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Freedom Financial Holdings Announces Earnings for Second Quarter of 2022

FAIRFAX, Va. (July 29, 2022) - Freedom Financial Holdings (OTCQX: FDVA), (the "Company" or "Freedom"), the holding company for The Freedom Bank of Virginia (the "Bank") today announced net income of $2,227,385 or $0.30 per diluted share, for the three months ended June 30, 2022. This compares to net income of $2,784,296 or $0.38 per diluted share, for the linked quarter and net income of $2,626,381 or $0.36 per diluted share for the three months ending June 30, 2021.

Joseph J. Thomas, President, and CEO, commented, "We experienced the full impact of cyclical changes in the economy in the second quarter of 2022 as fee-based revenue fell meaningfully, but the decline was largely offset by very strong core income from loan growth and net interest margin expansion. As interest rates increased, the residential real estate market began to cool, with mortgage banking revenues declining by $1.04 million or 51.29%. Likewise, as the federal government's Paycheck Protection Program ("PPP") wound down, the Bank's income from PPP loan forgiveness decreased by $364,438 or 244.42%, in the second quarter of 2022, compared to the same period in 2021. Our banking team was able to offset these expected declines in fee-based revenue with growth in net interest income (excluding the impact of PPP loans) of 18.24% in the second quarter of 2022 compared to the same period in 2021. This was driven by strong growth in loans held for investment (excluding PPP loans) of 28.72% annualized and 23.50% annualized growth in deposits, relative to the prior quarter. In response to the increase in interest rates, the Bank's net interest margin expanded by 27-basis points to 3.65% in the second quarter of 2022 compared to the same period in 2021. Consequently, our pre-tax, pre-provision net income declined by 11.5% to $3.24 million in the second quarter of 2022 compared to the same period in 2021. Notably, the allowance for loan losses at 1.13% (excluding PPP loans) and Tier 1 Capital Ratio at 13.84% puts us in a very strong position to manage through a potentially more challenging economic environment and continue to focus on proactively serving and innovatively growing with our clients."

Second Quarter 2022 Highlights include:

  • Net income for the second quarter was $2,227,385 or $0.30 per diluted share compared to net income of $2,784,297 or $0.38 per diluted share in the linked quarter and net income of $2,626,381 or $0.36 per diluted share for the three months ending June 30, 2021.
  • Return on Average Assets ("ROAA") was 1.01% for the quarter ended June 30, 2022, compared to 1.29% for the linked quarter and 1.24% for the three months ended June 30, 2021.
  • Return on Average Equity ("ROAE") was 11.44% for the three months ended June 30, 2022, compared to 13.53% for the linked quarter and 13.65% for the three months ended June 30, 2021.
  • Total assets were $895.52 million on June 30, 2022, an increase of $32.40 million or 3.75% from the end of the prior quarter and an increase of 2.15% from total assets on December 31, 2021.
  • Loans held-for-investment (excluding PPP loans) increased by $41.60 million or 7.16% during the quarter.
  • PPP loan balances decreased by $3.66 million during the second quarter on loan forgiveness and mortgage loans held for sale decreased by $4.49 million during the same period, on a decline in mortgage activity.
  • Cash balances at the Federal Reserve decreased by $5.40 million during the second quarter.
  • Available for sale investment securities increased by $1.28 million during the second quarter.
  • Total deposits increased by $41.90 million or by 5.86% in the second quarter. Non-interest-bearing demand deposits increased by $8.04 million from the linked quarter to $216.21 million and represented 28.58% of total deposits on June 30, 2022.
  • Excluding income from PPP loans, net interest income in the second quarter of 2022 increased by $1.68 million or by 29.17% compared to the same period in 2021. Excluding PPP loans, the net interest margin for the second quarter of 2022 was 3.62%, higher by 9 basis points compared to the prior quarter and was higher by 49 basis points compared to the same period in 2021. The net interest margin for the second quarter of 2022 was 3.65% if the income from PPP loans was included.
  • The cost of funds was 0.45% for the second quarter, higher by 9 basis points compared to the linked quarter and higher by 3 basis points compared to the same period in 2021, as deposit and borrowing costs increased during the quarter.
  • Non-interest income decreased by 8.84% compared to the linked quarter and decreased by 27.72% compared to the same period in 2021. The decrease in non-interest income compared to the linked quarter was primarily due to lower mortgage revenue and other fee income. The decrease in non-interest income compared to the calendar quarter was primarily due to lower mortgage revenue stemming from a slowdown in mortgage activity, partially offset by higher revenue from SBA loan sales and other fee income.
  • Non-interest expense in the second quarter increased by 3.72% compared to the linked quarter and was higher by 6.09% compared to the same period in 2021. The increase in non-interest expense in linked quarters was primarily due to higher professional fees and an increase in data processing expenses. Higher expenses compared to the calendar quarter were primarily related to an increase in compensation costs in the second quarter of 2022.
  • The Efficiency Ratio was 65.10% for the quarter ended June 30, 2022, compared to 61.70% for the linked quarter and 62.38% for the same period in 2021.
  • Non-accrual loans were relatively unchanged in the second quarter from the prior period, and the ratio of non-performing assets to total assets was 0.97% on June 30, 2022, compared to 0.11% on June 30, 2021.
  • 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 Company recognized a $375,000 provision for loan losses during the second quarter and the ratio of the allowance for loan and lease losses ("ALLL") to loans held-for-investment was 1.11% (or 1.13% excluding PPP loans, which carry a full faith and credit guarantee of the US Government) compared to 1.12% in the linked quarter (or 1.15% excluding PPP loans);
  • The Bank continues to be well capitalized and capital ratios continue to be strong with a Leverage ratio of 11.95%, Common Equity Tier 1 ratio of 13.84%, Tier 1 Risk Based Capital ratio of 13.84% and a Total Capital ratio of 14.77%.

