The Freedom Bank of Virginia Announces Earnings for the First Quarter of 2021

Rhea-AI Summary

The Freedom Bank of Virginia (OTCQX: FDVA) reported a net income of $2.47 million or $0.34 per diluted share for Q1 2021, up from $2.41 million or $0.33 per diluted share in the prior quarter and $849,806 or $0.11 the year before. Total assets rose to $871.04 million, a 13.56% increase since December 2020, driven by loan growth of $50.94 million, or 8.55%. The net interest margin improved to 3.55%, while non-interest income fell 35.16% due to reduced mortgage activity. The bank remains well-capitalized with strong asset quality.

Positive

• Net income increased by 2.26% from the prior quarter and 189.35% year-over-year.
• Total assets grew by 13.56% from December 2020, reaching $871.04 million.
• Total loans increased by 8.55% during the quarter, indicating strong lending activity.
• Net interest margin improved by 49 basis points over the previous quarter to 3.55%.

Negative

• Non-interest income dropped 35.16% compared to the linked quarter, primarily due to declining mortgage revenue.
• Higher non-interest expenses increased by 37.96% year-over-year, reflecting rising performance-related costs.

FAIRFAX, Va., April 29, 2021 /PRNewswire/ -- The Freedom Bank of Virginia (OTCQX: FDVA), (the "Bank" or "Freedom") today announced net income of $2,468,211, or $0.34 per diluted share, for the three months ended March 31, 2021. This compares to net income of $2,413,775 or $0.33 per diluted share, for the linked quarter and net income of $849,806 or $0.11 per diluted share for the three months ending March 31, 2020.   

Joseph J. Thomas, President and CEO, commented, "Balance sheet growth fueled by new lead relationships and additional PPP clients, along with continued improvement in the composition and cost of our deposits, enabled the bank to drive our net income for the first quarter of 2021 to another record level, overcoming a softening in mortgage business volumes caused by rising rates and historically low levels of homes for sale in our primary market.  The Bank's momentum enabled us to nearly triple net income in the first quarter of 2021 compared to the prior year and sustain strong returns on average assets and returns on average equity relative to peers.  I remain grateful to our clients for choosing Freedom Bank in this challenging business climate and proud of our employees who continue to work virtually and deliver strong results in the face of persistent impacts of the COVID-19 pandemic across the DC region. "

First Quarter 2021 Highlights include:

