Freedom Financial Holdings Announces Earnings for Second Quarter of 2022

Jul 29th, 2022 12:31 EST

Freedom Financial Holdings Announces Earnings for Second Quarter of 2022

Freedom Financial Holdings Announces Earnings for Second Quarter of 2022

PR Newswire

FAIRFAX, Va., July 29, 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 $2,227,385 or $0.30 per diluted share, for the three months ended June 30, 2022. This compares to net income of $2,784,296 or $0.38 per diluted share, for the linked quarter and net income of $2,626,381 or $0.36 per diluted share for the three months ending June 30, 2021.    

Joseph J. Thomas, President, and CEO, commented, "We experienced the full impact of cyclical changes in the economy in the second quarter of 2022 as fee-based revenue fell meaningfully, but the decline was largely offset by very strong core income from loan growth and net interest margin expansion.  As interest rates increased, the residential real estate market began to cool, with mortgage banking revenues declining by $1.04 million or 51.29%.  Likewise, as the federal government's Paycheck Protection Program ("PPP") wound down, the Bank's income from PPP loan forgiveness decreased by $364,438 or 244.42%, in the second quarter of 2022, compared to the same period in 2021.  Our banking team was able to offset these expected declines in fee-based revenue with growth in net interest income (excluding the impact of PPP loans) of 18.24% in the second quarter of 2022 compared to the same period in 2021. This was driven by strong growth in loans held for investment (excluding PPP loans) of 28.72% annualized and 23.50% annualized growth in deposits, relative to the prior quarter.  In response to the increase in interest rates, the Bank's net interest margin expanded by 27-basis points to 3.65% in the second quarter of 2022 compared to the same period in 2021. Consequently, our pre-tax, pre-provision net income declined by 11.5% to $3.24 million in the second quarter of 2022 compared to the same period in 2021.    Notably, the allowance for loan losses at 1.13% (excluding PPP loans) and Tier 1 Capital Ratio at 13.84% puts us in a very strong position to manage through a potentially more challenging economic environment and continue to focus on proactively serving and innovatively growing with our clients."

Second Quarter 2022 Highlights include:

  • Net income for the second quarter was $2,227,385 or $0.30 per diluted share compared to net income of $2,784,297 or $0.38 per diluted share in the linked quarter and net income of $2,626,381 or $0.36 per diluted share for the three months ending June 30, 2021.
  • Return on Average Assets ("ROAA") was 1.01% for the quarter ended June 30, 2022, compared to 1.29% for the linked quarter and 1.24% for the three months ended June 30, 2021.
  • Return on Average Equity ("ROAE") was 11.44% for the three months ended June 30, 2022, compared to 13.53% for the linked quarter and 13.65% for the three months ended June 30, 2021.
  • Total assets were $895.52 million on June 30, 2022, an increase of $32.40 million or 3.75% from the end of the prior quarter and an increase of 2.15% from total assets on December 31, 2021.
  • Loans held-for-investment (excluding PPP loans) increased by $41.60 million or 7.16% during the quarter.
  • PPP loan balances decreased by $3.66 million during the second quarter on loan forgiveness and mortgage loans held for sale decreased by $4.49 million during the same period, on a decline in mortgage activity.
  • Cash balances at the Federal Reserve decreased by $5.40 million during the second quarter.
  • Available for sale investment securities increased by $1.28 million during the second quarter.
  • Total deposits increased by $41.90 million or by 5.86% in the second quarter. Non-interest-bearing demand deposits increased by $8.04 million from the linked quarter to $216.21 million and represented 28.58% of total deposits on June 30, 2022.
  • Excluding income from PPP loans, net interest income in the second quarter of 2022 increased by $1.68 million or by 29.17% compared to the same period in 2021. Excluding PPP loans, the net interest margin for the second quarter of 2022 was 3.62%, higher by 9 basis points compared to the prior quarter and was higher by 49 basis points compared to the same period in 2021. The net interest margin for the second quarter of 2022 was 3.65% if the income from PPP loans was included.
  • The cost of funds was 0.45% for the second quarter, higher by 9 basis points compared to the linked quarter and higher by 3 basis points compared to the same period in 2021, as deposit and borrowing costs increased during the quarter.
  • Non-interest income decreased by 8.84% compared to the linked quarter and decreased by 27.72% compared to the same period in 2021. The decrease in non-interest income compared to the linked quarter was primarily due to lower mortgage revenue 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 higher revenue from SBA loan sales and other fee income.
  • Non-interest expense in the second quarter increased by 3.72% compared to the linked quarter and was higher by 6.09% compared to the same period in 2021. The increase in non-interest expense in linked quarters was primarily due to higher professional fees and an increase in data processing expenses. Higher expenses compared to the calendar quarter were primarily related to an increase in compensation costs in the second quarter of 2022.
  • The Efficiency Ratio was 65.10% for the quarter ended June 30, 2022, compared to 61.70% for the linked quarter and 62.38% for the same period in 2021.
  • Non-accrual loans were relatively unchanged in the second quarter from the prior period, and the ratio of non-performing assets to total assets was 0.97% on June 30, 2022, compared to 0.11% on June 30, 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 $375,000 provision for loan losses during the second quarter and the ratio of the allowance for loan and lease losses ("ALLL") to loans held-for-investment was 1.11% (or 1.13% excluding PPP loans, which carry a full faith and credit guarantee of the US Government) compared to 1.12% in the linked quarter (or 1.15% excluding PPP loans);
  • The Bank continues to be well capitalized and capital ratios continue to be strong with a Leverage ratio of 11.95%, Common Equity Tier 1 ratio of 13.84%, Tier 1 Risk Based Capital ratio of 13.84% and a Total Capital ratio of 14.77%.

