Freedom Financial Holdings Announces Earnings for Fourth Quarter and Full Year 2021 and Approves Stock Repurchase

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Jan 28, 2022, 08:30 ET

FAIRFAX, Va., Jan. 28, 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 $2,743,088, or $0.37 per diluted share, for the three months ended December 31, 2021. This compares to net income of $2,890,281 or $0.39 per diluted share, for the linked quarter and net income of $2,413,775 or $0.33 per diluted share for the three months ending December 31, 2020. Net income for the full year 2021 was $10,727,961 or $1.44 per diluted share compared to net income of $7,364,477 or $1.01 per diluted share for the full year 2020.

Joseph J. Thomas, President and CEO, commented, "We accomplished many milestones as a company in 2021, including celebrating our 20^th anniversary, forming a new holding company, issuing $20 million in subordinated debt, and reporting record full-year earnings per share of $1.44, a 45.67% increase compared to full year 2020 results. Our talented team of bankers was able to deliver organic loan growth (excluding PPP loans) of 26.89% while also reducing cost of funds to 0.40% for the full year 2021 compared to 0.87% in 2020. With solid expense control driving efficiency ratio down to 62.62%, the company achieved ROAA and ROAE for the full year 2021 of 1.27% and 13.60%, respectively, compared to 1.12% and 10.84% for the full year 2020. On the heels of these results, the Company's board has authorized a stock repurchase of up to 250,000 shares as a strategic means of deploying our new capital. We remain confident in our future growth and earning potential, and I am excited to enter 2022 focused on serving our clients with abundant talent and leading technology."

Fourth Quarter and Full Year 2021 Highlights include:

On November 1, 2021, the Company completed the reorganization in which Freedom Financial Holdings, Inc. became the parent bank holding company of the Bank;
On November 18, 2021, the Company issued $20 million of subordinated debt through a Private Placement, with the proceeds to be used for general corporate purposes, which include working capital and the funding of organic growth; or to fund possible future acquisitions;
Net income for the fourth quarter was $2,743,088 or $0.37 per diluted share compared to net income of $2,890,281 or $0.39 per diluted share in the linked quarter and net income of $2,413,775 or $0.33 per diluted share for the three months ending December 31, 2020;
Net income for the full year 2021 increased by 45.67% compared to the full year 2020. Net income was $10,727,961 or $1.44 per diluted share compared to net income of $7,364,477 or $1.01 per diluted share for the full year 2020. The increase in net income in 2021 was driven by higher net interest income as well as an increase in earning assets;
Pre-tax, pre-provision net income, which is a non-GAAP measure, decreased by 5.76% to $3,658,435 for the fourth quarter compared to pre-tax, pre-provision net income of $3,882,322 in the linked quarter and increased by 9.99% to $3,325,866 for the same period in 2020;
Return on Average Assets ("ROAA") was 1.22% for the quarter ended December 31, 2021 compared to 1.35% for the linked quarter and 1.28% for the three months ended December 31, 2020. ROAA for the full year 2021 was 1.27% compared to 1.12% for the full year 2020;
Return on Average Equity ("ROAE") was 13.11% for the three months ended December 31, 2021 compared to 14.18% for the linked quarter and 13.43% for the three months ended December 31, 2020. ROAE for the full year 2021 was 13.60% compared to 10.84% for the full year 2020;
Total assets were $876.85 million on December 31, 2021, an increase of $109.80 million or 14.31% from total assets on December 31, 2020;
Loans held-for-investment (excluding PPP loans) increased by $57.34 million or 11.19% during the quarter and by $120.80 million or 26.89% for the full year 2021 on strong portfolio loan growth;
PPP loan balances decreased by $25.45 million during the fourth quarter on loan forgiveness and mortgage loans held for sale decreased by $8.89 million during the same period, on a decline in mortgage activity;
Cash balances at the Federal Reserve decreased by $30.06 million during the fourth quarter;
Available for sale investment securities increased by $34.28 million during the fourth quarter and by $74.34 million in 2021;
Total deposits increased by $26.20 million or by 3.88% in the fourth quarter and increased by $153.20 million or 27.93% for the full year 2021. Non-interest bearing demand deposits increased by $5.78 million from the linked quarter to $222.17 million and were higher by $29.18 million for the full year 2021 and represented 31.66% of total deposits on December 31, 2021;
The net interest margin increased in the fourth quarter to 3.74%, higher by 31 basis points compared to the linked quarter and higher by 68 basis points compared to the same period in 2020. Excluding PPP loans, the net interest margin would have been 3.49%. The increase in the net interest margin across linked quarters was primarily due to higher yields on loans and a 4 basis point reduction in funding costs;
The cost of funds was 0.33% for the fourth quarter, lower by 4 basis points compared to the linked quarter and lower by 30 basis points compared to the same period in 2020, as deposit costs declined, partially offset by an increase in borrowing costs related to the issuance of subordinated debt in the fourth quarter of 2021;
Cost of funds was 0.40% for the full year 2021 compared to 0.87% for the full year 2020, primarily due to reduced deposit expense and higher non-interest bearing deposit balances in 2021;
Non-interest income decreased by 32.39% compared to the linked quarter and decreased by 62.67% compared to the same period in 2020. Non-interest income in the full year 2021 was lower by 36.91% compared to the prior year. The decrease in non-interest income in 2021 was primarily due to lower mortgage revenue stemming from a slowdown in mortgage activity in 2021 compared to the prior year, partially offset by revenue from SBA loan sales in 2021;
Non-interest expense in the fourth quarter increased by 7.14% compared to the linked quarter and decreased by 11.35% compared to the same period in 2020. The increase in non-interest expense for linked quarters was primarily due to legal costs related to the formation of the bank holding company, which was completed in the fourth quarter of 2021. The decrease in non-interest expense in calendar quarters was primarily due to lower performance related costs: specifically, commissions paid to mortgage loan officers and mortgage settlement costs;
The Efficiency Ratio was 62.62% for the quarter ended December 31, 2021, compared to 59.57% for the linked quarter and 67.52% for the same period in 2020. The efficiency ratio for the full year 2021 was 63.14% compared to 69.68% for the full year 2020;
Non-accrual loans increased in the fourth quarter causing the ratio of non-performing assets to total assets to increase to 1.01% on December 31, 2021 compared to 0.41% on December 31, 2020. The increase in non-accrual loans in the fourth quarter was entirely due to a single relationship on which the bank is adequately collatralized and as a result we did not recognize any impairment. We are actively pursuing a workout on this relationship;
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 $355,000 provision for loan losses during the fourth quarter and the ratio of the allowance for loan and lease losses to loans held-for-investment was 1.08% (or 1.14% excluding PPP loans, which carry a full faith and guarantee of the US Government) compared to 1.05% in the linked quarter (or 1.17% excluding PPP loans);
The Bank continues to be well capitalized and capital ratios continue to be strong with a Leverage ratio of 11.85%, Common Equity Tier 1 ratio of 14.49%, Tier 1 Risk Based Capital ratio of 14.49% and a Total Capital ratio of 15.42%.

