Village Bank and Trust Financial
Village Bank and Trust Financial — Investor Presentation (January 2024)
27 slides from Village Bank and Trust Financial's investor presentation, Jan 26, 2024
Slide 1: You're a neighbor, not a number: Q1 2024 Investor Presentation
You're a neighbor, not a number Q1 2024 Investor Presentation
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements In addition to historical information, this presentation may contain forward-looking statements. For this purpose, any statement that is not a statement of historical fact may be deemed to be a forward-looking statement. These forward-looking
Slide 3: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements • risks inherent in making loans such as repayment risks and fluctuating collateral values; • changes in operations of Village Bank Mortgage Corporation as a result of the activity in the residential real estate market; • exposure to repurcha
Slide 4: Non-GAAP Financial Measures
Non-GAAP Financial Measures The accounting and reporting polices of the Company conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, management uses certain non-GAAP measures to supplement the evaluation of the C
Slide 5: Village Bank and Trust Financial Corp. Market Areas
Village Bank and Trust Financial Corp. (Nasdaq: VBFC) Market Areas (1) Source: S&P Global, Data as of the 6/30/2023 FDIC Summary of Deposits for the Richmond, VA MSA. (2) Source: Greater Richmond Partnership. (3) Source: Williamsburgva.gov Richmond MSA(2) • State Capital • 5 major colleges & univers
Slide 6: Financial Highlights
Financial Highlights Financial Highlights (dollars in thousands, except per share amounts) 2019 2020 2021 2022 2023 Balance Sheet Metrics Total Assets $ 540,313 $ 706,236 $ 748,401 $ 723,270 $ 736,616 Total Loans 430,059 558,955 526,024 539,015 575,811 Total Deposits 443,208 588,382 664,048 624,743
Slide 7: Major Items on Investors and Customers Minds
Major Items on Investors and Customers Minds Loan-to-Deposits 95.12% Deposit Costs Cost of total deposits 0.85%, total deposit beta of 19.62% since December 31, 2021. Average Deposit Per Account ~$33,000 as of December 31, 2023 Securities 14.43% of Earning Assets, all AFS status, Duration of 3.35, B
Slide 8: Our Value Proposition
Our Value Proposition • We think and behave like long-term investors Vision, Discipline, Execution • Strong market position in a very attractive market Market Opportunity • Excellent opportunity to take market • A strong community bank with a successful mortgage company Differentiated Transparency a
Slide 9: Our Strategy Is Built Around Delivering Top Quartile Long Term Returns
Our Strategy Is Built Around Delivering Top Quartile Long Term Returns To Our Shareholders This Means… • Top Quartile Return on Tangible Common Equity • Sustained High Single Digit Earnings Per Share Growth • Best Quartile Asset Quality in Worst Part of Cycle • Best Quartile Earnings Volatility 8
Slide 10: Strategic Priorities and Objectives
Strategic Priorities and Objectives 1. Generate Top Quartile Returns a. Invest for long-term out performance (people, process and technology) b. Diversify and grow fee revenue c. Focus on deploying capital into growth opportunities 2. Grow Franchise a. Generate strong relationship growth b. Add reve
Slide 11: Core earnings over the past years
Core earnings over the past 5 years (1) Non-GAAP financial measure. See GAAP to Non-GAAP financial measure reconciliation at the end of this presentation. (2) Source: S&P Global – Southeast Public Banks under $1 billion in assets as of December 31, 2022. 12.72% 19.12% 21.02% 13.54% 9.35% (5.00%) 0.0
Slide 12: PTPP Income Growth
PTPP Income Growth (1) Non-GAAP financial measure. See GAAP to Non-GAAP financial measure reconciliation at the end of this presentation. $3,070 $2,267 $1,816 $1,967 $2,460 $2,682 $1,865 $1,513 $(3,307) $2,144 $(6,000) $(5,000) $(4,000) $(3,000) $(2,000) $(1,000) $- $1,000 $2,000 $3,000 $4,000 Q4 20
Slide 13: Net Interest Margin
Net Interest Margin • NIM driven by: • Strategically deploying excess liquidity to minimize negative arbitrage from the high levels of liquid assets. • Maintain our disciplined pricing approach to funding sources and loans. • Executed a securities repositioning during Q3 2023, which resulted in a on
Slide 14: Deposit Portfolio