Paycheck Protection Program ("PPP") Activity

For the first six months of 2022, 103 PPP loans with balances of $13.35 million were forgiven by the SBA, and the Company recognized $608,952 of income from acceleration of processing fees associated with these loans. This compares with 354 PPP loans with balances of $55.08 million forgiven by the SBA in the first six months of 2021 with $1.09 million of income from acceleration of processing fees. 

Net Interest Income

The Company recorded net interest income of $7.61 million for the second quarter of 2022, relatively unchanged compared to the linked quarter, and 11.53% higher than the same period in 2021.

Income from PPP loans during the second quarter of 2022 was $166,582 (including $149,105 from forgiveness of $3.15 million of PPP loans), compared to PPP loan income of $504,177 (including $459,847 from forgiveness of $14.42 million of PPP loans) during the first quarter of 2022, and $1,061,442 (including $513,343 from forgiveness of $30.25 million of PPP loans) during the second quarter of 2021. Excluding income from PPP loans, net interest income in the second quarter of 2022 increased by $338,597 or 4.76%, and by $1.68 million or 29.17% compared to the same period in 2021. 

The net interest margin in the second quarter of 2022 was 3.65%, lower by 3 basis points compared to the linked quarter and higher by 27 basis points compared to the same period in 2021. Excluding PPP loans, the net interest margin increased by 9 basis points compared to the prior quarter and was higher by 49 basis points compared to the same period in 2021.

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

  • Yields on average earning assets increased by 7 basis points to 4.08% compared to 4.01% in the linked quarter, driven by higher yields on investments and deposits at the Federal Reserve, offset partially by lower yields on loans during the quarter.
  • Loan yields decreased by 8 basis points to 4.67% from 4.75% in the linked quarter, while yields on investment securities increased by 33 basis points to 2.78% from 2.45% in the linked quarter. Excluding PPP loans, loan yields would have increased by 5 bp from the prior quarter.
  • Cost of funds increased by 9 basis points to 0.45%, from 0.36% in the linked quarter, on higher deposit and borrowing costs.
  • Excluding the impact of PPP loans from the second and prior quarter, the net interest margin increased by 9 basis points across linked quarters.

