FAIRFAX, Va.--(BUSINESS WIRE)--The Freedom Bank of Virginia (OTCQX: FDVA) earned net income of $402 thousand for the first quarter of 2016, which is more than double the $142 thousand earned the same period the prior year. Solid asset growth by the Bank and profitable mortgage banking activities produced the strong gain. Growth was not sacrificed to achieve increased profits as total assets grew over $71 million from the prior year to $425 million at March 31, 2016.
“Investments in prior years produced improving profitability in 2015 and the trend is accelerating in 2016,” said CEO Craig Underhill. “The Bank has sufficient staff to continue producing very good asset growth, particularly with the larger legal lending limit from our recent capital raise, without significant additions to staff. Asset quality remains well above our peer group as the Bank continues to grow loans to and to support our clients.”
Revenue increases across all business lines were responsible for the improved profitability.
- Investment income doubled to $284 thousand.
- Interest on loans increased $604 thousand to $4.32 million.
- Mortgage banking revenue increased $403 thousand to $570 thousand.
- Earnings per share increased to $0.07 at March 31, 2016 versus $0.03 for 2015 despite the additional shares from the recent capital raise.
Asset growth continued through the first quarter of 2016 much faster than the national average, for the third consecutive year.
- Total assets increased $71 million to $425 million.
- Loans increased 14% from $293 million to $335 million.
- Investment securities held more than doubled from $30 million to $61 million.
Asset growth was funded by very favorable increases in operating accounts and additional equity through the successful capital raise.
- Checking deposits were unchanged at $56 million.
- Interest checking balances increased to $101 million at March 31, 2016 from $74 million a year earlier.
- Equity increased to $49 million from $32 million the prior year due to retained earnings and a $16 million capital infusion. Book value per share was $8.02 at March 31, 2016, up from $7.47 at March 31, 2015.
Loans past due more than thirty days were 0.23% of total loans for the quarter. This was slightly down from 0.24% at March 31, 2015. Non performing assets were 0.23% of total assets compared to 0.13% at March 31, 2015. Both of these levels are lower than local peers.
Freedom Bank is a community-oriented bank with locations in Fairfax, Reston 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 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 | |||||||||
| (UNAUDITIED) | |||||||||
| March 31, 2016 | March 31, 2015 | ||||||||
| ASSETS | |||||||||
| Cash and due from banks | $ | 6,805,540 | $ | 7,184,426 | |||||
| Federal funds sold | 10,107,000 | 13,844,000 | |||||||
| Interest Bearing Balances with Banks | 1,029,270 | 1,025,154 | |||||||
| Investment securities available for sale, at fair value | 60,724,772 | 29,843,965 | |||||||
| FHLB and Federal Reserve Bank stock | 2,062,700 | 1,201,500 | |||||||
| Loans held for sale | 5,712,411 | 4,778,993 | |||||||
| Loans receivable | 334,793,831 | 292,752,822 | |||||||
| Allowance for possible loan losses | (3,317,959 | ) | (2,985,807 | ) | |||||
| Net Loans | 331,475,872 | 289,767,015 | |||||||
| Premises and equipment, net | 673,126 | 819,678 | |||||||
| Accrued interest and other receivables | 1,144,289 | 821,241 | |||||||
| Deferred Tax Asset | 1,604,000 | 1,320,000 | |||||||
| Other assets | 1,559,988 | 883,962 | |||||||
| Bank Owned Life Insurance | 2,237,015 | 2,176,141 | |||||||
