Village Bank & Trust Financial Corp. - FORM 10-Q

Attached files

file	filename
EX-31.2 - Village Bank & Trust Financial Corp.	ex312.htm
EX-31.1 - Village Bank & Trust Financial Corp.	ex311.htm
EX-32.1 - Village Bank & Trust Financial Corp.	ex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

¨TRANSITION REPORT UNDER SECTION 13 OR 15(d)

OF THE EXCHANGE ACT

For the transition period from ______ to ______

__________

Commission file number: 0-50765

VILLAGE BANK AND TRUST FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

Virginia (State or other jurisdiction of incorporation)		16-1694602 (IRS Employer Identification No.)

15521 Midlothian Turnpike, Midlothian, Virginia (Address of principal executive offices)	23113 (Zip Code)

804-897-3900

(Registrant’s telephone number, including area code)

Indicate by check whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No £.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes £ No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o	Accelerated Filer o
Non-Accelerated Filer o (Do not check if smaller reporting company)	Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes £ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

4,243,378 shares of common stock, $4.00 par value, outstanding as of May 8, 2011

Village Bank and Trust Financial Corp.

Form 10-Q

TABLE OF CONTENTS

Part I – Financial Information
	Item 1. Financial Statements

	Consolidated Balance Sheets
	March 31, 2011 (unaudited) and December 31, 2010	3

	Consolidated Statements of Income
	For the Three Months Ended
	March 31, 2011 and 2010 (unaudited)	4

	Consolidated Statements of Stockholders’ Equity
	For the Three Months Ended
	March 31, 2011 and 2010 (unaudited)	5

	Consolidated Statements of Cash Flows
	For the Three Months Ended
	March 31, 2011 and 2010 (unaudited)	6

	Notes to Condensed Consolidated Financial Statements (unaudited)	7

	Item 2. Management’s Discussion and Analysis of Financial Condition
	and Results of Operations	21

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	41

	Item 4. Controls and Procedures	41

Part II – Other Information

	Item 1. Legal Proceedings	42

	Item 1A. Risk Factors	42

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	42

	Item 3. Defaults Upon Senior Securities	42

	Item 4. (Removed and Reserved)	42

	Item 5. Other Information	42

	Item 6. Exhibits	42

Signatures		43

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

Village Bank and Trust Financial Corp. and Subsidiary
Consolidated Balance Sheets
March 31, 2011 and December 31, 2010

	March 31,			December 31,
	2011			2010
	(Unaudited)
Assets
Cash and due from banks	$	12,765,062		$	9,390,377
Federal funds sold		8,751,212			2,621,934
Investment securities available for sale		81,810,230			53,597,174
Loans held for sale		8,629,602			19,871,787
Loans
Outstandings		442,720,243			453,242,950
Allowance for loan losses		(7,434,283	)		(7,311,712	)
Deferred fees and costs		666,247			623,851
		435,952,207			446,555,089
Premises and equipment, net		27,416,915			27,437,452
Accrued interest receivable		2,536,961			2,347,211
Bank owned life insurance		5,917,952			5,871,765
Other real estate owned		13,505,097			12,028,111
Other assets		10,978,196			12,058,315

	$	608,263,434		$	591,779,215

Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest bearing	$	46,035,898		$	41,036,262
Interest bearing		458,923,419			457,975,931
Total deposits		504,959,317			499,012,193
Federal Home Loan Bank advances		38,750,000			28,750,000
Long-term debt - trust preferred securities		8,764,000			8,764,000
Other borrowings		5,241,499			4,165,430
Accrued interest payable		454,712			404,801
Other liabilities		1,934,474			2,362,597
Total liabilities		560,104,002			543,459,021

Stockholders' equity
Preferred stock, $4 par value, $1,000 liquidation preference,
1,000,000 shares authorized, 14,738 shares issued and outstanding		58,952			58,952
Common stock, $4 par value - 10,000,000 shares authorized
4,243,378 shares issued and oustanding at March 31, 2011
4,238,416 shares issued and outstanding at December 31,2010		16,973,512			16,953,664
Additional paid-in capital		40,643,345			40,633,581
Retained earnings (deficit)		(9,327,890	)		(9,192,552	)
Common stock warrant		732,479			732,479
Discount on preferred stock		(456,099	)		(492,456	)
Accumulated other comprehensive loss		(464,867	)		(373,474	)
Total stockholders' equity		48,159,432			48,320,194

	$	608,263,434		$	591,779,215

See accompanying notes to consolidated financial statements

Village Bank and Trust Financial Corp. and Subsidiary
Consolidated Statements of Income
Three Months Ended March 31, 2011 and 2010
(Unaudited)


