Freedom Financial Holdings Announces Earnings for First Quarter of 2022
Freedom Financial Holdings Announces Earnings for First Quarter of 2022

FAIRFAX, Va., April 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 $2,784,297, or $0.38 per diluted share, for the three months ended March 31, 2022. This compares to net income of $2,743,088 or $0.37 per diluted share, for the linked quarter and net income of $2,468,211 or $0.34 per diluted share for the three months ending March 31, 2021.    

Joseph J. Thomas, President, and CEO, commented, “We entered 2022 with lots of uncertainties including COVID outbreaks, supply chain problems, low housing inventory, significant inflation, higher interest rates, and geopolitical instability.  I am proud of our team for sustaining the Company’s profitability with net income up 12.8% in the first quarter of 2022 compared to the prior year and higher ROAA and ROAE of 1.29% and 13.53%, respectively.  Annualized growth in loans held-for-investment (excluding PPP loans) at 7.48% along with a 13-basis point increase in net interest margin to 3.68% bolstered interest income, up 9.86% over the prior year.  The company’s core profitability has been resilient through a major cyclical downdraft in residential mortgage volumes, in part due to the emerging contribution of our Small Business Lending platform.  We have also been very disciplined on the expense front as reflected in the improved Efficiency Ratio of 61.70% for the quarter compared to 67.91% for the same period in 2021.  We remain grateful that the clients and communities we serve see value in our culture of innovation.  We continue to develop creative ideas to help clients grow and provide the financial services that they need.”

First Quarter 2022 Highlights include:

  • Net income for the first quarter was $2,784,297 or $0.38 per diluted share compared to net income of $2,743,088 or $0.37 per diluted share in the linked quarter and net income of $2,468,211 or $0.34 per diluted share for the three months ending March 31, 2021.
  • Return on Average Assets (“ROAA”) was 1.29% for the quarter ended March 31, 2022, compared to 1.22% for the linked quarter and 1.26% for the three months ended March 31, 2021.
  • Return on Average Equity (“ROAE”) was 13.53% for the three months ended March 31, 2022, compared to 13.11% for the linked quarter and 13.44% for the three months ended March 31, 2021.
  • Total assets were $863.12 million on March 31, 2022, a decrease of $13.55 million or 1.55% from total assets on December 31, 2021.
  • Loans held-for-investment (excluding PPP loans) increased by $10.64 million or 1.87% during the quarter.
  • PPP loan balances decreased by $19.31 million during the first quarter on loan forgiveness and mortgage loans held for sale decreased by $2.04 million during the same period, on a decline in mortgage activity.
  • Cash balances at the Federal Reserve decreased by $3.01 million during the first quarter.
  • Available for sale investment securities decreased by $2.42 million during the first quarter.
  • Total deposits increased by $12.99 million or by 1.85% in the first quarter. Non-interest-bearing demand deposits decreased by $13.99 million from the linked quarter to $208.17 million and represented 29.13% of total deposits on March 31, 2022.
  • The net interest margin decreased in the first quarter to 3.68%, lower by 6 basis points compared to the linked quarter and higher by 13 basis points compared to the same period in 2021. Excluding PPP loans, the net interest margin would have been 3.55%. The decrease in the net interest margin across linked quarters was primarily due to lower yields on loans and a 3-basis point increase in funding costs.
  • The cost of funds was 0.36% for the first quarter, higher by 3 basis points compared to the linked quarter and lower by 15 basis points compared to the same period in 2021, as deposit costs declined, partially offset by an increase in borrowing costs related to the issuance of subordinated debt in the fourth quarter of 2021.
  • Non-interest income increased by 3.17% compared to the linked quarter and decreased by 40.61% compared to the same period in 2021. The increase in non-interest income compared to the linked quarter was primarily due to revenue from the sale of SBA loans and other fee income. The decrease in non-interest income compared to the calendar quarter was primarily due to lower mortgage revenue stemming from a slowdown in mortgage activity, partially offset by revenue from SBA loan sales.
  • Non-interest expense in the first quarter decreased by 5.04% compared to the linked quarter and decreased by 11.94% compared to the same period in 2021. The decrease in non-interest expense in calendar quarters was primarily due to lower performance related costs: specifically, commissions paid to mortgage loan officers and mortgage settlement costs.
  • The Efficiency Ratio was 61.70% for the quarter ended March 31, 2022, compared to 62.62% for the linked quarter and 67.91% for the same period in 2021.
  • Non-accrual loans were relatively unchanged in the first quarter from the prior period, and the ratio of non-performing assets to total assets was 1.02% on March 31, 2022, compared to 0.28% on March 31, 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 $164,000 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 1.12% (or 1.15% excluding PPP loans, which carry a full faith and guarantee of the US Government) compared to 1.08% in the linked quarter (or 1.14% excluding PPP loans);
  • The Bank continues to be well capitalized and capital ratios continue to be strong with a Leverage ratio of 12.09%, Common Equity Tier 1 ratio of 14.23%, Tier 1 Risk Based Capital ratio of 14.23% and a Total Capital ratio of 15.15%.

