Cordia Bancorp Inc. Sells CordiaGrad Student Loan Origination Platform
09 Marzo 2016 - 6:46PM
Cordia Bancorp Inc. ("Cordia") (NASDAQ:BVA), parent company of Bank
of Virginia, announced today that it has sold its student loan
origination platform, CordiaGrad, to its chief executive officer,
Jack Zoeller, who has stepped down from his positions with Cordia
and Bank of Virginia in connection with the transaction. The
transaction was approved by a committee of disinterested directors
and the Board of Directors. RP Financial, LC. provided a fairness
opinion.
CordiaGrad, which launched in late 2014, is an online lending
channel that offers refinancing to highly qualified borrowers
holding federal, private, or parent student loans.
Under the terms of the agreement, Bank of Virginia transferred
certain marketing agreements, internet domains, and intellectual
property to a newly formed subsidiary, which it sold to Mr. Zoeller
in exchange for nominal consideration and Mr. Zoeller’s agreement
to relinquish his rights under his employment agreement with
Cordia. Five Bank of Virginia employees, in addition to Mr.
Zoeller, will transfer to the new entity. No loans are being sold
as part of this transaction. In connection with the transaction, Ed
Barham has been appointed as President and Chief Executive Officer
of Cordia, as a director of Cordia and as Chairman of the Board of
Directors of Bank of Virginia.
"This transaction will permit CordiaGrad to accelerate its
growth and focus on competing in the dynamic market for on-line
lending and student loan refinancing without the constraints of
operating within a small community bank," said Jack Zoeller,
President and CEO of Cordia. "At the same time, the transaction
will reduce Cordia's non-interest expense. I know that I will leave
Bank of Virginia in the competent hands of the Bank's experienced
management team led by Ed Barham."
“The divestiture of Bank of Virginia’s online student lending
business will help Cordia to focus on its core businesses, while
allowing us to facilitate and explore future growth opportunities,”
commented Ed Barham.
Cordia anticipates recording charges totaling $1.6 million in
the first quarter relating to the loss on the sale of the
CordiaGrad business and the vesting of equity awards held by Mr.
Zoeller. The reduction to book value is expected to be
approximately $740,000. The transaction is expected to be
immediately accretive to Cordia’s earnings with an earnback period
for tangible book value dilution of one year or less. Cordia also
anticipates that the transaction will accelerate its ability to
recapture the valuation allowance on its $6.1 million net deferred
tax asset.
Bank of Virginia will continue to originate student loans on
behalf of CordiaGrad for an interim transition period.
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.
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.
FOR MORE INFORMATION CONTACT:
Mark Severson,
EVP and CFO, Cordia Bancorp Inc.
804-763-1322
Cordia Bancorp Inc. (NASDAQ:BVA)
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