in an amount that, when aggregated with the amount of all other loans to such person and his or her related interests, are in excess of the greater of $25,000 or 5% of the institution’s capital and surplus (up to a maximum of $500,000), must be approved in advance by a majority of the disinterested members of the Board of Directors.

Other Transactions. Gallagher Evelius & Jones LLP, of which Robert R. Kern, Jr. is a partner, has performed legal services for Bay-Vanguard Federal. Bay-Vanguard Federal paid a total of $31,775 and $42,000 in legal fees to Gallagher Evelius & Jones LLP for fiscal 2005 and fiscal 2004, respectively.

Notwithstanding anything to the contrary set forth in any of the Company’s previous filings under the Securities Act of 1933 or the Securities Exchange Act of 1934 that might incorporate future filings, including this proxy statement, in whole or in part, the following report of the Audit Committee shall not be incorporated by reference into any such filings.

The Audit Committee of the Company’s Board of Directors is comprised of three non-employee directors and operates under a written charter adopted by the Board of Directors, a copy of which is included as Appendix A to this proxy statement. The Board of Directors has determined that each Audit Committee member is independent in accordance with the listing standards of the Nasdaq Stock Market.

The Company’s management is responsible for the Company’s internal control over financial reporting. The independent auditors are responsible for performing an independent audit of the Company’s consolidated financial statements and issuing an opinion on the conformity of those financial statements with generally accepted accounting principals. The Audit Committee oversees the Company’s internal control over financial reporting on behalf of the Board of Directors.

In this context, the Audit Committee has met and held discussions with management and the independent auditors. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent auditors. The Audit Committee discussed with the independent auditors matters required to be discussed by Statement on Auditing Standards No. 61 (Communication With Audit Committees), including the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements.

In addition, the Audit Committee has received the written disclosures and the letter from the independent auditors required by the Independence Standards Board Standard No. 1 (Independence Discussions With Audit Committees) and has discussed with the independent auditors the auditors’ independence from the Company and its management. In concluding that the auditors are independent, the Audit Committee considered, among other factors, whether the non-audit services provided by the auditors were compatible with its independence.

The Audit Committee discussed with the Company’s independent auditors the overall scope and plans for their audit. The Audit Committee meets with the independent auditors, with and without management present, to discuss the results of their examination, their evaluation of the Company’s internal control over financial reporting, and the overall quality of the Company’s financial reporting process.

In performing all of these functions, the Audit Committee acts only in an oversight capacity. In its oversight role, the Audit Committee relies on the work and assurances of the Company’s management, which has the primary responsibility for financial statements and reports, and of the independent auditors who, in their report, express an opinion on the conformity of the Company’s financial statements to generally accepted accounting principles. The Audit Committee’s oversight does not provide it with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal control over financial reporting designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions with management and the independent auditors do not assure that the Company’s financial statements are presented in accordance with generally accepted accounting principles, that the audit of the Company’s financial statements has been carried out in accordance with the standards of the Public Company Accounting Oversight Board (United States) or that the Company’s independent auditors are in fact “independent.”

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the board approved, that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-KSB for the year ended June 30, 2005 for filing with the Securities and Exchange Commission. The Audit Committee appointed, subject to stockholder ratification, the selection of the Company’s independent auditors for the fiscal year ending June 30, 2006.

It is the policy of the Nominating and Governance Committee of the Board of Directors of the Company to consider director candidates recommended by stockholders who appear to be qualified to serve on the Company’s Board of Directors. The Nominating and Governance Committee may choose not to consider an unsolicited recommendation if no vacancy exists on the Board of Directors and the Nominating and Governance Committee does not perceive a need to increase the size of the Board of Directors. To avoid the unnecessary use of the Nominating and Governance Committee’s resources, the Nominating and Governance Committee will consider only those director candidates recommended in accordance with the procedures set forth below.

To submit a recommendation of a director candidate to the Nominating and Governance Committee, a stockholder should submit the following information in writing, addressed to the Chair of the Nominating and Governance Committee, care of the Corporate Secretary, at the main office of the Company:

In order for a director candidate to be considered for nomination at the Company’s annual meeting of stockholders, the recommendation must be received by the Nominating and Governance Committee at least 120 calendar days before the date the Company’s proxy statement was released to stockholders in connection with the previous year’s annual meeting, advanced by one year.

The process that the Nominating and Governance Committee follows when it identifies and evaluates individuals to be nominated for election to the Board of Directors is as follows:

Identification. For purposes of identifying nominees for the Board of Directors, the Nominating and Governance Committee relies on personal contacts of the committee members and other members of the Board of Directors, as well as their knowledge of members of the communities served by Bay-Vanguard Federal. The Nominating and Governance Committee also will consider director candidates recommended by stockholders in accordance with the policy and procedures set forth above. The Nominating and Governance Committee has not used an independent search firm to identify nominees.

Evaluation. In evaluating potential nominees, the Nominating and Governance Committee determines whether the candidate is eligible and qualified for service on the Board of Directors by evaluating the candidate under the selection criteria, which are discussed in more detail below. If such individual fulfills these criteria, the Nominating and Governance Committee will conduct a check of the individual’s background and interview the candidate to further assess the qualities of the prospective nominee and the contributions he or she would make to the board.

The Nominating and Governance Committee has adopted a set of criteria that it considers when it selects individuals not currently on the Board of Directors to be nominated for election to the Board of Directors. A candidate must meet the eligibility requirements set forth in the Company’s bylaws, which include an age limitation, a stock ownership requirement and a requirement that the candidate not have been subject to certain criminal or regulatory actions. A candidate must also meet any qualification requirements set forth in any board or committee governing documents.

