Village Bank & Trust Financial Corp. - 10-Q filing on 2021-08-13

Loans and allowance for loan losses (Tables)

6 Months Ended

Jun. 30, 2021

Schedule of composition of loan portfolio (excluding mortgage loans held for sale)

Loans classified by type as of June 30, 2021 and December 31, 2020 are as follows (dollars in thousands):


	June 30, 2021				December 31, 2020
	Amount		%		Amount		%
Construction and land development
Residential	$	7,802	1.41	%	$	8,103	1.44	%
Commercial		36,271	6.57	%		21,466	3.82	%
		44,073	7.98	%		29,569	5.26	%
Commercial real estate
Owner occupied		100,405	18.20	%		99,784	17.79	%
Non-owner occupied		127,363	23.09	%		121,184	21.60	%
Multifamily		11,743	2.13	%		9,889	1.75	%
Farmland		1,076	0.20	%		367	0.07	%
		240,587	43.62	%		231,224	41.21	%
Consumer real estate
Home equity lines		17,199	3.12	%		18,394	3.28	%
Secured by 1-4 family residential,
First deed of trust		56,728	10.28	%		57,089	10.18	%
Second deed of trust		12,606	2.29	%		11,097	1.98	%
		86,533	15.69	%		86,580	15.44	%
Commercial and industrial loans (except those secured by real estate)		148,656	26.95	%		181,088	32.28	%
Guaranteed student loans		28,601	5.18	%		29,657	5.29	%
Consumer and other		3,214	0.58	%		2,885	0.52	%

Total loans		551,664	100.0	%		561,003	100.0	%
Deferred fees and costs, net		(2,578)				(2,048)
Less: allowance for loan losses		(3,429)				(3,970)

	$	545,657			$	554,985

Schedule of PPP loans by loan size including SBA fees earned


	June 30, 2021
	Round 1			Round 2			Total
Loan Size	# of Loans	$ of Loans		# of Loans	$ of Loans		# of Loans	$ of Loans
< $350,000	228	$	17,535	706	$	44,744	934	$	62,279
$350,000 - $2 million	12		7,174	41		28,164	53		35,338
> $2 million	—		—	—		—	—		—
Total	240	$	24,709	747	$	72,908	987	$	97,617


	December 31, 2020
	Round 1
Loan Size	# of Loans	$ of Loans
< $350,000	1,172	$	72,526
$350,000 - $2 million	57		41,046
> $2 million	6		23,102
Total	1,235	$	136,674

Schedule of information on nonaccrual loans

The following table provides information on nonaccrual loans segregated by type at the dates indicated (in thousands):


	June 30,		December 31,
	2021		2020
Commercial real estate
Non-owner occupied	$	297	$	303
		297		303
Consumer real estate
Home equity lines		300		300
Secured by 1-4 family residential
First deed of trust		623		630
Second deed of trust		302		317
		1,225		1,247
Commercial and industrial loans (except those secured by real estate)		24		27

Total loans	$	1,546	$	1,577

Schedule of information on the risk rating of loans

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


	Risk Rated		Risk Rated		Risk Rated		Risk Rated		Total
	1-4		5		6		7		Loans
June 30, 2021
Construction and land development
Residential	$	7,802	$	—	$	—	$	—	$	7,802
Commercial		33,545		2,726		—		—		36,271
		41,347		2,726		—		—		44,073
Commercial real estate
Owner occupied		89,793		6,996		3,616		—		100,405
Non-owner occupied		122,454		4,232		677		—		127,363
Multifamily		11,743		-		—		—		11,743
Farmland		1,076		-		—		—		1,076
		225,066		11,228		4,293		—		240,587
Consumer real estate
Home equity lines		16,274		625		300		—		17,199
Secured by 1-4 family residential
First deed of trust		53,569		2,260		899		—		56,728
Second deed of trust		11,839		434		333		—		12,606
		81,682		3,319		1,532		—		86,533
Commercial and industrial loans (except those secured by real estate)		146,336		2,019		301		—		148,656
Guaranteed student loans		28,601		—		—		—		28,601
Consumer and other		3,177		37		—		—		3,214

