##### Table of Contents

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



---

FORM 10-QSB



---

(Mark One)

|x | QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------

For the quarterly period ended September 30, 2007

OR



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------

For the transition period from  to

Commission file number: 0-51014



---

BV FINANCIAL, INC.

(Exact name of small business issuer as specified in its charter)



---



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Federal                                                        |  | 14-1920944                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

7114 North Point Road, Baltimore, Maryland 21219

(Address of principal executive offices)

(410) 477-5000

(Issuers telephone number)

Not Applicable

(Former name, former address and former fiscal year, if
changed since last report)



---

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x

As of November 7, 2007, there were 2,512,137 shares of the registrants common stock outstanding.



---



---

##### Table of Contents

BV FINANCIAL, INC.

Form 10-QSB

Table of Contents



|                              |  |                                                                                                                    |  |         
|----------------------------- |  | ------------------------------------------------------------------------------------------------------------------ |  | --------
|                              |  |                                                                                                                    |  | Page No.
|PART I. FINANCIAL INFORMATION |  |                                                                                                                   
|                              |  |                                                                                                                   
|Item 1.                       |  | Financial Statements                                                                                               |  |         
|                              |  |                                                                                                                   
|                              |  | Consolidated Statements of Financial Condition at September 30, 2007 and June 30, 2007 (unaudited)                 |  | 1       
|                              |  |                                                                                                                   
|                              |  | Consolidated Statements of Income for the three months ended September 30, 2007 and 2006 (unaudited)               |  | 2       
|                              |  |                                                                                                                   
|                              |  | Consolidated Statements of Comprehensive Income for the three months ended September 30, 2007 and 2006 (unaudited) |  | 3       
|                              |  |                                                                                                                   
|                              |  | Consolidated Statements of Cash Flows for the three months ended September 30, 2007 and 2006 (unaudited)           |  | 4       
|                              |  |                                                                                                                   
|                              |  | Notes to Unaudited Consolidated Financial Statements                                                               |  | 5       
|                              |  |                                                                                                                   
|Item 2.                       |  | Managements Discussion and Analysis or Plan of Operation                                                          |  | 7       
|                              |  |                                                                                                                   
|Item 3.                       |  | Controls and Procedures                                                                                            |  | 14      
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                                                   
|                              |  |                                                                                                                   
|Item 1.                       |  | Legal Proceedings                                                                                                  |  | 15      
|                              |  |                                                                                                                   
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                        |  | 15      
|                              |  |                                                                                                                   
|Item 3.                       |  | Defaults upon Senior Securities                                                                                    |  | 15      
|                              |  |                                                                                                                   
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                                |  | 15      
|                              |  |                                                                                                                   
|Item 5.                       |  | Other Information                                                                                                  |  | 15      
|                              |  |                                                                                                                   
|Item 6.                       |  | Exhibits                                                                                                           |  | 16      
|                              |  |                                                                                                                   
|Signatures                    |  |                                                                                                                    |  |         



i



---

##### Table of Contents

PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

BV FINANCIAL, INC. AND SUBSIDIARY

Consolidated Statements of Financial Condition

(Unaudited)



|                                                                                                                                                                                         |  |                                              |         |   |               |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------- | ------- | - | ------------- | - | ------- | -
|                                                                                                                                                                                         |  | September 30, 2007                           |         |   | June 30, 2007 |  
|                                                                                                                                                                                         |  |                                             
|                                                                                                                                                                                         |  | (Dollars in thousands,except per share data) |        
|ASSETS                                                                                                                                                                                   |  |                                              |         |   |              
|Cash                                                                                                                                                                                     |  | $                                            | 1,793   |   |               | $ | 1,547   |  
|Interest bearing deposits in other banks                                                                                                                                                 |  |                                              | 819     |   |               |   | 199     |  
|Federal funds sold                                                                                                                                                                       |  |                                              | 33,155  |   |               |   | 3,810   |  
|                                                                                                                                                                                         |  |                                              |         |   |               |   |         |  
|Cash and Cash Equivalents                                                                                                                                                                |  |                                              | 35,767  |   |               |   | 5,556   |  
|Securities available for sale                                                                                                                                                            |  |                                              | 3,332   |   |               |   | 3,300   |  
|Securities held to maturity                                                                                                                                                              |  |                                              | 2,146   |   |               |   | 2,656   |  
|Loans receivable, net of allowance for loan losses September 30, 2007$422; June 30, 2007$402                                                                                           |  |                                              | 120,036 |   |               |   | 116,051 |  
|Goodwill                                                                                                                                                                                 |  |                                              | 3,917   |   |               |   |        |  
|Premises and equipment, net                                                                                                                                                              |  |                                              | 2,465   |   |               |   | 2,404   |  
|Federal Home Loan Bank of Atlanta stock, at cost                                                                                                                                         |  |                                              | 600     |   |               |   | 848     |  
|Investment in life insurance                                                                                                                                                             |  |                                              | 1,995   |   |               |   | 1,978   |  
|Accrued interest receivable                                                                                                                                                              |  |                                              | 596     |   |               |   | 538     |  
|Other assets                                                                                                                                                                             |  |                                              | 1,218   |   |               |   | 679     |  
|                                                                                                                                                                                         |  |                                              |         |   |               |   |         |  
|Total Assets                                                                                                                                                                             |  | $                                            | 172,072 |   |               | $ | 134,010 |  
|                                                                                                                                                                                         |  |                                              |         |   |               |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                     | 
|LIABILITIES                                                                                                                                                                              |  |                                              |         |   |               |   |         |  
|Non-interest bearing deposits                                                                                                                                                            |  | $                                            | 6,175   |   |               | $ | 3,571   |  
|Interest bearing deposits                                                                                                                                                                |  |                                              | 137,433 |   |               |   | 94,921  |  
|                                                                                                                                                                                         |  |                                              |         |   |               |   |         |  
|Total Deposits                                                                                                                                                                           |  |                                              | 143,608 |   |               |   | 98,492  |  
|                                                                                                                                                                                         |  |                                             
|Federal Home Loan Bank advances                                                                                                                                                          |  |                                              | 8,000   |   |               |   | 13,500  |  
|Official checks                                                                                                                                                                          |  |                                              | 1,289   |   |               |   | 1,779   |  
|Advance payments by borrowers for taxes and insurance                                                                                                                                    |  |                                              | 534     |   |               |   | 1,139   |  
|Other liabilities                                                                                                                                                                        |  |                                              | 1,031   |   |               |   | 882     |  
|                                                                                                                                                                                         |  |                                              |         |   |               |   |         |  
|Total Liabilities                                                                                                                                                                        |  | $                                            | 154,462 |   |               | $ | 115,792 |  
|                                                                                                                                                                                         |  |                                              |         |   |               |   |         |  
|COMMITMENTS AND CONTINGENCIES                                                                                                                                                            |  |                                              |         |   |               |   |         |  
|                                                                                                                                                                                         |  |                                             
|STOCKHOLDERS EQUITY                                                                                                                                                                     |  |                                              |         |   |               |   |         |  
|Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued or outstanding                                                                                                |  |                                              |        |   |               |   |        |  
|Common stock, $0.01 par value; 9,000,000 shares authorized; 2,645,000 shares issued; 2,512,137 and 2,541,859 shares outstanding as of
September 30, 2007 and June 30, 2007, respectively |  |                                              | 26      |   |               |   | 26      |  
|Paid-in capital                                                                                                                                                                          |  |                                              | 11,099  |   |               |   | 11,083  |  
|Unearned employee stock ownership plan shares                                                                                                                                            |  |                                              | (807    | ) |               |   | (825    | )
|Treasury stock, at cost; 132,863 shares and 103,141 shares as of September 30, 2007 and June 30, 2007, respectively                                                                      |  |                                              | (1,492  | ) |               |   | (878    | )
|Retained earnings                                                                                                                                                                        |  |                                              | 8,835   |   |               |   | 8,866   |  
|Accumulated other comprehensive loss                                                                                                                                                     |  |                                              | (51     | ) |               |   | (54     | )
|                                                                                                                                                                                         |  |                                              |         |   |               |   |         |  
|Total Stockholders Equity                                                                                                                                                               |  |                                              | 17,610  |   |               |   | 18,218  |  
|                                                                                                                                                                                         |  |                                              |         |   |               |   |         |  
|Total Liabilities and Stockholders Equity                                                                                                                                               |  | $                                            | 172,072 |   |               | $ | 134,010 |  
|                                                                                                                                                                                         |  |                                              |         |   |               |   |         |  