If the candidate is deemed eligible for election to the Board of Directors, the Nominating and Governance Committee will then evaluate the prospective nominee to determine if he or she possesses the following qualifications, qualities or skills:

The Committee will also consider any other factors it deems relevant, including age, diversity, size of the Board of Directors and regulatory disclosure obligations.

With respect to nominating an existing director for re-election to the Board of Directors, the Nominating and Governance Committee will consider and review an existing director’s board and

committee attendance and performance; length of board service; experience, skills and contributions that the existing director brings to the board; and independence.

The Company must receive proposals that stockholders seek to have included in the proxy statement for the Company’s next annual meeting no later than June 6, 2006. If next year’s annual meeting is held on a date more than 30 calendar days from November 8, 2006, a stockholder proposal must be received a reasonable time before the Company begins to print and mail its proxy solicitation materials. Any stockholder proposals will be subject to the requirements of the proxy rules adopted by the Securities and Exchange Commission.

The Company’s Bylaws provide that in order for a stockholder to make nominations for the election of directors or proposals for business to be brought before a meeting of stockholders, a stockholder must deliver written notice of such nominations and/or proposals to the Corporate Secretary not less than 30 days before the date of the meeting; provided that if less than 40 days’ notice or prior public disclosure of the meeting is given or made to stockholders, such notice must be delivered not later than the close of the tenth day following the day on which notice of the meeting was mailed to stockholders or such public disclosure was made.

The Company encourages stockholder communications to the Board of Directors and/or individual directors. Stockholders who wish to communicate with the Board of Directors or an individual director should send their communications to the care of Robert R. Kern, Jr., Corporate Secretary, BV Financial, Inc., 7114 North Point Road, Baltimore, Maryland 21219. Communications regarding financial or accounting policies should be sent to the attention of the Chair of the Audit Committee. All other communications should be sent to the attention of the Chair of the Nominating and Governance Committee.

The Company will pay the cost of this proxy solicitation. In addition to the solicitation of proxies by mail, Regan & Associates, a proxy solicitation firm, will assist the Company in soliciting proxies for the annual meeting. The Company will pay a fee of $5,250, including expenses, for these services. The Company will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of the Company. In addition to soliciting proxies by mail, directors, officers and regular employees of the Company may solicit proxies personally or by telephone. None of these persons will receive additional compensation for these activities.

The Company’s Annual Report to Stockholders on Form 10-KSB has been mailed to all persons who were stockholders as of the close of business on September 23, 2005. Any stockholder who has not received a copy of the Annual Report may obtain a copy by writing to the Corporate Secretary of the Company. The Annual Report is not to be treated as part of the proxy solicitation material or as having been incorporated in this proxy statement by reference.

If you and others who share your address own your shares in “street name,” your broker or other holder of record may be sending only one annual report and proxy statement to your address. This practice, known as “householding,” is designed to reduce our printing and postage costs. However, if a shareholder residing at such an address wishes to receive a separate annual report or proxy statement in the future, he or she should contact the broker or other holder of record. If you own your shares in “street name” and are receiving multiple copies of our annual report and proxy statement, you can request householding by contacting your broker or other holder of record.

Whether or not you plan to attend the annual meeting, please vote by marking, signing, dating and promptly returning the enclosed proxy card in the enclosed envelope.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Robert R. Kern, Jr.

Robert R. Kern, Jr.

Corporate Secretary

This document sets forth the charter of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of BV Financial, Inc. (the “Company”).

The primary function of the Committee of the Board of the Company is to review: the integrity of the financial reports and other financial information provided by the Company to any governmental body or the public, including any certification, report, opinion or review performed by the Company’s independent auditor; the Company’s compliance with legal and regulatory requirements; the independent auditor’s qualifications and independence; the performance of the Company’s independent auditors and system of internal controls and disclosure procedures regarding finance, accounting, legal compliance and ethics that management and the board have established; the Company’s auditing, accounting and financial reporting processes generally; and the preparation of information required by the Securities and Exchange Commission rules to be included in the Company’s annual proxy statement.

The Committee will be comprised of three or more directors, each of whom shall satisfy the definition of independent director as defined in any qualitative listing requirements for Nasdaq Stock Market, Inc. issuers and any applicable Securities and Exchange Commission rules and regulations. All members of the Committee should be financially literate at the time of appointment, meaning they should have the ability to read and understand fundamental financial statements, including the Company’s balance sheet, income statement and cash flow statement. The members of the Committee and the Chairperson shall be elected by the board on an annual basis. Members shall serve until their successors are appointed.

The Committee shall meet four times per year, or more frequently as circumstances may require. A quorum of the Committee shall be declared when a majority of the appointed members of the Committee are in attendance. The Committee chairperson shall preside at the meeting and, in consultation with other members of the Committee, will set the frequency and length of each meeting and the agenda of the items to be addressed at each meeting. The Committee chairperson shall ensure that the agenda for each meeting is circulated to each Committee member in advance of the meeting. The Committee shall keep written minutes of all meetings.

In carrying out its responsibilities, the Committee believes its policies and procedures should remain flexible to best react to changing conditions and to ensure to the directors and shareholders that the corporate accounting and reporting practices of the Company are in accordance with all requirements and are of the highest quality. To fulfill its responsibilities and duties, the Committee shall:

In addition to the responsibilities presented above, the Committee will examine this charter on an annual basis to assure that it remains adequate to address the responsibilities of the Committee. Further, the Committee will disclose in annual proxy statement a copy of the charter once every three years.