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

  • Yields on average earning assets increased by 30 basis points to 4.08% compared to 3.78% in the calendar quarter, driven by higher yields on loans, investments, and deposits at the Federal Reserve.
  • Loan yields increased by 19 basis points to 4.67% from 4.48% in the calendar quarter, while yields on investment securities increased by 56 basis points to 2.78% from 2.22% in the calendar quarter.
  • Cost of funds increased by 3 basis points to 0.45%, from 0.42% in the calendar quarter, on higher deposit and borrowing costs.
  • Excluding the impact of PPP loans from the second and calendar quarter, the net interest margin increased by 49 basis points across quarters.

Non-interest IncomeNon-interest income was $1.66 million for the second quarter, lower by 8.84% compared to the linked quarter and lower by 27.72% compared to the same period in 2021. The lower non-interest income across linked quarters was primarily due to a decline in mortgage revenue and lower fee income from other sources, 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, partially offset by higher SBA income and fee income from other sources.

Total RevenueTotal revenue, defined as the sum of net interest income, before provision for loan losses, and non-interest income, was lower by 1.69% compared to the linked quarter, primarily due to lower non-interest income, and higher by 1.66% compared to the same period in 2021, primarily due to net margin expansion and loan growth.

Non-interest ExpensesNon-interest expenses in the second quarter of 2022 were higher by 3.72% compared to the linked quarter and increased by 6.09% compared to the same period in 2021. The increase in non-interest expenses in the second quarter compared to the prior quarter was largely due to higher professional fees and an increase in data processing expenses. Higher expenses compared to the calendar quarter were largely due to an increase in compensation costs in the second quarter of 2022. 

The Efficiency Ratio was 65.10% for the quarter ended June 30, 2022, compared to 61.70% for the prior quarter and 62.38% for the same period in 2021.

Asset QualityNon-accrual loans were $8,712,326 or 1.38% of loans held-for-investment as of June 30, 2022, compared to $8,770,552 or 1.48% of loans held-for-investment at the end of the linked quarter. There were no troubled debt restructurings ("TDRs") as June 30, 2022. On June 30, 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 June 30, 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 $8,712,326 or 0.97% of total assets on June 30, 2022, compared to $8,770,552 or 1.02% 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 second quarter, it was determined that a $375,000 provision for loan losses was necessary to account for loan growth and changes to environmental factors. The Company booked a provision of $191,000 in the first quarter of 2022. The Company's ALLL ratio was 1.11% of loans held-for-investment (or 1.13% of loans held-for investment excluding PPP loans) as of June 30, 2022, compared to an ALLL ratio of 1.12% on March 31, 2022 (or 1.15% of loans held-for-investment excluding PPP loans).

Total AssetsTotal assets on June 30, 2022, were $895.52 million compared to $863.12 million on March 31, 2022. Changes in major asset categories during linked quarters were as follows:

  • Cash balances at the Federal Reserve decreased by $5.40 million
  • Available for sale investment balances increased by $1.28 million
  • PPP loan balances decreased by $3.66 million on loan forgiveness by the SBA
  • Other loans held-for investment grew by $41.60 million
  • Mortgage loans held-for-sale declined by $4.49 million

Total LiabilitiesTotal liabilities on June 30, 2022, were $820.05 million compared to total liabilities of $783.33 million on March 31, 2022. Total deposits were $756.58 million compared to total deposits of $714.69 million on March 31, 2022. Non-interest-bearing demand deposits increased by $8.04 million during the quarter and comprised 28.58% 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 $9.02 million, savings deposits decreased by $730,576 and time deposits increased by $25.56 million during the quarter. Federal Home Loan Bank advances decreased by $10.75 million during the quarter, while Federal Reserve borrowings increased by $6.28 million.

Stockholders' Equity and CapitalStockholders' equity on June 30, 2022, was $75.47 million compared to $79.79 million on March 31, 2022. Additional paid-in capital was $58.82 million on June 30, 2022, compared to $58.66 million on March 31, 2022. Accumulated Other Comprehensive Income ("AOCI"), which generally comprises unrealized gains and losses on available-for-sale securities and derivative positions, decreased by $6.71 million on net unrealized losses during the second quarter of 2022. Retained earnings were $28.56 million on June 30, 2022, compared to $26.33 million at the end of the prior quarter. Total shares issued and outstanding were 7,319,006 on June 30, 2022, compared to 7,286,915 shares on March 31, 2022. The tangible book value of the Company's common stock on June 30, 2022, was $10.29 per share compared to $10.95 per share on March 31, 2022, and $10.81 per share on June 30, 2021.