Total loans	$	526,209	$	19,329	$	6,126	$	—	$	551,664

	Risk Rated		Risk Rated		Risk Rated		Risk Rated		Total
	1-4		5		6		7		Loans
December 31, 2020
Construction and land development
Residential	$	8,103	$	—	$	—	$	—	$	8,103
Commercial		21,370		96		—		—		21,466
		29,473		96		—		—		29,569
Commercial real estate
Owner occupied		88,066		9,405		2,313		—		99,784
Non-owner occupied		116,161		4,244		779		—		121,184
Multifamily		9,889		—		—		—		9,889
Farmland		367		—		—		—		367
		214,483		13,649		3,092		—		231,224
Consumer real estate
Home equity lines		17,298		796		300		—		18,394
Secured by 1-4 family residential
First deed of trust		53,731		2,212		1,146		—		57,089
Second deed of trust		9,425		1,236		436		—		11,097
		80,454		4,244		1,882		—		86,580
Commercial and industrial loans (except those secured by real estate)		178,217		2,602		269		—		181,088
Guaranteed student loans		29,657		—		—		—		29,657
Consumer and other		2,844		41		—		—		2,885

Total loans	$	535,128	$	20,632	$	5,243	$	—	$	561,003

Schedule of aging of recorded investment in past due loans and leases

The following table presents the aging of the recorded investment in past due loans and leases as of the dates indicated (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
June 30, 2021
Construction and land development
Residential	$	—	$	—	$	—	$	—	$	7,802	$	7,802	$	—
Commercial		—		—		—		—		36,271		36,271		—
		—		—		—		—		44,073		44,073		—
Commercial real estate
Owner occupied		—		—		—		—		100,405		100,405		—
Non-owner occupied		—		—		—		—		127,363		127,363		—
Multifamily		—		—		—		—		11,743		11,743		—
Farmland		—		—		—		—		1,076		1,076		—
		—		—		—		—		240,587		240,587		—
Consumer real estate
Home equity lines		—		—		—		—		17,199		17,199		—
Secured by 1-4 family residential
First deed of trust		—				—		—		56,728		56,728		—
Second deed of trust		—		—		—		—		12,606		12,606		—
		—		—		—		—		86,533		86,533		—
Commercial and industrial loans (except those secured by real estate)		409		—		—		409		148,247		148,656		—
Guaranteed student loans		983		515		2,496		3,994		24,607		28,601		2,496
Consumer and other		—		—		—		—		3,214		3,214		—

Total loans	$	1,392	$	515	$	2,496	$	4,403	$	547,261	$	551,664	$	2,496


													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, 2020
Construction and land development
Residential	$	—	$	—	$	—	$	—	$	8,103	$	8,103	$	—
Commercial		—		—		—		—		21,466		21,466		—
		—		—		—		—		29,569		29,569		—
Commercial real estate
Owner occupied		86		—		—		86		99,698		99,784		—
Non-owner occupied		—		—		—		—		121,184		121,184		—
Multifamily		—		—		—		—		9,889		9,889		—
Farmland		—		—		—		—		367		367		—
		86		—		—		86		231,138		231,224		—
Consumer real estate
Home equity lines		—		—		—		—		18,394		18,394		—
Secured by 1-4 family residential
First deed of trust		133				—		133		56,956		57,089		—
Second deed of trust		—		57		—		57		11,040		11,097		—
		133		57		—		190		86,390		86,580		—
Commercial and industrial loans (except those secured by real estate)		25		—		—		25		181,063		181,088		—
Guaranteed student loans		1,428		1,009		2,193		4,630		25,027		29,657		2,193
Consumer and other		1		—		—		1		2,884		2,885		—

Total loans	$	1,673	$	1,066	$	2,193	$	4,932	$	556,071	$	561,003	$	2,193

Schedule of impaired loans


	June 30, 2021						December 31, 2020
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded
Commercial real estate
Owner occupied	$	5,167	$	5,182	$	—	$	2,780	$	2,795	$	—
Non-owner occupied		1,873		1,873		—		1,991		1,991		—
		7,040		7,055		—		4,771		4,786		—
Consumer real estate
Home equity lines		300		300		—		300		300		—
Secured by 1-4 family residential
First deed of trust		1,867		1,867		—		1,937		1,940		—
Second deed of trust		625		918		—		699		992		—
		2,792		3,085		—		2,936		3,232		—
Commercial and industrial loans (except those secured by real estate)		201		201		—		141		141		—
		10,033		10,341		—		7,848		8,159		—

