BV Financial, Inc. operates as the holding company for BayVanguard Bank that provides various financial services.
The company is a registered bank holding company subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System (the ‘Federal Reserve Board’).
The bank is a Maryland-chartered commercial bank headquartered in Baltimore, Maryland and is a full-service community-oriented financial institution dedicated to serving the financial service need...
BV Financial, Inc. operates as the holding company for BayVanguard Bank that provides various financial services.
The company is a registered bank holding company subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System (the ‘Federal Reserve Board’).
The bank is a Maryland-chartered commercial bank headquartered in Baltimore, Maryland and is a full-service community-oriented financial institution dedicated to serving the financial service needs of consumers and businesses. BayVanguard Bank’s business primarily consists of taking deposits from the general public and investing those deposits, together with funds generated from operations, in commercial real estate loans (commercial – owner occupied and commercial – investor), one- to four-family real estate loans (one- to four-family – owner occupied and one- to four-family – non-owner occupied) and, to a lesser extent, commercial loans, construction and land loans, marine loans, farm loans and certain consumer loans.
In recent years, the company has increased its focus, consistent with its conservative underwriting standards, on originating commercial real estate and commercial loans. The company also invests in investment securities. The company’s revenues are derived primarily from interest on loans and, to a lesser extent, interest on investment securities. The company’s primary sources of funds are deposits and principal and interest payments on loans and securities. BayVanguard Bank offers a variety of deposit accounts, including noninterest-bearing and interest-bearing checking accounts, money market accounts, savings accounts and certificates of deposit.
The bank is subject to comprehensive regulation and examination by the Office of the Commissioner of Financial Regulation for the State of Maryland (the ‘OCFR’) and the Federal Deposit Insurance Corporation (the ‘FDIC’). BayVanguard Bank is a member of the Federal Home Loan Bank system.
Market Area
The company conducts its operations from its main office, various branch offices, and a standalone interactive teller machine (‘ITM’), all of which are located in the Baltimore market (Baltimore City, Anne Arundel, Baltimore and Harford counties, Maryland) and Dorchester and Talbot counties, Maryland on the Eastern Shore of Maryland.
Lending Activities
The company’s principal lending activity is the origination of commercial real estate loans, one- to four-family real estate loans, and to a lesser extent, commercial loans, construction and loan loans, marine loans, and farm loans. The company’s lending function focuses on three areas – consumer, community, and investment real estate. The consumer group generally includes loans made to the company’s customer base (e.g., mortgages) and through local brokers (e.g., marine lending). The community group generally includes loans serving the business needs of the communities in the company’s market area, including through non-owner occupied residential lending, commercial real estate lending and other commercial lending. In 2020, the company established the investment real estate group charged with originating larger real estate loans, primarily non-owner occupied commercial real estate loans, both inside and outside of the company’s market area.
Commercial Real Estate Lending
The company’s commercial real estate loans are secured by a variety of properties, including multi-family, commercial retail, smaller suburban office buildings, shopping centers and hotels.
The company’s commercial real estate loans are generally originated as five- to ten-year balloon loans and are amortized over 20 to 25 years.
One- to-Four Family Residential Real Estate Lending
The company’s one-to four-family residential loan portfolio consists of mortgage loans that enable borrowers to purchase or refinance homes. Generally, the company’s one- to four-family residential real estate loans have terms of up to 30 years.
Commercial Lending
The company originates commercial loans, including equipment loans and business acquisitions loans, and lines of credit to small- and medium-sized companies in the company’s market area. The company’s commercial loan portfolio consists of mix of secured loans and unsecured loans.
The commercial loans that the company offers are variable- and fixed-rate loans, generally for a one- to ten-year term.
Construction and Land Lending
The company makes construction loans, mostly to builders and commercial borrowers for owner occupied projects. The company also makes a limited amount of land loans. Most of the company’s construction and land loans are secured by properties located in the company’s market area. Construction loans generally have a maximum term of 24 months.
The company also originates loans to finance the acquisition and development of land. Land development loans are generally secured by vacant land located in Maryland and in process of improvement.
Marine Lending
Marine loans are typically made through two, long standing, dealer and broker relationships, and, to a much lesser extent, walk-in applications. These loans typically have a maximum loan term of 20 years and are made at a fixed rate.
