Freedom Financial Holdings Announces Earnings for Second Quarter of 2025
FAIRFAX, Va., July 30, 2025 /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 $799,896 or $0.11 per diluted share for the second quarter compared to net income of $2,019,348, or $0.28 per diluted share for the three months ended March 31, 2025, and net income of $2,044,233 or $0.28 per diluted share for the three months ended June 30, 2024. Net income for the six months ended June 30, 2025, was $2,819,240 or $0.39 per diluted share, compared to $3,208,460 or $0.44 per diluted share for the six months ended June 30, 2024.
Joseph J. Thomas, President, and CEO, commented, "While proactively increasing our loan loss provision negatively impacted our bottom line results, our second quarter performance reflects strong improvement in core profitability as pre-tax, pre-provision income1 of $1.84 million increased by 35.7% compared to the same quarter in 2024, driven by a 25-basis point increase in net interest margin to 2.66% and a 7.8% increase in non-interest income in the quarter compared to last year. With payoffs in problem loans, run-off in the investment portfolio, and increased core deposit inflows, we repaid higher cost brokered time deposits and borrowings to reduce cost of funds by 42 basis points compared to 2024. While loan demand remained tepid in the second quarter, the investments in our team and technology and improvement in the company's balance sheet resilience will enable us to meet current and new customer demand and achieve higher levels of loan and deposit growth as the economy stabilizes in the second half of 2025."
Second Quarter 2025 Highlights include:
The Company posted net income of $799,896 or $0.11 per diluted share for the second quarter compared to net income of $2,019,348 or $0.28 per diluted share for the three months ended March 31, 2025, and net income of $2,044,233 or $0.28 per diluted share for the three months ending June 30, 2024.
Tangible Book Value per share2 increased during the quarter to $12.01 on June 30, 2025, compared to $11.87 on March 31, 2025.
Return on Average Assets ("ROAA") was 0.29% for the quarter ended June 30, 2025, compared to ROAA of 0.76% for the quarter ended March 31, 2025, and 0.75% for the three months ended June 30, 2024.
Return on Average Equity ("ROAE") was 3.97% for the quarter ended June 30, 2025, compared to ROAE of 9.95% for the three months ended March 31, 2025, and 10.71% for the three months ended June 30, 2024.
Total Assets were $1.07 billion on June 30, 2025, a decrease of $18.41 million or 1.69% from total assets on December 31, 2024.
Loans held-for-investment (excluding PPP loans) decreased by $10.59 million or 1.41% during the quarter.
Total deposits increased by $7.38 million or by 0.81% during the quarter, indicating results from our marketing efforts.
Non-interest-bearing demand deposits decreased by $15.58 million from the linked quarter to $126.92 million and represented 13.82% of total deposits on June 30, 2025.
The net interest margin3 decreased in the second quarter to 2.66%, lower by 37 basis points compared to the linked quarter and increased by 25 basis points compared to the same period in 2024. The decrease in the net interest margin across linked quarters was primarily related to interest income recovery during the first quarter. The change from the prior year's second quarter represents improvements in cost of funds as the Bank has decreased its use of wholesale funding.
The cost of funds was 3.19% for the second quarter, lower by 4 basis points compared to the linked quarter and lower by 42 basis points compared to the same period in 2024, as the reduction of wholesale funding continued.
Non-interest income increased by 34.14% compared to the linked quarter and increased by 7.79% compared to the same period in 2024. The increase in non-interest income in the second quarter of 2025 compared to the linked quarter was primarily due to higher revenue from mortgage loans and an increase in the value of investments in SBIC's.
Non-interest expense in the second quarter increased by 5.49% compared to the linked quarter and increased by 4.95% compared to the same period in 2024. The increase in non-interest expense compared to the linked quarter and prior calendar quarter was primarily due to higher expenses related to data processing costs and compensation expense.
The Efficiency Ratio4 was 77.57% for the quarter ended June 30, 2025, compared to 69.22% for the linked quarter and 81.72% for the same period in 2024.
