Village Bank and Trust Financial (US:VBFC)2024-05-10 12:46Financial Performance - For the three months ended March 31, 2024, the company reported a net income of $1.77 million, or $1.19 per fully diluted share, compared to $1.54 million, or $1.04 per fully diluted share for the same period in 2023[122]. - Net interest income for the three months ended March 31, 2024, was $6.396 million, a slight increase of $31, compared to $6.365 million for the same period in 2023[127]. - Total noninterest income for the three months ended March 31, 2024, was $1.60 million, a 27.7% increase from $1.26 million in the same period in 2023, driven primarily by a 77.8% increase in mortgage banking income[139]. - Noninterest expense decreased by $127,000 to $5.63 million for the three months ended March 31, 2024, primarily due to a reduction in other operating expenses[143]. - The effective tax rate for the three months ended March 31, 2024, was 20.2%, compared to 17.4% for the same period in 2023, influenced by a decrease in tax credits related to state taxes[144]. Asset and Deposit Growth - Total assets increased to $736.31 million as of March 31, 2024, compared to $724.47 million as of March 31, 2023[130]. - Total deposits rose to $370.71 million, with an increase in interest-bearing deposits contributing to a net interest margin of 3.72% for the quarter[130]. - Total deposits increased by $14,924,000, or 2.47%, from December 31, 2023, with noninterest bearing demand accounts decreasing by $17,506,000, or 7.07%[159][160]. - Time deposits increased by $21,984,000, or 47.23%, from December 31, 2023, due to the issuance of $20.0 million in brokered time deposits at a weighted average rate of 4.89%[160]. Loan and Credit Quality - The allowance for credit losses increased to $3.89 million as of March 31, 2024, up from $3.52 million on January 1, 2023, reflecting an allowance for loans of $3.57 million and a reserve for unfunded commitments of $320,000[124][123]. - Non-performing loans decreased from 0.12% at March 31, 2023, to 0.05% at March 31, 2024, indicating improved credit quality[133]. - The allowance for credit losses as of March 31, 2024, was $3.89 million, with an allowance for loans of $3.57 million, reflecting a provision for credit losses of $136,700 for the quarter due to loan growth[132][133]. - The total nonperforming assets were $281,000 as of March 31, 2024, compared to $291,000 at December 31, 2023, showing a decline of 3.44%[155]. - The ratio of nonaccrual loans to total loans remained stable at 0.05% for both March 31, 2024, and December 31, 2023[154]. Interest Income and Costs - The interest income for the three months ended March 31, 2024, was $9.335 million, an increase of $1.752 million compared to $7.583 million for the same period in 2023[127]. - The overall cost of funds increased by 103 basis points to 1.78% for the three months ended March 31, 2024, compared to 0.75% for the same period in 2023[128]. - The yield on interest-earning assets increased to 5.42% for the three months ended March 31, 2024, compared to 4.51% for the same period in 2023, reflecting a 91 basis point increase[128]. - The cost of interest-bearing liabilities rose significantly by 153 basis points to 2.75% for the three months ended March 31, 2024, compared to 1.22% for the same period in 2023[128]. - The net interest margin (NIM) decreased by seven basis points to 3.72% for the three months ended March 31, 2024, down from 3.79% for the same period in 2023[128]. Capital and Liquidity - Shareholders' equity at March 31, 2024, was $68,358,000, an increase of $802,000 from December 31, 2023, primarily due to net income of $1,772,000[165]. - Total risk-based capital was $88,249,000 with a leverage ratio of 11.36% and a common equity tier 1 capital ratio of 13.51% as of March 31, 2024[167]. - Liquid assets totaled $115,180,000, or 15.42% of total assets, providing a secondary source of liquidity[169]. - The company had approximately $218.5 million in uninsured deposits, representing 35.30% of total deposits, with total liquidity sources equaling $196.4 million[170]. Loan Portfolio Composition - The company maintains a diversified loan portfolio, with approximately 81.0% of loans secured by real property, and a focus on minimizing credit concentration risk[146][147]. - As of March 31, 2024, total loans amounted to $591,338,000, an increase from $575,008,000 as of December 31, 2023, representing a growth of 2.30%[148]. - The commercial real estate loans accounted for 51.61% of total loans as of March 31, 2024, compared to 50.54% as of December 31, 2023[148]. - Home equity lines of credit increased to $21,682,000, representing 3.67% of total loans as of March 31, 2024, compared to $21,557,000 or 3.75% at the end of 2023[148]. - Commercial and industrial loans (excluding those secured by real estate) rose to $92,600,000, which is 15.66% of total loans, up from $86,203,000 or 14.99%[148]. Other Notable Adjustments - The company recorded a one-time adjustment of $233,900 in mortgage banking income due to fair value adjustments, which is not expected to recur in future periods[142]. - The transition from LIBOR to SOFR for financial instruments did not have a significant impact on the company's consolidated financial statements[185].