See Notes to Unaudited Consolidated Financial Statements.



1



---

##### Table of Contents

BV FINANCIAL, INC. AND SUBSIDIARY

Consolidated Statements of Income

(Unaudited)



|                                                    |  |                                               |       |      |   |      
|--------------------------------------------------- |  | --------------------------------------------- | ----- | ---- | - | -----
|                                                    |  | Three Months Ended September 30,             
|                                                    |  | 2007                                          |       | 2006
|                                                    |  | (Dollars in thousands, except per share data)
|INTEREST INCOME                                     |  |                                               |       |      |   |      
|Loans, including fees                               |  | $                                             | 1,880 |      | $ | 1,755
|Investment securities                               |  |                                               | 86    |      |   | 92   
|Other                                               |  |                                               | 223   |      |   | 37   
|                                                    |  |                                               |       |      |   |      
|Total Interest Income                               |  |                                               | 2,189 |      |   | 1,884
|                                                    |  |                                              
|Interest Expense                                    |  |                                               |       |      |   |      
|Deposits                                            |  |                                               | 1,079 |      |   | 888  
|Federal Home Loan Bank Advances                     |  |                                               | 194   |      |   | 163  
|                                                    |  |                                               |       |      |   |      
|Total Interest Expense                              |  |                                               | 1,273 |      |   | 1,051
|                                                    |  |                                               |       |      |   |      
|Net Interest Income                                 |  |                                               | 916   |      |   | 833  
|PROVISION FOR LOAN LOSSES                           |  |                                               | 20    |      |   | 5    
|                                                    |  |                                               |       |      |   |      
|Net Interest Income after Provision for Loan Losses |  |                                               | 896   |      |   | 828  
|                                                    |  |                                               |       |      |   |      
|NON-INTEREST INCOME                                 |  |                                               |       |      |   |      
|Service fees on deposits                            |  |                                               | 31    |      |   | 30   
|Service fees on loans                               |  |                                               | 8     |      |   | 7    
|Income from investment in life insurance            |  |                                               | 17    |      |   | 30   
|Other income                                        |  |                                               | 16    |      |   | 12   
|                                                    |  |                                               |       |      |   |      
|Total Non-Interest Income                           |  |                                               | 72    |      |   | 79   
|                                                    |  |                                               |       |      |   |      
|NON-INTEREST EXPENSES                               |  |                                               |       |      |   |      
|Compensation and related expenses                   |  |                                               | 536   |      |   | 517  
|Occupancy                                           |  |                                               | 55    |      |   | 45   
|Data processing                                     |  |                                               | 75    |      |   | 66   
|Telephone and postage                               |  |                                               | 17    |      |   | 17   
|Advertising                                         |  |                                               | 30    |      |   | 24   
|Professional fees                                   |  |                                               | 61    |      |   | 67   
|Equipment                                           |  |                                               | 42    |      |   | 33   
|Other                                               |  |                                               | 113   |      |   | 87   
|                                                    |  |                                               |       |      |   |      
|Total Non-Interest Expenses                         |  |                                               | 929   |      |   | 856  
|                                                    |  |                                               |       |      |   |      
|Income before Income Taxes                          |  |                                               | 39    |      |   | 51   
|PROVISION FOR INCOME TAXES                          |  |                                               | 17    |      |   | 21   
|                                                    |  |                                               |       |      |   |      
|Net Income                                          |  | $                                             | 22    |      | $ | 30   
|                                                    |  |                                               |       |      |   |      
|BASIC AND DILUTED EARNINGS PER
SHARE                |  | $                                             | 0.01  |      | $ | 0.01 
|                                                    |  |                                               |       |      |   |      
|DIVIDENDS DECLARED PER SHARE                        |  | $                                             | 0.05  |      | $ |     
|                                                    |  |                                               |       |      |   |      

See Notes to Unaudited Consolidated Financial Statements.



2



---

##### Table of Contents

BV FINANCIAL, INC. AND SUBSIDIARY

Consolidated Statements of Comprehensive Income

(Unaudited)



|                                                                                         |  |                                     |    |      |   |   
|---------------------------------------------------------------------------------------- |  | ----------------------------------- | -- | ---- | - | --
|                                                                                         |  | For Three Months EndedSeptember 30,
|                                                                                         |  | 2007                                |    | 2006
|                                                                                         |  | (In thousands)                     
|Net Income                                                                               |  | $                                   | 22 |      | $ | 30
|Unrealized net holding gains on available-for-sale securities, net of taxes of $2 and $5 |  |                                     | 3  |      |   | 16
|                                                                                         |  |                                     |    |      |   |   
|Comprehensive income                                                                     |  | $                                   | 25 |      | $ | 46
|                                                                                         |  |                                     |    |      |   |   

See Notes to Unaudited Consolidated Financial Statements.



