updated 4/1/2011 6:46:49 PM ET 2011-04-01T22:46:49

MIDLOTHIAN, Va., April 1, 2011 (GLOBE NEWSWIRE) -- Bank of Virginia (Nasdaq:BOVA) ( www.bankofva.com ), has announced financial results for the year ended December 31, 2010.

For the year ended December 31, 2010, the Bank reported a net loss of $9.2 million, or ($1.85) per share, compared with a net loss of $4.2 million or ($1.39) per share for the year ended December 31, 2009. The loss primarily occurred as a result of a considerable increase in the provision for loan losses from the 2009 amount of $4.5 million to $9.0 million in 2010. Further deterioration in the quality of the Bank's loan portfolio combined with a fourth quarter enhancement of procedures for earlier identification of problem loans led to the additional charges. The Bank improved its net interest income by $287,000, or 4.7%, to $6.4 million in 2010, compared to $6.1 million in 2009. The net interest margin for 2010 improved to 3.09% from 2.88% in 2009. The improvement in net interest margin was the result of repricing our interest-bearing liabilities lower by 76 basis points, while the pricing on interest-earning assets was reduced by 48 basis points from 2009.

Review of the balance sheet

The Bank's total assets decreased $12.4 million, or 5.6%, to $209.2 million at December 31, 2010 from December 31, 2009's total of $221.6 million. The main driver behind the reduction of assets was the $26.6 million, or 16%, decline in net loans from $166.3 million in 2009 to $139.7 million in 2010. The decline in loan balances was attributable to loan charge-offs and pay downs in the absence of significant new lending. The Bank was restricted from loan portfolio growth under the terms of its Written Agreement with banking regulators. Offsetting that reduction in loans was an increase of cash and cash equivalents to $25.7 million from $8.1 million, an increase of $17.6 million, or 217.3%. On the liability side of the balance sheet, total deposits were $181.2 million at December 31, 2010, down from $193.1 million at year end 2009, a drop of $11.9 million, or 6.2%. The Bank did not renew certain higher costing time deposits in 2010, thereby reducing its costs of funds. Time deposits balances fell $8.0 million from $148.2 million at December 31, 2009 to $140.2 million at December 31, 2010. Total liabilities were $192.2 million and $204.4 million at December 31, 2010 and 2009, respectively.  

The Bank's total capital at December 31, 2010 was $17.0 million compared to $17.2 million at December 31, 2009. In December 2010, the Bank restored its well-capitalized status according to regulatory guidelines. The Bank's capital ratios at December 31, 2010 were as follows: tier one leverage capital of 7.9%, tier one risked based capital of 10.9%, and total risked based capital of 12.2%. The Bank closed an equity transaction on December 10, 2010, with Cordia Bancorp, which infused $9.6 million in new net capital, making the Bank a majority-owned subsidiary of Cordia Bancorp. 

Recent Changes

In December 2010, the Bank enhanced its board oversight through the appointment of six new directors in conjunction with the Cordia transaction. Furthermore, Jack Zoeller was appointed Chairman, President and Chief Executive Officer and Nancy Corsiglia, Chief Financial Officer, further strengthening the management and operations of the Bank. 

Highlights of 2011 Strategic Plan

In early 2011, the Bank developed a realignment plan for its loan quality and service and delivery system. The major components of the plan are as follows: reduction of full time equivalent staff, Saturday closure of a low traffic retail location, closure of a full–service branch located in close proximity to the Bank's main office, as well as the hiring new senior credit and lending staff.

"We have made significant improvements to manage the asset quality issues caused by the current credit cycle and continue to take a very conservative approach to lending.  Although the negative results were expected, they do create a great opportunity for the Bank, especially with the additional resources and talent we have added to our Board of Directors and Senior Management team. Moreover, the additional capital from Cordia provides a foundation for repositioning the Bank and returning it to long-term profitability," said Jack Zoeller, Chairman and CEO.

About Bank of Virginia

Bank of Virginia, a Virginia state chartered bank headquartered in Midlothian, Virginia, currently operates five full-service offices in the counties of Chesterfield and Henrico, Virginia. Bank of Virginia's common stock is traded on the NASDAQ stock market under the quotation symbol "BOVA". Additional investor relations information can be found on the internet at www.bankofva.com. Bank of Virginia is a member of the FDIC and Equal Housing Lender.

About Cordia Bancorp

Cordia Bancorp is a private bank holding company incorporated in 2009 by a team of former bank CEOs, directors and advisors seeking to invest in undervalued or troubled community banks in the Mid-Atlantic and Southeast. Its application to become a bank holding company and to buy a majority interest in the Bank was approved by the Board of Governors of the Federal Reserve in November 2010. Cordia purchased $10,300,000 of the Bank's common stock at a price of $1.52 per share, resulting in the ownership of approximately 59.8% of the outstanding shares. Additional information about Cordia can be found at www.cordiabancorp.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 Bank's periodic filings with the Board of Governors of the Federal Reserve System, including the Bank's annual report on Form 10-K as filed with the Board of Governors of the Federal Reserve. 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.

