Freedom Bank Earns Record Pre-Tax Income of $1.9 Million in 2011

FAIRFAX, Va.--(BUSINESS WIRE)--The Freedom Bank of Virginia (Bank) (Bulletin Board:FDVA.OB) earned a pre-tax net profit in 2011 of $1,900,300 ($0.80 per share), up from $1,821,514 in 2010 ($0.77 per share).

“The Bank’s investment in new lending staff paid off in 2011 through improved loan growth. These same lenders also generated new deposit customers, resulting in significant increases in transaction account balances held by the Bank.”

Freedom Bank took a tax benefit of $612,000 in 2010 that increased net profit after taxes to $2,433,514 in 2010. No benefits were taken for taxes in 2011. This is the second consecutive year of profit as well as the eleventh consecutive profitable quarter for the Bank.

Assets broke the $200 million level at $207,557,264 at 12/31/2011, up 21.1% from $171,350,118 at 12/31/2010. Gross loans increased to $157,414,693 at 12/31/2011, up 11.6% from $141,067,476 at 12/31/2011. Stockholder’s Equity increased to $23,697,402, up 9.8% from $21,575,018 at 12/31/2010. Book value per share was $10.03 per share at 12/31/2011, up from $9.15 the prior year. All were at record levels at 12/31/2011.

Primary drivers for the increased interest income were a $16,347,217 increase in loans and an $8,077,806 increase in investment securities held at 12/31/2011 versus the prior year.

At 12/31/2011 deposits in transaction accounts were $67,066,073, up 37% from $48,836,933 the prior year. Total deposits grew by 22.8% over year end levels for 2010.

CEO Craig S. Underhill said, “The Bank’s investment in new lending staff paid off in 2011 through improved loan growth. These same lenders also generated new deposit customers, resulting in significant increases in transaction account balances held by the Bank.”

Capital continues to be the strength of the Bank. Regulatory capital minimums to be considered well capitalized 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 12/31/2011 the ratios for the Bank were 12.85%, 14.44% and 14.52% respectively, all in the well capitalized category. This compares favorably to the 12/31/2010 levels of 12.49%, 14.85% and 14.91% respectively. The Bank continues its tradition of 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.

The Freedom Bank of Virginia
Statements of Financial Condition
(Unaudited)
	December 31, 2011			December 31, 2010
ASSETS
Assets:
Cash and due from banks	$	16,128,032		$	3,441,325
Federal funds sold		15,753,000			17,212,000
Interest Bearing Balances with Banks		1,007,339			-
Investment securities available for sale, at fair value		15,183,798			5,767,655
Investment securities held to maturity		666,152			2,004,489
Federal Reserve Bank stock		689,350			615,600
Loans receivable		157,414,693			141,067,476
Allowance for possible loan losses		(2,037,164	)		(1,735,353	)
Net Loans		155,377,529			139,332,123
Bank Premises and equipment, net		213,857			315,774
Accrued interest and other receivables		519,450			517,293
Other assets		1,406,757			1,531,859
Deferred Tax Asset		612,000			612,000
Total Assets	$	207,557,264		$	171,350,118
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits
Demand deposits:
Non-interest bearing deposits	$	25,392,303		$	29,797,798
Interest Checking		41,673,770			19,039,135
Savings deposits		1,269,065			830,262
Time deposits		114,811,184			99,455,768
Total Deposits		183,146,322			149,122,963
Other accrued expenses		654,898			580,902
Accrued interest payable		58,642			71,235
Total Liabilities		183,859,862			149,775,100
Stockholders' Equity
Common stock, $5 par value. (5,000,000 shares authorized: 2,363,665 shares issued and outstanding, December 31, 2011 2,357,361 shares issued and outstanding, December 31, 2010)		11,818,325			11,786,805
Additional paid-in capital		16,184,810			16,042,863
Accumulated other comprehensive income		134,776			86,159
Retained earnings (deficit)		(4,440,509	)		(6,340,809	)
Total Stockholders' Equity		23,697,402			21,575,018
Total Liabilities and Stockholders' Equity	$	207,557,264		$	171,350,118

The Freedom Bank of Virginia
Statements of Operations
(Unaudited)
	For the three months ended					For the year ended
	December 31,					December 31,
	2011		2010			2011		2010
Interest Income
Interest and fees on loans	$	2,313,214	$	2,170,347		$	9,110,312	$	8,730,192
Interest on investment securities		117,583		86,812			399,427		379,702
Interest on Federal funds sold		12,508		13,603			38,662		46,035
Total Interest Income		2,443,305		2,270,762			9,548,401		9,155,929
Interest Expense
Interest on deposits		487,861		541,206			1,861,828		2,197,618
Net Interest Income		1,955,444		1,729,556			7,686,573		6,958,311
Provision for Possible Loan Losses		15,000		-			348,000		200,000
Net Interest Income after
Provision for Possible Loan Losses		1,940,444		1,729,556			7,338,573		6,758,311
Other Income
Service charges and other income		180,332		208,536			568,028		548,428
Operating Expenses
Officers and employee compensation and benefits		872,473		849,263			3,406,089		3,156,155
Occupancy expense		129,763		140,176			530,328		544,326
Equipment and depreciation expense		48,660		55,120			218,752		234,641
Insurance expense		41,579		73,908			241,878		332,217
Professional fees		207,101		106,727			398,568		101,590
Data and item processing		144,927		137,349			534,008		525,559
Business development		27,607		22,144			124,851		109,202
Franchise tax		48,840		52,871			202,955		202,136
Other operating expenses		119,884		60,371			348,872		279,399
Total Operating Expenses		1,640,834		1,497,929			6,006,301		5,485,225
Income before Income Taxes		479,942		440,163			1,900,300		1,821,514
Income Tax (Benefit) Expense		-		(612,000	)		-		(612,000	)
Net Income	$	479,942	$	1,052,163		$	1,900,300	$	2,433,514
Net Income Per Common Share	$	0.20	$	0.45		$	0.80	$	1.03
Net Income Per Diluted Share	$	0.20	$	0.45		$	0.80	$	1.03