Friendly Hills Bank Reports Second Quarter Results

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| Source: Friendly Hills Bank

WHITTIER, Calif., Aug. 8, 2014 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the "bank") (OTCBB:FHLB) reported results for the second quarter of 2014.

For the six month period ending June 30, 2014, the bank reported a profit of $268,000 or $0.17 per diluted share of common stock. This figure includes a $45,000 increase in the value of the interest rate caps and a $17,000 gain on securities sold. The bank reported a profit of $258,000 or $0.16 per diluted share of common stock for the six months ended June 30, 2013. This figure includes a $68,000 increase in the value of the interest rate caps, a $181,000 gain on securities sold, and a $99,000 provision for loan loss. 

As of June 30, 2014, the bank reported total assets of $110.0 million, a 10% increase from $99.7 million as of June 30, 2013. The bank's loan portfolio, net of unearned income, decreased 3% from $58.6 million as of June 30, 2013, to $56.8 million as of June 30, 2014.  The portfolio remains diversified with $26.1 million or 46% in Commercial & Industrial Loans to local businesses (including $17.7 million in Owner Occupied Commercial Real Estate Loans), $12.4 million or 22% in Residential Real Estate Loans to investors and $12.0 million or 21% in Commercial Real Estate Loans to investors.  The bank has an additional $17.7 million in unfunded loan commitments.

The bank's overall deposit base has increased 12% in the twelve months ended June 30, 2014, from $78.0 million as of June 30, 2013, to $87.7 million as of June 30, 2014. Non-interest bearing deposits continue to form a substantial part of the deposit base (41%), growing from $33.0 million to $36.0 million as of June 30, 2014. During the same time period interest-bearing deposits increased from $45.0 million to $51.7 million on June 30, 2014.   The bank has no deposits which were sourced through brokers or other wholesale funding sources. 

At June 30, 2014, shareholders' equity was $13.1 million and the bank's total risk-based capital ratio was 18%, significantly exceeding the "well-capitalized" level of 10% prescribed under regulatory requirements. The bank also continues to maintain substantial liquidity positions, retaining significant balances of liquidity as well as available collateralized borrowings and other potential sources of liquidity.

"Despite continued challenges in loan growth and interest rate margins we are pleased to report an increase in the core earnings of the bank," commented Jeffrey K. Ball, Chief Executive Officer. "Market conditions continue to be a challenge but we are confident that the bank is properly positioned for long-term shareholder value. This has been accomplished by maintaining our consistent underwriting standards and mitigating the potential risk associated with rising interest rates."

Company Profile:

Friendly Hills Bank is a community bank which was formed to primarily serve the Southern California communities of eastern Los Angeles County and northern Orange County. The bank was established in 2006 by prominent members of the local community who were seeking an alternative to the larger financial institutions in the area. The bank is headquartered in Whittier, California with an additional branch office in Santa Fe Springs, California and a loan production office in Irvine, California. For more information on the bank, please visit www.friendlyhillsbank.com or call 562-947-1920.

Forward Looking Statements:

The numbers in this press release are unaudited. Statements such as those regarding the anticipated development and expansion of Friendly Hills Bank's business, and the intent, belief or current expectations of the bank, its directors or its officers, are "forward looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, risks related to the local and national economy, the bank's performance, including its ability to generate loan and deposit growth, changes in interest rates, and regulatory matters.

 
Friendly Hills Bank
Balance Sheets (Unaudited)
(in thousands, except per share information)
   
6/30/14
 
12/31/13
 
6/30/13
ASSETS      
Cash and due from banks $ 4,981 $ 3,217 $ 3,342
Interest bearing deposits with other financial institutions 5,682 5,893 7,874
Cash and Cash Equivalents 10,663 9,110 11,216
Investment securities available-for-sale 38,916 37,750 26,421
Federal Home Loan Bank stock 677 646 600
Loans, net of unearned income 56,815 57,635 58,598
Allowance for loan losses (1,587) (1,457) (1,346)
Net Loans 55,228 56,178 57,252
Premises and equipment, net 526 561 597
Accrued interest receivable and other assets 3,964 3,667 3,605
Total Assets $109,974 $107,912 $99,691
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Liabilities      
Deposits      
Noninterest-bearing deposits $ 36,036 $ 37,436 $ 32,997
Interest-bearing deposits 51,710 48,911 44,992
Total Deposits 87,746 86,347 77,989
FHLB advances 8,750 8,750 8,750
Accrued interest payable and other liabilities 376 333 325
Total Liabilities 96,872  95,430  87,064
Shareholders' Equity      
Common stock, no par value, 10,000,000 shares authorized:      
1,616,000 shares issued and outstanding 15,958 15,958 15,958
Additional paid-in-capital 1,091 1,090 1,083
Accumulated deficit (4,028) (4,295) (4,410)
Accumulated other comprehensive income (loss) 81 (271) (4)
Total Shareholders' Equity 13,102 12,482 12,627
Total Liabilities and Shareholders' Equity $109,974 $ 107,912 $ 99,691
       
Book Value Per Share $ 8.11 $ 7.72 $ 7.81
 
 
 
Friendly Hills Bank
Statements of Operations (Unaudited)
 (in thousands, except per share information)
     
  For the six For the six
  months ended months ended
  6/30/14 6/30/13
Interest Income $   2,077 $      1,884
Interest Expense 187 215
Net Interest Income 1,890 1,669
Provision for Credit Losses 0 99
Net Interest Income after Provision for Credit Losses  1,890  1,570
     
Other Income 211 163
Operating Expenses 1,895 1,723
Gain on Investment Securities and Hedging Contracts 62 249
Earnings before Provision for Income Taxes 268 259
Income Tax Expense 0 (1)
Net Earnings $   268 $    258
     
Basic and Diluted Earnings Per Share $     0.17 $     0.16
Jeffrey K. Ball (President & CEO)
Daniel L. Erickson (EVP & CFO)
(562) 947-1920