Paycheck Protection Program ("PPP") Activity

For the first six months of 2022, 103 PPP loans with balances of $13.35 million were forgiven by the SBA, and the Company recognized $608,952 of income from acceleration of processing fees associated with these loans. This compares with 354 PPP loans with balances of $55.08 million forgiven by the SBA in the first six months of 2021 with $1.09 million of income from acceleration of processing fees.

Net Interest Income

The Company recorded net interest income of $7.61 million for the second quarter of 2022, relatively unchanged compared to the linked quarter, and 11.53% higher than the same period in 2021.

Income from PPP loans during the second quarter of 2022 was $166,582 (including $149,105 from forgiveness of $3.15 million of PPP loans), compared to PPP loan income of $504,177 (including $459,847 from forgiveness of $14.42 million of PPP loans) during the first quarter of 2022, and $1,061,442 (including $513,343 from forgiveness of $30.25 million of PPP loans) during the second quarter of 2021. Excluding income from PPP loans, net interest income in the second quarter of 2022 increased by $338,597 or 4.76%, and by $1.68 million or 29.17% compared to the same period in 2021.

The net interest margin in the second quarter of 2022 was 3.65%, lower by 3 basis points compared to the linked quarter and higher by 27 basis points compared to the same period in 2021. Excluding PPP loans, the net interest margin increased by 9 basis points compared to the prior quarter and was higher by 49 basis points compared to the same period in 2021.

The following factors contributed to the changes in net interest margin during the second quarter of 2022 compared to the linked quarter:

  • Yields on average earning assets increased by 7 basis points to 4.08% compared to 4.01% in the linked quarter, driven by higher yields on investments and deposits at the Federal Reserve, offset partially by lower yields on loans during the quarter.
  • Loan yields decreased by 8 basis points to 4.67% from 4.75% in the linked quarter, while yields on investment securities increased by 33 basis points to 2.78% from 2.45% in the linked quarter. Excluding PPP loans, loan yields would have increased by 5 bp from the prior quarter.
  • Cost of funds increased by 9 basis points to 0.45%, from 0.36% in the linked quarter, on higher deposit and borrowing costs.
  • Excluding the impact of PPP loans from the second and prior quarter, the net interest margin increased by 9 basis points across linked quarters.

The following factors contributed to the changes in net interest margin during the second quarter of 2022 compared to the calendar quarter:


  • Yields on average earning assets increased by 30 basis points to 4.08% compared to 3.78% in the calendar quarter, driven by higher yields on loans, investments, and deposits at the Federal Reserve.
  • Loan yields increased by 19 basis points to 4.67% from 4.48% in the calendar quarter, while yields on investment securities increased by 56 basis points to 2.78% from 2.22% in the calendar quarter.
  • Cost of funds increased by 3 basis points to 0.45%, from 0.42% in the calendar quarter, on higher deposit and borrowing costs.
  • Excluding the impact of PPP loans from the second and calendar quarter, the net interest margin increased by 49 basis points across quarters.

Non-interest Income

Non-interest income was $1.66 million for the second quarter, lower by 8.84% compared to the linked quarter and lower by 27.72% compared to the same period in 2021. The lower non-interest income across linked quarters was primarily due to a decline in mortgage revenue and lower fee income from other sources, while the decline in non-interest income compared to the calendar quarter was largely due to lower mortgage gain-on-sale and fee revenue, stemming from a decline in mortgage activity, partially offset by higher SBA income and fee income from other sources.