Uninsured deposits were 22.76% of total deposits and total liquidity5 was 167.83% of uninsured deposits on June 30, 2025.
Net charge offs decreased in the second quarter and were 0.01% of average loans compared to 0.03% in the prior quarter. The ratio of non-accrual loans to loans held-for-investment was 1.45% on June 30, 2025, compared to 1.45% on March 31, 2025, and 1.49% on June 30, 2024. The ratio of non-performing assets to total assets was 0.98% on June 30, 2025, compared to 1.01% on March 31, 2025, and 1.06% on June 30, 2024.
The Company had a loan loss provision of $688,865 in the second quarter, which increased the allowance for credit losses, due in part to the increase in specific reserves related to two loans, while nearly half of the increase was related to the increase in qualitative factors in the model for changes in the outlook of general economic conditions.
The ratio of the allowance for credit losses to loans held-for-investment was 0.96% compared to 0.88% in the linked quarter.
The Company continues to be well capitalized and capital ratios continue to be strong with a Leverage ratio of 10.66%, Common Equity Tier 1 ratio of 14.30%, Tier 1 Risk Based Capital ratio of 14.30% and a Total Capital ratio of 15.20%.
Net Interest IncomeThe Company recorded net interest income of $6.88 million for the second quarter of 2025, lower by 10.93% compared to the linked quarter, and higher by 11.12% compared to the same period in 2024. The net interest margin in the second quarter of 2025 was 2.66%, lower by 37 basis points compared to the linked quarter and higher by 25 basis points compared to the same period in 2024.
The following factors contributed to the changes in net interest margin during the second quarter of 2024 compared to the linked and calendar quarters.
Yields on average earning assets were 5.73% in the second quarter of 2025, lower by 38 basis points compared to the linked quarter, and lower by 17 basis points compared to the calendar quarter. The decline in yields on average earning assets in the second quarter was primarily due to non-recurring interest income being recognized in the first quarter.
Loan yields decreased by 54 basis points to 6.20% from 6.74% in the linked quarter, while yields on investment securities decreased by 16 basis points to 4.39% from 4.55% in the linked quarter. Loan yields decreased by 17 basis points, while yields on investment securities decreased by 53 basis points compared to the calendar quarter.
Cost of funds decreased by 4 basis points to 3.19% from 3.23% in the linked quarter, and by 42 basis points compared to the calendar quarter. The decrease was primarily due to a decline in costs for time deposits and borrowings, partially offset by an increase in costs for non-maturity deposits.
Non-interest IncomeNon-interest income was $1.31 million for the second quarter, an increase of 34.14% when compared to the linked quarter and an increase of 7.79% when compared to the same period in 2024. The increase in non-interest income in the second quarter of 2025 compared to the linked quarter was primarily due to higher revenue from mortgage loans and an increase in the value of investments in SBIC's.
Total Revenue6Total revenue, defined as the sum of net interest income, before provision for loan losses, and non-interest income, was lower by 5.86% compared to the linked quarter and higher by 10.57% compared to the calendar quarter in 2024. The decrease in total revenue compared to the linked quarter was primarily due to non-recurring interest recognized in the first quarter.
Non-interest ExpenseNon-interest expense in the second quarter increased by 5.49% compared to the linked quarter and increased by 4.95% compared to the same period in 2024. The increase in non-interest expense compared to both the linked and calendar quarters was primarily due to compensation and data processing expense
The Efficiency Ratio was 77.57% for the quarter ended June 30, 2025, compared to 69.22% for the linked quarter and 81.72% for the same period in 2024.
Asset QualityNon-accrual loans were unchanged in the second quarter and were 1.45% of loans held-for-investment compared to 1.45% of loans held-for-investment at the end of the linked quarter. Total non-performing assets (defined as the sum of loans on non-accrual, loans greater than 90 days past due and accruing, and OREO assets) were 0.98% of total assets as of June 30, 2025, compared to 1.01% of total assets, at the end of the linked quarter.
