Joseph J. Thomas, President, and CEO, commented, "Our team worked hard in the third quarter to achieve improved financial results by expanding net interest margin and growing C&I loans, while also reducing wholesale funding and addressing problem loans. The company's net income for the third quarter increased 40.4% over the second quarter of 2025 and 225.6% compared to the third quarter 2024. Our net interest margin for the quarter increased 34 basis points to 2.66% compared to third quarter of 2024. Improvements were partially achieved through a reduction in wholesale deposits of $127.3 million or 36.5% during the first nine months of the year. The Bank produced $31 million in new commercial loan balances in the third quarter compared to $16 million in the second quarter of 2025, reflecting continued client confidence. Loans Held for Investment were flat in the quarter as a result of the payment and resolution of $6.7 million in Classified Assets in the quarter. We continue to contribute to our allowance as we work through problem assets and navigate a period elevated risk and weakening economic conditions in our market. Our levels of liquidity and capital continue to provide resiliency at a time of market uncertainty. The reduction in short term rates that occurred at the end of the third quarter is expected to positively impact margin and earnings in the year ahead."
Third Quarter 2025 Highlights include:
The Company posted net income of $1,122,930 or $0.16 per diluted share for the third quarter compared to net income of $799,896 or $0.11 per diluted share for the three months ended June 30, 2025, and net income of $344,919 or $0.05 per diluted share for the three months ending September 30, 2024.
Tangible Book Value per share1 increased during the quarter to $12.45 on September 30, 2025, compared to $12.01 on June 30, 2025.
Return on Average Assets ("ROAA") was 0.41% for the quarter ended September 30, 2025, compared to ROAA of 0.29% for the quarter ended June 30, 2025, and 0.12% for the three months ended September 30, 2024.
Return on Average Equity ("ROAE") was 5.57% for the quarter ended September 30, 2025, compared to ROAE of 3.97% for the three months ended June 30, 2025, and 1.70% for the three months ended September 30, 2024.
Total Assets were $1.03 billion on September 30, 2025, a decrease of $40.7 million or 3.80% from total assets on June 30, 2025 as the Bank reduced brokered funding.
Loans held-for-investment (excluding PPP loans) decreased by $737 thousand or 0.10% during the quarter.
Total deposits decreased by $63.2 million or by 6.89% during the quarter, $62.9 million of which was the intentional reduction in brokered CDs.
Non-interest-bearing demand deposits decreased by $210 thousand from the linked quarter to $126.71 million and represented 14.82% of total deposits on September 30, 2025.
The net interest margin2 was flat in the third quarter at 2.66%, same as the linked quarter and increased by 34 basis points compared to the same period in 2024. The change from the prior year's third quarter represents improvements in the cost of funds as the Bank has decreased its use of wholesale funding and rate reductions in overnight cost of funds in the capital markets.
The cost of funds was 3.19% for the second and third quarter, and lower by 57 basis points compared to the same period in 2024, as wholesale funding use was reduced and the market rate environment came down.
Non-interest income increased by 8.47% compared to the linked quarter and increased by 23.4% compared to the same period in 2024. The increase in non-interest income in the third quarter of 2025 compared to the linked quarter was primarily due to higher revenue from BOLI products and an increase in the value of investments in SBIC's.
Non-interest expense in the third quarter decreased by 0.38% compared to the linked quarter and increased by 0.99% compared to the same period in 2024. The decrease in non-interest expense compared to the linked quarter and prior calendar quarter was primarily due to savings in professional fees and outside services.
The Efficiency Ratio3 was 77.43% for the quarter ended September 30, 2025, compared to 77.57% for the linked quarter and 88.13% for the same period in 2024.
Uninsured deposits were 24.51% of total deposits and total liquidity4 was 136.91% of uninsured deposits on September 30, 2025.
Net charge offs increased in the third quarter and were 0.13% of average loans compared to 0.01% in the prior quarter. The ratio of non-accrual loans to loans held-for-investment was 2.30% on September 30, 2025, compared to 1.45% on June 30, 2025, and 1.52% on September 30, 2024. The ratio of non-performing assets to total assets was 1.65% on September 30, 2025, compared to 0.98% on June 30, 2025, and 1.07% on September 30, 2024.
The Company had a loan loss provision of $496,824 in the third quarter, due to the charge-off of one consumer and one commercial loan. This was partially offset by reduction in the provision for unfunded commitments as those expired or were funded, and a reversal of a specific reserve for one corporate bond that was upgraded in the quarter.
The ratio of the allowance for credit losses to loans held-for-investment was 0.96% compared to 0.96% in the linked quarter.
The Company continues to be well capitalized and capital ratios continue to be strong with a Leverage ratio of 11.23%, Common Equity Tier 1 ratio of 14.64%, Tier 1 Risk Based Capital ratio of 14.64% and a Total Capital ratio of 15.53%.