| Total Assets | $ | 425,135,983 | $ | 353,666,075 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Liabilities: | |||||||||
| Demand deposits: | |||||||||
| Non-interest bearing deposits | $ | 56,151,831 | $ | 56,025,178 | |||||
| Interest Checking | 101,231,999 | 73,919,620 | |||||||
| Savings deposits | 1,977,218 | 2,162,176 | |||||||
| Time deposits | 205,891,287 | 188,402,312 | |||||||
| Total Deposits | 365,252,335 | 320,509,286 | |||||||
| FHLB advances | 9,057,143 | - | |||||||
| Other accrued expenses | 1,285,717 | 1,075,194 | |||||||
| Accrued interest payable | 112,182 | 109,522 | |||||||
| Total Liabilities | 375,707,377 | 321,694,002 | |||||||
| Stockholders' Equity: | |||||||||
|
Common stock of $0.01 par value with 25,000,000 shares authorized, 6,166,454 shares issued and outstanding at March 31, 2016 |
|||||||||
|
Common stock of $3.16 par value with 5,000,000 shares authorized, 4,279,335 shares issued and outstanding March 31, 2015 |
|||||||||
| Voting Common Stock | 55,377 | 13,509,638 | |||||||
|
5,537,747 and 4,279,335 shares issued and outstanding March 31, 2016 and March 31, 2015 |
|||||||||
| Non-Voting Common Stock | 6,287 | - | |||||||
| 628,707 shares issued and outstanding March 31, 2016 | |||||||||
| Additional paid-in capital | 47,739,708 | 18,613,529 | |||||||
| Accumulated other comprehensive income | (217,699 | ) | (17,532 | ) | |||||
| Retained earnings (deficit) | 1,844,934 | (133,562 | ) | ||||||
| Total Stockholders' Equity | 49,428,607 | 31,972,073 | |||||||
| Total Liabilities and Stockholders' Equity | $ | 425,135,984 | $ | 353,666,075 | |||||
| The Notes to Financial Statements are an integral part of these statements. | |||||||||
| The Freedom Bank of Virginia | ||||||
| Statements of Operations | ||||||
| (UNAUDITED) | ||||||
| For the three months ended | ||||||
| March 31, | ||||||
| 2016 | 2015 | |||||
| Interest Income | ||||||
| Interest and fees on loans | $ | 4,324,296 | $ | 3,720,202 | ||
| Interest on investment securities | 284,377 | 144,552 | ||||
| Interest on Federal funds sold | 7,082 | 7,314 | ||||
| Total Interest Income | 4,615,755 | 3,872,068 | ||||
| Interest Expense | ||||||
| Interest on deposits | 830,066 | 680,349 | ||||
| Interest on borrowed funds | 18,218 | - | ||||
| Total Interest Expense | 848,284 | 680,349 | ||||
| Net Interest Income | 3,767,471 | 3,191,719 | ||||
| Provision for Possible Loan Losses | 143,000 | 300,000 | ||||
|
Net Interest Income after Provision for Possible Loan Losses |
3,624,471 | 2,891,719 | ||||
| Other Income | ||||||
| Gain on sale of mortgage loans | 570,386 | 167,216 | ||||
| Service charges and other income | 65,488 | 53,879 | ||||
| Increase in cash surrender value of bank-owned life insurance | 15,320 | 15,574 | ||||
| Total Other Income | 651,194 | 236,669 | ||||
| Operating Expenses | ||||||
| Officers and employee compensation and benefits | 2,453,682 | 1,824,622 | ||||
| Occupancy expense | 242,317 | 197,111 | ||||
| Equipment and depreciation expense | 127,215 | 108,583 | ||||
| Insurance expense | 78,597 | 69,875 | ||||
| Professional fees | 226,066 | 231,708 | ||||
| Data and item processing | 236,847 | 233,881 | ||||
| Business development | 43,085 | 51,361 | ||||
| Franchise tax | 75,201 | 65,915 | ||||
| Other operating expenses | 182,405 | 129,308 | ||||
| Total Operating Expenses | 3,665,415 | 2,912,364 | ||||
| Income before Income Taxes | 610,250 | 216,024 | ||||
| Provision for Income Taxes | 207,800 | 73,500 | ||||
| Net Income | $ | 402,450 | $ | 142,524 | ||
| The Notes to Financial Statements are an integral part of these statements. | ||||||
