FAIRFAX, Va.--(BUSINESS WIRE)--The Freedom Bank of Virginia (OTCQX:FDVA) continued its impressive record of growth through June 30, 2015 with total assets of $381,368,227, up (26.9%) from $300,555,167 a year earlier. Gains occurred across the bank’s major earning asset groups of marketable securities, loans held for sale and loans receivable. Marketable securities consisting of bonds increased to $32,520,056 up 72.8% from $18,823,922 a year earlier. Strong performance by the mortgage division increased loans available for sale at June 30, 2015 to $10,264,722, up from $459,000 the prior year. The bank’s highest yielding asset, loans receivable, grew to $306,080,492 at June 30, 2015, up 21.0% from $253,070,371 at June 30, 2014.
The bank continues maintaining high quality credit standards. Past due loans were only 0.04% at June 30, 2015 and non-performing assets for the bank were only 0.17%. Both of these measures of asset quality are superior to the bank’s peer group and better than national averages.
More loans generated total interest income of $7,973,176 at June 30, 2015, up 21.8% from $6,543,869 the prior year. Non interest income of $1,198,192 at June 30, 2015 increased $954,811 primarily due to an $885,485 increase in fees from mortgage banking operations from the prior year.
Richard Hutchison, Chief Mortgage Officer of Freedom Bank Mortgage, added, “We have assembled a great group of people here at Freedom Bank Mortgage, many of whom previously worked together. We look forward to continuing to build our team and are pleased we have been able to contribute to the bank’s overall profitability in a short period of time.”
Large increases in assets were funded by more deposits and capital. Non-interest bearing checking deposits were $53,421,966 at June 30, 2015 compared with $48,823,404 a year earlier. Interest bearing checking deposits were $75,990,493, up 51.5% from $50,145,053 the prior year. Certificates of Deposits increased to $215,697,857 at June 30, 2015 from $170,554,825 same period prior year. Capital increased to $32,163,397 at June 30, 2015, up $5,027,031(18.5%) from the $27,136,366 balance at June 30, 2014.
The bank earned a record pre-tax net income of $904,881 at June 30, 2015, up from $828,592 for the first half of 2014. Net income after tax was $597,381 at June 30, 2015. Freedom Bank earned a pre-tax net income of $688,857 for the quarter ended June 30, 2015 up (43.4%) from the $480,377 pre-tax net income for the same period the prior year. The bank incurred no income tax expense in 2014. Net income after taxes was $454,857 for the quarter ended June 30, 2015. This was the bank’s twenty-fifth consecutive quarterly net profit.
CEO Craig Underhill indicated, “The bank made a substantial investment in its mortgage division in the first quarter of 2015, which affected net income for that quarter. We began realizing a return on that investment in the second quarter. Strong mortgage banking revenue and loan production were the primary drivers increasing profitability.”
Freedom Bank is a community-oriented, locally-owned bank with locations in Fairfax, Vienna, and Reston 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 Federal Financial Institutions Examination Council. 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, 2015 | June 30,2014 | |||||||
ASSETS | ||||||||
Cash and due from banks | $ | 7,433,050 | $ | 7,260,790 | ||||
Federal funds sold | 19,048,000 | 15,828,000 | ||||||
Interest Bearing Balances with Banks | 1,026,177 | 1,022,092 | ||||||
Investment securities available for sale, at fair value | 32,520,056 | 18,823,922 | ||||||
Investment securities held to maturity | - | 23,780 | ||||||
FHLB and Federal Reserve Bank stock | 1,267,600 | 797,400 | ||||||
Loans held for sale | 10,264,722 | 459,000 | ||||||
Loans receivable | 306,080,492 | 253,070,371 | ||||||
Allowance for possible loan losses | (2,930,920 | ) | (2,695,357 | ) | ||||
