Cordia Bancorp Inc. Reports Third Quarter Profit

Bank of Virginia Adds Two Richmond Branches and Four Loan Officers

| Source: Cordia Bancorp Cordia Bancorp

MIDLOTHIAN, Va., Nov. 6, 2014 (GLOBE NEWSWIRE) -- Cordia Bancorp Inc. ("Cordia") (Nasdaq:BVA), parent company of Bank of Virginia, reported net income of $82,000 or $0.01 per share for the third quarter of 2014, compared to net income of $208,000 or $0.07 per share for the third quarter of 2013. For the first nine months of 2014, the net loss was $472,000 or $(0.12) per share compared to net income of $690,000 or $0.27 per share for the same period of 2013.

Highlights for the first nine months of 2014

  • $15.4 million capital raise
  • Issuance of 3,629,871 voting and nonvoting common shares
  • Two new retail bank branches serving Chesterfield County, the largest county in the Richmond area
  • Five new officers in commercial, residential and student lending
  • Launch of new consumer loan program to refinance college debt
  • 28% growth in total assets
  • 20% growth in deposits
  • 26% increase in employees
  • 17% growth in loans
  • Net interest income increased $950,000, or 19.2%, net of purchase accounting adjustment
  • Nonperforming assets decreased to 0.95% of total assets

Chief Executive Officer Jack Zoeller stated, "Since we raised $15.4 million in capital, we have continued to build our infrastructure to significantly grow the company and improve future earnings. Already in 2014 we have increased our assets by 28%, or $65.7 million. In the 3rd quarter we were excited to recruit four seasoned loan officers whose impact will be felt in the upcoming quarters. We believe we are on course in utilizing our new capital to support sustainable organic growth and profitability in 2015 and beyond."

Balance Sheet Activity

  • Asset Growth. Total assets were $300.8 million at September 30, 2014, compared to $235.1 million at December 31, 2013. During the first nine months of 2014 organic loans increased a net $18.3 million while student loans, 98% guaranteed by the U.S. Department of Education, increased a net $12.0 million. In addition, investment securities increased $37.0 million.
     
  • Deposit Growth and Mix. Total deposits increased 20% to $252.9 million at September 30, 2014, compared to $210.8 million at December 31, 2013.  Non-interest bearing deposits increased 7% while interest bearing deposits increased over 21% during the nine months ended September 30, 2014. 
     
  • Asset Quality. Asset quality continued to improve, with non-performing assets decreasing to $2.9 million, or 0.95% of total assets, at September 30, 2014, from $5.5 million, or 2.33% of total assets, at December 31, 2013.
     
  • Tangible Book Value. Tangible book value per share was $4.13 at September 30, 2014.  

Operating Results

Three months ended September 30, 2014 compared to the three months ended September 30, 2013

  • The net income for the quarter ended September 30, 2014 was $82,000 compared to net income of $208,000 for the prior year third quarter. 
     
  • Net interest income was $2.1 million for the third quarter of 2014, compared to $1.87 million for the third quarter of 2013. 
     
  • Net interest income, net of purchase accounting adjustments, increased $358,000, or 20.8%.
     
  • Net interest margin was 3.01% and 3.26% for the third quarter of 2014 and 2013, respectively. Adjusting for the impact of purchase accounting, net interest margin was 2.95% compared to 3.03% for the 2013 period. 
     
  • The provision for loan losses was a recovery of $106,000 in the third quarter of 2014 compared to a $23,000 recovery in the prior year quarter.
     
  • Noninterest expense increased to $2.2 million for the third quarter of 2014, compared to $1.8 million for the third quarter of 2013. The increase in noninterest expense was primarily due to staff additions and increased student loan servicing expenses.

Nine months ended September 30, 2014 compared to the nine months ended September 30, 2013

  • The net loss for the first nine months of 2014 was $472,000 compared to net income of $690,000 for the first nine months of 2013. 
     
