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Freedom Financial Holdings Announces Earnings for Fourth Quarter and Full Year 2022

Freedom Financial Holdings Announces Earnings for Fourth Quarter and Full Year 2022
PR Newswire
FAIRFAX, Va., Jan. 27, 2023

FAIRFAX, Va., Jan. 27, 2023 /PRNewswire/ — Freedom Financial Holdings (OTCQX: FDVA), (the “Company” or “Freedom”), the hold…

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Freedom Financial Holdings Announces Earnings for Fourth Quarter and Full Year 2022

PR Newswire

FAIRFAX, Va., Jan. 27, 2023 /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 $2,861,940, or $0.39 per diluted share, for the three months ended December 31, 2022. This compares to net income of $2,689,950 or $0.37 per diluted share, for the linked quarter and net income of $2,743,088 or $0.37 per diluted share for the three months ended December 31, 2021. Net income for the full year 2022 was $10,563,572 or $1.45 per diluted share compared to net income of $10,727,961 or $1.46 per diluted share for the full year 2021. Tangible book value per share in the fourth quarter of 2022 was higher by 4.72% from the prior quarter but was lower by 8.91% compared to the same period in 2021, primarily due to changes in Accumulated Other Comprehensive Income ("AOCI"). 

Joseph J. Thomas, President, and CEO, commented, "I am proud of the entire Freedom Bank team that worked diligently to deliver strong fourth quarter earnings that were higher by 6.39% compared to the prior quarter, and an increase in tangible book value per share1, excluding changes in AOCI of 13.29%, to $12.87, on December 31, 2022. Full year earnings of $10.56 million reflect our core bank's profitability, which was strong compared to the prior year, with loan growth of 21.78%, a 10-basis point increase in net interest margin2 to 3.63%, and an improvement in the efficiency ratio3 to 61.11% in 2022 from 63.14% in the prior year.  These results enabled the Company to overcome a $5.2 million decline in mortgage revenue in 2022 compared to 2021, in part offset by a solid contribution from the SBA lending business which delivered an increase in gain on sale revenue of 127.94% compared to the prior year.  We accomplished all of this while maintaining a strong allowance for loan losses at 1.10% of total loans (excluding PPP loans) and Tier 1 Capital Ratio at 13.37%, all of which are important as the economic environment becomes more challenging and uncertain."

Fourth Quarter and Full Year 2022 Highlights include:

  • Net income for the fourth quarter was $2,861,940 or $0.39 per diluted share compared to net income of $2,689,950 or $0.37 per diluted share in the linked quarter and net income of $2,743,088 or $0.37 per diluted share for the three months ending December 31, 2021.
  • Net income for the full year 2022 was lower by 1.53% compared to the full year 2021. Net income was $10,563,572 or $1.45 per diluted share compared to net income of $10,727,961 or $1.46 per diluted share for the full year 2021.
  • Return on Average Assets ("ROAA") was 1.17% for the quarter ended December 31, 2022, compared to 1.15% for the linked quarter and 1.22% for the three months ended December 31, 2021. ROAA for the full year 2022 was 1.16% compared to 1.27% for the full year 2021.
  • Return on Average Equity ("ROAE") was 15.51% for the three months ended December 31, 2022, compared to 13.81% for the linked quarter and 13.11% for the three months ended December 31, 2021. ROAE for the full year 2022 was 13.55% compared to 13.60% for the full year 2021.
  • Total assets were $985.06 million on December 31, 2022, an increase of $108.39 million or 12.36% from total assets on December 31, 2021.
  • Loans held-for-investment (excluding PPP loans) increased by $36.91 million or 5.62% during the quarter and by $124.16 million or 21.78% for the full year 2022 on continued strong portfolio loan growth.
  • PPP loan balances decreased by $25.53 million during 2022 on loan forgiveness and mortgage loans held for sale decreased by $8.23 million during the year, on continued decline in mortgage activity.
  • Cash balances at the Federal Reserve decreased by $18.99 million during the fourth quarter.
  • Available for sale investment securities were unchanged during the fourth quarter and increased by $10.04 million in 2022.
  • Total deposits increased by $10.40 million or by 1.24% in the fourth quarter and increased by $147.30 million or 20.99% for the full year 2022. Non-interest-bearing demand deposits decreased by $17.31 million from the linked quarter to $187.42 million and were lower by $34.75 million for the full year 2022 and represented 22.08% of total deposits on December 31, 2022.
  • The net interest margin decreased in the fourth quarter to 3.49%, lower by 22 basis points compared to the linked quarter and lower by 25 basis points compared to the same period in 2021. The decrease in the net interest margin across linked and calendar quarters was primarily due to an increase in funding costs.
  • The cost of funds was 1.69% for the fourth quarter, higher by 77 basis points compared to the linked quarter and higher by 136 basis points compared to the same period in 2021, as deposit costs increased, partially offset by income from balance sheet hedges.
  • Cost of funds was 0.89% for the full year 2022 compared to 0.40% for the full year 2021, primarily due to increased deposit costs across all deposit categories in 2022.
  • Non-interest income decreased by 4.32% compared to the linked quarter and decreased by 38.31% compared to the same period in 2021. Non-interest income in the full year 2022 was lower by 41.39% compared to the prior year. The decrease in non-interest income in 2022 was primarily due to lower mortgage revenue stemming from a slowdown in mortgage activity in 2022 resulting from higher rates and tight housing inventory, compared to the prior year, as well as lower gain-on-sale revenue from SBA loans. Premiums in the secondary market were lower in 2022, which led to more SBA loan originations being retained on the balance sheet.
  • Non-interest expense in the fourth quarter decreased by 3.09% compared to the linked quarter and decreased by 12.21% compared to the same period in 2021. Non-interest expenses for the full year 2022 were lower by 5.63% compared to the prior year. The decrease in non-interest expense for linked and calendar quarters, as well as the full year was primarily due to lower performance related costs, such as commissions paid to mortgage loan officers and mortgage settlement costs, as well as lower fees for legal and other professional services.
  • The Efficiency Ratio was 58.44% for the quarter ended December 31, 2022, compared to 59.19% for the linked quarter and 62.62% for the same period in 2021. The efficiency ratio for the full year 2022 was 61.11% compared to 63.14% for the full year 2021.
  • Credit metrics improved in the fourth quarter causing the ratio of non-performing assets to total assets to decrease to 0.88% on December 31, 2022, compared to 1.01% on December 31, 2021. Most of the Company's non-accrual loan balances comprise a single relationship and various workout solutions are currently being implemented to resolve 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 $327,000 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 1.09% (or 1.10% excluding PPP loans, which carry a full faith and credit guarantee of the US Government) compared to 1.12% in the linked quarter (or 1.13% excluding PPP loans).
  • The Company continues to be well capitalized and capital ratios continue to be strong with a Leverage ratio of 11.32%, Common Equity Tier 1 ratio of 13.37%, Tier 1 Risk Based Capital ratio of 13.37% and a Total Capital ratio of 14.28%.