• Net income for the first quarter was $2,468,211 or $0.34 per diluted share compared to net income of $2,413,775 or $0.33 per diluted share in the linked quarter and net income of $849,806 or $0.11 per diluted share for the three months ended March 31, 2020. The increase in net income in calendar quarters was primarily due to an increase in earning assets and an expansion in net interest margin;
• Pre-tax, pre-provision net income was $3,122,414 for the first quarter compared to pre-tax, pre-provision net income of $1,398,806 for the same period in 2020;
• Return on Average Assets ("ROAA") was 1.26% for the quarter ended March 31, 2021 compared to 1.28% for the linked quarter and 0.68% for the three months ended March 31, 2020;
• Return on Average Equity ("ROAE") was 13.44% for the three months ended March 31, 2021 compared to 13.43% for the linked quarter and 5.27% for the three months ended March 31, 2020;
• Total assets were $871.04 million on March 31, 2021, an increase of $103.99 million or 13.56% from total assets on December 31, 2020;
• Total loans increased by $50.94 million or by 8.55% during the quarter. Loans held-for-investment (excluding PPP loans) increased by $26.20 million or 5.83% during the quarter, while PPP loan balances increased by $22.32 million and mortgage loans held for sale increased by $2.42 million;
• Cash balances at the Federal Reserve increased by $49.91 million during the first quarter, primarily due to a surge in deposit growth;
• Total deposits increased by $78.63 million or by 14.34% in the first quarter. Non-interest bearing demand deposits increased by $24.45 million from the linked quarter to $217.44 million and represented 34.67% of total deposits on March 31, 2021;
• The net interest margin increased in the first quarter to 3.55%, higher by 49 basis points compared to the linked quarter and higher by 29 basis points compared to the same period in 2020. The increase in the net interest margin across linked quarters was primarily due to higher loan yields, up by 47 basis points, and a 12 basis point reduction in funding costs. The increase in loan yields was due to strong loan growth during the quarter as well as acceleration of deferred fees from PPP loans that were forgiven in the first quarter. Excluding the additional income from PPP loan forgiveness would have reduced the net interest margin by 31 basis points;
• The cost of funds was 0.51% for the first quarter, lower by 12 basis points compared to the linked quarter and lower by 93 basis points compared to the same period in 2020, as deposit and borrowing costs declined across the board;
• Non-interest income decreased by 35.16% compared to the linked quarter, primarily due to lower mortgage revenue as higher rates caused mortgage activity to slow from the linked quarter;
• Non-interest expense decreased by 4.41% compared to the linked quarter and increased by 37.96% compared to the same period in 2020. The increase in non-interest expense in calendar quarters was primarily due to higher performance related costs: specifically, commissions paid to mortgage loan officers and mortgage settlement costs, as well as an increase in data processing expenses stemming from loan and deposit growth;
• The Efficiency Ratio was 67.91% for the quarter ended March 31, 2021, compared to 67.52% for the linked quarter and 76.15% for the same period in 2020;
• Asset quality remained strong with the ratio of non-performing assets to total assets at 0.28% on March 31, 2021 compared to 0.41% on December 31, 2020;
• As a result of an increase in loans held-for-investment during the quarter and an assessment of the risks in the held-for-investment loan portfolio, the Bank recognized a $64,000 provision for loan losses during the first quarter and the ratio of the allowance for loan and lease losses to loans held-for-investment was 0.92% (or 1.16% excluding PPP loans, which carry a full faith and guarantee of the US Government) compared to 0.99% in the linked quarter (or 1.21% excluding PPP loans);
• The Bank continues to be well capitalized and capital ratios continue to be strong with a Leverage ratio of 10.95%, Common Equity Tier 1 ratio of 12.88%, Tier 1 Risk Based Capital ratio of 12.88% and a Total Capital ratio of 13.84%.

Total Revenue
Total revenue, defined as the sum of net interest income, before provision for loan losses, and non-interest income, was less than the linked quarter, primarily due to lower non-interest income, and higher by 54.69% compared to the same period in 2020.  

Payment Protection Program Activity
In the second quarter of 2020, the Bank processed and funded 510 PPP loans (referred to as 2020 PPP loans), with balances of $106.37 million.  The interest rate on these 2020 PPP loans was 1% and the term varied from two to five years. The SBA also paid processing fees which were deferred over the term of the loans. The loans were fully guaranteed and could be forgiven in whole or in part by the SBA. 

In December of 2020, Congress approved a renewal of the PPP loan program with different rules and requirements for small businesses to receive loans, referred to as 2021 PPP loans. These 2021 PPP loans were also fully guaranteed and may be forgiven in whole or in part by the SBA. The interest rate on the loans was 1% and the term was five years. As with 2020 PPP loans, the SBA paid processing fees which are being deferred over the term of the loans. As of April 13, 2021, the bank had made 337 of these PPP loans with a total balance of $50.14 million and expects to collect $2.10 million in fees over the term of the loans.

Beginning in January of 2021, the bank began to process loan forgiveness applications from borrowers of 2020 PPP loans. As of April 13, 2021, the SBA had forgiven 277 of these PPP loans with balances of $33.19 million, and the bank had earned $1.31 million in fees expected to be collected on all 2020 PPP loans. 

Net Interest Income
The Bank recorded net interest income of $6.67 million for the first quarter of 2021, an increase of 20.88% compared to the linked quarter, and 70.20% higher than the same period in 2020. The net interest margin in the first quarter of 2021 was 3.55%, higher by 49 basis points compared to the linked quarter and higher by 29 basis points compared to the same period in 2020. Income from PPP loan forgiveness during the quarter was $576,748.

The following factors contributed to the changes in net interest margin during the first quarter of 2021 compared to the linked quarter:

• The surge in deposits during the quarter resulted in high levels of excess liquidity which pressured yields on average earning assets.
• Yields on average earning assets increased by 38 basis points to 4.02% compared to 3.64% in the linked quarter, primarily due to higher yields on loans and investment securities.
• Loan yields increased by 47 basis points to 4.61% from 4.14% in the linked quarter, while yields on investment securities increased by 4 basis points to 2.34% from 2.30% in the linked quarter.
• Cost of funds decreased by 12 basis points to 0.51%, from 0.63% in the linked quarter, on continued declines in deposit and borrowing costs.
• Excluding the additional income from PPP loan forgiveness would have reduced the net interest margin by 31 basis points.

