The Freedom Bank of Virginia Announces Earnings For The First Quarter of 2020
*FAIRFAX, VA / ACCESSWIRE / April 29, 2020 /* The Freedom Bank of Virginia (OTCQX:FDVA), (the "Bank" or "Freedom") today announced net income of $849,806, or $0.11 per diluted share, for the three months ended March 31, 2020.
Joseph J. Thomas, President and CEO, commented "Every employee across our company has been incredibly dedicated to serving clients and supporting our communities during the unfolding national health crisis. It is also very gratifying to see the results for shareholders improving with the company's net income of $849.8 thousand, or an ROAA of 0.68% for the first quarter, an increase of 13.6% over the prior quarter and higher by 64.7% compared to the first quarter in 2019. This also represents pre-tax, pre-provision income of $1.50 million in the first quarter of 2020, an increase of 58.9% over the prior quarter and 185.9% higher than the comparable quarter in 2019. This is equivalent to a pre-tax, pre-provision ROAA of 1.20% and enabled us to strengthen our loan loss reserves by $549 thousand and still improve net income. Our company enters into this unprecedented global contraction stronger than ever with the talent and technology to operate remotely for clients, the product lines to generate fee-based revenues (37% of total revenue in the first quarter of 2020) as net interest margins are compressed, and the capital and loan loss reserves to weather a sustained economic downturn."
First Quarter Highlights include:
· Net income for the first quarter was $849,806 or $0.11 per diluted share compared to $747,808 or $0.10 per diluted share for the fourth quarter of 2019, and net income of $515,986 or $0.07 per diluted share, for the three months ended March 31, 2019;
· Return on Average Assets ("ROAA") was 0.68% for the quarter ended March 31, 2020 compared to 0.59% for the prior quarter and 0.43% for the three months ended March 31, 2019;
· Return on Average Equity ("ROAE") was 5.27% for the three months ended March 31, 2020 compared to 4.66% for the prior quarter and 3.51% for the three months ended March 31, 2019;
· Total assets increased by $35.90 million during the first quarter to $536.29 million.
· Total loans increased by $27.39 million or by 6.77% during the quarter. Loans held-for-investment increased by $9.50 million or by 2.42%, while loans held-for-sale increased by $17.88 million or by 153.41% in the first quarter;Available-for-sale Securities increased by $7.56 million or by 15.16% during the quarter;
· Total deposits increased by $17.47 million or by 4.42% in the first quarter. Non-interest bearing demand deposits increased to $84.94 million and represented 20.58% of total deposits at the end of the quarter;
· The net interest margin was 3.31% in the first quarter of 2020, lower by 2 basis points compared to the previous quarter and lower by 29 basis points for the same period in 2019. The net interest margin was pressured by lower earning asset yields, partially offset by a reduction in the cost of funds;
· The cost of funds was 1.44% for the first quarter, lower by 10 basis points compared to the previous quarter and by 10 basis points compared to the same period in 2019, largely due to lower funding costs for borrowings, time deposits and interest bearing demand deposits;
· Non-interest income increased by 91.34% compared to the previous quarter and increased by 154.43% compared to the same period in 2019, primarily due to higher revenue from the sale of mortgage loans, income from additional Bank Owned Life Insurance purchased during the first quarter of 2020 and swap fee income;
· Non-interest expenses increased by 11.91% compared to the previous quarter and increased by 7.33% compared to the same period In 2019, primarily due to higher compensation costs related to commissions paid to mortgage loan officers and an increase in mortgage settlement costs;
· The Efficiency Ratio was 76.36% for the quarter ended March 31, 2020, compared to 82.10% for the previous quarter and 89.59% for the same period in 2019;
· The Bank recognized a $549,000 provision for loan losses during the first quarter and the ratio of the allowance for loan and lease losses to loans held-for-investment increased to 1.16% compared to 1.05% in the previous quarter. The increase in reserves was due to loan growth during the first quarter as well as a deterioration in the economy stemming from COVID-19;
· The Bank is well capitalized and capital ratios continue to be strong with a Leverage ratio of 12.88%, Common Equity Tier 1 ratio of 14.35%, Tier 1 Risk Based Capital ratio of 14.35% and a Total Capital ratio of 15.38%.
