Cordia Bancorp Inc. Reports 2013 Earnings

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

CONTACT: Jack Zoeller, CEO Cordia Bancorp 804-763-1301Source:Cordia Bancorp