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Freedom Financial Holdings Announces Earnings for Third Quarter of 2022

FAIRFAX, Va., Oct. 28, 2022 /PRNewswire/ -- 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 $2,689,950, or $0.37 per diluted share, for the three months ended September 30, 2022. This compares to net income of $2,227,385 or $0.30 per diluted share, for the linked quarter and net income of $2,890,281 or $0.39 per diluted share for the three months ended September 30, 2021. Net income for the first nine months of 2022 was $7,701,632 or $1.05 per diluted share compared to net income of $7,984,873 or $1.09 per diluted share for the first nine months of 2021.

Joseph J. Thomas, President, and CEO, commented, "Our team continues to pivot in the face of changing market conditions to innovate our products and help our clients grow and succeed. These efforts translated into a pre-tax, pre-provision net income1 increase of 18.28% to $3.83 million in the third quarter of 2022 compared to the prior quarter. We were able to grow our assets at an annualized rate of 30.46% in the quarter and, more importantly, enjoyed annualized organic loan growth of 22.33% in the third quarter. We were also able to achieve strong annualized deposit growth of 43.01% in the quarter by attracting new clients to our high tech and high touch operating platform and offering competitive interest rates. While we experienced a 47 basis points increase in cost of funds when compared to the linked quarter to 92 basis points, our net margin remains strong at 3.71%, increasing 28 basis points compared to prior year. Total revenue2 was down by $223,021 or 2.32% compared to the prior year, as mortgage banking activity has been negatively impacted by higher rates. To achieve these results, we also used strong expense control to drive down our efficiency ratio4 to 59.19% for the third quarter compared to 65.10% for the prior quarter. We continue to maintain a strong balance sheet given the more challenging economic environment with allowance for loan losses at 1.13% (excluding PPP loans) and Tier 1 Capital Ratio at 13.62%."

Third Quarter 2022 Highlights include:

  • Net income for the third quarter was $2,689,950 or $0.37 per diluted share compared to net income of $2,227,385 or $0.30 per diluted share in the linked quarter and net income of $2,890,281 or $0.39 per diluted share for the three months ended September 30, 2021.
  • Return on Average Assets ("ROAA") was 1.15% for the quarter ended September 30, 2022, compared to 1.01% for the linked quarter and 1.35% for the three months ended September 30, 2021.
  • Return on Average Equity ("ROAE") was 13.81% for the three months ended September 30, 2022, compared to 11.44% for the linked quarter and 14.18% for the three months ended September 30, 2021.
  • Total assets were $964.28 million as of September 30, 2022, an increase of $87.61 million or 9.99% from total assets as of December 31, 2021.
  • Loans held-for-investment (excluding PPP loans) increased by $35.02 million or 5.63% during the quarter.
  • PPP loan balances decreased by $2.56 million during the third quarter on loan forgiveness and mortgage loans held for sale decreased by $3.66 million during the same period, on a decline in mortgage activity.
  • Cash balances at the Federal Reserve and the Federal Home Loan Bank (FHLB) increased by $28.38 million during the third quarter.
  • Available for sale investment securities increased by $11.17 million during the third quarter.
  • Total deposits increased by $82.02 million or by 10.84% in the third quarter. Non-interest-bearing demand deposits decreased by $11.48 million from the linked quarter to $204.73 million and represented 24.41% of total deposits as of September 30, 2022.
  • The net interest margin3 increased in the third quarter to 3.71%, higher by 6 basis points compared to the linked quarter and higher by 28 basis points compared to the same period in 2021. Excluding PPP loans, the net interest margin3 would have been 3.68%. The increase in the net interest margin3 across linked quarters was primarily due to higher yields on investment securities and loans offset by a rising cost of funds.
  • The cost of funds was 0.92% for the third quarter, higher by 47 basis points compared to the linked quarter and higher by 55 basis points compared to the same period in 2021. This was driven largely by rising rates on interest checking deposits and money market accounts.
  • Non-interest income decreased by 31.44% compared to the linked quarter and decreased by 56.41% compared to the same period in 2021. The decrease in non-interest income compared to the prior calendar quarter and same period in 2021 was primarily due to lower mortgage revenue stemming from a slowdown in mortgage activity as well as a reduction in SBA gain on sale revenue. During the current quarter, the Bank was granted the designation as a Preferred Lender by the SBA. This designation gives the Bank more authority to process, close, service, and liquidate SBA-guaranteed loans. As a Preferred Lender, the Bank is authorized to make SBA-guaranteed loans without prior SBA review of eligibility or creditworthiness allowing for a more seamless and timely loan process.
  • Non-interest expense in the third quarter decreased by 8.03% compared to the linked quarter and decreased by 2.94% compared to the same period in 2021. The decrease in non-interest expense from the prior calendar quarters was primarily due to lower performance related costs: specifically, commissions paid to mortgage loan officers and mortgage settlement costs.
  • The Efficiency Ratio4 was 59.19% for the quarter ended September 30, 2022, compared to 65.10% for the linked quarter and 59.57% for the same period in 2021.
  • Non-accrual loans were unchanged in the third quarter from the prior period, and the ratio of non-performing assets to total assets was 0.90% as of September 30, 2022, compared to 0.10% as of September 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 $382,000 provision for loan losses during the third quarter and the ratio of the allowance for loan and lease losses to loans held-for-investment was 1.12% (or 1.13% excluding PPP loans, which carry a full faith and guarantee of the US Government) compared to 1.11% in the linked quarter (or 1.13% excluding PPP loans);
  • The Bank continues to be well capitalized and capital ratios continue to be strong with a Leverage ratio of 11.59%, Common Equity Tier 1 ratio of 13.62%, Tier 1 Risk Based Capital ratio of 13.62% and a Total Capital ratio of 14.55%.

