Village Bank & Trust Financial Corp. [VBFC] Filings

10-Q 1 vbfc-20240630x10q.htm 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number: 0-50765

VILLAGE BANK AND TRUST FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

Virginia	16-1694602
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

13319 Midlothian Turnpike, Midlothian, Virginia	23113
(Address of principal executive offices)	(Zip code)

804-897-3900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $4.00 per share	VBFC	Nasdaq Capital Market

Indicate by check whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐	Accelerated Filer ☐
Non-Accelerated Filer ☒	Smaller Reporting Company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

1,495,160 shares of common stock, $4.00 par value, outstanding as of July 31, 2024

Table of Contents

Village Bank and Trust Financial Corp.

Form 10-Q

TABLE OF CONTENTS


Part I – Financial Information

Item 1. Financial Statements

Consolidated Balance Sheets June 30, 2024 (unaudited) and December 31, 2023	3

Consolidated Statements of Income For the Three and Six Months Ended June 30, 2024 and 2023 (unaudited)	4

Consolidated Statements of Comprehensive Income For the Three and Six Months Ended June 30, 2024 and 2023 (unaudited)	5

Consolidated Statements of Shareholders’ Equity For the Three and Six Months and Ended June 30, 2024 and 2023 (unaudited)	6

Consolidated Statements of Cash Flows For Six Months Ended June 30, 2024 and 2023 (unaudited)	8

Notes to Consolidated Financial Statements (unaudited)	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

Item 3. Quantitative and Qualitative Disclosures About Market Risk	52

Item 4. Controls and Procedures	52

Part II – Other Information

Item 1. Legal Proceedings	53

Item 1A. Risk Factors	53

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	53

Item 3. Defaults Upon Senior Securities	53

Item 4. Mine Safety Disclosures	53

Item 5. Other Information	53

Item 6. Exhibits	53

Signatures	54

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

Village Bank and Trust Financial Corp. and Subsidiary

Consolidated Balance Sheets

June 30, 2024 (Unaudited) and December 31, 2023*

(in thousands, except share and per share data)


	June 30,		December 31,
	2024		2023
Assets
Cash and due from banks	$	17,154	$	10,383
Federal funds sold		1,337		7,331
Total cash and cash equivalents		18,491		17,714
Investment securities available for sale, at fair value		83,124		105,585
Restricted stock, at cost		2,277		2,985
Loans held for sale		8,236		4,983
Loans
Outstandings		605,408		575,008
Allowance for credit losses		(3,681)		(3,423)
Deferred costs, net		678		803
Total loans, net		602,405		572,388
Premises and equipment, net		11,671		11,760
Bank owned life insurance		13,291		13,120
Accrued interest receivable		3,857		3,827
Other assets		4,374		4,254
Total Assets	$	747,726	$	736,616

Liabilities and Shareholders’ Equity
Liabilities
Deposits
Noninterest bearing demand	$	236,063	$	247,624
Interest bearing		392,849		357,721
Total deposits		628,912		605,345
Long-term debt - trust preferred securities		8,764		8,764
Subordinated debt, net		5,700		5,700
Federal Home Loan Bank advances		30,000		45,000
Accrued interest payable		489		210
Other liabilities		3,719		4,041
Total liabilities		677,584		669,060

Shareholders’ equity
Common stock, $4 par value, 10,000,000 shares authorized; 1,495,160 shares issued and outstanding at June 30, 2024 and 1,492,879 shares issued and outstanding at December 31, 2023		5,918		5,908
Additional paid-in capital		55,690		55,486
Retained earnings		14,662		11,775
Stock in directors rabbi trust		(439)		(467)
Directors deferred fees obligation		439		467
Accumulated other comprehensive loss		(6,128)		(5,613)
Total shareholders’ equity		70,142		67,556

Total liabilities and shareholders' equity	$	747,726	$	736,616

* Derived from audited consolidated financial statements.

See accompanying notes to consolidated financial statements.

Table of Contents

Village Bank and Trust Financial Corp. and Subsidiary

Consolidated Statements of Income

Three and Six Months Ended June 30, 2024 and 2023

(Unaudited)

(in thousands, except per share data)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Interest income
Loans	$	8,712	$	7,266	$	16,912	$	14,029
Investment securities		905		719		1,837		1,446
Federal funds sold		252		114		455		207
Total interest income		9,869		8,099		19,204		15,682

Interest expense
Deposits		2,452		1,186		4,548		1,810
Borrowed funds		807		789		1,650		1,383
Total interest expense		3,259		1,975		6,198		3,193

Net interest income		6,610		6,124		13,006		12,489
Provision for credit losses		—		—		150		—
Net interest income after provision for credit losses		6,610		6,124		12,856		12,489

Noninterest income
Service charges and fees		655		711		1,296		1,380
Mortgage banking income, net		552		386		1,402		864
Other		184		124		296		234
Total noninterest income		1,391		1,221		2,994		2,478

Noninterest expense
Salaries and benefits		3,485		3,415		6,949		6,863
Occupancy		310		307		642		618
Equipment		302		280		580		565
Supplies		49		35		99		84
Data processing		482		492		921		931
Professional and outside services		411		346		829		720
Advertising and marketing		95		140		178		251
FDIC insurance premium		82		84		174		134
Other operating expense		723		733		1,195		1,423
Total noninterest expense		5,939		5,832		11,567		11,589

Income before income tax expense		2,062		1,513		4,283		3,378
Income tax expense		409		274		858		599

Net income	$	1,653	$	1,239	$	3,425	$	2,779

Earnings per share, basic	$	1.11	$	0.83	$	2.29	$	1.87
Earnings per share, diluted	$	1.11	$	0.83	$	2.29	$	1.87

See accompanying notes to consolidated financial statements.

