Freedom Bank Announces Record First Half Profits on Strong Loan Growth

Freedom Bank Announces Record First Half Profits on Strong Loan Growth

Net Profit Up 47% through June 30, 2013 Compared with Prior Year

Loans Receivable Up 23% over Second Quarter 2012

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

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
June 30, 2013June 30, 2012
Cash and due from banks$10,091,976$2,871,644
Federal funds sold14,798,0008,776,000

Interest bearing balances with banks

Investment securities available for sale, at fair value29,398,10831,129,001
Investment securities held to maturity77,740455,025
Federal Reserve Bank stock766,650719,900
Loans held for sale3,060,0901,836,478
Loans receivable193,071,420157,026,486
Allowance for possible loan losses (2,456,325) (2,119,622)
Net Loans190,615,095


Premises and equipment, net237,632215,502
Accrued interest and other receivables875,489643,367
Other assets1,100,5501,369,751
Bank Owned Life Insurance2,072,8642,012,115

Deferred tax asset

 692,861  612,000 
Total Assets$254,805,078 $206,560,467 
Demand deposits:
Non-interest bearing deposits$37,811,979$34,889,239

Interest checking

Savings deposits1,321,5311,445,136

Time deposits

 146,719,225  118,864,983 
Total Deposits226,426,598181,477,602
Other accrued expenses2,595,661601,522
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)11,967,24811,858,828
Additional paid-in capital16,303,44216,213,270
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
For the three months endedFor the six months ended
June 30,June 30,
2013 20122013 2012
Interest Income
Interest and fees on loans$2,841,769$2,317,251$5,306,144$4,616,034
Interest on investment securities136,644170,401238,005314,041
Interest on Federal funds sold 4,350 11,837 12,105 25,623
Total Interest Income2,982,7632,499,4895,556,2544,955,698
Interest Expense
Interest on deposits 477,355 516,163 960,197 1,038,092
Net Interest Income2,505,4081,983,3264,596,0573,917,606
Provision for Possible Loan Losses 88,500 305,000 158,500 571,000

Net interest income after

Provision for possible loan losses

Other Income
Service charges and other income212,266203,943443,804407,888
Increase in cash surrender value of bank-owned life insurance 14,442 12,115 29,689 12,115
Total Other Income226,708216,058473,493420,003
Operating Expenses
Officers and employee compensation and benefits1,309,644919,1182,514,0651,868,733
Occupancy expense134,797126,878259,792259,929
Equipment and depreciation expense54,63848,126107,34296,369
Insurance expense52,90744,191104,43685,580
Professional fees136,655141,686276,192226,993
Data and item processing176,231151,985352,872303,898
Business development38,83231,91486,87866,110
Franchise tax61,02356,447120,684106,787
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 Taxes525,713252,083826,309560,855
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

Freedom Bank of Virginia
Craig S. Underhill, President & CEO

KEYWORDS:   United States  North America  Virginia


The article Freedom Bank Announces Record First Half Profits on Strong Loan Growth originally appeared on

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story