Net Interest Income

The Company recorded net interest income of $8.24 million for the third quarter of 2022, an increase of 8.25% compared to the linked quarter, and 17.83% higher than the same period in 2021. The net interest margin3 in the third quarter of 2022 was 3.71%, higher by 6 basis points compared to the linked quarter and higher by 28 basis points compared to the same period in 2021. Income from PPP loan forgiveness during the third quarter was $123,150 (from $2.10 million of PPP loans forgiven by the SBA), compared to PPP loan forgiveness income of $149,105 (from $3.15 million of PPP loans forgiven by the SBA) during the second quarter of 2022. Excluding the PPP loans, the net interest margin3 in the third quarter would have been 3.68%.

The following factors contributed to the changes in net interest margin3 during the third quarter of 2022 compared to the linked quarter:

  • Yields on average earning assets increased by 50 basis points to 4.58% compared to 4.08% in the linked quarter, driven by higher yields on investment securities and loans.
  • Loan yields increased by 47 basis points to 5.14% from 4.67% in the linked quarter, while yields on investment securities increased by 51 basis points to 3.29% from 2.78% in the linked quarter. Rising rates on floating rate securities contributed to the increase in investment yields.
  • Cost of funds increased by 47 basis points to 0.92%, from 0.45% in the linked quarter, due to rising rates on interest checking and money market deposit accounts. Borrowing costs increased 10 basis points due to maturing borrowing repricing at higher rates as well as fewer low-cost advances from the PPP Liquidity Facility. Advances from the PPP Liquidity Facility are retired as the associated PPP loans are forgiven or paid off.
  • Excluding PPP loans would have decreased the net interest margin3 by 6 basis points.

The following factors contributed to the changes in net interest margin3 during the third quarter of 2022 compared to the prior calendar quarter:

  • Yields on average earning assets increased by 81 basis points to 4.58% compared to 3.77% in the prior calendar quarter, driven by higher yields on loans, investments, and interest earning cash balances.
  • Loan yields increased by 59 basis points to 5.14% from 4.55% in the calendar quarter, while yields on investment securities increased by 106 basis points to 3.29% from 2.23% in the prior calendar quarter.
  • Cost of funds increased by 55 basis points to 0.92%, from 0.37% in the calendar quarter, on higher deposit and borrowing costs.
  • Excluding the impact of PPP loans from the same quarter previous year, the net interest margin3 increased by 45 basis points.

Non-interest Income

Non-interest income was $1.14 million for the third quarter, a decreased of 31.44% when compared to the linked quarter and a decreased of 56.41% when compared to the same period in 2021. The decrease in non-interest income compared to linked and calendar quarters was primarily due to lower mortgage revenue stemming from a slowdown in mortgage activity, as well as lower revenue from SBA loan sales. Secondary market premiums for SBA loans decreased during the third quarter, and the Company held more closed SBA loans on its balance sheet instead of selling them into the secondary market.

Total Revenue2

Total Revenue2, defined as the sum of net interest income, before provision for loan losses, and non-interest income, was higher by 1.15% compared to the linked quarter, primarily due to higher interest income on investment securities and loans offset by rising costs of deposits and reduced activity in current period gain-on-sale income. Total Revenue2 was lower by 2.32% compared to the same period in 2021, primarily due to lower non-interest income in the prior calendar quarter.

Non-interest Expenses

Non-interest expenses in the third quarter of 2022 decreased by 8.03% compared to the linked quarter and decreased by 2.94% compared to the same period in 2021. The decrease in non-interest expenses in the third quarter compared to the prior quarter was largely due to lower compensation costs, a decrease in legal fees and lower mortgage settlements costs.

The Efficiency Ratio4 was 59.19% for the quarter ended September 30, 2022, compared to 65.10% for the prior quarter and 59.57% for the same period in 2021.

