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.
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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.
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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 | ||
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