Deposit Portfolio • Total deposits decreased by $19,398,000, or 3.10%, from December 31, 2022. • The decrease in deposits was driven by a combination of consumers and businesses drawing down balances due to increased pressure from high inflation, as well as seasonal reductions due to year-end payout
Slide 15: Securities Portfolio
Securities Portfolio $133,853 $135,953 $132,235 $104,046 $105,585 $147,603 $147,827 $145,421 $114,233 $112,678 2.10% 2.18% 2.14% 2.37% 3.87% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023
Slide 16: Loan Portfolio
Loan Portfolio Core loans, which are total loans, excluding PPP loans, increased by $36,774,000, or 6.83%, from December 31, 2022. The commercial loan portfolio, excluding PPP loans, increased by $4,390,000, or 1.05%, from December 31, 2022. Growth in the portfolio was impacted by several large payo
Slide 17: Our credit strategy is to deliver best quartile asset quality
Our credit strategy is to deliver best quartile asset quality in the worst part of the cycle… (1) Source - SNL data for VA Banks <$1 Billion in assets as of September 30, 2023. (2) Annualized. • We believe stable credit quality and improving economic factors and improved credit metrics support the a
Slide 18: Mortgage Banking Segment Opportunities
Mortgage Banking Segment Opportunities • Continue purchase money focus • Provide sales team tools and marketing to support in current environment • Portfolio product introduced November 2022 • Expense reduction initiatives to lower break even to match anticipated rates and volume in coming quarters
Slide 19: Technology Roadmap
Technology Roadmap • FedNOW – Real Time Payments • AutoBooks for small business • Webchat to support customer service • DNS-SEC • Internal data storage clean-up • ESign for retail acct opening • ESign for often used customer docs • Printer upgrades at each Branch • POE Switch Replacements • Phone Sy
Slide 20: Board of Directors
Board of Directors Craig Bell Chairman Since 1998 Frank Jenkins Director Since 2017 Mike Katzen Director Since 2008 Mike Toalson Director Since 2004 Devon Henry Director Since 2018 Mary Margaret Kastelberg Director Since 2020 Jay Hendricks President & Chief Executive Officer Since 2020 Ron Carey Dir
Slide 21: Management Team
Management Team Jay Hendricks President & Chief Executive Officer Donnie Kaloski Chief Financial Officer & Chief Risk Officer Max Morehead Commercial Banking • CEO and President of the Company and the Bank since August 2020. • Previously Chief Operating Officer and Chief Risk Officer of the Bank sin
Slide 22: Management Team, continued
Management Team, continued Jennifer Church Retail Banking Christy Quesenbery Operations Roy Barzel Chief Credit Officer Clif Winn President & CEO Village Bank Mortgage Corp • Executive Vice President – Retail Banking of the Bank since March 2022. • Prior to joining the Bank served as Vice President
Slide 23: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Non-GAAP Financial Measures (dollars in thousands, except per share amounts) * Reference notes on following page. 22 GAAP Operating Results by Segment 2019 2020 2021 2022 2023 Pre-tax earnings by segment Commercial banking $ 4,402 $ 6,0
Slide 24: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Non-GAAP Financial Measures (dollars in thousands, except per share amounts) Reference notes for GAAP to Core Operating Income (1) Non-GAAP financial measure. (2) The Company recognized $814,000 in additional compensation expense during
Slide 25: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Non-GAAP Financial Measures (dollars in thousands, except per share amounts) (1) Non-GAAP financial measure (2) Derived from the Core Operating Results by Segment table. 2019 2020 2021 2022 2023 ROTCE Average shareholder's equity $ 40,1
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Non-GAAP Financial Measures (in thousands, except per share amounts) (1) Derived from the Core Operating Results by Segment table. (2) Non-GAAP financial measure. 2019 2020 2021 2022 2023 GAAP earnings per share Weighted Average Share O
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of Non-GAAP Financial Measures (in thousands, except per share amounts) (1) Non-GAAP financial measure. Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Pre-Tax Earnings by Segment Commercial banking - PTPP (ex. loss trade impact)(1) $ 3,070 $ 2,26
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