The Committee shall be authorized to retain independent counsel and other advisors as it deems necessary to carry out its duties. In connection therewith, the Committee shall be provided appropriate funding, as determined by the Committee, for payment to such counsel and other advisors. In addition, the Committee shall be provided funding for ordinary administrative expenses of the Committee.

The primary objectives of the Nominating and Governance Committee (the “Committee”) are to assist the Board of Directors (the “Board”) of BV Financial, Inc. (the “Company”) by: (i) identifying individuals qualified to become board members and recommending a group of director nominees for election at each annual meeting of the Company’s shareholders; (ii) ensuring that the Audit, Compensation, and Nominating and Governance Committees of the board shall have the benefit of qualified and experienced “independent” directors; and (iii) developing and recommending to the board a set of effective corporate governance policies and procedures applicable to the Company.

The Committee shall consist of three or more directors, each of whom shall satisfy the definition of independent director as defined in any qualitative listing requirements for Nasdaq Stock Market, Inc. issuers and any applicable Securities and Exchange Commission rules and regulations.

The members of the Committee and the chairperson shall be elected by the board on an annual basis. Members shall serve until their successors are appointed. The Committee may form and delegate authority to subcommittees when appropriate.

The chairperson of the Committee will preside at each meeting and, in consultation with the other members of the Committee, will set the frequency and length of each meeting and the agenda of items to be addressed at each meeting. The chairperson of the Committee shall ensure that the agenda for each meeting is circulated to each Committee member in advance of the meeting. The Committee shall keep written minutes of all meetings.

The Committee shall: (i) develop and recommend to the board a Corporate Governance Policy (the “Policy”) applicable to the Company, and review and reassess the adequacy of such Policy annually and recommend to the board any changes deemed appropriate; (ii) develop policies on the size and composition of the board; (iii) review possible candidates for board membership consistent with the board’s criteria for selecting new directors; (iv) annually recommend a slate of nominees to the board with respect to nominations for the board at the annual meeting of the Company’s shareholders; and (vi) generally advise the board (as a whole) on corporate governance matters.

The Committee shall also advise the board on (i) committee member qualifications, (ii) committee member appointments and removals, (iii) committee structure and operations (including authority to delegate to subcommittees) and (iv) committee reporting to the board. The Committee shall maintain an orientation program for new directors and a continuing education program for all directors.

The Committee will annually review and reassess the adequacy of this charter and recommend any proposed changes to the board for approval.

The Committee shall perform any other activities consistent with this charter, the Company’s bylaws and governing law and regulations as the Committee or the board deems appropriate.

The Committee shall conduct an annual performance evaluation of the board. The evaluation shall be of the board’s contribution as a whole and specifically review areas in which the board and/or management believes a better contribution could be made.

The Committee shall have the authority to obtain advice and seek assistance from internal or external legal, accounting or other advisors. The Committee shall have the sole authority to retain and terminate any search firm to be used to identify director candidates, including sole authority to approve such search firm’s fees and other retention terms.

The purpose of the BV Financial, Inc. 2005 Equity Incentive Plan (the “Plan”) is to promote the success and enhance the value of BV Financial, Inc. (the “Company”) by linking the financial and economic interests of employees, officers and directors of the Company or any Affiliate (as defined below) to those of Company shareholders and by providing such persons with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract and retain the services of employees, officers and directors upon whose judgment, interest and special effort the successful conduct of the Company’s operation is largely dependent. Accordingly, the Plan permits the grant of equity incentive awards from time to time to selected employees, officers and directors of the Company and its Affiliates.

When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence, the word or phrase shall generally be given the meaning ascribed to it in this Article 2 unless a clearly different meaning is required by the context. The following words and phrases shall have the following meanings:

“Affiliate” means an entity that directly or through one or more intermediaries controls, is controlled by or is under common control with, the Company, as determined by the Committee.

“Award” means any Option or Restricted Stock Award granted to a Participant under the Plan.

“Award Agreement” means a written document, in such form as the Committee prescribes from time to time, setting forth the terms and conditions of an Award.

“Change in Control” means the occurrence of any one of the following events:

Notwithstanding anything in this Plan to the Contrary, in no event shall the full conversion of Bay-Vanguard, M.H.C., or any successor corporation, to the stock form of ownership under applicable regulations, constitute a Change in Control.

“Change in Control Price” means the highest price per share of Shares offered in conjunction with any transaction resulting in a Change in Control (as determined in good faith by the Committee if any part of the offered price is payable other than in cash) or, in the case of a Change in Control occurring solely by reason of a change in the composition of the Board of Directors, the highest Fair Market Value of the Shares on any of the thirty (30) trading days immediately preceding the date on which a Change in Control occurs.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Committee” means the committee of the Board of Directors described in Article 4 of the Plan.

“Continuous Status as a Participant” means the absence of any interruption or termination of service as an employee, officer or director of the Company or any Affiliate, as applicable. Continuous service shall not be considered interrupted in the case of sick leave, military leave or any other absence approved by the Company or an Affiliate, in the case of transfers between payroll locations or between the Company, an Affiliate or a successor or performance of services in an emeritus advisory or consulting capacity; provided, however, that for purposes of an Incentive Stock Option, “Continuous Status as a Participant” means the absence of any interruption or termination of service as an employee of the Company or any Parent or Subsidiary, as applicable.

“Covered Employee” means a covered employee as defined in Section 162(m)(3) of the Code.