Stock Repurchase Program

The Board of Directors has approved a repurchase program of up to 250,000 shares of the Company's common stock, which represented 3.79% of the 6,589,757 million voting shares that were outstanding as of December 31, 2021. The funding for this stock repurchase will come from cash currently at the holding company sourced from the $20 million subordinated debt issue in the fourth quarter of 2021 and, as necessary, an upstream dividend from the Bank. Shares will be purchased in accordance with the SEC's Rule 10b-18.

Pre-tax, Pre-Provision Net Income

Pre-tax, pre-provision net income, which is a non-GAAP measure decreased by 5.76% to $3,658,435 for the fourth quarter of 2021 compared to pre-tax, pre-provision net income of $3,882,322 in the linked quarter, primarily due to a decrease in non-interest income in the fourth quarter and increased by 9.99% compared to $3,325,866 for the fourth quarter of 2020.

Pre-tax, pre-provision net income is a non-GAAP financial measure that the Bank views as an important metric to assess its performance. The following table provides a reconciliation of this measure to net income, the most directly comparable financial measure in accordance with GAAP.

Reconciliation of Pre-Tax, Pre-Provision Net Income

	(Unaudited)		(Unaudited)		(Unaudited)
	For the three		For the three		For the three
	months ended		months ended		months ended
	December 31, 2021		September 30, 2021		December 31, 2020

After-tax Income	$	2,743,088	$	2,890,281	$	2,413,775
Income Taxes	560,347		763,041		674,091
Provision for Loan Losses	355,000		229,000		238,000

Pre-tax, Pre-provision Net Income	$	3,658,435	$	3,882,322	$	3,325,866

Paycheck Protection Program ("PPP") Activity

In the second quarter of 2020, the Company processed and funded 510 PPP loans (referred to as 2020 PPP loans), with balances of $106.37 million. The interest rate on these 2020 PPP loans was 1% and the term varied from two to five years. The SBA also paid processing fees which were deferred over the term of the loans. The loans were fully guaranteed and could be forgiven in whole or in part by the SBA.

