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Cordia Bancorp Inc. Reports Second Quarter Profit

MIDLOTHIAN, Va., Aug. 24, 2015 (GLOBE NEWSWIRE) -- Cordia Bancorp Inc. ("Cordia") (NASDAQ:BVA), parent company of Bank of Virginia, reported net income of $236,000 or $0.04 per share for the second quarter of 2015, compared to a net loss of $270,000, or $(0.09) per share for the second quarter of 2014. For the first six months of 2015, net income was $587,000 or $0.09 per share compared to a net loss of $554,000, or $(0.19) per share, for the same period of 2014.

Highlights

  • 26% year-over-year growth in loans, excluding government guaranteed student loans
  • 16% year-over-year growth in total assets and total deposits
  • Nonperforming assets decreased to 1.08% of total assets
  • Ramp-up of CordiaGrad, an online lending platform to refinance student loans.

Chief Executive Officer Jack Zoeller stated, "In 2015 we have continued our exceptional growth in assets which has averaged 25% per year since 2011. Our new online lending channel CordiaGrad is now accelerating its production of high quality consumer loans. In addition, our recruitment of Ed Barham as the new Bank of Virginia CEO demonstrates our commitment to strategic as well as organic growth."

Balance Sheet Activity

  • Asset Growth. Total assets increased to $342.8 million at June 30, 2015, compared to $318.6 million at December 31, 2014. Year-over-year, total assets increased 16%, from $295.5 million at June 30, 2014. During the six months of 2015, loans held for investment increased 6%, or $12.9 million. Of this amount, organic originations accounted for $19.9 million while purchased guaranteed student loans decreased $7.0 million. In addition, investment securities increased $11.3 million, while cash and cash equivalents decreased $2.5 million.
  • Deposit Growth. Total deposits at June 30, 2015, were $284.6 million, an increase of $19.0 million from $265.6 million at December 31, 2014. Year-over-year, total deposits increased 16%, from $245.2 million at June 30, 2014.
  • Asset Quality. Asset quality continued to improve, with non-performing assets decreasing to $3.7 million, or 1.08% of total assets, at June 30, 2015, from $3.9 million, or 1.21% of total assets, at December 31, 2014, and $4.1 million, or 1.39%, at June 30, 2014.
  • Tangible Book Value. Tangible book value per share was $4.19 at June 30, 2015.

Operating Results

Three months ended June 30, 2015 compared to the three months ended June 30, 2014

  • Net income for the quarter ended June 30, 2015 was $236,000 compared to a net loss of $270,000 for the prior year second quarter.
  • Net interest income was $2.15 million for the second quarter of 2015, compared to $2.08 million for the second quarter of 2014.
  • Net interest income, net of acquisition accounting adjustments, increased $91,000, or 4.5%.
  • Net interest margin was 2.78% and 3.05% for the second quarter of 2015 and 2014, respectively. Adjusting for the impact of acquisition accounting, net interest margin was 2.71% for the 2015 quarter compared to 2.95% for the 2014 quarter.
  • The provision for loan losses was $63,000 in the second quarter of 2015 compared to a provision of $209,000 in the prior year quarter.
  • Noninterest income increased to $97,000 from $62,000 in the prior year quarter.
  • Noninterest expense decreased $248,000 to $1.95 million for the second quarter of 2015, compared to $2.20 million for the second quarter of 2014 primarily due to a favorable reversal in the 2015 quarter of a fair value discount of $225,000 related to the purchase of a bank property and the termination of the related lease.

Six months ended June 30, 2015 compared to the six months ended June 30, 2014

  • Net income for the first six months of 2015 was $587,000 compared to a net loss of $554,000 for the first six months of 2014.
  • Net interest income was $4.16 million for the 2015 period, compared to $3.97 million for the 2014 period.
  • Net interest income, net of acquisition accounting adjustments, increased $276,000, or 7.2%.
  • Net interest margin was 2.74% and 3.19% for the first six months of 2015 and 2014, respectively. Adjusting for the impact of acquisition accounting, net interest margin was 2.69% for the 2015 period compared to 3.06% for the 2014 period.
  • The provision for loan losses was a recovery of $277,000 for the first six months of 2015 compared to a provision of $229,000 for the first six months of 2014.
  • Noninterest income increased to $310,000 from $185,000 in the prior year period due primarily to an increase in gains on the sale of securities and loans of $80,000.
  • Noninterest expense decreased $318,000 to $4.16 million for the first six months of 2015, compared to $4.48 million for the first six months of 2014 primarily due to a favorable reversal in the 2015 quarter of a fair value discount of $225,000 related to the purchase of a bank property and the termination of the related lease.

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.