Net Interest IncomeThe Company recorded net interest income of $6.75 million for the third quarter, lower by 1.85% compared to the linked quarter, and higher by 10.66% compared to the same period in 2024. The net interest margin in the third quarter of 2025 was 2.66%, flat compared to the linked quarter and higher by 34 basis points compared to the same period in 2024.
The following factors contributed to the changes in net interest margin during the third quarter of 2025 compared to the linked and calendar quarters.
Yields on average earning assets were 5.72% in the third quarter of 2025, lower by 1 basis point compared to the linked quarter, and lower by 21 basis points compared to the calendar quarter. The decline in yields on average earning assets in the third quarter was primarily due to reduction in market rates in the economic environment.
Loan yields increased by 2 basis points to 6.22% from 6.20% in the linked quarter, while yields on investment securities decreased by 10 basis points to 4.29% from 4.39% in the linked quarter. Loan yields decreased by 8 basis points, while yields on investment securities decreased by 56 basis points compared to the calendar quarter.
Cost of funds remained flat 3.19% in both the 2nd and 3rd quarter, and was lower by 57 basis points compared to the calendar quarter.
Non-interest IncomeNon-interest income was $1.42 million for the third quarter, an increase of 8.47% when compared to the linked quarter and an increase of 23.40% when compared to the same period in 2024. The increase in non-interest income in the third quarter of 2025 compared to the linked quarter was primarily due to an increase in the value of investments in SBIC's and BOLI income.
Total Revenue5Total revenue, defined as the sum of net interest income, before provision for loan losses, and non-interest income, was lower by 0.2% compared to the linked quarter and higher by 12.69% compared to the calendar quarter in 2024. The decrease in total revenue compared to the linked quarter was primarily due to lower average earning assets in the quarter. The increase over the prior year quarter stems improvements in both Net Interest Income, the improvement in margin, and from increased non-interest income via SBIC and BOLI income.
Non-interest ExpenseNon-interest expense in the third quarter decreased by 0.38% compared to the linked quarter and decreased by 0.99% compared to the same period in 2024. The decrease in non-interest expense compared to both the linked and calendar quarters was primarily due to lower expense on professional fees and outside services.
The Efficiency Ratio was 77.43% for the quarter ended September 30, 2025, compared to 77.57% for the linked quarter and 88.13% for the same period in 2024.
Asset QualityNon-accrual loans increased in the third quarter to 2.3% of loans held-for-investment compared to 1.45% of loans held-for-investment at the end of the linked quarter, as five loans in the quarter went on non-accrual. 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 1.65% of total assets as of September 30, 2025, compared to 0.98% of total assets, at the end of the linked quarter.
The Company recognized a provision for loan losses of $496,824 related to two charged off loans in the quarter, partially offset by the release of specific reserves on an upgraded corporate bond and the reduction in provisions for unfunded commitments.
The Company's ratio of Allowance for Credit Losses to loans held-for-investment was 0.96% as of September 30, 2025, compared to the ratio of Allowance for Credit Losses to loans held-for-investment of 0.96% as of June 30, 2025.
Total AssetsTotal assets on September 30, 2025 were $1.03 billion compared to total assets of $1.07 billion on June 30, 2025.
Total LiabilitiesTotal liabilities on September 30, 2025, were $944.17 million compared to total liabilities of $987.96 million on June 30, 2025, and total liabilities of $1.01 billion on December 31, 2024. Total deposits were $855.02 million on September 30, 2025, compared to total deposits of $918.25 million on June 30, 2025, and total deposits of $909.53 million on December 31, 2024. Non-interest-bearing demand deposits decreased by $210 thousand during the third quarter and comprised 14.82% of total deposits at the end of the third quarter. Federal Home Loan Bank borrowings increased by $20 million during the quarter.
Stockholders' Equity and CapitalStockholders' equity as of September 30, 2025, was $87.19 million compared to $84.12 million on March 31, 2025, and stockholders' equity of $81.44 million on December 31, 2024. AOCI improved by $1.8 million over the quarter as rates came down and the bonds moved closer to maturity. The tangible book value of the Company's common stock on September 30, 2025, was $12.45 per share compared to $12.01 on June 30, 2025, and tangible book value per share of $11.39 on December 31, 2024. Excluding AOCI losses/gains, the tangible book value of the Company's common stock on June 30, 2025, was $14.58 per share compared to $14.39 on March 31, 2025, and $13.94 per share on December 31, 2024.
Stock Buyback ProgramIn the first quarter, the Company purchased 177,692 shares pursuant to its previously announced share repurchase program, but made no repurchases in the second or third quarter. As of September 30, 2025, the Company had repurchased 214,400 of the 250,000 shares authorized for repurchase under the program. Our Board of Directors continues to believe that the share buyback program represents a disciplined capital management strategy for the Company.