Net Interest Income
The Bank recorded net interest income of $3.98 million for the first quarter of 2020, a decrease of 1.49% compared to the previous quarter, and 3.24% less than the same period in 2019 The net interest margin in the first quarter of 2020 was 3.31%, lower by 2 basis points compared to the previous quarter, and lower by 29 basis points compared to the same period in 2019.
The following factors contributed to the changes in net interest margin during the first quarter of 2020 compared to the previous quarter:
· Yields on average earning assets decreased by 12 basis points to 4.59% compared to 4.71% in the previous quarter, primarily due to a decrease in loan yields during the first quarter, stemming from loan payoffs and refinancing activity as well as a reduction in the 1-month LIBOR rate and the Prime rate during the first quarter.
· Loan yields decreased by 13 basis points to 5.07% from 5.20% in the previous quarter, while yields on investment securities increased by 30 basis point to 2.62%, from 2.32% in the previous quarter.
· Cost of funds decreased by 10 basis points to 1.44%, from 1.54% in the previous quarter, primarily due to lower costs related to borrowings, time deposits and interest bearing demand deposits and changes in the funding mix.
The following factors contributed to the changes in net interest margin during the first quarter compared to the same period in 2019:
· Loan yields decreased by 35 basis points to 5.07% from 5.42% in the first quarter of 2019, while yields on investment securities decreased by 21 basis points to 2.62%, from 2.83% in the same period in 2019.
· Cost of funds decreased by 10 basis points to 1.44%, from 1.54% in the first quarter of 2019, primarily due to lower costs related to borrowing and money market deposits.
As the COVID-19 outbreak spread across the country and the macroeconomic outlook deteriorated, interest rates declined and the Federal Reserve implemented a series of actions in March to stabilize markets. These actions included a reduction in the Federal Funds target by 150 basis points, increased purchases of mortgage backed securities and Treasuries and the announcement of a number of new lending programs. The decline in interest rates has put pressure on yields for all earning assets and while we have reduced deposit and borrowing costs and expect our cost-of-funds to decline, net interest margin will continue to be under pressure.
On March 27, 2020, the President signed H.R. 748, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") into law. Among other provisions, the CARES Act authorized the Payment Protection Program ("PPP"). The PPP provides small businesses with 500 or fewer employees with funds to pay up to eight weeks of payroll costs including benefits, interest on mortgages, rent and utilities. Funds were made available in the form of fully guaranteed 7(a) loans administered by the Small Business Administration ("SBA"), and made by approved SBA lenders. The loan amounts disbursed may be forgiven in whole or in part by the SBA. The interest rate on the PPP loans is 1%, the term is two years and loan payments are deferred for six months. Additionally, the SBA pays processing fees to the lenders which vary depending upon the loan amount.
As an approved SBA lender, the Bank participated in the PPP loan program, processed and funded 139 loans totaling $61.0 million, in the initial PPP authorization. Upon reauthorization of the PPP loan program, the Bank had processed 263 additional loans for a total of $41 million, as of April 28^th, 2020. The Bank expects to receive total processing fees of approximately $3 million from the SBA on the PPP loans processed through April 28^th, 2020 The fees represent approximately 2.9% of PPP loan balances, and will be deferred through the term of the loans. The large volume of PPP loans processed by the Bank will lower our loan yields in subsequent quarters and as long as the loans are on the Bank's balance sheet.
Non-interest Income
Non-interest income was $2.37 million for the first quarter, higher by 91.34% compared to the previous quarter and higher by 154.43% compared to the same period in 2019. The principal contributor to the increase in non-interest income in the first quarter of 2020 compared to the previous quarter was higher gain-on-sale revenue from mortgage loans, stemming from an increase in mortgage refinancing activity. Other factors that contributed to the increase in non-interest income were swap fees and income from additional Bank Owned Life Insurance that was purchased during the first quarter.
Non-interest Expenses
Non-interest expenses in the first quarter of 2020 increased by 11.91% compared to the previous quarter and increased by 7.33% compared to the same period in 2019. The increase was largely driven by higher commissions paid to mortgage loan officers and an increase in mortgage settlement costs on higher closed loan volume during the quarter.
Additional categories of non-interest expenses that changed in the first quarter of 2020 were the following:
· Professional fees were lower by 7.60% in the first quarter of 2020 compared to the same period in 2019, primarily due to a streamlining of vendor agreements, and more efficient use of legal services.
· Data processing expenses in the first quarter were lower by 25.91% compared to the same period in 2019, primarily due to re-negotiation of certain vendor agreements and more efficient utilization of data processing services.