Paycheck Protection Program (“PPP”) Activity
In the second quarter of 2020, the Company 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 round two 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. The Company originated $53.89 million of round two PPP loans during 2021.

Beginning in January of 2021, the Company began to process loan forgiveness applications from borrowers of 2020 PPP loans and round two PPP loans. As of March 31, 2022, the SBA had forgiven 713 of these PPP loans with balances of $117.17 million, and the Company had recognized income from acceleration of processing fees of $2.97 million.

Net Interest Income
The Company recorded net interest income of $7.61 million for the first quarter of 2022, a decrease of 5.12% compared to the linked quarter, and 14.16% higher than the same period in 2021. The net interest margin in the first quarter of 2022 was 3.68%, lower by 6 basis points compared to the linked quarter and higher by 13 basis points compared to the same period in 2021. Income from PPP loan forgiveness during the first quarter was $459,847 (from $14.42 million of PPP loans forgiven by the SBA), compared to PPP loan forgiveness income of $755,510 (from $19.75 million of PPP loans forgiven by the SBA) during the fourth quarter of 2021. Excluding the PPP loans, the net interest margin in the first quarter would have been 3.53%.

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

  • Yields on average earning assets decreased by 4 basis points to 4.01% compared to 4.05% in the linked quarter, driven by lower yields on loans and investments during the quarter.
  • Loan yields decreased by 36 basis points to 4.75% from 5.11% in the linked quarter, while yields on investment securities decreased by 9 basis points to 2.45% from 2.54% in the linked quarter. Higher payoff activity and a slower pace of PPP loan forgiveness contributed to the decline in loan yields.
  • Cost of funds increased by 3 basis points to 0.36%, from 0.33% in the linked quarter, as higher borrowing costs offset declines in deposit costs. The higher borrowing costs were related to the subordinated debt that was issued in November of 2021 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 reduced the net interest margin by 15 basis points.

Non-interest Income
Non-interest income was $1.82 million for the first quarter, higher by 3.17% compared to the linked quarter and lower by 40.61% compared to the same period in 2021. The higher non-interest income across linked quarters was primarily due to an increase in SBA gain-on-sale revenue and other fee income, while the decline in non-interest income compared to the calendar quarter was largely due to lower mortgage gain-on-sale and fee revenue, stemming from a decline in mortgage activity.

Total Revenue
Total revenue, defined as the sum of net interest income, before provision for loan losses, and non-interest income, was lower by 3.63% compared to the linked quarter, primarily due to lower net interest income driven by a decline in the net interest margin, and lower by 3.07% compared to the same period in 2021, primarily due to lower non-interest income in the calendar quarter.

Non-interest Expenses
Non-interest expenses in the first quarter of 2022 were lower by 5.04% compared to the linked quarter and decreased by 11.94% compared to the same period in 2021. The decrease in non-interest expenses in the first 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 Ratio was 61.70% for the quarter ended March 31, 2022, compared to 62.62% for the prior quarter and 67.91% for the same period in 2021.

Asset Quality
Non-accrual loans were $8,770,552 or 1.48% of loans held-for-investment as of March 31, 2022, compared to $8,801,983 or 1.46% of loans held-for-investment at the end of the linked quarter. There were no troubled debt restructurings (“TDRs”) as of March 31, 2022. On March 31, 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 March 31, 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 $8,770,552 or 1.02% of total assets on March 31, 2022, compared to $8,801,983 or 1.00% 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 fourth quarter, it was determined that a $164,000 provision for loan losses was necessary to account for loan growth and changes to environmental factors. The Company booked a provision of $355,000 in the fourth quarter of 2021. The Company’s ALLL ratio was 1.12% of loans held-for-investment (or 1.15% of loans held-for investment excluding PPP loans) as of March 31, 2022, compared to an ALLL ratio of 1.08% on December 31, 2021 (or 1.14% of loans held-for-investment excluding PPP loans).

