Village Bank and Trust Financial Corp. (VBFC): History, Ownership, Mission, How It Works & Makes Money

Are you looking to understand the history and operating model of Village Bank and Trust Financial Corp. (VBFC), or are you more interested in the $80.25 per share cash offer that took the company private in 2025? The truth is, you can't analyze this regional bank without acknowledging the major market event of its acquisition by TowneBank, which was finalized on April 1, 2025. This deal capped a period of strong performance, evidenced by the bank's $756.1 million in total assets and its impressive 31.48% revenue growth in the twelve months leading up to the merger. So, what made a micro-cap bank with a pre-merger market capitalization of about $120.34 million such a compelling target, and what does its legacy tell us about the value of niche, community-focused banking in a consolidating industry?

Village Bank and Trust Financial Corp. (VBFC) History

You want the real story of Village Bank and Trust Financial Corp., not the marketing fluff. The direct takeaway is that VBFC, a bank born from local Virginia business leaders, successfully navigated two decades of community banking before its ultimate, transformative event in 2025: its acquisition by TowneBank. This merger, valued at $80.25 per share, marks the end of its run as an independent, publicly traded entity and the start of its life as a division of a larger regional bank.

Given Company's Founding Timeline

Year established

Village Bank was established in 1999, with the holding company, Village Bank and Trust Financial Corp., formally incorporated in January 2003.

Original location

The bank started in Midlothian, Virginia, USA, focusing its efforts on the Richmond metropolitan area.

Founding team members

The bank was founded by a group of local business leaders and experienced bankers. Their primary goal was to create a community-focused bank to serve the Richmond area, which is defintely a classic community bank origin story.

Initial capital/funding

The specific initial seed capital amount is not publicly disclosed, but the funds were raised locally to meet all regulatory requirements and start operations.

Given Company's Evolution Milestones

Given Company's Transformative Moments

Two decisions fundamentally changed VBFC's trajectory: the 2005 IPO and the 2025 acquisition. The IPO was the first big leap, shifting the bank from a purely private, local venture to a publicly scrutinized company. This move gave them the capital to grow, but also exposed them to the market's volatility.

The second, and most recent, moment was the merger with TowneBank. This was a clear, high-value exit for shareholders. Here's the quick math on the final valuation:

• Total assets as of December 31, 2024, were $756.1 million.
• The merger consideration was $80.25 per share.
• With 1,498,097 shares outstanding as of March 15, 2025, the implied market value was approximately $120 million, aligning with the final reported market capitalization.

The merger became effective on April 1, 2025, with Village Bank operating as a division of TowneBank until mid-June 2025, when systems were scheduled to fully convert. This event provided a strong return for investors, but it also ended the independent story of the community bank. To be fair, the financial health leading up to this point was solid, with 2024 revenue for the Bank segment at $43.1 million. If you want to dive deeper into the numbers that led to this valuation, you can read Breaking Down Village Bank and Trust Financial Corp. (VBFC) Financial Health: Key Insights for Investors.

What this estimate hides is the integration risk, but for VBFC shareholders, the action was clear: take the $80.25 per share and move on. The company is now part of a larger, $17.25 billion asset institution (TowneBank as of December 31, 2024).

Village Bank and Trust Financial Corp. (VBFC) Ownership Structure

As of November 2025, Village Bank and Trust Financial Corp. (VBFC) does not exist as an independent, publicly traded entity; it is a wholly-owned part of TowneBank, following a cash acquisition finalized in April 2025.

This means the former shareholder base, which included a mix of institutional, insider, and retail investors, was fully bought out for cash consideration, transferring 100% of the equity control to the acquiring company.

Given Company's Current Status

Village Bank and Trust Financial Corp. was a publicly traded company on the Nasdaq Capital Market under the ticker VBFC until its acquisition by TowneBank. The $120.4 million all-cash transaction was completed on April 1, 2025, resulting in VBFC ceasing to exist as a separate corporate entity.

Consequently, Village Bank's common stock was delisted from Nasdaq, and all former shares were converted into the right to receive $80.25 in cash per share. The former Village Bank now operates as a division of TowneBank, with core system integration scheduled to be completed by mid-June 2025.

The decision to merge was strongly supported by the former shareholders, with over 86% of the outstanding shares voting in favor of the deal in December 2024. This is a defintely clean exit for the former shareholders.

For more on the strategic rationale behind the merger, you can read the Mission Statement, Vision, & Core Values of Village Bank and Trust Financial Corp. (VBFC).

