Village Bank & Trust Financial Corp. - 10-Q filing on 2017-11-13

Loans and allowance for loan losses (Tables)

9 Months Ended

Sep. 30, 2017

Composition of loan portfolio (excluding mortgage loans held for sale) [Table Text Block]

The following table presents the composition of our loan portfolio (excluding mortgage loans held for sale) at the dates indicated (dollars in thousands):

	September 30, 2017					December 31, 2016
	Amount		%			Amount		%
Construction and land development
Residential	$	6,327		1.82	%	$	6,770		2.01	%
Commercial		28,721		8.28	%		27,092		8.04	%
		35,048		10.10	%		33,862		10.05	%
Commercial real estate
Owner occupied		71,834		20.70	%		66,021		19.59	%
Non-owner occupied		61,831		17.82	%		57,944		17.19	%
Multifamily		6,114		1.76	%		8,824		2.62	%
Farmland		278		0.08	%		310		0.09	%
		140,057		40.36	%		133,099		39.49	%
Consumer real estate
Home equity lines		20,595		5.94	%		20,691		6.14	%
Secured by 1-4 family residential,
First deed of trust		54,820		15.80	%		54,791		16.25	%
Second deed of trust		6,293		1.81	%		5,768		1.71	%
		81,708		23.55	%		81,250		24.10	%
Commercial and industrial loans (except those secured by real estate)		40,647		11.71	%		39,390		11.68	%
Guaranteed student loans		47,643		13.73	%		47,398		14.06	%
Consumer and other		1,899		0.55	%		2,101		0.62	%

Total loans		347,002		100.0	%		337,100		100.0	%
Deferred loan cost, net		676					660
Less: allowance for loan losses		(3,243)					(3,373)

	$	344,435				$	334,387

Information on Risk Rating of Loans [Table Text Block]

The following tables provide information on the risk rating of loans at the dates indicated (dollars in thousands):

	Risk Rated		Risk Rated		Risk Rated		Risk Rated		Total
	1-4		5		6		7		Loans
September 30, 2017
Construction and land development
Residential	$	6,327	$	-	$	-	$	-	$	6,327
Commercial		27,495		1,129		97		-		28,721
		33,822		1,129		97		-		35,048
Commercial real estate
Owner occupied		70,657		798		379		-		71,834
Non-owner occupied		57,095		1,568		3,168		-		61,831
Multifamily		6,114		-		-		-		6,114
Farmland		278		-		-		-		278
		134,144		2,366		3,547		-		140,057
Consumer real estate
Home equity lines		19,495		378		722		-		20,595
Secured by 1-4 family residential
First deed of trust		50,626		2,016		2,178		-		54,820
Second deed of trust		5,944		206		143		-		6,293
		76,065		2,600		3,043		-		81,708
Commercial and industrial loans (except those secured by real estate)		35,440		3,916		1,291		-		40,647
Guaranteed student loans		47,643		-		-		-		47,643
Consumer and other		1,659		222		18		-		1,899

Total loans	$	328,773	$	10,233	$	7,996	$	-	$	347,002


December 31, 2016
Construction and land development
Residential	$	6,770	$	-	$	-	$	-	$	6,770
Commercial		25,342		1,648		102		-		27,092
		32,112		1,648		102		-		33,862
Commercial real estate
Owner occupied		58,788		3,565		3,668		-		66,021
Non-owner occupied		57,944		-		-		-		57,944
Multifamily		8,634		190		-		-		8,824
Farmland		310		-		-		-		310
		125,676		3,755		3,668		-		133,099
Consumer real estate
Home equity lines		19,501		487		703		-		20,691
Secured by 1-4 family residential
First deed of trust		49,648		2,847		2,296		-		54,791
Second deed of trust		5,399		125		244		-		5,768
		74,548		3,459		3,243		-		81,250
Commercial and industrial loans (except those secured by real estate)		39,390		-		-		-		39,390
Guaranteed student loans		46,009		739		650		-		47,398
Consumer and other		2,043		52		6		-		2,101