Total Assets
Total assets on March 31, 2022, were $863.12 million compared to $876.67 million on December 31, 2021. Changes in major asset categories during linked quarters were as follows:

  • Cash balances at the Federal Reserve decreased by $3.01 million
  • Available for sale investment balances decreased by $2.42 million
  • PPP loan balances decreased by $19.31 million on loan forgiveness by the SBA
  • Other loans held-for investment grew by $10.64 million
  • Mortgage loans held-for-sale declined by $2.04 million

Total Liabilities

Total liabilities on March 31, 2022, were $783.33 million compared to total liabilities of $792.51 million on December 31, 2021. Total deposits were $714.69 million compared to total deposits of $701.69 million on December 31, 2021. Non-interest-bearing demand deposits decreased by $13.99 million during the quarter and comprised 29.13% of total deposits at the end of the quarter, compared to 31.66% of total deposits on December 31, 2021. Other interest-bearing demand deposits increased by $26.37 million, savings deposits increased by $1.63 million and time deposits declined by $1.01 million during the quarter. Federal Home Loan Bank advances decreased by $3.14 million during the quarter, while PPP Liquidity Facility term advances decreased by $18.95 million, in line with PPP loan forgiveness.

Stockholders’ Equity and Capital

Stockholders’ equity on March 31, 2022, was $79.79 million compared to $84.16 million on December 31, 2021. Additional paid-in capital was $58.66 million on March 31, 2022, compared to $59.88 million on December 31, 2021. Accumulated Other Comprehensive Income (“AOCI”), which generally comprises unrealized gains and losses on available-for-sale securities and derivative positions, decreased by $5.92 million on net unrealized losses during the first quarter of 2022. Retained earnings were $26.33 million on March 31, 2022, compared to $23.55 million at the end of the prior quarter. Total shares issued and outstanding were 7,286,915 on March 31, 2022, compared to 7,262,757 shares on December 31, 2021. The tangible book value of the Company’s common stock on March 31, 2022, was $10.95 per share compared to $11.59 per share on December 31, 2021, and $10.35 per share on March 31, 2021.

As of March 31, 2022, the Bank’s capital ratios were well above regulatory minimum capital ratios for well-capitalized bank holding companies. The Bank’s capital ratios on March 31, 2022, and December 31, 2021, were as follows:


March 31, 2022                   

December 31, 2021           




Total Capital Ratio               

15.15%

15.42%




Tier 1 Capital Ratio                               

14.23%

14.49%

Common Equity



Tier 1 Capital Ratio                               

14.23%

14.49%




Leverage Ratio                                     

12.09%

11.85%

About Freedom Financial Holdings, Inc.

Freedom Financial Holdings, Inc. is the holding company of The Freedom Bank of Virginia, a community bank with locations in Fairfax, Reston, Chantilly, Vienna, and Manassas, Virginia. The Freedom Bank of Virginia also has a mortgage division headquartered in Chantilly. For information about deposit, loan and other services, visit the website at www.freedom.bank.

Forward Looking Statements

This release contains forward-looking statements, including our expectations with respect to future events that are subject to various risks and uncertainties. Factors that could cause actual results to differ materially from management’s projections, forecasts, estimates, and expectations include: fluctuation in market rates of interest and loan and deposit pricing; general economic and financial market conditions, in the United States generally and particularly in the markets in which the Company operates and which its loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels 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.