Capital RatiosAs of September 30, 2025, the Bank's capital ratios were well above regulatory minimum capital ratios for well-capitalized bank holding companies. The Bank's capital ratios as of September 30, 2025, and December 31, 2024, were as follows:
September 30, 2025
December 31, 2024
Total Capital Ratio
15.53 %
14.35 %
Tier 1 Capital Ratio
14.64 %
13.57 %
Common Equity Tier 1 Capital Ratio
14.64 %
13.57 %
Leverage Ratio
11.23 %
10.39 %
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. For information about deposits, loans 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 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 the impact of geopolitical conflicts, such as the war between Russia and Ukraine and the conflict in the Middle East; U.S. and global trade policies and changes, including the impact of the imposition of or changes in tariffs and trade barriers, adverse developments in the financial services industry such as the bank failures in 2023; maintenance and development of well-established and valued client relationships and referral source relationships; the adequacy or inadequacy of our allowance for credit losses; acquisition or loss of key production personnel; whether we realize the expected impact of our investments in technology and personnel; and the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, wars, terrorist acts or public health events, 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.
FREEDOM FINANCIAL HOLDINGS
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Unaudited)
(Audited)
September 30,
June 30,
December 31,
2025
2025
2024
ASSETS
Cash and Due from Banks
$ 4,818,837
$ 10,668,471
$ 5,685,008
Interest Bearing Deposits with Banks
18,496,712
48,991,785
23,004,874
Securities Available-for-Sale
187,268,762
193,740,578
209,687,859
Securities Held-to-Maturity
19,343,569
19,475,547
20,315,651
Restricted Stock Investments
6,385,300
5,065,300
6,249,000
Loans Held for Sale
7,183,273
4,882,264
5,963,969
PPP Loans Held for Investment
125,403
133,049
159,825
Other Loans Held for Investment
741,335,198
742,071,827
767,737,719
Allowance for Loan Losses
(7,137,980)
(7,188,387)
(6,534,757)
Net Loans
741,505,894
739,898,753
767,326,756
Bank Premises and Equipment, net
692,681
717,599
767,773
Accrued Interest Receivable
4,264,875
4,567,221
4,155,077
Deferred Tax Asset
6,063,117
6,587,963
7,560,441
Bank-Owned Life Insurance
28,236,091
28,004,541
27,560,616
Right of Use Asset, net
1,419,569
1,572,800
1,874,403
Other Assets
12,867,243
12,791,140
16,299,753
Total Assets
$ 1,031,362,649
$ 1,072,081,698
$ 1,090,487,211
LIABILITIES AND STOCKHOLDERS' EQUITY
-
-
Deposits
Demand Deposits
Non-interest Bearing
$ 126,711,971
$ 126,922,031
133,665,194
Interest Bearing
$ 549,852,965
552,796,334
$ 475,397,117
Savings Deposits
$ 1,988,586
2,550,937
3,866,241
Time Deposits
$ 176,467,460
235,975,996
296,603,142
Total Deposits
855,020,982
918,245,298
909,531,694
Federal Home Loan Bank Advances
60,000,000
40,000,000
65,000,000
Other Borrowings
125,403
133,049
159,825
Subordinated Debt (Net of Issuance Costs)
19,909,087
19,889,606
19,850,643
Accrued Interest Payable
1,098,199
2,014,296
2,445,741
Lease Liability
1,520,701
1,694,646
2,013,912
Other Liabilities
6,495,085
5,981,294
10,045,990
Total Liabilities
$ 944,169,457
$ 987,958,189
1,009,047,805
Stockholders' Equity
Preferred stock, $0.01 par value, 5,000,000 shares authorized:
0 Shares Issued and Outstanding, September 30, 2025, June 30, 2025, and December 31, 2024
Common Stock, $0.01 Par Value, 25,000,000 Shares authorized:
23,000,000 Shares Voting and 2,000,000 Shares Non-voting.