Given Company's Ownership Breakdown

The table below reflects the current ownership structure as of November 2025, which is a direct result of the acquisition. For context, the notes detail the former shareholder composition just prior to the merger's closing.

Given Company's Leadership

The former leadership team and Board of Directors of Village Bank and Trust Financial Corp. ceased their roles with the company upon the merger's completion. The governance and executive oversight for the former Village Bank operations are now integrated into TowneBank's structure.

Here's the quick math: the leadership team transitioned to new roles within the larger TowneBank organization to ensure a smooth integration and continued regional presence.

• James E. Hendricks, Jr.: The former President and Chief Executive Officer of Village Bank was appointed as a Senior Executive Vice President at TowneBank.
• Frank E. Jenkins, Jr.: A former director of Village Bank was appointed to the TowneBank board of directors, effective upon the merger's closing on April 1, 2025.
• The remaining directors of Village Bank ceased serving on its board as part of the merger agreement.

Finance: draft a memo outlining the integration of former VBFC assets into the TowneBank balance sheet by Friday.

Village Bank and Trust Financial Corp. (VBFC) Mission and Values

Village Bank and Trust Financial Corp. built its identity on being a true community partner, focusing its mission on local relationships and responsive, personalized financial services. This community-centric DNA guided their strategy right up to the acquisition by TowneBank in April 2025.

Given Company's Core Purpose

The core purpose of Village Bank and Trust Financial Corp. was to foster economic growth and stability within the specific Virginia communities it served, primarily the Richmond metropolitan area. They were a community-focused bank holding company, meaning they prioritized local decision-making and reinvesting in their geographic footprint.

• Local Focus: Prioritized lending and services for small-to-medium-sized businesses and individuals in Central Virginia.
• Relationship Banking: Emphasized strong, personal connections over transactional volume to build a loyal customer base.
• Sustainable Growth: Balanced shareholder returns with the long-term economic health of their local market.

For example, this focus translated into significant local impact; as of December 31, 2024, the company held total assets of approximately $756.1 million, with much of that capital deployed back into the community through commercial and real estate loans.

Official mission statement

While a single, formally published mission statement was not always front-and-center, the operational philosophy centered on being a dedicated community partner that provides responsive financial solutions. Their daily work was the mission-delivering personalized banking to local businesses and families.

• Be a dedicated community partner in the local Virginia markets.
• Offer responsive, personalized financial services.
• Support community development through lending and deposits.

The company's Traditional Commercial Banking segment, which generated 2024 revenue of $43.1 million, was the main engine for delivering this mission. That's a defintely clear signal of where the focus lay.

Vision statement

The company's actions articulated a vision of becoming the preeminent financial institution for local prosperity in the communities it served. This wasn't about being the biggest, but about being the most essential to the local Virginia economy.

• Be the leading financial institution dedicated to local Virginia prosperity.
• Foster economic growth through personalized banking solutions.
• Maintain superior credit quality and capital levels.

This vision was tested and validated by the market, culminating in the merger with TowneBank, where each share of Village Bank and Trust Financial Corp. common stock was converted to the right to receive $80.25 in cash on April 1, 2025. You can dig deeper into the numbers here: Breaking Down Village Bank and Trust Financial Corp. (VBFC) Financial Health: Key Insights for Investors

Given Company slogan/tagline

Village Bank and Trust Financial Corp. did not use a single, heavily promoted corporate slogan, preferring to let their local service speak for itself. Their branding consistently emphasized themes of local commitment and personal service.

• Themes revolved around local commitment and relationship banking.
• Focus was on being the local expert and trusted advisor.

The lack of a slick, national tagline highlights their grassroots approach; they believed a strong local reputation was more valuable than any marketing phrase. Honestly, for a community bank, that's just smart strategy.

Village Bank and Trust Financial Corp. (VBFC) How It Works

Village Bank and Trust Financial Corp. (VBFC) ceased to exist as an independent entity on April 1, 2025, following its acquisition by TowneBank, and now operates as the Village Bank Division, primarily serving the Richmond and Williamsburg, Virginia, metropolitan areas. The division functions as a community banking hub that generates revenue by taking in local deposits and deploying that capital through commercial and retail loans, a model that produced an adjusted diluted earnings per share (EPS) of $1.48 in the final quarter of 2024 before the merger.