Asset Quality

Non-accrual loans were $8,677,688 or 1.31% of loans held-for-investment as of September 30, 2022, compared to $8,712,326 or 1.38% of loans held-for-investment at the end of the linked quarter. There were no troubled debt restructurings ("TDRs") as of September 30, 2022. As of September 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 September 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 $8,677,688 or 0.90% of total assets as of September 30, 2022, compared to $8,712,326 or 0.97% 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 third quarter, it was determined that a $382,000 provision for loan losses was necessary to account for loan growth and changes to environmental factors. The Company booked a provision of $375,000 in the second quarter of 2022. The Company's ALLL ratio was 1.12% of loans held-for-investment (or 1.13% of loans held-for investment excluding PPP loans) as of September 30, 2022, compared to an ALLL ratio of 1.11% as of June 30, 2022 (or 1.13% of loans held-for-investment excluding PPP loans).

Total Assets

Total assets as of September 30, 2022, were $964.28 million compared to $895.52 million as of June 30, 2022. Changes in major asset categories during linked quarters were as follows:

  • Cash balances at the Federal Reserve and Federal Home Loan Bank increased by $28.38 million
  • Available for sale investment balances increased by $11.12 million
  • PPP loan balances decreased by $2.56 million on loan forgiveness by the SBA
  • Other loans held-for investment grew by $35.02 million
  • Mortgage loans held-for-sale declined by $3.66 million

Total Liabilities

Total liabilities as of September 30, 2022, were $891.79 million compared to total liabilities of $820.05 million as of June 30, 2022. Total deposits were $838.60 million compared to total deposits of $756.58 million as of June 30, 2022. Non-interest-bearing demand deposits decreased by $11.48 million during the quarter and comprised 24.41% of total deposits at the end of the quarter, compared to 28.58% of total deposits as of June 30, 2022. Other interest-bearing demand deposits increased by $23.11 million, savings deposits decreased by $696.23 thousand and time deposits increased by $71.08 million during the quarter. Federal Home Loan Bank advances decreased by $10.14 million during the quarter, while PPP Liquidity Facility term advances decreased by $2.31 million, in line with PPP loan forgiveness.

Stockholders' Equity and Capital

Stockholders' equity as of September 30, 2022, was $72.49 million compared to $75.47 million as of June 30, 2022. Additional paid-in capital was $58.45 million on September 30, 2022, compared to $58.82 million as of June 30, 2022. Accumulated Other Comprehensive Income ("AOCI"), which generally comprises unrealized gains and losses on available-for-sale securities and derivative positions, decreased by $5.30 million on net unrealized losses during the third quarter of 2022. Retained earnings were $31.25 million on September 30, 2022, compared to $28.56 million at the end of the prior quarter. Total shares issued and outstanding were 7,281,606 as of September 30, 2022, compared to 7,319,006 shares as of June 30, 2022. The tangible book value5 of the Company's common stock on September 30, 2022, was $9.96 per share compared to $10.31 per share as of June 30, 2022, and $11.14 per share as of September 30, 2021.

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





September 30, 2022


June 30, 2022






Total Capital Ratio


14.55 %


14.77 %






Tier 1 Capital Ratio


13.62 %


13.84 %






Common Equity










Tier 1 Capital Ratio


13.62 %


13.84 %






Leverage Ratio


11.59 %


11.95 %

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, Virginia and an SBA division headquartered in Mamaroneck, NY. 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)




Sep 30,



Jun 30,



Dec 31,




2022



2022



2021


ASSETS













Cash and Due from Banks


$

1,959,084



$

3,923,888



$

2,536,450


Interest Bearing Deposits with Banks



51,668,557




23,290,289




31,696,891


Securities Available-for-Sale



181,558,490




170,386,775




171,532,394


Securities Held-to-Maturity



17,586,727




17,952,914




18,012,874


Restricted Stock Investments



3,389,200




3,422,700




3,321,250


Loans Held for Sale



3,107,940




6,770,732




13,297,125


PPP Loans Held for Investment



6,824,897




9,386,915




32,355,451


Other Loans Held for Investment



657,263,342




622,247,733




570,013,870


Allowance for Loan Losses



(7,407,120)




(7,025,120)




(6,486,120)


Net Loans



656,681,119




624,609,528




595,883,201


Bank Premises and Equipment, net



1,018,840




1,060,288




1,139,204


Accrued Interest Receivable



2,822,515




2,659,581




2,466,712


Deferred Tax Asset



1,842,093




1,669,731




1,631,115


Bank-Owned Life Insurance



26,090,001




24,914,186




24,579,879


Right of Use Asset, net



1,980,602




2,223,461




2,704,888


Other Assets



14,573,695




12,638,343




7,870,617


Total Assets


$

964,278,863



$

895,522,416



$

876,672,600


LIABILITIES AND STOCKHOLDERS' EQUITY













Liabilities













Deposits













Demand Deposits













Non-interest Bearing


$

204,729,741



$

216,207,976



$

222,167,095


Interest Bearing



358,864,222




335,752,409




300,361,979


Savings Deposits



6,044,616




6,740,850




5,841,800


Time Deposits



268,956,966




197,874,220




173,322,527


Total Deposits



838,595,545




756,575,455




701,693,401


Federal Home Loan Bank Advances



15,000,000




25,142,857




29,035,714


PPP Liquidity Facility Advances



7,075,513




9,387,174




32,055,915


Subordinated Debt (Net of Issuance Cost)