	Three Months Ended March 31,
	2011			2010
Interest income
Loans	$	7,040,768		$	7,089,244
Investment securities		300,326			357,120
Federal funds sold		18,323			14,232
Total interest income		7,359,417			7,460,596

Interest expense
Deposits		2,038,876			2,510,967
Borrowed funds		282,691			533,820
Total interest expense		2,321,567			3,044,787

Net interest income		5,037,850			4,415,809
Provision for loan losses		1,003,000			500,000
Net interest income after provision for loan losses		4,034,850			3,915,809

Noninterest income
Service charges and fees		372,950			407,689
Gain on sale of loans		1,372,678			1,171,954
Gain on sale of assets		63,125			242,936
Rental income		151,937			103,671
Other		94,518			227,720
Total noninterest income		2,055,208			2,153,970

Noninterest expense
Salaries and benefits		3,050,116			2,767,389
Occupancy		493,224			509,918
Equipment		220,070			217,724
Supplies		116,159			134,362
Professional and outside services		566,354			522,809
Advertising and marketing		122,839			89,626
Expenses related to foreclosed real estate		462,316			209,828
FDIC insurance premium		333,208			292,168
Other operating expense		533,652			586,805
Total noninterest expense		5,897,938			5,330,629

Net income before income taxes		192,120			739,150
Income tax expense		109,400			251,311

Net income		82,720			487,839

Preferred stock dividends and accretion of discount		218,058			217,688

Net income (loss) available to common shareholders	$	(135,338	)	$	270,151

Earnings (loss) per share, basic	$	(0.03	)	$	0.06
Earnings (loss) per share, diluted	$	(0.03	)	$	0.06

See accompanying notes to consolidated financial statements

Village Bank and Trust Financial Corp. and Subsidiary
Consolidated Statements of Stockholders' Equity
and Comprehensive Income
Three Months Ended March 31, 2011 and 2010
(Unaudited)

																Accumulated
					Additional			Retained					Discount on			Other
	Preferred		Common		Paid-in			Earnings					Preferred			Comprehensive
	Stock		Stock		Capital			(Deficit)			Warrant		Stock			Income (loss)			Total

Balance, December 31, 2010	$	58,952	$	16,953,664	$	40,633,581		$	(9,192,552	)	$	732,479	$	(492,456	)	$	(373,474	)	$	48,320,194
Amortization of preferred stock																	-			-
discount		-							(36,357	)		-		36,357						-
Preferred stock dividend		-		-					(181,701	)		-		-			-			(181,701	)
Issuance of common stock		-		19,848		(19,848	)		-			-		-			-			-
Stock based compensation						29,612														29,612
Minimum pension adjustment
(net of income taxes of $1,105)		-		-		-			-			-		-			2,145			2,145
Net income		-		-		-			82,720			-		-			-			82,720
Change in unrealized gain on
investment securities available-for-sale,
net of reclassification and tax effect		-		-		-			-			-		-			(93,538	)		(93,538	)
Total comprehensive income		-		-		-			-			-		-			-			(8,673	)

Balance, March 31, 2011	$	58,952	$	16,973,512	$	40,643,345		$	(9,327,890	)	$	732,479	$	(456,099	)	$	(464,867	)	$	48,159,432

Balance, December 31, 2009	$	58,952	$	16,922,512	$	40,568,771		$	(8,647,731	)	$	732,479	$	(636,959	)	$	(56,205	)	$	48,941,819
Amortization of preferred stock																	-			-
discount		-		-					(35,988	)		-		35,988						-
Preferred stock dividend		-		-					(181,700	)		-		-			-			(181,700	)
Issuance of common stock		-		-					-			-		-			-			-
Stock based compensation						30,044														30,044
Minimum pension adjustment																				-
(net of income taxes of $1,105)		-		-		-			-			-		-			2,145			2,145
Net income		-		-		-			487,839			-		-			-			487,839
Change in unrealized gain on
investment securities available-for-sale,
net of reclassification and tax effect		-		-		-			-			-		-			80,871			80,871
Total comprehensive income		-		-		-			-			-		-			-			570,855

Balance, March 31, 2010	$	58,952	$	16,922,512	$	40,598,815		$	(8,377,580	)	$	732,479	$	(600,971	)	$	26,811		$	49,361,018

See accompanying notes to consolidated financial statements.

