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Cordia Bancorp Inc. Reports Third Quarter Profit

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

CONTACT: Mark Severson, CFO, Cordia Bancorp Inc. 804-763-1322

Source:Cordia Bancorp