Net Interest Income
The Company recorded net interest income of $8.11 million for the fourth quarter of 2022, lower by 1.52% compared to the linked quarter, and 1.16% higher than the same period in 2021. The net interest margin in the fourth quarter of 2022 was 3.49%, lower by 22 basis points compared to the linked quarter and lower by 25 basis points compared to the same period in 2021. The net interest margin for the full year 2022 was 3.63%, higher by 10 basis points compared to 2021.

The following factors contributed to the changes in net interest margin during the fourth quarter of 2022 compared to the linked and calendar quarters:

  • Yields on average earning assets increased by 53 basis points to 5.11% compared to 4.58% in the linked quarter. Yields on average earning assets increased by 106 basis points in 2022 compared to the calendar quarter. Higher yields on investment securities, loans and cash balances at the Federal Reserve drove the increase in yields on earning assets.
  • Loan yields increased by 33 basis points to 5.47% from 5.14% in the linked quarter, while yields on investment securities increased by 82 basis points to 4.11% from 3.29% in the linked quarter. Loan yields increased by 36 basis points, while yields on investment securities increased by 157 basis points compared to the calendar quarter. Repricing of loans and securities in the higher rate environment was the primary reason for higher yields on these asset categories.
  • Cost of funds increased by 77 basis points to 1.69% from 0.92% in the linked quarter, and by 136 basis points compared to the calendar quarter, due to rising rates on interest checking and money market deposit accounts. The increase in deposit expense was partially offset by interest income from balance sheet hedges, in the form of interest rate swaps, whereby the bank pays a fixed rate and receives the Federal Funds effective rate for the duration of the swaps. The notional amount of the interest rate swaps was $50 million with a weighted average remaining term of 4.20 years, as of December 31, 2022.

The following factors contributed to the changes in net interest margin during the full year 2022 compared to the prior year:

  • Yields on average earning assets increased by 57 basis points to 4.47% compared to 3.90% in the prior year, driven by higher yields on loans, investments, and interest earning cash balances.
  • Loan yields increased by 35 basis points to 5.03% from 4.68% in the prior year, while yields on investment securities increased by 87 basis points to 3.21% from 2.34% in the prior year.
  • Cost of funds increased by 49 basis points to 0.89%, from 0.40% in the prior year, on higher deposit and borrowing costs.

Non-interest Income
Non-interest income was $1.09 million for the fourth quarter, a decrease of 4.32% when compared to the linked quarter and a decrease of 38.31% when compared to the same period in 2021. Non-interest income in 2022 was lower by 41.39% compared to the prior year. The decrease in non-interest income compared to linked and calendar quarters, as well to the prior year, was primarily due to lower mortgage revenue stemming from a slowdown in mortgage activity. Additionally, secondary market premiums for SBA loans decreased during 2022, and the Company elected to retain more SBA loans on its balance sheet instead of selling them into the secondary market.

Total Revenue4
Total revenue, defined as the sum of net interest income, before provision for loan losses, and non-interest income, was lower by 1.86% compared to the linked quarter and lower by 5.94% compared to the calendar quarter in 2021, primarily due to a decline in non-interest income stemming from reduced mortgage activity. Total revenue for the full year 2022 was lower by 2.49% compared to 2021, primarily due to lower non-interest income, also related to a decline in mortgage activity, compared to the prior year.

Non-interest Expenses
Non-interest expenses in the fourth quarter of 2022 decreased by 3.09% compared to the linked quarter and decreased by 12.21% compared to the same period in 2021. Non-interest expenses for the full year 2022 were lower by 5.63% compared to the prior year. The decrease in non-interest expense for linked and calendar quarters, as well as the full year was primarily due to lower performance related costs, such as commissions paid to mortgage loan officers and mortgage settlement costs, as well as lower fees for legal and other professional services.

The Efficiency Ratio was 58.44% for the quarter ended December 31, 2022, compared to 59.19% for the prior quarter and 62.62% for the same period in 2021. The Efficiency Ratio for the full year 2022 was 61.11% compared to 63.14% for 2021.

Asset Quality 

  • Non-accrual loans were $8,638,559 or 1.23% of loans held-for-investment as of December 31, 2022, compared to $8,677,688 or 1.31% of loans held-for-investment at the end of the linked quarter. There were no troubled debt restructurings ("TDRs") as of December 31, 2022. As of December 31, 2022, 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, 2022. 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 $8,638,559 or 0.88% of total assets as of December 31, 2022, compared to $8,677,688 or 0.90% of assets, at the end of the linked quarter. Most of the Company's non-accrual loan balances comprise a single relationship and various workout solutions are currently being implemented to resolve this relationship.

Following an assessment of the collectability of the loans held-for-investment at the end of the third quarter, it was determined that a $327,000 provision for loan losses was necessary to account for loan growth and changes to environmental factors. The Company booked a provision of $355,000 in the third quarter of 2022. The Company's ALLL ratio was 1.09% of loans held-for-investment (or 1.10% of loans held-for investment excluding PPP loans) as of December 31, 2022, compared to an ALLL ratio of 1.12% as of September 30, 2022 (or 1.13% of loans held-for-investment excluding PPP loans).

The Company adopted ASU 2016-13, Topic 326, Financial Instruments – Credit Losses, effective January 1, 2023. The accounting standard requires the use of the current expected credit losses methodology (CECL) for estimating allowances for credit losses. We do not expect that the adoption of CECL will have a material impact on the Company's allowance for credit losses.

Total Assets
Total assets as of December 31, 2022, were $985.06 million compared to $964.28 million as of September 30, 2022. Changes in major asset categories during linked quarters were as follows:

  • Cash balances at the Federal Reserve and Federal Home Loan Banks decreased by $18.99 million, as the Company deployed excess liquidity to fund loan growth.
  • Available for sale investment balances were flat.
  • Other loans held-for investment grew by $36.91 million.
  • Mortgage loans held-for-sale increased by $1.96 million.