As of June 30, 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 June 30, 2022, and March 31, 2022, were as follows:

June 30, 2022                       

March 31, 2022  

Total Capital Ratio               

14.77 %

15.15 %

Tier 1 Capital Ratio                               

13.84 %

14.23 %

Common Equity

Tier 1 Capital Ratio                               

13.84 %

14.23 %

Leverage Ratio                                     

11.95 %

12.09 %

 

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, increases in unemployment levels, inflation, recessions 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. ThomasPresident & Chief Executive Officer703-667-4161: Phone[email protected]: Email

FREEDOM FINANCIAL HOLDINGS

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Unaudited)

(Audited)

June 30,

March 31,

December 31,

2022

2022

2021

ASSETS

Cash and Due from Banks

$                           3,923,888

$                               2,348,210

$                           2,536,450

Interest Bearing Deposits with Banks

23,290,289

28,687,951

31,696,891

Securities Available-for-Sale

170,386,775

169,108,572

171,532,394

Securities Held-to-Maturity

17,952,914

17,982,536

18,012,874

Restricted Stock Investments

3,422,700

3,797,700

3,321,250

Loans Held for Sale

6,770,732

11,256,546

13,297,125

PPP Loans Held for Investment 

9,386,915

13,046,988

32,355,451

Other Loans Held for Investment 

622,247,733

580,650,677

570,013,870

Allowance for Loan Losses

(7,025,120)

(6,650,120)

(6,486,120)

Net Loans

624,609,528

587,047,545

595,883,201

Bank Premises and Equipment, net

1,060,288

1,099,230

1,139,204

Accrued Interest Receivable

2,659,581

2,412,068

2,466,712

Deferred Tax Asset

1,669,731

1,642,041

1,631,115

Bank-Owned Life Insurance

24,914,186

24,740,507

24,579,879

Right of Use Asset, net

2,223,461

2,464,873

2,704,888

Other Assets

12,638,343

10,533,227

7,870,617

Total Assets

$  895,522,416

$      863,121,006

$  876,672,600

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits

Demand Deposits

Non-interest Bearing

$          216,207,976

$  208,170,761

222,167,095

Interest Bearing

335,752,409

326,732,976

300,361,979

Savings Deposits

6,740,850

7,471,426

5,841,800

Time Deposits

197,874,220

172,310,577

173,322,527

Total Deposits

756,575,455

714,685,740

701,693,401

Federal Home Loan Bank Advances

15,142,857

25,892,857

29,035,714

Other Borrowings

19,387,174

13,106,863

32,055,915

Subordinated Debt (Net of Issuance Costs)

19,655,832

19,636,350

19,616,869

Accrued Interest Payable

286,422

388,953

294,237

Lease Liability

2,335,741

2,581,181

2,823,885

Other Liabilities

6,665,567

7,035,034

6,993,855

Total Liabilities

$  820,049,048

$      783,326,978

$  792,513,876

Stockholders' Equity

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

0 Shares Issued and Outstanding, June 30, 2022, 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:

          6,646,006, 6,626,819 and 6,589,757 Shares Issued and Outstanding

    at June 30, 2022, March 31, 2022 and December 31, 2021 respectively

    (Includes 94,503, 86,381 and 106,171 Unvested Shares on June 30, 2022, March 31, 2022 and    

December 31, 2021, respectively)

65,515

65,404

65,898

Non-Voting Common Stock:

673,000 Shares Issued and Outstanding at June 30, 2022, March 31, 2022  

 and December 31, 2021

6,730

6,730

6,730

 Additional Paid-in Capital 

58,824,430

58,659,955

59,884,615

Accumulated Other Comprehensive Income, Net

(11,985,199)

(5,272,569)