19,675,313




19,655,832




19,616,869


Accrued Interest Payable



741,780




286,422




294,237


Lease Liability



2,088,416




2,335,741




2,823,885


Other Liabilities



8,612,267




6,665,567




6,993,855


Total Liabilities


$

891,788,834



$

820,049,048



$

792,513,876


Stockholders' Equity













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













0 Shares Issued and Outstanding, all periods presented



-




-




-


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:













           6,608,606, 6,646,006 and 6,676,545 Shares Issued and Outstanding













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













    (Includes 93,003, 94,503 and 86,788 Unvested Shares at September 30, 2022, June 30, 2022













and December 31, 2021, respectively)



65,156




65,515




65,898


Non-Voting Common Stock:













673,000 Shares Issued and Outstanding, all periods presented



6,730




6,730




6,730


Additional Paid-in Capital



58,454,038




58,824,430




59,884,615


Accumulated Other Comprehensive Loss, Net



(17,287,737)




(11,985,199)




651,272


Retained Earnings



31,251,842




28,561,892




23,550,209


Total Stockholders' Equity



72,490,029




75,473,368




84,158,724


Total Liabilities and Stockholders' Equity


$

964,278,863



$

895,522,416



$

876,672,600


FREEDOM FINANCIAL HOLDINGS



CONSOLIDATED STATEMENTS OF OPERATIONS









(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)





For the three



For the three



For the nine



For the nine





months ended



months ended



months ended



months ended





Sep-22



Sep-21



Sep-22



Sep-21



Interest Income


















Interest and Fees on Loans


$

8,408,971



$

6,914,454



$

22,710,581



$

20,778,804



Interest on Investment Securities



1,626,322




750,570




4,050,458




2,043,308



Interest on Deposits with Other Banks



171,644




26,994




261,790




50,996



Total Interest Income



10,206,937




7,692,018




27,022,829




22,873,108



Interest Expense


















Interest on Deposits



1,735,027




546,168




2,827,212




1,804,989



Interest on Borrowings



229,283




150,599




725,176




576,226



Total Interest Expense



1,964,310




696,767




3,552,388




2,381,215





















Net Interest Income



8,242,627




6,995,251




23,470,441




20,491,893



Provision for Loan Losses



(382,000)




(229,000)




(921,000)




(484,000)



Net Interest Income After


















Provision for Loan Losses



7,860,627




6,766,251




22,549,441




20,007,893



Non-Interest Income


















Mortgage Loan Gain-on-Sale and Fee Revenue



710,149




1,995,535




2,734,287




6,829,874



SBA Gain-on-Sale Revenue



63,727




371,172




593,557




437,825



Service Charges and Other Income



52,755




67,374




530,135




159,576



Gain on Sale of Securities



10,600




(13,493)