In December of 2020, Congress approved a renewal of the PPP loan program with different rules and requirements for small businesses to receive loans, referred to as round two PPP loans. These 2021 PPP loans were also fully guaranteed and may be forgiven in whole or in part by the SBA. The interest rate on the loans was 1% and the term was five years. As with 2020 PPP loans, the SBA paid processing fees which are being deferred over the term of the loans. The Company originated $53.89 million of round two PPP loans during 2021.

Beginning in January of 2021, the Company began to process loan forgiveness applications from borrowers of 2020 PPP loans and round two PPP loans. As of December 31, 2021, the SBA had forgiven 638 of these PPP loans with balances of $102.75 million, and the Company had recognized income from acceleration of processing fees of $2.51 million.

Net Interest Income
The Company recorded net interest income of $8.02 million for the fourth quarter of 2021, an increase of 14.71% compared to the linked quarter, and 45.43% higher than the same period in 2020. The net interest margin in the fourth quarter of 2021 was 3.74%, higher by 31 basis points compared to the linked quarter and higher by 68 basis points compared to the same period in 2020. Income from PPP loan forgiveness during the fourth quarter was $755,510(from $19.75 million of PPP loans forgiven by the SBA), compared to PPP loan forgiveness income of $667,746 (from $27.92 million of PPP loans forgiven by the SBA) during the third quarter of 2021. Excluding the PPP loans, the net interest margin in the fourth quarter would have been 3.49%.

The following factors contributed to the changes in net interest margin during the fourth quarter of 2021 compared to the linked quarter:

Yields on average earning assets increased by 28 basis points to 4.05% compared to 3.77% in the linked quarter, driven by higher yields on loans and investment during the quarter.
Loan yields increased by 56 basis points to 5.11% from 4.55% in the linked quarter, while yields on investment securities increased by 31 basis points to 2.54% from 2.23% in the linked quarter.
Cost of funds decreased by 4 basis points to 0.33%, from 0.37% in the linked quarter, on continued declines in deposit costs, partially offset by higher borrowing costs related to the issuance of subordinated debt in the fourth quarter.
Excluding PPP loans would have reduced the net interest margin by 25 basis points.

Non-interest Income
Non-interest income was $1.76 million for the fourth quarter, lower by 32.39% compared to the linked quarter and lower by 62.67% compared to the same period in 2020. The lower non-interest income across linked quarters was primarily due to lower mortgage and SBA gain-on-sale revenue, 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.

Total Revenue
Total revenue, defined as the sum of net interest income, before provision for loan losses, and non-interest income, was higher by 1.92% compared to the linked quarter, primarily due to higher net interest income, and lower by 4.42% compared to the same period in 2020.

Non-interest Expenses
Non-interest expenses in the fourth quarter of 2021 were higher by 7.14% compared to the linked quarter and decreased by 11.35% compared to the same period in 2020. The increase in non-interest expenses in the fourth quarter compared to the prior quarter was largely due to costs related to the formation of the holding company, which was completed in the fourth quarter of 2021.

The Efficiency Ratio was 62.62% for the quarter ended December 31, 2021, compared to 59.57% for the prior quarter and 67.52% for the same period in 2020.

Asset Quality
Non-accrual loans increased to $8,890,960 or 1.48% of loans held-for-investment as of December 31, 2021, compared to $879,078 or 0.15% of loans held-for-investment at the end of the linked quarter. The increase in non-accrual loans in the fourth quarter was entirely due to a single relationship on which the bank is adequately secured and as a result we did not recognize any impairment. We are actively pursuing a workout on this relationship. There were no troubled debt restructurings ("TDRs") as of December 31, 2021. On December 31, 2021, 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 December 31, 2021. 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 $879,089 or 0.10% of total assets at September 30, 2021 compared to $8,890,960 or 1.01% of assets, at the end of the linked quarter.

In 2020, in accordance with the spirit and provisions of the CARES Act, the Company allowed borrowers who had been impacted by the COVID-19 pandemic to defer loan payments for six months. All of those borrowers had resumed loan payments and there were no loans on payment deferrals as of December 31, 2021.

Following an assessment of the collectability of the loans held-for-investment at the end of the fourth quarter, it was determined that a $355,000 provision for loan losses was necessary to account for loan growth and changes to environmental factors. The Company booked a provision of $229,000 in the third quarter of 2021. The Company's ALLL ratio was 1.08% of loans held-for-investment (or 1.14% of loans held-for investment excluding PPP loans) as of December 31, 2021 compared to an ALLL ratio of 1.05% at September 30, 2021 (or 1.17% of loans held-for-investment excluding PPP loans).