Village Bank and Trust Financial Corp. and Subsidiary
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2011 and 2010
(Unaudited)

	2011			2010
Cash Flows from Operating Activities
Net income	$	82,720		$	487,839
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization		350,499			315,000
Deferred income taxes		(3,710,085	)		(4,046,825	)
Provision for loan losses		1,003,000			500,000
Write-down of other real estate owned		362,237			43,000
Gain on securities sold		(63,125	)		(108,213	)
Gain on loans sold		(1,372,678	)		(1,171,954	)
(Gain) loss on sale of premises and equipment		-			(242,936	)
Gain on sale of other real estate owned		(6,467	)		(68,475	)
Stock compensation expense		29,612			30,044
Proceeds from sale of other real estate owned		555,152			1,568,051
Proceeds from sale of mortgage loans		55,513,663			49,053,958
Origination of mortgage loans for sale		(42,898,800	)		(50,901,191	)
Amortization of premiums and accrection of discounts on securities, net		26,737			209,813
(Increase) decrease in interest receivable		(189,750	)		834,122
Increase in bank owned life insurance		(46,187	)		(57,250	)
(Increase) decrease in other assets		4,840,536			4,326,703
Increase (decrease) in interest payable		49,911			(17,501	)
Decrease in other liabilities		(428,122	)		(274,734	)
Net cash used in operating activities		14,098,853			479,451

Cash Flows from Investing Activities
Purchases of available for sale securities		(54,960,337	)		(2,950,740	)
Proceeds from the sale of calls of available for sale securities		803,100			299,054
Proceeds from maturities and principal payments of available for sale securities		25,838,844			16,162,000
Net increase in loans		7,211,973			154,043
Purchases of premises and equipment		(329,962	)		(335,423	)
Proceeds from sale of premises and equipment		-			377,321
Net cash (used in) provided by investing activities		(21,436,382	)		13,706,255

Cash Flows from Financing Activities
Net increase (decrease) in deposits		5,947,124			12,692,158
Net increase (decrease) in federal home loan bank advances		10,000,000
Net increase (decrease) in other borrowings		1,076,069			(358,791	)
Dividends on preferred stock		(181,701	)		(181,700	)
Net cash provided by financing activities		16,841,492			12,151,667

Net increase in cash and cash equivalents		9,503,963			26,337,373
Cash and cash equivalents, beginning of period		12,012,311			20,661,820

Cash and cash equivalents, end of period	$	21,516,274		$	46,999,193

Supplemental Schedule of Non Cash Activities
Real estate owned assets acquired in settlement of loans	$	2,387,908		$	978,635

See accompanying notes to consolidated financial statements.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1 - Principles of presentation

Village Bank and Trust Financial Corp. (the “Company”) is the holding company of Village Bank (the “Bank”). The consolidated financial statements include the accounts of the Company, the Bank and the Bank’s three wholly-owned subsidiaries, Village Bank Mortgage Company, Village Insurance Agency, Inc., and Village Financial Services Company. All material intercompany balances and transactions have been eliminated in consolidation.

The Company’s financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) which, effective for all interim and annual periods ending after September 15, 2009, principally consist of the Financial Accounting Standards Board Accounting Standards Codification (“FASB Codification”). FASB Codification Topic 105: Generally Accepted Accounting Principles establishes the FASB codification as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative guidance for SEC registrants. All guidance contained in the FASB Codification carries an equal level of authority. All non-grandfathered, non-SEC accounting literature not included in the FASB Codification is superseded and deemed non-authoritative.

In the opinion of management, the accompanying condensed consolidated financial statements of the Company have been prepared on the accrual basis in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, all adjustments that are, in the opinion of management, necessary for a fair presentation have been included. The results of operations for the three month period ended March 31, 2011 is not necessarily indicative of the results to be expected for the full year ending December 31, 2011. The unaudited interim financial statements should be read in conjunction with the audited financial statements and notes to financial statements that are presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 as filed with the Securities and Exchange Commission.

Note 2 - Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the statements of financial condition and revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. A material estimate that is particularly susceptible to significant change in the near term relates to the determination of the allowance for loan losses.

Note 3 – Earnings (loss) per common share

The following table presents the basic and diluted earnings per share computations:

	Three Months Ended March 31,
	2011			2010
Numerator
Net income (loss) - basic and diluted	$	82,720		$	487,839
Preferred stock dividend and accretion		218,058			217,689
Net income (loss) available to common
shareholders	$	(135,338	)	$	270,150

Denominator
Weighted average shares outstanding - basic		4,241,945			4,230,628
Dilutive effect of common stock options and
restricted stock awards		-			-

Weighted average shares outstanding - diluted		4,241,945			4,230,628

Earnings (loss) per share - basic and diluted
Earnings (loss) per share - basic	$	(0.03	)	$	0.06
Effect of dilutive common stock options		-			-

Earnings (loss) per share - diluted	$	(0.03	)	$	0.06

Outstanding options and warrants to purchase common stock were considered in the computation of diluted earnings per share for the periods presented. Stock options for 310,205 and 336,005 shares of common stock were not included in computing diluted earnings per share for the three months ended March 31, 2011 and 2010, respectively, because their effects were anti-dilutive. Warrants for 499,029 shares of common stock were not included in computing earnings per share in 2011 and 2010 because their effects were also anti-dilutive.

