FDVA: Loan Growth, Expense Control On Track, But NIM Falls Sharply; Maintaining Target Price; Reaffirming Neutral Rating.

Freedom Bank of Virginia reported 2Q19 net income of $509k, compared to the $515k posted in 1Q19 and the $700k recorded in the year-ago period. This translates to 2Q19 earnings per share of $0.07 compared to $0.07 in 1Q19 and $0.10 in 2Q18. The posted results fell $0.03 short of our $0.10 EPS estimate. Greater-than-expected NIM compression, was partially offset by lower noninterest expenses. The loan loss provision increased versus the prior quarter and the company recorded a significantly higher effective tax rate compared to 1Q19, but both of these changes had been anticipated. Highlights from the quarter include:

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Media Contact: Joseph Gladue, CFA, PRM

Joseph Gladue has over 30 years industry experience with over 25 years focused on banking research. Mr. Gladue was Director of Research at several firms including Cohen & Company and Merion Capital Group. Previously he was a senior research analyst at B. Riley and worked in finance at Bank of the Internet. Joe has covered small and mid-cap banks across the US and has also follow companies in other financial service industries. Joe also provides his banking expertise in the asset management arena for Bluestone Capital Partners. Joe can be reached at jgladue@aldensecurities.com, 215-572-8700.

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