Total Assets
Total assets at December 31, 2021 were $876.85 million compared to $846.60 million on September 30, 2021. Changes in major asset categories during linked quarters were as follows:

Cash balances at the Federal Reserve decreased by $30.06 million
Available for sale investment balances increased by $34.28 million
PPP loan balances decreased by $25.45 million on loan forgiveness by the SBA
Other loans held-for investment grew by $57.34 million
Mortgage loans held-for-sale declined by $8.89 million

Total Liabilities
Total liabilities at December 31, 2021 were $792.69 million compared to total liabilities of $765.15 million on September 30, 2021. Total deposits were $701.69 million compared to total deposits of $675.50 million on September 30, 2021. Non-interest bearing demand deposits increased by $5.78 million during the quarter, and comprised 31.66% of total deposits at the end of the quarter, compared to 35.19% of total deposits on December 31, 2020. Other interest bearing demand deposits increased by $40.06 million, while time deposits declined by $20.70 million during the quarter. Federal Home Loan Bank advances increased by $10.00 million during the quarter, while PPP Liquidity Facility term advances decreased by $25.80 million, in line with PPP loan forgiveness. The Company issued subordinated debt during the fourth quarter of 2021. The subordinated debt balance, net of issuance costs, was $19.62 million on December 31, 2021.

Stockholders' Equity and Capital
Stockholders' equity at December 31, 2021 was $84.16 million compared to $81.45 million on September 30, 2021. Additional paid-in capital was $59.88 million on December 31, 2021 compared to $59.56 million on September 30, 2021. Accumulated Other Comprehensive Income ("AOCI"), which generally comprises unrealized gains and losses on available-for-sale securities and derivative positions, decreased by $361,021 on net unrealized losses during the fourth quarter of 2021. Retained earnings were $23.55 million on December 31, 2021 compared to $20.81 million at the end of the prior quarter. Total shares issued and outstanding were 7,262,757 on December 31, 2021 compared to 7,312,565 shares on September 30, 2021. The tangible book value of the Company's common stock at December 31, 2021 was $11.59 per share compared to $11.14 per share on September 30, 2021 and $10.09 per share on December 31, 2020.

As of December 31, 2021 of the Bank's capital ratios were well above regulatory minimum capital ratios for well-capitalized bank holding companies. The Bank's capital ratios on December 31, 2021 and September 30, 2021 were as follows:

	December 31, 2021	September 30, 2021

Total Capital Ratio	15.42%	13.68%

Tier 1 Capital Ratio	14.49%	12.73%
Common Equity
Tier 1 Capital Ratio	14.49%	12.73%

Leverage Ratio	11.85%	10.47%

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, an increase in unemployment levels and slowdowns in economic growth, including as a result of COVID-19; 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, 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.

FREEDOM FINANCIAL HOLDINGS
CONSOLIDATED BALANCE SHEETS

	(Unaudited) December 31, 2021		(Unaudited) September 30, 2021		(Audited) December 31, 2020
ASSETS
Cash and Due from Banks	$	2,536,450	$	2,430,918	$	1,792,660
Interest Bearing Deposits with Banks	31,696,892		61,753,387		25,543,295
Securities Available-for-Sale	171,532,394		137,253,597		97,188,125
Securities Held-to-Maturity	18,012,874		18,497,540		16,132,367
Restricted Stock Investments	3,321,250		2,951,550		3,607,800
Loans Held for Sale	13,297,125		22,191,469		45,047,711
PPP Loans Held for Investment	32,355,450		57,809,131		101,215,376
Other Loans Held for Investment	570,013,870		512,670,067		449,211,475
Allowance for Loan Losses	(6,486,120)		(6,011,021)		(5,454,925)
Net Loans	595,883,200		564,468,177		544,971,926
Bank Premises and Equipment, net	1,139,204		1,182,250		1,298,409
Accrued Interest Receivable	2,466,712		2,304,786		2,868,868
Deferred Tax Asset	1,804,238		1,223,546		1,154,078
Bank-Owned Life Insurance	24,579,879		20,428,825		17,035,214
Right of Use Asset, net	2,704,888		2,943,456		3,258,817
Other Assets	7,870,617		8,972,651		7,145,687
Total Assets	$	876,845,723	$	846,602,152	767,044,957
LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits
Demand Deposits
Non-interest Bearing	222,167,095		216,387,250		$	192,987,984
Interest Bearing	300,361,978		260,304,062		176,424,255
Savings Deposits	5,841,800		4,780,274		2,962,303
Time Deposits	173,322,527		194,024,810		176,114,292
Total Deposits	701,693,400		675,496,396		548,488,834
Federal Home Loan Bank Advances	29,035,714		19,035,714		30,071,429
PPP Liquidity Facility Advances	32,055,915		57,857,132		101,951,020
Subordinated Debt (Net of Issuance Costs)	19,616,869		-		-
Accrued Interest Payable	294,237		268,170		480,816
Lease Liability	2,823,885		3,060,286		3,347,075
Other Liabilities	7,166,978		9,429,531		9,247,507
Total Liabilities	$	792,686,998	765,147,229		693,586,681
Stockholders' Equity
Preferred stock, $0.01 par value, 5,000,000 shares authorized;
0 Shares Issued and Outstanding, December 31, 2021, September 30, 2021,
and December 31, 2020					-
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:
6,589,757, 6,639,565, and 6,610,647 Shares Issued and Outstanding
at December 31, 2021, September 30, 2021, and December 31, 2020 respectively
(Includes 106,171, 102,455, and 100,002 Unvested Shares at December 31, 2021,
September 30, 2021 and December 31, 2020, respectively)	65,898		65,371		65,106
Non-Voting Common Stock:
673,000 Shares Issued and Outstanding December 31, 2021, September 30, 2021,
and December 31, 2020	6,730		6,730		6,730
Additional Paid-in Capital	59,884,615		59,563,407		59,223,538
Accumulated Other Comprehensive Income, Net	651,272		1,012,293		1,340,654
Retained Earnings	23,550,210		20,807,122		12,822,248
Total Stockholders' Equity	84,158,725		81,454,923		73,458,276
Total Liabilities and Stockholders' Equity	$	876,845,723	$	846,602,152	767,044,957

