FAIRFAX, Va.--(BUSINESS WIRE)--The Freedom Bank of Virginia (OTCQX:FDVA) had second quarter net income of $663,424, up 45.9% from $454,857 for the second quarter of 2015, and midyear net income of $1,065,875, up 78.4% from $597,381 earned through June 30, 2015.
CEO Craig Underhill indicated, “The Bank is leveraging its increased legal lending limit to grow its loan portfolio, while maintaining our stringent credit underwriting standards. We made $1 million in net income by midyear for the first time, and are increasing our return on equity for our shareholders in line with larger high performing peers.”
Revenue increases across all business lines contributed to the improved profitability.
- Investment income doubled to $0.62 million.
- Interest on loans increased $1.20 million (15%) to $8.86 million.
- Mortgage banking revenue increased $0.88 million (102.4%) to $1.74 million.
- Earnings per share for the quarter were $0.11 at June 30, 2016. This was unchanged from the second quarter of 2015 due to 1,887,119 additional shares outstanding at June 30, 2016 versus the prior year from a successful stock sale.
Asset growth accelerated in the second quarter of 2016, remaining far above the national average for the third consecutive year.
- Total assets increased 24.8% or $94.5 million to $475.8 million at June 30, 2016 from the prior year.
- Loans receivable, the Bank’s highest yielding asset, increased 19.8% from $306.1 million to $366.8 million.
- Loans held for sale from the mortgage division increased 74.9% from $10.3 million at June 30, 2015 to $17.9 million at June 30, 2016
- Marketable securities consisting of bonds increased to $55.9 million at June 30, 2016 up 72.0% from $32.5 million at June 30, 2015.
Asset growth was funded by increases in operating accounts and borrowings.
- Checking deposits rose $13.2 million (24.7%) over the prior year to $66.6 million.
- Interest checking balances increased $27.3 million to $103.3 million at June 30, 2016, up 36% from $76.0 million a year earlier.
- Certificates of deposit increased 3.3% from the prior year from $215.7 million to $222.8 million.
- The Bank began borrowing from FHLB Atlanta in 2016 both to hedge longer term loans as well as short term to fund the build up in loans held for sale. Borrowings were $24.1 million at June 30, 2016, up from $0 the prior year. It also borrowed $5 million on a Fed Funds facility at June 30, 2016.
- Equity increased to $50.4 million from $32.1 million the prior year due to retained earnings and a $16 million capital infusion. Book value per share was $8.17 at June 30, 2016, up from $7.52 at June 30, 2015.
Asset quality remains far superior to national averages. Loans past due more than thirty days were 0.18% of total loans for the quarter compared to 0.04% at June 30, 2015. Non performing assets were 0.20% of total assets at June 30, 2016 versus 0.17% the prior year.
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 | |||||||||
|
(UNAUDITED) |
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| June 30, 2016 | June 30, 2015 | ||||||||
| ASSETS | |||||||||
| Cash and due from banks | $ | 26,728,752 | $ | 7,433,050 | |||||
| Federal funds sold | 107,000 | 19,048,000 | |||||||
| Interest Bearing Balances with Banks | 1,030,295 | 1,026,177 | |||||||
| Investment securities available for sale, at fair value | 55,927,128 | 32,520,056 | |||||||
| FHLB and Federal Reserve Bank stock | 2,883,000 | 1,267,600 | |||||||
| Loans held for sale | 17,958,377 | 10,264,722 | |||||||
| Loans receivable | 366,760,237 | 306,080,492 | |||||||
| Allowance for possible loan losses | (3,584,959 | ) | (2,930,920 | ) | |||||
| Net Loans | 363,175,278 | 303,149,572 | |||||||
| Premises and equipment, net | 641,784 | 808,779 | |||||||
| Accrued interest and other receivables | 1,161,348 | 909,014 | |||||||
| Deferred Tax Asset | 1,604,000 | 1,320,000 | |||||||
| Other assets | 2,363,071 | 1,429,857 | |||||||
| Bank Owned Life Insurance | 2,251,955 | 2,191,400 | |||||||
| Total Assets | $ | 475,831,988 | $ | 381,368,227 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Liabilities: | |||||||||
| Demand deposits: | |||||||||
