Market Overview

Freedom Bank Earns Record Net Income for Third Quarter and First Nine Months

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Bank Increases Core Deposits to Fund Continuing Growth

The Freedom Bank of Virginia (OTCQX:FDVA) earned net income of $791,715
for the third quarter ending September 30, 2017, up 9% from $719,205 for
the same period in 2016. For the nine months ending September 30, 2016,
net income was $2,515,851. This was up $730,771 (40.1%) from the prior
year. Earnings per share were $0.13 for third quarter, compared to $0.12
for the third quarter of 2016. Earnings per share through the third
quarter of 2017 were $0.41 per share, up from $0.29 per share in 2016.

Total assets increased $67,102,775 (13.6%) to $561,130,267 at September
30, 2017 compared to September 30, 2016. The highest yielding asset of
loans receivable grew $1,743,286 to $398,562,312 at September 30, 2017
from a year earlier. Loans held for sale were $11,528,559 compared to
$13,825,894 the prior year. Investment securities held for sale were
$52,772,671, up from $46,196,986 in 2016. Additionally, the bank had
$14,911,233 in municipal bonds held to maturity in 2017 that it did not
have the prior year.

Asset quality remains strong with non-performing assets comprising 0.30%
of total assets at September 30, 2017, versus 0.22% of total assets at
September 30, 2016. Past due loan balances still accruing interest were
$1,512,627 at September 30, 2017. Both of these metrics are superior to
community banks nationally.

Freedom generated core deposit growth in the third quarter. The bank
will use these deposits to fund loans and investments, which should have
a positive effect on profitability. Non-interest checking balances were
$73,483,463 at September 30, 2017, up 11.2% from $66,056,888 a year
earlier. Interest bearing checking account balances were $179,943,810, a
$74,887,370 (71.3%) increase from $105,056,440 the prior year.
Certificates of deposits were $238,411,457, down from $241,037,751 a
year earlier, as transaction accounts funded more of the growth of the
bank. Total deposits were $493,902,789 at September 30, 2017, versus
$414,299,769 the prior year. Transaction account balances of
$253,427,272 exceeded time and savings deposit balances of $240,475,516
for the first time in the past five years as a result of the bank's
emphasis on core deposit growth.

CEO Craig Underhill stated, "The bank focused on sustainable growth in
2017 by improving our infrastructure, growing core deposits and
improving our loan mix. Short-term borrowings were repaid to the FHLB
Atlanta and a large portion of brokered certificate of deposits were
redeemed and replaced with transaction account balances and public
deposits from local municipalities. We expect to open our fourth branch
office at 4500 Daly Drive, Suite 240, Chantilly, Virginia 20151 in the
fourth quarter to help continue growing core deposits and to serve new
and existing customers in this area. Freedom Bank also reduced its CRE
loan concentration in 2017 to provide a more diversified loan portfolio.
These actions slowed loan growth for 2017 versus the prior year but
positioned the bank for sustainable growth going forward."

Capital increased to $54,700,983 at September 30, 2017, a $3,542,012
increase over the $51,158,971 level at September 30, 2016. Tangible book
value per share was $8.81 at September 30, 2017, an increase from $8.30
per share at September 30, 2016.

Freedom Bank is a community-oriented, locally-owned bank with locations
in Fairfax, Reston and Vienna, Virginia, and coming soon our newest
location in Chantilly, Virginia. For information about Freedom Bank's
deposit and loan services, visit the Bank's website at www.freedombankva.com.

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, adverse changes in the overall national
economy as well as adverse economic conditions in our specific market
areas, maintenance and development of well-established and valued client
relationships and referral source relationships, and acquisition or loss
of key personnel. Other risks that can affect the Bank are detailed from
time to time in our quarterly and annual reports filed with the Federal
Financial Institutions Examination Council. We caution readers that the
list of factors above is not exclusive. The forward-looking statements
are made as of the date of this release, and we 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.

