Cordia Bancorp Inc. Reports Fourth Quarter 2014 Profit

Launched CordiaGrad, an Online Lending Platform to Refinance Student Loans


MIDLOTHIAN, Va., March 4, 2015 (GLOBE NEWSWIRE) -- Cordia Bancorp Inc. ("Cordia") (Nasdaq:BVA), parent company of Bank of Virginia, reported net income of $60,000 or $0.01 per share for the fourth quarter of 2014, compared to net income of $5,000 for the fourth quarter of 2013. For the year ended December 31, 2014, the net loss was $(412,000) or $(0.09) per share compared to net income of $696,000 or $0.27 per share for the year ended December 31, 2013.

Highlights for the year 2014

  • $15.4 million capital raise in April 2014 with the issuance of 3,629,871 voting and nonvoting common shares
  • Added five new officers in commercial, residential and student lending
  • Launched CordiaGrad in the fourth quarter, a new online lending platform to refinance student loans
  • Added two new retail bank branches in the third quarter to expand market share in Chesterfield County, the largest and wealthiest county in Greater Richmond
  • 35% growth in total assets
  • 22% growth in loans
  • 26% growth in deposits
  • 31% increase in employees
  • Net interest income increased $1.4 million, or 21%, net of acquisition accounting adjustment
  • Nonperforming assets decreased to 1.21% of total assets

Chief Executive Officer Jack Zoeller stated, "We have positioned Cordia for a significant new round of growth and sustainable profitability in 2015 and beyond. Our company has grown over 35% after raising fresh capital in the spring of 2014. In addition, CordiaGrad, our new online lending platform, began refinancing student loan debt in late 2014. Our commercial and residential lending team in Richmond continued to produce exceptional results with over 22% growth last year."

Balance Sheet Activity

  • Asset Growth. Total assets increased over 35%, to $318.6 million at December 31, 2014, compared to $235.1 million at December 31, 2013. During 2014, loans increased 22%, or $39 million. Of this amount, organic originations accounted for $29.5 million and purchases of guaranteed student loans increased $9.5 million. In addition, investment securities increased $34.9 million.
  • Deposit Growth and Mix. Total deposits increased 26% to $265.6 million at December 31, 2014, compared to $210.8 million at December 31, 2013. Non-interest bearing deposits increased 34% while interest bearing deposits increased 25% during the year ended December 31, 2014.  The cost of deposits decreased from 80 to 73 basis points during the year.
  • Asset Quality. Asset quality continued to improve, with non-performing assets decreasing to $3.9 million, or 1.21% of total assets, at December 31, 2014, from $5.5 million, or 2.33% of total assets, at December 31, 2013.
  • Tangible Book Value. Tangible book value per share was $4.16 at December 31, 2014.

Operating Results

Three months ended December 31, 2014 compared to the three months ended December 31, 2013

  • Net income for the quarter ended December 31, 2014 was $60,000 compared to net income of $5,000 for the prior year fourth quarter. 
  • Net interest income was $2.13 million for the fourth quarter of 2014, compared to $1.81 million for the fourth quarter of 2013. 
  • Net interest income, net of acquisition accounting adjustments, increased $429,000, or 25.5%.
  • Net interest margin was 2.83% and 3.30% for the fourth quarter of 2014 and 2013, respectively. Adjusting for the impact of acquisition accounting, net interest margin was 2.80% compared to 3.04% for the 2013 period. 
  • The provision for loan losses was $182,000 in the fourth quarter of 2014 compared to a $92,000 recovery in the prior year quarter.
  • Noninterest expense increased to $2.09 million for the fourth quarter of 2014, compared to $1.98 million for the fourth quarter of 2013. The increase in noninterest expense was primarily due to staff additions and increased student loan servicing expenses.