Village Bank Division's Product/Service Portfolio

The division's value proposition is built on its two core, historically profitable segments: Traditional Commercial Banking and Mortgage Banking. The focus remains on relationship-based lending and deposit gathering from small to medium-sized businesses (SMBs) and affluent individuals, now backed by TowneBank's larger balance sheet and expanded financial services group.

Village Bank Division's Operational Framework

The operational process is now fully integrated into the larger TowneBank structure, leveraging centralized technology and back-office functions while maintaining a local front-office presence. This transition, which included the conversion of core systems by mid-June 2025, allows the division to cut noninterest expense-like duplicative software and administrative costs-while expanding its product offerings.

The division makes money primarily through net interest income (NII), which is the difference between interest earned on loans and interest paid on deposits. The final quarter of 2024 saw the Net Interest Margin (NIM) expand to 4.02%, indicating strong pricing power on loans and disciplined management of deposit costs.

• Deposit Sourcing: Focus on low-cost, noninterest-bearing deposits from core business relationships to stabilize funding costs.
• Credit Underwriting: Maintain historically strong credit quality; the nonperforming loans (NPLs) to total loans ratio was exceptionally low at 0.06% in Q4 2024, a key metric for risk management.
• Capital Deployment: Direct capital to higher-yielding commercial and real estate loans in the growing Richmond MSA, a core strategic area for TowneBank.
• Cross-Selling: Use the local branch network to introduce customers to the full Towne Financial Services Group, including wealth management and insurance.

Here's the quick math: The division's ability to maintain a strong NIM while keeping credit losses near zero is the defintely the central profit driver.

Village Bank Division's Strategic Advantages

The division's competitive edge now stems from combining its deep local market knowledge with the financial muscle and diversified services of a larger regional bank. This structure allows it to compete effectively against both national banks and smaller community institutions.

• Local Relationship Capital: Over two decades of community presence in the Richmond and Williamsburg areas, established since 1999, provides a loyal customer base and a pipeline of quality loan opportunities.
• Enhanced Scale and Resources: Access to TowneBank's total assets, which were over $17.25 billion as of the merger date, provides greater lending capacity for larger commercial clients than the division could offer independently.
• Superior Credit Profile: The division's historical asset quality, with a nonperforming loan ratio of just 0.06%, acts as a competitive differentiator, attracting high-quality borrowers and minimizing credit risk for the parent company.
• Revenue Synergy Opportunities: The merger provides immediate opportunities for diverse revenue synergies by integrating the division's customers into TowneBank's full suite of financial products, including Towne Wealth Management and Towne Insurance Agency.

For a deeper dive into the stakeholders who benefited from the acquisition, you should read Exploring Village Bank and Trust Financial Corp. (VBFC) Investor Profile: Who's Buying and Why?

Village Bank and Trust Financial Corp. (VBFC) How It Makes Money

Village Bank and Trust Financial Corp. generated the vast majority of its revenue from traditional commercial banking activities-specifically, the spread between interest earned on loans and interest paid on deposits, known as net interest income. The company's independent financial engine ceased operation on April 1, 2025, when its merger with TowneBank was completed, so our analysis focuses on its final full-year performance as a standalone entity in 2024.

Given Company's Revenue Breakdown

The core of the business was lending, which generated nearly 88% of the company's total revenue in its final full year of operation. The remaining revenue came from non-interest activities like service charges and mortgage banking fees, a segment that faced significant headwinds in 2024.

Here's the quick math: Based on the final 2024 financial results, the company reported total revenue of roughly $33.14 million. [cite: 3 in step 1] We estimate that Net Interest Income accounted for about $29.20 million of that, driven by a rising net interest margin, while Non-Interest Income contributed approximately $3.94 million.

Business Economics

A community bank's economic fundamentals revolve around its net interest margin (NIM), which is essentially the profit from lending money versus the cost of borrowing it (deposits). For the full year 2024, Village Bank and Trust Financial Corp.'s NIM expanded by 21 basis points to 3.86%. [cite: 1 in step 4] This is a strong indicator of effective asset-liability management during a period of rising interest rates.

• Lending Yields: The yield on earning assets increased by 84 basis points to 5.64% in 2024 compared to the prior year, a direct benefit of higher interest rates on their loan portfolio. [cite: 1 in step 4]
• Funding Costs: This yield increase was partially offset by a 98 basis point rise in the cost of interest-bearing liabilities, which hit 2.88% in 2024. [cite: 1 in step 4] The biggest pressure came from time deposits, where the rate paid increased by 170 basis points to 3.46%. [cite: 1 in step 4]
• Deposit Mix: The bank maintained a strong level of non-interest-bearing deposits, which helped mitigate the overall cost of funds, but rising rates still squeezed the margin.