Non-interest Income
Non-interest income was $3.06 million for the first quarter, lower by 35.16% compared to the linked quarter and higher by 29.06% compared to the same period in 2020. The decline in non-interest income compared to the previous quarter was largely due to lower mortgage gain-on-sale and fee revenue, stemming from a decline in mortgage originations in the first quarter of 2021.  

Non-interest Expenses
Non-interest expenses in the first quarter of 2021 decreased by 4.41% compared to the linked quarter and increased by 37.96% compared to the same period in 2020.   The decline in non-interest expenses in the first quarter compared to the linked quarter was largely due to lower mortgage settlement costs, and declines in professional fees and data processing expenses.    

The Efficiency Ratio was 67.91% for the quarter ended March 31, 2021, compared to 67.52% for the prior quarter and 76.15% for the same period in 2020.  

Income Taxes
The bank's effective tax rate during the quarter was 19.30% compared to an effective tax rate of 21.83% in the fourth quarter of 2020. The lower effective tax rate was largely due to application of tax credits received from an investment in low income housing tax credits. The bank expects to receive additional tax credits from this investment in 2021.

Asset Quality
Non-accrual loans were $2.48 million or 0.41% of loans held-for-investment at the end of the first quarter of 2021, compared to $3.18 million or 0.58% of loans held-for-investment at the end of the linked quarter. There were no troubled debt restructurings ("TDRs") as of March 31, 2021. On March 31, 2021, there were no loans that were 90 days or more past due and accruing.  There was no Other Real Estate Owned ("OREO") on the balance sheet as of March 31, 2021. Total non-performing assets (defined as the sum of loans on non-accrual, loans greater than 90 days past due and accruing, loans that are TDRs but not on non-accrual, and OREO assets) were $2.48 million or 0.28% of total assets at March 31, 2021 compared to $3.18 million or 0.41% of total assets, at the end of the linked quarter.

In 2020, in accordance with the spirit and provisions of the CARES Act, the Bank allowed borrowers who had been impacted by the COVID-19 pandemic, to defer loan payments for six months. All of those borrowers had resumed loan payments and there were no loans on payment deferrals as of March 31, 2021.

Following an assessment of the collectability of the loans held-for-investment at the end of the first quarter, it was determined that a $64,000 provision for loan losses was necessary to account for loan growth, the release of reserves related to loans whose payments had been deferred, and changes to environmental factors. The Bank booked a provision of $238,000 in the fourth quarter of 2020. The Bank's ALLL ratio was 0.92% of loans held-for-investment (or 1.16% of loans held-for investment excluding PPP loans) as of March 31, 2021 compared to an ALLL ratio of 0.99% at December 31, 2020 (or 1.21% of loans held-for-investment excluding PPP loans).

Total Assets
Total assets at March 31, 2021 were $871.04 million compared to $767.04 million on December 31, 2020. Changes in major asset categories during linked quarters were as follows:

• PPP loan balances increased by $22.32 million
• Other loans held-for investment grew by $26.20 million
• Cash balances at the Federal Reserve increased by $49.91 million

Total Liabilities
Total liabilities at March 31, 2021 were $795.41 million compared to total liabilities of $693.59 million on December  31, 2020.  Total deposits were $627.12 million compared to total deposits of $548.49 million on December 31, 2020. The primary reason for the increase in deposits compared to the linked quarter was an increase in non-interest bearing deposits. Non-interest bearing demand deposits increased by $27.45 million during the quarter, and comprised 34.67% of total deposits at the end of the quarter, compared to 35.19% of total deposits on December 31, 2020, and 20.58% of total deposits on March 31, 2020. Federal Home Loan Bank advances declined during the quarter, while lower cost PPP Liquidity Facility term advances increased.