“Disability” shall mean any illness or other physical or mental condition of a Participant that renders the Participant incapable of performing his customary and usual duties for the Company, or any medically determinable illness or other physical or mental condition resulting from a bodily injury, disease or mental disorder which, in the judgment of the Committee, is permanent and continuous in nature. The Committee may require such medical or other evidence as it deems necessary to judge the

nature and permanency of the Participant’s condition. Notwithstanding the above, with respect to an Incentive Stock Option, Disability shall mean Permanent and Total Disability as defined in Section 22(e)(3) of the Code.

“Effective Date” has the meaning assigned such term in Section 3.1 of the Plan.

“Eligible Participant” means an employee, officer or director of the Company or any Affiliate.

“Exchange” means any national securities exchange or national securities association on which the Stock may from time to time be listed or traded.

“Fair Market Value” on any date, means (i) if the Stock is listed on an Exchange, the closing sales price on such exchange or over such system on such date or, in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported, or (ii) if the Stock is not listed on an Exchange, Fair Market Value shall mean a price determined by the Committee in good faith on the basis of objective criteria.

“Incentive Stock Option” means an Option that is intended to be an incentive stock option and meets the requirements of Section 422 of the Code or any successor provision thereto.

“Non-Employee Director” means a director of the Company or an Affiliate who is not a common law employee of the Company or an Affiliate.

“Non-statutory Stock Option” means an Option that is not an Incentive Stock Option.

“Option” means a right granted to a Participant under Article 7 of the Plan to purchase Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Non-statutory Stock Option.

“Parent or Subsidiary” means a “parent” or “subsidiary” as such terms are defined in Sections 424(e) and (f) of the Code.

“Participant” means a person who, as an employee, officer or director of the Company or any Affiliate, has been granted an Award under the Plan; provided that in the case of the death of a Participant, the term “Participant” refers to a beneficiary designated pursuant to Section 9.3 of the Plan or the legal guardian or other legal representative acting in a fiduciary capacity on behalf of the Participant under applicable state law and court supervision.

“Plan” means the BV Financial, Inc. 2005 Equity Incentive Plan, as amended from time to time.

“Restricted Stock Award” means Stock granted to a Participant under Article 8 of the Plan that is subject to certain restrictions and to risk of forfeiture.

“Shares” means shares of the Company’s Stock. If there has been an adjustment or substitution pursuant to Article 10 of the Plan, the term “Shares” shall also include any shares of stock or other

securities that are substituted for Shares or into which Shares are adjusted pursuant to Article 10 of the Plan.

“Stock” means the common stock of the Company, par value $0.01, and such other securities of the Company as may be substituted for Stock pursuant to Article 10 of the Plan.

“1933 Act” means the Securities Act of 1933, as amended from time to time.

“1934 Act” means the Securities Exchange Act of 1934, as amended from time to time.

3.1 EFFECTIVE DATE. The Plan shall be effective as of the date it is approved by the stockholders of the Company (the “Effective Date”).

3.2 TERMINATION OF PLAN. The Plan shall terminate on the tenth anniversary of the Effective Date. The termination of the Plan on such date shall not affect the validity of any Award outstanding on the date of termination.

4.1 COMMITTEE. The Plan shall be administered by a Committee appointed by the Board of Directors (which Committee shall consist of at least two disinterested directors) or, at the discretion of the Board from time to time, the Plan may be administered by the Board of Directors. It is intended that at least two of the directors appointed to serve on the Committee shall be “non-employee directors” (within the meaning of Rule 16b-3 promulgated under the 1934 Act) and “outside directors” (within the meaning of Code Section 162(m) and the regulations thereunder) and that any such members of the Committee who do not so qualify shall abstain from participating in any decision to make or administer Awards that are made to Eligible Participants who, at the time of consideration for such Award, (i) are persons subject to the short-swing profit rules of Section 16 of the 1934 Act or (ii) are reasonably anticipated to become Covered Employees during the term of the Award. However, the mere fact that a Committee member shall fail to qualify under either of the foregoing requirements or shall fail to abstain from such action shall not invalidate any Award made by the Committee, which Award is otherwise validly made under the Plan. The members of the Committee shall be appointed by, and may be changed at any time and from time to time in the discretion of, the Board of Directors. The Board of Directors may reserve for itself any or all of the authority and responsibility of the Committee under the Plan or may act as administrator of the Plan for any and all purposes. To the extent the Board of Directors has reserved any authority and responsibility or during any time that the Board of Directors is acting as administrator of the Plan, it shall have all the powers of the Committee hereunder, and any reference herein to the Committee (other than in this Section 4.1) shall include the Board of Directors. To the extent any action of the Board of Directors under the Plan conflicts with actions taken by the Committee, the actions of the Board of Directors shall control.

4.2 ACTION AND INTERPRETATIONS BY THE COMMITTEE. For purposes of administering the Plan, the Committee may from time to time adopt rules, regulations, guidelines and procedures for carrying out the provisions and purposes of the Plan and make such other determinations,

not inconsistent with the Plan, as the Committee may deem appropriate. The Committee’s interpretation of the Plan, any Awards granted under the Plan, any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding and conclusive on all parties. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Affiliate, the Company’s or an Affiliate’s independent certified public accountants, Company counsel or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

4.3 AUTHORITY OF COMMITTEE. Except as provided below, the Committee has the exclusive power, authority and discretion to:

Notwithstanding the above, the Board of Directors or the Committee may also delegate, to the extent permitted by applicable law, to one or more officers of the Company, the Committee’s authority under subsections (a) through (h) above, pursuant to a resolution that specifies the total number of

Options or Restricted Stock Awards that may be granted under the delegation, provided that no officer may be delegated the power to designate himself or herself as a recipient of such Awards; and provided further that no delegation of its duties and responsibilities may be made to officers of the Company with respect to Awards to Eligible Participants who, as of the Grant Date, are persons subject to the short-swing profit rules of Section 16 of the 1934 Act or who, as of the Grant Date, are reasonably anticipated to become Covered Employees during the term of the Award. The acts of such delegates shall be treated hereunder as acts of the Committee and such delegates shall report to the Committee regarding the delegated duties and responsibilities.

