Freedom Bank Posts Record Results for First Half of 2014

Freedom Bank of Virginia (Bank) (OTC.QB:FDVA) achieved several objectives during the first half of 2014 setting all-time highs for net income, total assets, total loans and capital. The Bank earned record net income of $828,592 for the first half of 2014. Total assets exceeded $300 million at June 30, 2014, increasing 17.95% to $300,555,167 from $254,805,078 at June 30, 2013. Loans receivable at June 30, 2014 passed the $250 million mark, increasing to $253,070,371 from $193,071,420 at June 30, 2013. The Bank's capital increased $1,437,794 since June 30, 2013, exceeding $27 million for the first time. In addition to passing these milestones, the Bank opened its third location in Reston, Virginia.

According to the Chief Lending Officer, C. Kevin Curtis, “The Bank’s investment in additional lending staff over the past two years greatly accelerated loan growth over previous years. The 2013 rate was 22.95% and additional staff enhanced the growth rate to 31.08% at June 30, 2014.” CEO Craig S. Underhill added, “We remain committed to consistent growth in both assets and profits which are now at record levels.”

Freedom Bank emphasizes relationship banking so deposits increased proportionally with loans. Demand deposits improved $11,011,425 (29.12%) to $48,823,404 at June 30, 2014. Money market account deposits grew $9,571,190 (23.59%) to $50,145,053. Increased business deposits reduced the Bank’s reliance on higher cost certificates of deposit, which expanded $23,835,600 (16.25%) to $170,554,825 at June 30, 2014. Total liabilities increased $44,312,295 (19.34%) to $273,418,801 in 2014.

Capital continues to be strong expanding $1,437,794 (5.59%) to $27,136,366 at June 30, 2014. Book value per share was $7.11 at June 30, 2014, up from $6.78 the prior year. Regulatory Capital minimums for Tier 1 Leverage Ratio, Risk Based Capital Tier 1, and Risk Based Capital Tier 2 were 5.0%, 6.0% and 10.0% respectively, to be considered well capitalized. At June 30, 2014 the ratios for the Bank were 9.37%, 11.16% and 12.25% respectively, all in the well capitalized category.

Freedom Bank earned net income of $828,592 for the first half of 2014 compared to net income of $826,309 for the first half of 2013. Loan growth fueled a 17.77% rise in total interest income. While deposits grew 20.3% in 2014, interest expense increased only 12.05% due to large increases in non interest bearing deposits. Additional loans generated in the first half of 2014 required $76,500 more in provision expense for 2014. Operating expenses increased $563,051 (13.78%). More compensation for additional lenders, support personnel and staff for the third branch was the main factor. Also professional fees rose $144,846 (44.36%), required by escalating banking regulations and support for the Bank’s M&A subsidiary, FBV Capital Advisors, Inc. Net income for the second quarter of 2014 represented the Bank's twenty-first consecutive quarterly profit.

Freedom Bank is a community-oriented, locally-owned bank with locations in Fairfax, Vienna, and Reston, 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 production personnel. Other risks that can affect the Bank are detailed from time to time in our quarterly and annual reports filed with the Board of Governors of the Federal Reserve System. 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.