Total Liabilities
Total liabilities as of December 31, 2022, were $910.12 million compared to total liabilities of $891.79 million as of September 30, 2022. Total deposits were $848.90 million compared to total deposits of $838.60 million as of September 30, 2022. Non-interest-bearing demand deposits decreased by $17.31 million during the quarter and comprised 22.08% of total deposits at the end of 2022. Other interest-bearing demand deposits increased by $50.90 million, savings deposits were flat and time deposits decreased by $23.12 million during the quarter. Federal Home Loan Bank advances increased by $10.00 million during the quarter.

Stockholders' Equity and Capital
Stockholders' equity as of December 31, 2022, was $74.95 million compared to $72.49 million as of September 30, 2022. Additional paid-in capital was $58.24 million on December 31, 2022, compared to $58.45 million as of September 30, 2022. Accumulated Other Comprehensive Income ("AOCI"), which generally comprises unrealized gains and losses on available-for-sale securities and derivative positions, was generally unchanged during the fourth quarter of 2022. Retained earnings were $34.11 million on December 31, 2022, compared to $31.25 million at the end of the prior quarter. Total shares issued and outstanding were 7,184,259 as of December 31, 2022, compared to 7,281,606 shares as of September 30, 2022. The tangible book value of the Company's common stock on December 31, 2022, was $10.43 per share compared to $9.96 per share on September 30, 2022, and $11.59 per share on December 31, 2021. Excluding AOCI losses/gains, the tangible book value of the Company's common stock on December 31, 2022, was $12.87 per share compared to $12.33 per share on September 30, 2022, and $11.36 per share on December 31, 2021.

In 2022, the Company repurchased 173,400 shares of its common stock, pursuant to a Board-authorized stock repurchase plan of 250,000 shares.

As of December 31, 2022, 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 December 31, 2022, and September 30, 2022, were as follows:


December 31, 2022   

September 30, 2022         

Total Capital Ratio

14.28 %

14.55 %

Tier 1 Capital Ratio

13.37 %

13.62 %

Common Equity



Tier 1 Capital Ratio

13.37 %

13.62 %

Leverage Ratio

11.32 %

11.59 %

 

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, Virginia and an SBA division headquartered in Harrison, NY. 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 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;  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, 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.  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)



(Unaudited)



(Audited)




December 31,



September 30,



December 31,




2022



2022



2021


ASSETS










Cash and Due from Banks

$

2,099,062


$

1,959,084


$

2,536,450


Interest Bearing Deposits with Banks


32,674,953



51,668,557



31,696,891


Securities Available-for-Sale


181,558,037



181,558,490



171,532,394


Securities Held-to-Maturity


17,096,010



17,586,727



18,012,874


Restricted Stock Investments


3,889,200



3,389,200



3,321,250


Loans Held for Sale


5,064,385



3,107,940



13,297,125


PPP Loans Held for Investment 


5,829,662



6,824,897



32,355,451


Other Loans Held for Investment 


694,173,347



657,263,342



570,013,870


Allowance for Loan Losses


(7,614,120)



(7,407,120)



(6,486,120)


Net Loans


692,388,889



656,681,120



595,883,201


Bank Premises and Equipment, net


989,072



1,018,840



1,139,204


Accrued Interest Receivable


3,784,076



2,822,515



2,466,712


Deferred Tax Asset


1,982,776



1,842,093



1,631,115


Bank-Owned Life Insurance


26,248,974



26,090,001



24,579,879


Right of Use Asset, net


1,736,285



1,980,602



2,704,888


Other Assets


15,551,415



14,573,695



7,870,617


Total Assets

$

985,063,133


$

964,278,863


$

876,672,600


LIABILITIES AND STOCKHOLDERS' EQUITY




















Deposits










Demand Deposits










Non-interest Bearing

$

187,416,628


$

204,729,740



222,167,095


Interest Bearing


409,760,573



358,864,223



300,361,979


Savings Deposits


5,977,828



6,044,616



5,841,800


Time Deposits


245,840,048



268,956,966



173,322,527


Total Deposits


848,995,078



838,595,544



701,693,401


Federal Home Loan Bank Advances


25,000,000



15,000,000



29,035,714


Other Borrowings


5,826,298



7,075,513



32,055,915


Subordinated Debt (Net of Issuance Costs)


19,674,794



19,675,313



19,616,869


Accrued Interest Payable


1,265,796



741,780



294,237


Lease Liability


1,862,773



2,088,416



2,823,885


Other Liabilities


7,492,264



8,612,267



6,993,855


Total Liabilities

$

910,117,002


$

891,788,834


$

792,513,876


Stockholders' Equity










Preferred stock, $0.01 par value, 5,000,000 shares authorized:










0 Shares Issued and Outstanding, December 31, 2022, September 30, 2022, and December 31, 2021,  










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:










          6,511,259, 6,608,606 and 6,676,545 Shares Issued and Outstanding










    at December 31, 2022, September 30, 2022 and December 31, 2021 respectively










    (Includes 93,003, 93,003, and 106,171 Unvested Shares on December 31, 2022, September 30, 2022, and    










December 31, 2021, respectively)


65,160



65,156



65,898


Non-Voting Common Stock:










673,000 Shares Issued and Outstanding at December 31, 2022, September 30, 2022, 










 and December 31, 2021


6,730



6,730



6,730


 Additional Paid-in Capital 


58,241,451



58,454,038



59,884,615


Accumulated Other Comprehensive Income, Net


(17,480,993)



(17,287,737)



651,272


Retained Earnings


34,113,783



31,251,842



23,550,209


Total Stockholders' Equity


74,946,131



72,490,030



84,158,724


Total Liabilities and Stockholders' Equity

$

985,063,133


$

964,278,863


$

876,672,600


 


FREEDOM FINANCIAL HOLDINGS


CONSOLIDATED STATEMENTS OF OPERATIONS




(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)