4.4 AWARD AGREEMENTS. Each Award shall be evidenced by an Award Agreement. Each Award Agreement shall include such provisions, not inconsistent with the Plan, as may be specified by the Committee.

5.1 NUMBER OF SHARES. Subject to adjustment as provided in Article 10 of the Plan, the aggregate number of Shares reserved and available for issuance pursuant to Awards granted under the Plan shall be 181,447.

5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market.

5.4 LIMITATION ON AWARDS. Notwithstanding any provision in the Plan to the contrary (but subject to adjustment as provided in Section 10.1), the maximum number of Shares that may be delivered pursuant to Options under the Plan is 129,605 and the maximum number of Shares that may be delivered pursuant to an award of Restricted Stock under the Plan is 51,842. The maximum

number of Shares with respect to which more Options may be granted during any one calendar year under the Plan to any one Participant shall be 45,361.

Awards may be granted only to Eligible Participants; except that Incentive Stock Options may be granted only to Eligible Participants who are employees of the Company or a Parent or Subsidiary of the Company.

7.1 GENERAL. The Committee is authorized to grant Options to Participants on the following terms and conditions:

7.2 INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options granted under the Plan must comply with the following additional rules:

Unless the exercisability of the Incentive Stock Option is accelerated as provided in Articles 9 or 10 of the Plan, if a Participant exercises an Option after termination of employment, the Option may be exercised only with respect to the Shares that were otherwise vested on the Participant’s termination of employment. Upon the Participant’s death, any exercisable Incentive Stock Options may be exercised by the Participant’s beneficiary, determined in accordance with Section 9.3 of the Plan.

8.1 GRANT OF RESTRICTED STOCK. The Committee is authorized to make awards of Restricted Stock to Participants in such amounts and subject to such terms and conditions as may be selected by the Committee. An award of Restricted Stock shall be evidenced by an Award Agreement setting forth the terms, conditions and restrictions applicable to the Award.

8.2 ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on the Restricted Stock). These restrictions may lapse separately or in combination at such times, under such circumstances, in such installments, upon the satisfaction of performance goals or otherwise, as the Committee determines at the time of the grant of the Award or thereafter. Except as otherwise provided in an Award Agreement, the Participant shall have all of the rights of a stockholder with respect to the Restricted Stock.

8.3 FORFEITURE. Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of Continuous Status as a Participant during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited; provided, however, that the Committee may provide in any Award Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from death or Disability or in connection with a Change in Control, and the Committee may in other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock.

8.4 DELIVERY OF RESTRICTED STOCK. Unless otherwise held in a trust and registered in the name of the trustee, reasonably promptly after the Grant Date with respect to shares of Restricted Stock, the Company shall cause to be issued a stock certificate, registered in the name of the Participant to whom the Restricted Stock was granted, evidencing such shares. Each such stock certificate shall bear the following legend:

“The transferability of this certificate and the shares of stock represented hereby are subject to the restrictions, terms and conditions (including forfeiture provisions and restrictions against transfer) contained in the BV Financial, Inc. 2005 Equity Incentive Plan and Award Agreement entered into between the registered owner of such shares and BV Financial, Inc. or its Affiliates. A copy of the Plan and Award Agreement is on file in the office of the Corporate Secretary of BV Financial, Inc.”

Such legend shall not be removed until the Participant vests in such shares pursuant to the terms of the Plan and Award Agreement. Each certificate issued pursuant to this Section 8.4, in connection with a Restricted Stock Award, shall be held by the Company or its Affiliates, unless the Committee determines otherwise.

8.5 VOTING RIGHTS. Unless otherwise determined by the Committee at the time of grant, a Participant holding Restricted Stock shall be entitled to exercise full voting rights with respect to those Shares during the restriction period.

8.6 DIVIDENDS AND OTHER DISTRIBUTIONS. During the restriction period, a Participant holding Restricted Stock may, if the Committee so determines, be credited with dividends paid with respect to the underlying Shares. Such dividends shall be paid to the Participant at times determined by the Committee in its sole discretion. The Committee may apply any restrictions to the dividends that the Committee deems appropriate.

9.1 TERM OF AWARD. The term of each Award shall be for the period as determined by the Committee, provided that in no event shall the term of any Incentive Stock Option exceed a period of ten years from its Grant Date (or, if Section 7.2(c) applies, five years from its Grant Date).

9.2 LIMITS ON TRANSFER. No right or interest of a Participant in any unexercised or restricted Award may be pledged, encumbered or hypothecated to or in favor of any party other than the Company or an Affiliate, or shall be subject to any lien, obligation or liability of such Participant to any other party other than the Company or an Affiliate. No unexercised or restricted Award shall be assignable or transferable by a Participant other than by will or the laws of descent and distribution or, except in the case of an Incentive Stock Option, pursuant to a domestic relations order that would satisfy Section 414(p)(1)(A) of the Code if that Code section applied to an Award under the Plan; provided, however, that the Committee may (but need not) permit other transfers where the Committee concludes that such transferability (i) does not result in accelerated taxation, (ii) does not cause any Option intended to be an Incentive Stock Option to fail to be described in Code Section 422(b) and (iii) is otherwise appropriate and desirable, taking into account any factors deemed relevant, including without limitation, state or federal tax or securities laws applicable to transferable Awards.