· Advertising expenses in the first quarter of 2020 declined relative to the previous quarter on curtailed media advertising.
Asset Quality
Non-accrual loans were $2.16 million or 0.50% of total loans at the end of the first quarter of 2020, compared to $1.70 million or 0.42% of total loans at the end of the prior quarter. As of both March 31, 2020 and December 31, 2019, there were no troubled debt restructurings ("TDRs"). On March 31, 2020 there was one loan with a book balance of $150,000 that was 90 days or more past due and accruing, compared to $4.52 million of loans that were 90 days or more past due and accruing, equivalent to 1.15% of total loans on December 31, 2019. There was no Other Real Estate Owned ("OREO") on the balance sheet on March 31, 2020 or December 31, 2019. Total non-performing assets (defined as the sum of loans on non-accrual, loans greater than 90 days past due and accruing, loans that were TDRs but not on non-accrual, and OREO assets) were $2.31 million or 0.43% of total assets at March 31, 2020 compared to $6.23 million or 1.24% of total assets, at the end of the previous quarter.
As of April 28^th, pursuant to the CARES Act and interagency guidance on loan modifications related to COVID-19, the Bank granted loan payment deferrals of up to six months to 81 affected borrowers representing $93 million of outstanding loan balances.
Following an assessment of the collectability of the loans held-for-investment at the end of the first quarter, it was determined that an additional provision for loan losses of $549,000 was necessary to account for loan growth as well as the deteriorating macro-economic outlook as a result of the COVID-19 outbreak. The Bank's ALLL ratio was 1.16% of loans held-for investment on March 31, 2020 compared to an ALLL ratio of 1.05% at December 31, 2019.
Total Assets
Total assets at March 31, 2020 were $536.29 million compared to $500.39 million on December 31, 2019. Changes in major asset categories during linked quarters were as follows:
· Cash balances and deposits with other banks decreased by $4.28 million during the quarter.
· The available-for-sale securities portfolio increased by $7.56 million compared to December 31, 2019.
· Loans held-for-investment increased by $9.50 million during the quarter.
· Loans held-for-sale increased by $17.88 million during the quarter.
Total Liabilities
Total liabilities at March 31, 2020 were $471.02 million compared to total liabilities of $436.37 million on December 31, 2019, Total deposits were $412.68 million on March 31, 2020 compared to total deposits of $395.21 million on December 31, 2019. On a linked quarter basis, interest bearing demand deposits increased by $23.22 million, with the bulk of the increase occurring in low cost interest checking balances, while time deposits declined by $10.17 million. Non-interest bearing demand deposits increased during the quarter as well to $84.94 million, and comprised 20.58% of total deposits at the end of the quarter, compared to 18.41% of total deposits on March 31, 2019. The change in funding mix enables the Bank's cost of funds to benefit from lower interest rates. Federal Home Loan Bank advances increased by $16.86 million during the quarter, as the bank took advantage of low borrowing costs to bolster balance sheet liquidity.
Stockholders' Equity and Capital
Stockholders' equity at March 31, 2020 was $65.27 million compared to $64.03 million on December 31, 2019. Additional paid in capital at March 31, 2020 was $58.65 million compared to $58.53 million on December 31, 2019. Accumulated Other Comprehensive Income ("AOCI"), which generally comprises unrealized gains and losses on available-for-sale securities on the balance sheet, increased by $270,395 on unrealized gains during the first quarter of 2020. Total shares issued and outstanding were 7,238,751 on March 31, 2020 compared to 7,221,046 shares on December 31, 2019 and 6,996,602 shares on March 31, 2019. The book value of the Bank's common stock at March 31, 2020 was $9.02 per share compared to $8.86 per share on December 31, 2019.
As of March 31, 2020, all 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, 2020 and December 31, 2019 were as follows:
March 31, 2020 December 31, 2019
Total Capital Ratio 15.38% 16.24%
Tier 1 Capital Ratio 14.35% 15.26%
Common Equity
Tier 1 Capital Ratio 14.35% 15.26%
Leverage Ratio 12.88% 12.80%
*About Freedom Bank*
Freedom Bank is a community-oriented bank with locations in Fairfax, Reston, Chantilly and Vienna, 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.