  • Net interest income was $6.10 million for the 2014 period, compared to $6.25 million for the 2013 period. 
     
  • Net interest income, net of purchase accounting adjustments, increased $950,000, or 19.2%.
     
  • Net interest margin for the 2014 period was 3.13% compared to 3.67% for the 2013 period. Adjusting for the impact of purchase accounting, net interest margin was 3.02% compared to 2.89% for the 2013 period. 
     
  • Noninterest income was $267,000 for the 2014 period, compared to $215,000 for the 2013 period.
     
  • Noninterest expense increased to $6.7 million for the 2014 period, compared to $5.7 million for the 2014 period. The increase in noninterest expense was primarily due to incentive compensation, staff additions and an increase in student loan servicing volume.

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 six full-service 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, www.bankofva.com and www.cordiagrad.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)      
           
(Dollars in thousands, except per share data) Sept. 30,
2014		 June 30,
2014		 March 31,
2014		 Dec. 31,
2013		 Sept. 30,
2013
Assets          
Cash and due from banks  $ 5,789  $ 5,332  $ 10,499  $ 5,290  $ 6,893
Fed funds sold and Interest-bearing deposits   6,131  9,843  16,839  8,694  15,889
Total cash and cash equivalents  11,920  15,175  27,338  13,984  22,782
Securities available for sale, at fair value  54,581  45,835  24,464  24,567  29,807
Securities held to maturity  21,263  21,839  14,500  14,753  --
Restricted securities  1,525  1,525  1,529  1,074  1,071
           
Loans held for investment:        
Commercial real estate  92,300  90,909  85,084  82,602  85,962
Commercial and industrial  25,376  24,605  22,118  21,208  20,388
Guaranteed student loans  67,421  70,624  80,966  55,427  51,293
Consumer and other  19,221  18,147  16,914  14,770  15,146
Total loans held for investment  204,318  204,285  205,082  174,007  172,789
Less: Allowance for loan losses  (1,226)  (1,407)  (1,504)  (1,489)  (1,517)
Net loans held for investment  203,092  202,878  203,578  172,518  171,272
           
Loans held for sale  --  --  --  --  --
Premises and equipment, net  4,496  4,510  4,430  4,464  4,512
Accrued interest receivable  1,902  1,830  2,177  1,655  1,335
Other real estate owned, net of valuation allowance  1,543  1,543  1,543  1,545  1,545
Other assets  485  390  697  588  648
Total assets  $ 300,807  $ 295,525  $ 280,256  $ 235,148  $ 232,972
           
Liabilities and stockholders' equity        
Non-interest bearing deposits  24,483  24,883  21,642  22,845  21,719
Savings and interest bearing demand deposits  78,786  76,044  74,825  60,685  59,546
Time deposits, $100,000 and greater  100,446  93,565  87,559  76,231  75,023
Other time deposits  49,233  50,701  51,002  51,053  52,620
Total deposits  252,948  245,193  235,028  210,814  208,908
           
Accrued expenses and other liabilities  877  3,419  12,202  1,047  897
FHLB borrowings  20,000  20,000  20,000  10,000  10,000
Total liabilities  273,825  268,612  267,230  221,861  219,805
           
Preferred stock  --  --  --  --  --
Common stock - voting  50  50  28  28  28
Common stock - nonvoting  14  14  --  --  --
Additional paid-in-capital  32,896  32,848  18,672  18,648  18,606
Retained deficit  (5,477)  (5,559)  (5,289)  (5,005)  (5,011)
Accumulated other comprehensive income  (501)  (440)  (385)  (384)  (456)
Total stockholders' equity  26,982  26,913  13,026  13,287  13,167
Total liabilities and stockholders' equity  $ 300,807  $ 295,525  $ 280,256  $ 235,148  $ 232,972
               
Cordia Bancorp              
Consolidated Statements of Income (unaudited)            
               