651,272

Retained Earnings

28,561,892

26,334,508

23,550,209

Total Stockholders' Equity

75,473,368

79,794,028

84,158,724

Total Liabilities and Stockholders' Equity

$  895,522,416

$      863,121,006

$  876,672,600

 

FREEDOM FINANCIAL HOLDINGS

CONSOLIDATED STATEMENTS OF OPERATIONS  

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

For the three

For the three

For the six

For the six

months ended

months ended

months ended

months ended

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Interest Income

Interest and Fees on Loans

$                7,159,610

$                6,951,964

$                14,301,609

$                    13,864,350

Interest on Investment Securities

1,278,759

655,996

2,424,136

1,292,738

Interest on Deposits with Other Banks

74,550

15,170

90,146

24,002

Total Interest Income

8,512,919

7,623,130

16,815,891

15,181,090

Interest Expense

Interest on Deposits

673,396

582,997

1,092,184

1,258,821

Interest on Borrowings

225,115

212,703

495,894

425,626

Total Interest Expense

898,511

795,700

1,588,078

1,684,447

Net Interest Income

7,614,408

6,827,430

15,227,813

13,496,643

Provision for Loan Losses

(375,000)

(191,000)

(539,000)

(255,000)

Net Interest Income After

     Provision for Loan Losses

7,239,408

6,636,430

14,688,813

13,241,643

Non-Interest Income

Mortgage Loan Gain-on-Sale and Fee Revenue

986,160

2,012,153

2,024,138

4,834,339

 SBA Gain-on-Sale Revenue

263,806

66,652

529,830

66,652

Service Charges and Other Income

175,853

43,501

477,380

92,203

Gain on Sale of Securities

-

1,726

(131)

14,610

 Servicing Income

57,917

42,847

110,065

94,490

Swap Fee Income

-

-

-

-

Increase in Cash Surrender Value of Bank-

owned Life Insurance

173,679

126,117

334,307

252,003

Total Non-interest Income

1,657,415

2,292,996

3,475,589

5,354,297

Non-Interest Expenses

Officer and Employee Compensation

and Benefits

4,005,945

3,760,697

8,009,266

8,422,931

Occupancy Expense

304,153

306,521

636,519

596,910

Equipment and Depreciation Expense

183,315

159,420

355,421

315,336

Insurance Expense

74,983

65,356

145,609

122,412

Professional Fees

323,647

359,159

571,976

650,593

Data and Item Processing

342,340

311,000

607,965

578,783

Advertising  

114,966

82,605

220,335

155,683

Franchise Taxes and State Assessment Fees

224,636

192,508

424,734

377,937

Mortgage Fees and Settlements

129,210

274,231

235,059

737,651

Other Operating Expense

332,567

177,593

647,983

338,954

Total Non-interest Expenses

6,035,762

5,689,090

11,854,868

12,297,190

Income Before Income Taxes

2,861,061

3,240,336

6,309,535

6,298,750

Income Tax Expense

633,677

613,955

1,297,853

1,204,158

Net Income

$                   2,227,385

$                    2,626,381

$                      5,011,682

$                      5,094,592

Earnings per Common Share - Basic

$                            0.31

$                              0.36

$                                0.69

$                                0.70

Earnings per Common Share - Diluted

$                            0.30

$                              0.36

$                                0.68

$                                0.69

Weighted-Average Common Shares

Outstanding - Basic

7,290,417

7,306,710

7,313,766

7,300,953

Weighted-Average Common Shares 

Outstanding - Diluted

7,312,200

7,354,389

7,343,634

7,344,697

 

 

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

June 30, 2022

March 31, 2022

December 31, 2021

September 30, 2021

June 30, 2021

Interest Income

Interest and Fees on Loans

$   7,159,610

$   7,141,999

$         7,556,406

$          6,914,453

$   6,951,964

Interest on Investment Securities

1,278,759

1,145,377

1,092,427

750,570

655,996

Interest on Deposits with Other Banks  

74,550

15,596

35,908

26,994

15,170

Total Interest Income

8,512,919

8,302,972

8,684,741

7,692,017

7,623,130

Interest Expense

Interest on Deposits

673,396

418,788

470,791

546,168

582,997

Interest on Borrowings

225,115

270,778

189,834

150,599

212,703

Total Interest Expense

898,511

689,566

660,625

696,767

795,700

Net Interest Income

7,614,408

7,613,406

8,024,116

6,995,249

6,827,430

PPP income

$166,582

$504,177

$1,061,442

Net Interest Income (ex PPP loans)