Year ended December 31, 2014 compared to the year ended December 31, 2013

  • The net loss for the year ended December 31, 2014 was $(412,000) compared to net income of $696,000 for the year ended December 31, 2013.
  • Net interest income was $8.23 million for the 2014 period, compared to $8.06 million for the 2013 period. 
  • Net interest income, net of acquisition accounting adjustments, increased $1.38 million, or 21%.
  • Net interest margin for the 2014 period was 3.04% compared to 3.64% for the 2013 period. Adjusting for the impact of acquisition accounting, net interest margin was 2.96% compared to 2.97% for the 2013 period. 
  • Noninterest income was $467,000 for the 2014 period, compared to $300,000 for the 2013 period.
  • Noninterest expense increased to $8.80 million for the 2014 period, compared to $7.64 million for the 2013 period. The increase in noninterest expense was primarily due to incentive compensation, staff additions and an increase in student loan servicing volume.

In the fourth quarter of 2014 the Bank launched CordiaGrad, a student loan refinancing program aimed at high-achieving student loan borrowers who have earned their degrees, established their careers, and maintained good to excellent credit. CordiaGrad is dedicated to offering significant rate savings to holders of federal, private, or parent student loans. To date, the average CordiaGrad customer has lowered their interest rate by 2.50% and reduced their total interest costs by more than $23,000 over the lifetime of their loans.

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. CordiaGrad provides student loan refinancing services through two offices in Midlothian, VA and Washington, DC.

For more information about Cordia Bancorp, Bank of Virginia and CordiaGrad, 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)      
           
  Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(Dollars in thousands, except per share data) 2014 2014 2014 2014 2013
Assets          
Cash and due from banks  $ 5,484  $ 5,789  $ 5,332  $ 10,499  $ 5,290
Fed funds sold and Interest-bearing deposits   16,363  6,131  9,843  16,839  8,694
Total cash and cash equivalents  21,847  11,920  15,175  27,338  13,984
Securities available for sale, at fair value  53,483  54,581  45,835  24,464  24,567
Securities held to maturity, at cost  20,716  21,263  21,839  14,500  14,753
Restricted securities  2,092  1,525  1,525  1,529  1,074
           
Loans held for investment:          
Commercial real estate  103,253  92,300  90,909  85,084  82,581
Commercial and industrial  24,153  25,376  24,605  22,118  21,085
Guaranteed student loans  64,870  67,421  70,624  80,966  55,427
Consumer and other  20,683  19,221  18,147  16,914  14,914
Total loans held for investment  212,959  204,318  204,285  205,082  174,007
Less: Allowance for loan losses  (1,089)  (1,226)  (1,407)  (1,504)  (1,489)
Net loans held for investment  211,870  203,092  202,878  203,578  172,518
           
Premises and equipment, net  4,432  4,496  4,510  4,430  4,464
Accrued interest receivable  2,040  1,902  1,830  2,177  1,655
Other real estate owned, net of valuation allowance  1,641  1,543  1,543  1,543  1,545
Other assets  479  485  390  697  588
Total assets  $ 318,600  $ 300,807  $ 295,525  $ 280,256  $ 235,148
           
Liabilities and stockholders' equity          
Non-interest bearing deposits  30,709  24,490  24,890  21,649  22,845
Savings and interest bearing demand deposits  83,339  78,779  75,660  74,818  60,685
Time deposits  151,555  149,679  144,643  138,561  127,284
Total deposits  265,603  252,948  245,193  235,028  210,814
           
Accrued expenses and other liabilities  861  877  3,419  12,202  1,047
FHLB borrowings  25,000  20,000  20,000  20,000  10,000
Total liabilities  291,464  273,825  268,612  267,230  221,861
           
Common stock - voting  50  50  50  28  28
Common stock - nonvoting  14  14  14  --  --
Additional paid-in-capital  32,957  32,896  32,848  18,672  18,648
Retained deficit  (5,417)  (5,477)  (5,559)  (5,289)  (5,005)
Accumulated other comprehensive loss  (468)  (501)  (440)  (385)  (384)
Total stockholders' equity  27,136  26,982  26,913  13,026  13,287
Total liabilities and stockholders' equity  $ 318,600  $ 300,807  $ 295,525  $ 280,256  $ 235,148
           