| Non-interest bearing deposits | $ | 66,628,612 | $ | 53,421,966 | |||||
| Interest Checking | 103,320,977 | 75,990,493 | |||||||
| Savings deposits | 2,003,193 | 2,855,498 | |||||||
| Time deposits | 222,870,391 | 215,697,857 | |||||||
| Total Deposits | 394,823,173 | 347,965,814 | |||||||
| Fed Funds Purchased and FHLB advances | 29,057,143 | - | |||||||
| Other accrued expenses | 1,420,774 | 1,119,868 | |||||||
| Accrued interest payable | 137,956 | 119,148 | |||||||
| Total Liabilities | 425,439,046 | 349,204,830 | |||||||
| Stockholders' Equity: | |||||||||
|
Common stock of $0.01 par value with 25,000,000 shares authorized, 6,166,454 shares issued and outstanding at June 30, 2016 |
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|
Common stock of $3.16 par value with 15,000,000 shares authorized, 4,279,349 shares issued and outstanding June 30, 2015 |
|||||||||
| Voting Common Stock | 55,377 | 13,509,682 | |||||||
|
5,537,747 and 4,279,349 shares issued and outstanding June 30, 2016 and June 30, 2015 |
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| Non-Voting Common Stock | 6,287 | - | |||||||
| 628,707 shares issued and outstanding June 30, 2016 | |||||||||
| Additional paid-in capital | 47,744,708 | 18,628,656 | |||||||
| Accumulated other comprehensive income | 78,211 | (296,237 | ) | ||||||
| Retained earnings (deficit) | 2,508,359 | 321,296 | |||||||
| Total Stockholders' Equity | 50,392,942 | 32,163,397 | |||||||
| Total Liabilities and Stockholders' Equity | $ | 475,831,988 | $ | 381,368,227 | |||||
| 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 | For the six months ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||
| Interest Income | ||||||||||||
| Interest and fees on loans | $ | 4,532,347 | $ | 3,933,577 | $ | 8,856,643 | $ | 7,653,779 | ||||
| Interest on investment securities | 335,430 | 162,819 | 619,807 | 307,371 | ||||||||
| Interest on Federal funds sold | 640 | 4,712 | 7,722 | 12,026 | ||||||||
| Total Interest Income | 4,868,417 | 4,101,108 | 9,484,172 | 7,973,176 | ||||||||
| Interest Expense | ||||||||||||
| Interest on deposits | 851,589 | 720,220 | 1,681,655 | 1,400,569 | ||||||||
| Interest on borrowed funds | 31,102 | - | 49,320 | - | ||||||||
| Total Interest Expense | 882,691 | 720,220 | 1,730,975 | 1,400,569 | ||||||||
| Net Interest Income | 3,985,726 | 3,380,888 | 7,753,197 | 6,572,607 | ||||||||
| Provision for Possible Loan Losses | 267,000 | 170,000 | 410,000 | 470,000 | ||||||||
|
Net Interest Income after Provision for Possible Loan Losses |
3,718,726 | 3,210,888 | 7,343,197 | 6,102,607 | ||||||||
| Other Income | ||||||||||||
| Gain on sale of mortgage loans | 1,174,243 | 694,588 | 1,744,629 | 861,804 | ||||||||
| Service charges and other income | 56,696 | 54,205 | 122,184 | 108,084 | ||||||||
| Increase in cash surrender value of bank-owned life insurance | 14,940 | 15,259 | 30,260 | 30,833 | ||||||||
| Total Other Income | 1,245,879 | 764,052 | 1,897,073 | 1,000,721 | ||||||||
| Operating Expenses | ||||||||||||
| Officers and employee compensation and benefits | 2,733,780 | 2,214,368 | 5,187,462 | 4,038,990 | ||||||||
| Occupancy expense | 237,866 | 201,979 | 480,183 | 399,090 | ||||||||
| Equipment and depreciation expense | 126,412 | 117,400 | 253,627 | 225,983 | ||||||||
| Insurance expense | 79,468 | 68,802 | 158,065 | 138,677 | ||||||||
| Professional fees | 239,753 | 221,690 | 465,819 | 453,398 | ||||||||
| Data and item processing | 232,169 | 224,301 | 469,016 | 458,182 | ||||||||
| Business development | 71,596 | 44,233 | 114,681 | 95,594 | ||||||||
| Franchise tax | 96,447 | 75,571 | 171,648 | 141,486 | ||||||||
| Other operating expenses | 141,189 | 117,739 | 323,594 | 247,047 | ||||||||
| Total Operating Expenses | 3,958,680 | 3,286,083 | 7,624,095 | 6,198,447 | ||||||||
|
Income before Income Taxes |
1,005,925 | 688,857 | 1,616,175 | 904,881 | ||||||||
| Provision for Income Taxes | 342,500 | 234,000 | 550,300 | 307,500 | ||||||||
| Net Income | $ | 663,425 | $ | 454,857 | $ | 1,065,875 | $ | 597,381 | ||||
| The Notes to Financial Statements are an integral part of these statements. | ||||||||||||