With an allowance recorded
Commercial real estate
Owner occupied		—		—		—		1,125		1,125		9
		—		—		—		1,125		1,125		9
Consumer real estate
Secured by 1-4 family residential
First deed of trust		150		150		8		74		74		8
		150		150		8		74		74		8

Total
Commercial real estate
Owner occupied		5,167		5,182		—		3,905		3,920		9
Non-owner occupied		1,873		1,873		—		1,991		1,991		—
		7,040		7,055		—		5,896		5,911		9
Consumer real estate
Home equity lines		300		300		—		300		300		—
Secured by 1-4 family residential,
First deed of trust		2,017		2,017		8		2,011		2,014		8
Second deed of trust		625		918		—		699		992		—
		2,942		3,235		8		3,010		3,306		8

Commercial and industrial loans (except those secured by real estate)		201		201		—		141		141		—
	$	10,183	$	10,491	$	8	$	9,047	$	9,358	$	17

Schedule of average recorded investment in impaired loans

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 (in thousands):


	For the Three Months				For the Six Months
	Ended June 30, 2021				Ended June 30, 2021
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With no related allowance recorded
Construction and land development
Commercial	$	—	$	—	$	72	$	—
		—		—		72		—
Commercial real estate
Owner occupied		5,211		38		4,073		96
Non-owner occupied		1,884		29		1,862		59
		7,095		67		5,935		155
Consumer real estate
Home equity lines		300		5		300		13
Secured by 1-4 family residential
First deed of trust		1,989		22		2,001		45
Second deed of trust		977		8		695		19
		3,266		35		2,996		77
Commercial and industrial loans (except those secured by real estate)		202		1		173		1
		10,563		103		9,176		233

With an allowance recorded
Construction and land development
Commercial		—		—		26		—

Commercial real estate
Owner occupied		—		—		562		15
		—		—		562		15
Consumer real estate
Secured by 1-4 family residential
First deed of trust		151		1		113		2
		151		1		113		2
Commercial and industrial loans (except those secured by real estate)		—		—		42		6
		151		1		743		23

Total
Construction and land development
Commercial		—		—		98		—
		—		—		98		—
Commercial real estate
Owner occupied		5,211		38		4,635		111
Non-owner occupied		1,884		29		1,862		59
		7,095		67		6,497		170
Consumer real estate
Home equity lines		300		5		300		13
Secured by 1-4 family residential,
First deed of trust		2,140		23		2,114		47
Second deed of trust		977		8		695		19
		3,417		36		3,109		79
Commercial and industrial loans (except those secured by real estate)		202		1		215		7
	$	10,714	$	104	$	9,919	$	256

Schedule of troubled debt restructurings on financing receivables


							Specific
							Valuation
	Total		Performing		Nonaccrual		Allowance
June 30, 2021
Commercial real estate
Owner occupied	$	3,328	$	3,328	$	—	$	—
Non-owner occupied		1,874		1,576		298		—
		5,202		4,904		298		—
Consumer real estate
Secured by 1-4 family residential
First deeds of trust		1,691		1,148		543		8
Second deeds of trust		523		463		60		—
		2,214		1,611		603		8
Commercial and industrial loans (except those secured by real estate)		24		—		24		—
	$	7,440	$	6,515	$	925	$	8

Number of loans		33		26		7		2


							Specific
							Valuation
	Total		Performing		Nonaccrual		Allowance
December 31, 2020
Commercial real estate
Owner occupied	$	3,396	$	3,396	$	—	$	9
Non-owner occupied		1,991		1,688		303		—
		5,387		5,084		303		9
Consumer real estate
Secured by 1-4 family residential
First deeds of trust		1,460		910		550		8
Second deeds of trust		617		556		61		—
		2,077		1,466		611		8
Commercial and industrial loans (except those secured by real estate)		27		—		27		—
	$	7,491	$	6,550	$	941	$	17