For the three



For the three



For the twelve



For the twelve




months ended



months ended



months ended



months ended




December 31, 2022



December 31, 2021



December 31, 2022



December 31, 2021

Interest Income













Interest and Fees on Loans


$

9,503,228


$

7,556,406


$

32,213,808


$

28,335,210

Interest on Investment Securities



2,061,298



1,092,427



6,111,756



3,135,735

Interest on Deposits with Other Banks



339,592



35,908



601,382



86,903

Total Interest Income



11,904,118



8,684,741



38,926,946



31,557,848

Interest Expense













Interest on Deposits



3,685,412



470,791



6,512,624



2,275,780

Interest on Borrowings



101,216



189,834



826,392



766,060

Total Interest Expense



3,786,628



660,625



7,339,016



3,041,840














Net Interest Income



8,117,490



8,024,116



31,587,930



28,516,009

Provision for Loan Losses



(327,000)



(355,000)



(1,248,000)



(839,000)

Net Interest Income After













Provision for Loan Losses



7,790,490



7,669,116



30,339,930



27,677,009

Non-Interest Income













Mortgage Loan Gain-on-Sale and Fee Revenue



357,654



1,456,195



3,091,941



8,286,068

 SBA Gain-on-Sale Revenue



404,409



-



997,967



437,825

Service Charges and Other Income



92,235



95,335



622,369



254,911

Gain on Sale of Securities



20,503



6,315



30,972



7,432

 Servicing Income



53,332



53,479



218,190



192,413

Swap Fee Income



-



-



68,404



-

Increase in Cash Surrender Value of Bank-













owned Life Insurance



158,972



151,054



669,094



544,665

Total Non-interest Income



1,087,106



1,762,377



5,698,937



9,723,314

Non-Interest Expenses













Officer and Employee Compensation













and Benefits



3,495,260



4,055,344



15,160,439



16,341,245

Occupancy Expense



318,462



317,038



1,266,050



1,232,056

Equipment and Depreciation Expense



179,679



170,335



705,170



662,050

Insurance Expense



140,926



74,357



363,099



267,583

Professional Fees



238,732



470,786



1,062,306



1,365,057

Data and Item Processing



304,767



299,120



1,212,233



1,181,347

Advertising  



124,450



80,569



448,904



329,059

Franchise Taxes and State Assessment Fees



282,796



200,084



990,442



778,069

Mortgage Fees and Settlements



23,156



172,967



355,710



1,141,200

Other Operating Expense



271,396



287,458



1,221,355



847,150

Total Non-interest Expenses



5,379,623



6,128,057



22,785,708



24,144,815

Income Before Income Taxes



3,497,972



3,303,435



13,253,160



13,255,507

Income Tax Expense



636,033



560,347



2,689,588



2,527,546

Net Income


$

2,861,939


$

2,743,088


$

10,563,572


$

10,727,961

Earnings per Common Share - Basic


$

0.40


$

0.37


$

1.45


$

1.47

Earnings per Common Share - Diluted


$

0.39


$

0.37


$

1.45


$

1.46

Weighted-Average Common Shares













Outstanding - Basic



7,238,807



7,336,016



7,285,726



7,316,505

Weighted-Average Common Shares 













Outstanding - Diluted



7,252,669



7,380,138



7,307,659



7,363,536








































Efficiency Ratio



58.44 %



62.62 %



61.11 %



63.14 %

 


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, 2022



September 30, 2022



June 30, 2022



March 31, 2022



December 31, 2021

Interest Income















Interest and Fees on Loans

$

9,503,228


$

8,408,971


$

7,159,610


$

7,141,999


$

7,556,406

Interest on Investment Securities


2,061,298



1,626,322



1,278,759



1,145,377



1,092,427

Interest on Deposits with Other Banks  


339,592



171,644



74,550



15,596



35,908

Total Interest Income


11,904,118



10,206,937



8,512,919



8,302,972



8,684,741
















Interest Expense















Interest on Deposits


3,685,412



1,735,027



673,396



418,788



470,791

Interest on Borrowings


101,216



229,283



225,115



270,778



189,834

Total Interest Expense


3,786,628



1,964,310



898,511



689,566



660,625
















Net Interest Income


8,117,490



8,242,627



7,614,408



7,613,406



8,024,116

Provision for Loan Losses


(327,000)



(382,000)



(375,000)



(164,000)



(355,000)

Net Interest Income after















Provision for Loan Losses


7,790,490



7,860,627



7,239,408



7,449,406



7,669,116

Non-Interest Income















Mortgage Loan Gain-on-Sale and Fee Revenue


357,654



710,149



986,160



1,037,978



1,456,195

 SBA Gain-on-Sale Revenue


404,409



63,727



263,806



266,023



-

Service Charges and Other Income


92,235



52,755



175,853



301,396



95,335

Gains on Sale of Securities


20,503



10,600



-



-



6,315

Servicing Income


53,332



54,792



57,917



52,149



53,479

Swap Fee Income


-



68,404



-



-



-

Increase in Cash Surrender Value of Bank-















owned Life Insurance


158,972



175,815



173,679



160,628



151,054

Total Non-interest Income


1,087,106



1,136,243



1,657,415



1,818,174



1,762,378































Total Revenue4

$

9,204,596


$

9,378,870


$

9,271,823


$

9,431,580


$

9,786,494
















Non-Interest Expenses















Officer and Employee Compensation















and Benefits


3,495,260



3,655,913



4,005,945



4,003,321



4,055,344

Occupancy Expense


318,462



311,070



304,153



332,366



317,038

Equipment and Depreciation Expense


179,679



170,070



183,315



172,107



170,335

Insurance Expense


140,926



76,563



74,983



70,626



74,357

Professional Fees


238,732



251,597



323,647



248,329



470,786

Data and Item Processing


304,767



299,501



342,340



265,625



299,120

Advertising


124,450



104,119



114,966



105,369



80,569

Franchise Taxes and State Assessment Fees


282,796



282,912



224,636



200,099



200,084

Mortgage Fees and Settlements


23,156



97,495



129,210



105,849



172,967

Other Operating Expense


271,396



301,977



332,567



315,416



287,459
















Total Non-interest Expenses


5,379,623



5,551,217



6,035,762



5,819,107



6,128,059

Income before Income Taxes


3,497,972



3,445,652



2,861,061



3,448,473



3,303,435
















Income Tax Expense


636,033



755,702



633,677



664,176



560,347
















Net Income

$

2,861,939


$

2,689,950


$

2,227,385


$

2,784,297


$

2,743,088

Earnings per Common Share - Basic

$

0.40


$

0.37


$

0.31


$

0.38


$

0.37

Earnings per Common Share - Diluted

$

0.39


$

0.37


$

0.30


$

0.38


$

0.37

Weighted-Average Common Shares















Outstanding - Basic


7,238,807



7,271,784



7,290,417



7,324,527



7,336,016

Weighted-Average Common Shares 















Outstanding - Diluted


7,252,669



7,285,786



7,312,200



7,362,290



7,380,138

 

