Cordia Bancorp Inc. Reports First Quarter 2016 Results

CordiaGrad Divestiture in First Quarter

| Source: Cordia Bancorp Cordia Bancorp

MIDLOTHIAN, Va., May 16, 2016 (GLOBE NEWSWIRE) -- Cordia Bancorp Inc. (“Cordia”) (NASDAQ:BVA), parent company of Bank of Virginia, reported net loss of $(2.315) million, or $(0.35) per share, for the first quarter of 2015, compared to net income of $351,000, $0.05 per share, for the first quarter of 2015.  Excluding one-time charges of $2.366 million related to the divestiture of CordiaGrad, our online student loan refinancing platform, core net earnings were $51,000, or $0.01 per share.  Included in first quarter results were $221,000 of non-interest expenses for CordiaGrad that will not be included in future quarters due to the divestiture.

 Highlights

  • Divestiture of CordiaGrad, our online student loan refinancing platform.  One-time charges related to the divestiture are $800,000 for stock compensation for the former chief executive officer, loss on sale of the CordiaGrad business of $843,000, and a loan held-for-sale valuation expense of $723,000, for a total of $2.366 million.
  • 16% year-over-year growth in loans, excluding guaranteed student loans
  • 9% year-over-year growth in total deposits
  • Net interest income up 19%, compared to the first quarter of 2015
  • Nonperforming assets decreased to 1.06% of total assets from 1.16% for the first quarter of 2015
  • Tangible book value per share was $3.94 at March 31, 2016, down from $4.20 at December 31, 2015
  • Net interest margin increased to 2.88% from 2.69% for the first quarter of 2015

Chief Executive Officer Ed Barham stated, “Clearly, the biggest impact to our first quarter results related to the company’s strategic decision to exit the student loan refinance business.  While we will incur some additional transitional costs related to the divestiture of CordiaGrad over the next quarter, our second half of the year should generate improved earnings momentum as we focus on our core community banking business.  Despite the loss incurred from divestiture, Cordia Bancorp remains well capitalized as measured by regulatory standards.”

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 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 31,
(Dollars in thousands, except per share data) 2016
 2015
 2015
 2015
 2015
Assets       
 Cash and due from banks $4,911  $6,135  $9,437  $11,771  $9,602 
 Fed funds sold and interest-bearing deposits  12,805   12,325   15,970   7,593   23,495 
 Total cash and cash equivalents  17,716   18,460   25,407   19,364   33,097 
 Securities available for sale, at fair value  44,899   46,220   48,721   58,445   41,411 
 Securities held to maturity, at cost  37,227   25,500   26,281   27,087   20,132 
 Restricted securities  2,393   2,355   2,330   2,331   2,405 
 Loans held for sale  10,646   220   109   96   117 
 Loans held for investment:          
  Commercial real estate  110,903   105,902   106,335   111,180   109,734 
  Commercial and industrial  32,881   34,819   26,751   27,919   24,057 
  Guaranteed student loans  51,693   53,847   56,072   57,900   61,441 
  Consumer and other  29,943   51,465   39,607   28,865   24,521 
 Total loans held for investment  225,420   246,033   228,765   225,864   219,753 
 Less: Allowance for loan losses  (866)  (823)  (903)  (990)  (1,102)
 Net loans held for investment  224,554   245,210   227,862   224,874   218,651 
              
 Premises and equipment, net  5,919   5,980   6,034   6,083   4,402 
 Accrued interest receivable  2,018   2,085   1,924   2,033   1,986 
 Other real estate owned, net of valuation allowance  2,017   1,870   1,761   1,769   1,647 
 Other assets  429   590   7,555   704   696 
  Total assets $347,818  $348,490  $347,984  $342,786  $324,544 
              
Liabilities and stockholders' equity          
 Non-interest bearing deposits  26,938   28,969   26,829   30,066   26,489 
 Savings and interest bearing demand deposits  112,582   107,057   105,540   101,769   84,216 
 Time deposits  150,503   154,018   156,939   152,800   154,920 
  Total deposits  290,023   290,044   289,308   284,635   265,625 
              
 Accrued expenses and other liabilities  943   707   553   464   1,061 
 FHLB borrowings  30,000   30,000   30,000   30,000   30,000 
  Total liabilities  320,966   320,751   319,861   315,099   296,686 
              
 Common stock - voting  53   51   50   51   51 
 Common stock - nonvoting  14   14   14   14   14 
 Additional paid-in-capital  34,075   33,191   33,044   33,061   33,011 
 Retained deficit  (7,142)  (4,827)  (4,700)  (4,830)  (5,066)
 Accumulated other comprehensive loss  (148)  (690)  (285)  (609)  (152)
  Total stockholders' equity  26,852   27,739   28,123   27,687   27,858 
  Total liabilities and stockholders' equity $347,818  $348,490  $347,984  $342,786  $324,544 
              

