UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of report (Date of earliest event reported): March 21, 2018

VILLAGE BANK AND TRUST FINANCIAL CORP.

(Exact Name of Registrant as Specified in Charter)

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:

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

On March 21, 2018, Village Bank and Trust Financial Corp. (the “Company”) entered into a Subordinated Note Purchase Agreement (the “Purchase Agreement”) with 10 accredited investors under which the Company issued an aggregate of $5.7 million of fixed-to-floating rate subordinated notes due March 31, 2028 (the “Notes”) in a private placement. The Company expects to receive approximately $5.525 million in net proceeds after deducting issuance costs.

The Notes accrue interest at a fixed interest rate of 6.50% per year for the first five years of their term. For the remaining five years of their term, the Notes bear interest at a floating rate of three-month LIBOR plus 3.73%. The Notes are not convertible into common stock or preferred stock, and are not callable by the holders. The Company has the right to redeem the Notes, in whole or in part, without premium or penalty, at any time on or after March 21, 2023, with certain exceptions provided in the Notes that allow the Company to redeem the Notes prior to that date.

If an event of default occurs, such as the bankruptcy of the Company, the holder of a Note may declare the principal amount of the Note to be due and immediately payable. The Notes are unsecured obligations subordinate and junior in right of payment to all of the Company’s existing and future senior indebtedness, whether secured or unsecured, including claims of depositors and general creditors, and rank equally in right of payment with any unsecured, subordinated indebtedness that the Company may incur in the future that rank equally with the Notes.

The Notes are intended to qualify as Tier 2 capital for regulatory purposes. The Company expects to use the net proceeds from the sale of the Notes to redeem all of the Company’s 5,027 outstanding shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A on March 30, 2018, and for general corporate purposes.

The Notes were offered and sold in reliance on the exemptions from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder. Accordingly, the Notes were offered and sold exclusively to persons who are “accredited investors” within the meaning of Rule 501(a) of Regulation D.

The foregoing descriptions of the Purchase Agreement and the Notes do not purport to be complete and are qualified in their entirety by reference to the forms of the Purchase Agreement and the Notes which are attached hereto as Exhibits 10.1 and 4.1, respectively, and are incorporated herein by reference.

The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.

On March 21, 2018, the Company issued a press release regarding the offering of Notes. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

(d)       Exhibits.

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.