Stockholders' Equity and Capital
Stockholders' equity at March 31, 2021 was $75.63 million compared to $73.46 million on December 31, 2020. Additional paid in capital was $59.35 million on March 31, 2021 compared to $59.22 million on December 31, 2020.   Accumulated Other Comprehensive Income ("AOCI"), which generally comprises unrealized gains and losses on available-for-sale securities and derivative positions, decreased by $420,596 on net unrealized losses during the first quarter of 2021.  Total shares issued and outstanding were 7,307,915 on March 31, 2021 compared to 7,283,647 shares on December 31, 2020. The tangible book value of the Bank's common stock at March 31, 2021 was $10.35 per share compared to $10.09 per share on December 31, 2020 and $9.02 per share on March 31, 2020.

As of March 31, 2021 of the Bank's capital ratios were well above regulatory minimum capital ratios for well-capitalized banks. The Bank's capital ratios on March 31, 2021 and December 31, 2020 were as follows:

	March 31, 2021	December 31, 2020
Total Capital Ratio	13.84%	14.21%
Tier 1 Capital Ratio	12.88%	13.21%
Common Equity
Tier 1 Capital Ratio	12.88%	13.21%
Leverage Ratio	10.95%	11.20%

About Freedom Bank

Freedom Bank is a community-oriented bank with locations in Fairfax, Reston, Chantilly, Vienna and Manassas, Virginia. Freedom Bank also has a mortgage division headquartered in Chantilly.  For information about Freedom Bank's deposit and loan services, visit the Bank's website at www.freedom.bank

Forward Looking Statements

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; general economic and financial market conditions, in the United States generally and particularly in the markets in which the Bank operates and which its loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels and slowdowns in economic growth, including as a result of COVID-19;  maintenance and development of well-established and valued client relationships and referral source relationships; the adequacy or inadequacy of our allowance for loan and lease losses; acquisition or loss of key production personnel; and the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts or public health events (such as COVID-19), and of governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of the Bank's borrowers to satisfy their obligations to the Bank, on the value of collateral securing loans, on the demand for the Bank's loans or its other products and services, on incidents of cyberattack and fraud, on the Bank's liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the Bank's business operations and on financial markets and economic growth. The Bank cautions readers that the list of factors above is not exclusive. The forward-looking statements are made as of the date of this release, and the Bank 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.  Some of the financial tables in this document reflect classifications to accounts to improve consistency in financial reporting

THE FREEDOM BANK OF VIRGINIA
CONSOLIDATED BALANCE SHEETS
		(Unaudited)		(Audited)
		March 31,		December 31,
		2021		2020
ASSETS
Cash and Due from Banks		$            2,070,355		$            1,792,660
Interest Bearing Deposits with Banks		75,456,515		25,543,295
Securities Available-for-Sale		99,205,646		97,188,125
Securities Held-to-Maturity		16,102,737		16,132,367
Restricted Stock Investments		3,243,650		3,607,800
Loans Held for Sale		47,468,542		45,047,711
PPP Loans Held for Investment		123,536,745		101,215,376
Other Loans Held for Investment		475,410,582		449,211,475
Allowance for Loan Losses		(5,534,832)		(5,454,925)
Net Loans		593,412,495		544,971,926
Bank Premises and Equipment, net		1,249,420		1,298,409
Accrued Interest Receivable		2,762,987		2,868,868
Deferred Tax Asset		949,565		1,154,078
Bank-Owned Life Insurance		17,161,100		17,035,214
Right of Use Asset, net		3,421,073		3,258,817
Other Assets		8,540,665		7,145,687
Total Assets		871,044,750		767,044,957
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Demand Deposits
Non-interest Bearing		$       217,441,663		$       192,987,984
Interest Bearing		206,798,973		176,424,255
Savings Deposits		3,864,523		2,962,303
Time Deposits		199,011,687		176,114,292
Total Deposits		627,116,846		548,488,834
Federal Home Loan Bank Advances		26,928,571		30,071,429
PPP Liquidity Facility Advances		123,053,517		101,951,020
Accrued Interest Payable		432,554		480,816
Lease Liability		3,512,888		3,347,075
Other Liabilities		14,365,904		9,247,507
Total Liabilities		795,410,280		693,586,681
Stockholders' Equity
Preferred stock, $0.01 par value, 5,000,000 shares authorized;
0 Shares Issued and Outstanding, March 31, 2021 and December 31, 2020		-		-
Common Stock, $0.01 Par Value, 25,000,000 Shares:
23,000,000 Shares Voting and 2,000,000 Shares Non-voting.
Voting Common Stock:
6,634,915 and 6,610,647 Shares Issued and Outstanding
at March 31, 2021 and December 31, 2020 respectively
(Includes 97,805 and 100,002 Unvested Shares at March 31, 2021 and December 31, 2020,
respectively)		65,371		65,106
Non-Voting Common Stock:
673,000 Shares Issued and Outstanding March 31, 2021 and December 31, 2020,
		6,730		6,730
Additional Paid-in Capital		59,351,852		59,223,538
Accumulated Other Comprehensive Income, Net		920,057		1,340,654
Retained Earnings		15,290,459		12,822,248
Total Stockholders' Equity		75,634,469		73,458,276
Total Liabilities and Stockholders' Equity		871,044,750		767,044,957