Contact:
Joseph J. Thomas
President & Chief Executive Officer
703-667-4161: Phone
[email protected]: Email

FREEDOM FINANCIAL HOLDINGS

CONSOLIDATED BALANCE SHEETS









(Unaudited)
March 31,
2022


(Audited)
December 31,
2021


ASSETS







Cash and Due from Banks

$

2,348,210


$

2,536,450


Interest Bearing Deposits with Banks


28,687,951



31,696,891


Securities Available-for-Sale


169,108,572



171,532,394


Securities Held-to-Maturity


17,982,536



18,012,874


Restricted Stock Investments


3,797,700



3,321,250


Loans Held for Sale


11,256,546



13,297,125


PPP Loans Held for Investment 


13,046,988



32,355,451


Other Loans Held for Investment 


580,650,677



570,013,870


Allowance for Loan Losses


(6,650,120)



(6,486,120)


Net Loans


587,047,545



595,883,201


Bank Premises and Equipment, net


1,099,230



1,139,204


Accrued Interest Receivable


2,412,068



2,466,712


Deferred Tax Asset


1,642,041



1,631,115


Bank-Owned Life Insurance


24,740,507



24,579,879


Right of Use Asset, net


2,464,873



2,704,888


Other Assets


10,533,227



7,870,617


Total Assets

$

863,121,006


$

876,672,600


LIABILITIES AND STOCKHOLDERS’ EQUITY














Deposits







Demand Deposits







Non-interest Bearing

$

208,170,761



222,167,095


Interest Bearing


326,732,976



300,361,979


Savings Deposits


7,471,426



5,841,800


Time Deposits


172,310,577



173,322,527


Total Deposits


714,685,740



701,693,401


Federal Home Loan Bank Advances


25,892,857



29,035,714


PPP Liquidity Facility Advances


13,106,863



32,055,915


Subordinated Debt (Net of Issuance Costs)


19,636,350



19,616,869


Accrued Interest Payable


388,953



294,237


Lease Liability


2,581,181



2,823,885


Other Liabilities


7,035,034



6,993,855


Total Liabilities

$

783,326,978


$

792,513,876


Stockholders’ Equity







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







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







Common Stock, $0.01 Par Value, 25,000,000 Shares:







23,000,000 Shares Voting and 2,000,000 Shares Non-voting.







Voting Common Stock:







                 6,626,819 and 6,589,757 Shares Issued and Outstanding
                 at March 31, 2022 and December 31, 2021 respectively
                 (Includes 86,381 and 106,171 Unvested Shares on March 31, 2022 and
                 December 31, 2021, respectively)


65,404



65,898


Non-Voting Common Stock:







673,000 Shares Issued and Outstanding March 31, 2022
and December 31, 2021


6,730



6,730


Additional Paid-in Capital


58,659,955



59,884,615


Accumulated Other Comprehensive Income, Net


(5,272,569)



651,272


Retained Earnings


26,334,508



23,550,209


Total Stockholders’ Equity


79,794,028



84,158,724


Total Liabilities and Stockholders’ Equity

$

863,121,006


$

876,672,600


FREEDOM FINANCIAL HOLDINGS

CONSOLIDATED STATEMENTS OF OPERATIONS  









(Unaudited)


(Unaudited)




For the three


For the three




months ended


months ended




March 31, 2022


March 31, 2021


Interest Income






Interest and Fees on Loans


$                   7,141,999


$                   6,912,386


Interest on Investment Securities


1,145,377


636,742


Interest on Deposits with Other Banks


15,596


8,831


Total Interest Income


8,302,972


7,557,959


Interest Expense






Interest on Deposits


418,788


675,824


Interest on Borrowings


270,778


212,923


Total Interest Expense


689,566


888,747








Net Interest Income


7,613,406


6,669,212


Provision for Loan Losses


(164,000)


(64,000)


