BV Financial, Inc. (OTCPK:BVFL) entered into a definitive merger agreement to acquire Delmarva Bancshares, Inc. (OTCPK:DLMV) for $35.3 million on June 17, 2020. Under the terms of the agreement, the preferred and common shareholders of Delmarva will receive cash of $8.9 for each share of Delmarva they own. BV Financial intends to fund the merger consideration through a combination of the issuance of $30 million in subordinated debt i.e. from the private placement of $35.0 million of its 4.875% Fixed-to-Floating Rate Subordinated Notesand a cash dividend to be paid by Bay-Vanguard Bank.

There will be no change in the management of BV Financial or Bay-Vanguard Bank as a part of the transaction. Kim C. Liddell, Delmarva's Chairman, President and Chief Executive Officer, will be appointed as Chairman of the Board of BV Financial and as a Director of Bay-Vanguard Bank. The completion of the transaction is subject to customary closing conditions, including the receipt of required regulatory approvals and the approval of Delmarva Bancshares' shareholders.

The transaction has been unanimously approved by the Boards of Directors of both BV Financial and Delmarva. As on September 17, 2020, the completion of the transaction remains subject to the issuance of $30 million in subordinated debt by BV Financial and customary closing conditions. BV Financial and Delmarva received all regulatory approvals to complete the merger.

The shareholders of Delmarva approved the transaction at the special meeting of shareholders on August 27, 2020. The transaction is expected to close in the fourth quarter of 2020. The transaction is expected to be accretive to BV Financial's 2021 earnings per share.

Scott A. Brow and Thomas P. Hutton of Luse Gorman, PC acted as legal advisor and Banks Street Partners acted as financial advisor to BV Financial. Benjamin A. Barnhill and Kathryn B. Solley of Nelson Mullins Riley & Scarborough LLP acted as legal advisor and Raymond James and Associates, Inc. acted as financial advisor to Delmarva.