FAIRFAX, Va.--(BUSINESS WIRE)--Freedom Bank of Virginia (Bank) (Bulletin Board:FDVA.OB) earned a net profit before taxes of $826,309 for the first half of 2013 compared to a net profit for the first half of 2012 of $560,855, an increase of 47.33%. Net profit before taxes was $525,713 for the quarter ending June 30, 2013. This was more than double the $252,083 net profit before taxes for the quarter ending June 30, 2012 and was the seventeenth consecutive quarterly profit for the Bank. Income increased from higher interest earned on loan volumes and a decrease in the provision for loan losses due to continued improving asset quality. According to CEO Craig Underhill, “The Bank invested in additional lending staff in the fourth quarter of last year and the first quarter of this year and we are seeing results from that investment. Additionally, the Bank is reaping the benefits of an effective credit culture from reduced loan loss provisions.”
Total assets increased 23.36% to $254,805,078, up from $206,560,467 at June 30, 2012. This was the first time assets exceeded $250,000,000 for the Bank. Loans receivable increased to $193,071,420 from $157,026,486 at June 30, 2012, a $36,044,934 (22.95%) increase. In addition to loan growth, quality also continues to improve with non-accrual loans declining as a percentage of total loans from 1.42% at June 30, 2012 to 0.78% at June 30, 2013.
Solid loan growth allowed the Bank to invest less in lower yielding marketable securities. Investment securities decreased slightly to $29,475,848 from $31,584,026 during the same period the prior year. The growth in assets was funded by $44,948,996 growth in deposits (24.77%). Non interest checking increased $2,922,740 (8.38%) to $37,811,979. Interest checking account balances increased $14,295,619 (54.40%) to $40,573,863. Certificates of deposit growth was $27,854,242 (23.43%) to $146,719,225.
Capital continues to be strong, growing $1,289,294 (5.28%) over the same period in the prior year to $25,698,572. The rapid increase in longer term interest rates at the end of the second quarter negatively impacted all banks’ investment securities including Freedom Bank. The rise in rates caused the value of bonds being held to decline by $367,005. Since the Bank continues to own these bonds, there has not been a loss realized from the change, but accounting rules require the Bank to show this change in value as a reduction in its capital account. Book value per share was $8.95. 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, 2013, the ratios for the Bank were 10.45%, 13.02% and 14.26%, respectively, all in the well capitalized category. The Bank continues its tradition of maintaining a robust capital base to serve the needs of its customers and stockholders.
About Freedom Bank
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, 2013 | June 30, 2012 | |||||||||
| ASSETS | ||||||||||
| Cash and due from banks | $ | 10,091,976 | $ | 2,871,644 | ||||||
| Federal funds sold | 14,798,000 | 8,776,000 | ||||||||
|
Interest bearing balances with banks |
1,018,023 | 1,012,820 | ||||||||
| Investment securities available for sale, at fair value | 29,398,108 | 31,129,001 | ||||||||
| Investment securities held to maturity | 77,740 | 455,025 | ||||||||
| Federal Reserve Bank stock | 766,650 | 719,900 | ||||||||
| Loans held for sale | 3,060,090 | 1,836,478 | ||||||||
| Loans receivable | 193,071,420 | 157,026,486 | ||||||||
| Allowance for possible loan losses | (2,456,325 | ) | (2,119,622 | ) | ||||||
| Net Loans | 190,615,095 |
154,906,864 |
||||||||
| Premises and equipment, net | 237,632 | 215,502 | ||||||||
| Accrued interest and other receivables | 875,489 | 643,367 | ||||||||
| Other assets | 1,100,550 | 1,369,751 | ||||||||
| Bank Owned Life Insurance | 2,072,864 | 2,012,115 | ||||||||
|
Deferred tax asset |
692,861 | 612,000 | ||||||||