The Company recognized a provision for loan losses of $688,865, related to specific reserves for two loan relationships, but largely due to the adjustment in qualitative factors in our model for a weakening economic outlook.
The Company's ratio of Allowance for Credit Losses to loans held-for-investment was 0.96% as of June 30, 2025, compared to the ratio of Allowance for Credit Losses to loans held-for-investment of 0.88% as of March 31, 2025.
Total AssetsTotal assets on June 30, 2025, were $1.07 billion compared to total assets of $1.08 billion on March 31, 2025.
Total LiabilitiesTotal liabilities on June 30, 2025, were $987.96 million compared to total liabilities of $999.01 million on March 31, 2025, and total liabilities of $1.01 billion on December 31, 2024. Total deposits were $918.25 million on June 30, 2025, compared to total deposits of $910.87 million on March 31, 2025, and total deposits of $909.53 million on December 31, 2024. Non-interest-bearing demand deposits decreased by $15.58 million during the second quarter and comprised 13.82% of total deposits at the end of the second quarter. Other interest-bearing demand deposits increased by $80.68 million, savings deposits decreased by $5.48 million and time deposits decreased by $52.25 million during the quarter. Federal Home Loan Bank borrowings decreased by $15 million during the quarter.
Stockholders' Equity and CapitalStockholders' equity as of June 30, 2025, was $84.12 million compared to $83.13 million on March 31, 2025, and stockholders' equity of $81.44 million on December 31, 2024. AOCI was relatively unchanged during the second quarter. The tangible book value of the Company's common stock on June 30, 2025, was $12.01 per share compared to $11.87 on March 31, 2025, and tangible book value per share of $11.39 on December 31, 2024. Excluding AOCI losses/gains, the tangible book value of the Company's common stock on June 30, 2025, was $14.39 per share compared to $14.26 on March 31, 2025, and $13.94 per share on December 31, 2024.
Stock Buyback ProgramIn the first quarter, the Company purchased 177,692 shares pursuant to its previously announced share repurchase program, but made no repurchases in the second quarter. As of June 30, 2025, the Company had repurchased 214,400 of the 250,000 shares authorized for repurchase under the program. Our Board of Directors continues to believe that the share buyback program represents a disciplined capital management strategy for the Company.
Capital RatiosAs of June 30, 2025, the Bank's capital ratios were well above regulatory minimum capital ratios for well-capitalized bank holding companies. The Bank's capital ratios as of June 30, 2025, and December 31, 2024, were as follows:
June 30, 2025
December 31, 2024
Total Capital Ratio
15.20 %
14.35 %
Tier 1 Capital Ratio
14.30 %
13.57 %
Common Equity Tier 1 Capital Ratio
14.30 %
13.57 %
Leverage Ratio
10.66 %
10.39 %
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. For information about deposits, loans 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 in 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 the impact of geopolitical conflicts, such as the war between Russia and Ukraine and the conflict in the Middle East; U.S. and global trade policies and changes, including the impact of the imposition of or changes in tariffs and trade barriers, adverse developments in the financial services industry such as the bank failures in 2023; maintenance and development of well-established and valued client relationships and referral source relationships; the adequacy or inadequacy of our allowance for credit losses; acquisition or loss of key production personnel; whether we realize the expected impact of our investments in technology and personnel; and the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, wars, terrorist acts or public health events, 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.