  Three Months Ended Nine Months Ended
(Dollars in thousands, except per share data) Sept. 30,
2014		 June 30,
2014		 March 31,
2014		 Dec. 31,
2013		 Sept. 30,
2013		 September 30,
2014		 September 30,
2013
Interest Income              
Interest and fees on loans  $ 2,275  $ 2,252  $ 2,149  $ 2,089  $ 2,182  $ 6,676  $ 7,277
Investment securities  346  311  207  161  123  864  265
Interest on federal funds sold and deposits with banks  4  9  6  10  19  19  63
Total interest income  2,625  2,572  2,362  2,260  2,324  7,559  7,605
               
Interest Expense              
Interest on deposits  443  441  426  412  415  1,310  1,233
Interest on FHLB Borrowings  57  56  41  40  42  154  123
Total interest expense  500  497  467  452  457  1,464  1,356
               
Net interest income  2,125  2,075  1,895  1,808  1,867  6,095  6,249
Provision for (benefit from) loan losses  (106)  209  20  (92)  (23)  123  111
Net interest income after provision for loan losses  2,231  1,866  1,875  1,900  1,890  5,972  6,138
               
Non-interest income              
Service charges on deposit accounts  44  19  26  40  31  89  93
Net gain on sale of available for sale securities  (3)  --  64  --  --  61  --
Other fee income  41  43  33  46  51  117  122
Total non-interest income  82  62  123  86  82  267  215
               
Non-interest expense              
Salaries and employee benefits  1,266  1,150 1,406 1,066 991  3,822 3,150
Professional services  92  125  106  161  67  323  340
Occupancy  139  136  151  138  137  426  427
Data processing and communications  206  160  148  139  140  514  409
FDIC assessment and bank fees  99  96  94  97  102  289  336
Bank franchise taxes  23  27  29  14  14  79  60
Student loan servicing fees and other loan expenses  144  210  126  76  81  480  198
Other real estate expenses  6  17  5  16  5  28  33
Gain on sale of other real estate owned  --  --  --  --  (36)  --  (36)
Supplies and equipment  82  83  75  75  66  240  199
Insurance  40  44  41  40  42  125  126
Director's fees  24  27  16  32  34  67  106
Marketing and business development  15  9  6  32  19  30  56
Other operating expenses  95  114  79  95  102  288  259
Total non-interest expense  2,231  2,198  2,282  1,981  1,764  6,711  5,663
               
Consolidated net income (loss) before non-controlling interest  82  (270)  (284)  5  208  (472)  690
Net income (loss)  $ 82  $ (270)  $ (284)  $ 5  $ 208  $ (472)  $ 690
               
Earnings (loss) per share, basic and diluted  $ 0.01  $ (0.09)  $ (0.10)  $ --   $ 0.07  $ (0.12) $ 0.27
Weighted average shares outstanding, basic   6,420,107  3,017,772  2,776,992  2,773,320  2,768,484  4,084,960  2,544,744
Weighted average shares outstanding, diluted  6,504,106  3,017,772  2,776,992  2,788,302  2,777,840  4,122,217  2,557,115
               
Cordia Bancorp              
Consolidated Financial Highlights (unaudited)          
    As of and for the Three Months Ended Nine Months Ended     
(Dollars in thousands, except per share data) Sept. 30,
2014		 June 30,
2014		 March 31,
2014		 Dec. 31,
2013		 Sept. 30,
2013		 September 30,
2014		 September 30,
2013
Results of Operations              
Interest income  $ 2,625  $ 2,572  $ 2,362  $ 2,260  $ 2,324  $ 7,559  $ 7,605
Interest expense  500  497  467  452  457  1,464  1,356
Net interest income  2,125  2,075  1,895  1,808  1,867  6,095  6,249
Provision (benefit) for loan losses  (106)  209  20  (92)  (23)  123  111
Net interest income after provision for loan losses  2,231  1,866  1,875  1,900  1,890  5,972  6,138
Non-interest income  82  62  123  86  82  267  215
Non-interest expense  2,231  2,198  2,282  1,981  1,764  6,711  5,663
Net income  $ 82  $ (270)  $ (284)  $ 5  $ 208  $ (472)  $ 690
               