Note 4 – Loans and Allowance for Loan Losses

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

Loan Portfolio, Net
(In thousands)

	March 31, 2011						December 31, 2010
	Amount			%			Amount			%

Commercial	$	35,415			8.0	%	$	37,228			8.2	%
Real estate - Construction, land development & other loans		87,933			19.9	%		90,773			20.0	%
Real estate - Commercial		166,207			37.5	%		173,227			38.2	%
Real estate - 1-4 Residential		147,696			33.4	%		146,647			32.4	%
Consumer		5,469			1.2	%		5,368			1.2	%

Total loans		442,720			100.0	%		453,243			100.0	%
Deferred loan cost (unearned income), net		666						624
Less: Allowance for loan losses		(7,434	)					(7,312	)

Total loans, net	$	435,952					$	446,555

The Company assigns risk rating classifications to its loans. These risk ratings are divided into the following groups:

·	Risk rated 1 to 4 loans are considered of sufficient quality to preclude an adverse rating. 1-4 assets generally are well protected by the current net worth and paying capacity of the obligor or by the value of the asset or underlying collateral;

·	Risk rated 5 loans are defined as having potential weaknesses that deserve management’s close attention;

·	Risk rated 6 loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any, and;

·	Risk rated 7 loans have all the weaknesses inherent in substandard loans, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

	Risk Rated		Risk Rated		Risk Rated		Risk Rated		Total
	1-4		5		6		7		Loans

Commercial	$	28,477,734	$	2,927,082	$	3,486,526	$	523,868	$	35,415,210
Real estate - Construction, land development & other loans		59,664,988		3,750,564		24,516,852		-		87,932,404
Real estate - Commercial		116,749,553		23,635,110		25,629,443		193,251		166,207,357
Real estate - 1-4 Residential		131,407,250		5,892,408		10,232,721		163,825		147,696,204
Consumer		4,313,495		745,905		302,702		106,966		5,469,068

Total loans	$	340,613,020	$	36,951,069	$	64,168,244	$	987,910	$	442,720,243

The following table presents the aging of the recorded investment in past due loans and leases as of March 31, 2011:

													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

Commercial	$	381,958	$	381,974	$	11,926	$	775,858	$	34,639,352	$	35,415,210	$	11,926
Real estate - Construction, land development & other loans		4,017,664		196,564		-		4,214,228		83,718,176		87,932,404		-
Real estate - Commercial		3,517,265		268,443		173,213		3,958,921		162,248,436		166,207,357		173,213
Real estate - 1-4 Residential		5,503,828		1,625,973		228,175		7,357,976		140,338,228		147,696,204		228,175
Consumer		106,659		-		26,574		133,233		5,335,835		5,469,068		26,574

Total	$	13,527,374	$	2,472,954	$	439,888	$	16,440,216	$	426,280,027	$	442,720,243	$	439,888

Loans are considered impaired when, based on current information and events it is probably the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans, or portions thereof, are charged off when deemed uncollectible. Impaired loans at March 31, 2011 are set forth in the following table.

			Recorded Investment
	Unpaid						Recorded
	Contractual		Total		Recorded		Investment				Recorded
	Principal		Recorded		Investment		With No		Related		Average
Description of Loans	Balance		Investment		with Allowance		Allowance		Allowance		Investment

Commercial	$	3,128,283	$	2,936,225			$	2,936,225			$	2,342,004
Real estate - Construction, land development & other loans		7,937,685		6,793,373	$	372,155		6,421,218	$	50,000		5,726,924
Real estate - Commercial		2,032,248		1,603,604				1,603,604				5,589,010
Real estate - 1-4 Residential		7,096,355		6,080,588		236,991		5,843,597		41,500		5,153,596
Consumer		155,854		153,782		-		153,782		-		117,295

	$	20,350,425	$	17,567,572	$	609,146	$	16,958,426	$	91,500	$	18,928,829

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

				Real estate
				Construction,
				land development			Real estate			Real estate
	Commercial			and other			Commercial			1-4 Residential			Consumer			Total

