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

FAIRFAX, Va. (April 29, 2021) – 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 $0.33per diluted share, for the linked quarter and net income of $849,806 or $0.11 per diluted share for the three months ending March31, 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 2021Highlights 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

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
Phone: 703-667-4161
Email: jthomas@freedom.bank


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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
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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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