7,447,826

7,109,229

5,765,988

Provision for Loan Losses

(375,000)

(164,000)

(355,000)

(229,000)

(191,000)

Net Interest Income after

Provision for Loan Losses

7,239,408

7,449,406

7,669,116

6,766,249

6,636,430

Non-Interest Income

Mortgage Loan Gain-on-Sale and Fee Revenue

986,160

1,037,978

1,456,195

1,995,535

2,012,153

 SBA Gain-on-Sale Revenue

263,806

266,023

-

371,172

66,652

Service Charges and Other Income

175,853

301,396

95,335

67,374

43,501

Gains on Sale of Securities

-

-

6,315

(13,493)

1,726

Servicing Income

57,917

52,149

53,479

44,443

42,847

Swap Fee Income

-

-

-

-

-

Increase in Cash Surrender Value of Bank-

owned Life Insurance

173,679

160,628

151,054

141,608

126,117

Total Non-interest Income

1,657,415

1,818,174

1,762,378

2,606,639

2,292,996

 Total Revenue 

$       9,271,823

$       9,431,580

$             9,786,494

$              9,601,889

$       9,120,426

Non-Interest Expenses

Officer and Employee Compensation

and Benefits

4,005,945

4,003,321

4,055,344

3,862,969

3,760,697

Occupancy Expense

304,153

332,366

317,038

318,109

306,521

Equipment and Depreciation Expense

183,315

172,107

170,335

176,379

159,420

Insurance Expense

74,983

70,626

74,357

70,814

65,356

Professional Fees

323,647

248,329

470,786

243,678

359,159

Data and Item Processing

342,340

265,625

299,120

303,444

311,000

Advertising

114,966

105,369

80,569

92,806

82,605

Franchise Taxes and State Assessment Fees

224,636

200,099

200,084

200,048

192,508

Mortgage Fees and Settlements

129,210

105,849

172,967

230,582

274,231

Other Operating Expense

332,567

315,416

287,459

220,739

177,593

Total Non-interest Expenses

6,035,762

5,819,107

6,128,059

5,719,568

5,689,090

Income before Income Taxes

2,861,061

3,448,473

3,303,435

3,653,322

3,240,336

Income Tax Expense

633,677

664,176

560,347

763,041

613,955

Net Income

$         2,227,385

$        2,784,297

$              2,743,088

$               2,890,281

$        2,626,381

Earnings per Common Share - Basic

$                  0.31

$                 0.38

$                       0.37

$                        0.39

$                 0.36

Earnings per Common Share - Diluted

$                  0.30

$                 0.38

$                       0.37

$                        0.39

$                 0.36

Weighted-Average Common Shares

Outstanding - Basic

7,290,417

7,324,527

7,336,016

7,341,635

7,306,710

Weighted-Average Common Shares 

Outstanding - Diluted

7,312,200

7,362,290

7,380,138

7,395,062

7,354,389

 

 

 

Average Balances, Income and Expenses, Yields and Rates

(Unaudited)

Three Months Ended

Three Months Ended

Three Months Ended

Three Months Ended

Three Months Ended

June 30, 2022

March 31, 2022

December 31, 2021

September 30, 2021

June 30, 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

$              35,469,783

$       74,550

0.84 %

$              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 %

Investments (Tax Exempt)

22,199,648

187,816

23,331,336

187,632

23,460,432

190,195

27,138,446

177,809

23,292,663

223,691

Investments (Taxable)