Net Interest Income After






Provision for Loan Losses


7,449,406


6,605,212


Non-Interest Income






Mortgage Loan Gain-on-Sale and Fee Revenue

1,037,978


2,822,186


 SBA Gain-on-Sale Revenue


266,023



Service Charges and Other Income


301,396


48,702


Gain on Sale of Securities



12,885


 Servicing Income


52,149


51,643


Swap Fee Income




Increase in Cash Surrender Value of Bank-






owned Life Insurance


160,628


125,886


Total Non-interest Income


1,818,174


3,061,302


Non-Interest Expenses






Officer and Employee Compensation






and Benefits


4,003,321


4,662,235


Occupancy Expense


332,366


290,389


Equipment and Depreciation Expense


172,107


155,916


Insurance Expense


70,626


57,056


Professional Fees


248,329


291,434


Data and Item Processing


265,625


267,783


Advertising  


105,369


73,078


Franchise Taxes and State Assessment Fees


200,099


185,429


Mortgage Fees and Settlements


105,849


463,419


Other Operating Expense


315,416


161,361


Total Non-interest Expenses


5,819,107


6,608,100


Income Before Income Taxes


3,448,473


3,058,414


Income Tax Expense


664,176


590,203


Net Income


$                    2,784,297


$                    2,468,211


Earnings per Common Share – Basic


$                             0.38


$                             0.34


Earnings per Common Share – Diluted


$                             0.38


$                             0.34


Weighted-Average Common Shares






Outstanding – Basic


7,324,527


7,295,190


Weighted-Average Common Shares 






Outstanding – Diluted


7,362,290


7,334,463


FREEDOM FINANCIAL HOLDINGS

CONSOLIDATED STATEMENTS OF OPERATIONS  












(Unaudited)


(Unaudited)

(Unaudited)


(Unaudited)


(Unaudited)


For the three


For the three

For the three


For the three


For the three


months ended


months ended

months ended


months ended


months ended


March 31, 2022


December 31, 2021

September 30, 2021


June 30, 2021


March 31, 2021

Interest Income









Interest and Fees on Loans

$

7,141,999


$

7,556,406

$

6,914,453


$

6,951,964


$

6,912,386

Interest on Investment Securities

1,145,377


1,092,427

750,570


655,996


636,742

Interest on Deposits with Other Banks  

15,596


35,908

26,994


15,170


8,831

Total Interest Income

8,302,972


8,684,741

7,692,017


7,623,130


7,557,959










Interest Expense









Interest on Deposits

418,788


470,791

546,168


582,997


675,824

Interest on Borrowings

270,778


189,834

150,599


212,703


212,923

Total Interest Expense

689,566


660,625

696,767


795,700


888,747










Net Interest Income

7,613,406


8,024,116

6,995,249


6,827,430


6,669,212

Provision for Loan Losses

(164,000)


(355,000)

(229,000)


(191,000)


(64,000)

Net Interest Income after









Provision for Loan Losses

7,449,406


7,669,116

6,766,249


6,636,430


6,605,212

Non-Interest Income









Mortgage Loan Gain-on-Sale and Fee Revenue

1,037,978


1,456,195

1,995,535


2,012,153


2,822,186

 SBA Gain-on-Sale Revenue

266,023


371,172


66,652


Service Charges and Other Income

301,396


95,335

67,374


43,501


48,702

Gains on Sale of Securities


6,315

(13,493)


1,726


12,885

Servicing Income

52,149


53,479

44,443


42,847


51,643

Swap Fee Income




Increase in Cash Surrender Value of Bank-









owned Life Insurance

160,628


151,054

141,608


126,117


125,886

Total Non-interest Income

1,818,174


1,762,378

2,606,639


2,292,996


3,061,302



















Revenue

$

9,431,580


$

9,786,494

$

9,601,889


$

9,120,426


$

9,730,514










Non-Interest Expenses









Officer and Employee Compensation









and Benefits

4,003,321


4,055,344

3,862,969


3,760,697


4,662,235

Occupancy Expense

332,366


317,038

318,109


306,521


290,389

Equipment and Depreciation Expense

172,107


170,335

176,379


159,420


155,916

Insurance Expense

70,626


74,357

70,814


65,356


57,056

Professional Fees

248,329


470,786

243,678


359,159


291,434

Data and Item Processing

265,625


299,120

303,444


311,000


267,783

Advertising

105,369


80,569

92,806


82,605


73,078

Franchise Taxes and State Assessment Fees

200,099


200,084

200,048


192,508


185,429

Mortgage Fees and Settlements

105,849


172,967

230,582


274,231


463,419

Other Operating Expense

315,416


287,459

220,739


177,593


161,361










Total Non-interest Expenses

5,819,108


6,128,059

5,719,568


5,689,090


6,608,100

Income before Income Taxes

3,448,473


3,448,473

3,653,322


3,240,336


3,058,414










Income Tax Expense

664,176


560,347

763,041


613,955


590,203










Net Income

$

2,784,297


$

2,743,088

$

2,890,281


$

2,626,381


$

2,468,211

Earnings per Common Share – Basic

$

0.38


$

0.37

$

0.39


$

0.36


$

0.34

Earnings per Common Share – Diluted

$

0.38


$

0.37

$

0.39


$

0.36


$

0.34

Weighted-Average Common Shares









Outstanding – Basic

7,324,527


7,336,016

7,341,635


7,306,710


7,295,190

Weighted-Average Common Shares 









Outstanding – Diluted

7,362,290


7,380,138

7,395,062


7,354,389


7,334,463

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, 2022






December 31, 2021






September 30, 2021






June 30, 2021






March 31, 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

$                                       40,375,846


$             15,596


0.16%


$                                       91,458,843


$             35,908


0.16%


$              71,114,495


$       26,994


0.15%


$           64,848,200


$       15,170


0.09%


$              42,563,835


$          8,831


0.08%































Investments (Tax Exempt)