     
BANK OF VIRGINIA
Balance Sheets
     
   
  December 31,
  2010 (audited) 2009 (audited)
     
Assets    
Cash and due from banks  $ 25,641,357  $ 4,596,953
Federal funds sold and interest bearing deposits with banks  42,925  3,527,759
Total cash and cash equivalents  25,684,282  8,124,712
Securities available for sale, at fair market value  34,956,000  38,109,075
Restricted securities  1,435,150  1,475,350
Loans net of allowance for loan losses of $6,832,444 and $5,222,023 in 2010 and 2009, respectively  139,739,604  166,342,222
Premises and equipment, net  5,655,255  5,630,860
Accrued interest receivable  774,101  849,201
Other real estate owned, net of valuation allowance  551,076  578,535
Other assets  394,948  441,565
Total assets  $ 209,190,416  $ 221,551,520
     
Liabilities and Stockholders' Equity    
Deposits    
Non-interest bearing  $ 14,506,462  $ 14,701,106
Savings and interest-bearing demand  26,488,921  30,211,719
Time, $100,000 and over  64,148,592  60,631,093
Other time  76,096,688  87,598,774
Total deposits  181,240,663  193,142,692
     
Accrued expenses and other liabilities  970,143  1,213,562
FHLB borrowings  10,000,000  10,000,000
Total liabilities  192,210,806  204,356,254
     
Stockholders' Equity    
Preferred stock, $5 par value, 5,000,000 shares authorized, none issued  - -  - -
Common stock, 40,000,000 shares authorized, in 2010, $1 par value, 11,328,182, shares issued and outstanding; in 2009, $2.50 par value, 4,551,866 shares issued and outstanding  11,328,182  11,379,665
Additional paid-in capital  24,610,544  14,975,103
Retained deficit  (19,277,288)  (10,126,367)
Accumulated other comprehensive income  318,172  966,865
Total stockholders' equity  16,979,610  17,195,266
Total liabilities and stockholders' equity  $ 209,190,416  $ 221,551,520
     
BANK OF VIRGINIA
Statements of Operations
Years Ended December 31, 2010 and 2009
 
     
  2010 (audited) 2009 (audited)
Interest income    
Interest and fees on loans  $ 9,313,952  $ 10,041,122
Investment securities  1,500,691  2,042,383
Federal funds sold and deposits with banks  17,374  7,019
Total interest income  10,832,017  12,090,524
Interest expense    
Interest on deposits  4,009,181  5,531,975
Interest on federal funds purchased  103  6,187
Interest on FHLB borrowings  443,088  459,852
Total interest expense  4,452,372  5,998,014
Net interest income  6,379,645  6,092,510
Provision for loan losses  9,017,516  4,483,650
Net interest income (loss) after provision for loan losses  (2,637,871)  1,608,860
     
Non-interest income    
Service charges on deposit accounts  170,046  182,040
 Net gain on sale of available for sale securities  544,173  281,287
 Other fee income  142,886  173,652
 Loss on sale and impairment of OREO  (25,337)  (228,036)
Total non-interest income  831,768  408,943
     
Non-interest expense    
Salaries and employee benefits  3,426,463  3,240,723
Occupancy expense  662,273  516,298
Equipment expense  343,258  260,589
Data processing  405,758  480,628
Marketing expense  162,978  144,207
Legal and professional  650,134  351,913
Bank franchise tax  130,570  131,160
FDIC assessment  669,093  428,949
Other operating expenses  894,291  675,762
Total non-interest expense  7,344,818  6,230,229
 Net loss  $ (9,150,921)  $ (4,212,426)
 Basic loss per share  $ (1.85)  $ (1.39)
 Diluted loss per share $ (1.85)  $ (1.39)
     
Weighted average shares outstanding, basic  4,941,736  3,040,195
Weighted average shares outstanding, diluted  4,941,736  3,040,195
         
Bank of Virginia 
Quarterly Earnings Summary
(Unaudited)
         
  2010
  March 31 June 30 Sept 30 Dec 31
   
Interest income  $ 2,816,769  $ 2,619,999  $ 2,754,815  $ 2,640,434
Interest expense  1,208,587  1,145,138  1,104,559  994,088
Net interest income  1,608,182  1,474,861  1,650,256  1,646,346
Provision for loan losses  325,885  161,543  4,841,759  3,688,329
Net interest income (loss) after provision for loan losses  1,282,297  1,313,318  (3,191,503)  (2,041,983)
Other income  67,066  74,664  59,813  86,051
Securities gains  94,428  --  14,825  434,920
Other expenses  1,801,890  1,652,119  1,771,619  2,119,189
(Loss) income before income taxes  (358,099)  (264,137)  (4,888,484)  (3,640,201)
Income taxes  --  --  --  --
Net (loss)  $ (358,099)  $ (264,137)  $ (4,888,484)  $ (3,640,201)
Basic (loss) per share  $ (0.08)  $ (0.06)  $ (1.07)  $ (0.60)
Diluted (loss) per share  $ (0.08)  $ (0.06)  $ (1.07)  $ (0.60)
Dividends $ --  $ --  $ --  $ -- 
Weighted-average basic shares  4,551,866  4,551,866  4,551,866  6,057,714
Weighted-average diluted shares  4,551,866  4,551,866  4,551,866  6,057,714
         
