Freedom Bank Reports Third Consecutive Year of Profitability in 2012

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Freedom Bank Reports Third Consecutive Year of Profitability in 2012

FAIRFAX, Va.--(BUSINESS WIRE)-- The Freedom Bank of Virginia (Bulletin Board:FDVA.OB): finished its third consecutive year and fifteenth consecutive profitable quarter on December 31, 2012.

Assets grew to $238,642,144 at December 31, 2012. This was up 14.98% from $207,557,264 at the prior period. The investment in additional lending officers resulted in double digit loan growth for the year. New lenders made a particularly strong contribution in the fourth quarter with loans to medical professionals. Gross loans increased 11.33% to $171,901,847 up from $154,407,193 at December 31, 2011. In addition to strong loan growth, Investment Securities Available for Sale increased $13,533,997 (89.13%) to $28,717,795 at December 31, 2012.


Deposit growth was strong for the year at 16.05%. Non-interest bearing deposits increased $9,558,806 (37.64%) to $34,951,109. This growth was due primarily to the Bank's strong penetration of the government contracting market. The Bank has focused on this market for many years and strong deposit growth in 2012 resulted from this long term effort. Time deposits increased $29,429,419 (21.55%) to $139,555,489 at December 31, 2012. Part of the strong growth in these areas was reduced by a decline in interest bearing checking accounts, which dropped $5,071,905 (12.17%) to $36,601,864 during the year.

Net profit declined for the year primarily due to investments the Bank made in loan growth and improving asset quality. The Bank increased its lending staff by 80% late in the year. This helped increase loan production, but also increased compensation expense by $270,000 in the fourth quarter. The Bank earned a net profit in 2012 of $1,192,000 ($0.42 per share), down from $1,900,300 in 2010 ($0.67 per share). Asset quality improved greatly. Loans on which the Bank is no longer accruing interest was halved from 2.43% at December 31, 2011 to 1.21% at December 31, 2012. Loans past due for regularly scheduled payments declined from 1.67% at December 31, 2011 to 0.23% at December 31, 2012. Although the result positioned the Bank well for the coming year, it did require the Bank to increase the Provision for Possible Loan Losses by $340,200 over the prior year.

Stockholder's Equity exceeded $25,000,000 for the first time for the year ending December 31, 2012. Stockholders Equity was $25,264,084 up 6.61% from $23,697,402 at 12/31/2011. Year end book value per share was $8.81, up from $8.07 the prior year.

Capital continues to be a strength of the Bank. Regulatory capital minimums to be considered well capitalized for Tier 1 Leverage Ratio, Risk Based Capital Tier 1, and Risk Based Capital Tier 2 are 5.0%, 6.0% and 10.0% respectively. At 12/31/2012 the ratios for the Bank were 11.06%, 13.80% and 15.03% 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
 

 

December 31, 2012

December 31, 2011
ASSETS
Assets:

 

Cash and due from banks$10,884,094$16,128,032
Federal funds sold18,788,00015,753,000
Interest Bearing Balances with Banks1,016,0061,007,339
Investment securities available for sale, at fair value28,717,79515,183,798
Investment securities held to maturity348,616666,152
Federal Reserve Bank stock746,650689,350
Loans held for sale3,656,8293,007,500
Loans receivable171,901,847154,407,193
Allowance for possible loan losses (2,236,822) (2,037,164)

Net Loans

169,665,025152,370,029
Bank Premises and equipment, net199,500213,857
Accrued interest and other receivables607,276519,450
Other assets3,400,3531,406,757
Deferred Tax Asset 612,000  612,000 
 
Total Assets$238,642,144 $207,557,264 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits
Demand deposits:

Non-interest bearing deposits

$34,951,109$25,392,303

Interest Checking

36,601,86441,673,770
Savings deposits1,467,2801,269,065
Time deposits 139,555,489  114,811,184 

Total Deposits

212,575,742183,146,322
 
Other accrued expenses732,466654,898
Accrued interest payable 69,852  58,642 

Total Liabilities

 213,378,060  183,859,862 
 
Stockholders' Equity

Common stock, $5 par value. (5,000,000 shares authorized:

2,866,117 shares issued and outstanding, December 31, 2012

2,836,404 shares issued and outstanding, December 31, 2011)

11,942,22811,818,325
Additional paid-in capital16,284,30316,184,810
Accumulated other comprehensive income285,809134,776
Retained earnings (deficit) (3,248,256) (4,440,509)
 

Total Stockholders' Equity

 25,264,084  23,697,402 
 
Total Liabilities and Stockholders' Equity$238,642,144 $207,557,264 
 
  
The Freedom Bank of Virginia
Statements of Operations
 
For the year ended
December 31,
2012 2011
Interest Income
Interest and fees on loans$9,305,595$9,110,312
Interest on investment securities574,361399,427
Interest on Federal funds sold 40,993 38,662
Total Interest Income9,920,9499,548,401
 
Interest Expense
Interest on deposits 2,008,653 1,861,828
 
Net Interest Income7,912,2967,686,573
 
Provision for Possible Loan Losses 688,200 348,000
 

Net Interest Income after Provision for Possible Loan Losses

7,224,0967,338,573
 
Other Income
Service charges and other income875,816568,028
 
Operating Expenses
Officers and employee compensation and benefits4,094,0313,406,089
Occupancy expense510,776530,328
Equipment and depreciation expense188,442218,752
Insurance expense179,105241,878
Professional fees548,748398,568
Data and item processing607,388534,008
Business development123,455124,851
Franchise tax226,110202,955
Other operating expenses 429,602 348,872
Total Operating Expenses 6,907,657 6,006,301
 
Income before Income Taxes1,192,2551,900,300
Income Tax (Benefit) Expense - -
 
Net Income$1,192,255$1,900,300
 
Net Income Per Common Share$0.42$0.67
 
Net Income Per Diluted Share$0.42$0.67
 



The Freedom Bank of Virginia
Craig S. Underhill, Chief Executive Officer
703-242-5300

KEYWORDS:   United States  North America  Virginia

INDUSTRY KEYWORDS:

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