23,331,336


187,632




23,460,432


190,195




27,138,446


177,809




23,292,663


223,691




24,057,819


152,583



Investments (Taxable)

165,979,811


957,745




153,582,906


942,173




113,180,210


610,101




103,971,494


479,280




91,675,593


516,202



Total Investments

189,311,147


1,145,377


2.45%


177,043,338


1,132,368


2.54%


140,318,656


787,910


2.23%


127,264,157


702,971


2.22%


115,733,412


668,785


2.34%































Total Loans 

609,412,292


7,141,999


4.75%


586,725,477


7,556,406


5.11%


602,948,952


$6,914,454


4.55%


622,826,541


$6,951,964


4.48%


607,880,043


$6,912,386


4.61%































Earning Assets

839,099,285


8,302,972


4.01%


855,227,658


8,724,682


4.05%


814,382,103


7,729,358


3.77%


814,938,898


7,670,105


3.78%


766,177,290


7,590,002


4.02%



























































































Assets

$                                     876,180,566






$                                     891,226,178






$            847,472,317






$         846,402,419






$            794,829,492



































Liabilities






























Interest Checking

$                                     110,305,411


48,246


0.18%


$                                       88,172,651


38,893


0.18%


$              36,659,322


12,240


0.13%


$           34,272,772


10,907


0.13%


$              32,270,173


15,629


0.20%

Money Market

206,230,959


89,516


0.18%


202,560,648


85,450


0.17%


189,055,851


80,347


0.17%


164,337,737


63,989


0.16%


148,969,677


62,497


0.17%

Savings

6,652,079


1,725


0.11%


5,336,531


1,431


0.11%


4,147,591


1,170


0.11%


4,195,416


1,078


0.10%


3,301,845


814


0.10%

Time Deposits 

174,009,190


279,301


0.65%


187,240,613


345,016


0.73%


197,133,663


452,411


0.91%


197,180,571


507,023


1.03%


172,994,520


596,885


1.40%

Interest Bearing Deposits

497,197,639


418,788


0.34%


483,310,443


470,790


0.38%


426,996,427


546,168


0.51%


399,986,496


582,997


0.58%


357,536,215


675,825


0.77%































Borrowings

$                                       71,634,636


270,778


1.53%


$                                       81,399,848


189,834


0.93%


$            101,033,443


150,599


0.59%


$         138,398,143


212,703


0.62%


$            134,120,845


212,923


0.64%































Interest Bearing Liabilities

568,832,275


689,566


0.49%


564,710,291


660,624


0.46%


528,029,870


696,767


0.52%


538,384,639


795,700


0.59%


491,657,060


888,748


0.73%































Non Interest Bearing Deposits

$                                     213,315,104






$                                     231,181,073






$            226,514,808






$         217,927,934






$            215,148,589



































Cost of Funds





0.36%






0.33%






0.37%






0.42%






0.51%































Net Interest Margin1



$       7,613,406


3.68%




$       8,064,057


3.74%




$  7,032,590


3.43%




$  6,874,405


3.38%




$  6,701,254


3.55%

Shareholders Equity

$                                       83,440,208






$                                       82,994,140






$              80,866,605






$           77,178,196






$              74,480,607



































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, 2022


Income /




March 31, 2021


Income /







Average Balance


Expense


Yield


Average Balance


Expense


Yield




Assets















Cash

$              40,375,846


$         15,596


0.16%


$              42,563,835


$           8,831


0.08%



















Investments (Tax Exempt)

23,331,336


187,632




24,057,819


152,583






Investments (Taxable)