Voting Common Stock:
7,002,103 , 7,002,103 and 7,268,087 Shares Issued and Outstanding
at September 30, 2025, June 30, 2025, and December 31, 2024 respectively
70,021
70,021
71,501
Non-Voting Common Stock:
-
-
0 Shares Issued and Outstanding at September 30, 2025, June 30, 2025,
and December 31, 2024 respectively)
-
Additional Paid-in Capital
56,800,773
56,630,385
58,347,356
Accumulated Other Comprehensive Income, Net
(14,881,004)
(16,657,368)
(18,240,683)
Retained Earnings
45,203,402
44,080,472
41,261,232
Total Stockholders' Equity
$ 87,193,192.52
$ 84,123,509.55
81,439,406
Total Liabilities and Stockholders' Equity
$ 1,031,362,649
$ 1,072,081,698
$ 1,090,487,211
FREEDOM FINANCIAL HOLDINGS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
For the three
For the three
For the nine
For the nine
months ended
months ended
months ended
months ended
September 30, 2025
September 30, 2024
September 30, 2025
September 30, 2024
Interest Income
Interest and Fees on Loans
$ 11,671,310
$ 12,358,391
$ 36,048,818
$ 36,534,919
Interest on Investment Securities
$ 2,307,732
2,932,219
$ 7,371,904
8,731,004
Interest on Deposits with Other Banks
$ 507,622
390,373
$ 1,520,740
1,094,445
Total Interest Income
14,486,664
15,680,983
44,941,462
46,360,368
Interest Expense
Interest on Deposits
$ 7,036,552
7,968,925
$ 21,257,818
23,858,749
Interest on Borrowings
$ 701,474
1,613,452
$ 2,338,844
3,667,858
Total Interest Expense
7,738,026
9,582,377
23,596,662
27,526,607
Net Interest Income
6,748,638
6,098,606
21,344,800
18,833,761
Provision/(Recovery) for Loan Losses
$ 496,824
546,439
$ 1,470,372
649,044
Net Interest Income After
Provision for Loan Losses
6,251,814
5,552,167
19,874,428
19,482,805
Non-Interest Income
Mortgage Loan Gain-on-Sale and Fee Revenue
718,684
649,097
2,173,755
1,931,187
SBA Gain-on-Sale Revenue
-
-
-
287,032
Service Charges and Other Income
$ 453,981
255,889
$ 798,103
594,271
Gain on Sale of Securities
-
-
-
1,816
Servicing Income
19,060
36,752
66,207
114,273
Swap Fee Income
-
-
-
-
Increase in Cash Surrender Value of Bank-
owned Life Insurance
231,549
211,642
675,474
616,402
Total Non-interest Income
1,423,274
1,153,380
3,713,539
3,544,981
Total Revenue
8,171,913
7,251,986
25,058,339
22,378,742
Non-Interest Expenses
Officer and Employee Compensation
and Benefits
$ 4,067,037
3,674,499
$ 11,589,333
10,953,786
Occupancy Expense
$ 246,378
233,807
$ 732,820
880,916
Equipment and Depreciation Expense
$ 16,039
285,083
$ 41,384
666,387
Insurance Expense
$ 244,170
232,774
$ 690,281
686,040
Professional Fees
$ 291,975
532,379
$ 1,322,188
1,627,717
Data and Item Processing
$ 540,506
433,431
$ 1,674,211
1,090,292
Advertising
$ 112,566
172,136
$ 347,357
449,488
Franchise Taxes and State Assessment Fees
$ 334,422
329,056
$ 963,080
915,768
Mortgage Fees and Settlements
106,266
123,853
280,814
302,471
Other Operating Expense
$ 368,343
374,273
$ 1,058,790
1,096,487
Total Non-interest Expenses
6,327,702
6,391,291
18,700,258
18,669,352
Income Before Income Taxes
1,347,386
314,256
4,887,709
4,358,434
Income Tax Expense/(Benefit)
224,456
(30,663)
945,538
805,056
Net Income
$ 1,122,930
$ 344,919
$ 3,942,172
$ 3,553,378
Earnings per Common Share - Basic
$ 0.16
$ 0.05
$ 0.55
$ 0.49
Earnings per Common Share - Diluted
$ 0.16
$ 0.05
$ 0.55
$ 0.49
Weighted-Average Common Shares
Outstanding - Basic
7,134,446
7,263,880
7,141,452
7,271,981
Weighted-Average Common Shares
Outstanding - Diluted
7,184,688
7,299,553
7,194,576
7,314,290
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
September 30, 2025
June 30, 2025
March 31, 2025
December 31, 2024
September 30, 2024
Interest Income
Interest and Fees on Loans
$ 11,671,310
$ 11,673,927
$ 12,703,493
$ 11,991,578
$ 12,358,391
Interest on Investment Securities
$ 2,307,732
2,450,914
2,613,258
2,798,420
2,932,219
Interest on Deposits with Other Banks
$ 507,622
750,610
262,507
446,184
390,373
Total Interest Income
14,486,664
14,875,451
15,579,258
15,236,182
15,680,983
Interest Expense
Interest on Deposits
7,036,552
7,275,073
6,946,194
7,628,382
7,968,925
Interest on Borrowings
701,474
724,216
913,154
1,183,419
1,613,452
Total Interest Expense
7,738,026
7,999,289
7,859,348
8,811,801
9,582,377
Net Interest Income
6,748,638
6,876,162
7,719,910
6,424,381
6,098,606
Provision/(Recovery) for Loan Losses
496,824
688,865
284,683
14,922
546,439
Net Interest Income after
Provision/Recovery for Loan Losses
6,251,814
6,187,297