3



---

##### Table of Contents

BV FINANCIAL, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                  |  |                                 |         |   |      |   |        |  
|--------------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ---- | - | ------ | -
|                                                                                  |  | Three Months EndedSeptember 30, |        
|                                                                                  |  | 2007                            |         |   | 2006 |  
|                                                                                  |  | (In thousands)                  |        
|CASH FLOWS FROM OPERATING ACTIVITIES                                              |  |                                 |         |   |      |   |        |  
|Net income                                                                        |  | $                               | 22      |   |      | $ | 30     |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                 |         |   |      |   |        |  
|Net amortization of discounts and premiums                                        |  |                                 |        |   |      |   | 2      |  
|Provision for loan losses                                                         |  |                                 | 20      |   |      |   | 5      |  
|Amortization of deferred loan fees/costs                                          |  |                                 | 15      |   |      |   | 16     |  
|Provision for depreciation                                                        |  |                                 | 39      |   |      |   | 37     |  
|Increase in cash surrender value of life insurance                                |  |                                 | (17     | ) |      |   | (30    | )
|Stock-based compensation expense                                                  |  |                                 | 55      |   |      |   | 70     |  
|Amortization of core deposit intangible                                           |  |                                 | 21      |   |      |   |       |  
|Increase in other assets                                                          |  |                                 | (628    | ) |      |   | (40    | )
|Increase in other liabilities                                                     |  |                                 | 149     |   |      |   |       |  
|                                                                                  |  |                                 |         |   |      |   |        |  
|Net Cash (Used in) Provided by Operating Activities                               |  |                                 | (324    | ) |      |   | 90     |  
|                                                                                  |  |                                 |         |   |      |   |        |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                              |  |                                 |         |   |      |   |        |  
|Purchases of securities available for sale                                        |  |                                 | (39     | ) |      |   | (33    | )
|Proceeds from maturity of securities held to maturity                             |  |                                 | 500     |   |      |   |       |  
|Principal collected on mortgage backed securities                                 |  |                                 | 22      |   |      |   | 41     |  
|Net increase in loans                                                             |  |                                 | (2,134  | ) |      |   | (958   | )
|Purchase of loans                                                                 |  |                                 | (1,886  | ) |      |   | (332   | )
|Purchase of premises and equipment                                                |  |                                 | (100    | ) |      |   | (53    | )
|Purchase of Federal Home Loan Bank stock                                          |  |                                 |        |   |      |   | (45    | )
|Proceeds from the sale of Federal Home Loan Bank stock                            |  |                                 | 248     |   |      |   |       |  
|Net Cash received in branch acquisition                                           |  |                                 | 43,002  |   |      |   |       |  
|                                                                                  |  |                                 |         |   |      |   |        |  
|Net Cash Used in (Provided by) Investing Activities                               |  |                                 | 39,613  |   |      |   | (1,380 | )
|                                                                                  |  |                                 |         |   |      |   |        |  
|CASH FLOWS FROM FINANCING
ACTIVITIES                                              |  |                                 |         |   |      |   |        |  
|Decrease in official checks                                                       |  |                                 | (490    | ) |      |   | (3,556 | )
|Net decrease in deposits                                                          |  |                                 | (1,797  | ) |      |   | (562   | )
|Decrease in advance payments by borrowers for taxes and insurance                 |  |                                 | (605    | ) |      |   | (600   | )
|Advances from Federal Home Loan Bank                                              |  |                                 | 7,500   |   |      |   | 2,000  |  
|Repayment of advances from Federal Home Loan Bank                                 |  |                                 | (13,000 | ) |      |   | (500   | )
|Cash dividend paid                                                                |  |                                 | (52     | ) |      |   |       |  
|Treasury stock repurchased                                                        |  |                                 | (634    | ) |      |   |       |  
|                                                                                  |  |                                 |         |   |      |   |        |  
|Net Cash Used In Financing Activities                                             |  |                                 | (9,078  | ) |      |   | (3,218 | )
|                                                                                  |  |                                 |         |   |      |   |        |  
|Net Increase (Decrease) in Cash and Cash Equivalents                              |  |                                 | 30,211  |   |      |   | (4,508 | )
|CASH AND CASH EQUIVALENTS  BEGINNING                                             |  |                                 | 5,556   |   |      |   | 9,079  |  
|                                                                                  |  |                                 |         |   |      |   |        |  
|CASH AND CASH EQUIVALENTS  ENDING                                                |  | $                               | 35,767  |   |      | $ | 4,571  |  
|                                                                                  |  |                                 |         |   |      |   |        |  
|SUPPLEMENTARY CASH FLOWS INFORMATION                                              |  |                                 |         |   |      |   |        |  
|Interest paid                                                                     |  | $                               | 1,062   |   |      | $ | 1,047  |  
|                                                                                  |  |                                 |         |   |      |   |        |  
|Income taxes paid                                                                 |  | $                               |        |   |      | $ |       |  
|                                                                                  |  |                                 |         |   |      |   |        |  
|Net loans transferred to foreclosed real estate/repossessed assets                |  | $                               |        |   |      | $ | 7      |  
|                                                                                  |  |                                 |         |   |      |   |        |  

See Notes to Unaudited Consolidated Financial Statements.



4



---

##### Table of Contents

BV FINANCIAL, INC. AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements

September 30, 2007



|(1) | Basis of Presentation
|--- | ---------------------

The accompanying unaudited
consolidated financial statements have been prepared in accordance with instructions for Form 10-QSB and, therefore, do not include all disclosures necessary for a complete presentation of the financial statements in conformity with accounting
principles generally accepted in the United States of America. However, all adjustments that are, in the opinion of management, necessary for the fair presentation of the interim financial statements have been included. Such adjustments were of a
normal recurring nature. The results of operations for the period ended September 30, 2007 are not necessarily indicative of the results that may be expected for the entire year. These unaudited consolidated financial statements should be read
in conjunction with BV Financial Inc.s (the Company) Annual Report on Form 10-KSB for the year ended June 30, 2007.

