Source: Cordia Bancorp

Cordia Bancorp Inc. Reports 2013 Earnings

Foundation Completed for Bank of Virginia Growth in 2014

MIDLOTHIAN, Va., March 5, 2014 (GLOBE NEWSWIRE) -- Cordia Bancorp Inc. (the "Company") (Nasdaq:BVA), parent company of Bank of Virginia (the "Bank"), reported net income of $696 thousand or $0.27 per share for the year ended December 31, 2013, compared to a net loss of $544 thousand or ($0.32) per share for the year ended December 31, 2012.

2013 Highlights

  • Completion of merger of Cordia Bancorp and Bank of Virginia in March 2013.
  • Four quarters of profitability in 2013 - after losses in four previous years.
  • Double digit increase in assets for second consecutive year.
  • 82% reduction in substandard loans in past nine quarters.
  • Highest % increase in deposits among 47 financial institutions headquartered in the greater Richmond Virginia MSA in 2013 – an increase of 37% from 2012 to 2013.
  • A decrease in cost of funds from 1.45% in 2012 to 0.84% in 2013.
  • Lifting of our Written Agreement with regulators in August 2013.
  • Availability for future recovery of $6.0 million of deferred tax asset value.

Chief Executive Officer Jack Zoeller stated, "2013 was a game-changing year for Cordia and Bank of Virginia. We took some first steps forward in our growth strategy, after several years of rebuilding the bank's credit portfolio, culture and management. As we enter 2014, we are poised for a significant new phase of growth."

Mr. Zoeller added, "We are grateful to our shareholders, customers and employees for their substantial support these past few years. Our board and management remain stable and committed to achieving our shared goals."

Financial Highlights

  • Asset Growth. Total assets were $235.1 million at December 31, 2013, compared to $178.7 million at December 31, 2012. Total loans held for investment increased 54%, to $174.0 million at December 31, 2013, from $113.1 million at December 31, 2012. During 2013 the Company originated $61.4 million of new and renewed loans and also purchased $59.7 million of student loans that are approximately 98% guaranteed by the U.S. Department of Education.
     
  • Deposit Growth and Mix. Total deposits increased to $210.8 million at December 31, 2013, compared to $154.4 million at December 31, 2012. The Company continued to shift its retail deposit mix away from time deposits into transaction accounts. Total checking, money market and savings accounts increased 42%, to $83.5 million at December 31, 2013, from $58.9 million at December 31, 2012. 
     
  • Net Interest Income. Net interest income after provision for loan losses was $8.0 million for the year ended December 31, 2013 compared to $6.3 million for the year ended December 31, 2012.
     
  • Asset Quality. Asset quality continued to improve, with total non-performing assets, net of accruing troubled debt restructurings, decreasing to $5.5 million, or 2.3% of assets, at December 31, 2013, from $7.2 million, or 4.1% of assets, at December 31, 2012. At year-end 2013, the Company had reserve equivalents (including the credit mark on purchased loans) totaling 1.40% of total outstanding loans, excluding guaranteed student loans.   There were no delinquencies on the Company's accruing originated loan portfolio at December 31, 2013. 
     
  • Tangible Book Value. Tangible book value per share increased to $4.74 at December 31, 2013, from $4.15 at December 31, 2012, due primarily to the March 29, 2013 share exchange between the Company and the Bank.
     
  • Deferred Tax Asset. As of December 31, 2013, the Company had net deferred tax assets that were fully offset by a valuation allowance (netting to zero on the balance sheet). Of the total such assets, $6.0 million will be fully recovered on the balance sheet, if it is determined that realization of the full deferred tax asset is more-likely-than-not.

Operating Results

Net interest income after the provision for loan losses was $8.0 million for the year ended December 31, 2013, compared to $6.3 million for the year ended December 31, 2012. The increase in net interest income for the year ended December 31, 2013 as compared to the year ended December 31, 2012 was primarily the result of an increase in average earning assets of $57.8 million.

Net interest margin was 3.64% and 4.20% for the years ended December 31, 2013 and 2012, respectively. The decrease in net interest margin was primarily the result of a decrease in the yield on loans held for investment caused by the addition of the guaranteed student loan portfolio to the balance sheet in the first quarter of 2013 and the Company's held-for-sale residential mortgage program that was terminated in the second quarter of 2013. In addition, the cost of deposits decreased to 0.79% from 1.02% for the years ended December 31, 2013 and 2012, respectively, primarily through shifting the retail deposit mix away from time deposits into transaction accounts as well as lower cost time deposits. The Company balance sheet is in an asset sensitive position as of December 31, 2013. 

Noninterest income decreased slightly from $338 thousand for the year ended December 31, 2012, compared to $336 thousand for the year ended December 31, 2013.

