GLOUCESTER, Va., May 12, 2014 (GLOBE NEWSWIRE) -- Colonial Virginia Bank (OTCBB:CNVB) ("the Bank"), today reported net income of $73,529 after taxes, or $0.12 per share, for the quarter ended March 31, 2014, compared to net income of $164,506, or $0.27 per share assuming dilution, for the same period in 2013. As announced March 21, 2014, the Bank entered into a definitive merger agreement on March 20, 2014 with Xenith Bankshares (XBKS), Richmond, VA, whereby the Bank will be merged with and into Xenith Bank, wholly owned subsidiary of Xenith Bankshares. A major factor in the reduction in the Bank's net income was attributable to merger related expenses, totaling $137,259 in the current quarter, compared to $0 for the quarter ended March 31, 2013. Absent the extraordinary merger related costs, net income for the quarter would have totaled approximately $164,120 or $0.27 per share for the current quarter, substantially level to the same period in 2013. Return on average assets ("ROAA") was 0.30% for the current quarter compared to 0.59% for March 31, 2013. Earnings performance from core operations, exclusive of the recent merger related expenses, has continued to reflect stability in recent quarters, an improvement over several quarters of volatile effects from the economic debacle of the past few years.

The Bank relies primarily on net interest income (interest income on loans and investments minus interest expense on deposits and borrowings) for its overall net income. Net interest income for the quarter-ended March 31, 2014 totaled $1,078,499, down marginally compared to $1,102,690 for the same period in 2013. The decline was associated with the shrinkage of average earning assets, as well as declining yields in the bond market negatively affecting the Bank's investment portfolio. The average net interest margin for the quarter was 4.36%, improved slightly from 4.33% for the same period a year ago.

Non-interest income for the three months ended March 31, 2014 totaled $99,406 which compares to $106,217 for the first quarter of 2013. Total non-interest expense for the quarter 2014 was $1,057,676 which compares to $941,301 for the first quarter of 2013. Loan loss provision expense totaled $35,000 for the current quarter 2014, equal to the $35,000 in the same period of 2013. The allowance for loan and lease loss ("ALLL"), as a percentage of gross loans at quarter end, was 2.17%, compared to 2.59% a year ago. The decline was attributable to the charge off of loans for which impairment exposure had been identified in prior periods. Therefore, the ALLL continues to be considered adequate to cover embedded loss risk in the loan portfolio. The ratio of non-performing assets to total assets of 3.66% is appreciably lower than the ratio of 4.63% level at March 31, 2013. First quarter provisions for federal income taxes totaled $11,700 compared $68,100 in the first quarter of last year. 

Total assets as of March 31, 2014 were $120.1 million, representing growth of 1.9% over March 31, 2013. The securities portfolio increased 12.8% from March 31, 2013 to $19.4 million. Gross loans as of March 31, 2014 decreased 2.4% from a year ago to $75.2 million. Total deposits of $104.5 million demonstrate growth of 5.1% for the quarter and 1.9% from March 31, 2013. Federal Home Loan Bank advances were stable at $1.5 million throughout the previous year. Total capital at March 31, 2014 increased 2.6% from March 31, 2013 to $12.3 million.    

Bob Bailey, President and CEO, stated, "Despite unusual, one-time expenses related to the proposed merger, we are proud to post another quarterly profit. We are pleased that loan production has improved and all indications are that it should continue on this path as we increase our lending limits when we join Xenith. Our focus is on the pending merger and ensuring a smooth, seamless transition for our customers. The addition of new products and enhancements to be offered as a result of the merger with Xenith is exciting."

The Bank operates two full service retail bank offices in Gloucester County, Virginia and a Loan Production Office ("LPO") in York County. The Bank is engaged in a referral relationship with Lions Bridge Financial to accommodate Bank investment clients. The Lions Bridge relationship involves no ownership by the Bank.

The Bank's stock is listed for trading on the Over the Counter Bulletin Board (OTCBB) under the symbol CNVB. The bank's primary market maker is Davenport & Company LLC, Richmond, VA.

Additional information regarding the bank's products and services, as well as access to its regulatory filings, are available on the bank's web site at

Use of Certain Non-GAAP Financial Measures. In addition to results presented in accordance with United States generally accepted accounting principles (GAAP), this earnings release includes certain non-GAAP financial measures, which are reconciled to their equivalent GAAP financial measures below. Management believes these non-GAAP financial measures provide information useful to investors in understanding the corporation's performance trends and facilitate comparisons with its peers.