Total Revenue

Total revenue, defined as the sum of net interest income, before provision for loan losses, and non-interest income, was lower by 1.69% compared to the linked quarter, primarily due to lower non-interest income, and higher by 1.66% compared to the same period in 2021, primarily due to net margin expansion and loan growth.

Non-interest Expenses

Non-interest expenses in the second quarter of 2022 were higher by 3.72% compared to the linked quarter and increased by 6.09% compared to the same period in 2021. The increase in non-interest expenses in the second quarter compared to the prior quarter was largely due to higher professional fees and an increase in data processing expenses. Higher expenses compared to the calendar quarter were largely due to an increase in compensation costs in the second quarter of 2022.

The Efficiency Ratio was 65.10% for the quarter ended June 30, 2022, compared to 61.70% for the prior quarter and 62.38% for the same period in 2021.

Asset Quality

Non-accrual loans were $8,712,326 or 1.38% of loans held-for-investment as of June 30, 2022, compared to $8,770,552 or 1.48% of loans held-for-investment at the end of the linked quarter. There were no troubled debt restructurings ("TDRs") as June 30, 2022. On June 30, 2022, 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 June 30, 2022. 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 $8,712,326 or 0.97% of total assets on June 30, 2022, compared to $8,770,552 or 1.02% of assets, at the end of the linked quarter.

Following an assessment of the collectability of the loans held-for-investment at the end of the second quarter, it was determined that a $375,000 provision for loan losses was necessary to account for loan growth and changes to environmental factors. The Company booked a provision of $191,000 in the first quarter of 2022. The Company's ALLL ratio was 1.11% of loans held-for-investment (or 1.13% of loans held-for investment excluding PPP loans) as of June 30, 2022, compared to an ALLL ratio of 1.12% on March 31, 2022 (or 1.15% of loans held-for-investment excluding PPP loans).

Total Assets

Total assets on June 30, 2022, were $895.52 million compared to $863.12 million on March 31, 2022. Changes in major asset categories during linked quarters were as follows:

  • Cash balances at the Federal Reserve decreased by $5.40 million
  • Available for sale investment balances increased by $1.28 million
  • PPP loan balances decreased by $3.66 million on loan forgiveness by the SBA
  • Other loans held-for investment grew by $41.60 million
  • Mortgage loans held-for-sale declined by $4.49 million

Total Liabilities

Total liabilities on June 30, 2022, were $820.05 million compared to total liabilities of $783.33 million on March 31, 2022. Total deposits were $756.58 million compared to total deposits of $714.69 million on March 31, 2022. Non-interest-bearing demand deposits increased by $8.04 million during the quarter and comprised 28.58% of total deposits at the end of the quarter, compared to 31.66% of total deposits on December 31, 2021. Other interest-bearing demand deposits increased by $9.02 million, savings deposits decreased by $730,576 and time deposits increased by $25.56 million during the quarter. Federal Home Loan Bank advances decreased by $10.75 million during the quarter, while Federal Reserve borrowings increased by $6.28 million.

Stockholders' Equity and Capital

Stockholders' equity on June 30, 2022, was $75.47 million compared to $79.79 million on March 31, 2022. Additional paid-in capital was $58.82 million on June 30, 2022, compared to $58.66 million on March 31, 2022. Accumulated Other Comprehensive Income ("AOCI"), which generally comprises unrealized gains and losses on available-for-sale securities and derivative positions, decreased by $6.71 million on net unrealized losses during the second quarter of 2022. Retained earnings were $28.56 million on June 30, 2022, compared to $26.33 million at the end of the prior quarter. Total shares issued and outstanding were 7,319,006 on June 30, 2022, compared to 7,286,915 shares on March 31, 2022. The tangible book value of the Company's common stock on June 30, 2022, was $10.29 per share compared to $10.95 per share on March 31, 2022, and $10.81 per share on June 30, 2021.

As of June 30, 2022, the Bank's capital ratios were well above regulatory minimum capital ratios for well-capitalized bank holding companies. The Bank's capital ratios on June 30, 2022, and March 31, 2022, were as follows:


June 30, 2022                       

March 31, 2022  




Total Capital Ratio               

14.77 %

15.15 %




Tier 1 Capital Ratio                               

13.84 %

14.23 %

Common Equity



Tier 1 Capital Ratio                               

13.84 %

14.23 %




Leverage Ratio                                     

11.95 %

12.09 %

About Freedom Financial Holdings, Inc.

