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The Freedom Bank of Virginia (Bulletin Board:FDVA.OB): finished its third consecutive year and fifteenth consecutive profitable quarter on December 31, 2012.
Assets grew to $238,642,144 at December 31, 2012. This was up 14.98% from $207,557,264 at the prior period. The investment in additional lending officers resulted in double digit loan growth for the year. New lenders made a particularly strong contribution in the fourth quarter with loans to medical professionals. Gross loans increased 11.33% to $171,901,847 up from $154,407,193 at December 31, 2011. In addition to strong loan growth, Investment Securities Available for Sale increased $13,533,997 (89.13%) to $28,717,795 at December 31, 2012.
Deposit growth was strong for the year at 16.05%. Non-interest bearing deposits increased $9,558,806 (37.64%) to $34,951,109. This growth was due primarily to the Bank’s strong penetration of the government contracting market. The Bank has focused on this market for many years and strong deposit growth in 2012 resulted from this long term effort. Time deposits increased $29,429,419 (21.55%) to $139,555,489 at December 31, 2012. Part of the strong growth in these areas was reduced by a decline in interest bearing checking accounts, which dropped $5,071,905 (12.17%) to $36,601,864 during the year.
Net profit declined for the year primarily due to investments the Bank made in loan growth and improving asset quality. The Bank increased its lending staff by 80% late in the year. This helped increase loan production, but also increased compensation expense by $270,000 in the fourth quarter. The Bank earned a net profit in 2012 of $1,192,000 ($0.42 per share), down from $1,900,300 in 2010 ($0.67 per share). Asset quality improved greatly. Loans on which the Bank is no longer accruing interest was halved from 2.43% at December 31, 2011 to 1.21% at December 31, 2012. Loans past due for regularly scheduled payments declined from 1.67% at December 31, 2011 to 0.23% at December 31, 2012. Although the result positioned the Bank well for the coming year, it did require the Bank to increase the Provision for Possible Loan Losses by $340,200 over the prior year.