Noninterest expense increased from $7.4 million for the year ended December 31, 2012 to $7.7 million for the year ended December 31, 2013.  This increase was primarily due to the hiring of two new senior officers as well as loan administrative fees relating to the Bank's new guaranteed student loan program.

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 Bank does not undertake to update forward-looking statements contained within this news release.

Cordia Bancorp          
Consolidated Balance Sheets (unaudited)          
           
(Dollars in thousands, except per share data) Dec. 31,
2013		 Sept. 30,
2013		 June 30,
2013		 March 30,
2013		 Dec. 31,
2012
Assets          
Cash and due from banks  $ 5,290  $ 6,893  $ 3,756  $ 5,340  $ 4,234
Fed funds sold and Interest-bearing deposits   8,694  15,889  27,766  9,201  7,747
Total cash and cash equivalents  13,984  22,782  31,522  14,541  11,981
Securities available for sale, at fair value  24,567  29,807  22,105  17,182  18,511
Securities held to maturity  14,753  --  --  --  --
Restricted securities  1,074  1,071  1,134  1,124  1,156
           
Loans held for investment:          
Commercial real estate  82,602  85,962  80,289  78,405  73,630
Commercial and industrial  21,208  20,388  21,273  23,384  23,488
Guaranteed student loans  55,427  51,293  52,957  34,696  --
Consumer and other  14,770  15,146  13,960  14,712  15,952
Total loans held for investment  174,007  172,789  168,479  151,197  113,070
Less: Allowance for loan losses  (1,489)  (1,517)  (1,562)  (1,583)  (2,110)
Net loans held for investment  172,518  171,272  166,917  149,614  110,960
           
Loans held for sale  --  --  --  59,761  28,949
Premises and equipment, net  4,464  4,512  4,287  4,327  4,392
Accrued interest receivable  1,655  1,335  1,132  1,097  419
Other real estate owned, net of valuation allowance  1,545  1,545  1,768  1,768  1,768
Other assets  588  648  655  953  560
Total assets  $ 235,148  $ 232,972  $ 229,520  $ 250,367  $ 178,696
           
Liabilities and stockholders' equity          
Non-interest bearing deposits  22,845  21,719  21,338  20,786  19,498
Savings and interest bearing demand deposits  60,685  59,546  49,493  80,665  39,393
Time deposits, $100,000 and greater  76,231  75,023  79,795  70,080  41,395
Other time deposits  51,053  52,620  54,732  54,202  54,142
Total deposits  210,814  208,908  205,358  225,733  154,428
           
Accrued expenses and other liabilities  1,047  897  998  1,361  1,129
FHLB borrowings  10,000  10,000  10,000  10,000  10,000
Total Liabilities  221,861  219,805  216,356  237,094  165,557
           
Preferred stock          
Common stock  28  28  28  28  21
Additional paid-in-capital  18,648  18,606  18,579  18,689  14,428
Retained deficit  (5,005)  (5,011)  (5,219)  (5,479)  (5,701)
Accumulated other comprehensive income  (384)  (456)  (224)  35  56
Non-controlling interest  --  --  --  --  4,335
Total stockholders' equity  13,287  13,167  13,164  13,273  13,139
Total liabilities and stockholders' equity  $ 235,148  $ 232,972  $ 229,520  $ 250,367  $ 178,696
               
Cordia Bancorp              
Consolidated Statements of Income (unaudited)              
               
  Three Months Ended Twelve Months Ended
  Dec. 31, Sept. 30, June 30, March 31, Dec. 31, December 31,
(Dollars in thousands, except per share data) 2013 2013 2013 2013 2012 2013 2012
Interest Income              
Interest and fees on loans  $ 2,089  $ 2,182  $ 2,516  $ 2,579  $ 2,112  $ 9,366  $ 7,784
Investment securities  161  123  72  70  362  426  587
Interest on federal funds sold and deposits with banks  10  19  29  15  21  73  70
Total interest income  2,260  2,324  2,617  2,664  2,495  9,865  8,441
               
Interest Expense              
Interest on deposits  412  415  426  391  381  1,644  1,529
Interest on FHLB Borrowings  40  42  41  41  5  164  23
Total interest expense  452  457  467  432  386  1,808  1,552
               
Net interest income  1,808  1,867  2,150  2,232  2,109  8,057  6,889
Provision for (benefit from) loan losses  (92)  (23)  7  127  383  19  588
Net interest income after provision for loan losses  1,900  1,890  2,143  2,105  1,726  8,038  6,301
               
Non-interest income              
Service charges on deposit accounts  40  31  29  32  33  132  134
Net gain on sale of available for sale securities  --  --  --  --  (72)  --  (30)
Other fee income  46  51  36  35  40  168  148
Total non-interest income  86  82  65  67  1  300  252
               