*NEWS RELEASE*
*Contact:*
Joseph J. Thomas
President & Chief Executive Officer
703-667-4161: Phone
jthomas@freedom.bank: Email
*THE FREEDOM BANK OF VIRGINIA*
CONSOLIDATED BALANCE SHEETS
(Unaudited) (Audited) (Unaudited)
March 31, December 31, March 31,
2020 2019 2019
*ASSETS*
Cash and Due from Banks
$ 3,095,339 $ 927,322 $ 1,796,929
Interest Bearing Deposits with Banks
18,287,112 24,735,085 13,804,921
Securities Available-for-Sale
57,411,258 49,854,912 54,177,183
Restricted Stock Investments
4,514,750 3,752,750 3,041,300
Loans Held for Sale
29,539,880 11,656,802 10,562,219
Loans Held for Investment
402,444,811 392,941,874 377,458,580
Allowance for Loan Losses
(4,670,692 ) (4,121,693 ) (4,509,489 )
Net Loans
397,774,119 388,820,181 372,949,091
Bank Premises and Equipment, net
1,413,622 1,480,535 1,678,539
Accrued Interest Receivable
1,346,501 1,278,037 1,363,329
Deferred Tax Asset
678,826 857,698 864,642
Bank-Owned Life Insurance
16,885,603 12,783,605 12,493,532
Right of Use Asset, net
3,254,731 2,928,546 3,548,583
Other Assets
2,088,067 1,317,201 1,622,226
Total Assets
$ *536,289,808 * $ *500,392,674 * $ *477,902,494 *
*LIABILITIES AND STOCKHOLDERS' EQUITY*
*Liabilities*
Deposits
Demand Deposits
Non-interest Bearing
$ 84,937,943 $ 80,630,053 $ 72,778,632
Interest Bearing
135,821,899 112,605,618 121,777,996
Savings Deposits
2,275,796 2,153,939 2,481,822
Time Deposits
189,646,824 199,821,006 198,188,774
Total Deposits
412,682,462 395,210,616 395,227,224
Federal Home Loan Bank Advances
52,714,286 35,857,143 17,000,000
Accrued Interest Payable
358,717 433,586 408,730
Lease Liability
3,314,889 2,981,132 3,565,909
Other Liabilities
1,951,421 1,883,782 1,415,153
Total Liabilities
471,021,775 436,366,259 417,617,016
*Stockholders' Equity*
Preferred stock, $0.01 par value, 5,000,000 shares authorized;
0 Shares Issued and Outstanding, 2020 and 2019
- - -
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:
6,565,751, 6,548,046 and 6,323,602 Shares Issued and Outstanding
at March 31, 2020, December 31, 2019 and March 31, 2019, Respectively
(Includes 118,335, 120,500 and 115,000 Unvested Shares at March 31, 2020
December 31, 2019 and March 31, 2019, Respectively)
64,474 64,275 63,236
Non-Voting Common Stock:
673,000 Shares Issued and Outstanding March 31, 2020, December 31, 2019
and March 31, 2019
6,730 6,730 6,730
Additional Paid-in Capital
58,648,131 58,526,913 57,530,232
Accumulated Other Comprehensive Loss, Net
241,120 (29,274 ) (583,261 )
Retained Earnings
6,307,578 5,457,771 3,268,541
Total Stockholders' Equity
65,268,033 64,026,415 60,285,478
*Total Liabilities and Stockholders' Equity*
$ *536,289,808 * $ *500,392,674 * $ *477,902,494 *
*THE FREEDOM BANK OF VIRGINIA*
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (Unaudited)
For the three For the three
months ended months ended
March 31, 2020 March 31, 2019
*Interest Income*
Interest and Fees on Loans
$ 5,092,699 $ 5,204,718
Interest on Investment Securities
357,942 367,017
Interest on Deposits with Other Banks
78,237 125,328
Total Interest Income
5,528,878 5,697,063
*Interest Expense*
Interest on Deposits
1,395,959 1,501,319
Interest on Borrowings
157,519 87,132
Total Interest Expense
1,553,478 1,588,451
Net Interest Income
3,975,400 4,108,612
*Provision for Loan Losses*
(549,000 ) -
Net Interest Income After
Provision for Loan Losses
3,426,400 4,108,612
*Non-Interest Income*
Gain on Sale of Mortgage Loans
1,886,952 688,393
Service Charges and Other Income
357,489 148,977
Gain on Sale of Securities
25,608 2,688
Increase in Cash Surrender Value of Bank-