9.3 BENEFICIARIES. Notwithstanding Section 9.2 of the Plan, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary, legal guardian, legal representative or other person claiming any rights under the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If no beneficiary has been designated or survives the Participant, payment shall be made to the Participant’s estate. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time, provided the change or revocation is filed with the Committee.

9.4 STOCK CERTIFICATES. All Stock issuable under the Plan is subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal or state securities laws, rules and regulations and the rules of any national securities exchange or automated quotation system on which the Stock is listed, quoted or traded. The Committee may place legends on any stock certificate or issue instructions to the transfer agent to reference restrictions applicable to the Stock.

9.5 ACCELERATION UPON DEATH OR DISABILITY. Except as otherwise provided in the Award Agreement, upon the Participant’s death or Disability during his or her Continuous Status as a Participant, all of such Participant’s outstanding Options and other Awards in the nature of rights that may be exercised shall become fully exercisable and all time-based vesting restrictions on the

Participant’s outstanding Awards shall lapse. Any Awards shall thereafter continue or lapse in accordance with the other provisions of the Plan and the Award Agreement. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Section 7.2(b) of the Plan, the excess Options shall be deemed to be Non-statutory Stock Options.

9.6 TERMINATION OF EMPLOYMENT. Whether military, government or other service or other leave of absence shall constitute a termination of employment shall be determined in each case by the Committee at its discretion, and any determination by the Committee shall be final and conclusive. A Participant’s Continuous Status as a Participant shall not be deemed to terminate in a circumstance in which a Participant transfers from the Company to an Affiliate, transfers from an Affiliate to the Company, or transfers from one Affiliate to another Affiliate. To the extent that this provision causes Incentive Stock Options to extend beyond three months from the date a Participant is deemed to be an employee of the Company, a Parent or Subsidiary for purposes of Sections 424(e) and 424(f) of the Code, the Options held by such Participant shall be deemed to be Non-statutory Stock Options.

10.1 CHANGES IN CAPITAL STRUCTURE. In the event of a corporate event or transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the authorization limits under Article 5 shall be adjusted proportionately, and the Committee may adjust the Plan and Awards to preserve the benefits or potential benefits of the Awards. Action by the Committee may include: (i) adjustment of the number and kind of shares which may be delivered under the Plan; (ii) adjustment of the number and kind of shares subject to outstanding Awards; (iii) adjustment of the exercise price of outstanding Awards or the measure to be used to determine the amount of the benefit payable on an Award; and (iv) any other adjustments that the Committee determines to be equitable. Without limiting the foregoing, in the event of a subdivision of the outstanding stock (stock split), a declaration of a dividend payable in Shares or a combination or consolidation of the outstanding stock unto a lesser number of Shares, the authorization limits under Article 5 shall automatically be adjusted proportionately and the Shares then subject to each Award shall automatically be adjusted proportionately without any change in the aggregate purchase price therefor.

10.2 ACCELERATED VESTING AND PAYMENT. Subject to the provisions of Section 10.3 of the Plan or as otherwise provided in the Award Agreement, in the event of a Change in Control, unless otherwise specifically prohibited under law or by the rules and regulations of an Exchange:

10.3 ALTERNATIVE AWARDS. Notwithstanding Section 10.2 of the Plan, no cash settlement or other payment shall occur with respect to any Award if the Committee reasonably determines in good faith prior to the occurrence of a Change in Control that such Award shall be honored or assumed, or new rights substituted therefor (such honored, assumed or substituted Award hereinafter called an “Alternative Award”) by any successor as described in Section 12.16 of the Plan; provided that any such Alternative Award must:

11.1 AMENDMENT, MODIFICATION AND TERMINATION. The Board or the Committee may, at any time and from time to time, amend, modify or terminate the Plan without stockholder approval; provided, however, that if an amendment to the Plan would, in the reasonable opinion of the Board of Directors or the Committee, either (i) materially increase the number of Shares available under the Plan, (ii) expand the types of awards under the Plan, (iii) materially expand the class of participants eligible to participate in the Plan, (iv) materially extend the term of the Plan, or (v) otherwise constitute a material change requiring shareholder approval under applicable laws, policies or regulations or the applicable listing or other requirements of an Exchange, then such amendment shall be subject to shareholder approval; and provided, further, that the Board of Directors or Committee may condition any other amendment or modification on the approval of shareholders of the Company for any reason, including by reason of such approval being necessary or deemed advisable to (i) permit Awards made hereunder to be exempt from liability under Section 16(b) of the 1934 Act, (ii) to comply with the listing or other requirements of an exchange, or (iii) to satisfy any other tax, securities or other applicable laws, policies or regulations.

11.2 AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the Committee may amend, modify or terminate any outstanding Award without approval of the Participant; provided, however:

12.1 NO RIGHTS TO AWARDS; NON-UNIFORM DETERMINATIONS. No Participant or any Eligible Participant shall have any claim to be granted any Award under the Plan. Neither the Company, its Affiliates nor the Committee is obligated to treat Participants or Eligible Participants uniformly, and determinations made under the Plan may be made by the Committee selectively among Eligible Participants who receive, or are eligible to receive, Awards (whether or not such Eligible Participants are similarly situated).

12.2 NO SHAREHOLDER RIGHTS. Except as otherwise provided in this Plan or an Award Agreement, no Award gives a Participant any of the rights of a shareholder of the Company unless and until Shares are in fact issued to such person in connection with such Award.