 

THE FREEDOM BANK OF VIRGINIA
CONSOLIDATED STATEMENTS OF OPERATIONS
		(Unaudited)		(Unaudited)
		For the three		For the three
		months ended		months ended
		March 31, 2021		March 31, 2020
Interest Income
Interest and Fees on Loans		$              6,912,386		$                  5,035,645
Interest on Investment Securities		636,742		357,942
Interest on Deposits with Other Banks		8,831		78,237
Total Interest Income		7,557,959		5,471,824
Interest Expense
Interest on Deposits		675,824		1,395,959
Interest on Borrowings		212,923		157,519
Total Interest Expense		888,747		1,553,478
Net Interest Income		6,669,212		3,918,346
Provision for Loan Losses		(64,000)		(549,000)
Net Interest Income After
Provision for Loan Losses		6,605,212		3,369,346
Non-Interest Income
Mortgage Loan Gain-on-Sale and Fee Revenue		2,822,186		2,117,866
Service Charges and Other Income		48,702		39,075
Gain on Sale of Securities		12,885		25,608
Servicing Income		51,643		-
Swap Fee Income		-		87,500
Increase in Cash Surrender Value of Bank-
owned Life Insurance		125,886		101,998
Total Non-interest Income		3,061,302		2,372,047
Non-Interest Expenses
Officer and Employee Compensation
and Benefits		4,662,235		3,200,721
Occupancy Expense		290,389		292,794
Equipment and Depreciation Expense		155,916		184,022
Insurance Expense		57,056		52,335
Professional Fees		291,434		281,396
Data and Item Processing		267,783		174,135
Advertising		73,078		58,804
Franchise Taxes and State Assessment Fees		185,429		175,870
Mortgage Fees and Settlements		463,419		221,374
Other Operating Expense		161,361		148,487
Total Non-interest Expenses		6,608,100		4,789,938
Income Before Income Taxes		3,058,414		951,455
Income Tax Expense		590,203		101,649
Net Income		$                    2,468,211		$                       849,806
Earnings per Common Share - Basic		$                             0.34		$                             0.12
Earnings per Common Share - Diluted		$                             0.34		$                             0.11
Weighted-Average Common Shares
Outstanding - Basic		7,295,190		7,348,022
Weighted-Average Common Shares
Outstanding - Diluted		7,334,463		7,435,490

 