167,905,374

1,130,385

165,979,811

957,745

153,582,906

942,173

113,180,210

610,101

103,971,494

479,280

Total Investments

190,105,022

1,318,201

2.78 %

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 %

Total Loans 

615,110,994

7,159,610

4.67 %

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 %

Earning Assets

840,685,799

8,552,361

4.08 %

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 %

Assets

$            880,810,523

$            876,180,566

$            891,226,178

$            847,472,317

$            846,402,419

Liabilities

Interest Checking

$            128,008,728

134,727

0.42 %

$            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 %

Money Market

203,094,067

180,932

0.36 %

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 %

Savings

8,303,586

2,147

0.10 %

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 %

Time Deposits 

186,130,419

355,590

0.77 %

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 %

Interest Bearing Deposits

525,536,800

673,396

0.51 %

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 %

Borrowings

$              56,154,130

225,115

1.61 %

$              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 %

Interest Bearing Liabilities

581,690,931

898,511

0.62 %

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 %

Non Interest Bearing Deposits

$            212,429,933

$            213,315,104

$            231,181,073

$            226,514,808

$            217,927,934

Cost of Funds

0.45 %

0.36 %

0.33 %

0.37 %

0.42 %

Net Interest Margin1

$  7,653,850

3.65 %

$  7,613,406

3.68 %

$  8,064,057

3.74 %

$  7,032,590

3.43 %

$  6,874,405

3.38 %

Shareholders Equity

$              78,112,151

$              83,440,208

$              82,994,140

$              80,866,605

$              77,178,196

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

Six Months Ended

Six Months Ended

June 30, 2022

Income /

June 30, 2021

Income /

June 30, 2022

Income /

June 30, 2021

Income /

Average Balance

Expense

Yield

Average Balance

Expense

Yield

Average Balance

Expense

Yield

Average Balance

Expense

Yield

Assets

Cash

$               35,469,783

$          74,550

0.84 %

$               64,848,200

$        15,170

0.09 %

$         37,909,262

$          90,146

0.48 %

$         53,767,576

$          24,002

0.09 %

Investments (Tax Exempt)

22,199,648

187,816

23,292,663

223,691

22,762,366

375,447

23,673,128

451,599

Investments (Taxable)