| Total Assets | $ | 254,805,078 | $ | 206,560,467 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Liabilities: | ||||||||||
| Demand deposits: | ||||||||||
| Non-interest bearing deposits | $ | 37,811,979 | $ | 34,889,239 | ||||||
|
Interest checking |
40,573,863 | 26,278,244 | ||||||||
| Savings deposits | 1,321,531 | 1,445,136 | ||||||||
|
Time deposits |
146,719,225 | 118,864,983 | ||||||||
| Total Deposits | 226,426,598 | 181,477,602 | ||||||||
| Other accrued expenses | 2,595,661 | 601,522 | ||||||||
| Accrued interest payable | 84,247 | 72,065 | ||||||||
| Total Liabilities | 229,106,506 | 182,151,189 | ||||||||
| Stockholders' Equity: | ||||||||||
| Common stock, $4.17 par value. (5,000,000 shares authorized: | ||||||||||
| 2,872,117 shares issued and outstanding June 30, 2013 | ||||||||||
| 2,846,117 shares issued and outstanding June 30, 2012) | 11,967,248 | 11,858,828 | ||||||||
| Additional paid-in capital | 16,303,442 | 16,213,270 | ||||||||
| Accumulated other comprehensive income | (150,171 | ) | 216,834 | |||||||
| Retained earnings (deficit) | (2,421,947 | ) | (3,879,654 | ) | ||||||
| Total Stockholders' Equity | 25,698,572 | 24,409,278 | ||||||||
| Total Liabilities and Stockholders' Equity | $ | 254,805,078 | $ | 206,560,467 | ||||||
| The Freedom Bank of Virginia | ||||||||||||||||
| Statements of Operations | ||||||||||||||||
| UNAUDITED | ||||||||||||||||
| For the three months ended | For the six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Interest Income | ||||||||||||||||
| Interest and fees on loans | $ | 2,841,769 | $ | 2,317,251 | $ | 5,306,144 | $ | 4,616,034 | ||||||||
| Interest on investment securities | 136,644 | 170,401 | 238,005 | 314,041 | ||||||||||||
| Interest on Federal funds sold | 4,350 | 11,837 | 12,105 | 25,623 | ||||||||||||
| Total Interest Income | 2,982,763 | 2,499,489 | 5,556,254 | 4,955,698 | ||||||||||||
| Interest Expense | ||||||||||||||||
| Interest on deposits | 477,355 | 516,163 | 960,197 | 1,038,092 | ||||||||||||
| Net Interest Income | 2,505,408 | 1,983,326 | 4,596,057 | 3,917,606 | ||||||||||||
| Provision for Possible Loan Losses | 88,500 | 305,000 | 158,500 | 571,000 | ||||||||||||
|
Net interest income after |
||||||||||||||||
|
Provision for possible loan losses |
2,416,908 | 1,678,326 | 4,437,557 | 3,346,606 | ||||||||||||
| Other Income | ||||||||||||||||
| Service charges and other income | 212,266 | 203,943 | 443,804 | 407,888 | ||||||||||||
| Increase in cash surrender value of bank-owned life insurance | 14,442 | 12,115 | 29,689 | 12,115 | ||||||||||||
| Total Other Income | 226,708 | 216,058 | 473,493 | 420,003 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Officers and employee compensation and benefits | 1,309,644 | 919,118 | 2,514,065 | 1,868,733 | ||||||||||||
| Occupancy expense | 134,797 | 126,878 | 259,792 | 259,929 | ||||||||||||
| Equipment and depreciation expense | 54,638 | 48,126 | 107,342 | 96,369 | ||||||||||||
| Insurance expense | 52,907 | 44,191 | 104,436 | 85,580 | ||||||||||||
| Professional fees | 136,655 | 141,686 | 276,192 | 226,993 | ||||||||||||
| Data and item processing | 176,231 | 151,985 | 352,872 | 303,898 | ||||||||||||
| Business development | 38,832 | 31,914 | 86,878 | 66,110 | ||||||||||||
| Franchise tax | 61,023 | 56,447 | 120,684 | 106,787 | ||||||||||||
| Other operating expenses | 153,176 | 121,956 | 262,480 | 191,355 | ||||||||||||
| Total Operating Expenses | 2,117,903 | 1,642,301 | 4,084,741 | 3,205,754 | ||||||||||||
| Income before Income Taxes | 525,713 | 252,083 | 826,309 | 560,855 | ||||||||||||
| Provision for Income Taxes | - | - | - | - | ||||||||||||
| Net Income | $ | 525,713 | $ | 252,083 | $ | 826,309 | $ | 560,855 | ||||||||
| Net Income Per Common Share | $ | 0.18 | $ | 0.09 | $ | 0.29 | $ | 0.20 | ||||||||
| Net Income Per Diluted Share | $ | 0.18 | $ | 0.09 | $ | 0.29 | $ | 0.20 | ||||||||
