Cordia Bancorp Inc. Reports First Quarter Results

MIDLOTHIAN, Va., May 7, 2014 (GLOBE NEWSWIRE) -- Cordia Bancorp Inc. ("Cordia") (Nasdaq:BVA), parent company of Bank of Virginia, reported a net loss of $284,000 or $(0.10) per share for the first quarter of 2014, compared to net income of $222,000 or $0.08 per share for the first quarter of 2013.

First Quarter 2014 Highlights
  • 19% growth in total assets
  • 11% growth in deposits
  • 10% increase in full time employees
  • Acquisition of $26.5 million portfolio of student loans
  • Nonperforming assets continued to decrease to 1.7% of total assets

Chief Executive Officer Jack Zoeller stated, "We launched a fresh round of growth in the first quarter in anticipation of the $15.4 million capital raise that closed in early April. While we incurred a modest quartlerly loss primarily due to one-time factors and timing differences related to compensation, additions to staffand loan loss reserves, Cordia remains focused on its strategy to grow both our geographic footprint and earnings base." Cordia recently announced plans to open two new full-service branches in Chesterfield County and Colonial Heights, Virginia.

Financial Highlights
  • Asset Growth. Total assets were $280.3 million at March 31, 2014, compared to $235.1 million at December 31, 2013. During the first three months of 2014 the Company originated $11.7 million of new organic loans and also purchased $26.5 million of student loans 98% guaranteed by the U.S. Department of Education.  
  • Deposit Growth and Mix. Total deposits increased to $235.0 million at March 31, 2014, compared to $210.8 million at December 31, 2013. Total checking, money market and savings accounts increased 16%, to $96.5 million at March 31, 2014, from $83.5 million at December 31, 2013.  
  • Net Interest Income. Net interest income after provision for loan losses was $1.9 million in the first quarter of 2014, compared to $2.1 million in the first quarter of 2013.  
  • Asset Quality. Asset quality continued to improve, with total non-performing assets decreasing to $4.8 million, or 1.7% of assets, at March 31, 2014, from $5.5 million, or 2.3% of assets, at December 31, 2013. There were no delinquencies in the Company's organic loan portfolio at March 31, 2014.  
  • Tangible Book Value. Tangible book value per share decreased to $4.63 at March 31, 2014, from $4.72 at December 31, 2013.  
  • Deferred Tax Asset. As of March 31, 2014, the Company had net deferred tax assets totaling $6.9 million. Upon a determination that realizing the full deferred tax asset is more likely than not, $6.2 million of valuation allowance may be reversed. Cordia anticipates that such a determination may potentially be made near the end of 2014.

Operating Results

Cordia reported a net loss of $284,000 or $(0.10) per share for the first quarter of 2014, compared to net income of $222,000 or $0.08 per share for the first quarter of 2013.

Net interest income after the provision for loan losses was $1.9 million for the first quarter of 2014, compared to $2.1 million for the first quarter of 2013, or a decrease of $230,000. Net interest margin was 3.34% and 4.31% for the first quarter of 2014 and 2013, respectively. The decrease in net interest margin was primarily the result of a decrease of $617,000 in the amount of accretion income on purchased loans in 2014 compared to 2013. Excluding the decrease in the accretion income, interest income on loans held for investment increased by $187,000 due to an increase in average balances of $46.5 million offset by a 47 basis point decrease in average yield. Cordia's cost of deposits, adjusted to exclude accretion income, decreased 15 basis points while total deposits increased $9.3 million. The net interest margin, adjusted for accretion income, increased from 2.83% to 3.18% or 35 basis points.

Noninterest income increased to $123,000 for the first quarter of 2014, compared to $67,000 for the first quarter of 2013. The increase was driven by a net gain on the sale of available for sale securities of $64,000.

Noninterest expense increased to $2.3 million for the first quarter of 2014, compared to $2.0 million for the first quarter of 2013. This increase was primarily due to a one-time accrual of incentive compensation and the costs of staff additions associated with Cordia's growth.

About Cordia Bancorp

Cordia Bancorp Inc. is a public bank holding company founded in 2009 seeking to invest in undervalued community banks and pursue organic and strategic growth in the Mid-Atlantic banking market.  Substantially all of the assets of Cordia consist of its investment in Bank of Virginia. Bank of Virginia provides retail banking services to individuals and commercial customers through four full-service and two ATM-only banking locations in the greater Richmond market, including Chesterfield and Henrico Counties and Colonial Heights, Virginia.