167,905,374

1,130,385

103,971,494

479,280

166,947,911

2,127,533

97,857,510

935,975

Total Investments

190,105,022

1,318,201

2.78 %

127,264,158

702,971

2.22 %

189,710,277

2,502,980

2.66 %

121,530,638

1,387,574

2.30 %

Total Loans 

615,110,994

7,159,610

4.67 %

622,826,541

6,951,964

4.48 %

612,277,385

14,301,609

4.71 %

615,394,581

13,864,350

4.54 %

Earning Assets

840,685,799

8,552,361

4.08 %

814,938,898

7,670,105

3.78 %

$839,896,924

16,894,735

4.06 %

790,692,795

15,275,926

3.90 %

Assets

$            880,810,523

$            846,402,419

$      878,508,335

$      820,758,422

Liabilities

Interest Checking

$            128,008,728

134,727

0.42 %

$               34,272,772

10,907

0.13 %

$      122,562,966

182,973

0.30 %

$         29,739,959

$          26,536

0.18 %

Money Market

203,094,067

180,932

0.36 %

164,337,737

63,989

0.16 %

201,296,855

270,448

0.27 %

155,132,593

126,485

0.16 %

Savings

8,303,586

2,147

0.10 %

4,195,416

1,078

0.10 %

7,482,395

3,872

0.10 %

3,751,099

1,892

0.10 %

Time Deposits 

186,130,419

355,590

0.77 %

197,180,571

507,023

1.03 %

180,103,288

634,891

0.71 %

185,927,578

1,103,908

1.20 %

Interest Bearing Deposits

525,536,800

673,396

0.51 %

399,986,496

582,997

0.58 %

511,445,504

1,092,184

0.43 %

374,551,228

1,258,821

0.68 %

Borrowings

56,154,130

225,115

1.61 %

138,398,143

212,703

0.62 %

63,851,619

495,894

1.57 %

136,271,310

425,626

0.63 %

Interest Bearing Liabilities

581,690,931

898,511

0.62 %

538,384,639

795,700

0.59 %

575,297,123

1,588,078

0.56 %

510,822,538

1,684,447

0.66 %

Non Interest Bearing Deposits

$            212,429,933

$            217,927,934

$      212,870,074

$      216,545,940

Cost of Funds

0.45 %

0.42 %

0.41 %

0.47 %

Net Interest Margin1

$    7,653,850

3.65 %

$  6,874,405

3.38 %

$  15,306,657

3.68 %

$  13,591,479

3.47 %

Shareholders Equity

$               78,112,151

$               77,178,196

$         80,761,461

$         75,836,853

ROAA

1.01 %

1.24 %

1.15 %

1.25 %

ROAE

11.44 %

13.65 %

12.51 %

13.55 %

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

June 30, 2022

March 31, 2022

December 31, 2021

September 30, 2021

June 30, 2021

Loans held-for-investment to Deposits 

83.49 %

83.07 %

85.85 %

84.45 %

96.14 %

Income Statement Ratios (Quarterly)

Return on Average Assets (ROAA)

1.01 %

1.29 %

1.22 %

1.35 %

1.24 %

Return on Average Equity (ROAE)

11.44 %

13.53 %

13.11 %

14.18 %

13.65 %

Efficiency Ratio

65.10 %

61.70 %

62.62 %

59.57 %

62.38 %

Net Interest Margin1

3.65 %

3.68 %

3.74 %

3.43 %

3.38 %

Yield on Average Earning Assets

4.08 %

4.01 %

4.05 %

3.77 %

3.78 %

Yield on Securities

2.78 %

2.45 %

2.54 %

2.23 %

2.22 %

Yield on Loans

4.67 %

4.75 %

5.11 %

4.55 %

4.48 %

Cost of Funds

0.45 %

0.36 %

0.33 %

0.37 %

0.42 %

Noninterest income to Total Revenue

17.88 %

19.28 %

18.01 %

27.15 %

25.14 %

Per Share Data

Tangible Book Value

$10.31

$10.95

$11.59

$11.14

$10.81

Share Price Data

Closing Price

$14.80

$14.06

$13.37

$12.55

$11.98

Book Value Multiple

144 %

128 %

115 %

113 %

111 %

Common Stock Data

Outstanding Shares at End of Period

7,319,006

7,286,915

7,262,757

7,312,565

7,305,581

Weighted Average shares outstanding, basic

7,290,417

7,324,527

7,336,016

7,341,635

7,306,710

Weighted Average shares outstanding, diluted

7,312,200

7,362,290

7,438,268

7,395,062

7,354,389

Capital Ratios (Bank Only)

Tier 1 Leverage ratio

11.95 %

12.09 %

11.85 %

10.47 %

10.56 %

Common Equity Tier 1 ratio

13.84 %

14.23 %

14.49 %

12.73 %

12.90 %

Tier 1 Risk Based Capital ratio

13.84 %

14.23 %

14.49 %

12.73 %

12.90 %

Total Risk Based Capital ratio

14.77 %

15.15 %

15.42 %

13.68 %

13.86 %

Credit Quality

Net Charge-offs to Average Loans

0.00 %

0.00 %

-0.02 %

0.00 %

0.00 %

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

1.38 %

1.48 %

1.46 %

0.15 %

0.15 %

Total Non-performing Assets to Total Assets

0.97 %

1.02 %

1.00 %

0.10 %

0.11 %

Nonaccrual Loans to loans held-for-investment

1.38 %

1.48 %

1.46 %

0.15 %

0.15 %

Provision for Loan and Lease Losses

$375,000

$164,000

$355,000

$229,000

$191,000

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

1.11 %

1.12 %

1.08 %

1.05 %

0.96 %

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

1.13 %

1.15 %

1.14 %

1.17 %

1.15 %

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

 

 

"Cision" View original content to download multimedia:https://www.prnewswire.com/news-releases/freedom-financial-holdings-announces-earnings-for-second-quarter-of-2022-301596066.html

SOURCE Freedom Financial Holdings

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