FREEDOM FINANCIAL HOLDINGS
CONSOLIDATED STATEMENTS OF OPERATIONS

	(Unaudited)		(Unaudited)		(Unaudited)		(Audited)
	For the three		For the three		For the twelve		For the twelve
	months ended		months ended		months ended		months ended
	December 31, 2021		December 31, 2020		December 31, 2021		December 31, 2020
Interest Income
Interest and Fees on Loans	$	7,556,406	$	5,931,405	$	28,335,210	$	22,133,659
Interest on Investment Securities	1,092,427		630,449		3,135,735		2,288,660
Interest on Deposits with Other Banks	35,908		10,083		86,903		109,557
Total Interest Income	8,684,741		6,571,937		31,557,848		24,531,876
Interest Expense
Interest on Deposits	470,791		827,779		2,275,780		4,238,596
Interest on Borrowings	189,834		226,724		766,060		824,708
Total Interest Expense	660,625		1,054,503		3,041,840		5,063,304

Net Interest Income	8,024,116		5,517,433		28,516,009		19,468,571
Provision for Loan Losses	(355,000)		(238,000)		(839,000)		(1,492,000)
Net Interest Income After
Provision for Loan Losses	7,669,116		5,279,433		27,677,009		17,976,571
Non-Interest Income
Mortgage Loan Gain-on-Sale and Fee Revenue	1,456,195		4,283,961		8,286,068		13,949,984
SBA Gain-on-Sale Revenue	-		-		437,825		-
Service Charges and Other Income	95,335		30,535		254,911		118,322
Gain on Sale of Securities	6,315		3,921		7,432		46,703
Servicing Income	53,479		-		192,413		-
Swap Fee Income	-		270,450		-		657,712
Increase in Cash Surrender Value of Bank-
owned Life Insurance	151,054		132,555		544,665		639,213
Total Non-interest Income	1,762,378		4,721,422		9,723,314		15,411,934
Non-Interest Expenses
Officer and Employee Compensation
and Benefits	4,055,344		4,479,310		16,341,245		16,233,421
Occupancy Expense	317,038		294,601		1,232,056		1,194,320
Equipment and Depreciation Expense	170,335		227,758		662,050		735,374
Insurance Expense	74,357		49,008		267,583		196,442
Professional Fees	470,786		417,497		1,365,057		1,298,943
Data and Item Processing	299,120		322,373		1,181,347		1,012,601
Advertising	80,569		83,559		329,059		278,602
Franchise Taxes and State Assessment Fees	200,084		185,379		778,069		725,466
Mortgage Fees and Settlements	172,967		675,218		1,141,200		1,952,049
Other Operating Expense	287,459		178,286		847,150		678,284
Total Non-interest Expenses	6,128,059		6,912,989		24,144,816		24,305,502
Income Before Income Taxes	3,303,435		3,087,867		13,255,507		9,083,004
Income Tax Expense	560,347		674,091		2,527,546		1,718,526
Net Income	$	2,743,088	$	2,413,776	$	10,727,961	$	7,364,478
Earnings per Common Share - Basic	$	0.37	$	0.33	$	1.46	$	1.02
Earnings per Common Share - Diluted	$	0.37	$	0.33	$	1.44	$	1.01
Weighted-Average Common Shares
Outstanding - Basic	7,336,016		7,252,552		7,352,237		7,247,895
Weighted-Average Common Shares
Outstanding - Diluted	7,438,268		7,312,247		7,449,683		7,309,011

