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Cordia Bancorp Inc. Reports First Quarter Results

Cordia Bancorp

MIDLOTHIAN, Va., May 7, 2014 (GLOBE NEWSWIRE) -- Cordia Bancorp Inc. ("Cordia") (Nasdaq:BVA), parent company of Bank of Virginia, reported a net loss of $284,000 or $(0.10) per share for the first quarter of 2014, compared to net income of $222,000 or $0.08 per share for the first quarter of 2013.

First Quarter 2014 Highlights

  • 19% growth in total assets
  • 11% growth in deposits
  • 10% increase in full time employees
  • Acquisition of $26.5 million portfolio of student loans
  • Nonperforming assets continued to decrease to 1.7% of total assets

Chief Executive Officer Jack Zoeller stated, "We launched a fresh round of growth in the first quarter in anticipation of the $15.4 million capital raise that closed in early April. While we incurred a modest quartlerly loss primarily due to one-time factors and timing differences related to compensation, additions to staffand loan loss reserves, Cordia remains focused on its strategy to grow both our geographic footprint and earnings base." Cordia recently announced plans to open two new full-service branches in Chesterfield County and Colonial Heights, Virginia.

Financial Highlights

  • Asset Growth. Total assets were $280.3 million at March 31, 2014, compared to $235.1 million at December 31, 2013. During the first three months of 2014 the Company originated $11.7 million of new organic loans and also purchased $26.5 million of student loans 98% guaranteed by the U.S. Department of Education.
  • Deposit Growth and Mix. Total deposits increased to $235.0 million at March 31, 2014, compared to $210.8 million at December 31, 2013. Total checking, money market and savings accounts increased 16%, to $96.5 million at March 31, 2014, from $83.5 million at December 31, 2013.
  • Net Interest Income. Net interest income after provision for loan losses was $1.9 million in the first quarter of 2014, compared to $2.1 million in the first quarter of 2013.
  • Asset Quality. Asset quality continued to improve, with total non-performing assets decreasing to $4.8 million, or 1.7% of assets, at March 31, 2014, from $5.5 million, or 2.3% of assets, at December 31, 2013. There were no delinquencies in the Company's organic loan portfolio at March 31, 2014.
  • Tangible Book Value. Tangible book value per share decreased to $4.63 at March 31, 2014, from $4.72 at December 31, 2013.
  • Deferred Tax Asset. As of March 31, 2014, the Company had net deferred tax assets totaling $6.9 million. Upon a determination that realizing the full deferred tax asset is more likely than not, $6.2 million of valuation allowance may be reversed. Cordia anticipates that such a determination may potentially be made near the end of 2014.

Operating Results

Cordia reported a net loss of $284,000 or $(0.10) per share for the first quarter of 2014, compared to net income of $222,000 or $0.08 per share for the first quarter of 2013.

Net interest income after the provision for loan losses was $1.9 million for the first quarter of 2014, compared to $2.1 million for the first quarter of 2013, or a decrease of $230,000. Net interest margin was 3.34% and 4.31% for the first quarter of 2014 and 2013, respectively. The decrease in net interest margin was primarily the result of a decrease of $617,000 in the amount of accretion income on purchased loans in 2014 compared to 2013. Excluding the decrease in the accretion income, interest income on loans held for investment increased by $187,000 due to an increase in average balances of $46.5 million offset by a 47 basis point decrease in average yield. Cordia's cost of deposits, adjusted to exclude accretion income, decreased 15 basis points while total deposits increased $9.3 million. The net interest margin, adjusted for accretion income, increased from 2.83% to 3.18% or 35 basis points.

Noninterest income increased to $123,000 for the first quarter of 2014, compared to $67,000 for the first quarter of 2013. The increase was driven by a net gain on the sale of available for sale securities of $64,000.

Noninterest expense increased to $2.3 million for the first quarter of 2014, compared to $2.0 million for the first quarter of 2013. This increase was primarily due to a one-time accrual of incentive compensation and the costs of staff additions associated with Cordia's growth.