 
The Freedom Bank of Virginia
Statements of Financial Condition
                         

September 30, 2017

September 30, 2016

   
ASSETS
Cash and due from banks $ 1,487,632 $ 1,176,028
Federal funds sold 69,119,000 24,107,000
Interest Bearing Balances with Banks 6,080,661 4,760,857
Investment securities available for sale, at fair value 52,722,671 46,196,986
Investment securities held to maturity 14,911,233 -
FHLB and Federal Reserve Bank stock 2,411,550 2,995,900
Loans held for sale 11,528,559 13,825,894
Loans receivable 398,562,312 396,819,026
Allowance for possible loan losses   (4,562,370 )   (4,100,459 )
Net Loans 393,999,942 392,718,567
Premises and equipment, net 1,383,953 713,768
Accrued interest and other receivables 1,392,669 1,028,948
Deferred Tax Asset 2,125,500 1,604,000
Other assets 1,643,945 2,632,761
Bank Owned Life Insurance   2,322,952     2,266,784  
 
Total Assets $ 561,130,267   $ 494,027,493  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits:
Non-interest bearing deposits $ 73,483,463 $ 66,056,888
Interest Checking 179,943,810 105,056,440
Savings deposits 2,064,059 2,148,690
Time deposits   238,411,457     241,037,751  
Total Deposits 493,902,789 414,299,769
 
Fed Funds Purchased and FHLB advances 10,428,571 26,714,286
Other accrued expenses 1,950,442 1,685,112
Accrued interest payable   147,482     169,355  
Total Liabilities   506,429,284     442,868,522  
 
Stockholders' Equity:
 
Common stock of $0.01 par value with 25,000,000 shares authorized,
6,207,735 shares issued and outstanding at June 30, 2017
6,166,454 shares issued and outstanding at June 30, 2016
 
Voting Common Stock 58,668 55,377

5,579,028 and 5,537,747 shares issued and outstanding June 30,
2017 and June 30, 2016

Non-Voting Common Stock 6,601 6,287

628,707 shares issued and outstanding June 30, 2017 and June 30,
2016

Additional paid-in capital 52,311,337 47,774,866
Accumulated other comprehensive income (387,271 ) 94,876
Dividends Declared - -
Retained earnings   2,711,648     3,227,565  
 

Total Stockholders' Equity

  54,700,983     51,158,971  
 
Total Liabilities and Stockholders' Equity $ 561,130,267   $ 494,027,493  
The Notes to Financial Statements are an integral part of these
statements.
 
 
The Freedom Bank of Virginia
Statements of Operations
                   
For the three months ended For the nine months ended
September 30, September 30,
2017   2016 2017   2016
Interest Income
  Interest and fees on loans $ 5,286,184 $ 5,127,745 $ 15,814,952 $ 13,984,388
Interest on investment securities 603,727 288,447 1,390,015 908,254
Interest on Federal funds sold   6,388   362   12,565   8,084
  Total Interest Income 5,896,299 5,416,554 17,217,532 14,900,726
 
Interest Expense
Interest on deposits 1,336,841 942,623 3,485,109 2,624,278
Interest on borrowed funds   47,076   32,130   125,709   81,450
Total Interest Expense 1,383,917 974,753 3,610,818 2,705,728
 
Net Interest Income 4,512,382 4,441,801 13,606,714 12,194,998
 
Provision for Possible Loan Losses   -   515,500   30,000   925,500
 
Net Interest Income after
Provision for Possible Loan Losses 4,512,382 3,926,301 13,576,714 11,269,498
 
Other Income
Gain on sale of mortgage loans 1,231,444 1,648,245 3,376,345 3,823,619
Service charges and other income 56,501 35,188 193,044 157,372
Increase in cash surrender value of bank-owned life insurance   13,894   14,829   42,569   45,089
Total Other Income 1,301,839 1,698,262 3,611,958 4,026,080
 
Operating Expenses
Officers and employee compensation and benefits 2,869,891 2,969,295 8,507,074 8,156,757
Occupancy expense 264,713 250,340 754,793 730,523
Equipment and depreciation expense 144,742 150,177 432,083 403,804
Insurance expense 73,932 78,579 290,335 236,644
Professional fees 397,895 227,682 1,055,925 693,501
Data and item processing 256,270 221,129 670,757 690,145
Business development 61,092 36,128 169,001 150,809
Franchise tax 131,156 107,070 361,353 278,718
Mortgage fees and settlements 203,356 314,588 530,087 745,333
Other operating expenses   211,559   181,270   605,413   504,864
Total Operating Expenses   4,614,606   4,536,258   13,376,821   12,591,098
 
Income before Income Taxes 1,199,615 1,088,305 3,811,851 2,704,480
Provision for Income Taxes   407,900   369,100   1,296,000   919,400
 
Net Income $ 791,715 $ 719,205 $ 2,515,851 $ 1,785,080
 
The Notes to Financial Statements are an integral part of these
statements.
 

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