Farm Lending
The farm loan portfolio consists of loans to farmers and agricultural businesses, most of which are located on the Eastern Shore of Maryland.
Other Consumer Lending
The company originates limited amounts of consumer loans apart from marine loans. The consumer loans that the company originates generally consist of loans secured by automobile loans, deposits and miscellaneous other types of installment loans and are generally only provided to existing lending clients upon request.
Guaranteed by the U.S. Government
The company has in the past purchased the guaranteed portion of the U.S. Department of Agriculture and SBA loans in the secondary market, though the company is no longer actively engaged in this market. The company is also authorized lenders under the SBA’s 7(a) and 504 programs and has originated loans under those programs in the past.
Investment Activities
The company invests in mortgage-backed securities, investment grade corporate bonds and securities issued by the U.S. Government and its agencies or government sponsored enterprises.
Deposits
The company’s deposits are generated primarily from its primary market area. The company offers a selection of deposit accounts, including noninterest-bearing and interest-bearing checking accounts, money market accounts, savings accounts and certificates of deposit.
Supervision and Regulation
As a Maryland-chartered commercial bank, BayVanguard Bank is subject to examination and regulation by the OCFR, as its chartering authority, and, as a federally insured nonmember institution, by the FDIC. BayVanguard Bank is a member of the Federal Home Loan Bank of Atlanta and its deposits are insured up to applicable limits by the FDIC. BayVanguard Bank is required to file reports with, and is periodically examined by, the FDIC and the OCFR concerning its activities and financial condition, and must obtain regulatory approvals before entering into certain transactions, including mergers with or acquisitions of other financial institutions.
As a bank holding company, the company is required to comply with the rules and regulations of the Federal Reserve Board. It is required to file certain reports with the Federal Reserve Board and is subject to examination by and the enforcement authority of the Federal Reserve Board. The company is also subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.
Section 23B and Regulation W require that all such transactions be on terms and under circumstances substantially the same, or at least as favorable, to the bank or the bank’s subsidiary as prevailing market terms for comparable transactions with or involving a non-affiliate.
A bank’s loans to its executive officers, directors, any owner of 10% or more of its stock (each, an insider) and any of certain entities controlled by any such insider (an insider’s related interest) as well as loans to insiders of affiliates and such insiders’ related interests are subject to the conditions and limitations imposed by Section 22(h) of the Federal Reserve Act, as made applicable to the bank by Section 18(j) of the Federal Deposit Insurance Act, and its implementing regulation, Regulation O, as made applicable by FDIC regulation.
BayVanguard Bank is a member of the Deposit Insurance Fund, which is administered by the FDIC. BayVanguard Bank’s most recent FDIC CRA rating in December 20223 was ‘Satisfactory’.
BayVanguard Bank is subject to a variety of federal and Maryland statutes and regulations that are intended to protect consumers and prohibit discrimination in the granting of credit. These statutes and regulations provide for a range of sanctions for non-compliance with their terms, including imposition of cease-and-desist orders and civil money penalties, and referral to the U.S. Attorney General for prosecution of a civil action seeking actual and punitive damages and injunctive relief. Certain of these statutes, including Section 5 of the Federal Trade Commission Act, which prohibits unfair and deceptive acts and practices against consumers.
BayVanguard Bank is a member of the Federal Home Loan Bank System. The deposit operations of BayVanguard Bank also are subject to, among others, the:
Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records;
Check Clearing for the 21st Century Act (also known as ‘Check 21’), which gives ‘substitute checks,’ such as digital check images and copies made from that image, the same legal standing as the original paper check; and
Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.
BV Financial common stock is registered with the Securities and Exchange Commission. BV Financial is subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Securities Exchange Act of 1934.
Shares purchased by an affiliate of BV Financial are subject to the resale restrictions of Rule 144 under the Securities Act of 1933.
The Sarbanes-Oxley Act of 2002 is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. The company has policies, procedures and systems designed to comply with this Act and its implementing regulations, and the company reviews and documents such policies, procedures and systems to ensure continued compliance with this Act and its implementing regulations.
History
BV Financial, Inc. was founded in 1873. The company was incorporated in 2019.
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