Non-interest expense              
Salaries and employee benefits 1,066 991 974 1,185 943 4,216 3,536
Professional services  161  67  211  62  204  501  521
Occupancy  138  137  145  145  167  565  664
Data processing and communications  139  140  144  125  149  548  518
FDIC assessment and bank fees  111  116  114  120  129  461  511
Loan expenses including OREO  92  86  114  31  67  323  235
Gain on sale of OREO  --  (36)  --  --  (86)  (36)  (86)
Supplies and equipment  75  66  64  69  85  274  363
Insurance  40  42  42  42  27  166  114
Directors fees  32  34  38  34  93  138  150
Marketing and business development  32  19  15  22  17  88  57
Other   95  102  86  115  212  398  696
Total non-interest expense  1,981  1,764  1,947  1,950  2,007  7,642  7,279
               
Consolidated net income (loss) before non-controlling interest  5  208  261  222  (280)  696  (726)
Less: Non-controlling interest in net income  --  --  --  --  (161)  --  (182)
Net income (loss)  5  208  261  222  (119)  696  (544)
           --    
Earnings per share, basic and diluted  $ --   $ 0.07  $ 0.09  $ 0.08  $ (0.05)  $ 0.27  $ (0.32)
Weighted average shares outstanding, basic and diluted  2,773,320  2,775,802  2,775,802  2,778,677  2,380,000  2,602,357  1,705,112
               
Cordia Bancorp              
Consolidated Financial Highlights (unaudited) As of and for the 
  Three Months Ended Twelve Months Ended
  Dec. 31, Sept. 30, June 30, March 31, Dec. 31, December 31,
(Dollars in thousands, except per share data) 2013 2013 2013 2013 2012 2013 2012
Results of Operations              
Interest income  $ 2,260  $ 2,324  $ 2,617  $ 2,664  $ 2,495  $ 9,865  $ 8,441
Interest expense  452  457  467  432  386  1,808  1,552
Net interest income  1,808  1,867  2,150  2,232  2,109  8,057  6,889
Provision (benefit) for loan losses  (92)  (23)  7  127  383  19  588
Net interest income after provision for loan losses  1,900  1,890  2,143  2,105  1,726  8,038  6,301
Non-interest income  86  82  65  67  1  300  252
Non-interest expense  1,981  1,764  1,947  1,950  2,007  7,642  7,279
Net income  $ 5  $ 208  $ 261  $ 222  $ (119)  $ 696  $ (544)
               
Earnings per share, basics and diluted  $ --   $ 0.07  $ 0.09  $ 0.08  $ (0.05)  $ 0.27  $ (0.32)
Weighted average shares outstanding, basic and diluted  2,773,320  2,775,802  2,775,802  2,778,677  2,380,000  2,602,357  1,705,112
               
Performance Ratios              
Return on average assets 0.01% 0.35% 0.41% 0.42% -0.28% 0.30% -0.33%
Return on average equity 0.15% 6.39% 7.88% 6.34% -3.13% 5.12% -4.34%
Return on average tangible equity 0.15% 6.46% 7.97% 6.42% -3.17% 5.18% -4.41%
Efficiency ratio 104.59% 90.51% 87.90% 84.82% 95.12% 91.44% 101.93%
               
Yields and Rates              
Yield on loans 4.82% 5.11% 5.55% 6.66% 7.27% 5.50% 6.88%
Yield on securities 2.14% 1.79% 1.70% 1.56% 8.68% 1.84% 3.22%
Yield on interest earning assets 4.13% 4.09% 4.23% 5.14% 6.21% 4.45% 5.15%
Cost of interest bearing deposits 0.89% 0.88% 0.82% 0.92% 1.12% 0.87% 1.15%
Cost of total deposits 0.80% 0.79% 0.75% 0.83% 0.99% 0.79% 1.02%
Cost of borrowings 1.60% 1.68% 1.64% 1.64% 1.53% 1.64% 0.71%
Cost of interest bearing liabilities 0.93% 0.92% 0.86% 0.96% 1.12% 0.91% 1.14%
Interest rate spread 3.21% 3.17% 3.38% 4.18% 5.10% 3.54% 4.01%
Net interest margin 3.30% 3.29% 3.48% 4.31% 5.25% 3.64% 4.20%
               
Capital              
Total equity to total assets 5.65% 5.65% 5.74% 5.30% 7.35% 5.65% 7.35%
Tangible equity to total assets 5.59% 5.59% 5.67% 5.24% 7.26% 5.59% 7.26%
Book value per share  4.79  4.74  4.74  4.78  4.24  4.79  4.24
Tangible book value per share  4.74  4.69  4.69  4.72  4.15  4.74  4.15
Common shares outstanding  2,776,602  2,775,802  2,775,802  2,778,677  2,077,605  2,776,602  2,077,605
               
