The bank’s branch at 10501 Patterson Ave.
And then there were two.
The rejuvenation of the local banking scene continued this week as Midlothian-based Bank of Virginia, once stuck in a hole of heavy losses and bad loans, was released Thursday from a restrictive written agreement with regulators that lasted more than three years.
It’s the second time this month a local bank was able to shed such a burden and the third since December. Only two local banks remain under written agreement: Village Bank and Central Virginia Bank.
Jack Zoeller
Bank of Virginia’s turnaround has been steered by a team of veteran bankers who in late 2010 bought a controlling interest in the small bank. Inheriting the written agreement, they brought with them big plans and $14 million in fresh capital, and they created a new holding company for the bank, Cordia Bancorp.
“We said what we were going to do, and we did it,” said Jack Zoeller, Cordia’s chief executive. “And we’re very proud. This is an institution that could well not have made it.”
The bank suffered almost three full years of losses between 2009 and 2011 fueled by loan defaults, and its capital dwindled. Regulators stepped in at the beginning of 2010 and instituted the written agreement, designed to help the bank get its bad loans under control and rebuild its capital.
Zoeller and crew set out to rebuild the management team, clean up the balance sheet and loan portfolio, and change the bank’s lending practices. They cut the staff to 37 employees from 58.
Once it had a handle on things, Cordia began lending in earnest – particularly commercial loans to local businesses – and bought into a national student loan pool to drive earnings and asset growth. The staff is back up to around 45 employees.
Those moves have led to steady profits through first half of the year, and the bank’s asset base has jumped $50 million since the end of 2012.
“Bank of Virginia is a very sound bank now, I’d say, in all respects,” Zoeller said.
Cordia reported $261,000 in profit in the second quarter and profit of $482,000 through the first half of 2013. Its asset base grew to $230 million.
Its levels of delinquent loans and foreclosed real estate declined to $7.6 million as of June 30 from more than $9 million six months ago.
It reported $205 million in deposits, up from $154 million over the past six months.
“In the last year, we’ve probably written close to $100 million in new loans, of which probably about half are student [loans] and most of the rest are commercial,” Zoeller said. “Our normal Richmond area commercial loan production has been going quite well.”
Getting out from under the written agreement allows the bank to accelerate its growth strategy.
Zoeller said it would look to expand through acquisition and by adding locations across the Richmond market. The bank has four branches in the region and two ATM-only sites that could eventually be built out into full-service locations.
The bank will look at potential capital raises to fuel its expansion, but Zoeller wouldn’t get too specific.
“Raising capital is a lot easier when you don’t have the regulatory agreement,” he said.
The bank’s branch at 10501 Patterson Ave.
And then there were two.
The rejuvenation of the local banking scene continued this week as Midlothian-based Bank of Virginia, once stuck in a hole of heavy losses and bad loans, was released Thursday from a restrictive written agreement with regulators that lasted more than three years.
It’s the second time this month a local bank was able to shed such a burden and the third since December. Only two local banks remain under written agreement: Village Bank and Central Virginia Bank.
Jack Zoeller
Bank of Virginia’s turnaround has been steered by a team of veteran bankers who in late 2010 bought a controlling interest in the small bank. Inheriting the written agreement, they brought with them big plans and $14 million in fresh capital, and they created a new holding company for the bank, Cordia Bancorp.
“We said what we were going to do, and we did it,” said Jack Zoeller, Cordia’s chief executive. “And we’re very proud. This is an institution that could well not have made it.”
The bank suffered almost three full years of losses between 2009 and 2011 fueled by loan defaults, and its capital dwindled. Regulators stepped in at the beginning of 2010 and instituted the written agreement, designed to help the bank get its bad loans under control and rebuild its capital.
Zoeller and crew set out to rebuild the management team, clean up the balance sheet and loan portfolio, and change the bank’s lending practices. They cut the staff to 37 employees from 58.
Once it had a handle on things, Cordia began lending in earnest – particularly commercial loans to local businesses – and bought into a national student loan pool to drive earnings and asset growth. The staff is back up to around 45 employees.
Those moves have led to steady profits through first half of the year, and the bank’s asset base has jumped $50 million since the end of 2012.
“Bank of Virginia is a very sound bank now, I’d say, in all respects,” Zoeller said.
Cordia reported $261,000 in profit in the second quarter and profit of $482,000 through the first half of 2013. Its asset base grew to $230 million.
Its levels of delinquent loans and foreclosed real estate declined to $7.6 million as of June 30 from more than $9 million six months ago.
It reported $205 million in deposits, up from $154 million over the past six months.
“In the last year, we’ve probably written close to $100 million in new loans, of which probably about half are student [loans] and most of the rest are commercial,” Zoeller said. “Our normal Richmond area commercial loan production has been going quite well.”
Getting out from under the written agreement allows the bank to accelerate its growth strategy.
Zoeller said it would look to expand through acquisition and by adding locations across the Richmond market. The bank has four branches in the region and two ATM-only sites that could eventually be built out into full-service locations.
The bank will look at potential capital raises to fuel its expansion, but Zoeller wouldn’t get too specific.
“Raising capital is a lot easier when you don’t have the regulatory agreement,” he said.