BV Financial, Inc. Debt Disclosure

Note 7 – Borrowings

The Bank has an agreement under a blanket floating lien with the FHLB providing the Bank a line of credit of up to 25% of its total assets limited to the lendable collateral value of qualified assets the Bank has to pledge to support its borrowings. At December 31, 2025 and December 31, 2024, the Bank had credit availability of $108.0 million and $120.0 million, respectively.

The Bank had $35.0 million in FHLB advances outstanding at December 31, 2025 and $15.0 million in FHLB advances outstanding at December 31, 2024. Additionally, at December 31, 2025 and December 31, 2024, the Bank had unfunded letters of credit used to secure municipal deposits outstanding against the FHLB line of credit of $29.0 million and $23.0 million, respectively.

The Bank is required to maintain qualified mortgage loans as collateral for its FHLB advances and letters of credit in an amount equal to 100% of the outstanding advances. As of December 31, 2025 and December 31, 2024, the Bank pledged $171.6 million and $157.6 million of loans to the FHLB for advances, respectively. Additionally, at December 31, 2025 and December 31, 2024, the Bank had a $20.0 million unsecured demand line of credit facility with a correspondent bank, which had no outstanding balance.

The Company issued $35.0 million in Fixed-to-Floating Rate Subordinated Notes Due 2030 on October 21, 2020. The proceeds were used to acquire Delmarva Bancshares, Inc. and to retire the Delmarva Bancshares 2015 Senior Notes. The interest rate on these notes was fixed for the first five years at 4.875% and then would have reset quarterly to an interest rate per annum equal to the then current three-month term Secured Overnight Financing Rate (“SOFR”) plus 472 basis points, payable quarterly in arrears. The Company redeemed the $35.0 million subordinated debt in December 2025.

Note 7 – Borrowings (Continued)

The Easton Capital Trust Junior Subordinated Notes were issued by Easton Bank & Trust and assumed by Delmarva Bancshares on July 15, 2015 and then assumed by the Company on October 31, 2020. The Company acquired $3.0 million of junior subordinated debt of Easton Capital Trust I. The junior subordinated debt was scheduled to mature on February 8, 2034, but may have been called starting on February 8, 2009. The junior subordinated debt accrued interest at a floating rate equal to the three-month SOFR plus 2.85%, payable quarterly. The quarterly interest rate on the debentures was 8.49% at December 31, 2023. In the first quarter of 2024, the Company paid off this junior subordinated debt, which resulted in the write-off (increase in interest expense) of the remaining purchase accounting fair market value adjustment of $566,000.