owned Life Insurance
101,998 92,215
Total Non-interest Income
2,372,047 932,273
*Non-Interest Expenses*
Officer and Employee Compensation
and Benefits
3,257,775 2,932,993
Occupancy Expense
292,794 275,776
Equipment and Depreciation Expense
184,022 185,521
Insurance Expense
52,335 77,984
Professional Fees
281,396 304,548
Data and Item Processing
187,101 252,548
Advertising
58,804 35,269
Franchise Taxes and State Assessment Fees
175,870 160,697
Mortgage Fees and Settlements
221,374 131,882
Other Operating Expense
135,521 158,927
Total Non-interest Expenses
4,846,992 4,516,144
Income Before Income Taxes
951,455 524,742
*Income Tax Expense*
101,649 8,756
*Net Income*
$ 849,806 $ 515,986
*Earnings per Common Share - Basic*
$ 0.12 $ 0.07
*Earnings per Common Share - Diluted*
$ 0.11 $ 0.07
*Weighted-Average Common Shares*
*Outstanding - Basic*
7,348,022 7,097,602
*Weighted-Average Common Shares *
*Outstanding - Diluted*
7,435,490 7,173,623
*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, 2020 December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019
*Interest Income*
Interest and Fees on Loans
$ 5,092,699 $ 5,345,417 $ 5,541,462 $ 5,022,252 $ 5,204,718
Interest on Investment Securities
357,942 278,164 343,288 381,352 367,017
Interest on Deposits with Other Banks
78,237 88,239 82,831 94,979 125,328
Total Interest Income
5,528,878 5,711,820 5,967,581 5,498,583 5,697,063
*Interest Expense*
Interest on Deposits
1,395,959 1,513,662 1,585,209 1,606,953 1,501,319
Interest on Borrowings
157,519 162,502 174,810 120,696 87,132
Total Interest Expense
1,553,478 1,676,164 1,760,019 1,727,649 1,588,451
Net Interest Income
3,975,400 4,035,657 4,207,562 3,770,934 4,108,612
*Provision for Loan Losses*
(549,000 ) - 47,000 147,500 -
Net Interest Income after
Provision for Loan Losses
3,426,400 4,035,657 4,160,562 3,623,434 4,108,612
*Non-Interest Income*
Gain on Sale of Mortgage Loans
1,886,952 924,410 1,473,453 997,461 688,393
Service Charges and Other Income
357,489 218,583 265,589 203,252 148,977
Gains on Sale of Securities
25,608 - - 103,034 2,688
Increase in Cash Surrender Value of Bank-
owned Life Insurance
101,998 96,727 97,022 96,324 92,215
Total Non-interest Income
2,372,048 1,239,720 1,836,064 1,400,071 932,273
*Non-Interest Expenses*
Officer and Employee Compensation
and Benefits
3,257,775 2,637,977 3,064,244 2,711,906 2,932,993
Occupancy Expense
292,794 293,058 285,798 288,213 275,776
Equipment and Depreciation Expense
184,022 261,871 216,275 227,717 185,521
Insurance Expense
52,335 10,760 (48,502 ) 77,984 77,984
Professional Fees
281,396 278,594 297,947 225,119 304,548
Data and Item Processing
187,101 189,680 256,535 187,073 252,548
Advertising
58,804 113,194 63,543 124,276 35,269
Franchise Taxes and State Assessment Fees
175,870 175,920 175,895 117,478 160,697
Mortgage Fees and Settlements
221,374 200,192 312,346 198,771 131,881
Other Operating Expense
135,521 169,741 295,082 235,124 158,927
Total Non-interest Expenses
4,846,992 4,330,987 4,919,163 4,393,661 4,516,142
Income before Income Taxes
951,455 944,389 1,077,463 629,844 524,742
*Income Tax Expense*
101,649 196,581 145,115 120,769 8,756
*Net Income*
$ 849,806 $ 747,808 $ 932,348 $ 509,075 $ 515,986
*Earnings per Common Share - Basic*
$ 0.12 $ 0.10 $ 0.13 $ 0.07 $ 0.07
*Earnings per Common Share - Diluted*
$ 0.11 $ 0.10 $ 0.13 $ 0.07 $ 0.07
*Weighted-Average Common Shares*
*Outstanding - Basic*
7,348,022 7,212,568 7,150,649 7,114,190 7,097,635
*Weighted-Average Common Shares *
*Outstanding - Diluted*
7,435,490 7,272,228 7,194,786 7,177,984 7,173,656