Principles
of Consolidation

The consolidated financial statements at September 30, 2007 and June 30, 2007 and for the three months ended
September 30, 2007 include the accounts of the Company, Bay-Vanguard Federal Savings Bank (the Bank) and its wholly-owned subsidiary, Housing Recovery Corporation. All intercompany balances and transactions have been eliminated in
consolidation.



|(2) | Earnings Per Share
|--- | ------------------

Basic earnings per share is
computed by dividing net income by the weighted average number of common shares outstanding for the appropriate period. Unearned shares under the Bay-Vanguard Federal Savings Bank Employee Stock Ownership Plan (ESOP) are not included in
outstanding shares. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding as adjusted for the dilutive effect of stock options and unvested stock awards based on the treasury stock
method. Information related to the calculation of earnings per share is summarized for the three months ended September 30, 2007 and 2006 as follows:



|                                           |  |                                     |       |         |   |       |  |         |       |  |   |      
|------------------------------------------ |  | ----------------------------------- | ----- | ------- | - | ----- |  | ------- | ----- |  | - | -----
|                                           |  | Three Months Ended September 30,   
|                                           |  | 2007                                |       | 2006   
|                                           |  | Basic                               |       | Diluted |   | Basic |  | Diluted
|                                           |  | In Thousands, Except Per Share Data
|Net income                                 |  | $                                   | 22    |         | $ | 22    |  | $       | 30    |  | $ | 30   
|                                           |  |                                     |       |         |   |       |  |         |       |  |   |      
|Weighted average common shares outstanding |  |                                     | 2,356 |         |   | 2,356 |  |         | 2,504 |  |   | 2,504
|                                           |  |                                     |       |        
|Diluted securities:                        |  |                                     |       |         |   |       |  |         |       |  |   |      
|Restricted stock                           |  |                                     |      |         |   |      |  |         |      |  |   | 1    
|Stock options                              |  |                                     |      |         |   |      |  |         |      |  |   | 2    
|                                           |  |                                     |       |         |   |       |  |         |       |  |   |      
|Adjusted weighted average shares           |  |                                     | 2,356 |         |   | 2,356 |  |         | 2,504 |  |   | 2,507
|                                           |  |                                     |       |         |   |       |  |         |       |  |   |      
|Per share amount                           |  | $                                   | 0.01  |         | $ | 0.01  |  | $       | 0.01  |  | $ | 0 .01
|                                           |  |                                     |       |         |   |       |  |         |       |  |   |      



5



---

##### Table of Contents

|(3) | Equity Incentive Plan
|--- | ---------------------

On November 8, 2005,
stockholders approved the Plan that enabled the Company to grant stock options and restricted stock awards to employees and directors. On November 14, 2005, the Company granted stock options covering 111,456 shares of common stock to
certain employees and directors of the Company. The options were granted at the then fair market value of the stock of $8.94, vest over five years and expire ten years from the date of grant.

The Compensation cost charged against income for the BV Financial, Inc. 2005 Equity Compensation Plan (the Plan) was $39,000 and $55,000 for
the three months ended September 30, 2007 and 2006, respectively. The total income tax benefit recognized was $10,000 and $11,000 for the three months ended September 30, 2007 and 2006, respectively.

At September 30, 2007, there was $344,000 of total unrecognized compensation cost related to unvested share-based compensation arrangements granted
under the Plan. The cost is expected to be recognized over a weighted average period of 3.1 years.

During the three months ended
September 30, 2007, there were no grants of stock options or restricted stock under the Plan. No stock options were exercised during the three months ended September 30, 2007. At September 30, 2007, there were 22,286 stock
options and 8,914 restricted stock shares that had vested under the Companys Plan. At September 30, 2007, the outstanding unexercisable options and exercisable options had no intrinsic value.



|(4) | Branch Acquisition
|--- | ------------------

On August 24, 2007, the
Bank acquired a branch office located at 8070 Ritchie Highway in Pasadena, Maryland from Greater Atlantic Bank. The Bank paid a premium of $4.4 million on the net liabilities, primarily on the deposits assumed at closing. The premium primarily
constitutes goodwill, which will not be amortized. At the time of closing, the branch office had $51.5 million in deposits.



|(5) | Recent Accounting Pronouncements
|--- | --------------------------------

In July 2006, the
FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting for uncertainty in tax positions. This Interpretation
requires that companies recognize in their financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN 48 are effective
for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. The Company has analyzed FIN 48 and determined that upon adoption, it
had no impact on our financial statements.

In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurements,
which defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements. FASB Statement No. 157 applies to other accounting pronouncements that require or permit fair value
measurements. The new guidance is effective for financial statements issued for fiscal years beginning after November 15, 2007, and for interim periods within those fiscal years. The company has evaluated FASB Statement No. 157 and
determined that it will not have a significant impact on our consolidated financial position, results of operations and cash flows.



6



---

##### Table of Contents

In September 2006, the FASBs Emerging Issues Task Force (EITF) issued EITF Issue No. 06-4,
Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split Dollar Life Insurance Arrangements (EITF 06-4). EITF 06-4 requires the recognition of a liability related to the postretirement
benefits covered by an endorsement split-dollar life insurance arrangement. The consensus highlights that the employer (who is also the policyholder) has a liability for the benefit it is providing to its employee. As such, if the policyholder has
agreed to maintain the insurance policy in force for the employees benefit during his or her retirement, then the liability recognized during the employees active service period should be based on the future cost of insurance to be
incurred during the employees retirement. Alternatively, if the policy holder has agreed to provide the employee with a death benefit, then the liability for the future death benefit should be recognized by following the guidance in SFAS
No. 106 or Accounting Principles Board (APB) Opinion No. 12, as appropriate. For transition, an entity can choose to apply the guidance using either of the following approaches: (a) a change in accounting principle through
retrospective application to all periods presented or (b) a change in accounting principle through a cumulative-effect adjustment to the balance in retained earnings at the beginning of the year of adoption. Implementation is required in fiscal
years beginning after December 15, 2007, with early adoption permitted. The Company is evaluating the impact that the adoption of EITF 06-4 will have on its consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities-Including an amendment of
FASB Statement No. 115. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected will
be recognized in earnings at each subsequent reporting date. SFAS No. 159 is effective for the Company July 1, 2008. The Company is evaluating the impact that the adoption of SFAS No. 159 will have on its consolidated financial
statements.



|Item 2. | Managements Discussion and Analysis or Plan of Operation
|------- | ---------------------------------------------------------

Managements discussion and analysis of the financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of BV Financial, Inc. (the
Company or BV Financial). The information contained in this section should be read in conjunction with the Unaudited Consolidated Financial Statements and footnotes appearing in Part I, Item 1 of this document.

Forward-Looking Statements

This
quarterly report contains forward-looking statements that are based on assumptions and may describe future plans, strategies and expectations of Bay-Vanguard, M.H.C., BV Financial and Bay-Vanguard Federal. These forward-looking statements are
generally identified by use of the words believe, expect, intend, anticipate, estimate, project or similar expressions.