     
   
  2009
  March 31 June 30 Sept 30 Dec 31
   
Interest income  $ 2,934,147  $ 3,054,114  $ 3,077,017  $ 3,025,246
Interest expense  1,551,378  1,592,965  1,505,434  1,348,237
Net interest income  1,382,769  1,461,149  1,571,583  1,677,009
Provision for loan losses  69,750  3,570,525  (181,576)  1,024,951
Net interest income after provision for loan losses  1,313,019  (2,109,376)  1,753,159  652,058
Other income  85,602  105,947  89,336  (153,229)
Securities gains  59,501  96,431  119,361  5,994
Other expenses  1,356,834  1,450,846  1,431,487  1,991,062
(Loss) income before income taxes  101,288  (3,357,844)  530,369  (1,486,239)
Income taxes  --  --  --  --
Net (loss) income  $ 101,288  $ (3,357,844)  $ 530,369  $ (1,486,239)
Basic earnings (loss) per share  $ 0.03  $ (1.11)  $ 0.17  $ (0.48)
Diluted earnings (loss) per share  $ 0.03  $ (1.11)  $ 0.17  $ (0.48)
Dividends $ --  $ --  $ --  $ -- 
Weighted-average basic shares  3,031,866  3,031,866  3,031,866  3,064,909
Weighted-average diluted shares  3,031,866  3,031,866  3,031,866  3,064,909
             
Average Balance Sheets and Net Interest Income Analysis (unaudited)
             
  2010 2009
  Average   Interest  Yield/ Average   Interest  Yield/
  Balance   Rate Balance   Rate
Earning Assets:            
Loans:            
Held for Investment (1)(2)            
 Taxable  $ 155,881,574  $ 9,313,952 5.98%  $ 166,061,284  $ 10,041,122 6.05%
Securities Available for Sale:            
 Taxable  44,177,360  1,500,691 3.40%  42,466,085  2,042,383 4.81%
Interest Bearing            
 Deposits with Banks  48,402  833 1.72%  --  --  
Federal Funds Sold  6,436,436  16,541 0.26%  2,947,390  7,019 0.24%
 Total Earning Assets  206,543,772 $ 10,832,017 5.24%  211,474,759 $ 12,090,524 5.72%
Other Assets  15,452,277      10,021,129    
 Total  $ 221,996,049      $ 221,495,888    
Interest-Bearing Liabilities:            
Demand Deposits  $ 7,236,365  28,478 0.39%  $ 6,819,076  29,598 0.43%
Savings Deposits  23,705,408  236,431 1.00%  18,468,997  237,040 1.28%
Time Deposits  144,945,204  3,744,272 2.58%  151,888,433  5,265,337 3.47%
Federal Funds Purchased  10,151  103 1.01%  614,496  6,187 1.01%
FHLB Borrowings  10,000,000  443,088 4.43%  12,109,589  459,852 3.80%
 Total Interest-bearing            
 Liabilities  185,897,128  4,452,372 2.40%  189,900,591  5,998,014 3.16%
             
Other Liabilities  16,469,614      15,222,222    
Stockholders' Equity  19,629,307      16,373,075    
 Total  $ 221,996,049      $ 221,495,888    
Net Interest Income    $ 6,379,645      $ 6,092,510  
Net Interest Rate Spread (3)     2.84%     2.56%
Net Interest Margin (4)     3.09%     2.88%
             
(1) Non-accrual loans, if any, are included in average balances outstanding, with no related interest income during non-accrual period.
(2) The effect of fees collected on loans totaling $33,000 and $114,000 in 2010 and 2009, respectively, increased the annualized yield on loans by 0.51% from 6.05% and by 0.07% from 5.98% in 2010 and 2009, respectively.
(3) Represents the difference between the yield on earning assets and cost of funds.
(4) Represents net interest income divided by average interest earning assets.
     
  December 31, 
Capital ratios: 2010 2009
Tier 1 leverage 7.9% 7.3%
Tier 1 capital to risk-weighted assets 10.9% 8.9%
Total regulatory capital to risk-weighted assets 12.2% 10.2%
Total equity to total assets 8.12% 7.76%
      
Credit quality ratios:    
Allowance for loan losses to total loans  4.66% 3.04%
Nonperforming loans to total loans  4.72% 4.18%
Nonperforming assets to total assets 5.09% 4.52%
CONTACT:  Jack Zoeller,
          Chairman and CEO, 804-763-1333

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