Freedom Bank’s Assets Exceed $350 Million

20% Asset Growth over Prior Year

FAIRFAX, Va.--(BUSINESS WIRE)-- The Freedom Bank of Virginia (OTCQX: FDVA) increased loans $48,017,799 (19.62%) fueling strong asset growth over the same period the prior year. Investment securities increased by $6,546,018 (28.1%) comprising the remaining rise in assets.

Strong asset growth generated strong revenue growth. Net interest income increased $558,118 (21.2%) at March 31, 2015 versus a year earlier. Asset growth was funded by large increases in transaction account balances. Non interest bearing balances increased $6,832,755 (13.9%). Interest checking deposits expanded even faster, $23,244,788 (45.9%). The rest was funded by a $24,201,186 (14.9%) increase in CDs.

Asset quality remained strong at March 31, 2015 with non performing assets declining to 0.13% of total assets at March 31, 2015, down from 0.49% at the same time last year.

Both revenues and expenses increased in the first quarter of 2015 compared with the prior year. The provision for loan losses increased from $100,000 in the first quarter of 2014 to $300,000 in the first quarter of 2015. While non interest income was up for the year, so were non interest expenses. These increases reduced net profit before taxes to $216,024 from $348,215 the prior year. The bank finished its twenty-fourth consecutive profitable quarter and for the first time began recording income taxes, which reduced net income by another $73,500 to $142,524.

According to CEO Craig Underhill, “We are very pleased with our growth this past quarter. Most of the growth was loans, our highest earning asset. We also invested in our third branch located in Reston and in our mortgage division, which increased our non interest expense for the first quarter. We are pleased with the results of both and hope they will be strong contributors to the bank later in 2015. The Reston branch ended the quarter with $30 million in deposits in only nine months. When the bank hired Richard Hutchison to run the mortgage division in December 2014, the division had $649,975 in loans for sale. At March 31, 2015 the division increased this to $4,778,993. The bank makes its money when it sells the mortgages to investors. This trend is promising for the future profitability of the division.”

Richard Hutchison said, “We are very fortunate to have assembled an exceptional team here at Freedom Mortgage. Many of our support staff worked with me at Virginia Heritage Bank and I am pleased they have joined us here. Now some of the lenders I worked with in the past are coming on board, with Christine Kern, Charles Hutchison, Bonnie Zapf, Steve Mitchell and Kim Cybulski recently joining Freedom Mortgage after working with me at Virginia Heritage. Our results today and in the future are due to the efforts of this exceptional team.”

Chairman Richard Litman complemented management on the results, “Our lending team now consistently produces strong loan growth. We opened a third branch last summer. Last December, we invested in Richard Hutchison and his mortgage team to build up this division. The board commends management on maintaining profitability while making these investments to increase our future growth and profits.” </p>

To support this growth, the Bank raised $3.5 million (after expenses) at 1.24 times the book value per share at the start of the offering. According to CEO Craig Underhill, “The offering added approximately $0.09 per share in tangible book value for our shareholders.” Combined with net profit, capital expanded $5,391,604 or 20.3% over the first quarter of 2014.

Provisions of the Basel III accords governing banks worldwide went into effect January 1, 2015 so now Freedom Bank must adhere to a new set of capital ratios. We are pleased that we remain well capitalized. Our ratios at March 31, 2015 were CET1 11.01%, Tier 1 Leverage 9.14%, Tier 1 Capital 11.03% and Tier 2 Capital 12.06%.

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 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
UNAUDITED

	March 31, 2015			March 31, 2014
ASSETS
Cash and due from banks	$	7,184,426		$	5,022,619
Federal funds sold		13,844,000			15,824,000
Interest Bearing Balances with Banks		1,025,154			1,021,073
Investment securities available for sale, at fair value		29,843,965			23,297,947
Investment securities held to maturity		-			35,399
Federal Reserve Bank stock		1,201,500			783,600
Loans held for sale		4,778,993			121,000
Loans receivable		292,752,822			244,735,023
Allowance for possible loan losses		(2,985,807	)		(2,590,115	)
Net Loans		289,767,015			242,144,908
Premises and equipment, net		819,678			276,405
Accrued interest and other receivables		821,241			671,251
Other assets		883,962			1,244,185
Bank Owned Life Insurance		2,176,141			2,115,308
Deferred Tax Asset		1,320,000			996,000

Total Assets	$	353,666,075		$	293,553,695

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits:
Non-interest bearing deposits	$	56,025,178		$	49,192,423
Interest Checking		73,919,620			50,674,832
Savings deposits		2,162,176			1,839,060
Time deposits		188,402,312			164,201,126
Total Deposits		320,509,286			265,907,441

Other accrued expenses		1,075,194			982,625
Accrued interest payable		109,522			83,160
Total Liabilities		321,694,002			266,973,226

Stockholders' Equity:
Common stock, $3.16 par value (15,000,000 shares authorized: 4,279,335 shares issued and outstanding March 31, 2015 3,814,956 shares issued and outstanding March 31, 2014)		13,509,638			12,042,200
Additional paid-in capital		18,613,529			16,371,940
Accumulated other comprehensive income		(17,532	)		(305,401	)
Retained earnings (deficit)		(133,562	)		(1,528,270	)

Total Stockholders' Equity		31,972,073			26,580,469

Total Liabilities and Stockholders' Equity	$	353,666,075		$	293,553,695

<td class="bwpadl0 bwnowrap bwpadr0 bwvertalignb bwalignr"> 247,373


The Freedom Bank of Virginia
Statements of Operations
UNAUDITED

	For the three months ended
	March 31,
	<b>2015		2014
Interest Income
Interest and fees on loans	$	3,720,202	$	3,019,245
Interest on investment securities		144,552		135,880
Interest on Federal funds sold		7,314		7,561
Total Interest Income		3,872,068		3,162,686

Interest Expense
Interest on deposits		680,349		529,086

Net Interest Income		3,191,719		2,633,600

Provision for Possible Loan Losses		300,000		100,000

Net Interest Income after Provision for Possible Loan Losses		2,891,719		2,533,600

Other Income
Service charges and other income			72,071
Increase in cash surrender value of bank-owned life insurance		15,574		13,704
Total Other Income		262,947		85,775

Operating Expenses
Officers and employee compensation and benefits		1,824,622		1,381,670
Occupancy expense		197,111		136,555
Equipment and depreciation expense		108,583		77,409
Insurance expense		69,875		55,469
Professional fees		231,708		229,505
Data and item processing		233,881		182,916
Business development		51,361		50,425
Franchise tax		65,915		63,748
Other operating expenses		155,586		93,463
Total Operating Expenses		2,938,642		2,271,160

Income before Income Taxes		216,024		348,215
Provision for Income Taxes		73,500		-

Net Income	$	142,524	$	348,215

Net Income Per Common Share	$	0.03	$	0.09