Table of Contents

Village Bank and Trust Financial Corp. and Subsidiary

Consolidated Statements of Comprehensive Income

Three and Six Months ended June 30, 2024 and 2023

(Unaudited)

(in thousands)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net income	$	1,653	$	1,239	$	3,425	$	2,779
Other comprehensive (loss) income
Unrealized holding (losses) gains arising during the period		338		(1,312)		(652)		564
Tax effect		(71)		276		137		(118)
Net change in unrealized holding (losses) gains on securities available for sale, net of tax		267		(1,036)		(515)		446

Minimum pension adjustment		—		3		—		6
Tax effect		—		(1)		—		(2)
Minimum pension adjustment, net of tax		—		2		—		4

Total other comprehensive (loss) income		267		(1,034)		(515)		450

Total comprehensive income	$	1,920	$	205	$	2,910	$	3,229

See accompanying notes to consolidated financial statements.

Table of Contents

Village Bank and Trust Financial Corp. and Subsidiary

Consolidated Statements of Shareholders' Equity

Three and Six Months Ended June 30, 2024 and 2023

(Unaudited)

(In thousands)


	Three Months Ended June 30, 2024

									Directors		Accumulated
			Additional				Stock in		Deferred		Other
	Common		Paid-in		Retained		Directors		Fees		Comprehensive
	Stock		Capital		Earnings		Rabbi Trust		Obligation		Income (Loss)		Total

Balance, March 31, 2024	$	5,918		55,557	$	13,278	$	(439)	$	439	$	(6,395)	$	68,358
Stock based compensation		—		133		—		—		—		—		133
Cash dividend declared ($0.18 per share)		—		—		(269)		—		—		—		(269)
Net income		—		—		1,653		—		—		—		1,653
Other comprehensive income		—		—		—		—		—		267		267
Balance, June 30, 2024	$	5,918	$	55,690	$	14,662	$	(439)	$	439	$	(6,128)	$	70,142


	Three Months Ended June 30, 2023

									Directors		Accumulated
			Additional				Stock in		Deferred		Other
	Common		Paid-in		Retained		Directors		Fees		Comprehensive
	Stock		Capital		Earnings		Rabbi Trust		Obligation		Income (Loss)		Total

Balance, March 31, 2023	$	5,881	$	55,256	$	12,141	$	(595)	$	595	$	(9,397)	$	63,881
Restricted stock redemption		—		—		—		128		(128)		—		—
Vesting of restricted stock		2		(2)		—		—		—		—		—
Stock based compensation		—		166		—		—		—		—		166
Cash dividend declared ($0.16 per share)		—		—		(238)		—		—		—		(238)
Net income		—		—		1,239		—		—		—		1,239
Other comprehensive loss		—		—		—		—		—		(1,034)		(1,034)
Balance, June 30, 2023	$	5,883	$	55,420	$	13,142	$	(467)	$	467	$	(10,431)	$	64,014


	Six Months Ended June 30, 2024

									Directors		Accumulated
			Additional				Stock in		Deferred		Other
	Common		Paid-in		Retained		Directors		Fees		Comprehensive
	Stock		Capital		Earnings		Rabbi Trust		Obligation		Income (Loss)		Total

Balance, December 31, 2023	$	5,908	$	55,486	$	11,775	$	(467)	$	467	$	(5,613)	$	67,556
Restricted stock redemption		—		—		—		28		(28)		—		—
Vesting of restricted stock		10		(10)		—		—		—		—		—
Stock based compensation		—		214		—		—		—		—		214
Cash dividend declared ($0.36 per share)		—		—		(538)								(538)
Net income		—		—		3,425		—		—		—		3,425
Other comprehensive loss		—		—		—		—		—		(515)		(515)
Balance, June 30, 2024	$	5,918	$	55,690	$	14,662	$	(439)	$	439	$	(6,128)	$	70,142

Table of Contents

Six Months Ended June 30, 2023

Village Bank & Trust Financial Corp. [VBFC] Filings
10-Q	[2024-08-09]
10-Q	[2024-05-10]
10-K	[2024-03-22]
10-Q	[2023-11-13]
10-Q	[2023-08-11]
10-Q	[2023-05-12]
10-K	[2023-03-20]
10-Q	[2022-11-10]
10-Q	[2022-08-11]
10-Q	[2022-05-12]
10-K	[2022-03-25]
10-Q	[2021-11-12]
10-Q	[2021-08-13]
10-Q	[2021-05-13]
10-K	[2021-03-19]
10-Q	[2020-11-13]
10-Q	[2020-08-14]
10-Q	[2020-05-14]
10-K	[2020-03-16]
10-Q	[2019-11-12]
10-Q	[2019-08-09]
10-Q	[2019-05-13]
10-K	[2019-03-29]
10-Q	[2018-11-09]
10-Q	[2018-08-14]
10-Q	[2018-05-15]
10-K	[2018-03-30]
10-Q	[2017-11-13]
10-Q	[2017-08-10]
10-Q	[2017-05-10]
10-K	[2017-03-31]
10-Q	[2016-11-14]
10-Q	[2016-08-12]
10-Q	[2016-05-13]
10-K	[2016-03-30]
10-Q	[2015-11-04]
10-Q	[2015-08-12]
10-Q	[2015-05-15]
10-K	[2015-03-02]
S-1	[2014-11-12]
10-Q	[2014-10-31]
10-Q	[2014-08-01]
10-Q	[2014-05-15]
10-K	[2014-03-26]
10-Q	[2013-11-04]
10-Q	[2013-08-14]
10-Q	[2013-05-15]
10-K	[2013-03-26]
10-Q	[2012-11-13]
10-Q	[2012-08-15]
10-Q	[2012-05-15]
10-K	[2012-03-30]