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
	December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020
Interest Income
Interest and Fees on Loans	$	7,556,406	$	6,914,453	$	6,951,964	$	6,912,386	$	5,931,405
Interest on Investment Securities	1,092,427		750,570		655,996		636,742		630,449
Interest on Deposits with Other Banks	35,908		26,994		15,170		8,831		10,083
Total Interest Income	8,684,741		7,692,017		7,623,130		7,557,959		6,571,937

Interest Expense
Interest on Deposits	470,791		546,168		582,997		675,824		827,780
Interest on Borrowings	189,834		150,599		212,703		212,923		226,724
Total Interest Expense	660,625		696,767		795,700		888,747		1,054,504

Net Interest Income	8,024,116		6,995,249		6,827,430		6,669,212		5,517,433
Provision for Loan Losses	(355,000)		(229,000)		(191,000)		(64,000)		(238,000)
Net Interest Income after
Provision for Loan Losses	7,669,116		6,766,249		6,636,430		6,605,212		5,279,433
Non-Interest Income
Mortgage Loan Gain-on-Sale and Fee Revenue	1,456,195		1,995,535		2,012,153		2,822,186		4,283,961
SBA Gain-on-Sale Revenue	-		371,172		66,652
Service Charges and Other Income	95,335		67,374		43,501		48,702		30,535
Gains on Sale of Securities	6,315		(13,493)		1,726		12,885		3,921
Servicing Income	53,479		44,443		42,847		51,643		-
Swap Fee Income	-		-		-		-		270,450
Increase in Cash Surrender Value of Bank-
owned Life Insurance	151,054		141,608		126,117		125,886		132,555
Total Non-interest Income	1,762,378		2,606,639		2,292,996		3,061,302		4,721,422


Revenue	$	9,786,494	$	9,601,889	$	9,120,426	$	9,730,514	$	10,238,855

Non-Interest Expenses
Officer and Employee Compensation
and Benefits	4,055,344		3,862,969		3,760,697		4,662,235		4,479,310
Occupancy Expense	317,038		318,109		306,521		290,389		294,600
Equipment and Depreciation Expense	170,335		176,379		159,420		155,916		227,758
Insurance Expense	74,357		70,814		65,356		57,056		49,008
Professional Fees	470,786		243,678		359,159		291,434		417,497
Data and Item Processing	299,120		303,444		311,000		267,783		322,373
Advertising	80,569		92,806		82,605		73,078		83,559
Franchise Taxes and State Assessment Fees	200,084		200,048		192,508		185,429		185,379
Mortgage Fees and Settlements	172,967		230,582		274,231		463,419		675,218
Other Operating Expense	287,459		220,739		177,593		161,361		178,287

Total Non-interest Expenses	6,128,059		5,719,568		5,689,090		6,608,100		6,912,989
Income before Income Taxes	3,303,435		3,653,322		3,240,336		3,058,414		3,087,866

Income Tax Expense	560,347		763,041		613,955		590,203		674,091

Net Income	$	2,743,088	$	2,890,281	$	2,626,381	$	2,468,211	$	2,413,775
Earnings per Common Share - Basic	$	0.37	$	0.39	$	0.36	$	0.34	$	0.33
Earnings per Common Share - Diluted	$	0.37	$	0.39	$	0.36	$	0.34	$	0.33
Weighted-Average Common Shares
Outstanding - Basic	7,336,016		7,341,635		7,306,710		7,295,190		7,252,552
Weighted-Average Common Shares
Outstanding - Diluted	7,438,268		7,395,062		7,354,389		7,334,463		7,312,247

Average Balances, Income and Expenses, Yields and Rates
(Unaudited)

	Three Months Ended					Three Months Ended					Three Months Ended					Three Months Ended					Three Months Ended
	December 31, 2021					September 30, 2021					June 30, 2021					March 31, 2021					December 31, 2020
	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	$	91,458,843	$	35,908	0.16%	$	71,114,495	$	26,994	0.15%	$	64,848,200	$	15,170	0.09%	$	42,563,835	$	8,831	0.08%	$	38,217,380	$	10,083	0.10%