*Average Balances, Income and Expenses, Yields and Rates*
*(Unaudited)*
*Three Months Ended* *Three Months Ended*
*March 31, 2020* *December 31, 2019*
Average Balance Income/Expense Yield Average Balance Income/Expense Yield
*Assets*
Cash
$ 24,919,112 $ 78,237 1.26 % $ 25,022,661 $ 88,239 1.40 %
Investments (Tax Exempt)
4,541,049 38,411 4,494,698 38,432
Investments (Taxable)
51,701,396 327,597 44,496,212 248,253
Total Investments
56,242,445 366,008 2.62 % 48,990,910 286,685 2.32 %
Loans (Tax Exempt)
4,533,284 60,196 4,561,638 61,239
Loans (Taxable)
400,287,163 5,045,143 404,433,331 5,297,040
Total Loans
404,820,447 5,105,339 5.07 % 408,994,969 5,358,279 5.20 %
Earning Assets
485,982,004 5,549,585 4.59 % 483,008,540 5,733,203 4.71 %
Assets
$ 504,847,678 $ 500,326,991
*Liabilities*
Interest Checking
$ 25,788,577 22,351 0.35 % $ 14,182,818 $ 14,869 0.42 %
Money Market
94,433,574 275,134 1.17 % 88,443,141 $ 292,962 1.31 %
Savings
2,382,236 1,099 0.19 % 2,272,908 1,146 0.20 %
Time Deposits
195,524,566 1,097,375 2.26 % 201,332,510 1,204,685 2.37 %
Interest Bearing Deposits
318,128,953 1,395,959 1.76 % 306,231,377 1,513,662 1.96 %
FHLB Borrowings
$ 40,076,102 157,519 1.58 % 39,890,991 162,502 1.62 %
Interest Bearing Liabilities
358,205,055 1,553,478 1.74 % 346,122,368 1,676,164 1.92 %
Non Interest Bearing Deposits
$ 76,609,290 $ 84,845,763
Cost of Funds
1.44 % 1.54 %
Net Interest Margin^1
$ 4,007,918 3.31 % $ 4,057,039 3.33 %
Shareholders Equity
$ 64,868,539 $ 63,634,670
^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*
*March 31, 2020* Income / *March 31, 2019* Income /
Average Balance Expense Yield Average Balance Expense Yield
*Assets*
Cash
$ 24,919,112 $ 78,237 1.26 % $ 20,706,435 $ 125,328 2.45 %
Investments (Tax Exempt)
4,541,049 38,411 4,643,552 43,118
Investments (Taxable)
51,701,396 327,597 49,309,238 332,954
Total Investments
56,242,445 366,008 2.62 % 53,952,790 376,072 2.83 %
Loans (Tax Exempt)
4,533,284 60,196 618,161 12,184
Loans (Taxable)
400,287,163 5,045,143 388,736,646 5,195,092
Total Loans
404,820,447 5,105,339 5.07 % 389,354,807 5,207,276 5.42 %
Earning Assets
485,982,004 5,549,585 4.59 % 464,014,032 5,708,676 4.99 %
Assets
$ 504,847,678 $ 482,503,597
*Liabilities*
Interest Checking
$ 25,788,577 22,351 0.35 % $ 6,933,095 9,165 0.54 %
Money Market
94,433,574 275,134 1.17 % 116,599,595 395,239 1.37 %
Savings
2,382,236 1,099 0.19 % 2,892,660 1,411 0.20 %
Time Deposits
195,524,566 1,097,375 2.26 % 199,846,160 1,095,504 2.22 %
Interest Bearing Deposits
318,128,953 1,395,959 1.76 % 326,271,510 1,501,319 1.87 %
FHLB Borrowings
40,076,102 157,519 1.58 % 17,131,746 87,131 2.06 %
Interest Bearing Liabilities
358,205,055 1,553,478 1.74 % 343,403,256 1,588,450 1.88 %
Non Interest Bearing Deposits
$ 76,609,290 $ 74,141,543
Cost of Funds
1.44 % 1.54 %
Net Interest Margin^1
$ 3,996,107 3.31 % $ 4,120,225 3.60 %
Shareholders Equity
$ 64,868,539 $ 59,571,345
ROAA
0.68 % 0.43 %
ROAE
5.27 % 3.51 %
^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
*Reconciliation of Return on Average Assets for the three months ended March 31, 2020*
Net Income
$ 849,806 $ 849,806
Provision
(549,000 ) n/a
Pre-Provision Income
1,398,806 n/a
Income Tax Expense
101,649 n/a
Pre-Tax, Pre-provision Income
1,500,455 n/a
Annualized Income
6,034,798 3,417,902
Average Assets
$ 504,847,678 $ 504,847,678
Provision (adjusted for daily avg.)^1
6,033 n/a
Average Assets (adjusted for Provision)
504,853,711 n/a
ROAA
1.20 % 0.68 %
^1 Provision was booked March 31, 2020 and was therefore, outstanding one of the ninety-one days in the quarter ended March 31, 2020.