For more information about Cordia Bancorp and Bank of Virginia, visit our websites: www.cordiabancorp.com and www.bankofva.com.

DISCLAIMER

This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company's periodic filings with the Securities Exchange Commission. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements contained within this news release.
           
Cordia Bancorp          
Consolidated Balance Sheets (unaudited)          
           
  March, 31 Dec. 31, Sept. 30, June 30, March 30,
(Dollars in thousands, except per share data) 2014 2013 2013 2013 2013
Assets          
Cash and due from banks  $ 10,499  $ 5,290  $ 6,893  $ 3,756  $ 5,340
Fed funds sold and Interest-bearing deposits   16,839  8,694  15,889  27,766  9,201
Total cash and cash equivalents  27,338  13,984  22,782  31,522  14,541
Securities available for sale, at fair value  24,464  24,567  29,807  22,105  17,182
Securities held to maturity  14,500  14,753  --  --  --
Restricted securities  1,529  1,074  1,071  1,134  1,124
           
Loans held for investment:          
Commercial real estate  85,084  82,602  85,962  80,289  78,405
Commercial and industrial  22,118  21,208  20,388  21,273  23,384
Guaranteed student loans  80,966  55,427  51,293  52,957  34,696
Consumer and other  16,914  14,770  15,146  13,960  14,712
Total loans held for investment  205,082  174,007  172,789  168,479  151,197
Less: Allowance for loan losses  (1,504)  (1,489)  (1,517)  (1,562)  (1,583)
Net loans held for investment  203,578  172,518  171,272  166,917  149,614
           
Loans held for sale  --  --  --  --  59,761
Premises and equipment, net  4,430  4,464  4,512  4,287  4,327
Accrued interest receivable  2,177  1,655  1,335  1,132  1,097
Other real estate owned, net of valuation allowance  1,543  1,545  1,545  1,768  1,768
Other assets  697  588  648  655  953
Total assets  $ 280,256  $ 235,148  $ 232,972  $ 229,520  $ 250,367
           
Liabilities and stockholders' equity          
Non-interest bearing deposits  21,642  22,845  21,719  21,338  20,786
Savings and interest bearing demand deposits  74,825  60,685  59,546  49,493  80,665
Time deposits, $100,000 and greater  87,559  76,231  75,023  79,795  70,080
Other time deposits  51,002  51,053  52,620  54,732  54,202
Total deposits  235,028  210,814  208,908  205,358  225,733
           
Accrued expenses and other liabilities  12,202  1,047  897  998  1,361
FHLB borrowings  20,000  10,000  10,000  10,000  10,000
Total Liabilities  267,230  221,861  219,805  216,356  237,094
           
Preferred stock  --  --  --  --  --
Common stock  28  28  28  28  28
Additional paid-in-capital  18,672  18,648  18,606  18,579  18,689
Retained deficit  (5,289)  (5,005)  (5,011)  (5,219)  (5,479)
Accumulated other comprehensive income  (385)  (384)  (456)  (224)  35
Total stockholders' equity  13,026  13,287  13,167  13,164  13,273
Total liabilities and stockholders' equity  $ 280,256  $ 235,148  $ 232,972  $ 229,520  $ 250,367
           
           
Cordia Bancorp          
Consolidated Statements of Income (unaudited)          
           
  Three Months Ended
  March 31, Dec. 31, Sept. 30, June 30, March 31,
(Dollars in thousands, except per share data) 2014 2013 2013 2013 2013
Interest Income          
Interest and fees on loans  $ 2,149  $ 2,089  $ 2,182  $ 2,516  $ 2,579
Investment securities  207  161  123  72  70
Interest on federal funds sold and deposits with banks  6  10  19  29  15
Total interest income  2,362  2,260  2,324  2,617  2,664
           
Interest Expense          
Interest on deposits  426  412  415  426  391
Interest on FHLB Borrowings  41  40  42  41  41
Total interest expense  467  452  457  467  432
           
Net interest income  1,895  1,808  1,867  2,150  2,232
Provision for (benefit from) loan losses  20  (92)  (23)  7  127
Net interest income after provision for loan losses  1,875  1,900  1,890  2,143  2,105
           