Total loans	$	319,778	$	9,653	$	7,669	$	-	$	337,100

Aging of Recorded Investment in Past Due Loans And Leases [Table Text Block]

The following table presents the aging of the recorded investment in past due loans and leases as of the dates indicated (dollars in thousands):

													Recorded
					Greater								Investment >
	30-59 Days		60-89 Days		Than		Total Past				Total		90 Days and
	Past Due		Past Due		90 Days		Due		Current		Loans		Accruing
September 30, 2017
Construction and land development
Residential	$	-	$	-	$	-	$	-	$	6,327	$	6,327	$	-
Commercial		26		-		-		26		28,695		28,721		-
		26		-		-		26		35,022		35,048		-
Commercial real estate
Owner occupied		-		-		-		-		71,834		71,834		-
Non-owner occupied		-		-		-		-		61,831		61,831		-
Multifamily		-		-		-		-		6,114		6,114		-
Farmland		-		-		-		-		278		278		-
		-		-		-		-		140,057		140,057		-
Consumer real estate
Home equity lines		-		-		-		-		20,595		20,595		-
Secured by 1-4 family residential
First deed of trust		271		150		-		421		54,399		54,820		-
Second deed of trust		95		-		-		95		6,198		6,293		-
		366		150		-		516		81,192		81,708		-
Commercial and industrial loans (except those secured by real estate)		-		536		-		536		40,111		40,647		-
Guaranteed student loans		2,077		1,597		8,113		11,787		35,856		47,643		8,113
Consumer and other		-		4		-		4		1,895		1,899		-

Total loans	$	2,469	$	2,287	$	8,113	$	12,869	$	334,133	$	347,002	$	8,113

													Recorded
					Greater								Investment >
	30-59 Days		60-89 Days		Than		Total Past				Total		90 Days and
	Past Due		Past Due		90 Days		Due		Current		Loans		Accruing
December 31, 2016
Construction and land development
Residential	$	-	$	-	$	-	$	-	$	6,770	$	6,770	$	-
Commercial		-		-		-		-		27,092		27,092		-
		-		-		-		-		33,862		33,862		-
Commercial real estate
Owner occupied		-		-		-		-		66,021		66,021		-
Non-owner occupied		-		-		-		-		57,944		57,944		-
Multifamily		190		-		-		190		8,634		8,824		-
Farmland		-		-		-		-		310		310		-
		190		-		-		190		132,909		133,099		-
Consumer real estate
Home equity lines		-		-		-		-		20,691		20,691		-
Secured by 1-4 family residential
First deed of trust		414		63		-		477		54,314		54,791		-
Second deed of trust		128		-		-		128		5,640		5,768		-
		542		63		-		605		80,645		81,250		-
Commercial and industrial loans (except those secured by real estate)		15		62		-		77		39,313		39,390		-
Guaranteed student loans		2,743		1,923		8,174		12,840		34,558		47,398		8,174
Consumer and other		11		-		-		11		2,090		2,101		-

Total loans	$	3,501	$	2,048	$	8,174	$	13,723	$	323,377	$	337,100	$	8,174

Summary of impaired loans [Table Text Block]

Impaired loans are set forth in the following table as of the dates indicated (in thousands):

	September 30, 2017
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
With no related allowance recorded
Construction and land development
Commercial	$	97	$	164	$	-
Commercial real estate
Owner occupied		3,512		3,512
Non-owner occupied		2,176		2,176		-
		5,688		5,688		-
Consumer real estate
Home equity lines		601		601		-
Secured by 1-4 family residential
First deed of trust		3,968		3,968		-
Second deed of trust		594		802		-
		5,163		5,371		-
Commercial and industrial loans (except those secured by real estate)		463		693		-
Consumer and other		3		3
		11,414		11,919		-

With an allowance recorded
Construction and land development
Commercial		464		464		2
Commercial real estate
Owner occupied		1,922		1,937		21
		1,922		1,937		21
Consumer real estate
Home equity lines		138		138		4
Secured by 1-4 family residential
First deed of trust		765		765		62
Second deed of trust		86		86		5
		989		989		71
Commercial and industrial loans (except those secured by real estate)		785		901		233
		4,160		4,291		327