           
Cordia Bancorp          
Consolidated Statements of Income (unaudited)          
               
  Three Months Ended Year Ended
  Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,
(Dollars in thousands, except per share data) 2014 2014 2014 2014 2013 2014 2013
Interest Income              
Interest and fees on loans  $ 2,247  $ 2,275  $ 2,252  $ 2,149  $ 2,089  $ 8,923  $ 9,366
Investment securities  405  346  311  207  161  1,269  426
Interest on federal funds sold and deposits with banks  6  4  9  6  10  25  73
Total interest income  2,658  2,625  2,572  2,362  2,260  10,217  9,865
               
Interest Expense              
Interest on deposits  451  443  441  426  412  1,761  1,644
Interest on FHLB Borrowings  76  57  56  41  40  230  164
Total interest expense  527  500  497  467  452  1,991  1,808
               
Net interest income  2,131  2,125  2,075  1,895  1,808  8,226  8,057
Provision for (recovery of) loan losses  182  (106)  209  20  (92)  305  19
Net interest income after provision for (recovery of) loan losses  1,949  2,231  1,866  1,875  1,900  7,921  8,038
               
Non-interest income              
Service charges on deposit accounts  34  44  19  26  40  123  132
Net gain (loss) on sale of available for sale securities  116  (3)  --  64  --  177  --
Other fee income  50  41  43  33  46  167  168
Total non-interest income  200  82  62  123  86  467  300
               
Non-interest expense              
Salaries and employee benefits  1,094  1,244  1,102 1,406 1,066  4,846 4,216
Professional services  104  92  125  106  161  427  501
Occupancy  139  139  136  151  138  565  565
Data processing and communications  184  206  160  148  139  698  548
FDIC assessment and bank fees  96  99  96  94  97  385  388
Bank franchise taxes  23  23  27  29  14  102  73
Student loan servicing fees and other loan expenses  191  144  210  126  76  671  275
Other real estate expenses  18  6  17  5  16  46  48
Gain on sale of other real estate owned  --  --  --  --  --  --  (36)
Supplies and equipment  78  82  83  75  75  318  274
Insurance  42  40  44  41  40  167  166
Director's fees  50  46  75  16  32  187  138
Marketing and business development  21  15  9  6  32  51  88
Other operating expenses  49  95  114  79  95  337  398
Total non-interest expense  2,089  2,231  2,198  2,282  1,981  8,800  7,642
               
Net income (loss)  $ 60  $ 82  $ (270)  $ (284)  $ 5  $ (412)  $ 696
               
Earnings (loss) per share, basic and diluted  $ 0.01  $ 0.01  $ (0.09)  $ (0.10)  $ --   $ (0.09)  $ 0.27
Weighted average shares outstanding, basic   6,426,078  6,420,107  3,017,772  2,776,992  2,773,320  4,675,468  2,602,357
Weighted average shares outstanding, diluted  6,504,160  6,504,106  3,017,772  2,776,992  2,788,302  4,705,948  2,615,387
           
           
Cordia Bancorp          
Consolidated Financial Highlights (unaudited)      
  As of and for the Three Months Ended Year Ended
  Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,
(Dollars in thousands, except per share data) 2014 2014 2014 2014 2013 2014 2013
Results of Operations              
Interest income  $ 2,658  $ 2,625  $ 2,572  $ 2,362  $ 2,260  $ 10,217  $ 9,865
Interest expense  527  500  497  467  452  1,991  1,808
Net interest income  2,131  2,125  2,075  1,895  1,808  8,226  8,057
Provision for (recovery of) loan losses  182  (106)  209  20  (92)  305  19
Net interest income after provision for (recovery of) loan losses  1,949  2,231  1,866  1,875  1,900  7,921  8,038
Non-interest income  200  82  62  123  86  467  300
Non-interest expense  2,089  2,231  2,198  2,282  1,981  8,800  7,642
Net income (loss)  $ 60  $ 82  $ (270)  $ (284)  $ 5  $ (412)  $ 696
               