In late 2014 the Bank launched CordiaGrad, an online lending channel that offers refinancing to highly qualified borrowers holding federal, private, or parent student loans.

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)
June 30, March 31, Dec. 31, Sept. 30, June 30,
(Dollars in thousands, except per share data) 2015 2015 2014 2014 2014
Assets
Cash and due from banks $ 11,771 $ 9,602 $ 5,484 $ 5,789 $ 5,332
Fed funds sold and Interest-bearing deposits 7,593 23,495 16,363 6,131 9,843
Total cash and cash equivalents 19,364 33,097 21,847 11,920 15,175
Securities available for sale, at fair value 58,445 41,411 53,483 54,581 45,835
Securities held to maturity, at cost 27,087 20,132 20,716 21,263 21,839
Restricted securities 2,331 2,405 2,092 1,525 1,525
Loans held for sale 96 117 -- -- --
Loans held for investment:
Commercial real estate 111,180 109,734 103,253 92,300 90,909
Commercial and industrial 27,919 24,057 24,153 25,376 24,605
Guaranteed student loans 57,900 61,441 64,870 67,421 70,624
Consumer and other 28,865 24,521 20,683 19,221 18,147
Total loans held for investment 225,864 219,753 212,959 204,318 204,285
Less: Allowance for loan losses (990) (1,102) (1,089) (1,226) (1,407)
Net loans held for investment 224,874 218,651 211,870 203,092 202,878
Premises and equipment, net 6,083 4,402 4,432 4,496 4,510
Accrued interest receivable 2,033 1,986 2,040 1,902 1,830
Other real estate owned, net of valuation allowance 1,769 1,647 1,641 1,543 1,543
Other assets 704 696 479 485 390
Total assets $ 342,786 $ 324,544 $ 318,600 $ 300,807 $ 295,525
Liabilities and stockholders' equity
Non-interest bearing deposits 31,239 27,628 30,709 24,490 24,890
Savings and interest bearing demand deposits 100,596 83,077 83,339 78,779 75,660
Time deposits 152,800 154,920 151,555 149,679 144,643
Total deposits 284,635 265,625 265,603 252,948 245,193
Accrued expenses and other liabilities 464 1,061 861 877 3,419
FHLB borrowings 30,000 30,000 25,000 20,000 20,000
Total liabilities 315,099 296,686 291,464 273,825 268,612
Common stock - voting 51 51 51 51 51
Common stock - nonvoting 14 14 14 14 14
Additional paid-in-capital 33,061 33,011 32,956 32,895 32,847
Retained deficit (4,830) (5,066) (5,417) (5,477) (5,559)
Accumulated other comprehensive loss (609) (152) (468) (501) (440)
Total stockholders' equity 27,687 27,858 27,136 26,982 26,913
Total liabilities and stockholders' equity $ 342,786 $ 324,544 $ 318,600 $ 300,807 $ 295,525
Cordia Bancorp
Consolidated Statements of Income (unaudited)
Three Months Ended Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,
(Dollars in thousands, except per share data) 2015 2015 2014 2014 2014 2015 2014
Interest Income
Interest and fees on loans $ 2,327 $ 2,183 $ 2,247 $ 2,275 $ 2,252 $ 4,510 $ 4,401
Investment securities 383 363 405 346 311 746 518
Interest on federal funds sold and deposits with banks 5 7 6 4 9 12 15
Total interest income 2,715 2,553 2,658 2,625 2,572 5,268 4,934
Interest Expense
Interest on deposits 470 454 451 443 441 924 867
Interest on FHLB Borrowings 93 89 76 57 56 182 97
Total interest expense 563 543 527 500 497 1,106 964
Net interest income 2,152 2,010 2,131 2,125 2,075 4,162 3,970
Provision for (recovery of) loan losses 63 (340) 182 (106) 209 (277) 229
Net interest income after provision for (recovery of) loan losses 2,089 2,350 1,949 2,231 1,866 4,439 3,741
Non-interest income
Service charges on deposit accounts 30 30 34 44 19 60 45
Net gain (loss) on sale of available for sale securities -- 114 116 (3) -- 114 64
Other fee income 67 69 50 41 43 136 76