Investments (Tax Exempt)	23,460,432		190,195			27,138,446		177,809			23,292,663		223,691			24,057,819		152,583			23,815,369		151,564
Investments (Taxable)	153,582,906		942,173			113,180,210		610,101			103,971,494		479,280			91,675,593		516,202			90,609,147		510,714
Total Investments	177,043,338		1,132,368		2.54%	140,318,656		787,910		2.23%	127,264,157		702,971		2.22%	115,733,412		668,785		2.34%	114,424,516		662,278		2.30%

Total Loans	586,725,477		7,556,406		5.11%	602,948,952		$6,914,454		4.55%	622,826,541		$	6,951,964	4.48%	607,880,043		$	6,912,386	4.61%	569,936,960		5,931,405		4.14%

Earning Assets	855,227,658		8,724,682		4.05%	814,382,103		7,729,358		3.77%	814,938,898		7,670,105		3.78%	766,177,290		7,590,002		4.02%	722,578,856		6,603,766		3.64%



Assets	$	891,226,178				$	847,472,317				$	846,402,419				$	794,829,492				$	747,427,986

Liabilities
Interest Checking	$	88,172,651	38,893		0.18%	$	36,659,322	12,240		0.13%	$	34,272,772	10,907		0.13%	$	32,270,173	15,629		0.20%	$	39,206,072	15,165		0.15%
Money Market	202,560,648		85,450		0.17%	189,055,851		80,347		0.17%	164,337,737		63,989		0.16%	148,969,677		62,497		0.17%	138,196,830		74,468		0.21%
Savings	5,336,531		1,431		0.11%	4,147,591		1,170		0.11%	4,195,416		1,078		0.10%	3,301,845		814		0.10%	2,836,001		717		0.10%
Time Deposits	187,240,613		345,016		0.73%	197,133,663		452,411		0.91%	197,180,571		507,023		1.03%	172,994,520		596,885		1.40%	175,514,471		737,430		1.67%
Interest Bearing Deposits	483,310,443		470,790		0.38%	426,996,427		546,168		0.51%	399,986,496		582,997		0.58%	357,536,215		675,825		0.77%	355,753,374		827,780		0.93%

Borrowings	$	81,399,848	189,834		0.93%	$	101,033,443	150,599		0.59%	$	138,398,143	212,703		0.62%	$	134,120,845	212,923		0.64%	$	135,328,997	226,724		0.67%

Interest Bearing Liabilities	564,710,291		660,624		0.46%	528,029,870		696,767		0.52%	538,384,639		795,700		0.59%	491,657,060		888,748		0.73%	491,082,371		1,054,504		0.85%

Non Interest Bearing Deposits	$	231,181,073				$	226,514,808				$	217,927,934				$	215,148,589				$	177,583,960

Cost of Funds					0.33%					0.37%					0.42%					0.51%					0.63%

Net Interest Margin¹			$	8,064,057	3.74%			$	7,032,590	3.43%			$	6,874,405	3.38%			$	6,701,254	3.55%			$	5,549,262	3.06%
Shareholders Equity	$	82,994,140				$	80,866,605				$	77,178,196				$	74,480,607				$	71,511,341

¹Net 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					Twelve Months Ended					Twelve Months Ended
	December 31, 2021		Income /			December 30, 2020		Income /			December 31, 2021		Income /			December 30, 2020		Income /
	Average Balance		Expense		Yield	Average Balance		Expense		Yield	Average Balance		Expense		Yield	Average Balance		Expense		Yield
Assets
Cash	$	91,458,843	$	35,908	0.16%	$	38,217,380	$	10,083	0.10%	$	67,640,215	$	86,903	0.13%	$	38,093,605	$	109,557	0.29%

Investments (Tax Exempt)	23,460,432		190,195			23,815,369		151,564			24,492,967		668,682			11,469,927		488,649
Investments (Taxable)	153,582,906		942,173			90,609,147		510,714			115,765,523		2,607,476			74,804,458		1,902,627
Total Investments	177,043,338		1,132,368		2.54%	114,424,516		662,278		2.30%	140,258,490		3,276,158		2.34%	86,274,385		2,391,276		2.77%

Total Loans	586,725,477		7,556,406		5.11%	569,936,960		5,931,405		4.14%	605,029,296		28,335,210		4.68%	435,139,660		22,133,688		4.35%

Earning Assets	855,227,658		8,724,682		4.05%	722,578,856		6,603,766		3.64%	812,928,001		31,698,271		3.90%	633,431,247		24,634,521		3.89%