Number of loans		34		27		7		2

Schedule of troubled debt restructurings on financing receivables modification

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

Three Months ended

Three Months Ended

June 30, 2021

June 30, 2020

Pre-

Post-

Pre-

Post-

Modification

Number of

Recorded

Number of

Recorded

Loans

Balance

Loans

Balance

Commercial real estate

Owner occupied

—

311

—

311


	Six Months Ended					Six Months Ended
	June 30, 2021					June 30, 2020
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	Loans	Balance		Balance		Loans	Balance		Balance

Commercial real estate
Owner occupied	—	$	—	$	—	1	$	311	$	311

Consumer real estate
Secured by 1-4 family residential,
First deed of trust	1	$	267	$	267	—	$	—	$	—
	1	$	267	$	267	1	$	311	$	311

Schedule of activity in the allowance for loan losses

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


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

Three Months Ended June 30, 2021
Construction and land development
Residential	$	100	$	(34)	$	—	$	—	$	66
Commercial		168		35		—		—		203
		268		1		—		—		269
Commercial real estate
Owner occupied		899		(97)		—		—		802
Non-owner occupied		1,286		(241)		—		14		1,059
Multifamily		38		(3)		—		—		35
Farmland		1		1		—		—		2
		2,224		(340)		—		14		1,898
Consumer real estate
Home equity lines		15		(14)		—		10		11
Secured by 1-4 family residential
First deed of trust		146		(41)		—		8		113
Second deed of trust		67		86		(84)		3		72
		228		31		(84)		21		196
Commercial and industrial loans (except those secured by real estate)		410		3		—		9		422
Student loans		76		9		(5)		—		80
Consumer and other		38		16		(18)		—		36
Unallocated		748		(220)		—		—		528

	$	3,992	$	(500)	$	(107)	$	44	$	3,429


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

Three Months Ended June 30, 2020
Construction and land development
Residential	$	219	$	(8)	$	—	$	2	$	213
Commercial		270		25		—		—		295
		489		17		—		2		508
Commercial real estate
Owner occupied		859		45		—		—		904
Non-owner occupied		1,058		144		—		—		1,202
Multifamily		68		(21)		—		—		47
Farmland		1		(1)		—		—		—
		1,986		167		—		—		2,153
Consumer real estate
Home equity lines		40		—		—		—		40
Secured by 1-4 family residential
First deed of trust		157		8		—		1		166
Second deed of trust		76		(4)		—		3		75
		273		4		—		4		281
Commercial and industrial loans (except those secured by real estate)		409		(110)		—		18		317
Student loans		104		3		(6)		—		101
Consumer and other		41		2		(3)		—		40
Unallocated		142		217		—		—		359

	$	3,444	$	300	$	(9)	$	24	$	3,759


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

Six Months Ended June 30, 2021
Construction and land development
Residential	$	214	$	(148)	$	—	$	—	$	66
Commercial		285		(82)		—		—		203
		499		(230)		—		—		269
Commercial real estate
Owner occupied		1,047		(245)		—		—		802
Non-owner occupied		1,421		(376)		—		14		1,059
Multifamily		47		(12)		—		—		35
Farmland		2		—		—		—		2
		2,517		(633)		—		14		1,898
Consumer real estate
Home equity lines		24		(23)		—		10		11
Secured by 1-4 family residential
First deed of trust		166		(62)		—		9		113
Second deed of trust		79		60		(84)		17		72
		269		(25)		(84)		36		196
Commercial and industrial loans (except those secured by real estate)		408		(10)		—		24		422
Student loans		87		6		(13)		—		80
Consumer and other		36		18		(18)		—		36
Unallocated		154		374		—		—		528
	$	3,970	$	(500)	$	(115)	$	74	$	3,429