Total
Construction and land development
Commercial		561		628		2
		561		628		2
Commercial real estate
Owner occupied		5,434		5,449		21
Non-owner occupied		2,176		2,176		-
		7,610		7,625		21
Consumer real estate
Home equity lines		739		739		4
Secured by 1-4 family residential,
First deed of trust		4,733		4,733		62
Second deed of trust		680		888		5
		6,152		6,360		71
Commercial and industrial loans (except those secured by real estate)		1,248		1,594		233
Consumer and other		3		3		-
	$	15,574	$	16,210	$	327

	December 31, 2016
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
With no related allowance recorded
Construction and land development
Commercial	$	102	$	169	$	-
Commercial real estate
Owner occupied		1,487		1,487		-
Non-owner occupied		2,236		2,236		-
		3,723		3,723		-
Consumer real estate
Home equity lines		703		703		-
Secured by 1-4 family residential
First deed of trust		3,514		3,518		-
Second deed of trust		619		865		-
		4,836		5,086		-
Commercial and industrial loans (except those secured by real estate)		538		768		-
		9,199		9,746		-

With an allowance recorded
Construction and land development
Commercial		479		479		9
Commercial real estate
Owner occupied		4,117		4,132		86
Non-Owner occupied		-		-		-
		4,117		4,132		86
Consumer real estate
Secured by 1-4 family residential
First deed of trust		1,550		1,550		144
Second deed of trust		90		90		90
		1,640		1,640		234
Commercial and industrial loans (except those secured by real estate)		6		122		6
		6,242		6,373		335

Total
Construction and land development
Commercial		581		648		9
		581		648		9
Commercial real estate
Owner occupied		5,604		5,619		86
Non-owner occupied		2,236		2,236		-
		7,840		7,855		86
Consumer real estate
Home equity lines		703		703		-
Secured by 1-4 family residential,
First deed of trust		5,064		5,068		144
Second deed of trust		709		955		90
		6,476		6,726		234
Commercial and industrial loans (except those secured by real estate)		544		890		6
	$	15,441	$	16,119	$	335

Summary of average recorded investment in impaired loans [Table Text Block]

The following is a summary of average recorded investment in impaired loans with and without a valuation allowance and interest income recognized on those loans for the periods indicated (dollars in thousands):

	For the Three Months				For the Nine Months
	Ended September 30, 2017				Ended September 30, 2017
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With no related allowance recorded
Construction and land development
Commercial	$	99	$	1	$	100	$	3
		99		1		100		3
Commercial real estate
Owner occupied		3,531		32		2,539		90
Non-owner occupied		2,187		23		2,206		82
		5,718		55		4,745		172
Consumer real estate
Home equity lines		751		16		761		17
Secured by 1-4 family residential
First deed of trust		3,737		24		3,615		86
Second deed of trust		555		9		563		27
		5,043		49		4,939		130
Commercial and industrial loans (except those secured by real estate)		470		35		493		49
Consumer and other		4		-		2		-
		11,334		140		10,279		354

With an allowance recorded
Construction and land development
Commercial		467		5		472		17
Commercial real estate
Owner occupied		1,929		17		2,978		58
		1,929		17		2,978		58
Consumer real estate
Home equity line		139		-		69		6
Secured by 1-4 family residential
First deed of trust		815		8		1,120		26
Second deed of trust		129		1		131		3
		1,083		9		1,320		35
Commercial and industrial loans (except those secured by real estate)		444		-		245		4
Consumer and other		-		-		1		-
		3,923		31		5,016		114

Total
Construction and land development
Commercial		566		6		572		20
		566		6		572		20
Commercial real estate
Owner occupied		5,460		49		5,517		148
Non-owner occupied		2,187		23		2,206		82
		7,647		72		7,723		230
Consumer real estate
Home equity lines		890		16		830		23
Secured by 1-4 family residential,
First deed of trust		4,552		32		4,735		112
Second deed of trust		684		10		694		30
		6,126		58		6,259		165
Commercial and industrial loans (except those secured by real estate)		915		35		738		53
Consumer and other		4		-		3		-
	$	15,257	$	171	$	15,295	$	468