THE FREEDOM BANK OF VIRGINIA
CONSOLIDATED STATEMENTS OF OPERATIONS
	For the three		For the three		For the three		For the three		For the three
	months ended		months ended		months ended		months ended		months ended
	March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020
Interest Income
Interest and Fees on Loans	$            6,912,386		$            5,931,405		$            5,657,929		$          5,508,679		$         5,035,645
Interest on Investment Securities	636,742		630,449		799,976		500,293		357,942
Interest on Deposits with Other Banks	8,831		10,083		8,236		13,002		78,237
Total Interest Income	7,557,959		6,571,937		6,466,141		6,021,974		5,471,824
Interest Expense
Interest on Deposits	675,824		827,780		919,326		1,095,532		1,395,959
Interest on Borrowings	212,923		226,724		231,700		208,765		157,519
Total Interest Expense	888,747		1,054,504		1,151,026		1,304,297		1,553,478
Net Interest Income	6,669,212		5,517,433		5,315,115		4,717,677		3,918,346
Provision for Loan Losses	(64,000)		(238,000)		-		(705,000)		(549,000)
Net Interest Income after
Provision for Loan Losses	6,605,212		5,279,433		5,315,115		4,012,677		3,369,346
Non-Interest Income
Mortgage Loan Gain-on-Sale and Fee Revenue	2,822,186		4,283,961		4,742,574		2,805,570		2,117,878
Service Charges and Other Income	48,702		30,535		14,802		33,923		39,062
Gains on Sale of Securities	12,885		3,921		17,174		-		25,608
Servicing Income	51,643		-		-		-		-
Swap Fee Income	-		270,450		-		299,762		87,500
Increase in Cash Surrender Value of Bank-
owned Life Insurance	125,886		132,555		277,164		127,496		101,998
Total Non-interest Income	3,061,302		4,721,422		5,051,714		3,266,751		2,372,046
Revenue	$              9,730,514		$           10,238,855		$           10,366,829		$           7,984,428		$           6,290,392
Non-Interest Expenses
Officer and Employee Compensation
and Benefits	4,662,235		4,479,310		5,065,021		3,488,369		3,200,721
Occupancy Expense	290,389		294,600		306,291		300,634		292,794
Equipment and Depreciation Expense	155,916		227,758		175,684		147,910		184,022
Insurance Expense	57,056		49,008		43,836		51,263		52,335
Professional Fees	291,434		417,497		274,505		325,545		281,396
Data and Item Processing	267,783		322,373		230,152		285,942		174,135
Advertising	73,078		83,559		99,508		36,732		58,804
Franchise Taxes and State Assessment Fees	185,429		185,379		185,404		178,812		175,870
Mortgage Fees and Settlements	463,419		675,218		600,592		454,866		221,374
Other Operating Expense	161,361		178,287		194,777		156,733		148,486
Total Non-interest Expenses	6,608,100		6,912,989		7,175,770		5,426,806		4,789,937
Income before Income Taxes	3,058,414		3,087,866		3,191,059		1,852,622		951,455
Income Tax Expense	590,203		674,091		615,689		327,097		101,649
Net Income	$              2,468,211		$           2,413,775		$           2,575,370		$           1,525,525		$              849,806
Earnings per Common Share - Basic	$                       0.34		$                    0.33		$                    0.36		$                    0.21		$                    0.12
Earnings per Common Share - Diluted	$                       0.34		$                    0.33		$                    0.35		$                    0.21		$                    0.11
Weighted-Average Common Shares
Outstanding - Basic	7,295,190		7,252,552		7,234,294		7,238,751		7,348,022
Weighted-Average Common Shares
Outstanding - Diluted	7,334,463		7,312,247		7,277,112		7,267,773		7,435,490

 