Total non-interest income 97 213 200 82 62 310 185
Non-interest expense
Salaries and employee benefits 1,082 1,280 1,094 1,244 1,102 2,362 2,508
Professional services 100 84 104 92 125 184 231
Occupancy 159 153 139 139 136 312 287
Reversal of occupancy fair value discount (225) -- -- -- -- (225) --
Data processing and communications 206 198 184 206 160 404 302
FDIC assessment and bank fees 92 90 96 99 96 182 190
Bank franchise taxes 49 49 23 23 27 98 56
Student loan servicing fees and other loan expenses 208 146 191 144 210 354 336
Other real estate expenses 45 6 18 6 17 51 22
Supplies and equipment 70 73 78 82 83 143 158
Insurance 19 20 42 40 44 39 85
Director's fees 21 26 50 46 75 47 91
Marketing and business development 31 18 21 15 9 49 15
Other operating expenses 93 69 49 95 114 162 199
Total non-interest expense 1,950 2,212 2,089 2,231 2,198 4,162 4,480
Net income (loss) $ 236 $ 351 $ 60 $ 82 $ (270) 587 (554)
Earnings (loss) per share, basic and diluted $ 0.04 $ 0.05 $ 0.01 $ 0.01 $ (0.09) $ 0.09 $ (0.19)
Weighted average shares outstanding, basic 6,583,848 6,559,217 6,504,106 6,504,106 3,033,300 6,571,600 2,898,047
Weighted average shares outstanding, diluted 6,583,848 6,559,217 6,504,106 6,504,106 3,033,300 6,571,600 2,898,047
Cordia Bancorp
Consolidated Financial Highlights (unaudited)
As of and for the Three Months Ended Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,
(Dollars in thousands, except per share data) 2015 2015 2014 2014 2014 2015 2014
Results of Operations
Interest income $ 2,715 $ 2,553 $ 2,658 $ 2,625 $ 2,572 $ 5,268 $ 4,934
Interest expense 563 543 527 500 497 1,106 964
Net interest income 2,152 2,010 2,131 2,125 2,075 4,162 3,970
Provision for (recovery of) loan losses 63 (340) 182 (106) 209 (277) 229
Net interest income after provision for (recovery of) loan losses 2,089 2,350 1,949 2,231 1,866 4,439 3,741
Non-interest income 97 213 200 82 62 310 185
Non-interest expense 1,950 2,212 2,089 2,231 2,198 4,162 4,480
Net income (loss) $ 236 $ 351 $ 60 $ 82 $ (270) $ 587 $ (554)
Earnings (loss) per share, basics and diluted $ 0.04 $ 0.05 $ 0.01 $ 0.01 $ (0.09) $ 0.09 $ (0.19)
Weighted average shares outstanding, basic 6,583,848 6,559,217 6,504,106 6,504,106 3,033,300 6,571,600 2,898,047
Weighted average shares outstanding, diluted 6,583,848 6,559,217 6,504,106 6,504,106 3,033,300 6,571,600 2,898,047
Performance Ratios
Return on average assets 0.29% 0.44% 0.08% 0.11% -0.38% 0.36% -0.42%
Return on average equity 3.40% 5.20% 0.88% 1.21% -4.21% 4.29% -5.66%
Return on average tangible equity 3.41% 5.22% 0.88% 1.21% -4.23% 4.30% -5.70%
Efficiency ratio 86.71% 99.51% 89.62% 101.09% 102.85% 93.07% 107.82%
Yields and Rates
Yield on loans 4.18% 4.16% 4.29% 4.47% 4.40% 4.17% 4.60%
Yield on securities 2.12% 2.07% 2.04% 1.94% 2.27% 2.10% 2.19%
Yield on interest earning assets 3.51% 3.42% 3.53% 3.72% 3.78% 3.46% 3.94%
Cost of interest bearing deposits 0.79% 0.78% 0.76% 0.78% 0.82% 0.79% 0.85%
Cost of total deposits 0.71% 0.70% 0.68% 0.71% 0.74% 0.70% 0.76%
Cost of borrowings 1.19% 1.25% 1.25% 1.13% 1.12% 1.22% 1.29%
Cost of interest bearing liabilities 0.84% 0.83% 0.81% 0.81% 0.85% 0.83% 0.88%
Interest rate spread 2.67% 2.59% 2.72% 2.91% 2.94% 2.63% 3.06%
Net interest margin 2.78% 2.69% 2.83% 3.01% 3.05% 2.74% 3.19%
Capital
Total equity to total assets 8.08% 8.58% 8.52% 8.97% 9.11% 8.08% 9.11%
Tangible equity to total assets 8.05% 8.56% 8.49% 8.94% 9.07% 8.05% 9.07%
Book value per share 4.21 4.23 4.17 4.15 4.14 4.21 4.14
Tangible book value per share 4.19 4.22 4.16 4.13 4.12 4.19 4.12