	For the Three Months				For the Nine Months
	Ended September 30, 2016				Ended September 30, 2016
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With no related allowance recorded
Construction and land development
Commercial	$	92	$	-	$	211	$	40
		92		-		211		40
Commercial real estate
Owner occupied		935		-		933		29
Non-owner occupied		2,546		28		2,537		92
		3,481		28		3,470		121
Consumer real estate
Home equity lines		1,164		-		1,246		1
Secured by 1-4 family residential
First deed of trust		4,137		42		4,188		134
Second deed of trust		839		9		950		32
		6,140		51		6,384		167
Commercial and industrial loans (except those secured by real estate)		455		-		568		14
Consumer and other		-		-		5		-
		10,168		79		10,638		342

With an allowance recorded
Construction and land development
Commercial		1,423		7		1,531		19
Commercial real estate
Owner occupied		4,911		47		5,272		157
Non-Owner occupied		158		-		174		9
		5,069		47		5,446		166
Consumer real estate
Secured by 1-4 family residential
First deed of trust		1,680		-		1,800		9
Second deed of trust		171		-		185		4
		1,851		-		1,985		13
Commercial and industrial loans (except those secured by real estate)		99		-		122		-
		8,442		54		9,084		198

Total
Construction and land development
Commercial		1,515		7		1,742		59
		1,515		7		1,742		59
Commercial real estate
Owner occupied		5,846		47		6,205		186
Non-owner occupied		2,704		28		2,711		101
		8,550		75		8,916		287
Consumer real estate
Home equity lines		1,164		-		1,246		1
Secured by 1-4 family residential,
First deed of trust		5,817		42		5,987		143
Second deed of trust		1,010		9		1,135		36
		7,991		51		8,368		180
Commercial and industrial loans (except those secured by real estate)		554		-		690		14
Consumer and other		-		-		5		-
	$	18,610	$	133	$	19,722	$	540

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

The following is a summary of performing and nonaccrual TDRs and the related specific valuation allowance by portfolio segment for the periods indicated (dollars in thousands).

							Specific
							Valuation
	Total		Performing		Nonaccrual		Allowance
September 30, 2017
Construction and land development Commercial	$	464	$	464	$	-	$	2
		464		464		-		2
Commercial real estate
Owner occupied		4,232		4,037		195		21
Non-owner occupied		2,176		2,176		-		-
		6,408		6,213		195		21
Consumer real estate
Secured by 1-4 family residential
First deeds of trust		3,432		2,733		699		60
Second deeds of trust		597		530		67		5
		4,029		3,263		766		65
Commercial and industrial loans (except those secured by real estate)		351		230		121		-
	$	11,252	$	10,170	$	1,082	$	88

							Specific
							Valuation
	Total		Performing		Nonaccrual		Allowance
December 31, 2016
Construction and land development Commercial	$	479	$	479	$	-	$	9
		479		479		-		9
Commercial real estate
Owner occupied		4,342		4,117		225		86
Non-owner occupied		2,236		2,236		-		-
		6,578		6,353		225		86
Consumer real estate
Secured by 1-4 family residential
First deeds of trust		3,853		3,012		841		139
Second deeds of trust		547		547		-		-
		4,400		3,559		841		139
Commercial and industrial loans (except those secured by real estate)		397		-		397		-
	$	11,854	$	10,391	$	1,463	$	234

The following table provides information about TDRs identified during the indicated period (dollars in thousands):

	Nine Months Ended
	September 30, 2017
			Pre-		Post-
			Modification		Modification
	Number of		Recorded		Recorded
	Loans		Balance		Balance

Secured by 1-4 family residential
First deed of trust		1	$	190	$	190
Second deed of trust		1		68		68
		2		258		258

		2	$	258	$	258

There were no TDRs identified during the nine months ended September 30, 2016.

