BV Financial, the parent company of BayVanguard Bank, has inked a definitive merger deal with Delmarva Bancshares, the parent company of 1880 Bank.

The deal has been unanimously approved by the boards of directors of both the banks.

BV Financial will acquire Delmarva Bancshares and its wholly-owned bank subsidiary 1880 Bank, in an all-cash transaction.

Under the terms of the agreement, Delmarva Bancshares shareholders will receive $8.90 in cash for each share of Delmarva held.

On aggregate, the deal is valued at approximately $54m.

BV Financial said that the transaction will be accretive to its earning per shares (EPS) in 2021.

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BV Financial will pay the deal value through a combination of $30m in subordinated debt issuance and a cash dividend paid by its subsidiary BayVanguard Bank.

Upon completion of the deal, BayVanguard Bank will have nearly $750m in assets and 16 branch locations.

BV Financial co-president and CEO David Flair said: “This transaction marks another strategic acquisition for BayVanguard Bank as we continue to expand our footprint.

BV Financial co-president and CEO Timothy Prindle added: “1880 Bank is a well-run and well-respected bank and we will make sure that their customers continue to receive the level of service they have come to expect.”

Delmarva Bancshares chairman, president and CEO Kim Liddell said: “We have come a long way since my joining Delmarva over a decade ago, from the brink of failure to joining forces with BayVanguard Bank to create a $750m bank.

“This combination will be positive for both banks. We believe our customers will benefit from BayVanguard’s increased capital and lending capacity while still maintaining local decision making and the exceptional service they have become accustomed to at 1880 Bank.”

Subject to receipt of regulatory approvals, the deal is expected to close in the fourth quarter of this year.