Freedom Financial Holdings, Inc. is the holding company of The Freedom Bank of Virginia, a community bank with locations in Fairfax, Reston, Chantilly, Vienna, and Manassas, Virginia. The Freedom Bank of Virginia also has a mortgage division headquartered in Chantilly. For information about deposit, loan and other services, visit the 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 Company operates and which its loans are concentrated, including the effects of declines in real estate values, increases in unemployment levels, inflation, recessions and slowdowns in economic growth, including as a result of COVID-19 and the impact of the geopolitical conflict between Russia and Ukraine; 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, wars, 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 Company's borrowers to satisfy their obligations to the Company, on the value of collateral securing loans, on the demand for the Company's loans or its other products and services, on incidents of cyberattack and fraud, on the Company's liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the Company's business operations and on financial markets and economic growth. The Company 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 Company 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.

FREEDOM FINANCIAL HOLDINGS

CONSOLIDATED BALANCE SHEETS









(Unaudited)


(Unaudited)


(Audited)



June 30,


March 31,


December 31,



2022


2022


2021


ASSETS







Cash and Due from Banks

$                           3,923,888


$                               2,348,210


$                           2,536,450


Interest Bearing Deposits with Banks

23,290,289


28,687,951


31,696,891


Securities Available-for-Sale

170,386,775


169,108,572


171,532,394


Securities Held-to-Maturity

17,952,914


17,982,536


18,012,874


Restricted Stock Investments

3,422,700


3,797,700


3,321,250


Loans Held for Sale

6,770,732


11,256,546


13,297,125


PPP Loans Held for Investment 

9,386,915


13,046,988


32,355,451


Other Loans Held for Investment 

622,247,733


580,650,677


570,013,870


Allowance for Loan Losses

(7,025,120)


(6,650,120)


(6,486,120)


Net Loans

624,609,528


587,047,545


595,883,201


Bank Premises and Equipment, net

1,060,288


1,099,230


1,139,204


Accrued Interest Receivable

2,659,581


2,412,068


2,466,712


Deferred Tax Asset

1,669,731


1,642,041


1,631,115


Bank-Owned Life Insurance

24,914,186


24,740,507


24,579,879


Right of Use Asset, net

2,223,461


2,464,873


2,704,888


Other Assets

12,638,343


10,533,227


7,870,617


Total Assets

$  895,522,416


$      863,121,006


$  876,672,600


LIABILITIES AND STOCKHOLDERS' EQUITY














Deposits







Demand Deposits







Non-interest Bearing

$          216,207,976


$  208,170,761


222,167,095


Interest Bearing

335,752,409


326,732,976


300,361,979


Savings Deposits

6,740,850


7,471,426


5,841,800


Time Deposits

197,874,220


172,310,577


173,322,527


Total Deposits

756,575,455


714,685,740


701,693,401


Federal Home Loan Bank Advances

15,142,857


25,892,857


29,035,714


Other Borrowings

19,387,174


13,106,863


32,055,915


Subordinated Debt (Net of Issuance Costs)

19,655,832


19,636,350


19,616,869


Accrued Interest Payable

286,422


388,953


294,237


Lease Liability

2,335,741


2,581,181


2,823,885


Other Liabilities

6,665,567


7,035,034


6,993,855


Total Liabilities

$  820,049,048


$      783,326,978


$  792,513,876


Stockholders' Equity







Preferred stock, $0.01 par value, 5,000,000 shares authorized:







0 Shares Issued and Outstanding, June 30, 2022, March 31, 2022 and December 31, 2021,  







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:







          6,646,006, 6,626,819 and 6,589,757 Shares Issued and Outstanding







    at June 30, 2022, March 31, 2022 and December 31, 2021 respectively







    (Includes 94,503, 86,381 and 106,171 Unvested Shares on June 30, 2022, March 31, 2022 and    







December 31, 2021, respectively)

65,515


65,404


65,898


Non-Voting Common Stock:







673,000 Shares Issued and Outstanding at June 30, 2022, March 31, 2022  







 and December 31, 2021

6,730


6,730


6,730


 Additional Paid-in Capital 

58,824,430


58,659,955


59,884,615


Accumulated Other Comprehensive Income, Net

(11,985,199)


(5,272,569)


651,272


Retained Earnings

28,561,892


26,334,508


23,550,209


Total Stockholders' Equity

75,473,368


79,794,028


84,158,724


Total Liabilities and Stockholders' Equity

$  895,522,416


$      863,121,006


$  876,672,600


FREEDOM FINANCIAL HOLDINGS

CONSOLIDATED STATEMENTS OF OPERATIONS  



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)