The following table summarizes defaults on TDRs identified for the indicated periods (dollars in thousands):

	Nine Months Ended				Nine Months Ended
	September 30, 2017				September 30, 2016
	Number of		Recorded		Number of		Recorded
	Loans		Balance		Loans		Balance

Commercial real estate
Owner occupied		3	$	2,309		2	$	390
Non-owner occupied		-		-		-		-
		3		2,309		2		390
Consumer real estate
Secured by 1-4 family residential
First deed of trust		10		1,049		7		692
Second deed of trust		2		75		2		86
		12		1,124		9		778

Commercial and industrial (except those secured by real estate)		2		44		1		103
		17	$	3,477		12	$	1,271

Activity in the allowance for loan losses [Table Text Block]

Activity in the allowance for loan losses is as follows for the periods indicated (dollars in thousands):

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance

Three Months Ended September 30, 2017
Construction and land development
Residential	$	38	$	-	$	-	$	-	$	38
Commercial		213		(40)		-		2		175
		251		(40)		-		2		213
Commercial real estate
Owner occupied		515		9		-		-		524
Non-owner occupied		416		18		-		-		434
Multifamily		40		(1)		-		-		39
Farmland		3		-		-		-		3
		974		26		-		-		1,000
Consumer real estate
Home equity lines		250		(3)		-		-		247
Secured by 1-4 family residential
First deed of trust		462		(10)		-		7		459
Second deed of trust		127		(89)		-		7		45
		839		(102)		-		14		751
Commercial and industrial loans (except those secured by real estate)		302		140		-		3		445
Student loans		99		45		(45)		-		99
Consumer and other		9		(4)		-		2		7
Unallocated		793		(65)		-		-		728

	$	3,267	$	-	$	(45)	$	21	$	3,243

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance

Three Months Ended September 30, 2016
Construction and land development
Residential	$	31	$	12	$	-	$	-	$	43
Commercial		259		22		(10)		5		276
		290		34		(10)		5		319
Commercial real estate
Owner occupied		711		(17)		(57)				637
Non-owner occupied		437		53		(1)		51		540
Multifamily		54		2		-		-		56
Farmland		2		1		-		-		3
		1,204		39		(58)		51		1,236
Consumer real estate
Home equity lines		259		4		-		1		264
Secured by 1-4 family residential
First deed of trust		490		79		(113)		6		462
Second deed of trust		133		(11)				6		128
		882		72		(113)		13		854
Commercial and industrial loans (except those secured by real estate)		226		(46)		(15)		46		211
Guaranteed student loans		191		13		(16)				188
Consumer and other		8		7		(12)		5		8
Unallocated		722		(119)		-		-		603

	$	3,523	$	-	$	(224)	$	120	$	3,419

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance

Nine Months Ended September 30, 2017
Construction and land development
Residential	$	41	$	(4)	$	-	$	1	$	38
Commercial		300		(127)		-		2		175
		341		(131)		-		3		213
Commercial real estate
Owner occupied		611		(100)		-		13		524
Non-owner occupied		406		28		-		-		434
Multifamily		56		(17)		-		-		39
Farmland		3		-		-		-		3
		1,076		(89)		-		13		1,000
Consumer real estate
Home equity lines		271		(25)		-		1		247
Secured by 1-4 family residential
First deed of trust		447		90		(107)		29		459
Second deed of trust		136		(120)		-		29		45
		854		(55)		(107)		59		751
Commercial and industrial loans (except those secured by real estate)		223		209		-		13		445
Student loans		158		56		(115)		-		99
Consumer and other		8		(5)		(2)		6		7
Unallocated		713		15		-		-		728