Earnings per share, basics and diluted  $ 0.01  $ (0.09)  $ (0.10)  $ --   $ 0.07  $ (0.12)  $ 0.27
Weighted average shares outstanding, basic   6,420,107  3,017,772  2,776,992  2,773,320  2,768,484  4,084,960  2,544,744
Weighted average shares outstanding, diluted  6,504,106  3,017,772  2,776,992  2,788,302  2,777,840  4,122,217  2,557,115
               
Performance Ratios              
Return on average assets 0.11% -0.38% -0.47% 0.01% 0.35% -0.23% 0.39%
Return on average equity 1.22% -4.20% -8.52% 0.15% 6.39% -2.86% 6.10%
Return on average tangible equity 1.22% -4.22% -8.61% 0.15% 6.46% -2.88% 6.17%
Efficiency ratio 101.09% 102.85% 113.08% 104.59% 90.51% 105.49% 87.61%
               
Yields and Rates              
Yield on loans 4.47% 4.39% 4.88% 4.82% 5.06% 4.58% 5.74%
Yield on securities 1.94% 2.27% 2.08% 2.14% 1.77% 2.09% 1.70%
Yield on interest earning assets 3.72% 3.77% 4.16% 4.13% 4.06% 3.88% 4.46%
Cost of interest bearing deposits 0.79% 0.82% 0.88% 0.89% 0.88% 0.83% 0.87%
Cost of total deposits 0.71% 0.74% 0.79% 0.80% 0.79% 0.75% 0.78%
Cost of borrowings 1.13% 1.12% 1.62% 1.60% 1.67% 1.23% 1.64%
Cost of interest bearing liabilities 0.81% 0.84% 0.92% 0.93% 0.92% 0.86% 0.91%
Interest rate spread 2.91% 2.93% 3.25% 3.21% 3.17% 3.02% 3.55%
Net interest margin 3.01% 3.05% 3.34% 3.30% 3.29% 3.13% 3.67%
               
Capital              
Total equity to total assets 8.97% 9.11% 4.65% 5.65% 5.65% 8.97% 5.65%
Tangible equity to total assets 8.94% 9.07% 4.60% 5.59% 5.59% 8.94% 5.59%
Book value per share  4.15  4.14  4.67  4.77  4.74  4.15  4.74
Tangible book value per share  4.13  4.12  4.63  4.72  4.69  4.13  4.69
Common shares outstanding  6,504,106  6,504,106  2,788,302  2,788,302  2,775,802  6,504,106  2,775,802
               
Average Balances              
Loans  $ 201,953  $ 205,104  $ 176,161  $ 173,536  $ 170,969  $ 194,990  $ 169,616
Securities  70,848  54,904  39,747  30,156  27,509  55,280  20,813
Earning assets  279,876  272,733  226,968  218,707  227,110  260,542  227,813
Total assets  295,834  286,525  241,660  231,435  235,067  274,871  235,131
Interest bearing deposits  223,927  215,856  193,946  184,920  188,526  211,352  189,313
Total deposits  248,087  238,416  215,721  206,981  210,395  234,187  209,503
FHLB borrowings  20,000  20,000  10,111  10,000  10,000  16,740  10,000
Interest bearing liabilities  243,927  235,856  204,057  194,920  198,526  228,092  199,313
Total equity  26,918  25,727  13,332  13,266  13,027  22,042  15,119
Tangible equity  26,800  25,601  13,196  13,123  12,875  21,916  14,957
               