10,469




1,117



Servicing Income



54,792




44,443




164,858




138,934



Swap Fee Income



68,404




-




68,404




-



Increase in Cash Surrender Value of Bank-











-




-



owned Life Insurance



175,815




141,608




510,122




393,611



Total Non-interest Income



1,136,242




2,606,639




4,611,832




7,960,937



Non-Interest Expenses


















Officer and Employee Compensation


















and Benefits



3,655,913




3,862,969




11,665,177




12,285,901



Occupancy Expense



311,070




318,109




947,589




915,018



Equipment and Depreciation Expense



170,070




176,379




525,492




491,715



Insurance Expense



76,563




70,814




222,173




193,227



Professional Fees



251,597




243,678




823,573




894,270



Data and Item Processing



299,501




303,444




907,465




882,227



Advertising



104,119




92,806




324,454




248,489



Franchise Taxes and State Assessment Fees



282,912




200,048




707,648




577,986



Mortgage Fees and Settlements



97,495




230,582




332,554




968,232



Other Operating Expense



301,977




220,739




949,961




559,693



Total Non-interest Expenses



5,551,217




5,719,568




17,406,086




18,016,758



Income Before Income Taxes



3,445,652




3,653,322




9,755,187




9,952,072



Income Tax Expense



755,702




763,041




2,053,554




1,967,199



Net Income


$

2,689,950



$

2,890,281



$

7,701,633



$

7,984,873



Earnings per Common Share - Basic


$

0.37



$

0.39



$

1.05



$

1.09



Earnings per Common Share - Diluted


$

0.37



$

0.39



$

1.05



$

1.09



Weighted-Average Common Shares


















Outstanding - Basic



7,271,784




7,341,635




7,308,866




7,310,007



Weighted-Average Common Shares


















Outstanding - Diluted



7,285,786




7,395,062




7,333,499




7,357,383



FREEDOM FINANCIAL HOLDINGS


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




September 30, 2022



June 30, 2022



March 31, 2022



December 31, 2021



September 30, 2021


Interest Income





















Interest and Fees on Loans


$

8,408,971



$

7,159,610



$

7,141,999



$

7,556,406



$

6,914,454


Interest on Investment Securities



1,626,322




1,278,759




1,145,377




1,092,427




750,570


Interest on Deposits with Other Banks



171,644




74,550




15,596




35,908




26,994


Total Interest Income



10,206,937




8,512,919




8,302,972




8,684,741




7,692,018























Interest Expense





















Interest on Deposits



1,735,027




673,396




418,788




470,791




546,168


Interest on Borrowings



229,283




225,115




270,778




189,834




150,599


Total Interest Expense



1,964,310




898,511




689,566




660,625




696,767























Net Interest Income



8,242,627




7,614,408




7,613,406




8,024,116




6,995,251


Provision for Loan Losses



(382,000)




(375,000)




(164,000)




(355,000)




(229,000)


Net Interest Income after





















Provision for Loan Losses



7,860,627




7,239,408




7,449,406




7,669,116




6,766,251


Non-Interest Income





















Mortgage Loan Gain-on-Sale and Fee Revenue



710,149




986,160




1,037,978




1,456,195




1,995,535


SBA Gain-on-Sale Revenue



63,727




263,806




266,023




-




371,172


Service Charges and Other Income



52,755




175,984




301,396




95,335




67,374


Gains on Sale of Securities



10,600




(131)




-




6,315




(13,493)


Servicing Income



54,792




57,917




52,149




53,479




44,443


Swap Fee Income



68,404




-




-




-




-


Increase in Cash Surrender Value of Bank-





















owned Life Insurance



175,815




173,679




160,628




151,054




141,608


Total Non-interest Income



1,136,242




1,657,415




1,818,174




1,762,378




2,606,639












































Revenue


$

9,378,869



$

9,271,823



$

9,431,580



$

9,786,494



$

9,601,890























Non-Interest Expenses





















Officer and Employee Compensation





















and Benefits



3,655,913




4,005,945




4,003,321




4,055,344




3,862,969


Occupancy Expense



311,070




304,153




332,366




317,038




318,109


Equipment and Depreciation Expense



170,070




183,315




172,107




170,335




176,379


Insurance Expense



76,563




74,983




70,626




74,357




70,814


Professional Fees



251,597




323,647




248,329




470,786




243,678


Data and Item Processing



299,501




342,340




265,625




299,120




303,444


Advertising



104,119




114,966




105,369




80,569




92,806


Franchise Taxes and State Assessment Fees



282,912




224,636




200,099




200,084




200,048


Mortgage Fees and Settlements



97,495




129,210




105,849




172,967




230,582


Other Operating Expense



301,977




332,567




315,416




287,459




220,739























Total Non-interest Expenses



5,551,217




6,035,762




5,819,107




6,128,059




5,719,568


Income before Income Taxes



3,445,652




2,861,061




3,448,473




3,303,435




3,653,322























Income Tax Expense



755,702




633,676




664,176




560,347




763,041























Net Income


$

2,689,950



$

2,227,385



$

2,784,297



$

2,743,088



$

2,890,281


Earnings per Common Share - Basic


$

0.37



$

0.31



$

0.38



$

0.37



$

0.39


Earnings per Common Share - Diluted


$

0.37



$

0.30



$

0.38



$

0.37



$

0.39


Weighted-Average Common Shares





















Outstanding - Basic



7,271,784




7,290,417




7,324,527




7,336,016




7,341,635


Weighted-Average Common Shares





















Outstanding - Diluted



7,285,786




7,312,200




7,362,290




7,438,268




7,395,062
























Average Balances, Income and Expenses,
Yields and Rates





























































(Unaudited)




























































































































Three
Months
Ended











Three
Months
Ended











Three
Months
Ended











Three
Months
Ended











Three
Months
Ended












September
30,
2022











June
30,
2022











March
31,
2022











December
31,
2021











September
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


$

37,133,361



$

171,644



1.83 %



$

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 %































































Investments (Tax Exempt)



21,615,440




186,314








22,199,648




187,816








23,331,336



$

187,632








23,460,432



$

190,195








27,138,446



$

177,809






Investments (Taxable)