Net Loans | 303,149,572 | 250,375,014 | ||||||
Premises and equipment, net | 808,779 | 251,582 | ||||||
Accrued interest and other receivables | 909,014 | 743,942 | ||||||
Deferred Tax Asset | 1,320,000 | 996,000 | ||||||
Other assets | 1,429,857 | 1,844,427 | ||||||
Bank Owned Life Insurance | 2,191,400 | 2,129,218 | ||||||
Total Assets | $ | 381,368,227 | $ | 300,555,167 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Liabilities: | ||||||||
Demand deposits: | ||||||||
Non-interest bearing deposits | $ | 53,421,966 | $ | 48,823,404 | ||||
Interest Checking | 75,990,493 | 50,145,053 | ||||||
Savings deposits | 2,855,498 | 2,870,723 | ||||||
Time deposits | 215,697,857 | 170,554,825 | ||||||
Total Deposits | 347,965,814 | 272,394,005 | ||||||
Other accrued expenses | 1,119,868 | 938,191 | ||||||
Accrued interest payable | 119,148 | 86,605 | ||||||
Total Liabilities | 349,204,830 | 273,418,801 | ||||||
Stockholders' Equity: | ||||||||
Common stock, $3.16 par value. (15,000,000 shares authorized: | ||||||||
4,279,349 shares issued and outstanding June 30, 2015 | ||||||||
3,815,029 shares issued and outstanding June 30, 2014) | 13,509,682 | 12,042,431 | ||||||
Additional paid-in capital | 18,628,656 | 16,372,319 | ||||||
Accumulated other comprehensive income | (296,237 | ) | (230,493 | ) | ||||
Retained earnings (deficit) | 321,296 | (1,047,891 | ) | |||||
Total Stockholders' Equity | 32,163,397 | 27,136,366 | ||||||
Total Liabilities and Stockholders' Equity | $ | 381,368,227 | $ | 300,555,167 | ||||
The Freedom Bank of Virginia | ||||||||||||
Statements of Operations | ||||||||||||
UNAUDITED | ||||||||||||
For the three months ended | For the six months ended | |||||||||||
June 30, | June 30, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
Interest Income | ||||||||||||
Interest and fees on loans | $ | 3,933,577 | $ | 3,255,751 | $ | 7,653,779 | $ | 6,274,996 | ||||
Interest on investment securities | 162,819 | 120,280 | 307,371 | 256,160 | ||||||||
Interest on Federal funds sold | 4,712 | 5,152 | 12,026 | 12,713 | ||||||||
Total Interest Income | 4,101,108 | 3,381,183 | 7,973,176 | 6,543,869 | ||||||||
Interest Expense | ||||||||||||
Interest on deposits | 720,220 | 546,780 | 1,400,569 | 1,075,866 | ||||||||
Net Interest Income | 3,380,888 | 2,834,403 | 6,572,607 | 5,468,003 | ||||||||
Provision for Possible Loan Losses | 170,000 | 135,000 | 470,000 | 235,000 | ||||||||
Net Interest Income after Provision for Possible Loan Losses |
3,210,888 | 2,699,403 | 6,102,607 | 5,233,003 | ||||||||
Other Income | ||||||||||||
Service charges and other income | 919,986 | 143,695 | 1,167,359 | 215,766 | ||||||||
Increase in cash surrender value of bank-owned life insurance | 15,259 | 13,911 | 30,833 | 27,615 | ||||||||
Total Other Income | 935,245 | 157,606 | 1,198,192 | 243,381 | ||||||||
Operating Expenses | ||||||||||||
Officers and employee compensation and benefits | 2,214,368 | 1,469,177 | 4,038,990 | 2,850,847 | ||||||||
Occupancy expense | 201,979 | 149,402 | 399,090 | 285,957 | ||||||||
Equipment and depreciation expense | 117,400 | 77,551 | 225,983 | 154,960 | ||||||||
Insurance expense | 68,802 | 54,143 | 138,677 | 109,612 | ||||||||
Professional fees | 221,690 | 191,533 | 453,398 | 421,038 | ||||||||
Data and item processing | 224,301 | 188,888 | 458,182 | 371,804 | ||||||||
Business development | 44,233 | 40,601 | 95,594 | 91,026 | ||||||||
Franchise tax | 75,571 | 64,470 | 141,486 | 128,218 | ||||||||
Other operating expenses | 288,932 | 140,867 | 444,518 | 234,330 | ||||||||
Total Operating Expenses | 3,457,276 | 2,376,632 | 6,395,918 | 4,647,792 | ||||||||
Income before Income Taxes | 688,857 | 480,377 | 904,881 | 828,592 | ||||||||
Provision for Income Taxes | 234,000 | - | 307,500 | - | ||||||||
Net Income | $ | 454,857 | $ | 480,377 | $ | 597,381 | $ | 828,592 | ||||
Net Income Per Common Share | $ | 0.11 | $ | 0.13 | $ | 0.14 | $ | 0.22 | ||||