Bay-Vanguard, M.H.C., BV Financial and Bay-Vanguard Federals ability to predict results or the actual effect of future plans or strategies is
inherently uncertain. Factors which could have a material adverse effect on the operations of BV Financial and its subsidiary include, but are not limited to, changes in interest rates, national and regional economic conditions, legislative and
regulatory changes, monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality and composition of the loan or investment portfolios, demand for loan products, deposit
flows, competition, demand for financial services in BV Financial and Bay-Vanguards market area, changes in real estate market values in BV Financial and Bay-Vanguards market area, and changes in relevant accounting principles and
guidelines.



7



---

##### Table of Contents

These risks and uncertainties should be considered in evaluating forward-looking statements and undue
reliance should not be placed on such statements. Except as required by applicable law or regulation, BV Financial does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any
forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

General

BV Financial was organized as a federally chartered corporation at the direction of Bay-Vanguard Federal Savings
Bank (the Bank or Bay-Vanguard Federal) in January 2005 to become the mid-tier stock holding company for Bay-Vanguard Federal upon the completion of its reorganization into the mutual holding company form of organization.
Pursuant to the Plan of Reorganization, the Bank converted to stock form with all of its stock owned by BV Financial and organized Bay-Vanguard, M.H.C. as a federally chartered mutual holding company that owns 58.9% of the common stock of BV
Financial. As part of the reorganization, the Company sold 1,190,250 shares of its common stock at a price of $10.00 per share to members of the Bank in a subscription offering raising approximately $11.0 million in net proceeds.

Bay-Vanguard Federal is headquartered in Baltimore, Maryland and is a community-oriented financial institution offering traditional financial services to
its local communities. The Bank is engaged primarily in the business of attracting deposits from the general public using such funds to originate one-to four-family real estate, mobile home, construction, multi-family and commercial real estate and
consumer loans.

The Banks savings accounts are insured up to the applicable legal limits by the Federal Deposit Insurance
Corporation. Bay-Vanguard Federal is a member of the Federal Home Loan Bank System.

Critical Accounting Policies

The Company considers accounting policies involving significant judgments and assumptions by management that have, or could have, a material impact on the
carrying value of certain assets and liabilities or income and expense to be critical accounting policies. The Company considers the allowance for loan losses to be a critical accounting policy.

Allowance for Loan Losses. The allowance for loan losses is the amount estimated by management as necessary to cover losses inherent in the
loan portfolio at the balance sheet date. The allowance is established through the provision for loan losses, which is charged to income. Determining the amount of the allowance for loan losses necessarily involves a high degree of judgment. Among
the material estimates required to establish the allowance are: loss exposure at default; the amount and timing of future cash flows on impacted loans; the value of collateral; and the determination of loss factors to be applied to the various
elements of the portfolio. All of these estimates are susceptible to significant change. However, historically, the Companys estimates and assumptions have provided results that did not differ materially from actual results.

Management reviews the level of the allowance on a quarterly basis, at a minimum, and establishes the provision for loan losses based on an evaluation of
the portfolio, past loss experience, economic conditions and business conditions affecting its primary market area, credit quality trends, collateral value, loan volumes and concentrations, seasoning of the loan portfolio, the duration of the
current business cycle, bank regulatory examination results and other factors related to the collectibility of the loan portfolio. Although the Company believes that it uses the best information available to establish



8



---

##### Table of Contents

the allowance for loan losses, future additions to the allowance may be necessary if certain future events occur that cause actual results to differ from the
assumptions used in making the evaluation. For example, a downturn in the local economy could cause increases in nonperforming loans. Additionally, a decline in real estate values could cause some of the Companys loans to become inadequately
collateralized. In either case, this may require the Company to increase its provisions for loan losses, which would negatively impact earnings. Further, the Office of Thrift Supervision, as an integral part of its examination process, periodically
reviews the Companys allowance for loan losses. Such agency may require the Company to recognize adjustments to the allowance based on its judgments about information available to it at the time of its examination. An increase to the allowance
required to be made by the Office of Thrift Supervision would negatively impact the Companys earnings. Additionally, a large loss could deplete the allowance and require increased provisions to replenish the allowance, which would negatively
affect earnings.

Comparison of Financial Condition at September 30, 2007 and June 30, 2007

Total assets increased $38.1 million, or 28.4%, to $172.1 million at September 30, 2007 from $134.0 million at June 30, 2007 primarily due to
the proceeds from the acquisition of a branch office from Greater Atlantic Bank. Federal Home Loan Bank stock decreased $248,000, or 29.3%, to $600,000 at September 30, 2007 as the Company sold stock as borrowings were paid off.

Loans receivable increased $4.0 million, or 3.4%, to $120.0 million at September 30, 2007 from $116.1 million at June 30, 2007 primarily due to
a $1.3 million increase in non-residential loans, a $1.2 million funding of existing construction loans and a $1.1 million increase in residential loans.Non-residential loans increased due to the Banks focus on its shorter term higher
rate loan products. Residential loans increased due to the purchase of four loan participations totaling $1.1 million.

Securities
decreased $478,000, or 8.0% to $5.5 million at September 30, 2007 from $6.0 million at June 30, 2007 primarily due to the maturity of a $500,000 Fannie Mae note.

Cash and cash equivalents increased $30.2 million, or 543.8%, to $35.8 million at September 30, 2007 from $5.6 million at June 30, 2007,
due to the receipt of funds in connection with the branch acquisition.

Deposits increased $45.1 million, or 45.8%, to $143.6
million at September 30, 2007, primarily due to the increase in cash and cash equivalents due to the branch acquisition. The increase in deposits was offset primarily by a $2.9 million reduction in certificates of deposit and a $1.4 million
reduction in money market accounts as the Bank continued its efforts to reduce the cost of funds by reducing the rates paid on deposits. Federal Home Loan Bank advances decreased $5.5 million, or 40.7%, to $8.0 million at September 30, 2007 as
funds from the branch acquisition were used to pay down borrowings.

Total equity decreased $608,000, or 3.3%, to $17.6 million at
September 30, 2007 primarily as a result of the repurchase of 72,650 shares of BV Financial stock at an average price of $8.73.

Results of
Operations for the Three Months Ended September 30, 2007 and 2006

General. Net income decreased $8,000, or 26.7%, to
$22,000 for the three months ended September 30, 2007 compared to the same period in the prior year due primarily to a $15,000 increase in provision for loan losses and a $73,000 increase in non-interest expenses, offset by an $83,000 increase
in net interest income.