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, 2022






September 30, 2022






June 30, 2022






March 31, 2022






December 31, 2021







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


$                                      35,596,385


$           339,592


3.78 %


$                                      37,133,361


$           171,644


1.83 %


$                                      35,469,783


$             74,550


0.84 %


$                                      40,375,846


$             15,596


0.16 %


$                                      91,458,843


$             35,908


0.16 %
































Investments (Tax Exempt)


20,664,285


184,800




21,615,440


186,314




22,199,648


187,816




23,331,336


187,632




23,460,432


190,195



Investments (Taxable)


182,096,499


1,915,306




179,086,818


1,479,134




167,905,374


1,130,385




165,979,811


957,745




153,582,906


942,173



Total Investments


202,760,784


2,100,106


4.11 %


200,702,258


1,665,447


3.29 %


190,105,022


1,318,201


2.78 %


189,311,147


1,145,377


2.45 %


177,043,338


1,132,368


2.54 %
































Total Loans 


689,158,712


9,503,228


5.47 %


648,964,205


8,408,971


5.14 %


615,110,994


7,159,610


4.67 %


609,412,292


7,141,999


4.75 %


586,725,477


7,556,406


5.11 %
































Earning Assets


927,515,881


11,942,926


5.11 %


886,799,824


10,246,063


4.58 %


840,685,799


8,552,361


4.08 %


839,099,285


8,302,972


4.01 %


855,227,658


8,724,682


4.05 %






























































































Assets


$                                    969,662,029






$                                    929,265,436






$                                    880,810,523






$                                    876,180,566






$                                    891,226,178




































Liabilities































Interest Checking


$                                    130,004,364


$           862,014


2.63 %


$                                    132,342,702


$           458,605


1.37 %


$                                    128,008,728


$           134,727


0.42 %


$                                    110,305,411


$             48,246


0.18 %


$                                      88,172,651


$             38,893


0.18 %

Money Market


240,285,109


1,383,701


2.28 %


216,851,258


581,082


1.06 %


203,094,067


180,932


0.36 %


206,230,959


89,516


0.18 %


202,560,648


85,450


0.17 %

Savings


6,108,935


3,067


0.20 %


6,659,935


2,119


0.13 %


8,303,586


2,147


0.10 %


6,652,079


1,725


0.11 %


5,336,531


1,431


0.11 %

Time Deposits 


261,984,431


1,436,630


2.18 %


218,365,002


693,221


1.26 %


186,130,419


355,590


0.77 %


174,009,190


279,301


0.65 %


187,240,613


345,016


0.73 %

Interest Bearing Deposits


638,382,839


3,685,412


2.29 %


574,218,895


1,735,027


1.20 %


525,536,800


673,396


0.51 %


497,197,639


418,788


0.34 %


483,310,443


470,790


0.39 %
































Borrowings


$                                      46,940,688


$           101,216


0.86 %


$                                      53,279,949


$           229,283


1.72 %


$                                      56,154,130


$           225,115


1.61 %


$                                      71,634,636


$           270,778


1.53 %


$                                      81,399,848


$           189,834


0.93 %
































Interest Bearing Liabilities


685,323,527


3,786,628


2.19 %


627,498,844


1,964,310


1.24 %


581,690,931


898,511


0.62 %


568,832,275


689,566


0.49 %


564,710,291


660,624


0.46 %
































Non Interest Bearing Deposits


$                                    202,342,666






$                                    215,426,363






$                                    212,429,933






$                                    213,315,104






$                                    231,181,073




































Cost of Funds






1.69 %






0.92 %






0.45 %






0.36 %






0.33 %
































Net Interest Margin2




$        8,156,298


3.49 %




$        8,281,753


3.71 %




$        7,653,850


3.65 %




$        7,613,406


3.68 %




$        8,064,057


3.74 %

Shareholders Equity


$                                      73,185,633






$                                      77,295,762






$                                      78,112,151






$                                      83,440,208






$                                      82,994,140




































2 Net 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, 2022


Income /




December 31, 2021


Income /




December 31, 2022


Income /




December 31, 2021


Income /




Average Balance


Expense


Yield


Average Balance


Expense


Yield


Average Balance


Expense


Yield


Average Balance


Expense


Yield

Assets
























Cash

$               35,596,385


$        339,592


3.78 %


$               91,458,843


$          35,908


0.16 %


$               37,130,721


$        601,382


1.62 %


$               67,640,215


$          86,903


0.13 %

























Investments (Tax Exempt)

20,664,285


184,800




23,460,432


190,195




21,944,446


746,561




24,492,967


668,682



Investments (Taxable)

