Freedom Bank Celebrates 13th Consecutive Quarterly Profit

FAIRFAX, Va.--(BUSINESS WIRE)--The Freedom Bank of Virginia (Bank) (Bulletin Board:FDVA.OB) earned a Net Profit Before Taxes of $252,083 for the quarter ending June 30, 2012, its thirteenth consecutive quarterly profit. Net Profit for the quarter ending June 30, 2011 was $386,395. Net Profit Before Taxes was $560,855 for the first half of 2012 compared to a Net Profit for the first half of 2011 of $802,037. The reduction in profit was principally due to an increase in the provision for loan losses. According to CEO Craig S. Underhill, “The Bank continues to be profitable and is growing during a challenging economy.”

“The Bank continues to be profitable and is growing during a challenging economy.”

Total Assets increased 18% to $206,560,467, up from $174,913,192 at June 30, 2011. Loans Receivable increased $17,447,975 (12.5%) to $157,026,486 and Investment Securities increased $20,099,420 (175%) to $31,584,026 during the same period. The growth in assets was funded by $29,666,827 growth in deposits (19.5%). Non Interest Checking increased $4,508,951 (14.8%) to $34,889,239. Certificates of Deposit growth was $24,608,276 (26.1%).

Capital continues to be strong, growing $1,896,511 (8.4%) over the same period in the prior year to $24,409,278. 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 to be considered well capitalized. At June 30, 2012, the ratios for the Bank were 11.29%, 14.54% and 15.80% respectively, all in the well capitalized category. 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

	June 30, 2012			June 30, 2011
ASSETS
Cash and due from banks	$	2,871,644		$	3,268,385
Federal funds sold		8,776,000			16,737,000
Interest bearing balances with banks		1,012,820			1,000,813
Investment securities available for sale, at fair value		31,129,001			10,611,672
Investment securities held to maturity		455,025			872,934
Federal Reserve Bank stock		719,900			659,850
Loans held for sale		1,836,478			1,242,325
Loans receivable		157,026,486			139,578,511
Allowance for possible loan losses		(2,119,622	)		(1,970,153	)
Net Loans		154,906,864			137,608,358
Premises and equipment, net		215,502			257,091
Accrued interest and other receivables		643,367			523,171
Other assets		3,381,866			1,519,593
Deferred tax asset		612,000			612,000

Total Assets	$	206,560,467		$	174,913,192

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits:
Non-interest bearing deposits		34,889,239			30,380,288
Interest Checking		26,278,244			26,158,957
Savings deposits		1,445,136			1,014,823
Time deposits		118,864,983			94,256,707
Total Deposits		181,477,602			151,810,775

Other accrued expenses		601,522			520,096
Accrued interest payable		72,065			69,554
Total Liabilities		182,151,189			152,400,425

Stockholders' Equity
Common stock, $4.17 par value. (5,000,000 shares authorized: issued and outstanding 2,846,117 shares for June 30, 2012 and 2,842,398 shares for June 30, 2011)		11,858,828			11,843,325
Additional paid-in capital		16,213,270			16,065,218
Accumulated other comprehensive income		216,833			142,996
Retained earnings (deficit)		(3,879,653	)		(5,538,772	)

Total Stockholders' Equity		24,409,278			22,512,767

Total Liabilities and Stockholders' Equity	$	206,560,467		$	174,913,192


The Freedom Bank of Virginia
Statements of Operations
UNAUDITED

	For the three months ended				For the six months ended
	June 30,				June 30,
	2012		2011		2012		2011

Interest Income
Interest and fees on loans	$	2,317,251	$	2,248,951	$	4,616,034	$	4,561,313
Interest on investment securities		170,401		92,691		314,041		174,130
Interest on Federal funds sold		11,837		9,059		25,623		17,833
Total Interest Income		2,499,489		2,350,701		4,955,698		4,753,276

Interest Expense
Interest on deposits		516,163		453,485		1,038,092		932,759

Net Interest Income		1,983,326		1,897,216		3,917,606		3,820,517

Provision for Possible Loan Losses		305,000		128,000		571,000		313,000

Net Interest Income after
Provision for Possible Loan Losses		1,678,326		1,769,216		3,346,606		3,507,517

Other Income
Service charges and other income		216,058		71,457		420,003		188,154

Operating Expenses
Officers and employee compensation and benefits		919,118		841,444		1,868,733		1,677,604
Occupancy expense		126,878		133,521		259,929		269,639
Equipment and depreciation expense		48,126		54,873		96,369		117,880
Insurance expense		44,191		66,820		85,580		138,114
Professional fees		141,686		65,518		226,993		123,348
Data and item processing		151,985		125,585		303,898		251,364
Business development		31,914		33,067		66,110		64,815
Franchise tax		56,447		52,404		106,787		105,275
Other operating expenses		121,956		81,046		191,355		145,595
Total Operating Expenses		1,642,301		1,454,278		3,205,754		2,893,634

Income before Income Taxes		252,083		386,395		560,855		802,037
Provision for Income Taxes		-		-		-		-

Net Income	$	252,083	$	386,395	$	560,855	$	802,037

Net Income Per Common Share	$	0.09	$	0.14	$	0.20	$	0.28

Net Income Per Diluted Share	$	0.09	$	0.14	$	0.20	$	0.28