Asset Quality              
Net charge-offs  75  306  5  (65)  22  386  704
Net charge-off rate 0.15% 0.60% 0.01% -0.15% 0.05% 0.20% 0.42%
Non-performing loans  1,323  2,572  3,225  3,934  4,054  1,323  4,054
Non-performing assets  2,866  4,115  4,768  5,479  5,599  2,866  5,599
Allowance for loan losses  1,226  1,407  1,504  1,489  1,517  1,226  1,517
Non-performing loans as a % of total loans held for investment 0.65% 1.26% 1.57% 2.26% 2.35% 0.65% 2.35%
Non-performing assets as a % of total assets 0.95% 1.39% 1.70% 2.33% 2.40% 0.95% 2.40%
Allowance for loan losses as a % of total loans held for investment 0.60% 0.69% 0.73% 0.86% 0.88% 0.60% 0.88%
Allowance for loan losses as a % of non-performing loans 92.67% 54.70% 46.64% 37.85% 37.42% 92.67% 37.42%
               
Cordia Bancorp              
GAAP to Non-GAAP Reconciliations (unaudited)              
               
The table below shows 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 Nine Months Ended
  Sept. 30,  June 30,  March 31, Dec. 31, Sept. 30, September 30,
(Dollars in thousands, except per share data) 2014 2014 2014 2013 2013 2014 2013
Tangible Equity and Tangible Assets (Period End)            
Total shareholders' equity (GAAP)  $ 26,982  $ 26,913  $ 13,026  $ 13,287  $ 13,167  $ 26,982  $ 13,167
Less: intangible assets  112  121  130  139  148  112  148
Tangible Equity (non-GAAP)  $ 26,870  $ 26,792  $ 12,896  $ 13,148  $ 13,019  $ 26,870  $ 13,019
               
Total assets (GAAP)  $ 300,807  $ 295,525  $ 280,256  $ 235,148  $ 232,972  $ 300,807  $ 232,972
Less: intangible assets  112  121  130  139  148  112  148
Tangible assets (non-GAAP)  $ 300,695  $ 295,404  $ 280,126  $ 235,009  $ 232,824  $ 300,695  $ 232,824
               
Total equity to total assets (GAAP) 8.97% 9.11% 4.65% 5.65% 5.65% 8.97% 5.65%
Book value per share (GAAP)  $ 4.15  $ 4.14  $ 4.67  $ 4.77  $ 4.74  $ 4.15  $ 4.74
Tangible equity to tangible assets (non-GAAP) 8.94% 9.07% 4.60% 5.59% 5.59% 8.94% 5.59%
Tangible book value per share (non-GAAP)  $ 4.13  $ 4.12  $ 4.63  $ 4.72  $ 4.69  $ 4.13  $ 4.69
               
               
Tangible Equity and Tangible Assets (Average)              
Total shareholders' equity (GAAP)  $ 26,918  $ 25,727  $ 13,332  $ 13,266  $ 13,027  $ 22,042  $ 15,119
Less: intangible assets  118  126  136  144  153  126  162
Tangible Equity (non-GAAP)  $ 26,800  $ 25,601  $ 13,196  $ 13,123  $ 12,875  $ 21,916  $ 14,957
               
Total assets (GAAP)  295,834  286,525  241,660  231,435  235,067  274,871  235,131
Less: intangible assets  118  126  136  144  153  126  162
Tangible assets (non-GAAP)  $ 295,716  $ 286,399  $ 241,524  $ 231,292  $ 234,915  $ 274,745  $ 234,969
               
Total equity to total assets (GAAP) 9.10% 8.98% 5.52% 5.73% 5.54% 8.02% 6.43%
Book value per share (GAAP)  $ 4.14  $ 3.95  $ 4.78  $ 4.76  $ 4.69  $ 3.39  $ 5.45
Tangible equity to tangible assets (non-GAAP) 9.06% 8.94% 5.46% 5.67% 5.48% 7.98% 6.37%
Tangible book value per share (non-GAAP)  $ 4.12  $ 3.94  $ 4.73  $ 4.71  $ 4.64  $ 3.37  $ 5.39 

            








        

            

                

                    
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