182,096,499


1,915,306




153,582,906


942,173




173,825,855


5,521,973




115,765,523


2,607,476



Total Investments

202,760,784


2,100,106


4.11 %


177,043,338


1,132,368


2.54 %


195,770,302


6,268,534


3.20 %


140,258,490


3,276,158


2.34 %

























Total Loans 

689,158,712


9,503,228


5.47 %


586,725,477


7,556,406


5.11 %


640,902,781


32,213,808


5.03 %


605,029,296


28,335,210


4.68 %

























Earning Assets

927,515,881


11,942,926


5.11 %


855,227,658


8,724,682


4.05 %


873,803,803


39,083,724


4.47 %


812,928,001


31,698,271


3.90 %

























Assets

$             969,662,029






$             891,226,178






$             914,277,631






$             845,256,803





























Liabilities
























Interest Checking

$             130,004,364


862,014


2.63 %


$               88,172,651


$          38,893


0.18 %


$             126,903,635


$     1,503,592


1.18 %


$               47,966,245


$          77,669


0.16 %

Money Market

240,285,109


1,383,701


2.28 %


202,560,648


85,450


0.17 %


215,044,593


2,235,231


1.04 %


176,412,939


292,283


0.17 %

Savings

6,108,935


3,067


0.20 %


5,336,531


1,431


0.11 %


6,928,902


9,059


0.13 %


4,250,652


4,494


0.11 %

Time Deposits 

261,984,431


1,436,630


2.18 %


187,240,613


345,016


0.73 %


210,385,871


2,764,742


1.31 %


189,083,082


1,901,335


1.01 %

Interest Bearing Deposits

638,382,839


3,685,412


2.29 %


483,310,443


470,790


0.39 %


559,263,003


6,512,624


1.16 %


417,712,918


2,275,781


0.54 %

























Borrowings

$               46,940,688


101,216


0.86 %


$               81,399,848


189,834


0.93 %


$               56,924,498


$        826,392


1.45 %


$             113,558,822


$        766,060


0.67 %

























Interest Bearing Liabilities

685,323,527


3,786,628


2.19 %


564,710,291


660,624


0.46 %


616,187,501


7,339,016


1.19 %


531,271,740


3,041,841


0.57 %

























Non Interest Bearing Deposits

$             202,342,666






$             231,181,073






$             210,860,915






$             222,747,496





























Cost of Funds





1.69 %






0.33 %






0.89 %






0.40 %

























Net Interest Margin2



$     8,156,298


3.49 %




$     8,064,057


3.74 %




$   31,744,708


3.63 %




$   28,656,431


3.53 %

Shareholders Equity

$               73,185,633






$               82,994,140






$               77,978,391






$               78,908,655





ROAA

1.17 %






1.22 %






1.16 %






1.27 %





ROAE

15.51 %






13.11 %






13.55 %






13.60 %





























2 Net 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, 2022

September 30, 2022

June 30, 2022

March 31, 2022

December 31, 2021

Loans held-for-investment to Deposits 

82.45 %

79.19 %

83.49 %

83.07 %

85.85 %

Income Statement Ratios (Quarterly)






Return on Average Assets (ROAA)

1.17 %

1.15 %

1.01 %

1.29 %

1.22 %

Return on Average Equity (ROAE)

15.51 %

13.81 %

11.44 %

13.53 %

13.11 %

Efficiency Ratio3

58.44 %

59.19 %

65.10 %

61.70 %

62.62 %

Net Interest Margin2

3.49 %

3.71 %

3.65 %

3.68 %

3.74 %

Yield on Average Earning Assets

5.11 %

4.58 %

4.08 %

4.01 %

4.05 %

Yield on Securities

4.11 %

3.29 %

2.78 %

2.45 %

2.54 %

Yield on Loans

5.47 %

5.14 %

4.67 %

4.75 %

5.11 %

Cost of Funds

1.69 %

0.92 %

0.45 %

0.36 %

0.33 %

Noninterest income to Total Revenue

11.81 %

12.11 %

17.88 %

19.28 %

18.01 %

Per Share Data






Tangible Book Value

$10.43

$9.96

$10.31

$10.94

$11.45

Tangible Book Value (ex AOCI)1

$12.87

$12.33

$11.95

$11.66

$11.36

Share Price Data






Closing Price

$14.57

$14.60

$14.80

$14.06

$13.37

Book Value Multiple

140 %

147 %

144 %

129 %

117 %

Common Stock Data






Outstanding Shares at End of Period

7,184,259

7,281,606

7,319,006

7,296,063

7,349,545

Weighted Average shares outstanding, basic

7,238,807

7,271,784

7,290,417

7,324,527

7,336,016

Weighted Average shares outstanding, diluted

7,252,669

7,285,786

7,312,200

7,362,290

7,438,268

Capital Ratios (Bank Only)






Tier 1 Leverage ratio

11.32 %

11.59 %

11.95 %

12.09 %

11.85 %

Common Equity Tier 1 ratio

13.37 %

13.62 %

13.84 %

14.23 %

14.49 %

Tier 1 Risk Based Capital ratio

13.37 %

13.62 %

13.84 %

14.23 %

14.49 %

Total Risk Based Capital ratio

14.28 %

14.55 %

14.77 %

15.15 %

15.42 %

Credit Quality






Net Charge-offs to Average Loans

0.02 %

0.00 %

0.00 %

0.00 %

-0.02 %

Total Non-performing Loans to loans held-for-investment

1.23 %

1.31 %

1.38 %

1.48 %

1.46 %

Total Non-performing Assets to Total Assets

0.88 %

0.90 %

0.97 %

1.02 %

1.00 %

Nonaccrual Loans to loans held-for-investment

1.23 %

1.31 %

1.38 %

1.48 %

1.46 %

Provision for Loan and Lease Losses

$327,000

$382,000

$375,000

$164,000

$355,000

Allowance for Loan and Lease Losses to net loans held-for-investment

1.09 %

1.12 %

1.11 %

1.12 %

1.08 %

Allowance for Loan and Lease Losses to net loans held-for-investment (ex PPP loans)

1.10 %

1.13 %

1.13 %

1.15 %

1.14 %







2 Net 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








 

FREEDOM FINANCIAL HOLDINGS, INC.

CONSOLIDATED SELECTED FINANCIAL DATA

DEFINITIONS AND RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES:



































1 Tangible Book Value (ex-AOCI) (non-GAAP)

As of









December 31,
2022


September 30,
2022


June 30,
2022


March 31,
2022


December 31,
2021





Shareholder's Equity

74,946,131


72,490,029


75,473,368


79,794,028


84,158,724





Outstanding Shares at End of Period

7,184,259


7,281,606


7,319,006


7,296,063


7,349,545





Tangible Book Value (GAAP)

$             10.43


$               9.96


$             10.31


$             10.94


$             11.45





Accumulated Other Comprehensive Income (Net) (AOCI)

(17,480,993)


(17,287,737)


(11,985,199)


(5,272,569)


651,272





AOCI per share equivalent

(2.43)


(2.37)


(1.64)


(0.72)


0.09





Tangible Book Value (ex-AOCI) (non-GAAP)

$             12.87


$             12.32


$             11.95


$             11.67


$             11.37






















2 Net interest income has been computed on a fully taxable equivalent basis ("FTE") using a 21% federal income tax rate for the 2022 and 2021 periods.