FREEDOM FINANCIAL HOLDINGS
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Unaudited)
(Audited)
June 30,
March 31,
December 31,
2025
2025
2024
ASSETS
Cash and Due from Banks
$ 10,668,471
$ 6,456,093
$ 5,685,008
Interest Bearing Deposits with Banks
48,991,785
39,016,262
23,004,874
Securities Available-for-Sale
193,740,578
203,807,955
209,687,859
Securities Held-to-Maturity
19,475,547
19,852,060
20,315,651
Restricted Stock Investments
5,065,300
5,777,800
6,249,000
Loans Held for Sale
4,882,264
5,487,972
5,963,969
PPP Loans Held for Investment
133,049
137,066
159,825
Other Loans Held for Investment
742,071,827
752,664,602
767,737,719
Allowance for Loan Losses
(7,188,387)
(6,592,220)
(6,534,757)
Net Loans
739,898,753
751,697,420
761,362,787
Bank Premises and Equipment, net
717,599
742,588
767,773
Accrued Interest Receivable
4,567,221
3,991,413
4,155,077
Deferred Tax Asset
6,587,963
7,230,083
7,560,441
Bank-Owned Life Insurance
28,004,541
27,781,480
27,560,616
Right of Use Asset, net
1,572,800
3,361,641
1,874,403
Other Assets
12,791,140
12,428,097
16,299,753
Total Assets
$ 1,072,081,698
$ 1,082,142,892
$ 1,090,487,211
LIABILITIES AND STOCKHOLDERS' EQUITY
-
Deposits
Demand Deposits
Non-interest Bearing
$ 126,922,031
$ 142,497,191
133,665,194
Interest Bearing
552,796,334
472,115,491
$ 475,397,117
Savings Deposits
2,550,937
8,034,522
3,866,241
Time Deposits
235,975,996
288,222,304
296,603,142
Total Deposits
918,245,298
910,869,508
909,531,694
Federal Home Loan Bank Advances
40,000,000
55,000,000
65,000,000
Other Borrowings
133,049
146,377
159,825
Subordinated Debt (Net of Issuance Costs)
19,889,606
19,870,125
19,850,643
Accrued Interest Payable
2,014,296
1,846,477
2,445,741
Lease Liability
1,694,646
1,855,161
2,013,912
Other Liabilities
5,981,294
9,420,497
10,045,990
Total Liabilities
$ 987,958,189
$ 999,008,145
1,009,047,805
Stockholders' Equity
Preferred stock, $0.01 par value, 5,000,000 shares authorized:
0 Shares Issued and Outstanding, June 30, 2025, March 31, 2025 and December 31, 2024
Common Stock, $0.01 Par Value, 25,000,000 Shares authorized:
23,000,000 Shares Voting and 2,000,000 Shares Non-voting.
Voting Common Stock:
7,002,103 , 7,002,103 and 7,268,087 Shares Issued and Outstanding
at June 30, 2025, March 31, 2025 and December 31, 2024 respectively
70,021
70,021
71,501
Non-Voting Common Stock:
-
-
0 Shares Issued and Outstanding at June 30, 2025, March 31, 2025
and December 31, 2024 respectively)
-
Additional Paid-in Capital
56,630,385
56,532,591
58,347,356
Accumulated Other Comprehensive Income, Net
(16,657,368)
(16,748,443)
(18,240,683)
Retained Earnings
44,080,472
43,280,578
41,261,232
Total Stockholders' Equity
$ 84,123,509.55
83,134,747
81,439,406
Total Liabilities and Stockholders' Equity
$ 1,072,081,698
$ 1,082,142,892
$ 1,090,487,211
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, 2025
June 30, 2024
June 30, 2025
June 30, 2024
Interest Income
Interest and Fees on Loans
$ 11,673,927
$ 11,893,288
$ 24,377,509
$ 24,176,527
Interest on Investment Securities
2,450,914
2,927,306
5,064,172
5,798,785
Interest on Deposits with Other Banks
750,611
375,815
1,013,118
704,072
Total Interest Income
14,875,452
15,196,409
30,454,799
30,679,384
Interest Expense
Interest on Deposits
7,275,073
7,865,934
14,221,266
15,889,824
Interest on Borrowings
724,216
1,142,481
1,637,370
2,054,407