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 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 30,
(Dollars in thousands, except per share data) 2014 2013 2013 2013 2013
Assets
Cash and due from banks $ 10,499 $ 5,290 $ 6,893 $ 3,756 $ 5,340
Fed funds sold and Interest-bearing deposits 16,839 8,694 15,889 27,766 9,201
Total cash and cash equivalents 27,338 13,984 22,782 31,522 14,541
Securities available for sale, at fair value 24,464 24,567 29,807 22,105 17,182
Securities held to maturity 14,500 14,753 -- -- --
Restricted securities 1,529 1,074 1,071 1,134 1,124
Loans held for investment:
Commercial real estate 85,084 82,602 85,962 80,289 78,405
Commercial and industrial 22,118 21,208 20,388 21,273 23,384
Guaranteed student loans 80,966 55,427 51,293 52,957 34,696
Consumer and other 16,914 14,770 15,146 13,960 14,712
Total loans held for investment 205,082 174,007 172,789 168,479 151,197
Less: Allowance for loan losses (1,504) (1,489) (1,517) (1,562) (1,583)
Net loans held for investment 203,578 172,518 171,272 166,917 149,614
Loans held for sale -- -- -- -- 59,761
Premises and equipment, net 4,430 4,464 4,512 4,287 4,327
Accrued interest receivable 2,177 1,655 1,335 1,132 1,097
Other real estate owned, net of valuation allowance 1,543 1,545 1,545 1,768 1,768
Other assets 697 588 648 655 953
Total assets $ 280,256 $ 235,148 $ 232,972 $ 229,520 $ 250,367
Liabilities and stockholders' equity
Non-interest bearing deposits 21,642 22,845 21,719 21,338 20,786
Savings and interest bearing demand deposits 74,825 60,685 59,546 49,493 80,665
Time deposits, $100,000 and greater 87,559 76,231 75,023 79,795 70,080
Other time deposits 51,002 51,053 52,620 54,732 54,202
Total deposits 235,028 210,814 208,908 205,358 225,733
Accrued expenses and other liabilities 12,202 1,047 897 998 1,361
FHLB borrowings 20,000 10,000 10,000 10,000 10,000
Total Liabilities 267,230 221,861 219,805 216,356 237,094
Preferred stock -- -- -- -- --
Common stock 28 28 28 28 28
Additional paid-in-capital 18,672 18,648 18,606 18,579 18,689
Retained deficit (5,289) (5,005) (5,011) (5,219) (5,479)
Accumulated other comprehensive income (385) (384) (456) (224) 35
Total stockholders' equity 13,026 13,287 13,167 13,164 13,273
Total liabilities and stockholders' equity $ 280,256 $ 235,148 $ 232,972 $ 229,520 $ 250,367
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) 2014 2013 2013 2013 2013
Interest Income
Interest and fees on loans $ 2,149 $ 2,089 $ 2,182 $ 2,516 $ 2,579
Investment securities 207 161 123 72 70
Interest on federal funds sold and deposits with banks 6 10 19 29 15
Total interest income 2,362 2,260 2,324 2,617 2,664
Interest Expense
Interest on deposits 426 412 415 426 391
Interest on FHLB Borrowings 41 40 42 41 41
Total interest expense 467 452 457 467 432
Net interest income 1,895 1,808 1,867 2,150 2,232
Provision for (benefit from) loan losses 20 (92) (23) 7 127
Net interest income after provision for loan losses 1,875 1,900 1,890 2,143 2,105
Non-interest income
Service charges on deposit accounts 26 40 31 29 32
Net gain on sale of available for sale securities 64 -- -- -- --
Other fee income 33 46 51 36 35
Total non-interest income 123 86 82 65 67
Non-interest expense
Salaries and employee benefits 1,406 1,066 991 974 1,185
Professional services 106 161 67 211 62
Occupancy 151 138 137 145 145
Data processing and communications 142 139 140 144 125
FDIC assessment and bank fees 123 111 116 114 120
Loan expenses 126 76 81 102 15
Other real estate expenses 5 16 5 12 16
Gain on sale of OREO -- -- (36) -- --
Supplies and equipment 75 75 66 64 69
Insurance 41 40 42 42 42
Directors fees 16 32 34 38 34
Marketing and business development 6 32 19 15 22
Other 85 95 102 86 115
Total non-interest expense 2,282 1,981 1,764 1,947 1,950
Consolidated net income (loss) before non-controlling interest (284) 5 208 261 222
Net income (loss) (284) 5 208 261 222
Earnings per share, basic and diluted $ (0.10) $ -- $ 0.07 $ 0.09 $ 0.08
Weighted average shares outstanding, basic and diluted 2,788,302 2,788,302 2,775,802 2,775,802 2,778,677
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) 2014 2013 2013 2013 2013
Results of Operations
Interest income $ 2,362 $ 2,260 $ 2,324 $ 2,617 $ 2,664
Interest expense 467 452 457 467 432
Net interest income 1,895 1,808 1,867 2,150 2,232