Quarter-to-Date


Year-to-Date





December 31,
2022


September 30,
2022


June 30,
2022


March 31,
2022


December 31,
2021


December 31,
2022


December 31,
2021

Income on Tax Exempt Securities

$         146,021


$         147,188


$         148,374


$         148,229


$         150,254


$         589,783


$         528,259

Tax Equivalent Adjustment

38,816


39,126


39,441


39,403


39,941


156,778


140,423

Income on Tax Exempt Securities (Non-GAAP)

184,837


186,314


187,816


187,632


190,195


746,561


668,682


















Average Earning Assets

927,515,881


886,799,824


840,685,799


839,099,285


855,227,658


873,803,804


812,928,001

Yield on Interest Earning Assets (GAAP)

5.09 %


4.57 %


4.06 %


4.01 %


4.03 %


4.45 %


3.89 %

Yield on Interest-Earning Assets (FTE) (Non-GAAP)

5.11 %


4.58 %


4.08 %


4.03 %


4.05 %


4.47 %


3.90 %

Net Interest Margin (NIM) (GAAP)

3.47 %


3.69 %


3.69 %


3.68 %


3.72 %


3.61 %


3.52 %

Net Interest Margin (NIM) (FTE) (Non-GAAP)

3.49 %


3.71 %


3.65 %


3.70 %


3.74 %


3.63 %


3.53 %


















3 Efficiency Ratio (Non-GAAP)

Quarter-to-Date


Year-to-Date





December 31,
2022


September 30,
2022


June 30,
2022


March 31,
2022


December 31,
2021


December 31,
2022


December 31,
2021

Net Interest Income

8,117,490


8,242,627


7,614,408


7,613,406


8,024,116


31,587,931


28,516,009

Non-Interest Income

1,087,106


1,136,242


1,657,415


1,818,174


1,762,378


5,698,938


9,723,314





9,204,596


9,378,869


9,271,823


9,431,579


9,786,494


37,286,869


38,239,322

Non-Interest Expense

5,379,623


5,551,217


6,035,762


5,819,107


6,128,059


22,785,709


24,144,816

Efficiency Ratio (Non-GAAP)

58.44 %


59.19 %


65.10 %


61.70 %


62.62 %


61.11 %


63.14 %


















4 Total Revenues (Non-GAAP)

Quarter-to-Date


Year-to-Date





December 31,
2022


September 30,
2022


June 30,
2022


March 31,
2022


December 31,
2021


December 31,
2022


December 31,
2021

Net Interest Income

$      8,117,490


$      8,242,627


$      7,614,408


$      7,613,406


$      8,024,116


$    31,587,931


$    28,516,009

Non-Interest Income

1,087,106


1,136,242


1,657,415


1,818,174


1,762,378


5,698,938


9,723,314

Total Revenue (non-GAAP)

$      9,204,596


$      9,378,869


$      9,271,823


$      9,431,579


$      9,786,494


$    37,286,869


$    38,239,322


















 

Contact:
Joseph J. Thomas
President & Chief Executive Officer
703-667-4161: Phone
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Aging at AACR Annual Meeting 2024

BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging…

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BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals

Credit: Impact Journals

BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals

Impact Journals will be participating as an exhibitor at the American Association for Cancer Research (AACR) Annual Meeting 2024 from April 5-10 at the San Diego Convention Center in San Diego, California. This year, the AACR meeting theme is “Inspiring Science • Fueling Progress • Revolutionizing Care.”

Visit booth #4159 at the AACR Annual Meeting 2024 to connect with members of the Aging team.

About Aging-US:

Aging publishes research papers in all fields of aging research including but not limited, aging from yeast to mammals, cellular senescence, age-related diseases such as cancer and Alzheimer’s diseases and their prevention and treatment, anti-aging strategies and drug development and especially the role of signal transduction pathways such as mTOR in aging and potential approaches to modulate these signaling pathways to extend lifespan. The journal aims to promote treatment of age-related diseases by slowing down aging, validation of anti-aging drugs by treating age-related diseases, prevention of cancer by inhibiting aging. Cancer and COVID-19 are age-related diseases.

Aging is indexed and archived by PubMed/Medline (abbreviated as “Aging (Albany NY)”), PubMed CentralWeb of Science: Science Citation Index Expanded (abbreviated as “Aging‐US” and listed in the Cell Biology and Geriatrics & Gerontology categories), Scopus (abbreviated as “Aging” and listed in the Cell Biology and Aging categories), Biological Abstracts, BIOSIS Previews, EMBASE, META (Chan Zuckerberg Initiative) (2018-2022), and Dimensions (Digital Science).

Please visit our website at www.Aging-US.com​​ and connect with us:

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  • Aging YouTube
  • Aging LinkedIn
  • Aging SoundCloud
  • Aging Pinterest
  • Aging Reddit

Click here to subscribe to Aging publication updates.

For media inquiries, please contact media@impactjournals.com.


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NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism

NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism

One month after the inflation outlook tracked…

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NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism

One month after the inflation outlook tracked by the NY Fed Consumer Survey extended their late 2023 slide, with 3Y inflation expectations in January sliding to a record low 2.4% (from 2.6% in December), even as 1 and 5Y inflation forecasts remained flat, moments ago the NY Fed reported that in February there was a sharp rebound in longer-term inflation expectations, rising to 2.7% from 2.4% at the three-year ahead horizon, and jumping to 2.9% from 2.5% at the five-year ahead horizon, while the 1Y inflation outlook was flat for the 3rd month in a row, stuck at 3.0%. 

The increases in both the three-year ahead and five-year ahead measures were most pronounced for respondents with at most high school degrees (in other words, the "really smart folks" are expecting deflation soon). The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at all horizons, while the median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—declined at the one- and three-year ahead horizons and remained unchanged at the five-year ahead horizon.

Going down the survey, we find that the median year-ahead expected price changes increased by 0.1 percentage point to 4.3% for gas; decreased by 1.8 percentage points to 6.8% for the cost of medical care (its lowest reading since September 2020); decreased by 0.1 percentage point to 5.8% for the cost of a college education; and surprisingly decreased by 0.3 percentage point for rent to 6.1% (its lowest reading since December 2020), and remained flat for food at 4.9%.

We find the rent expectations surprising because it is happening just asking rents are rising across the country.

At the same time as consumers erroneously saw sharply lower rents, median home price growth expectations remained unchanged for the fifth consecutive month at 3.0%.

Turning to the labor market, the survey found that the average perceived likelihood of voluntary and involuntary job separations increased, while the perceived likelihood of finding a job (in the event of a job loss) declined. "The mean probability of leaving one’s job voluntarily in the next 12 months also increased, by 1.8 percentage points to 19.5%."

Mean unemployment expectations - or the mean probability that the U.S. unemployment rate will be higher one year from now - decreased by 1.1 percentage points to 36.1%, the lowest reading since February 2022. Additionally, the median one-year-ahead expected earnings growth was unchanged at 2.8%, remaining slightly below its 12-month trailing average of 2.9%.