Earnings (loss) per share, basics and diluted  $ 0.01  $ 0.01  $ (0.09)  $ (0.10)  $ --   $ (0.09)  $ 0.27
Weighted average shares outstanding, basic   6,426,078  6,420,107  3,017,772  2,776,992  2,773,320  4,675,468  2,602,357
Weighted average shares outstanding, diluted  6,504,160  6,504,106  3,017,772  2,776,992  2,788,302  4,705,948  2,615,387
               
Performance Ratios              
Return on average assets 0.08% 0.11% -0.38% -0.47% 0.01% -0.14% 0.30%
Return on average equity 0.88% 1.22% -4.20% -8.52% 0.15% -1.77% 5.12%
Return on average tangible equity 0.89% 1.16% -4.22% -8.61% 0.15% -1.77% 5.18%
Efficiency ratio 89.62% 101.09% 102.85% 113.08% 104.59% 101.23% 91.44%
               
Yields and Rates              
Yield on loans 4.32% 4.51% 4.39% 4.88% 4.82% 4.50% 5.50%
Yield on securities 2.06% 1.95% 2.27% 2.08% 2.14% 2.08% 1.84%
Yield on interest earning assets 3.56% 3.75% 3.77% 4.16% 4.13% 3.78% 4.45%
Cost of interest bearing deposits 0.77% 0.79% 0.82% 0.88% 0.89% 0.81% 0.87%
Cost of total deposits 0.69% 0.71% 0.74% 0.79% 0.80% 0.73% 0.80%
Cost of borrowings 1.26% 1.14% 1.12% 1.62% 1.60% 1.24% 1.64%
Cost of interest bearing liabilities 0.81% 0.81% 0.84% 0.92% 0.93% 0.84% 0.91%
Interest rate spread 2.75% 2.91% 2.93% 3.25% 3.21% 2.94% 3.54%
Net interest margin 2.83% 3.01% 3.34% 3.30% 3.30% 3.04% 3.64%
               
Capital              
Total equity to total assets 8.52% 8.97% 9.11% 4.65% 5.65% 8.52% 5.65%
Tangible equity to total assets 8.49% 8.94% 9.07% 4.60% 5.59% 8.49% 5.59%
Book value per share  4.17  4.15  4.14  4.67  4.77  4.17  4.77
Tangible book value per share  4.16  4.13  4.12  4.63  4.72  4.16  4.72
Common shares outstanding  6,504,106  6,504,106  6,504,106  2,788,302  2,788,302  6,504,106  2,788,302
               
Average Balances              
Loans  $ 207,833  $ 201,953  $ 205,104  $ 176,161  $ 173,536  $ 198,227  $ 170,200
Securities  78,590  70,848  54,904  39,747  30,156  61,156  23,159
Earning assets  298,712  279,876  272,733  226,968  218,707  270,163  221,448
Total assets  315,167  295,834  286,525  241,660  231,435  285,028  233,140
Interest bearing deposits  234,953  223,927  215,856  193,946  184,920  217,301  188,206
Total deposits  262,947  248,087  238,416  215,721  206,981  241,441  204,868
FHLB borrowings  24,185  20,000  20,000  10,111  10,000  18,616  10,000
Interest bearing liabilities  259,138  243,927  235,856  204,057  194,920  235,917  198,206
Total equity  27,198  26,918  25,727  13,332  13,266  23,342  13,591
Tangible equity  27,089  26,800  25,601  13,196  13,124  23,220  13,434
               