 

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) 2016
 2015
 2015
 2015
 2015
Interest Income 
 Interest and fees on loans $2,628  $2,404  $2,294  $2,327  $2,183 
 Investment securities  398   412   446   383   363 
 Interest on federal funds sold and          
 deposits with banks  9   8   9   5   7 
 Total interest income  3,035   2,824   2,749   2,715   2,553 
          
Interest Expense          
 Interest on deposits  546   529   506   470   454 
 Interest on FHLB Borrowings  95   95   95   93   89 
 Total interest expense  641   624   601   563   543 
          
Net interest income  2,394   2,200   2,148   2,152   2,010 
 Provision for (recovery of) loan losses  98   37   (53)  63   (340)
Net interest income after provision for (recovery of) loan losses 2,296   2,163   2,201   2,089   2,350 
              
Non-interest income (loss)          
 Service charges on deposit accounts  31   39   35   30   30 
 Net gain (loss) on sale of available for sale securities  -   (3)  22   -   114 
 Realized and unrealized gains (losses) on loans held for sale (713)  11   6   9   21 
 Other fee income  68   62   52   58   48 
  Total non-interest income (loss)  (614)  109   115   97   213 
              
Non-interest expense          
 Salaries and employee benefits  1,904   1,006   1,085   1,082   1,280 
 Professional services  170   147   108   100   84 
 Occupancy  144   139   149   159   153 
 Reversal of occupancy fair value discount  -   -   -   (225)  - 
 Data processing and communications  246   257   233   206   198 
 FDIC assessment and bank fees  169   195   88   92   90 
 Bank franchise taxes  48   49   49   49   49 
 Student loan servicing fees and other loan expenses  167   227   174   208   146 
 Other real estate expenses  39   13   26   45   6 
 Supplies and equipment  73   72   71   70   73 
 Insurance  18   19   20   19   20 
 Director's fees  53   104   28   21   26 
 Marketing and business development  35   118   64   31   18 
 Loss on sale of subsidiary  843   -   -   -   - 
 Other operating expenses  88   53   91   93   69 
  Total non-interest expense  3,997   2,399   2,186   1,950   2,212 
              
Net  income (loss) $(2,315) $(127) $130  $236  $351 
              
Earnings (loss) per share, basic and diluted $(0.35) $(0.02) $0.02  $0.04  $0.05 
Weighted average shares outstanding, basic  6,658,976   6,572,933   6,572,239   6,583,848   6,559,217 
Weighted average shares outstanding, diluted  6,658,976   6,572,933   6,572,239   6,583,848   6,559,217 
              

 

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) 2016 2015 2015 2015 2015
Results of Operations 
 Interest income $3,035  $2,824  $2,749  $2,715  $2,553 
 Interest expense  641   624   601   563   543 
 Net interest income  2,394   2,200   2,148   2,152   2,010 
 Provision for (recovery of) loan losses  98   37   (53)  63   (340)
 Net interest income after provision for (recovery of) loan losses  2,296   2,163   2,201   2,089   2,350 
 Non-interest income (loss)  (614)  109   115   97   213 
 Non-interest expense  3,997   2,399   2,186   1,950   2,212 
 Net income (loss) $(2,315) $(127) $130  $236  $351 
              
 Earnings (loss) per share, basic and diluted $(0.35) $(0.02) $0.02  $0.04  $0.05 
 Weighted average shares outstanding, basic  6,658,976   6,572,933   6,572,239   6,583,848   6,559,217 
 Weighted average shares outstanding, diluted  6,658,976   6,572,933   6,572,239   6,583,848   6,559,217 
              
Performance Ratios          
 Return on average assets  -2.65%  -0.14%  0.15%  0.29%  0.44%
 Return on average equity  -33.54%  -1.79%  1.85%  3.40%  5.20%
 Return on average tangible equity  -33.61%  -1.80%  1.85%  3.41%  5.22%
 Efficiency ratio  224.55%  103.90%  96.60%  86.71%  99.51%
              