	$	3,373	$	-	$	(224)	$	94	$	3,243

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance

Nine Months Ended September 30, 2016
Construction and land development
Residential	$	30	$	12	$	-	$	1	$	43
Commercial		291		(10)		(10)		5		276
		321		2		(10)		6		319
Commercial real estate
Owner occupied		1,167		(464)		(66)		-		637
Non-owner occupied		460		27		-		53		540
Multifamily		51		5		-		-		56
Farmland		17		(139)		-		125		3
		1,695		(571)		(66)		178		1,236
Consumer real estate
Home equity lines		448		(134)		(53)		3		264
Secured by 1-4 family residential
First deed of trust		602		(20)		(140)		20		462
Second deed of trust		111		23		(25)		19		128
		1,161		(131)		(218)		42		854
Commercial and industrial loans (except those secured by real estate)		94		42		(15)		90		211
Guaranteed student loans		230		101		(143)		-		188
Consumer and other		2		13		(14)		7		8
Unallocated		59		544		-		-		603

	$	3,562	$	-	$	(466)	$	323	$	3,419

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance

Year Ended December 31, 2016
Construction and land development
Residential	$	30	$	10	$	-	$	1	$	41
Commercial		291		9		(10)		10		300
		321		19		(10)		11		341
Commercial real estate
Owner occupied		1,167		(490)		(66)		-		611
Non-owner occupied		460		(106)		(1)		53		406
Multifamily		51		5		-		-		56
Farmland		17		(139)		-		125		3
		1,695		(730)		(67)		178		1,076
Consumer real estate
Home equity lines		448		(127)		(53)		3		271
Secured by 1-4 family residential
First deed of trust		602		(40)		(140)		25		447
Second deed of trust		111		21		(25)		29		136
		1,161		(146)		(218)		57		854
Commercial and industrial loans (except those secured by real estate)		94		44		(15)		100		223
Student loans		230		149		(221)		-		158
Consumer and other		2		10		(13)		9		8
Unallocated		59		654		-		-		713

	$	3,562	$	-	$	(544)	$	355	$	3,373

Loans Evaluated For Impairment [Table Text Block]

Loans were evaluated for impairment as follows for the periods indicated (dollars in thousands):

	Recorded Investment in Loans
	Allowance						Loans

	Ending						Ending
	Balance		Individually		Collectively		Balance		Individually		Collectively

As of September 30, 2017
Construction and land development
Residential	$	38	$	-	$	38	$	6,327	$	-	$	6,327
Commercial		175		2		173		28,721		561		28,160
		213		2		211		35,048		561		34,487
Commercial real estate
Owner occupied		524		21		503		71,834		5,434		66,400
Non-owner occupied		434		-		434		61,831		2,176		59,655
Multifamily		39		-		39		6,114		-		6,114
Farmland		3		-		3		278		-		278
		1,000		21		979		140,057		7,610		132,447
Consumer real estate
Home equity lines		247		4		243		20,595		739		19,856
Secured by 1-4 family residential
First deed of trust		459		62		397		54,820		4,733		50,087
Second deed of trust		45		5		40		6,293		680		5,613
		751		71		680		81,708		6,152		75,556
Commercial and industrial loans (except those secured by real estate)		445		233		212		40,647		1,248		39,399
Student loans		99		-		99		47,643		-		47,643
Consumer and other		735		-		735		1,899		3		1,896

	$	3,243	$	327	$	2,916	$	347,002	$	15,574	$	331,428

As of December 31, 2016
Construction and land development
Residential	$	41	$	-	$	41	$	6,770	$	-	$	6,770
Commercial		300		9		291		27,092		581		26,511
		341		9		332		33,862		581		33,281
Commercial real estate
Owner occupied		611		86		525		66,021		5,604		60,417
Non-owner occupied		406		-		406		57,944		2,236		55,708
Multifamily		56		-		56		8,824		-		8,824
Farmland		3		-		3		310		-		310
		1,076		86		990		133,099		7,840		125,259
Consumer real estate
Home equity lines		271		-		271		20,691		703		19,988
Secured by 1-4 family residential
First deed of trust		447		144		303		54,791		5,064		49,727
Second deed of trust		136		90		46		5,768		709		5,059
		854		234		620		81,250		6,476		74,774
Commercial and industrial loans (except those secured by real estate)		223		6		217		39,390		544		38,846
Student loans		158		-		158		47,398		-		47,398
Consumer and other		721		-		721		2,101		-		2,101

	$	3,373	$	335	$	3,038	$	337,100	$	15,441	$	321,659