179,086,818




1,479,134








167,905,374




1,130,385








165,979,811



$

997,148








153,582,906



$

942,173








113,180,210



$

610,101






Total Investments



200,702,258




1,665,448



3.29 %




190,105,022




1,318,201



2.78 %




189,311,147




1,184,780



2.54 %




177,043,338




1,132,368



2.54 %




140,318,656




787,910



2.23 %































































Total Loans



648,964,205



$

8,408,971



5.14 %




615,110,994



$

7,159,610



4.67 %




609,412,292



$

7,141,999



4.75 %




586,725,477



$

7,556,406



5.11 %




602,942,022



$

6,914,454



4.55 %































































Earning Assets



886,799,824




10,246,063



4.58 %




840,685,799




8,552,361



4.08 %




839,099,285




8,342,375



4.03 %




855,227,658




8,724,682



4.05 %




814,375,173




7,729,358



3.77 %

























































































































































































Assets


$

929,265,436











$

880,810,523











$

876,180,566











$

891,226,178











$

847,472,317







































































Liabilities





























































Interest Checking


$

132,342,701



$

458,605



1.37 %



$

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 %


Money Market



216,851,257




581,082



1.06 %




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 %


Savings



6,659,935




2,119



0.13 %




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 %


Time Deposits



218,365,001




693,222



1.26 %




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 %


Interest Bearing Deposits



574,218,894




1,735,028



1.20 %




525,536,800




673,396



0.51 %




497,197,639




418,788



0.34 %




483,310,443




470,790



0.39 %




426,996,427




546,168



0.51 %































































Borrowings



53,279,949




229,283



1.71 %




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 %































































Interest Bearing Liabilities



627,498,843




1,964,311



1.24 %




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 %































































Non Interest Bearing Deposits


$

215,426,363











$

212,429,933











$

213,315,104











$

231,181,073











$

226,514,808







































































Cost of Funds










0.92 %











0.45 %











0.36 %











0.33 %











0.37 %































































Net Interest Margin3






$

8,281,752



3.71 %







$

7,653,850



3.65 %







$

7,652,809



3.70 %







$

8,064,058



3.74 %







$

7,032,591



3.43 %


Shareholders Equity


$

77,295,762











$

78,112,151











$

83,440,208











$

82,994,140











$

80,866,605










ROAA



1.15

%











1.01

%











1.29

%











1.22

%











1.35

%









ROAE



13.81

%











11.44

%











13.53

%











13.11

%











14.18

%











Average Balances, Income and Expenses,
Yields and Rates
















































(Unaudited)

















































Three Months
Ended











Three Months
Ended











Nine Months
Ended











Nine Months
Ended











September 30,
2022



Income /







September 30,
2021



Income /







September 30,
2022



Income /







September 30,
2021



Income /







Average Balance



Expense



Yield



Average Balance



Expense



Yield



Average Balance



Expense



Yield



Average Balance



Expense



Yield


Assets
















































Cash

$

37,133,361



$

171,644



1.83 %



$

71,114,495



$

26,994



0.15 %



$

37,647,786



$

261,790



0.93 %



$

59,613,424



$

50,996



0.11 %


















































Investments (Tax Exempt)


21,615,440




186,314








27,138,446




177,809








22,375,856




561,761








24,840,927




478,487






Investments (Taxable)