Provision (benefit) for loan losses 20 (92) (23) 7 127
Net interest income after provision for loan losses 1,875 1,900 1,890 2,143 2,105
Non-interest income 123 86 82 65 67
Non-interest expense 2,282 1,981 1,764 1,947 1,950
Net income $ (284) $ 5 $ 208 $ 261 $ 222
Earnings per share, basics and diluted $ (0.10) $ -- $ 0.07 $ 0.09 $ 0.08
Weighted average shares outstanding, basic and diluted 2,788,302 2,788,302 2,775,802 2,775,802 2,778,677
Performance Ratios
Return on average assets -0.47% 0.01% 0.35% 0.41% 0.42%
Return on average equity -8.52% 0.15% 6.39% 7.88% 6.34%
Return on average tangible equity -8.61% 0.15% 6.46% 7.97% 6.42%
Efficiency ratio 113.08% 104.59% 90.51% 87.90% 84.82%
Yields and Rates
Yield on loans 4.88% 4.82% 5.11% 5.55% 6.66%
Yield on securities 2.08% 2.14% 1.79% 1.70% 1.56%
Yield on interest earning assets 4.16% 4.13% 4.09% 4.23% 5.14%
Cost of interest bearing deposits 0.88% 0.89% 0.88% 0.82% 0.92%
Cost of total deposits 0.79% 0.80% 0.79% 0.75% 0.83%
Cost of borrowings 1.62% 1.60% 1.68% 1.64% 1.64%
Cost of interest bearing liabilities 0.92% 0.93% 0.92% 0.86% 0.96%
Interest rate spread 3.25% 3.21% 3.17% 3.38% 4.18%
Net interest margin 3.34% 3.30% 3.29% 3.48% 4.31%
Capital
Total equity to total assets 4.65% 5.65% 5.65% 5.74% 5.30%
Tangible equity to total assets 4.60% 5.59% 5.59% 5.67% 5.24%
Book value per share 4.67 4.77 4.74 4.74 4.78
Tangible book value per share 4.63 4.72 4.69 4.69 4.72
Common shares outstanding 2,788,302 2,788,302 2,775,802 2,775,802 2,778,677
Average Balances
Loans 176,161 173,536 170,969 181,373 154,799
Securities 39,747 30,156 27,509 16,922 17,904
Earning assets 226,968 218,707 227,110 247,283 207,299
Total assets 241,660 231,435 235,067 254,765 213,728
Interest bearing deposits 193,946 184,920 188,526 208,433 170,621
Total deposits 215,721 206,981 210,395 228,571 189,147
FHLB borrowings 10,111 10,000 10,000 10,000 10,000
Interest bearing liabilities 204,057 194,920 198,526 218,433 180,621
Total equity 13,332 13,266 13,027 13,254 14,006
Tangible equity 13,196 13,123 12,875 13,093 13,836
Asset Quality
Net charge-offs 5 (65) 22 28 661
Net charge-off rate 0.01% -0.15% 0.05% 0.06% 1.71%
Non-performing loans 3,225 3,934 4,054 3,980 4,490
Non-performing assets 4,768 5,479 5,599 5,748 6,258
Allowance for loan losses 1,504 1,489 1,517 1,562 1,583
Non-performing loans as a % of total loans held for investment 1.57% 2.26% 2.35% 2.36% 2.97%
Non-performing assets as a % of total assets 1.70% 2.33% 2.40% 2.50% 2.50%
Allowance for loan losses as a % of total loans held for investment 0.73% 0.86% 0.88% 0.93% 1.05%
Allowance for loan losses as a % of non-performing loans 46.64% 37.85% 37.42% 39.25% 35.26%
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 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) 2014 2013 2013 2013 2013
Tangible Equity and Tangible Assets (Period End)
Total shareholders' equity (GAAP) $ 13,026 $ 13,287 $ 13,167 $ 13,164 $ 13,273
Less: intangible assets 130 139 148 157 166
Tangible Equity (non-GAAP) $ 12,896 $ 13,148 $ 13,019 $ 13,007 $ 13,107
Total assets (GAAP) $ 280,256 $ 235,148 $ 232,972 $ 229,520 $ 250,367
Less: intangible assets 130 139 148 157 166
Tangible assets (non-GAAP) $ 280,126 $ 235,009 $ 232,824 $ 229,363 $ 250,201
Total equity to total assets (GAAP) 4.65% 5.65% 5.65% 5.74% 5.30%
Book value per share (GAAP) $ 4.67 $ 4.77 $ 4.74 $ 4.74 $ 4.78
Tangible equity to tangible assets (non-GAAP) 4.60% 5.59% 5.59% 5.67% 5.24%
Tangible book value per share (non-GAAP) $ 4.63 $ 4.72 $ 4.69 $ 4.69 $ 4.72
Tangible Equity and Tangible Assets (Average)
Total shareholders' equity (GAAP) 13,332 13,266 13,027 13,254 14,006
Less: intangible assets 136 144 153 162 171
Tangible Equity (non-GAAP) $ 13,196 $ 13,123 $ 12,875 $ 13,093 $ 13,836
Total assets (GAAP) 241,660 231,435 235,067 254,765 213,728
Less: intangible assets 136 144 153 162 171
Tangible assets (non-GAAP) $ 241,524 $ 231,292 $ 234,915 $ 254,604 $ 213,558
Total equity to total assets (GAAP) 5.52% 5.73% 5.54% 5.20% 6.55%
Book value per share (GAAP) $ 4.78 $ 4.76 $ 4.69 $ 4.77 $ 5.04
Tangible equity to tangible assets (non-GAAP) 5.46% 5.67% 5.48% 5.14% 6.48%
Tangible book value per share (non-GAAP) $ 4.73 $ 4.71 $ 4.64 $ 4.72 $ 4.98

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

Source:Cordia Bancorp