Freedom Bank Earns Record Quarterly Profits

FAIRFAX, Va.--(BUSINESS WIRE)--The Freedom Bank of Virginia (Bulletin Board:FDVA.OB) earned a record third quarter net profit of $618,321 ($0.26 per share), a 10.0 % increase from $561,600 ($0.24 per share) for the same period last year. This is the tenth consecutive profitable quarter for the Bank.

“The Bank invested in staff in the first half of 2011 to support the growth of two of the Bank’s initiatives, the medical professionals practice and the government contractor group, both of which contributed to the growth in loans and operating deposits during the third quarter.”

Assets broke the $200 million level at $200,913,660 at the end of the third quarter, up from $176,147,204 for the same period the prior year. Gross loans increased to $149,538,098 at September 30, 2011, up from $136,707,966 at September 30, 2010. Stockholder’s Equity increased to $22,976,863, up from $20,518,987 as of the end of the third quarter last year. All were at record levels at September 30^th.

Primary drivers for the quarter were increased interest income resulting from a $12,830,132 increase in loans since September 30, 2010, as well as a $72,500 gain on the sale of securities in the period.

Interest free demand deposits increased 11% from September 30, 2010 to $31,773,798. Including increases in money market accounts, total transaction accounts increased 54% from September 30, 2010 to $70,622,184. This allowed the Bank to reduce its more expensive CD balances by $2,527,701, yet still grow total deposits by 14% since September 30, 2010.

President & CEO Craig S. Underhill said, “The Bank invested in staff in the first half of 2011 to support the growth of two of the Bank’s initiatives, the medical professionals practice and the government contractor group, both of which contributed to the growth in loans and operating deposits during the third quarter."

Capital continues to be the strength of the Bank. Since December 31, 2009, Freedom Bank has increased its common equity by $3,917,835 (21%) to $22,976,863 as of September 30, 2011 through earnings. Book value per share grew to $9.72 per share at quarter end. Regulatory capital minimums for Tier 1 Leverage Ratio, Risk Based Capital Tier 1, and Risk Based Capital Tier 2 were 5.0%, 6.0% and 10.0% respectively. At September 30, 2011 the ratios for the Bank were 12.15%, 15.03% and 16.28% respectively, all in the well capitalized category. The Bank remains committed to maintaining a strong capital base to serve the needs of its customers and stockholders.

Freedom Bank is a community-oriented, locally-owned bank with locations in Fairfax and Vienna, Virginia. For information about Freedom Bank’s deposit and loan services, visit the Bank’s website at www.freedombankva.com.

This release contains forward-looking statements, including our expectations with respect to future events that are subject to various risks and uncertainties. Factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations include: fluctuation in market rates of interest and loan and deposit pricing, adverse changes in the overall national economy as well as adverse economic conditions in our specific market areas, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel. Other risks that can affect the Bank are detailed from time to time in our quarterly and annual reports filed with the Board of Governors of the Federal Reserve System. We caution readers that the list of factors above is not exclusive. The forward-looking statements are made as of the date of this release, and we may not undertake steps to update the forward-looking statements to reflect the impact of any circumstances or events that arise after the date the forward-looking statements are made. In addition, our past results of operations are not necessarily indicative of future performance.

Condensed Statement of Condition
As of September 30, 2011
UNAUDITED
	September 30, 2011			September 30, 2010
ASSETS
Cash and due from banks	$	18,072,108		$	3,693,179
Federal funds sold		18,742,000			26,150,000
Interest Bearing Balances with Banks		1,004,071			-
Investment securities available for sale, at fair value		11,325,335			5,992,507
Investment securities held to maturity		765,578			2,306,026
Federal Reserve Bank stock		675,400			598,150
Loans receivable		149,538,098			136,707,966
Allowance for possible loan losses		(2,021,135	)		(1,723,007	)
Net Loans		147,516,963			134,984,959
Premises & equipment, net		234,041			340,695
Accrued interest & other receivables		440,886			480,973
Other assets		1,525,278			1,600,715
Deferred Tax Asset		612,000			-
Total Assets	$	200,913,660		$	176,147,204
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits:
Non-interest bearing deposits	$	31,773,798		$	28,660,581
Interest Checking		38,848,386			17,321,751
Savings deposits		1,161,586			889,691
Time deposits		105,621,794			108,149,495
Total Deposits		177,405,564			155,021,518
Other accrued expenses		471,848			514,651
Accrued interest payable		59,385			92,048
Total Liabilities		177,936,797			155,628,217
Stockholders' Equity:
Common stock, $5 par value. (5,000,000 shares authorized:
2,363,665 shares issued and outstanding, September 30, 2011
2,357,361 shares issued and outstanding, September 30, 2010)		11,818,325			11,786,805
Additional paid-in capital		16,046,069			16,002,413
Accumulated other comprehensive income		32,920			122,741
Retained earnings (deficit)		(4,920,451	)		(7,392,972	)
Total Stockholders' Equity		22,976,863			20,518,987
Total Liabilities and Stockholders' Equity	$	200,913,660		$	176,147,204

Statement of Operations
As of September 30, 2011
UNAUDITED
	For the three months ended				For the nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Interest Income
Interest & fees on loans	$	2,235,785	$	2,256,641	$	6,797,098	$	6,559,845
Interest on investment securities		107,714		102,502		281,844		292,890
Interest on Federal funds sold		8,321		14,132		26,154		32,432
Total Interest Income		2,351,820		2,373,275		7,105,096		6,885,167
Interest Expense
Interest on deposits		441,208		585,087		1,373,967		1,656,412
Net Interest Income		1,910,612		1,788,188		5,731,129		5,228,755
Provision for Possible Loan Losses		20,000		-		333,000		200,000
Net Interest Income after
Provision for Possible Loan Losses		1,890,612		1,788,188		5,398,129		5,028,755
Other Income
Service charges & other income		199,542		157,337		387,696		339,892
Operating Expenses
Officers & employee compensation & benefits		856,012		783,257		2,533,616		2,306,892
Occupancy expense		130,926		139,477		400,565		404,150
Equipment & depreciation expense		52,212		55,087		170,092		179,521
Insurance expense		62,185		80,999		200,299		258,309
Professional fees		68,119		26,225		191,467		(5,137	)
Data & item processing		137,717		136,609		389,081		388,210
Business development		32,429		34,789		97,244		87,058
Franchise tax		48,840		44,871		154,115		149,265
Other operating expenses		83,393		82,611		228,988		219,028
Total Operating Expenses		1,471,833		1,383,925		4,365,467		3,987,296
Income before Income Taxes		618,321		561,600		1,420,358		1,381,351
Provision for Income Taxes		-		-		-		-
Net Income	$	618,321	$	561,600	$	1,420,358	$	1,381,351
Net Income Per Common Share	$	0.26	$	0.24	$	0.60	$	0.59
Net Income Per Diluted Share	$	0.26	$	0.24	$	0.60	$	0.59