12.3 WITHHOLDING. The Company or any Affiliate shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state and local taxes (including the Participant’s FICA obligation) required by law to be withheld with respect to any exercise, lapse of restriction or other taxable event arising as a result of the Plan. If Shares are surrendered to the Company to satisfy withholding obligations in excess of the minimum withholding obligation, such Shares must have been held by the Participant as fully vested shares for such period of time, if any, as necessary to avoid variable accounting for the Award. With respect to withholding required upon any taxable event under the Plan, the Committee may, at the time the Award is granted or thereafter, require or permit that any such withholding requirement be satisfied, in whole or in part, by withholding from the Award Shares having a Fair Market Value on the date of withholding

equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes, all in accordance with such procedures as the Committee establishes.

12.4 NO RIGHT TO CONTINUED SERVICE. Nothing in the Plan, any Award Agreement or any other document or statement made with respect to the Plan, shall interfere with or limit in any way the right of the Company or any Affiliate to terminate any Participant’s employment or status as an officer, director or consultant at any time, nor confer upon any Participant any right to continue as an employee, officer, director or consultant of the Company or any Affiliate, whether for the duration of a Participant’s Award or otherwise.

12.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the Company or any Affiliate. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974 (“ERISA”).

12.6 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or benefit plan of the Company or any Affiliate unless provided otherwise in such other plan.

12.7 EXPENSES. The expenses of administering the Plan shall be borne by the Company and its Affiliates.

12.8 TITLES AND HEADINGS. The titles and headings of the Sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

12.9 GENDER AND NUMBER. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.

12.10 FRACTIONAL SHARES. No fractional Shares shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down.

12.12 GOVERNING LAW. To the extent not governed by federal law, the Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the State of Maryland.

12.13 ADDITIONAL PROVISIONS. Each Award Agreement may contain such other terms and conditions as the Committee may determine; provided that such other terms and conditions are not inconsistent with the provisions of the Plan.

12.14 INDEMNIFICATION. To the extent allowable under applicable law, each member of the Committee shall be indemnified and held harmless by the Company from any loss, cost, liability or

expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit or proceeding to which such member may be a party or in which he may be involved by reason of any action or failure to act under the Plan and against and from any and all amounts paid by such member in satisfaction of judgment in such action, suit or proceeding against him provided he gives the Company an opportunity, at its own expense, to handle and defend the same before he undertakes to handle and defend it on his own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Charter or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

12.15 NO LIMITATIONS ON RIGHTS OF COMPANY. Subject to Section 12.16 of the Plan, the grant of any Award shall not in any way affect the right or power of the Company to make adjustments, reclassification or changes in its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. The Plan shall not restrict the authority of the Company, for proper corporate purposes, to draft or assume Awards, other than under the Plan, to or with respect to any person. If the Committee so directs, the Company may issue or transfer Shares to an Affiliate, for such lawful consideration as the Committee may specify, upon the condition or understanding that the Affiliate will transfer such Shares to a Participant in accordance with the terms of an Award granted to such Participant and specified by the Committee pursuant to the provisions of the Plan.

12.16 SUCCESSORS. Any obligations of the Company or an Affiliate under the Plan with respect to Awards granted hereunder, shall be binding on any successor to the Company or Affiliate, respectively, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company or Affiliate, as applicable.

The undersigned hereby appoints the official proxy committee of BV Financial, Inc. (the “Company”), consisting of Robert R. Kern, Jr., Jerry S. Sopher and Anthony J. Narutowicz, or each of them, with full power of substitution, to act as proxy for the undersigned, and to vote all shares of common stock of the Company which the undersigned is entitled to vote only at the annual meeting of stockholders, to be held on November 8, 2005 at 2:00 p.m., local time, at the Courtyard Marriott Hotel, 1671 West Nursery Road, Linthicum, Maryland and at any and all adjournments or postponements, with all of the powers the undersigned would possess if personally present at such meeting as follows:

INSTRUCTION: To withhold your vote for any individual nominee, mark “FOR ALL EXCEPT” and write that nominee’s name in the space provided below.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE LISTED PROPOSALS.

This proxy is revocable and, if properly signed and dated, will be voted as directed, but if no instructions are specified, this proxy will be voted “FOR” each of the proposals listed. If any other business is presented at the annual meeting, including whether or not to adjourn the meeting, this proxy will be voted by the proxies in their judgment. At the present time, the Board of Directors knows of no other business to be presented at the annual meeting. This proxy also confers discretionary authority on the Board of Directors to vote with respect to the election of any person as director where the nominees are unable to serve or for good cause will not serve and matters incident to the conduct of the meeting.



Dated:


SIGNATURE OF STOCKHOLDER


SIGNATURE OF CO-HOLDER (IF ANY)

The above signed acknowledges receipt from the Company, prior to the execution of this proxy, of a Notice of Annual Meeting of Stockholders, a Proxy Statement for the Annual Meeting and the Annual Report to Shareholders on Form 10-KSB.

Please sign exactly as your name appears on this card. When signing as attorney, executor, administrator, trustee or guardian, please give your full title. If shares are held jointly, each holder may sign but only one signature is required.

On behalf of the Board of Directors of BV Financial, Inc. (the “Company”), I am forwarding you the attached blue vote authorization form for the purpose of conveying your voting instructions to RSGroup Trust Company (the “Trustee”) on the proposals to be presented at the Annual Meeting of Stockholders of BV Financial, Inc. to be held on November 8, 2005. Also enclosed is a Notice and Proxy Statement for the Annual Meeting of Stockholders of BV Financial, Inc. and a copy of the Company’s Annual Report to Stockholders.