Yields and Rates          
 Yield on loans  4.18%  4.03%  4.09%  4.18%  4.16%
 Yield on securities  2.18%  2.15%  2.06%  2.12%  2.07%
 Yield on interest earning assets  3.65%  3.39%  3.34%  3.51%  3.42%
 Cost of interest bearing deposits  0.83%  0.80%  0.77%  0.79%  0.78%
 Cost of total deposits  0.75%  0.72%  0.70%  0.71%  0.70%
 Cost of borrowings  1.23%  1.26%  1.26%  1.19%  1.25%
 Cost of interest bearing liabilities  0.87%  0.84%  0.82%  0.83%  0.83%
 Interest rate spread  2.78%  2.55%  2.52%  2.67%  2.59%
 Net interest margin  2.88%  2.64%  2.61%  2.78%  2.69%
              
Capital            
 Total equity to total assets  7.72%  7.96%  8.08%  8.08%  8.58%
 Tangible equity to  total assets  7.70%  7.94%  8.06%  8.05%  8.56%
 Book value per share  3.95   4.21   4.29   4.21   4.23 
 Tangible book value per share  3.94   4.20   4.27   4.19   4.22 
 Common shares outstanding  6,795,000   6,586,786   6,562,906   6,582,806   6,584,106 
              
Average Balances          
 Loans  $252,849  $236,822  $222,371  $223,286  $212,566 
 Securities  73,562   75,979   86,089   72,391   71,198 
 Earning assets  334,158   330,603   326,904   310,680   302,481 
 Total assets  351,450   350,910   346,917   327,439   321,455 
 Interest bearing deposits  264,891   263,393   261,609   239,871   236,415 
 Total deposits  291,847   292,067   288,455   267,356   264,434 
 FHLB borrowings  31,129   30,000   30,000   31,346   28,778 
 Interest bearing liabilities  296,020   293,393   291,609   271,217   265,193 
 Total equity  27,763   28,106   27,938   27,835   27,353 
 Tangible equity  27,700   28,034   27,857   27,745   27,254 
              
Asset Quality          
 Net charge-offs/(recoveries)  55   171   34   175   (353)
 Net charge-off rate  0.09%  0.29%  0.06%  0.31%  -0.67%
 Non-performing loans  1,683   1,834   1,975   1,918   2,108 
 Non-performing assets  3,700   3,704   3,736   3,687   3,755 
 Allowance for loan losses  866   823   903   990   1,102 
 Non-performing loans as a % of total loans held for investment  0.75%  0.75%  0.86%  0.85%  0.96%
 Non-performing assets as a % of total assets  1.06%  1.06%  1.07%  1.08%  1.16%
 Allowance for loan losses as a % of  total loans held for investment 0.38%  0.33%  0.39%  0.44%  0.50%
 Allowance for loan losses as a % of non-performing loans  51.46%  44.87%  45.72%  51.62%  52.28%
              

 

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
 March 31, Dec. 31, Sept. 30, June 30, March 31,
(Dollars in thousands, except per share data) 2016
 2015
 2015
 2015
 2015
Tangible Equity and Tangible Assets (Period End)      
Total shareholders' equity (GAAP) $26,852  $27,739  $28,123  $27,687  $27,858 
Less: intangible assets  59   68   77   86   95 
Tangible Equity (non-GAAP) $26,793  $27,671  $28,046  $27,601  $27,763 
          
Total assets (GAAP) $347,818  $348,490  $347,984  $342,786  $324,544 
Less: intangible assets  59   68   77   86   95 
Tangible assets (non-GAAP) $347,759  $348,422  $347,907  $342,700  $324,449 
          
Total equity to total assets (GAAP)  7.72%  7.96%  8.08%  8.08%  8.58%
Book value per share (GAAP) $3.95  $4.21  $4.29  $4.21  $4.23 
Tangible equity to tangible assets (non-GAAP)  7.70%  7.94%  8.06%  8.05%  8.56%
Tangible book value per share (non-GAAP) $3.94  $4.20  $4.27  $4.19  $4.22 
          
          
Tangible Equity and Tangible Assets (Average)          
Total shareholders' equity (GAAP) $27,763  $28,106  $27,938  $27,835  $27,353 
Less: intangible assets  63   72   81   90   99 
Tangible Equity (non-GAAP) $27,700  $28,034  $27,857  $27,745  $27,254 
          
Total assets (GAAP)  351,450   350,910   346,917   327,439   321,455 
Less: intangible assets  63   72   81   90   99 
Tangible assets (non-GAAP) $351,387  $350,838  $346,836  $327,349  $321,356 
          
Total equity to total assets (GAAP)  7.90%  8.01%  8.05%  8.50%  8.51%
Book value per share (GAAP) $4.09  $4.27  $4.26  $4.23  $4.15 
Tangible equity to tangible assets (non-GAAP)  7.88%  7.99%  8.03%  8.48%  8.48%
Tangible book value per share (non-GAAP) $4.08  $4.26  $4.24  $4.21  $4.14 
    

            











    

        

        
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