Non-interest income          
Service charges on deposit accounts  26  40  31  29  32
Net gain on sale of available for sale securities  64  --  --  --  --
Other fee income  33  46  51  36  35
Total non-interest income  123  86  82  65  67
           
Non-interest expense          
Salaries and employee benefits 1,406 1,066 991 974 1,185
Professional services  106  161  67  211  62
Occupancy  151  138  137  145  145
Data processing and communications  142  139  140  144  125
FDIC assessment and bank fees  123  111  116  114  120
Loan expenses  126  76  81  102  15
Other real estate expenses  5  16  5  12  16
Gain on sale of OREO  --  --  (36)  --  --
Supplies and equipment  75  75  66  64  69
Insurance  41  40  42  42  42
Directors fees  16  32  34  38  34
Marketing and business development  6  32  19  15  22
Other   85  95  102  86  115
Total non-interest expense  2,282  1,981  1,764  1,947  1,950
           
Consolidated net income (loss) before non-controlling interest  (284)  5  208  261  222
Net income (loss)  (284)  5  208  261  222
           
Earnings per share, basic and diluted  $ (0.10)  $ --   $ 0.07  $ 0.09  $ 0.08
Weighted average shares outstanding, basic and diluted  2,788,302  2,788,302  2,775,802  2,775,802  2,778,677
           
           
Cordia Bancorp          
Consolidated Financial Highlights (unaudited)    
  As of and for the Three Months Ended
  March 31, Dec. 31, Sept. 30, June 30, March 31,
(Dollars in thousands, except per share data) 2014 2013 2013 2013 2013
Results of Operations          
Interest income  $ 2,362  $ 2,260  $ 2,324  $ 2,617  $ 2,664
Interest expense  467  452  457  467  432
Net interest income  1,895  1,808  1,867  2,150  2,232
Provision (benefit) for loan losses  20  (92)  (23)  7  127
Net interest income after provision for loan losses  1,875  1,900  1,890  2,143  2,105
Non-interest income  123  86  82  65  67
Non-interest expense  2,282  1,981  1,764  1,947  1,950
Net income  $ (284)  $ 5  $ 208  $ 261  $ 222
           
Earnings per share, basics and diluted  $ (0.10)  $ --   $ 0.07  $ 0.09  $ 0.08
Weighted average shares outstanding, basic and diluted  2,788,302  2,788,302  2,775,802  2,775,802  2,778,677
           
Performance Ratios          
Return on average assets -0.47% 0.01% 0.35% 0.41% 0.42%
Return on average equity -8.52% 0.15% 6.39% 7.88% 6.34%
Return on average tangible equity -8.61% 0.15% 6.46% 7.97% 6.42%
Efficiency ratio 113.08% 104.59% 90.51% 87.90% 84.82%
           
Yields and Rates          
Yield on loans 4.88% 4.82% 5.11% 5.55% 6.66%
Yield on securities 2.08% 2.14% 1.79% 1.70% 1.56%
Yield on interest earning assets 4.16% 4.13% 4.09% 4.23% 5.14%
Cost of interest bearing deposits 0.88% 0.89% 0.88% 0.82% 0.92%
Cost of total deposits 0.79% 0.80% 0.79% 0.75% 0.83%
Cost of borrowings 1.62% 1.60% 1.68% 1.64% 1.64%
Cost of interest bearing liabilities 0.92% 0.93% 0.92% 0.86% 0.96%
Interest rate spread 3.25% 3.21% 3.17% 3.38% 4.18%
Net interest margin 3.34% 3.30% 3.29% 3.48% 4.31%
           
Capital          
Total equity to total assets 4.65% 5.65% 5.65% 5.74% 5.30%
Tangible equity to total assets 4.60% 5.59% 5.59% 5.67% 5.24%
Book value per share  4.67  4.77  4.74  4.74  4.78
Tangible book value per share  4.63  4.72  4.69  4.69  4.72
Common shares outstanding  2,788,302  2,788,302  2,775,802  2,775,802  2,778,677
           