Asset Quality              
Net charge-offs  319  75  306  5  (65)  705  640
Net charge-off rate 0.61% 0.15% 0.60% 0.01% -0.15% 0.36% 0.38%
Non-performing loans  2,221  1,323  2,572  3,225  3,934  2,221  3,934
Non-performing assets  3,862  2,866  4,115  4,768  5,479  3,862  5,479
Allowance for loan losses  1,089  1,226  1,407  1,504  1,489  1,089  1,489
Non-performing loans as a % of total loans held for investment 1.04% 0.65% 1.26% 1.57% 2.26% 1.04% 2.26%
Non-performing assets as a % of total assets 1.21% 0.95% 1.39% 1.70% 2.33% 1.21% 2.33%
Allowance for loan losses as a % of total loans held for investment 0.51% 0.60% 0.69% 0.73% 0.86% 0.51% 0.86%
Allowance for loan losses as a % of non-performing loans 49.03% 92.67% 54.70% 46.64% 37.85% 49.03% 37.85%
       
       
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 Year Ended
  Dec. 31, Sept. 30, June 30, March 31,  Dec. 31, December 31,
(Dollars in thousands, except per share data) 2014 2014 2014 2014 2013 2014 2013
Tangible Equity and Tangible Assets (Period End)              
Total shareholders' equity (GAAP)  $ 27,136  $ 26,982  $ 26,913  $ 13,026  $ 13,287  $ 27,136  $ 13,287
Less: intangible assets  104  112  121  130  139  104  139
Tangible Equity (non-GAAP)  $ 27,032  $ 26,870  $ 26,792  $ 12,896  $ 13,148  $ 27,032  $ 13,148
               
Total assets (GAAP)  $ 318,600  $ 300,807  $ 295,525  $ 280,256  $ 235,148  $ 318,600  $ 235,148
Less: intangible assets  104  112  121  130  139  104  139
Tangible assets (non-GAAP)  $ 318,496  $ 300,695  $ 295,404  $ 280,126  $ 235,009  $ 318,496  $ 235,009
               
Total equity to total assets (GAAP) 8.52% 8.97% 9.11% 4.65% 5.65% 8.52% 5.65%
Book value per share (GAAP)  $ 4.17  $ 4.15  $ 4.14  $ 4.67  $ 4.77  $ 4.17  $ 4.77
Tangible equity to tangible assets (non-GAAP) 8.49% 8.94% 9.07% 4.60% 5.59% 8.49% 5.59%
Tangible book value per share (non-GAAP)  $ 4.16  $ 4.13  $ 4.12  $ 4.63  $ 4.72  $ 4.16  $ 4.72
               
               
Tangible Equity and Tangible Assets (Average)              
Total shareholders' equity (GAAP)  $ 27,198  $ 26,918  $ 25,727  $ 13,332  $ 13,266  $ 23,342  $ 13,591
Less: intangible assets  109  118  126  136  142  122  157
Tangible Equity (non-GAAP)  $ 27,089  $ 26,800  $ 25,601  $ 13,196  $ 13,124  $ 23,220  $ 13,434
               
Total assets (GAAP)  315,167  295,834  286,525  241,660  231,435  285,028  233,140
Less: intangible assets  109  118  126  136  142  122  157
Tangible assets (non-GAAP)  $ 315,058  $ 295,716  $ 286,399  $ 241,524  $ 231,293  $ 284,906  $ 232,983
               
Total equity to total assets (GAAP) 8.63% 9.10% 8.98% 5.52% 5.73% 8.19% 5.83%
Book value per share (GAAP)  $ 4.18  $ 4.14  $ 3.95  $ 4.78  $ 4.76  $ 3.59  $ 4.87
Tangible equity to tangible assets (non-GAAP) 8.60% 9.06% 8.94% 5.46% 5.67% 8.15% 5.77%
Tangible book value per share (non-GAAP)  $ 4.16  $ 4.12  $ 3.94  $ 4.73  $ 4.71  $ 3.57  $ 4.82

            

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