Average Balances, Income and Expenses, Yields and Rates
(Unaudited)
	Three Months Ended						Three Months Ended						Three Months Ended						Three Months Ended						Three Months Ended
	March 31, 2021						December 31, 2020						September 30, 2020						June 30, 2020						March 31, 2020
	Average Balance		Income/ Expense		Yield		Average Balance		Income/ Expense		Yield		Average Balance		Income/ Expense		Yield		Average Balance		Income/ Expense		Yield		Average Balance		Income/ Expense		Yield
Assets
Cash	$              42,563,835		$          8,831		0.08%		$              38,217,380		$       10,083		0.10%		$              29,769,485		$          8,236		0.11%		$              59,558,556		$       13,002		0.09%		$              24,919,112		$       78,237		1.26%
Investments (Tax Exempt)	24,057,819		152,583				23,815,369		151,564				11,434,264		250,016				5,953,752		48,657				4,541,049		38,411
Investments (Taxable)	91,675,593		516,202				90,609,147		510,714				90,668,376		602,463				65,890,906		399,846				51,701,396		327,597
Total Investments	115,733,412		668,785		2.34%		114,424,516		662,278		2.30%		102,102,640		852,479		3.32%		71,844,658		448,503		2.51%		56,242,445		366,008		2.62%
Total Loans	607,880,043		$6,912,386		4.61%		569,936,960		5,931,405		4.14%		549,575,996		5,657,929		4.10%		510,763,192		5,521,293		4.35%		404,818,548		5,048,285		5.02%
Earning Assets	766,177,290		7,590,002		4.02%		722,578,856		6,603,766		3.64%		681,448,121		6,518,644		3.81%		642,166,406		5,982,798		3.75%		485,980,105		5,492,530		4.55%
Assets	$            794,829,492						$            747,427,986						$            705,290,352						$            665,767,229						$            504,847,678
Liabilities
Interest Checking	$              32,270,173		15,629		0.20%		$              39,206,072		15,165		0.15%		$              27,902,031		11,914		0.17%		$              23,143,536		13,029		0.23%		$              25,788,577		22,351		0.35%
Money Market	148,969,677		62,497		0.17%		138,196,830		74,468		0.21%		132,371,367		93,750		0.28%		129,569,263		139,111		0.43%		94,433,574		275,134		1.17%
Savings	3,301,845		814		0.10%		2,836,001		717		0.10%		3,055,994		761		0.10%		2,533,676		703		0.11%		2,382,236		1,099		0.19%
Time Deposits	172,994,520		596,885		1.40%		175,514,471		737,430		1.67%		178,221,780		812,901		1.82%		183,220,441		942,690		2.07%		195,524,566		1,097,375		2.26%
Interest Bearing Deposits	357,536,215		675,825		0.77%		355,753,374		827,780		0.93%		341,551,172		919,326		1.07%		338,466,916		1,095,533		1.30%		318,128,953		1,395,959		1.76%
Borrowings	$            134,120,845		212,923		0.64%		$            135,328,997		226,724		0.67%		$            136,793,181		231,700		0.67%		$            110,132,851		208,765		0.76%		$              40,076,102		157,519		1.58%
Interest Bearing Liabilities	491,657,060		888,748		0.73%		491,082,371		1,054,504		0.85%		478,344,353		1,151,026		0.96%		448,599,767		1,304,298		1.17%		358,205,055		1,553,478		1.74%
Non Interest Bearing Deposits	$            215,148,589						$            177,583,960						$            151,878,149						$            145,370,721						$              76,609,290
Cost of Funds					0.51%						0.63%						0.73%						0.88%						1.44%
Net Interest Margin1			$  6,701,254		3.55%				$  5,549,262		3.06%				$  5,367,618		3.13%				$  4,678,500		2.93%				$  3,939,052		3.26%
Shareholders Equity	$              74,480,607						$              71,511,341						$              68,801,586						$              66,403,194						$              64,868,539
1Net interest margin is calculated as fully taxable equivalent net interest income divided by average earning assets and represents the Bank's net yield on its earning assets

 

Average Balances, Income and Expenses, Yields and Rates
(Unaudited)
	Three Months Ended						Three Months Ended
	March 31, 2021		Income /				March 30, 2020		Income /
	Average Balance		Expense		Yield		Average Balance		Expense		Yield
Assets
Cash	$              42,563,835		$           8,831		0.08%		$              24,919,112		$         78,237		1.26%
Investments (Tax Exempt)	24,057,819		152,583				4,541,049		38,411
Investments (Taxable)	91,675,593		516,202				51,701,396		327,597
Total Investments	115,733,412		668,785		2.34%		56,242,445		366,008		2.62%
Total Loans	607,880,043		6,912,386		4.61%		404,818,548		5,048,285		5.02%
Earning Assets	766,177,290		7,590,002		4.02%		485,980,105		5,492,530		4.55%
Assets	$            794,829,492						$            504,847,678
Liabilities
Interest Checking	$              32,270,173		15,629		0.20%		$              25,788,577		22,351		0.35%
Money Market	148,969,677		62,497		0.17%		94,433,574		275,134		1.17%
Savings	3,301,845		814		0.10%		2,382,236		1,099		0.19%
Time Deposits	172,994,520		596,885		1.40%		195,524,566		1,097,375		1.26%
Interest Bearing Deposits	357,536,215		675,825		0.77%		318,128,953		1,395,959		1.76%
Borrowings	134,120,845		212,923		0.64%		40,076,102		157,519		1.58%
Interest Bearing Liabilities	491,657,060		888,748		0.73%		358,205,055		1,553,478		1.74%
Non Interest Bearing Deposits	$            215,148,589						$              76,609,290
Cost of Funds					0.51%						1.44%
Net Interest Margin1			$   6,701,254		3.55%				$   3,939,052		3.26%
Shareholders Equity	$              74,480,607						$              64,868,539
ROAA	1.26%						0.68%
ROAE	13.44%						5.27%
1Net interest margin is calculated as fully taxable equivalent net interest income divided by average earning assets and represents the Bank's net yield on its earning assets