9



---

##### Table of Contents

Net Interest Income.The following table summarizes interest income and expense for the
three months ended September 30, 2007 and 2006.



|                                |  |                                  |       |      |   |          |  |       |  
|------------------------------- |  | -------------------------------- | ----- | ---- | - | -------- |  | ----- | -
|                                |  | Three Months Ended September 30, |      
|                                |  | 2007                             |       | 2006 |   | % change | 
|                                |  | (Dollars in thousands)           |      
|Interest Income:                |  |                                  |       |      |   |          |  |       |  
|Loans, including fees           |  | $                                | 1,880 |      | $ | 1,755    |  | 7.1   | %
|Investment securities           |  |                                  | 86    |      |   | 92       |  | (6.5  | )
|Other                           |  |                                  | 223   |      |   | 37       |  | 502.7 |  
|                                |  |                                  |       |      |   |          |  |       |  
|Total interest income           |  |                                  | 2,189 |      |   | 1,884    |  | 16.2  |  
|                                |  |                                  |      
|Interest Expense:               |  |                                  |       |      |   |          |  |       |  
|Deposits                        |  |                                  | 1,079 |      |   | 888      |  | 21.5  |  
|Federal Home Loan Bank advances |  |                                  | 194   |      |   | 163      |  | 19.0  |  
|                                |  |                                  |       |      |   |          |  |       |  
|Total interest expense          |  |                                  | 1,273 |      |   | 1,051    |  | 21.1  |  
|                                |  |                                  |       |      |   |          |  |       |  
|Net interest income             |  | $                                | 916   |      | $ | 833      |  | 10.0  |  
|                                |  |                                  |       |      |   |          |  |       |  

The following table summarizes average balances and average yield and costs for the three months
ended September 30, 2007 and 2006.



|                                |  |                                  |         |            |      |   |                |   |             |  |      |  
|------------------------------- |  | -------------------------------- | ------- | ---------- | ---- | - | -------------- | - | ----------- |  | ---- | -
|                                |  | Three Months Ended September 30, |        
|                                |  | 2007                             |         |            | 2006 |  
|                                |  | Average Balance                  |         | Yield/Cost |      |   | AverageBalance |   | Yield/ Cost | 
|                                |  | (Dollars in thousands)           |        
|Loans                           |  | $                                | 118,612 |            | 6.34 | % |                | $ | 113,867     |  | 6.17 | %
|Investment securities           |  |                                  | 5,830   |            | 5.97 |   |                |   | 7,486       |  | 4.92 |  
|Interest-bearing deposits       |  |                                  | 322     |            | 4.97 |   |                |   | 2,196       |  | 4.01 |  
|Federal funds sold              |  |                                  | 15,396  |            | 5.66 |   |                |   | 1,152       |  | 5.21 |  
|Deposits                        |  |                                  | 110,085 |            | 3.92 |   |                |   | 93,885      |  | 3.78 |  
|Federal Home Loan Bank advances |  |                                  | 15,190  |            | 5.11 |   |                |   | 14,867      |  | 4.39 |  

Net interest income for the three months ended September 30, 2007 increased $83,000, or
10.0%, compared to the same period last year, as a result of an increase in the interest rate spread to 2.19% from 2.17% offset by a larger average balance of interest-bearing liabilities. Total interest income increased as a result of the growth in
average interest-earning assets to $140.2 million from $124.7 million, and by an increase in the average yield to 6.25% from 6.04% due to the higher market interest rate environment. The growth in average interest-earning assets was mainly due to an
increase in fed funds, attributable to the assumption of deposits in the branch acquisition. Total interest expense increased as a result of an increase in the average balance of Federal Home Loan Bank borrowings to $15.2 million, compared to
average borrowings of $14.9 million in 2006. Interest expense on deposits increased due to a higher average balance of deposits and an increase in the average interest rate paid on deposits, which increased to 3.92% from 3.78%, due to the higher
market interest rate environment.



10



---

##### Table of Contents

Provision for Loan Losses. The following table summarizes the activity in the allowance for
loan losses for the three months ended September 30, 2007 and 2006.



|                                 |  |                                 |     |      |   |     |  
|-------------------------------- |  | ------------------------------- | --- | ---- | - | --- | -
|                                 |  | Three MonthsEnded September 30, |    
|                                 |  | 2007                            |     | 2006 |  
|                                 |  | (In thousands)                  |    
|Allowance at beginning of period |  | $                               | 402 |      | $ | 410 |  
|Provision for loan losses        |  |                                 | 20  |      |   | 5   |  
|Charge-offs                      |  |                                 |    |      |   | (13 | )
|Recoveries                       |  |                                 |    |      |   |    |  
|                                 |  |                                 |     |      |   |     |  
|Net charge-offs                  |  |                                 |    |      |   | (13 | )
|                                 |  |                                 |     |      |   |     |  
|Allowance at end of period       |  | $                               | 422 |      | $ | 402 |  
|                                 |  |                                 |     |      |   |     |  

The allowance for loan losses increased $20,000 to $422,000 for the three months ended
September 30, 2007. Provision expense was $20,000 for the first quarter of 2007 versus $5,000 for 2006. The increase in the provision for loan losses reflects an increase of the loan portfolio as well as an increase in nonperforming assets in
2007.

The following table provides information with respect to our nonperforming assets at the dates indicated. The Company did not have
any accruing loans past due 90 days or more or foreclosed real estate at the dates presented.



|                                            |  |                        |      |   |                  |   |      |          |  |         |  
|------------------------------------------- |  | ---------------------- | ---- | - | ---------------- | - | ---- | -------- |  | ------- | -
|                                            |  | At September 30,2007   |      |   | At June 30, 2007 |   |      | % change | 
|                                            |  | (Dollars in thousands) |     
|Nonaccruing loans:                          |  |                        |      |   |                  |   |      |          |  |         |  
|One- to four-family                         |  | $                      | 311  |   |                  | $ | 149  |          |  | 108.7   | %
|Other Consumer                              |  |                        | 49   |   |                  |   | 3    |          |  | 1,533.3 |  
|                                            |  |                        |      |   |                  |   |      |          |  |         |  
|Total                                       |  |                        | 360  |   |                  |   | 152  |          |  | 136.8   |  
|                                            |  |                        |      |   |                  |   |      |          |  |         |  
|Accruing loans past due 90 days or more     |  |                        |     |   |                  |   |     |          |  |        |  
|Troubled debt restructuring (1)             |  |                        |     |   |                  |   |     |          |  |        |  
|Foreclosed real estate                      |  |                        |     |   |                  |   | 64   |          |  | (100.0  | )
|Other repossessed assets                    |  |                        | 36   |   |                  |   | 44   |          |  | (18.2   | )
|                                            |  |                        |      |   |                  |   |      |          |  |         |  
|Total non-performing assets                 |  | $                      | 396  |   |                  | $ | 260  |          |  | 52.3    |  
|                                            |  |                        |      |   |                  |   |      |          |  |         |  
|Total non-performing loans to total loans   |  |                        | 0.26 | % |                  |   | 0.13 | %        |  | 100.0   |  
|Total non-performing loans to total assets  |  |                        | 0.18 |   |                  |   | 0.11 |          |  | 63.6    |  
|Total non-performing assets to total assets |  |                        | 0.23 |   |                  |   | 0.15 |          |  | 53.3    |  