Although the corporation's management believes the non-GAAP financial measures presented in this earnings release enhance investors' understandings of its performance, these non-GAAP financial measures should not be considered an alternative to GAAP-basis financial statements.

Forward-Looking Statements. The statements contained in this press release that are not historical facts may constitute "forward-looking statements" as defined by the federal securities laws. These statements may address issues that involve estimates and assumptions made by Management; risks and uncertainties, and actual results could differ materially from historical results or those anticipated by such statements. Factors that could have a material adverse effect on the operations and future prospects of the corporation include, but are not limited to, changes in: (1) interest rates, (2) general economic conditions, (3) demand for loan products, (4) the legislative/regulatory climate, (5) monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, (6) the quality or composition of the loan or investment portfolios, (7) deposit flows, (8) competition, (9) demand for financial services in the Bank's market area, (10) technology, (11) reliance on third parties for key services, and (12) accounting principles, policies and guidelines. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and readers are cautioned not to place undue reliance on such statements, which speak only as of their dates.

Balance Sheet ($)     Y-Y   Q-Q
  2014 Q1 2013 Q1 Ch (%) 2013 Q4 Ch (%)
Loans Held for Investment, before Reserves 75,221,813 77,105,184 (2.44) 72,985,833 3.06
Loan Loss Reserve 1,635,488 2,002,226 (18.32) 1,604,150 1.95
Net Loans Receivable  73,586,325 75,102,959 (2.02) 71,381,683 3.09
Total Assets 120,135,593 117,857,701 1.93 114,920,865 4.54
Deposits 104,535,211 102,586,670 1.90 99,474,979 5.09
Common Equity 12,288,705 11,975,031 2.62 12,129,825 1.31
Total Shareholders' Equity 12,288,705 11,975,031 2.62 12,129,825 1.31
Shares Outstanding (actual) 610,175 610,175 0.00 610,175 0.00
Income Statement ($)     Y-Y   Q-Q
  2014 Q1 2013 Q1 Ch (%) 2013 Q4 Ch (%)
Net Interest Income 1,078,499 1,102,690 (2.19) 1,129,885 (4.55)
Provision for Loan Losses 35,000 35,000 0.00 30,000 16.67
Noninterest Income 99,406 106,217 (6.41) 119,552 (16.85)
Noninterest Expense 1,057,676 941,301 12.36 1,006,020 5.13
Net Income Before Taxes 85,229 232,606 (63.36) 213,417 (60.06)
Income Tax Provision 11,700 68,100 (82.82) 60,457 (80.65)
Net Income 73,529 164,506 (55.30) 152,960 (51.93)
Per Share Items ($)     Y-Y   Q-Q
  2014 Q1 2013 Q1 Ch (%) 2013 Q4 Ch (%)
Book Value Per Share 20.14 19.63 2.62 19.88 1.31
Diluted Earnings Per Share 0.12 0.27 (55.56) 0.25 (52.00)
Dividends Declared 0.00 0.00 -- 0.00 --
Performance Ratios (%)*     Y-Y   Q-Q
  2014 Q1 2013 Q1 Ch (bp) 2013 Q4 Ch (bp)
ROAA 0.30 0.59 (29) 0.55 (25)
ROAE 2.82 5.79 (297) 5.44 (262)
Net Interest Margin 4.36 4.33 3 4.47 (11)
Loans / Deposits 71.96 75.16 (320) 73.37 (141)
Efficiency Ratio 87.21 72.66 1,455 78.08 913
Balance Sheet Ratios (%)     Y-Y   Q-Q
  2014 Q1 2013 Q1 Ch (bp) 2013 Q4 Ch (bp)
Equity / Assets 10.23 10.16 7 10.55 (32)
Asset Quality Ratios (%)     Y-Y   Q-Q
  2014 Q1 2013 Q1 Ch (bp) 2013 Q4 Ch (bp)
Nonperforming Assets / Assets 3.66 4.63 (97) 3.49 17
Loan Loss Reserves / Gross Loans 2.17 2.59 (42) 2.19 (2)
Loan Loss Reserves / Nonperforming Loans 49.13 60.60 (1,147) 53.54 (441)
Net Charge-offs / Avg Loans 0.02 0.58 (56) 0.50 (48)
Regulatory Capital Ratios (%)     Y-Y   Q-Q
  2014 Q1 2013 Q1 Ch (bp) 2013 Q4 Ch (bp)
Tier 1 Capital Ratio 14.67 14.22 45 15.39 (72)
*Performance Ratios are calculated on a fully taxable equivalent basis assuming a federal tax rate of 34%.
Kenneth E. Smith
Executive Vice President
& CFO of Colonial Virginia Bank