Bank Of Virginia Expects Additional Write-Offs And Increased Loan Loss Reserves, Signs Amended Stock Purchase Agreement With Cordia Bancorp And Appoints New Chief Financial Officer
MIDLOTHIAN, Va., Oct. 1, 2010 (GLOBE NEWSWIRE) -- Bank of Virginia (Nasdaq:BOVA) today announced that it expects to incur write-offs and increases to reserves for loan losses in the third quarter of 2010. The Bank plans to release third quarter operating results in early November. At this time, the Bank estimates that the third quarter loan loss provision, which includes both write-offs and increases to credit reserves, will be between $4.5 million and $5.5 million. This provision reflects a continued deterioration in the credit ratings of certain loans in the portfolio. Frank Bell, President & CEO, commented that, "In light of the continued economic uncertainty, the Bank is taking a pro-active stance with regards to credit risk management. Although the majority of our classified loans have performed as agreed, it is prudent for us to recognize the economic stress some of our borrowers are facing and provision accordingly."
Bank of Virginia also announced that Cordia Bancorp has re-affirmed its intention to purchase common shares of the Bank. The terms of the Stock Purchase Agreement have been amended primarily to reflect the anticipated decrease in the bank's book value as the result of the estimated third quarter loan loss provision and the Bank's current share price. Cordia has agreed to increase the maximum amount that it may invest in the Bank from $15 million to $20 million, and to increase the minimum investment from $6 million to $10 million. The per share purchase price has been reduced from $3.00 to $2.00 and is subject to adjustment, up or down, based on the Bank's book value prior to closing. The outside closing date has been extended until December 31, 2010 to allow the Bank to complete a shareholder vote and for Cordia to receive the necessary approvals from bank regulatory authorities. Mr. Bell said, "The Bank and Cordia remain committed to consummating this transaction. We are enthusiastic about the potential of a partnership with Cordia, and are encouraged by their willingness to stay the course and to increase their equity investment in the Bank. We remain optimistic that the necessary regulatory approvals will be forthcoming." Bank of Virginia also announced the hiring of Nancy E. Corsiglia, who will assume the position of interim Chief Financial Officer during the 4 th quarter of this year. Mr. Bell stated, "Ms. Corsiglia has had an outstanding career in finance." She has served as Executive Vice President and, for 15 years, as Chief Financial Officer of the Federal Agricultural Mortgage Corporation (FAMC), a New York Stock Exchange listed corporation. She co-started and was instrumental in building FAMC from a start-up into a national secondary market for agricultural mortgages and rural loans and financial guarantor with a $10 billion outstanding book of business. Previously, she was a Vice President for Federal Government Finance at Paine Webber Inc., and a Manager in the Treasurer's Office of General Motors Corporation. She started her career in commercial banking in New York City. Currently, she is a member of the Board of Directors of the Private National Mortgage Acceptance Company Mortgage Opportunity Funds and a member of the Board of Trustees of the Stoneleigh-Burnham School. She holds an MBA from the Tuck School of Business at Dartmouth College and an AB in Economics from Smith College.
Bell said, "Recently, Ms Corsiglia has served as a strategic and financial advisor to the Bank's management and Board and brings a wealth of valuable experience and expertise in financial management and strategy, including capital markets, treasury operations, asset-liability management, financial disclosure, Sarbanes-Oxley compliance and corporate governance. We are very pleased to add Nancy to the Bank of Virginia management team as we finalize our recapitalization, expand our opportunity to serve our clients, and reaffirm our commitment to build the finest community bank in Virginia."
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