Freedom Bank Announces 2012 Third Quarter Earnings

FAIRFAX, Va.--(BUSINESS WIRE)--The Freedom Bank of Virginia (Bank) (Bulletin Board: FDVA.OB) earned a Net Profit Before Taxes of $452,617 for the quarter ending September 30, 2012, its fourteenth consecutive quarterly profit. Net Profit for the quarter ended September 30, 2011 was $618,321. Net Profit Before Taxes was $1,013,472 for the first nine months of 2012 compared to a Net Profit for the first nine months of 2011 of $1,420,358. The reduction in profit in 2012 versus 2011 was principally due to an increase in the provision for loan losses as well as expenses associated with hiring additional commercial lenders in the third quarter.

Financial Highlights

• Total assets increased from $200,913,660 at September 30, 2011 to $218,243,386 at September 30, 2012.
• Investment Securities Available for Sale increased from $11,325,335 at September 30, 2011 to $30,631,566 at September 30, 2012.
• Loans Receivable increased from $148,612,798 at September 30, 2011 to $157,209,916 at September 30, 2012.
• Asset quality remains strong with non performing assets decreasing to 1.05% of total assets at September 30, 2012, down from 1.95% at September 30, 2011.
• Non Interest Bearing Deposits increased $6,646,676 (20.92%) to $38,420,474 between September 30, 2011 and September 30, 2012.
• Total deposits increased $15,247,247 (8.59%) to $193,356,884 between September 30, 2011 and September 30, 2012.
• Total capital increased $1,909,639 (8.31%) over the past year to $24,886,502 at September 30, 2012, up from $22,976,660 at September 30, 2011.
• Capital continues to be the strength of the Bank. 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. At September 30, 2012 the ratios for the Bank were 11.51%, 14.67%% and 15.92%% respectively, all in the well capitalized category.

According to CEO Craig Underhill, “The Bank continues to grow and be profitable despite the challenging economy. The Bank hired two additional commercial bankers during the third quarter as part of its growth plan. Subsequent to the end of the quarter, Freedom Bank also hired Kevin Curtis, Executive Vice President Corporate Banking, to accelerate future commercial loan growth.”

In 2012 the Bank made a decision to deregister its shares under the Jumpstart Our Business Startups Act (JOBS). The Bank filed its application on June 26, 2012 and deregistration became effective September 26, 2012. The Bank’s requirement to file reports with the Federal Reserve including forms 10-K, 10-Q and 8-K has been suspended. However, the Bank will continue to provide quarterly press releases of financial performance and to post annual and quarterly financial reports on our website at www.freedombankva.com. As part of our effort to be more environmentally responsible, we will now mail out quarterly reports only upon request.

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
UNAUDITED
	September 30, 2012			September 30, 2011
ASSETS
Cash and due from banks	$	3,837,765		$	18,072,108
Federal funds sold		19,780,000			18,742,000
Interest bearing balances with banks		1,014,986			1,004,071
Investment securities available for sale, at fair value		30,631,566			11,325,335
Investment securities held to maturity		403,670			765,578
Federal Reserve Bank stock		732,300			675,400
Loans held for sale		1,864,850			925,300
Loans receivable		157,209,916			148,612,798
Allowance for possible loan losses		(2,136,821	)		(2,021,135	)
Net Loans		155,073,095			146,591,663
Premises and equipment, net		207,380			234,041
Accrued interest and other receivables		660,303			440,886
Other assets		3,425,471			1,525,278
Deferred tax asset		612,000			612,000
Total Assets	$	218,243,386		$	200,913,660
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits:
Non-interest bearing deposits		38,420,474			31,773,798
Interest Checking		33,848,447			38,848,386
Savings deposits		1,525,117			1,161,586
Time deposits		118,858,773			105,621,794
Total Deposits		192,652,811			177,405,564
Other accrued expenses		633,388			471,848
Accrued interest payable		70,685			59,385
Total Liabilities		193,356,884			177,936,797
Stockholders' Equity
Common stock, $4.17 par value. (5,000,000 shares authorized: issued and outstanding 2,856,117 shares for September 30, 2012 and 2,836,398 shares for September 30, 2011)		11,858,828			11,818,325
Additional paid-in capital		16,247,703			16,046,069
Accumulated other comprehensive income		207,009			32,920
Retained earnings (deficit)		(3,427,038	)		(4,920,451	)
Total Stockholders' Equity		24,886,502			22,976,863
Total Liabilities and Stockholders' Equity	$	218,243,386		$	200,913,660

The Freedom Bank of Virginia
Statements of Operations
UNAUDITED
	For the three months ended				For the nine months ended
	September 30,				September 30,
	2012		2011		2012		2011
Interest Income
Interest and fees on loans	$	2,323,266	$	2,235,785	$	6,939,300	$	6,797,098
Interest on investment securities		148,077		107,714		462,118		281,844
Interest on Federal funds sold		5,767		8,321		31,390		26,154
Total Interest Income		2,477,110		2,351,820		7,432,808		7,105,096
Interest Expense
Interest on deposits		486,584		441,208		1,524,676		1,373,967
Net Interest Income		1,990,526		1,910,612		5,908,132		5,731,129
Provision for Possible Loan Losses		17,200		20,000		588,200		333,000
Net Interest Income after
Provision for Possible Loan Losses		1,973,326		1,890,612		5,319,932		5,398,129
Other Income
Service charges and other income		268,629		199,542		688,632		387,696
Operating Expenses
Officers and employee compensation and benefits		1,083,321		856,012		2,952,054		2,533,616
Occupancy expense		126,549		130,926		386,478		400,565
Equipment and depreciation expense		41,799		52,212		138,168		170,092
Insurance expense		43,588		62,185		129,168		200,299
Professional fees		142,581		68,119		369,574		191,467
Data and item processing		149,254		137,717		453,152		389,081
Business development		31,224		32,429		97,334		97,244
Franchise tax		59,662		48,840		166,449		154,115
Other operating expenses		111,360		83,393		302,715		228,988
Total Operating Expenses		1,789,338		1,471,833		4,995,092		4,365,467
Income before Income Taxes		452,617		618,321		1,013,472		1,420,358
Provision for Income Taxes		-		-		-		-
Net Income	$	452,617	$	618,321	$	1,013,472	$	1,420,358
Net Income Per Common Share	$	0.16	$	0.22	$	0.36	$	0.50
Net Income Per Diluted Share	$	0.16	$	0.22	$	0.36	$	0.28