Turning to household finance, we find the following:

  • The median expected growth in household income remained unchanged at 3.1%. The series has been moving within a narrow range of 2.9% to 3.3% since January 2023, and remains above the February 2020 pre-pandemic level of 2.7%.
  • Median household spending growth expectations increased by 0.2 percentage point to 5.2%. The increase was driven by respondents with a high school degree or less.
  • Median year-ahead expected growth in government debt increased to 9.3% from 8.9%.
  • The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 0.6 percentage point to 26.1%, remaining below its 12-month trailing average of 30%.
  • Perceptions about households’ current financial situations deteriorated somewhat with fewer respondents reporting being better off than a year ago. Year-ahead expectations also deteriorated marginally with a smaller share of respondents expecting to be better off and a slightly larger share of respondents expecting to be worse off a year from now.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.4 percentage point to 38.9%.
  • At the same time, perceptions and expectations about credit access turned less optimistic: "Perceptions of credit access compared to a year ago deteriorated with a larger share of respondents reporting tighter conditions and a smaller share reporting looser conditions compared to a year ago."

Also, a smaller percentage of consumers, 11.45% vs 12.14% in prior month, expect to not be able to make minimum debt payment over the next three months

Last, and perhaps most humorous, is the now traditional cognitive dissonance one observes with these polls, because at a time when long-term inflation expectations jumped, which clearly suggests that financial conditions will need to be tightened, the number of respondents expecting higher stock prices one year from today jumped to the highest since November 2021... which incidentally is just when the market topped out during the last cycle before suffering a painful bear market.

Tyler Durden Mon, 03/11/2024 - 12:40

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Homes listed for sale in early June sell for $7,700 more

New Zillow research suggests the spring home shopping season may see a second wave this summer if mortgage rates fall
The post Homes listed for sale in…

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  • A Zillow analysis of 2023 home sales finds homes listed in the first two weeks of June sold for 2.3% more. 
  • The best time to list a home for sale is a month later than it was in 2019, likely driven by mortgage rates.
  • The best time to list can be as early as the second half of February in San Francisco, and as late as the first half of July in New York and Philadelphia. 

Spring home sellers looking to maximize their sale price may want to wait it out and list their home for sale in the first half of June. A new Zillow® analysis of 2023 sales found that homes listed in the first two weeks of June sold for 2.3% more, a $7,700 boost on a typical U.S. home.  

The best time to list consistently had been early May in the years leading up to the pandemic. The shift to June suggests mortgage rates are strongly influencing demand on top of the usual seasonality that brings buyers to the market in the spring. This home-shopping season is poised to follow a similar pattern as that in 2023, with the potential for a second wave if the Federal Reserve lowers interest rates midyear or later. 

The 2.3% sale price premium registered last June followed the first spring in more than 15 years with mortgage rates over 6% on a 30-year fixed-rate loan. The high rates put home buyers on the back foot, and as rates continued upward through May, they were still reassessing and less likely to bid boldly. In June, however, rates pulled back a little from 6.79% to 6.67%, which likely presented an opportunity for determined buyers heading into summer. More buyers understood their market position and could afford to transact, boosting competition and sale prices.

The old logic was that sellers could earn a premium by listing in late spring, when search activity hit its peak. Now, with persistently low inventory, mortgage rate fluctuations make their own seasonality. First-time home buyers who are on the edge of qualifying for a home loan may dip in and out of the market, depending on what’s happening with rates. It is almost certain the Federal Reserve will push back any interest-rate cuts to mid-2024 at the earliest. If mortgage rates follow, that could bring another surge of buyers later this year.

Mortgage rates have been impacting affordability and sale prices since they began rising rapidly two years ago. In 2022, sellers nationwide saw the highest sale premium when they listed their home in late March, right before rates barreled past 5% and continued climbing. 

Zillow’s research finds the best time to list can vary widely by metropolitan area. In 2023, it was as early as the second half of February in San Francisco, and as late as the first half of July in New York. Thirty of the top 35 largest metro areas saw for-sale listings command the highest sale prices between May and early July last year. 

Zillow also found a wide range in the sale price premiums associated with homes listed during those peak periods. At the hottest time of the year in San Jose, homes sold for 5.5% more, a $88,000 boost on a typical home. Meanwhile, homes in San Antonio sold for 1.9% more during that same time period.  

 

Metropolitan Area Best Time to List Price Premium Dollar Boost
United States First half of June 2.3% $7,700
New York, NY First half of July 2.4% $15,500
Los Angeles, CA First half of May 4.1% $39,300
Chicago, IL First half of June 2.8% $8,800
Dallas, TX First half of June 2.5% $9,200
Houston, TX Second half of April 2.0% $6,200
Washington, DC Second half of June 2.2% $12,700
Philadelphia, PA First half of July 2.4% $8,200
Miami, FL First half of June 2.3% $12,900
Atlanta, GA Second half of June 2.3% $8,700
Boston, MA Second half of May 3.5% $23,600
Phoenix, AZ First half of June 3.2% $14,700
San Francisco, CA Second half of February 4.2% $50,300
Riverside, CA First half of May 2.7% $15,600
Detroit, MI First half of July 3.3% $7,900
Seattle, WA First half of June 4.3% $31,500
Minneapolis, MN Second half of May 3.7% $13,400
San Diego, CA Second half of April 3.1% $29,600
Tampa, FL Second half of June 2.1% $8,000
Denver, CO Second half of May 2.9% $16,900
Baltimore, MD First half of July 2.2% $8,200
St. Louis, MO First half of June 2.9% $7,000
Orlando, FL First half of June 2.2% $8,700
Charlotte, NC Second half of May 3.0% $11,000
San Antonio, TX First half of June 1.9% $5,400
Portland, OR Second half of April 2.6% $14,300
Sacramento, CA First half of June 3.2% $17,900
Pittsburgh, PA Second half of June 2.3% $4,700
Cincinnati, OH Second half of April 2.7% $7,500
Austin, TX Second half of May 2.8% $12,600
Las Vegas, NV First half of June 3.4% $14,600
Kansas City, MO Second half of May 2.5% $7,300
Columbus, OH Second half of June 3.3% $10,400
Indianapolis, IN First half of July 3.0% $8,100
Cleveland, OH First half of July  3.4% $7,400
San Jose, CA First half of June 5.5% $88,400

 

The post Homes listed for sale in early June sell for $7,700 more appeared first on Zillow Research.

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