165,979,811


957,745




91,675,593


516,202






Total Investments

189,311,147


1,145,377


2.45%


115,733,412


668,785


2.34%



















Total Loans 

609,412,292


7,141,999


4.75%


607,880,043


6,912,386


4.61%



















Earning Assets

839,099,285


8,302,972


4.01%


766,177,290


7,590,002


4.02%



















Assets

$            876,180,566






$            794,829,492























Liabilities















Interest Checking

$            110,305,411


48,246


0.18%


$              32,270,173


15,629


0.20%




Money Market

206,230,959


89,516


0.18%


148,969,677


62,497


0.17%




Savings

6,652,079


1,725


0.11%


3,301,845


814


0.10%




Time Deposits 

174,009,190


279,301


0.65%


172,994,520


596,885


1.40%




Interest Bearing Deposits

497,197,639


418,788


0.38%


357,536,215


675,825


0.77%



















Borrowings

71,634,636


270,778


1.53%


134,120,845


212,923


0.64%



















Interest Bearing Liabilities

568,832,275


689,566


0.49%


491,657,060


888,748


0.73%



















Non Interest Bearing Deposits

$            213,315,104






$            215,148,589























Cost of Funds





0.36%






0.51%



















Net Interest Margin1



$   7,613,406


3.68%




$   6,701,254


3.55%




Shareholders Equity

$              83,440,208






$              74,480,607








ROAA

1.29%






1.26%








ROAE

13.53%






13.44%























1 Net interest margin is calculated as fully taxable equivalent net interest income divided by average earning assets and represents the Bank’s net yield on its earning assets

Selected Financial Data by Quarter Ended:






(Unaudited)






Balance Sheet Ratios

March 31, 2022

December 31, 2021

September 30, 2021

June 30, 2021

March 31, 2021

Loans held-for-investment to Deposits 

83.07%

85.85%

84.45%

96.14%

95.51%

Income Statement Ratios (Quarterly)






Return on Average Assets (ROAA)

1.29%

1.22%

1.35%

1.24%

1.26%

Return on Average Equity (ROAE)

13.53%

13.11%

14.18%

13.65%

13.44%

Efficiency Ratio

61.70%

62.62%

59.57%

62.38%

67.91%

Net Interest Margin1

3.68%

3.74%

3.43%

3.38%

3.55%

Yield on Average Earning Assets

4.01%

4.05%

3.77%

3.78%

4.02%

Yield on Securities

2.45%

2.54%

2.23%

2.22%

2.34%

Yield on Loans

4.75%

5.11%

4.55%

4.48%

4.61%

Cost of Funds

0.36%

0.33%

0.37%

0.42%

0.51%

Noninterest income to Total Revenue

19.28%

18.01%

27.15%

25.14%

31.46%

Per Share Data






Tangible Book Value

$10.95

$11.59

$11.14

$10.81

$10.35

Share Price Data






Closing Price

$14.06

$13.37

$12.55

$11.98

$10.90

Book Value Multiple

128%

115%

113%

111%

105%

Common Stock Data






Outstanding Shares at End of Period

7,286,915

7,262,757

7,312,565

7,305,581

7,307,915

Weighted Average shares outstanding, basic

7,324,527

7,336,016

7,341,635

7,306,710

7,295,190

Weighted Average shares outstanding, diluted

7,362,290

7,438,268

7,395,062

7,354,389

7,334,463

Capital Ratios (Bank Only)






Tier 1 Leverage ratio

12.09%

11.85%

10.47%

10.56%

10.95%

Common Equity Tier 1 ratio

14.23%

14.49%

12.73%

12.90%

12.88%

Tier 1 Risk Based Capital ratio

14.23%

14.49%

12.73%

12.90%

12.88%

Total Risk Based Capital ratio

15.15%

15.42%

13.68%

13.86%

13.84%

Credit Quality






Net Charge-offs to Average Loans

0.00%

-0.02%

0.00%

0.00%

0.00%

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

1.48%

1.46%

0.15%

0.15%

0.41%

Total Non-performing Assets to Total Assets

1.02%

1.00%

0.10%

0.11%

0.28%

Nonaccrual Loans to loans held-for-investment

1.48%

1.46%

0.15%

0.15%

0.41%

Provision for Loan and Lease Losses

$164,000

$355,000

$229,000

$191,000

$64,000

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

1.12%

1.08%

1.05%

0.96%

0.92%

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

1.15%

1.14%

1.17%

1.15%

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 Financial Holdings

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