---

|(1) | As defined in Statement of Financial Accounting Standards No. 15.
|--- | -----------------------------------------------------------------

Nonperforming assets increased $136,000, or 52.3%, primarily due to the addition of one non-accrual one-to-four family residential loan and two mobile home loans offset by a reduction of foreclosed real estate and no
troubled debt restructurings during the quarter.



11



---

##### Table of Contents

Noninterest Income. The following table summarizes noninterest income for the three months
ended September 30, 2007 and 2006.



|                                                |  |                                 |    |      |   |          |  |       |  
|----------------------------------------------- |  | ------------------------------- | -- | ---- | - | -------- |  | ----- | -
|                                                |  | Three MonthsEnded September 30, |    |      |  
|                                                |  | 2007                            |    | 2006 |   | % change | 
|                                                |  | (Dollars in thousands)          |   
|Service fees on deposits                        |  | $                               | 31 |      | $ | 30       |  | 3.3   | %
|Service fees on loans                           |  |                                 | 8  |      |   | 7        |  | 14.3  |  
|Income from investment in life insurance policy |  |                                 | 17 |      |   | 30       |  | (43.3 | )
|Other income                                    |  |                                 | 16 |      |   | 12       |  | 33.3  |  
|                                                |  |                                 |    |      |   |          |  |       |  
|                                                |  | $                               | 72 |      | $ | 79       |  | (8.9  | )
|                                                |  |                                 |    |      |   |          |  |       |  

The decrease in investment in life insurance policy was due to a smaller increase in the cash
values of life insurance policies. The increase in other income of $4,000, or 33.3%, was due primarily to an increase in miscellaneous fees.

Noninterest Expenses. The following table summarizes noninterest expenses for the three months ended September 30, 2007 and 2006.



|                                  |  |                                 |      |   |      |   |      |          |  |      |  
|--------------------------------- |  | ------------------------------- | ---- | - | ---- | - | ---- | -------- |  | ---- | -
|                                  |  | Three MonthsEnded September 30, |      |   |      |  
|                                  |  | 2007                            |      |   | 2006 |   |      | % change | 
|                                  |  | (Dollars in thousands)          |     
|Compensation and related expenses |  | $                               | 536  |   |      | $ | 517  |          |  | 3.7  | %
|Occupancy                         |  |                                 | 55   |   |      |   | 45   |          |  | 22.2 |  
|Data processing                   |  |                                 | 75   |   |      |   | 66   |          |  | 13.6 |  
|Telephone and postage             |  |                                 | 17   |   |      |   | 17   |          |  |     |  
|Advertising                       |  |                                 | 30   |   |      |   | 24   |          |  | 25.0 |  
|Professional fees                 |  |                                 | 61   |   |      |   | 67   |          |  | (9.0 | )
|Equipment expense                 |  |                                 | 42   |   |      |   | 33   |          |  | 27.3 |  
|Other                             |  |                                 | 113  |   |      |   | 87   |          |  | 29.9 |  
|                                  |  |                                 |      |   |      |   |      |          |  |      |  
|Total                             |  | $                               | 929  |   |      | $ | 856  |          |  | 8.5  |  
|                                  |  |                                 |      |   |      |   |      |          |  |      |  
|Efficiency ratio (1)              |  |                                 | 94.0 | % |      |   | 93.9 | %        |  |      |  

---

|(1) | Computed as noninterest expenses divided by the sum of net interest income and other income.
|--- | --------------------------------------------------------------------------------------------

Total non-interest expenses increased $73,000, or 8.5%, primarily as a result of increases in occupancy, advertising, equipment and other expenses.
Occupancy expenses increased primarily due to increase in rental expense related to the new branch. Other expenses increased $26,000, or 29.9%, as a result of increases in office supplies, information technology expenses, bank charges and insurance
mainly as a result of the acquisition of a new branch. Advertising increased as the Company increased its loan product promotions. Data processing costs increased due to additional charges related to the branch acquisition.

Income Taxes. Provision for income taxes decreased $4,000, or 19.1%, from $21,000 for the three months ended September 30, 2006 to
$17,000 for the three months ended September 30, 2007. The



12



---

##### Table of Contents

effective tax rate was 40.4% for the three months ended September 30, 2006 compared to 43.6% for the three months ended September 30, 2007. The
increase in the effective tax rate was due to an increase in deferred non-deductible compensation expense.

Liquidity and Capital Resources

Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist
of deposit inflows, loan repayments and maturities and sales of investment securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly
influenced by general interest rates, economic conditions and competition.

We regularly adjust our investments in liquid assets based upon
our assessment of (1) expected loan demand, (2) expected deposit flows, (3) yields available on interest-earning deposits and securities and (4) the objectives of our asset/liability management program. Excess liquid assets are
invested generally in interest-earning deposits and short- and intermediate-term U.S. Treasury and federal agency securities.

Our
most liquid assets are cash and cash equivalents and interest-bearing deposits. The levels of these assets depend on our operating, financing, lending and investing activities during any given period. At September 30, 2007, cash and cash
equivalents totaled $35.8 million, including federal funds sold of $33.2 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $3.3 million at September 30, 2007. In addition, at
September 30, 2007, we had the ability to borrow a total of approximately $51.6 million from the Federal Home Loan Bank of Atlanta. On that date, we had advances outstanding of $8.0 million.

At September 30, 2007, we had $1.0 million in loan commitments outstanding, which included $758,000 in commitments to purchase mobile home loans. In
addition to commitments to originate loans, we had $2.7 million in unused lines of credit and $3.0 million of construction loans in process. Certificates of deposit due within one year of September 30, 2007 totaled $42.1 million, or 30.5% of
total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including other certificates of deposit and lines of credit. Depending on market conditions, we may be required to pay higher rates on such
deposits or other borrowings than we currently pay on the certificates of deposit due on or before September 30, 2007. We believe, however, based on past experience, that a significant portion of our certificates of deposit will remain with us.
We have the ability to attract and retain deposits by adjusting the interest rates offered.