Common shares outstanding 6,582,806 6,584,106 6,504,106 6,504,106 6,504,106 6,582,806 6,505,781
Average Balances
Loans $ 223,286 $ 212,566 $ 207,833 $ 201,953 $ 205,104 $ 217,956 $ 191,451
Securities 72,391 71,198 78,590 70,848 54,904 71,797 47,367
Earning assets 310,680 302,481 298,712 279,876 272,733 306,603 250,715
Total assets 327,439 321,455 315,167 295,834 286,525 324,464 264,216
Interest bearing deposits 238,715 235,388 234,953 223,927 215,856 237,061 204,959
Total deposits 267,356 264,434 262,947 248,087 238,416 265,903 227,130
FHLB borrowings 31,346 28,778 24,185 20,000 20,000 30,069 15,083
Interest bearing liabilities 270,061 264,166 259,138 243,927 235,856 267,130 220,042
Total equity 27,835 27,353 27,198 26,918 25,727 27,595 19,564
Tangible equity 27,745 27,254 27,089 26,800 25,601 27,500 19,434
Asset Quality
Net charge-offs/(recoveries) 175 (353) 319 75 306 (178) 311
Net charge-off rate 0.31% -0.67% 0.61% 0.15% 0.60% -0.16% 0.16%
Non-performing loans 1,918 2,108 2,221 1,323 2,572 1,918 2,572
Non-performing assets 3,687 3,755 3,862 2,866 4,115 3,687 4,115
Allowance for loan losses 990 1,102 1,089 1,226 1,407 990 1,407
Non-performing loans as a % of total loans held for investment 0.85% 0.96% 1.04% 0.65% 1.26% 0.85% 1.26%
Non-performing assets as a % of total assets 1.08% 1.16% 1.21% 0.95% 1.39% 1.08% 1.39%
Allowance for loan losses as a % of total loans held for investment 0.44% 0.50% 0.51% 0.60% 0.69% 0.44% 0.69%
Allowance for loan losses as a % of non-performing loans 51.62% 52.28% 49.03% 92.67% 54.70% 51.62% 54.70%
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 Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,
(Dollars in thousands, except per share data) 2015 2015 2014 2014 2014 2015 2014
Tangible Equity and Tangible Assets (Period End)
Total shareholders' equity (GAAP) $ 27,687 $ 27,858 $ 27,136 $ 26,982 $ 26,913 $ 27,687 $ 26,913
Less: intangible assets 86 95 104 112 121 86 121
Tangible Equity (non-GAAP) $ 27,601 $ 27,763 $ 27,032 $ 26,870 $ 26,792 $ 27,601 $ 26,792
Total assets (GAAP) $ 342,786 $ 324,544 $ 318,600 $ 300,807 $ 295,525 $ 342,786 $ 295,525
Less: intangible assets 86 95 104 112 121 86 121
Tangible assets (non-GAAP) $ 342,700 $ 324,449 $ 318,496 $ 300,695 $ 295,404 $ 342,700 $ 295,404
--
Total equity to total assets (GAAP) 8.08% 8.58% 8.52% 8.97% 9.11% 8.08% 9.11%
Book value per share (GAAP) $ 4.21 $ 4.23 $ 4.17 $ 4.15 $ 4.14 $ 4.21 $ 4.14
Tangible equity to tangible assets (non-GAAP) 8.05% 8.56% 8.49% 8.94% 9.07% 8.05% 9.07%
Tangible book value per share (non-GAAP) $ 4.19 $ 4.22 $ 4.16 $ 4.13 $ 4.12 $ 4.19 $ 4.12
Tangible Equity and Tangible Assets (Average)
Total shareholders' equity (GAAP) $ 27,835 $ 27,353 $ 27,198 $ 26,918 $ 25,727 $ 27,595 $ 19,564
Less: intangible assets 90 99 109 118 126 95 130
Tangible Equity (non-GAAP) $ 27,745 $ 27,254 $ 27,089 $ 26,800 $ 25,601 $ 27,500 $ 19,434
Total assets (GAAP) 327,439 321,455 315,167 295,834 286,525 324,464 264,216
Less: intangible assets 90 99 109 118 126 95 130
Tangible assets (non-GAAP) $ 327,349 $ 321,356 $ 315,058 $ 295,716 $ 286,399 $ 324,369 $ 264,086
Total equity to total assets (GAAP) 8.50% 8.51% 8.63% 9.10% 8.98% 8.50% 7.40%
Book value per share (GAAP) $ 4.23 $ 4.15 $ 4.18 $ 4.14 $ 3.95 $ 4.18 $ 3.01
Tangible equity to tangible assets (non-GAAP) 8.48% 8.48% 8.60% 9.06% 8.94% 8.48% 7.36%
Tangible book value per share (non-GAAP) $ 4.21 $ 4.14 $ 4.16 $ 4.12 $ 3.94 $ 4.18 $ 2.99

CONTACT: FOR MORE INFORMATION CONTACT: Mark Severson, EVP & CFO, Cordia Bancorp Inc. 804-763-1322

Source:Cordia Bancorp