For the three


For the three


For the six


For the six



months ended


months ended


months ended


months ended



June 30, 2022


June 30, 2021


June 30, 2022


June 30, 2021

Interest Income









Interest and Fees on Loans


$                7,159,610


$                6,951,964


$                14,301,609


$                    13,864,350

Interest on Investment Securities


1,278,759


655,996


2,424,136


1,292,738

Interest on Deposits with Other Banks


74,550


15,170


90,146


24,002

Total Interest Income


8,512,919


7,623,130


16,815,891


15,181,090

Interest Expense









Interest on Deposits


673,396


582,997


1,092,184


1,258,821

Interest on Borrowings


225,115


212,703


495,894


425,626

Total Interest Expense


898,511


795,700


1,588,078


1,684,447










Net Interest Income


7,614,408


6,827,430


15,227,813


13,496,643

Provision for Loan Losses


(375,000)


(191,000)


(539,000)


(255,000)

Net Interest Income After









     Provision for Loan Losses


7,239,408


6,636,430


14,688,813


13,241,643

Non-Interest Income









Mortgage Loan Gain-on-Sale and Fee Revenue


986,160


2,012,153


2,024,138


4,834,339

 SBA Gain-on-Sale Revenue


263,806


66,652


529,830


66,652

Service Charges and Other Income


175,853


43,501


477,380


92,203

Gain on Sale of Securities


-


1,726


(131)


14,610

 Servicing Income


57,917


42,847


110,065


94,490

Swap Fee Income


-


-


-


-

Increase in Cash Surrender Value of Bank-









owned Life Insurance


173,679


126,117


334,307


252,003

Total Non-interest Income


1,657,415


2,292,996


3,475,589


5,354,297

Non-Interest Expenses









Officer and Employee Compensation









and Benefits


4,005,945


3,760,697


8,009,266


8,422,931

Occupancy Expense


304,153


306,521


636,519


596,910

Equipment and Depreciation Expense


183,315


159,420


355,421


315,336

Insurance Expense


74,983


65,356


145,609


122,412

Professional Fees


323,647


359,159


571,976


650,593

Data and Item Processing


342,340


311,000


607,965


578,783

Advertising  


114,966


82,605


220,335


155,683

Franchise Taxes and State Assessment Fees


224,636


192,508


424,734


377,937

Mortgage Fees and Settlements


129,210


274,231


235,059


737,651

Other Operating Expense


332,567


177,593


647,983


338,954

Total Non-interest Expenses


6,035,762


5,689,090


11,854,868


12,297,190

Income Before Income Taxes


2,861,061


3,240,336


6,309,535


6,298,750

Income Tax Expense


633,677


613,955


1,297,853


1,204,158

Net Income


$                   2,227,385


$                    2,626,381


$                      5,011,682


$                      5,094,592

Earnings per Common Share - Basic


$                            0.31


$                              0.36


$                                0.69


$                                0.70

Earnings per Common Share - Diluted


$                            0.30


$                              0.36


$                                0.68


$                                0.69

Weighted-Average Common Shares









Outstanding - Basic


7,290,417


7,306,710


7,313,766


7,300,953

Weighted-Average Common Shares 









Outstanding - Diluted


7,312,200


7,354,389


7,343,634


7,344,697

FREEDOM FINANCIAL HOLDINGS

CONSOLIDATED STATEMENTS OF OPERATIONS  












(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


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


June 30, 2022


March 31, 2022


December 31, 2021


September 30, 2021


June 30, 2021

Interest Income










Interest and Fees on Loans

$   7,159,610


$   7,141,999


$         7,556,406


$          6,914,453


$   6,951,964

Interest on Investment Securities

1,278,759


1,145,377


1,092,427


750,570


655,996

Interest on Deposits with Other Banks  

74,550


15,596


35,908


26,994


15,170

Total Interest Income

8,512,919


8,302,972


8,684,741


7,692,017


7,623,130











Interest Expense










Interest on Deposits

673,396


418,788


470,791


546,168


582,997

Interest on Borrowings

225,115


270,778


189,834


150,599


212,703

Total Interest Expense

898,511


689,566


660,625


696,767


795,700











Net Interest Income

7,614,408


7,613,406


8,024,116


6,995,249


6,827,430

PPP income

$166,582


$504,177






$1,061,442

Net Interest Income (ex PPP loans)

7,447,826


7,109,229






5,765,988

Provision for Loan Losses

(375,000)


(164,000)


(355,000)


(229,000)


(191,000)