Total Interest Expense
7,999,289
9,008,415
15,858,637
17,944,231
Net Interest Income
6,876,162
6,187,994
14,596,162
12,735,154
Provision/(Recovery) for Loan Losses
688,865
(1,167,997)
973,548
(1,195,483)
Net Interest Income After
Provision for Loan Losses
6,187,298
7,355,991
13,622,614
13,930,637
Non-Interest Income
Mortgage Loan Gain-on-Sale and Fee Revenue
797,759
745,366
1,455,072
1,282,090
SBA Gain-on-Sale Revenue
-
-
-
287,032
Service Charges and Other Income
270,230
221,022
344,121
353,445
Gain on Sale of Securities
-
1,816
-
(13,246)
Servicing Income
21,045
42,268
47,147
77,522
Swap Fee Income
-
-
-
-
Increase in Cash Surrender Value of Bank-
owned Life Insurance
223,061
206,796
443,925
404,760
Total Non-interest Income
1,312,094
1,217,268
2,290,265
2,391,603
Total Revenue
8,188,257
7,405,262
16,886,427
15,126,757
Non-Interest Expenses
Officer and Employee Compensation
and Benefits
3,752,761
3,544,148
7,522,296
7,279,287
Occupancy Expense
244,279
255,233
486,442
647,109
Equipment and Depreciation Expense
16,619
185,959
25,345
53,081
Insurance Expense
220,346
229,259
446,112
453,266
Professional Fees
559,904
568,765
1,030,213
1,095,339
Data and Item Processing
595,492
395,579
1,133,705
985,084
Advertising
151,676
162,354
234,791
277,352
Franchise Taxes and State Assessment Fees
314,444
276,843
628,658
586,713
Mortgage Fees and Settlements
99,819
83,617
174,548
178,617
Other Operating Expense
396,213
349,979
690,447
722,214
Total Non-interest Expenses
6,351,552
6,051,736
12,372,557
12,278,062
Income Before Income Taxes
1,147,840
2,521,523
3,540,322
4,044,178
Income Tax Expense/(Benefit)
347,943
477,293
721,082
835,718
Net Income
$ 799,896
$ 2,044,230
$ 2,819,240
$ 3,208,460
Earnings per Common Share - Basic
$ 0.11
$ 0.28
$ 0.39
$ 0.44
Earnings per Common Share - Diluted
$ 0.11
$ 0.28
$ 0.39
$ 0.44
Weighted-Average Common Shares
Outstanding - Basic
7,137,779
7,267,044
7,151,171
7,276,076
Weighted-Average Common Shares
Outstanding - Diluted
7,140,491
7,305,392
7,153,655
7,314,424
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, 2025
March 31, 2025
December 31, 2024
September 30, 2024
June 30, 2024
Interest Income
Interest and Fees on Loans
$ 11,673,927
$ 12,703,493
$ 11,991,578
$ 12,358,391
$ 11,893,288
Interest on Investment Securities
2,450,914
2,613,258
2,798,420
2,932,219
2,927,306
Interest on Deposits with Other Banks
750,610
262,507
446,184
390,373
375,815
Total Interest Income
14,875,451
15,579,258
15,236,182
15,680,983
15,196,409
Interest Expense
Interest on Deposits
7,275,073
6,946,194
7,628,382
7,968,925
7,865,934
Interest on Borrowings
724,216
913,154
1,183,419
1,613,452
1,142,481
Total Interest Expense
7,999,289
7,859,348
8,811,801
9,582,377
9,008,415
Net Interest Income
6,876,162
7,719,910
6,424,381
6,098,606
6,187,994
Provision/(Recovery) for Loan Losses
688,865
284,683
14,922
546,439
(1,167,997)
Net Interest Income after
Provision/Recovery for Loan Losses
6,187,297
7,435,227
6,409,459
5,552,166
7,355,991
Non-Interest Income
Mortgage Loan Gain-on-Sale and Fee Revenue
797,759
654,530
769,060
649,097
745,366
SBA Gain-on-Sale Revenue
-
-
-
-
-
Service Charges and Other Income
270,230
70,334
252,275
255,889
221,022
Gains on Sale of Securities
-
-
-
-
1,816
Servicing Income
21,045
32,442
36,090
36,752
42,268
Swap Fee Income
-
-
-
-
-
Increase in Cash Surrender Value of Bank-