The mortgage banking segment, which generates non-interest income from loan origination fees and gains on loan sales, was a consistent drag on performance, posting a net loss of $159 thousand in the fourth quarter of 2024 alone. [cite: 4 in step 1] That's a clear example of how a weak housing market can pressure fee-based revenue.

You can see the strategic focus on core banking relationships in their Mission Statement, Vision, & Core Values of Village Bank and Trust Financial Corp. (VBFC).

Given Company's Financial Performance

Leading up to the merger, the company demonstrated solid core profitability, though its final reported earnings were impacted by one-time transaction costs. The final financial picture provides a benchmark for the value TowneBank acquired.

• Adjusted Net Income: For the full year 2024, adjusted net income (excluding $932 thousand in pre-tax merger expenses) was $7.753 million, or $5.19 per diluted share. [cite: 1 in step 4]
• Total Assets: The company's final balance sheet size was substantial for a community bank, with total assets reaching $756.1 million as of December 31, 2024. [cite: 2 in step 3]
• Return on Assets (ROA): The adjusted return on average assets (ROA) for 2024 was 1.03%, a healthy figure that shows the bank was defintely using its assets efficiently to generate profit. [cite: 1 in step 4]
• Return on Equity (ROE): The adjusted return on average equity (ROE) for 2024 was 10.95%, indicating a strong return for shareholders on their invested capital. [cite: 1 in step 4]

The key takeaway is that the bank's NIM expansion and strong ROA/ROE in 2024 made it an attractive acquisition target, justifying the aggregate transaction value of approximately $120.0 million paid by TowneBank. [cite: 3 in step 3]

Village Bank and Trust Financial Corp. (VBFC) Market Position & Future Outlook

Village Bank and Trust Financial Corp. (VBFC) no longer exists as an independent entity, having been acquired by TowneBank on April 1, 2025. The future outlook is now entirely mapped to TowneBank's strategy, which uses the former VBFC operations to significantly enhance its presence in the high-growth Richmond Metropolitan Statistical Area (MSA).

The merger transaction, valued at $80.25 per share in cash for VBFC shareholders, was a strategic move to integrate a local, relationship-focused commercial bank into a larger, diversified regional platform. This immediately boosts TowneBank's footprint and local market knowledge, especially in commercial and mortgage banking, which generated $33.14 million in revenue and $7.02 million in earnings for VBFC in 2024. For a deeper dive into the former company's performance, see Breaking Down Village Bank and Trust Financial Corp. (VBFC) Financial Health: Key Insights for Investors.

Competitive Landscape

In the Richmond MSA, the banking market is dominated by national giants, but the combined TowneBank/VBFC entity creates a more formidable regional challenger. The former VBFC's contribution, while small on its own, is critical for TowneBank's density in the market. Here's the snapshot based on June 2024 deposit market share data, with TowneBank's share reflecting the combined entity's estimated position in the MSA's $55.3 billion deposit market.

Opportunities & Challenges

The strategic move to integrate VBFC into TowneBank opens up clear opportunities but also carries near-term integration risks that investors must track through 2025 and into 2026. The integration of core systems and operations, scheduled for mid-June 2025, is the flashpoint for both success and risk.

Industry Position

The former VBFC, now operating as 'Village Bank, a Division of TowneBank,' has transitioned from a small, publicly traded community bank with a market capitalization of approximately $0.12 Billion USD to a key regional growth engine for a much larger institution. That's a huge shift in scale and resource access.

• Enhanced Scale: VBFC's nine branches in the Richmond MSA now leverage TowneBank's total assets of over $14 billion (as of Q4 2024 for TowneBank).
• Specialized Focus: The division retains its local focus on small and medium-sized businesses and professionals, a niche that a large national bank often struggles to serve with the same personal touch.
• De-risked Model: The merger provided VBFC's shareholders a solid cash exit at $80.25 per share, and the operating unit now benefits from TowneBank's more diversified revenue streams, particularly its strong non-interest income from mortgage banking and insurance.

The immediate next step for the combined entity is to ensure a defintely seamless integration of all customer-facing and back-office systems to prevent client churn. This is the single biggest factor determining the success of the acquisition.