UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K/A

(Amendment No. 1)

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): January 27, 2021

 

 

 

VILLAGE BANK AND TRUST FINANCIAL CORP.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Virginia

(State or Other Jurisdiction

of Incorporation)

0-50765

(Commission File Number)

16-1694602

(IRS Employer

Identification No.)

 

13319 Midlothian Turnpike

Midlothian, Virginia

(Address of Principal Executive Offices)

 

23113

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (804) 897-3900

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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 mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 

  Emerging growth company o

 

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

 

 

 

 

 Explanatory Note

 

This Form 8-K/A is being furnished to correct select financial information included with the Form 8-K furnished by Village Bank and Trust Financial Corp. (the “Company”) on January 27, 2021.

 

Item 2.02 Results of Operations and Financial Condition.

 

On January 27, 2021, the Company furnished a Form 8-K that included a press release reporting its financial results for the period ended December 31, 2020 (the “Press Release”). In the Press Release, the penalty of $696,000 related to the prepayment of the Company’s Federal Home Loan Bank advances during the quarter ended December 31, 2020 was classified as interest expense. After issuing the Press Release, the Company determined that such penalty of $696,000 should be reclassified from interest expense to non-interest expense (the “Reclassification”). The Reclassification had no impact on the net income and earnings per fully diluted share for the fourth quarter and year ended December 31, 2020 that were reported in the Press Release.

 

As a result of the Reclassification, the Company’s revised net interest income is increased to $6,551,000 for the quarter ended December 31, 2020 and $21,393,000 for the year ended December 31, 2020. The Company’s revised non-interest expense is increased to $6,484,000 for the quarter ended December 31, 2020 and $21,649,000 for the year ended December 31, 2020. The Company’s revised net interest margin is increased to 3.90% for the quarter ended December 31, 2020 and 3.41% for the year ended December 31, 2020. The Company’s net interest income to average assets is increased to 3.62% for the quarter ended December 31, 2020 and 3.15% for the year ended December 31, 2020. The Company’s non-interest expenses to average assets is increased to 2.87% for the quarter ended December 31, 2020 and 2.50% for the year ended December 31, 2020. The Reclassification had no impact on the Company’s return on average equity or return on average assets.

 

Set forth below are corrected Key Metric and Financial Highlights tables from the Press Release reflecting the Reclassification.

 

    Three Months Ended   Year Ended
Metric   December 31, 2020   December 31 2019   December 31, 2020   December 31 2019
Consolidated                
Return on average equity   23.57%   12.11%   17.98%   11.16%
Return on average assets   1.72%   0.94%   1.28%   0.84%
Commercial Banking Segment                
Return on average equity   11.99%   9.45%   9.71%   8.72%
Return on average assets   0.87%   0.74%   0.69%   0.66%
Net interest income to average assets   3.62%   3.19%   3.15%   3.33%
Provision to average assets   0.00%   0.10%   0.14%   0.03%
Noninterest income to average assets   0.40%   0.54%   0.40%   0.57%
Noninterest expense to average assets   2.87%   2.70%   2.50%   3.05%
Mortgage Banking Segment                
Return on average equity   11.58%   2.66%   8.27%   2.44%
Return on average assets   0.84%   0.21%   0.59%   0.18%
Net income before tax to average assets   1.07%   0.26%   0.75%   0.23%

 

  2  

 

 Financial Highlights

(Dollars in thousands, except per share amounts)

  

    December 31,     September 30,     June 30,     March 31,     December 31,  
    2020     2020     2020     2020     2019  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     *  
Balance Sheet Data                                        
Total assets   $ 706,236     $ 727,260     $ 722,646     $ 569,017     $ 540,313  
Investment securities     40,844       36,305       37,785       39,081       46,937  
Loans held for sale     34,421       27,525       17,761       16,759       12,722  
Loans, net     558,955       596,483       603,688       435,938       430,059  
Allowance for loan losses     (3,970 )     (4,050 )     (3,759 )     (3,444 )     (3,186 )
Deposits     588,382       573,852       579,795       468,843       443,208  
Borrowings     55,921       98,504       90,496       50,368       48,676  
Shareholders' equity     51,996       48,875       46,617       44,162       42,914  
Book value per share   $ 35.46     $ 33.33     $ 32.07     $ 30.38     $ 29.53  
Total shares outstanding     1,466,516       1,466,240       1,453,759       1,453,759       1,453,009  
                                         