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

Six Months Ended June 30, 2020
Construction and land development
Residential	$	48	$	162	$	—	$	3	$	213
Commercial		137		158		—		—		295
		185		320		—		3		508
Commercial real estate
Owner occupied		671		233		—		—		904
Non-owner occupied		831		371		—		—		1,202
Multifamily		85		(38)		—		—		47
Farmland		2		(2)		—		—		—
		1,589		564		—		—		2,153
Consumer real estate
Home equity lines		271		(231)		—		—		40
Secured by 1-4 family residential
First deed of trust		343		(181)		—		4		166
Second deed of trust		64		4		—		7		75
		678		(408)		—		11		281
Commercial and industrial loans (except those secured by real estate)		572		(141)		(135)		21		317
Student loans		108		19		(26)		—		101
Consumer and other		30		11		(4)		3		40
Unallocated		24		335		—		—		359

	$	3,186	$	700	$	(165)	$	38	$	3,759


			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Year Ended December 31, 2020
Construction and land development
Residential	$	48	$	141	$	—	$	25	$	214
Commercial		137		148		—		—		285
		185		289		—		25		499
Commercial real estate
Owner occupied		671		376		—		—		1,047
Non-owner occupied		831		590		—		—		1,421
Multifamily		85		(38)		—		—		47
Farmland		2		—		—		—		2
		1,589		928		—		—		2,517
Consumer real estate
Home equity lines		271		(247)		—		—		24
Secured by 1-4 family residential
First deed of trust		343		(190)		—		13		166
Second deed of trust		64		45		(85)		55		79
		678		(392)		(85)		68		269
Commercial and industrial loans (except those secured by real estate)		572		(58)		(135)		29		408
Student loans		108		27		(48)		—		87
Consumer and other		30		26		(24)		4		36
Unallocated		24		130		—		—		154

	$	3,186	$	950	$	(292)	$	126	$	3,970

Schedule of loans evaluated for impairment

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


	Recorded Investment in Loans
	Allowance						Loans
	Ending						Ending
	Balance		Individually		Collectively		Balance		Individually		Collectively

Six Months June 30, 2021
Construction and land development
Residential	$	66	$	—	$	66	$	7,802	$	—	$	7,802
Commercial		203		—		203		36,271		—		36,271
		269		—		269		44,073		—		44,073
Commercial real estate
Owner occupied		802		—		802		100,405		5,167		95,238
Non-owner occupied		1,059		—		1,059		127,363		1,873		125,490
Multifamily		35		—		35		11,743		—		11,743
Farmland		2		—		2		1,076		—		1,076
		1,898		—		1,898		240,587		7,040		233,547
Consumer real estate
Home equity lines		11		—		11		17,199		300		16,899
Secured by 1-4 family residential
First deed of trust		113		8		105		56,728		2,017		54,711
Second deed of trust		72		—		72		12,606		625		11,981
		196		8		188		86,533		2,942		83,591
Commercial and industrial loans (except those secured by real estate)		422		—		422		148,656		201		148,455
Student loans		80		—		80		28,601		—		28,601
Consumer and other		564		—		564		3,214		—		3,214

	$	3,429	$	8	$	3,421	$	551,664	$	10,183	$	541,481

Year Ended December 31, 2020
Construction and land development
Residential	$	214	$	—	$	214	$	8,103	$	—	$	8,103
Commercial		285		—		285		21,466		—		21,466
		499		—		499		29,569		—		29,569
Commercial real estate
Owner occupied		1,047		9		1,038		99,784		3,905		95,879
Non-owner occupied		1,421		—		1,421		121,184		1,991		119,193
Multifamily		47		—		47		9,889		—		9,889
Farmland		2		—		2		367		—		367
		2,517		9		2,508		231,224		5,896		225,328
Consumer real estate
Home equity lines		24		—		24		18,394		300		18,094
Secured by 1-4 family residential
First deed of trust		166		8		158		57,089		2,011		55,078
Second deed of trust		79		—		79		11,097		699		10,398
		269		8		261		86,580		3,010		83,570
Commercial and industrial loans (except those secured by real estate)		408		—		408		181,088		141		180,947
Student loans		87		—		87		29,657		—		29,657
Consumer and other		190		—		190		2,885		—		2,885

	$	3,970	$	17	$	3,953	$	561,003	$	9,047	$	551,956