 

Selected Financial Data by Quarter Ended:
(Unaudited)
Balance Sheet Ratios	March 31, 2021	December 31, 2020	September 30, 2020	June 30, 2020	March 31, 2020
Loans held-for-investment to Deposits	95.51%	100.35%	94.34%	105.31%	97.52%
Income Statement Ratios (Quarterly)
Return on Average Assets (ROAA)	1.26%	1.28%	1.45%	0.92%	0.68%
Return on Average Equity (ROAE)	13.44%	13.43%	14.89%	9.24%	5.27%
Efficiency Ratio	67.91%	67.52%	69.22%	67.97%	76.15%
Net Interest Margin1	3.55%	3.06%	3.13%	2.93%	3.26%
Yield on Average Earning Assets	4.02%	3.64%	3.81%	3.75%	4.55%
Yield on Securities	2.34%	2.30%	3.32%	2.51%	2.62%
Yield on Loans	4.61%	4.14%	4.10%	4.35%	5.02%
Cost of Funds	0.51%	0.63%	0.73%	0.88%	1.44%
Noninterest income to Total Revenue	31.46%	46.11%	48.73%	40.91%	37.71%
Per Share Data
Tangible Book Value	$10.35	$10.09	$9.75	$9.33	$9.02
Share Price Data
Closing Price	$10.90	$9.10	$7.20	$7.50	$5.80
Book Value Multiple	105%	90%	74%	80%	64%
Common Stock Data
Outstanding Shares at End of Period	7,307,915	7,283,647	7,233,751	7,238,751	7,238,751
Weighted Average shares outstanding, basic	7,295,190	7,252,552	7,234,294	7,238,751	7,348,022
Weighted Average shares outstanding, diluted	7,334,463	7,312,247	7,277,112	7,267,773	7,435,490
Capital Ratios
Tier 1 Leverage ratio	10.95%	11.20%	11.57%	11.23%	12.88%
Common Equity Tier 1 ratio	12.88%	13.21%	14.10%	13.90%	14.35%
Tier 1 Risk Based Capital ratio	12.88%	13.21%	14.10%	13.90%	14.35%
Total Risk Based Capital ratio	13.84%	14.21%	15.17%	14.99%	15.38%
Credit Quality
Net Charge-offs to Average Loans	0.00%	0.00%	0.00%	0.02%	0.00%
Total Non-performing Loans to loans held-for-investment	0.41%	0.58%	1.06%	0.77%	0.57%
Total Non-performing Assets to Total Assets	0.28%	0.41%	0.49%	0.57%	0.43%
Nonaccrual Loans to loans held-for-investment	0.41%	0.58%	0.76%	0.70%	0.54%
Provision for Loan and Lease Losses	$64,000	$238,000	$0	$705,000	$549,000
Allowance for Loan and Lease Losses to loans held-for-investment	0.92%	0.99%	1.04%	1.02%	1.16%
Allowance for Loan and Lease Losses to loans held-for-investment (ex PPP loans)	1.16%	1.21%	1.32%	1.28%	1.16%
1Net interest margin is calculated as fully taxable equivalent net interest income divided by average earning assets and represents the Bank's net yield on its earning assets

Contact:
Joseph J. Thomas
President  & Chief Executive Officer
703-667-4161: Phone
jthomas@freedom.bank: Email

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SOURCE Freedom Bank of Virginia

FAQ

What is the net income of Freedom Bank of Virginia for Q1 2021?

The net income for Q1 2021 was $2.47 million or $0.34 per diluted share.

How have total assets changed for Freedom Bank of Virginia in 2021?

Total assets increased by 13.56% from December 2020, reaching $871.04 million.

What factors contributed to Freedom Bank of Virginia's net income increase?

The increase in net income was primarily due to higher earning assets and an expansion in net interest margin.

What impact did rising interest rates have on Freedom Bank of Virginia?

Rising rates negatively affected mortgage business volumes but were offset by growth in loans and deposits.

Is Freedom Bank of Virginia well-capitalized?

Yes, Freedom Bank remains well-capitalized with strong capital ratios above regulatory minimums.