As a participant in the Bay-Vanguard Federal Savings Bank Employee Stock Ownership Plan (the “ESOP”), you are entitled to vote all shares of Company common stock allocated to your account as of September 23, 2005, the record date for the Annual Meeting. All allocated shares of Company common stock will be voted as directed by participants, so long as participant instructions are received by the Trustee on or before October 28, 2005. If you do not direct the Trustee how to vote the shares of Company common stock allocated to your ESOP account, the Trustee will vote your shares in a manner calculated to most accurately reflect the instructions it receives from other participants, subject to its fiduciary duties.

Please complete, sign and return the enclosed blue vote authorization form in the enclosed, postage-paid envelope. Your vote will not be revealed, directly or indirectly, to any employee or director of Bay-Vanguard Federal Savings Bank or BV Financial, Inc.

I understand that RSGroup Trust Company (the “ESOP Trustee”), is the holder of record and custodian of all shares of BV Financial, Inc. (the “Company”) common stock under the Bay-Vanguard Federal Savings Bank Employee Stock Ownership Plan. I understand that my voting instructions are solicited on behalf of the Company’s Board of Directors for the Annual Meeting of Stockholders to be held on November 8, 2005.

INSTRUCTION: To withhold your vote for any individual nominee, mark the “For All Except” and write that nominee’s name in the space provided below.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE LISTED PROPOSALS.

The ESOP Trustee is hereby authorized to vote all shares of Company common stock allocated to me in its trust capacity as indicated above.

Please date, sign and return this form in the enclosed postage-paid envelope no later than October 28, 2005.

On behalf of the Board of Directors of BV Financial, Inc. (the “Company”), I am forwarding you the attached green vote authorization form for the purpose of conveying your voting instructions to RSGroup Trust Co. (the “Trustee”) on the proposals to be presented at the Annual Meeting of Stockholders of BV Financial, Inc. to be held on November 8, 2005. Also enclosed is a Notice and Proxy Statement for the Annual Meeting of Stockholders of BV Financial, Inc. and a copy of the Company’s Annual Report to Stockholders.

As a holder of BV Financial, Inc. common stock under the Bay-Vanguard Federal Savings Bank 401(k) Profit Sharing Plan
(“401(k) Plan”), you are entitled to direct the Trustee how to vote the shares of common stock credited to your account as of September 23, 2005, the record date for the Annual Meeting. If the Trustee does not receive your instructions by October 28, 2005, the Trustee will vote your shares in a manner calculated to most accurately reflect the instructions received from other 401(k) Plan participants.

Please complete, sign and return the enclosed green vote authorization form in the enclosed, postage-paid envelope. Your vote will not be revealed, directly or indirectly, to any employee or director of Bay-Vanguard Federal Savings Bank or BV Financial, Inc.

I understand that RSGroup Trust Company (the “Trustee”) is the holder of record and custodian of all shares of BV Financial, Inc. (the “Company”) common stock credited to me under the Bay-Vanguard Federal Savings Bank 401(k) Profit Sharing Plan. I understand that my voting instructions are solicited on behalf of the Company’s Board of Directors for the Annual Meeting of Stockholders to be held on November 8, 2005.

INSTRUCTION: To withhold your vote for any individual nominee, mark the “For All Except” and write that nominee’s name in the space provided below.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE LISTED PROPOSALS.

The Trustee is hereby authorized to vote all shares of Company common stock credited to me in its trust capacity as indicated above.

Please date, sign and return this form in the enclosed postage-paid envelope no later than October 28, 2005.



/s/ Edmund T. Leonard				/s/ Carolyn M. Mroz
Edmund T. Leonard				Carolyn M. Mroz
Chairman of the Board and Chief Financial Officer				President and Chief Executive Officer


	2005		2004
Audit Fees	$	44,600	$	25,000
Audit-Related Fees⁽¹⁾		51,500		—
Tax Fees⁽²⁾		5,400		4,400
All Other Fees		—		—


	Annual Compensation
Name and Position	Year	Salary		Bonus		All Other Compensation ⁽¹⁾
Edmund T. Leonard Chairman and Chief Financial Officer	2005 2004 2003	$	115,084 94,700 90,000	$	24,352 13,719 13,462	$	7,069 10,188 10,058
Carolyn M. Mroz President and Chief Executive Officer	2005 2004 2003	$	115,084 94,700 90,000	$	14,352 13,719 13,462	$	6,510 9,974 10,140
Daniel J. Gallagher, Jr. Senior Vice President	2005 2004 2003	$	98,149 93,050 78,616	$	13,706 9,983 11,194	$	4,377 4,254 —


Brian K. McHale, Anthony J. Narutowicz and Jerry S. Sopher

FOR	WITHHOLD	FOR ALL EXCEPT
¨	¨	¨


FOR	AGAINST	ABSTAIN
¨	¨	¨


Name	Number of Shares Owned ⁽¹⁾⁽²⁾	Percent of Common Stock Outstanding
Michael J. Birmingham III	5,000	*
Daniel J. Gallagher, Jr.	11,151	*
Robert R. Kern, Jr.	5,000	*
Edmund J. Kowalewski	1,000	*
Edmund T. Leonard	11,652	*
Brian K. McHale	1,000	*
Carolyn M. Mroz	11,117	*
Anthony J. Narutowicz	1,000	*
Jerry S. Sopher	5,000	*
Catherine M. Staszak	790	*
All Directors and Executive Officers as a group (11 persons)	54,250	2.1	%