Net Interest Income after










Provision for Loan Losses

7,239,408


7,449,406


7,669,116


6,766,249


6,636,430

Non-Interest Income










Mortgage Loan Gain-on-Sale and Fee Revenue

986,160


1,037,978


1,456,195


1,995,535


2,012,153

 SBA Gain-on-Sale Revenue

263,806


266,023


-


371,172


66,652

Service Charges and Other Income

175,853


301,396


95,335


67,374


43,501

Gains on Sale of Securities

-


-


6,315


(13,493)


1,726

Servicing Income

57,917


52,149


53,479


44,443


42,847

Swap Fee Income

-


-


-


-


-

Increase in Cash Surrender Value of Bank-










owned Life Insurance

173,679


160,628


151,054


141,608


126,117

Total Non-interest Income

1,657,415


1,818,174


1,762,378


2,606,639


2,292,996





















 Total Revenue 

$       9,271,823


$       9,431,580


$             9,786,494


$              9,601,889


$       9,120,426











Non-Interest Expenses










Officer and Employee Compensation










and Benefits

4,005,945


4,003,321


4,055,344


3,862,969


3,760,697

Occupancy Expense

304,153


332,366


317,038


318,109


306,521

Equipment and Depreciation Expense

183,315


172,107


170,335


176,379


159,420

Insurance Expense

74,983


70,626


74,357


70,814


65,356

Professional Fees

323,647


248,329


470,786


243,678


359,159

Data and Item Processing

342,340


265,625


299,120


303,444


311,000

Advertising

114,966


105,369


80,569


92,806


82,605

Franchise Taxes and State Assessment Fees

224,636


200,099


200,084


200,048


192,508

Mortgage Fees and Settlements

129,210


105,849


172,967


230,582


274,231

Other Operating Expense

332,567


315,416


287,459


220,739


177,593











Total Non-interest Expenses

6,035,762


5,819,107


6,128,059


5,719,568


5,689,090

Income before Income Taxes

2,861,061


3,448,473


3,303,435


3,653,322


3,240,336











Income Tax Expense

633,677


664,176


560,347


763,041


613,955











Net Income

$         2,227,385


$        2,784,297


$              2,743,088


$               2,890,281


$        2,626,381

Earnings per Common Share - Basic

$                  0.31


$                 0.38


$                       0.37


$                        0.39


$                 0.36

Earnings per Common Share - Diluted

$                  0.30


$                 0.38


$                       0.37


$                        0.39


$                 0.36

Weighted-Average Common Shares










Outstanding - Basic

7,290,417


7,324,527


7,336,016


7,341,635


7,306,710

Weighted-Average Common Shares 










Outstanding - Diluted

7,312,200


7,362,290


7,380,138


7,395,062


7,354,389

Average Balances, Income and Expenses, Yields and Rates
































(Unaudited)


































































Three Months Ended






Three Months Ended






Three Months Ended






Three Months Ended






Three Months Ended








June 30, 2022






March 31, 2022






December 31, 2021






September 30, 2021






June 30, 2021








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


$              35,469,783


$       74,550


0.84 %


$              40,375,846


$       15,596


0.16 %


$              91,458,843


$       35,908


0.16 %


$              71,114,495


$       26,994


0.15 %


$              64,848,200


$       15,170


0.09 %


































Investments (Tax Exempt)


22,199,648


187,816




23,331,336


187,632




23,460,432


190,195




27,138,446


177,809




23,292,663


223,691




Investments (Taxable)