Average Balances          
Loans  176,161  173,536  170,969  181,373  154,799
Securities  39,747  30,156  27,509  16,922  17,904
Earning assets  226,968  218,707  227,110  247,283  207,299
Total assets  241,660  231,435  235,067  254,765  213,728
Interest bearing deposits  193,946  184,920  188,526  208,433  170,621
Total deposits  215,721  206,981  210,395  228,571  189,147
FHLB borrowings  10,111  10,000  10,000  10,000  10,000
Interest bearing liabilities  204,057  194,920  198,526  218,433  180,621
Total equity  13,332  13,266  13,027  13,254  14,006
Tangible equity  13,196  13,123  12,875  13,093  13,836
           
Asset Quality          
Net charge-offs  5  (65)  22  28  661
Net charge-off rate 0.01% -0.15% 0.05% 0.06% 1.71%
Non-performing loans  3,225  3,934  4,054  3,980  4,490
Non-performing assets  4,768  5,479  5,599  5,748  6,258
Allowance for loan losses  1,504  1,489  1,517  1,562  1,583
Non-performing loans as a % of total loans held for investment 1.57% 2.26% 2.35% 2.36% 2.97%
Non-performing assets as a % of total assets 1.70% 2.33% 2.40% 2.50% 2.50%
Allowance for loan losses as a % of total loans held for investment 0.73% 0.86% 0.88% 0.93% 1.05%
Allowance for loan losses as a % of non-performing loans 46.64% 37.85% 37.42% 39.25% 35.26%
           
Cordia Bancorp          
GAAP to Non-GAAP Reconciliations (unaudited)          
           
The table below show the computations of tangible equity and tangible assets and certain related ratios, all of which are considered to be non-GAAP financial measures. The tangible equity to tangible assets ratio has become a focus of some investors and management believes this ratio may assist in analyzing the Corporation's capital position, absent the effects of intangible assets. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation, or as substitute for analysis of results reported under GAAP. Because not all companies use identical calculations, the non-GAAP measures presented in the following table may not be comparable to those reported by other companies.
           
           
   
  As of and for the Three Months Ended
  March 31,  Dec. 31, Sept. 30, June 30, March 31, 
(Dollars in thousands, except per share data) 2014 2013 2013 2013 2013
Tangible Equity and Tangible Assets (Period End)        
Total shareholders' equity (GAAP)  $ 13,026  $ 13,287  $ 13,167  $ 13,164  $ 13,273
Less: intangible assets  130  139  148  157  166
Tangible Equity (non-GAAP)  $ 12,896  $ 13,148  $ 13,019  $ 13,007  $ 13,107
           
Total assets (GAAP)  $ 280,256  $ 235,148  $ 232,972  $ 229,520  $ 250,367
Less: intangible assets  130  139  148  157  166
Tangible assets (non-GAAP)  $ 280,126  $ 235,009  $ 232,824  $ 229,363  $ 250,201
           
Total equity to total assets (GAAP) 4.65% 5.65% 5.65% 5.74% 5.30%
Book value per share (GAAP)  $ 4.67  $ 4.77  $ 4.74  $ 4.74  $ 4.78
Tangible equity to tangible assets (non-GAAP) 4.60% 5.59% 5.59% 5.67% 5.24%
Tangible book value per share (non-GAAP)  $ 4.63  $ 4.72  $ 4.69  $ 4.69  $ 4.72
           
           
Tangible Equity and Tangible Assets (Average)          
Total shareholders' equity (GAAP)  13,332  13,266  13,027  13,254  14,006
Less: intangible assets  136  144  153  162  171
Tangible Equity (non-GAAP)  $ 13,196  $ 13,123  $ 12,875  $ 13,093  $ 13,836
           
Total assets (GAAP)  241,660  231,435  235,067  254,765  213,728
Less: intangible assets  136  144  153  162  171
Tangible assets (non-GAAP)  $ 241,524  $ 231,292  $ 234,915  $ 254,604  $ 213,558
           
Total equity to total assets (GAAP) 5.52% 5.73% 5.54% 5.20% 6.55%
Book value per share (GAAP)  $ 4.78  $ 4.76  $ 4.69  $ 4.77  $ 5.04
Tangible equity to tangible assets (non-GAAP) 5.46% 5.67% 5.48% 5.14% 6.48%
Tangible book value per share (non-GAAP)  $ 4.73  $ 4.71  $ 4.64  $ 4.72  $ 4.98
CONTACT: Jack Zoeller, CEO         Cordia Bancorp Inc.         804-763-1301

Cordia Bancorp

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