179,086,818




1,479,134








113,180,210




610,101








171,038,679




3,606,666








103,021,204




1,665,303






Total Investments


200,702,258




1,665,448



3.29 %




140,318,656




787,910



2.23 %




193,414,535




4,168,427



2.88 %




127,862,131




2,143,790



2.24 %


















































Total Loans


648,964,205




8,408,971



5.14 %




602,942,022




6,914,454



4.55 %




624,640,709




22,710,581



4.86 %




611,197,616




20,778,804



4.55 %


















































Earning Assets


886,799,824




10,246,063



4.58 %




814,375,173




7,729,358



3.77 %




855,703,031




27,140,798



4.24 %




798,673,171




22,973,589



3.85 %


















































Assets

$

929,265,436











$

847,472,317











$

895,613,292











$

829,760,907


























































Liabilities
















































Interest Checking

$

132,342,701




458,605



1.37 %



$

36,659,322




12,240



0.13 %



$

125,858,701




641,578



0.68 %



$

34,253,465




38,776



0.15 %


Money Market


216,851,257




581,082



1.06 %




189,055,851




80,347



0.17 %




206,538,632




851,530



0.55 %




167,601,257




206,832



0.16 %


Savings


6,659,935




2,119



0.13 %




4,147,591




1,170



0.11 %




7,205,229




5,992



0.11 %




3,884,715




3,062



0.11 %


Time Deposits


218,365,001




693,222



1.26 %




197,133,663




452,411



0.91 %




192,997,346




1,328,113



0.92 %




189,703,988




1,556,319



1.10 %


Interest Bearing Deposits


574,218,894




1,735,028



1.20 %




426,996,427




546,168



0.51 %




532,599,908




2,827,212



0.71 %




395,443,425




1,804,989



0.61 %


















































Borrowings


53,279,949




229,283



1.71 %




101,033,443




150,599



0.59 %




60,289,005




725,176



1.61 %




124,396,278




576,226



0.62 %


















































Interest Bearing Liabilities


627,498,843




1,964,311



1.24 %




528,029,870




696,767



0.52 %




592,888,913




3,552,388



0.80 %




519,839,703




2,381,215



0.61 %


















































Non Interest Bearing Deposits

$

215,426,363











$

226,514,808











$

213,731,534











$

219,905,412


























































Cost of Funds









0.92 %











0.37 %











0.59 %











0.43 %


















































Net Interest Margin3





$

8,281,752



3.71 %







$

7,032,591



3.43 %







$

23,588,410



3.69 %







$

20,592,374



3.45 %


Shareholders Equity

$

77,295,762











$

80,866,605











$

79,593,533











$

77,531,861










ROAA


1.15

%











1.35

%











1.15

%











1.29

%









ROAE


13.81

%











14.18

%











12.94

%











13.77

%



























































Selected Financial Data by Quarter Ended:
















(Unaudited)
















Balance Sheet Ratios

September 30, 2022


June 30, 2022


March 31, 2022


December 31, 2021


September 30, 2021


Loans held-for-investment to Deposits

79.19 %


83.49 %


83.07 %


85.85 %


84.45 %


Income Statement Ratios (Quarterly)
















Return on Average Assets (ROAA)

1.15 %


1.01 %


1.29 %


1.22 %


1.35 %


Return on Average Equity (ROAE)

13.81 %


11.44 %


13.53 %


13.11 %


14.18 %


Efficiency Ratio4

59.19 %


65.10 %


61.70 %


62.62 %


59.57 %


Net Interest Margin3

3.71 %


3.65 %


3.70 %


3.74 %


3.43 %


Yield on Average Earning Assets

4.58 %


4.08 %


4.03 %


4.00 %


3.77 %


Yield on Securities

3.29 %


2.78 %


2.54 %


2.54 %


2.23 %


Yield on Loans

5.14 %


4.67 %


4.75 %


5.11 %


4.55 %


Cost of Funds

0.92 %


0.45 %


0.36 %


0.33 %


0.37 %


Noninterest income to Total Revenue2

12.11 %


17.88 %


19.28 %


18.01 %


27.15 %


Per Share Data
















Tangible Book Value5

$

9.96


$

10.31


$

10.94


$

11.45


$

11.13


Tangible Book Value (ex AOCI)5

$

12.33


$

11.95


$

11.66


$

11.36


$

10.99


Share Price Data
















Closing Price

$

14.60


$

14.80


$

14.06


$

13.37


$

12.55


Book Value Multiple

147 %


144 %


129 %


117 %


113 %


Common Stock Data
















Outstanding Shares at End of Period


7,281,606



7,319,006



7,296,063



7,349,545



7,317,081


Weighted Average shares outstanding, basic


7,271,784



7,290,417



7,324,527



7,336,016



7,341,635


Weighted Average shares outstanding, diluted


7,285,786



7,312,200



7,362,290



7,438,268



7,395,062


Capital Ratios
















Tier 1 Leverage ratio

11.59 %


11.95 %


12.09 %


11.85 %


10.47 %


Common Equity Tier 1 ratio

13.62 %


13.84 %


14.23 %


14.49 %


12.73 %


Tier 1 Risk Based Capital ratio

13.62 %


13.84 %


14.23 %


14.49 %


12.73 %


Total Risk Based Capital ratio

14.55 %


14.77 %


15.15 %


15.42 %


13.68 %


Credit Quality
















Net Charge-offs to Average Loans

0.00 %


0.00 %


0.00 %


0.00 %


0.00 %


Total Non-performing Loans to Total Loans

1.31 %


1.38 %


1.48 %


1.46 %


0.15 %


Total Non-performing Assets to Total Assets

0.90 %


0.97 %


1.02 %


1.00 %


0.10 %


Nonaccrual Loans to Total Loans

1.31 %


1.38 %


1.48 %


1.46 %


0.15 %


Provision for Loan and Lease Losses

$

382,000


$

375,000


$

164,000


$

355,000


$

229,000


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

1.12 %


1.11 %


1.12 %


1.08 %


1.05 %


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

1.13 %


1.13 %


1.15 %


1.14 %


1.17 %




















FREEDOM FINANCIAL HOLDINGS, INC.