167,905,374


1,130,385




165,979,811


957,745




153,582,906


942,173




113,180,210


610,101




103,971,494


479,280




Total Investments


190,105,022


1,318,201


2.78 %


189,311,147


1,145,377


2.45 %


177,043,338


1,132,368


2.54 %


140,318,656


787,910


2.23 %


127,264,157


702,971


2.22 %


































Total Loans 


615,110,994


7,159,610


4.67 %


609,412,292


7,141,999


4.75 %


586,725,477


7,556,406


5.11 %


602,948,952


$6,914,454


4.55 %


622,826,541


$6,951,964


4.48 %


































Earning Assets


840,685,799


8,552,361


4.08 %


839,099,285


8,302,972


4.01 %


855,227,658


8,724,682


4.05 %


814,382,103


7,729,358


3.77 %


814,938,898


7,670,105


3.78 %


































































































Assets


$            880,810,523






$            876,180,566






$            891,226,178






$            847,472,317






$            846,402,419






































Liabilities
































Interest Checking


$            128,008,728


134,727


0.42 %


$            110,305,411


48,246


0.18 %


$              88,172,651


38,893


0.18 %


$              36,659,322


12,240


0.13 %


$              34,272,772


10,907


0.13 %


Money Market


203,094,067


180,932


0.36 %


206,230,959


89,516


0.18 %


202,560,648


85,450


0.17 %


189,055,851


80,347


0.17 %


164,337,737


63,989


0.16 %


Savings


8,303,586


2,147


0.10 %


6,652,079


1,725


0.11 %


5,336,531


1,431


0.11 %


4,147,591


1,170


0.11 %


4,195,416


1,078


0.10 %


Time Deposits 


186,130,419


355,590


0.77 %


174,009,190


279,301


0.65 %


187,240,613


345,016


0.73 %


197,133,663


452,411


0.91 %


197,180,571


507,023


1.03 %


Interest Bearing Deposits


525,536,800


673,396


0.51 %


497,197,639


418,788


0.34 %


483,310,443


470,790


0.38 %


426,996,427


546,168


0.51 %


399,986,496


582,997


0.58 %


































Borrowings


$              56,154,130


225,115


1.61 %


$              71,634,636


270,778


1.53 %


$              81,399,848


189,834


0.93 %


$            101,033,443


150,599


0.59 %


$            138,398,143


212,703


0.62 %


































Interest Bearing Liabilities


581,690,931


898,511


0.62 %


568,832,275


689,566


0.49 %


564,710,291


660,624


0.46 %


528,029,870


696,767


0.52 %


538,384,639


795,700


0.59 %


































Non Interest Bearing Deposits


$            212,429,933






$            213,315,104






$            231,181,073






$            226,514,808






$            217,927,934






































Cost of Funds






0.45 %






0.36 %






0.33 %






0.37 %






0.42 %


































Net Interest Margin1




$  7,653,850


3.65 %




$  7,613,406


3.68 %




$  8,064,057


3.74 %




$  7,032,590


3.43 %




$  6,874,405


3.38 %


Shareholders Equity


$              78,112,151






$              83,440,208






$              82,994,140






$              80,866,605






$              77,178,196






































1 Net 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






Six Months Ended






Six Months Ended








June 30, 2022


Income /




June 30, 2021


Income /




June 30, 2022


Income /




June 30, 2021


Income /






Average Balance


Expense


Yield


Average Balance


Expense


Yield


Average Balance


Expense


Yield


Average Balance


Expense


Yield



Assets


























Cash

$               35,469,783


$          74,550


0.84 %


$               64,848,200


$        15,170


0.09 %


$         37,909,262


$          90,146


0.48 %


$         53,767,576


$          24,002


0.09 %





























Investments (Tax Exempt)

22,199,648


187,816




23,292,663


223,691




22,762,366


375,447




23,673,128


451,599





Investments (Taxable)