Our primary investing activities are the
origination of loans and the purchase of securities. Our primary financing activities consist of activity in deposit accounts. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our
local competitors and other factors. We generally manage the pricing of our deposits to be competitive and to increase core deposits. Occasionally, we offer promotional rates on certain deposit products to attract deposits.



13



---

##### Table of Contents

|                                                       |  |                                  |        |   |      |   |       |  
|------------------------------------------------------ |  | -------------------------------- | ------ | - | ---- | - | ----- | -
|                                                       |  | Three Months Ended September 30, |       
|                                                       |  | 2007                             |        |   | 2006 |  
|                                                       |  | (In thousands)                   |       
|Investing activities:                                  |  |                                  |        |   |      |   |       |  
|Loan originations                                      |  | $                                | 4,759  |   |      | $ | 5,771 |  
|Loan and participation purchases                       |  |                                  | 1,886  |   |      |   | 332   |  
|Securities purchases                                   |  |                                  | 39     |   |      |   | 33    |  
|                                                       |  |                                 
|Financing activities:                                  |  |                                  |        |   |      |   |       |  
|Increase (Decrease) in deposits                        |  |                                  | 45,116 |   |      |   | (562  | )
|(Decrease) Increase in Federal Home Loan Bank advances |  |                                  | (5,500 | ) |      |   | 1,500 |  

We are subject to various regulatory capital requirements administered by the Office of Thrift
Supervision, including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad
risk categories. At September 30, 2007, we exceeded all of our regulatory capital requirements. We are considered well capitalized under regulatory guidelines.

Off-Balance Sheet Arrangements

In the normal course of operations, we engage in a variety of
financial transactions that, in accordance with generally accepted accounting principles, are not recorded in our financial statements. These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such
transactions are used primarily to manage customers requests for funding and take the form of loan commitments and lines of credit.

For the three months ended September 30, 2007 and the year ended June 30, 2007, we did not engage in any off-balance sheet transactions reasonably likely to have a material effect on our financial condition, results of operations
or cash flows.



|Item 3. | Controls and Procedures
|------- | -----------------------

The Companys
management, including the Companys principal executive officer and principal financial officer, have evaluated the effectiveness of the Companys disclosure controls and procedures, as such term is defined in Rule 13a-15(e)
promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by
this report, the Companys disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities
and Exchange Commission (the SEC) (1) is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and (2) is accumulated and communicated to the Companys
management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.



14



---

##### Table of Contents

Part II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

BV Financial is not involved in
any pending legal proceedings. Bay-Vanguard Federal is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. Such routine legal proceedings, in the aggregate, are believed by
management to be immaterial to its financial condition and results of operations.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

The following table sets forth information regarding the Companys repurchases of its common stock during the quarter ended September 30, 2007.



|                                        |  |                                          |  |                                  |      |                                                                                      |        |                                                                                    |       
|--------------------------------------- |  | ---------------------------------------- |  | -------------------------------- | ---- | ------------------------------------------------------------------------------------ | ------ | ---------------------------------------------------------------------------------- | ------
|Period                                  |  | (a) Total Number of Shares Purchased (1) |  | (b) Average Price Paid per Share |      | (c) Total Number of
Shares Purchased as
Part of Publicly Announced Plans or Programs |        | (d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|                                        |  |                                          | 
|                                        |  |                                          | 
|                                        |  |                                          | 
|                                        |  |                                          | 
|                                        |  |                                          | 
|                                        |  |                                          | 
|                                        |  |                                          | 
|                                        |  |                                          | 
|July 1, 2007 to July 31, 2007           |  | 53,199                                   |  | $                                | 8.75 |                                                                                      | 53,199 |                                                                                    | 69,728
|August 1, 2007 to August 31, 2007       |  | 19,451                                   |  |                                  | 8.69 |                                                                                      | 19,451 |                                                                                    | 50,277
|September 1, 2007 to September 30, 2007 |  |                                         |  |                                  |     |                                                                                      |       |                                                                                    | 50,277
|                                        |  |                                          |  |                                  |      |                                                                                      |        |                                                                                    |       
|Total                                   |  | 72,650                                   |  | $                                | 8.73 |                                                                                      | 72,650 |                                                                                    | N/A   
|                                        |  |                                          |  |                                  |      |                                                                                      |        |                                                                                    |       

---

|(1) | On August 16, 2007, the Company announced that it completed its previously announced stock repurchase plan under which it acquired 132,250 shares of its common stock and the
adoption of a new stock repurchase program to acquire up to 50,277 shares, or 5.0%, of its outstanding shares of common stock. The program will continue until it is completed or terminated by the Board of Directors.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 3. | Defaults upon Senior Securities
|------- | -------------------------------

Not Applicable.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

Not Applicable.



|Item 5. | Other Information
|------- | -----------------

None.



15



---

##### Table of Contents

|Item 6. | Exhibits
|------- | --------



|     |  |                                                                  
|---- |  | -----------------------------------------------------------------
|3.1  |  | Charter of BV Financial, Inc. (1)                                
|     | 
|3.2  |  | Bylaws of BV Financial, Inc. (1)                                 
|     | 
|4.0  |  | Stock Certificate of BV Financial, Inc. (1)                      
|     | 
|31.1 |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|     | 
|31.2 |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|     | 
|32.0 |  | Section 1350 Certification                                       

---

|(1) | Incorporated by reference into this document from the Exhibits filed with the Securities and Exchange Commission on the Registration Statement on Form SB-2, and any amendments
thereto, Registration No. 333-119083.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16



---

##### Table of Contents

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.



|                        |  |                    |  |                                                  
|----------------------- |  | ------------------ |  | -------------------------------------------------
|                        |  | BV FINANCIAL, INC.
|                        |  |                   
|Dated: November 7, 2007 |  | By:                |  | /s/ Carolyn M. Mroz                              
|                        |  |                    |  | Carolyn M. Mroz                                  
|                        |  |                    |  | President and Chief Executive Officer            
|                        |  |                    |  | (principal executive officer)                    
|                        |  |                   
|Dated: November 7, 2007 |  | By:                |  | /s/ Edmund T. Leonard                            
|                        |  |                    |  | Edmund T. Leonard                                
|                        |  |                    |  | Chairman of the Board and Chief Financial Officer
|                        |  |                    |  | (principal financial and accounting officer)