Assets	$	891,226,178				$	747,427,986				$	845,256,803				$	656,218,698

Liabilities
Interest Checking	$	88,172,651	38,893		0.18%	$	39,206,072	15,165		0.15%	$	47,966,245	77,669		0.16%	$	28,215,189	57,146		0.20%
Money Market	202,560,648		85,450		0.17%	138,196,830		74,468		0.21%	176,412,939		292,283		0.17%	124,526,068		587,777		0.47%
Savings	5,336,531		1,431		0.11%	2,836,001		717		0.10%	4,250,652		4,494		0.11%	2,703,310		3,279		0.12%
Time Deposits	187,240,613		345,016		0.73%	175,514,471		737,430		1.67%	189,083,082		1,901,335		1.01%	183,086,149		3,590,396		1.96%
Interest Bearing Deposits	483,310,443		470,790		0.38%	355,753,374		827,780		0.93%	417,712,918		2,275,781		0.54%	338,530,716		4,238,597		1.25%

Borrowings	81,399,848		189,834		0.93%	135,328,997		226,724		0.67%	113,558,822		766,060		0.67%	105,749,331		824,708		0.78%

Interest Bearing Liabilities	564,710,291		660,624		0.46%	491,082,371		1,054,504		0.85%	531,271,740		3,041,841		0.57%	444,280,048		5,063,305		1.14%

Non Interest Bearing Deposits	$	231,181,073				$	177,583,960				$	222,747,496				$	138,007,364

Cost of Funds					0.33%					0.63%					0.40%					0.87%

Net Interest Margin¹			$	8,064,057	3.74%			$	5,549,262	3.06%			$	28,656,431	3.53%			$	19,571,217	3.09%
Shareholders Equity	$	82,994,140				$	71,511,341				$	78,908,655				$	67,908,517
ROAA	1.22%					1.28%					1.27%					1.12%
ROAE	13.11%					13.43%					13.60%					10.84%

¹Net 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	December 31, 2021	September 30, 2021	June 30, 2021	March 31, 2021	December 31, 2020
Loans held-for-investment to Deposits	85.85%	84.45%	96.14%	95.51%	100.35%
Income Statement Ratios (Quarterly)
Return on Average Assets (ROAA)	1.22%	1.35%	1.24%	1.26%	1.28%
Return on Average Equity (ROAE)	13.11%	14.18%	13.65%	13.44%	13.43%
Efficiency Ratio	62.62%	59.57%	62.38%	67.91%	67.52%
Net Interest Margin¹	3.74%	3.43%	3.38%	3.55%	3.06%
Yield on Average Earning Assets	4.05%	3.77%	3.78%	4.02%	3.64%
Yield on Securities	2.54%	2.23%	2.22%	2.34%	2.30%
Yield on Loans	5.11%	4.55%	4.48%	4.61%	4.14%
Cost of Funds	0.33%	0.37%	0.42%	0.51%	0.63%
Noninterest income to Total Revenue	18.01%	27.15%	25.14%	31.46%	46.11%
Per Share Data
Tangible Book Value	$11.59	$11.14	$10.81	$10.35	$10.09
Share Price Data
Closing Price	$13.37	$12.55	$11.98	$10.90	$9.10
Book Value Multiple	115%	113%	111%	105%	90%
Common Stock Data
Outstanding Shares at End of Period	7,262,757	7,312,565	7,305,581	7,307,915	7,283,647
Weighted Average shares outstanding, basic	7,336,016	7,341,635	7,306,710	7,295,190	7,252,552
Weighted Average shares outstanding, diluted	7,438,268	7,395,062	7,354,389	7,334,463	7,312,247
Capital Ratios
Tier 1 Leverage ratio	11.85%	10.47%	10.56%	10.95%	11.20%
Common Equity Tier 1 ratio	14.49%	12.73%	12.90%	12.88%	13.21%
Tier 1 Risk Based Capital ratio	14.49%	12.73%	12.90%	12.88%	13.21%
Total Risk Based Capital ratio	15.42%	13.68%	13.86%	13.84%	14.21%
Credit Quality
Net Charge-offs to Average Loans	-0.02%	0.00%	0.00%	0.00%	0.00%
Total Non-performing Loans to loans held-for-investment	1.48%	0.15%	0.15%	0.41%	0.58%
Total Non-performing Assets to Total Assets	1.01%	0.10%	0.11%	0.28%	0.41%
Nonaccrual Loans to loans held-for-investment	1.48%	0.15%	0.15%	0.41%	0.58%
Provision for Loan and Lease Losses	$355,000	$229,000	$191,000	$64,000	$238,000
Allowance for Loan and Lease Losses to loans held-for-investment	1.08%	1.05%	0.96%	0.92%	0.99%
Allowance for Loan and Lease Losses to loans held-for-investment (ex PPP loans)	1.14%	1.17%	1.15%	1.16%	1.21%

¹Net 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