Asset Quality Ratios                                        
Allowance for loan losses to:                                        
Loans, net of deferred fees and costs     0.71 %     0.68 %     0.62 %     0.79 %     0.74 %
Loans, net of deferred fees and costs (excluding   PPP loans)     0.93 %     0.97 %     0.89 %     0.79 %     0.74 %
Nonperforming loans     251.75 %     181.98 %     205.33 %     261.58 %     170.57 %
Net charge-offs (recoveries) to average loans     0.05 %     (0.03 %)     (0.01 %)     0.13 %     0.05 %
Nonperforming assets to total assets     0.27 %     0.35 %     0.30 %     0.32 %     0.44 %
                                         
Bank Capital Ratios                                        
Common equity tier 1     13.35 %     13.19 %     12.85 %     11.89 %     12.15 %
Tier 1     13.35 %     13.19 %     12.85 %     11.89 %     12.15 %
Total capital     14.20 %     14.10 %     13.69 %     12.64 %     12.56 %
Tier 1 leverage     9.28 %     8.80 %     8.61 %     10.10 %     9.69 %

 

    Three Months Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,  
    2020     2020     2020     2020     2019  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
Selected Operating Data                                        
Interest income   $ 7,409     $ 6,540     $ 6,193     $ 5,684     $ 5,897  
Interest expense     858       1,069       1,249       1,257       1,370  
Net interest income before                                        
provision for loan losses     6,551       5,471       4,944       4,427       4,527  
Provision for loan losses     -       250       300       400       135  
Noninterest income     3,889       3,481       2,815       2,060       1,976  
Noninterest expense     6,484       5,756       4,459       4,950       4,719  
Income before income tax expense     3,956       2,946       3,000       1,137       1,649  
Income tax expense     904       677       665       239       345  
Net income   $ 3,052     $ 2,269     $ 2,335     $ 898     $ 1,304  
Earnings per share                                        
Basic   $ 2.08     $ 1.55     $ 1.61     $ 0.62     $ 0.90  
Diluted   $ 2.08     $ 1.55     $ 1.61     $ 0.62     $ 0.90  
                                         
Performance Ratios                                        
Return on average assets     1.72 %     1.26 %     1.34 %     0.67 %     0.94 %
Return on average equity     23.57 %     18.74 %     20.12 %     8.23 %     12.11 %
Net interest margin     3.90 %     3.21 %     3.02 %     3.55 %     3.52 %

 

* Derived from audited consolidated financial statements.

 

 

  3  

 

Financial Highlights

(Dollars in thousands, except per share amounts)

 

    Year Ended  
    December 31,     December 31,  
    2020     2019  
    (Unaudited)     (Unaudited)  
Selected Operating Data                
Interest income   $ 25,826     $ 23,487  
Interest expense     4,433       5,330  
Net interest income before                
provision for loan losses     21,393       18,157  
Provision for loan losses     950       135  
Noninterest income     12,245       7,908  
Noninterest expense     21,649       20,289  
Income before income tax expense     11,039       5,641  
Income tax expense     2,485       1,164  
Net income   $ 8,554     $ 4,477  
Net income available to common                
shareholders   $ 8,554     $ 4,477  
Earnings per share                
Basic   $ 5.86     $ 3.10  
Diluted   $ 5.86     $ 3.10  
                 
Performance Ratios                
Return on average assets     1.28 %     0.84 %
Return on average equity     17.98 %     11.16 %
Net interest margin     3.41 %     3.68 %
                 
* Derived from audited consolidated financial statements.                

 

Except as specifically set forth herein, this Form 8-K/A does not amend or update any other information contained in the Company’s Form 8-K furnished January 27, 2021. This Form 8-K/A should be read together with the Company’s Form 8-K furnished January 27, 2021.

 

  4  

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

  VILLAGE BANK AND TRUST FINANCIAL CORP.
  (Registrant)
   
Date: February 26, 2021 By:  /s/ Donald M. Kaloski, Jr.
    Donald M. Kaloski, Jr.
Executive Vice President and CFO

 

  5  

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