Average Balances              
Loans  173,536  170,969  181,373  154,799  116,125  170,200  113,101
Securities  30,156  27,509  16,922  17,904  16,682  23,159  18,250
Earning assets  218,707  227,110  247,283  207,299  160,591  221,448  163,854
Total assets  231,435  235,067  254,765  213,728  171,508  233,140  166,577
Interest bearing deposits  184,920  188,526  208,433  170,621  136,629  188,206  132,846
Total deposits  206,981  210,395  228,571  189,147  154,478  208,868  149,872
FHLB borrowings  10,000  10,000  10,000  10,000  1,304  10,000  3,251
Interest bearing liabilities  194,920  198,526  218,433  180,621  137,933  198,206  136,097
Total equity  13,266  13,027  13,254  14,006  15,213  13,591  12,528
Tangible equity  13,123  12,875  13,093  13,836  15,034  13,434  12,335
               
Asset Quality              
Net charge-offs  (65)  22  28  661  748  646  763
Net charge-off rate -0.15% 0.05% 0.06% 1.71% 0.64% 0.38% 0.67%
Non-performing loans  3,934  4,054  3,980  4,490  5,471  3,934  5,471
Non-performing assets  5,479  5,599  5,748  6,258  7,239  5,479  7,239
Allowance for loan losses  1,489  1,517  1,562  1,583  2,110  1,489  2,110
Non-performing loans as a % of total loans held for investment 2.26% 2.35% 2.36% 2.97% 4.84% 2.26% 4.84%
Non-performing assets as a % of total assets 2.33% 2.40% 2.50% 2.50% 4.05% 2.33% 4.05%
Allowance for loan losses as a % of total loans held for investment 0.86% 0.88% 0.93% 1.05% 1.87% 0.86% 1.87%
Allowance for loan losses as a % of non-performing loans 37.85% 37.42% 39.25% 35.26% 38.57% 37.85% 38.57%
               
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 quit 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 Twelve Months Ended
  Dec. 31, Sept. 30, June 30, March 31,  Dec. 31, December 31,
(Dollars in thousands, except per share data) 2013 2013 2013 2013 2012 2013 2012
Tangible Equity and Tangible Assets (Period End)              
Total shareholders' equity (GAAP)  $ 13,287  $ 13,167  $ 13,164  $ 13,273  $ 13,139  $ 13,287  $ 13,139
Less: intangible assets  139  148  157  166  175  139  175
Tangible Equity (non-GAAP)  $ 13,148  $ 13,019  $ 13,007  $ 13,107  $ 12,964  $ 13,148  $ 12,964
               
Total assets (GAAP)  $ 235,148  $ 232,972  $ 229,520  $ 250,367  $ 178,696  $ 235,148  $ 178,696
Less: intangible assets  139  148  157  166  175  139  175
Tangible assets (non-GAAP)  $ 235,009  $ 232,824  $ 229,363  $ 250,201  $ 178,521  $ 235,009  $ 178,521
               
Total equity to total assets (GAAP) 5.65% 5.65% 5.74% 5.30% 7.35% 5.65% 7.35%
Book value per share (GAAP)  $ 4.79  $ 4.74  $ 4.74  $ 4.78  $ 4.24  $ 4.79  $ 4.24
Tangible equity to tangible assets (non-GAAP) 5.59% 5.59% 5.67% 5.24% 7.26% 5.59% 7.26%
Tangible book value per share (non-GAAP)  $ 4.74  $ 4.69  $ 4.69  $ 4.72  $ 4.15  $ 4.74  $ 4.15
               
               
Tangible Equity and Tangible Assets (Average)              
Total shareholders' equity (GAAP)  13,266  13,027  13,254  14,006  15,213  13,591  12,528
Less: intangible assets  144  153  162  171  180  157  193
Tangible Equity (non-GAAP)  $ 13,123  $ 12,875  $ 13,093  $ 13,836  $ 15,034  $ 13,434  $ 12,335
               
Total assets (GAAP)  231,435  235,067  254,765  213,728  171,508  233,140  166,577
Less: intangible assets  144  153  162  171  180  157  193
Tangible assets (non-GAAP)  $ 231,292  $ 234,915  $ 254,604  $ 213,558  $ 171,329  $ 232,983  $ 166,384
               
Total equity to total assets (GAAP) 5.73% 5.54% 5.20% 6.55% 8.87% 5.83% 7.52%
Book value per share (GAAP)  $ 4.78  $ 4.69  $ 4.77  $ 5.04  $ 5.20  $ 4.89  $ 3.90
Tangible equity to tangible assets (non-GAAP) 5.67% 5.48% 5.14% 6.48% 8.77% 5.77% 7.41%
Tangible book value per share (non-GAAP)  $ 4.73  $ 4.64  $ 4.72  $ 4.98  $ 5.11  $ 4.84  $ 3.81