CONSOLIDATED SELECTED FINANCIAL DATA


DEFINITIONS AND RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES:





































1Pre-tax Pre-provision Income (Non-GAAP)

Quarter-to-Date



Year-to-Date






September 30,

2022



June 30,

2022



March 31,

2022





December 31,

2021





September 30,

2021



September 30,

2022



September 30,

2021


Net Interest Income

$

8,242,627



$

7,614,408



$

7,613,406





$

8,024,116





$

6,995,251



$

23,470,441



$

20,491,893


Non-Interest Income


1,136,242




1,657,415




1,818,174






1,762,378






2,606,639




4,611,832




7,960,937


Non-Interest Expense


5,551,217




6,035,762




5,819,107






6,128,059






5,719,568




17,406,086




18,016,758


Pre-tax Pre-provision Income (non-GAAP)

$

3,827,652



$

3,236,061



$

3,612,473





$

3,658,435





$

3,882,322



$

10,676,187



$

10,436,073





































2 Total Revenues (Non-GAAP)

Quarter-to-Date



Year-to-Date






September 30,

2022



June 30,

2022



March 31,

2022





December 31,

2021





September 30,

2021



September 30,

2022



September 30,

2021


Net Interest Income

$

8,242,627



$

7,614,408



$

7,613,406





$

8,024,116





$

6,995,251



$

23,470,441



$

20,491,893


Non-Interest Income


1,136,242




1,657,415




1,818,174






1,762,378






2,606,639




4,611,832




7,960,937


Total Revenue (non-GAAP)

$

9,378,869



$

9,271,823



$

9,431,579





$

9,786,494





$

9,601,890



$

28,082,273



$

28,452,830





































3 Net interest income has been computed on a fully taxable equivalent basis
("FTE") using a 21% federal income tax rate for the 2022 and 2021 periods.

Quarter-to-Date



Year-to-Date






September 30,

2022



June 30,

2022



March 31,

2022





December 31,

2021





September 30,

2021



September 30,

2022



September 30,

2021


Income on Tax Exempt Securities

$

147,188



$

148,374



$

148,229





$

150,254





$

140,469



$

443,791



$

378,005


Tax Equivalent Adjustment


39,126




39,441




39,403






39,941






37,340




117,970




100,482


Income on Tax Exempt Securities (Non-GAAP)


186,314




187,816




187,632






190,195






177,809




561,761




478,487





































Average Earnings Assets


886,799,824




840,685,799




839,099,285






855,227,658






814,375,173




855,703,031




798,673,171


Yield on Interest Earning Assets (GAAP)


4.57

%



4.06

%



4.01

%





4.03

%





3.75

%



4.22

%



3.84

%

Yield on Interest-Earning Assets (FTE) (Non-GAAP)


4.58

%



4.08

%



4.03

%





4.05

%





3.77

%



4.24

%



3.85

%

Net Interest Margin (NIM) (GAAP)


3.69

%



3.63

%



3.68

%





3.72

%





3.41

%



3.67

%



3.44

%

Net Interest Margin (NIM) (FTE) (Non-GAAP)


3.71

%



3.65

%



3.70

%





3.74

%





3.43

%



3.69

%



3.45

%




































4 Efficiency Ratio (Non-GAAP)

Quarter-to-Date



Year-to-Date






September 30,

2022



June 30,

2022



March 31,

2022





December 31,

2021





September 30,

2021



September 30,

2022



September 30,

2021


Net Interest Income


8,242,627




7,614,408




7,613,406






8,024,116






6,995,251




23,470,441




20,491,893


Non-Interest Income


1,136,242




1,657,415




1,818,174






1,762,378






2,606,639




4,611,832




7,960,937







9,378,869




9,271,823




9,431,579






9,786,494






9,601,890




28,082,273




28,452,830


Non-Interest Expense


5,551,217




6,035,762




5,819,107






6,128,059






5,719,568




17,406,086




18,016,758


Efficiency Ratio (Non-GAAP)


59.19

%



65.10

%



61.70

%





62.62

%





59.57

%



61.98

%



63.32

%




































5 Tangible Book Value (ex-AOCI) (non-GAAP)

As of














September 30,

2022



June 30,

2022



March 31,

2022





December 31,

2021





September 30,

2021










Shareholder's Equity


72,490,029




75,473,368




79,794,028






84,158,724






81,454,923










Outstanding Shares at End of Period


7,281,606




7,319,006




7,296,063






7,349,545






7,317,081










Tangible Book Value (GAAP)

$

9.96



$

10.31



$

10.94





$

11.45





$

11.13










Accumulated Other Comprehensive Income (Net) (AOCI)


(17,287,737)




(11,985,199)




(5,272,569)






651,272






1,012,293










AOCI per share equivalent


(2.37)




(1.64)




(0.72)






0.09






0.14










Tangible Book Value (ex-AOCI) (non-GAAP)

$

12.33



$

11.95



$

11.66





$

11.36





$

10.99















































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


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Member FDIC

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
Map & Hours

4500 Daly Drive Suite 240
Chantilly, VA 20151
(571) 395-4000
Map & Hours

4211 Pleasant Valley Road
Chantilly, VA 20151
(703) 766-6400
Map & Hours

10611 BaIls Ford Road Ste 110
Manassas, VA 20109
703-349-2210
Map & Hours

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