*Selected Financial Data by Quarter Ended:*
*(Unaudited)*
*Balance Sheet Ratios*
*March 31, 2020* *December 31, 2019* *September 30, 2019* *June 30, 2019* *March 31, 2019* December 31, 2018
Loans to Deposits
104.68 % 102.38 % 105.93 % 101.19 % 98.18 % 99.44 %
*Income Statement Ratios (Quarterly)*
Return on Average Assets (ROAA)
0.68 % 0.59 % 0.75 % 0.42 % 0.43 % 0.01 %
Return on Average Equity (ROAE)
5.27 % 4.66 % 6.34 % 3.36 % 3.51 % 0.10 %
Efficiency Ratio
76.36 % 82.10 % 81.39 % 84.97 % 89.59 % 89.97 %
Net Interest Margin^1
3.31 % 3.33 % 3.52 % 3.27 % 3.60 % 3.49 %
Yield on Average Earning Assets
4.59 % 4.71 % 4.99 % 4.76 % 4.99 % 4.74 %
Yield on Securities
2.62 % 2.32 % 2.79 % 2.80 % 2.83 % 2.67 %
Yield on Loans
5.07 % 5.20 % 5.36 % 5.17 % 5.42 % 5.22 %
Cost of Funds
1.44 % 1.54 % 1.64 % 1.66 % 1.54 % 1.41 %
Noninterest income to Total Revenue
37.37 % 23.50 % 30.38 % 27.08 % 18.49 % 14.62 %
*Per Share Data*
Tangible Book Value
$ 9.02 $ 8.86 $ 8.76 $ 8.60 $ 8.48 $ 8.47
*Share Price Data*
Closing Price
$ 5.80 $ 10.45 $ 9.95 $ 9.98 $ 10.00 $ 10.23
Book Value Multiple
64 % 118 % 114 % 116 % 116 % 121 %
*Common Stock Data*
Outstanding Shares at End of Period
7,238,751 7,221,046 7,211,046 7,122,102 7,112,102 7,096,602
Weighted Average shares outstanding, basic
7,348,022 7,212,568 7,150,649 7,114,190 7,097,635 7,085,636
Weighted Average shares outstanding, diluted
7,435,490 7,272,228 7,194,786 7,177,984 7,173,656 7,207,759
*Capital Ratios*
Tier 1 Leverage ratio
12.88 % 12.80 % 12.80 % 12.71 % 12.61 % 12.16 %
Common Equity Tier 1 ratio
14.35 % 15.26 % 14.79 % 14.91 % 15.28 % 14.73 %
Tier 1 Risk Based Capital ratio
14.35 % 15.26 % 14.79 % 14.91 % 15.28 % 14.73 %
Total Risk Based Capital ratio
15.38 % 16.24 % 15.84 % 15.98 % 16.42 % 15.85 %
*Credit Quality*
Net Charge-offs to Average Loans
0.00 % 0.09 % 0.00 % 0.06 % 0.02 % 0.03 %
Total Non-performing Loans to Total Loans
0.53 % 1.54 % 0.67 % 0.79 % 0.80 % 0.83 %
Total Non-performing Assets to Total Assets
0.43 % 1.24 % 0.55 % 0.65 % 0.64 % 0.69 %
Nonaccrual Loans to Total Loans
0.50 % 0.42 % 0.53 % 0.76 % 0.65 % 0.71 %
Allowance for Loan and Lease Losses to loans held-for-investment
1.16 % 1.05 % 1.12 % 1.14 % 1.19 % 1.16 %
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
*SOURCE: *Freedom Bank of VA
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https://www.accesswire.com/587646/The-Freedom-Bank-of-Virginia-Announces-Earnings-For-The-First-Quarter-of-2020