1. FDVA reported Q1 2025 net income of $2.02 million, up 73.4%. 2. Net interest margin expanded to 3.03%, a 59 basis point increase. 3. Non-accrual loans decreased by 22% to $10.7 million. 4. Stockholder equity increased to $81.11 million, sustaining growth momentum. 5. Share repurchase program continues with 214,400 shares bought back.
Strong net income growth and improved credit quality are positive signals. Historically, similar performance boosts stock prices.
The financial results indicate a turnaround in profitability and credit health, impacting investor sentiment strongly.
The immediate financial performance may attract investors, enhancing stock demand quickly.
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 $2,019,348 or $0.28 per diluted share for the first quarter compared to net income of $1,156,906, or $0.16 per diluted share for the three months ended December 31, 2024, and net income of $1,164,226 or $0.16 per diluted share for the three months ended March 31, 2024.
Joseph J. Thomas, President, and CEO, commented, "We are pleased to start off 2025 with strong results with net income increasing 73.4% over the comparable quarter in 2024 sustaining the momentum we gained in the second half of last year. We continue to see improvement in our cost of funds dropping 23 basis points in the first quarter enabling net interest margin expansion of 59 basis points to 3.03%. Despite the challenging economic environment, we continue to see improvement in the credit quality of our loan portfolio with non-accrual loans down 22% to $10.7 million. Our entire team is working hard to grow local, core deposits and we experienced a 26% annualized increase in non-interest deposits in the quarter. With our organic core deposit growth, cash flow from investments, and loan pre-payments, we are driving improved financial performance and franchise profile."
The Company recorded net interest income of $7.72 million for the first quarter of 2025, higher by 20.17% compared to the linked quarter, and lower by 17.91% compared to the same period in 2024. The net interest margin in the first quarter of 2025 was 3.03%, higher by 59 basis points compared to the linked quarter and higher by 49 basis points compared to the same period in 2024.
Non-interest income was $1 million for the first quarter, a decrease of 23% when compared to the linked quarter and an increase of 16.70% when compared to the same period in 2024. The decrease in non-interest income in the first quarter of 2025 compared to the linked quarter was due to lower revenue from the gain on sale of SBA loans and bank service charges and fees.
Total revenue, defined as the sum of net interest income, before provision for loan losses, and non-interest income, was higher by 13.04% compared to the linked quarter and higher by 12.65% compared to the calendar quarter in 2024. The increase in total revenue compared to the linked quarter was due to an increase in the net interest margin.
Non-interest expense in the first quarter decreased by $447,995 or by 6.93% compared to the linked quarter and decreased by 3.30% compared to the same period in 2024. The increase in expenses compared to the linked quarter was largely non-recurring and primarily related to personnel costs, an increase in software costs for the new online banking platform, consulting fees related to FDICIA compliance, and legal fees related to loan workouts. Excluding these non-recurring costs, non-interest expenses would have been flat to the prior quarter. The increase in expenses compared to the calendar quarter primarily related to higher compensation costs, higher occupancy costs, and higher professional fees, largely related to legal fees and accounting fees related to FDICIA.
The Efficiency Ratio was 69.22% for the quarter ended March 31, 2025, compared to 84.07% for the linked quarter and 80.64% for the same period in 2024.
Non-accrual loans decreased in the first quarter and were 1.45% of loans held-for-investment compared to 1.78% 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 1.01% of total assets as of March 31, 2025, compared to 1.25% of total assets at the end of the linked quarter.
The Company recognized a provision for loan losses of $284,683, primarily related to specific reserves for one loan relationship.
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.
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 COVID-19 and the impact of geopolitical conflicts, such as the war between Russia and Ukraine; adverse developments in the financial services industry such as the recent bank failures; and the adequacy or inadequacy of our allowance for loan and lease losses and acquisition or loss of key production personnel.
Joseph J. Thomas
President & Chief Executive Officer
703-667-4161: Phone
Email