167,905,374


1,130,385




103,971,494


479,280




166,947,911


2,127,533




97,857,510


935,975





Total Investments

190,105,022


1,318,201


2.78 %


127,264,158


702,971


2.22 %


189,710,277


2,502,980


2.66 %


121,530,638


1,387,574


2.30 %





























Total Loans 

615,110,994


7,159,610


4.67 %


622,826,541


6,951,964


4.48 %


612,277,385


14,301,609


4.71 %


615,394,581


13,864,350


4.54 %





























Earning Assets

840,685,799


8,552,361


4.08 %


814,938,898


7,670,105


3.78 %


$839,896,924


16,894,735


4.06 %


790,692,795


15,275,926


3.90 %





























Assets

$            880,810,523






$            846,402,419






$      878,508,335






$      820,758,422

































Liabilities


























Interest Checking

$            128,008,728


134,727


0.42 %


$               34,272,772


10,907


0.13 %


$      122,562,966


182,973


0.30 %


$         29,739,959


$          26,536


0.18 %



Money Market

203,094,067


180,932


0.36 %


164,337,737


63,989


0.16 %


201,296,855


270,448


0.27 %


155,132,593


126,485


0.16 %



Savings

8,303,586


2,147


0.10 %


4,195,416


1,078


0.10 %


7,482,395


3,872


0.10 %


3,751,099


1,892


0.10 %



Time Deposits 

186,130,419


355,590


0.77 %


197,180,571


507,023


1.03 %


180,103,288


634,891


0.71 %


185,927,578


1,103,908


1.20 %



Interest Bearing Deposits

525,536,800


673,396


0.51 %


399,986,496


582,997


0.58 %


511,445,504


1,092,184


0.43 %


374,551,228


1,258,821


0.68 %





























Borrowings

56,154,130


225,115


1.61 %


138,398,143


212,703


0.62 %


63,851,619


495,894


1.57 %


136,271,310


425,626


0.63 %





























Interest Bearing Liabilities

581,690,931


898,511


0.62 %


538,384,639


795,700


0.59 %


575,297,123


1,588,078


0.56 %


510,822,538


1,684,447


0.66 %





























Non Interest Bearing Deposits

$            212,429,933






$            217,927,934






$      212,870,074






$      216,545,940

































Cost of Funds





0.45 %






0.42 %






0.41 %






0.47 %





























Net Interest Margin1



$    7,653,850


3.65 %




$  6,874,405


3.38 %




$  15,306,657


3.68 %




$  13,591,479


3.47 %



Shareholders Equity

$               78,112,151






$               77,178,196






$         80,761,461






$         75,836,853







ROAA

1.01 %






1.24 %






1.15 %






1.25 %







ROAE

11.44 %






13.65 %






12.51 %






13.55 %

































1 Net 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

June 30, 2022

March 31, 2022

December 31, 2021

September 30, 2021

June 30, 2021

Loans held-for-investment to Deposits 

83.49 %

83.07 %

85.85 %

84.45 %

96.14 %

Income Statement Ratios (Quarterly)






Return on Average Assets (ROAA)

1.01 %

1.29 %

1.22 %

1.35 %

1.24 %

Return on Average Equity (ROAE)

11.44 %

13.53 %

13.11 %

14.18 %

13.65 %

Efficiency Ratio

65.10 %

61.70 %

62.62 %

59.57 %

62.38 %

Net Interest Margin1

3.65 %

3.68 %

3.74 %

3.43 %

3.38 %

Yield on Average Earning Assets

4.08 %

4.01 %

4.05 %

3.77 %

3.78 %

Yield on Securities

2.78 %

2.45 %

2.54 %

2.23 %

2.22 %

Yield on Loans

4.67 %

4.75 %

5.11 %

4.55 %

4.48 %

Cost of Funds

0.45 %

0.36 %

0.33 %

0.37 %

0.42 %

Noninterest income to Total Revenue

17.88 %

19.28 %

18.01 %

27.15 %

25.14 %

Per Share Data






Tangible Book Value

$10.31

$10.95

$11.59

$11.14

$10.81

Share Price Data






Closing Price

$14.80

$14.06

$13.37

$12.55

$11.98

Book Value Multiple

144 %

128 %

115 %

113 %

111 %

Common Stock Data






Outstanding Shares at End of Period

7,319,006

7,286,915

7,262,757

7,312,565

7,305,581

Weighted Average shares outstanding, basic

7,290,417

7,324,527

7,336,016

7,341,635

7,306,710

Weighted Average shares outstanding, diluted

7,312,200

7,362,290

7,438,268

7,395,062

7,354,389

Capital Ratios (Bank Only)






Tier 1 Leverage ratio

11.95 %

12.09 %

11.85 %

10.47 %

10.56 %

Common Equity Tier 1 ratio

13.84 %

14.23 %

14.49 %

12.73 %

12.90 %

Tier 1 Risk Based Capital ratio

13.84 %

14.23 %

14.49 %

12.73 %

12.90 %

Total Risk Based Capital ratio

14.77 %

15.15 %

15.42 %

13.68 %

13.86 %

Credit Quality






Net Charge-offs to Average Loans

0.00 %

0.00 %

-0.02 %

0.00 %

0.00 %

Total Non-performing Loans to loans held-for-investment

1.38 %

1.48 %

1.46 %

0.15 %

0.15 %

Total Non-performing Assets to Total Assets

0.97 %

1.02 %

1.00 %

0.10 %

0.11 %

Nonaccrual Loans to loans held-for-investment

1.38 %

1.48 %

1.46 %

0.15 %

0.15 %

Provision for Loan and Lease Losses

$375,000

$164,000

$355,000

$229,000

$191,000

Allowance for Loan and Lease Losses to net loans held-for-investment

1.11 %

1.12 %

1.08 %

1.05 %

0.96 %

Allowance for Loan and Lease Losses to net loans held-for-investment (ex PPP loans)

1.13 %

1.15 %

1.14 %

1.17 %

1.15 %







1 Net 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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10555 Main Street, Ste 100
Fairfax, VA 22030
(703) 667-4167
Map & Hours

502 Maple Avenue West
Vienna, VA 22180
(703) 667-4170
Map & Hours

11700 Plaza America Dr Ste 110
Reston, VA 20190
(703) 663-2300
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4500 Daly Drive Suite 240
Chantilly, VA 20151
(571) 395-4000
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4211 Pleasant Valley Road
Chantilly, VA 20151
(703) 766-6400
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10611 BaIls Ford Road Ste 110
Manassas, VA 20109
703-349-2210
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