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

Bank Increases Core Deposits to Fund Continuing Growth

FAIRFAX, Va.--(BUSINESS WIRE)-- Please replace the release dated October 23, 2017 with the following corrected version due to multiple revisions. The following reflects the increase in shares outstanding due to the previously announced five percent stock dividend that was paid on July 7, 2017 and related changes in the per share and shares outstanding figures included in the press release. The following also corrects the percentage increases in net income stated in the first and third sentences from 9% to 10% and from 40.1% to 40.9%, respectively, and corrects certain erroneous references to June 30 in the balance sheet to September 30.

The corrected release reads:

FREEDOM BANK EARNS RECORD NET INCOME FOR THIRD QUARTER AND FIRST NINE MONTHS

Bank Increases Core Deposits to Fund Continuing Growth

The Freedom Bank of Virginia (OTCQX:FDVA) earned net income of $791,715 for the third quarter ending September 30, 2017, up 10% from $719,205 for the same period in 2016. For the nine months ending September 30, 2017, net income was $2,515,851. This was up $730,771 (40.9%) from the prior year. Earnings per share were $0.12 for third quarter, compared to $0.11 for the third quarter of 2016 as restated for the five percent stock dividend that was paid on July 7, 2017. Earnings per share through the third quarter of 2017 were $0.39 per share, up from $0.28 per share in 2016 as restated for the stock dividend.

Total assets increased $67,102,774 (13.6%) to $561,130,267 at September 30, 2017 compared to September 30, 2016. The highest yielding asset of loans receivable grew $1,743,286 to $398,562,312 at September 30, 2017 from a year earlier. Loans held for sale were $11,528,559 compared to $13,825,894 the prior year. Investment securities held for sale were $52,772,671, up from $46,196,986 in 2016. Additionally, the bank had $14,911,233 in municipal bonds held to maturity in 2017 that it did not have the prior year.

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

Freedom generated core deposit growth in the third quarter. The bank will use these deposits to fund loans and investments, which should have a positive effect on profitability. Non-interest checking balances were $73,483,463 at September 30, 2017, up 11.2% from $66,056,888 a year earlier. Interest bearing checking account balances were $179,943,810, a $74,887,370 (71.3%) increase from $105,056,440 the prior year. Certificates of deposits were $238,411,457, down from $241,037,751 a year earlier, as transaction accounts funded more of the growth of the bank. Total deposits were $493,902,789 at September 30, 2017, versus $414,299,769 the prior year. Transaction account balances of $253,427,273 exceeded time and savings deposit balances of $240,475,516 for the first time in the past five years as a result of the bank’s emphasis on core deposit growth.

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

Capital increased to $54,700,983 at September 30, 2017, a $3,542,012 increase over the $51,158,971 level at September 30, 2016. Tangible book value per share was $8.38 at September 30, 2017, an increase from $7.90 per share at September 30, 2016 as restated for the stock dividend.

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

This release contains forward-looking statements, including our expectations with respect to future events that are subject to various risks and uncertainties. Factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations include: fluctuation in market rates of interest and loan and deposit pricing, adverse changes in the overall national economy as well as adverse economic conditions in our specific market areas, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key personnel. Other risks that can affect the Bank are detailed from time to time in our quarterly and annual reports filed with the Federal Financial Institutions Examination Council. We caution readers that the list of factors above is not exclusive. The forward-looking statements are made as of the date of this release, and we may not undertake steps to update the forward-looking statements to reflect the impact of any circumstances or events that arise after the date the forward-looking statements are made. In addition, our past results of operations are not necessarily indicative of future performance.

The Freedom Bank of Virginia
Statements of Financial Condition
September 30, 2017 September 30, 2016
ASSETS
Cash and due from banks $ 1,487,632 $ 1,176,028
Federal funds sold 69,119,000 24,107,000
Interest Bearing Balances with Banks 6,080,661 4,760,857
Investment securities available for sale, at fair value 52,722,671 46,196,986
Investment securities held to maturity 14,911,233 -
FHLB and Federal Reserve Bank stock 2,411,550 2,995,900
Loans held for sale 11,528,559 13,825,894
Loans receivable 398,562,312 396,819,026
Allowance for possible loan losses (4,562,370 ) (4,100,459 )
Net Loans 393,999,942 392,718,567
Premises and equipment, net 1,383,953 713,768
Accrued interest and other receivables 1,392,669 1,028,948
Deferred Tax Asset 2,125,500 1,604,000
Other assets 1,643,945 2,632,761
Bank Owned Life Insurance 2,322,952 2,266,784
Total Assets $ 561,130,267 $ 494,027,493
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits:
Non-interest bearing deposits $ 73,483,463 $ 66,056,888
Interest Checking 179,943,810 105,056,440
Savings deposits 2,064,059 2,148,690
Time deposits 238,411,457 241,037,751
Total Deposits 493,902,789 414,299,769
Fed Funds Purchased and FHLB advances 10,428,571 26,714,286
Other accrued expenses 1,950,442 1,685,112
Accrued interest payable 147,482 169,355
Total Liabilities 506,429,284 442,868,522
Stockholders' Equity:
Common stock of $0.01 par value with 25,000,000 shares authorized,
Voting Common Stock 58,668 55,377
5,866,765 and 5,537,747 shares issued and outstanding
September 30, 2017 and September 30, 2016
Non-Voting Common Stock 6,601 6,287
660,143 and 628,707 shares issued and outstanding
September 30, 2017 and September 30, 2016
Additional paid-in capital 52,311,337 47,774,866
Accumulated other comprehensive income (387,271 ) 94,876
Retained earnings 2,711,648 3,227,565
Total Stockholders' Equity 54,700,983 51,158,971
Total Liabilities and Stockholders' Equity $ 561,130,267 $ 494,027,493

The Notes to Financial Statements are an integral part of these statements.

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

View source version on businesswire.com: http://www.businesswire.com/news/home/20171023005758/en/

The Freedom Bank of Virginia
Craig S. Underhill
President & Chief Executive Officer
703-242-5300
cunderhill@freedombankva.com

Source: The Freedom Bank of Virginia