Balance December 31, 2011		819			2,265			2,899			1,090			239			7,312
Charge-offs		(474	)		(83	)		(327	)		-			-			(884	)
Recoveries		2			-						1			-			3
Provision		300			500			203									1,003

March 31, 2011		647			2,682			2,775			1,091			239			7,434




Balance December 31, 2009		710			3,500			4,442			355			1,515			10,522
Charge-offs		(183	)		(1,881	)		(5,067	)		(191	)		(1,044	)		(8,366	)
Recoveries		2			121			187			2			2			314
Provision		290			1,159			2,703			73			617			4,842

December 31, 2011		819			2,899			2,265			239			1,090			7,312

Note 5 – Investment securities

At March 31, 2011 and December 31, 2010, all of our securities were classified as available-for-sale. The following table presents the composition of our investment portfolio at the dates indicated.

Investment Securities Available-for-Sale
(Dollars in thousands)

					Gross		Gross			Estimated
	Par		Amortized		Unrealized		Unrealized			Fair		Average
	Value		Cost		Gains		Losses			Value		Yield
March 31, 2011
US Treasuries
One to five years	$	36,000	$	36,016		-	$	(67	)	$	35,949		0.17	%

US Government Agencies
Five to ten years		6,000		5,998		1		(111	)		5,888		2.62	%

Mortgage-backed securities
One to five years		192		203		-		(7	)		196		2.68	%
Five to ten years		1,964		2,002		-		(27	)		1,975		2.47	%
More than ten years		30,489		30,893		169		(208	)		30,854		2.89	%
Total		32,645		33,098		169		(242	)		33,025		2.86	%

Municipals
More than ten years		6,000		6,059		-		(290	)		5,769		4.69	%

Other investments
More than ten years		1,178		1,178		1					1,179		0.67	%

Total investment securities	$	81,823	$	82,349	$	171	$	(710	)	$	81,810		1.76	%

December 31, 2010
US Treasuries
One to five years	$	28,000	$	28,017	$	-	$	-		$	28,017		0.22	%

US Government Agencies
Five to ten years		3,000		3,000				(111	)		3,000		2.00	%

Mortgage-backed securities
One to five years		686		703		31		(10	)		734		4.90	%
More than ten years		14,410		14,796		91		(58	)		14,887		2.86	%
Total		15,096		15,499		122		(68	)		15,621		5.39	%

Municipals
More than ten years		6,000		6,060		-		(337	)		6,060		4.69	%

Other investments
More than ten years		1,418		1,418		-		(3	)		1,418		0.69	%

Total investment securities	$	53,514	$	53,994	$	122	$	(519	)	$	54,116		2.32	%

Investment securities available for sale that have an unrealized loss position at March 31, 2011 and December 31, 2010 are detailed below.

	Securities in a loss					Securities in a loss
	Position for less than					Position for more than
	12 Months					12 Months					Total
	Fair		Unrealized			Fair Value		Unrealized			Fair		Unrealized
March 31, 2011	Value		Losses			(Loss)		Losses			Value		Losses
	(in thousands)
Investment Securities
available for sale

US Government Agencies	$	40,337	$	(178	)	$	-	$	-		$	40,337	$	(178	)
Mortgage-backed securities		19,598		(230	)		396		(11	)		19,994		(241	)
Municipals		5,769		(290	)

Total	$	65,704	$	(698	)	$	396	$	(11	)	$	60,331	$	(419	)



	Securities in a loss					Securities in a loss
	Position for less than					Position for more than
	12 Months					12 Months					Total
	Fair		Unrealized			Fair Value		Unrealized			Fair		Unrealized
	Value		Losses			(Loss)		Losses			Value		Losses
December 31, 2010	(in thousands)

Investment Securities
available for sale

US Treasuries	$	30,286	$	(114	)	$	-	$	-		$	30,286	$	(114	)
Mortgage-backed securities		7,079		(68	)							7,079		(68	)
Municipals		5,723		(337	)		-		-			5,723		(337	)

Total	$	43,088	$	(519	)	$	-	$	-		$	43,088	$	(519	)

Management does not believe that any individual unrealized loss as of March 31, 2011 and December 31, 2010 is other than a temporary impairment. These unrealized losses are primarily attributable to changes in interest rates. As of March 31, 2011, management does not have the intent to sell any of the securities classified as available for sale and management believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost.

Note 6 – Deposits

Deposits as of March 31, 2011 and December 31, 2010 were as follows:

	March 31, 2011			December 31, 2010
	Amount		%	Amount	%

Noninterest bearing demand	$	46,035,898

Village Bank & Trust Financial Corp. - FORM 10-Q - May 16, 2011

Attached files