Friendly Hills Bank Reports Second Quarter Results


WHITTIER, Calif., Aug. 07, 2015 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “bank”) (OTCBB: FHLB) reported results for the second quarter of 2015.

For the six month period ending June 30, 2015, the bank reported net income of $174,000 or $0.11 per diluted share of common stock.  This figure includes a $22,000 increase in the value of the interest rate caps, a $31,000 gain on securities sold, and a $43,000 gain on other real estate owned.  The bank reported net income of $268,000 or $0.17 per diluted share of common stock for the six months ended June 30, 2014.  This figure includes a $68,000 loan referral fee, a $45,000 increase in the value of the interest rate caps, and a $17,000 gain on securities sold.

As of June 30, 2015, the bank reported total assets of $129.5 million, an 18% increase from $110.0 million as of June 30, 2014.  The bank’s loan portfolio, net of unearned income, increased 19% from $56.8 million as of June 30, 2014, to $67.8 million as of June 30, 2015.  The portfolio remains diversified with $33.0 million or 49% in Commercial & Industrial Loans to local businesses (including $19.7 million in Owner Occupied Commercial Real Estate Loans), $16.9 million or 25% in Residential Real Estate Loans to investors and $9.6 million or 14% in Commercial Real Estate Loans to investors.  The bank has an additional $19.2 million in unfunded loan commitments.

The bank’s overall deposit base has increased 15% in the twelve months ended June 30, 2015, from $87.7 million as of June 30, 2014, to $100.9 million as of June 30, 2015.  Non-interest bearing deposits continue to form a substantial part of the deposit base (47%), growing from $36.0 million to $47.2 million as of June 30, 2015.  During the same time period interest-bearing deposits increased from $51.7 million to $53.7 million on June 30, 2015.   The bank has no deposits which were sourced through brokers or other wholesale funding sources. 

At June 30, 2015, shareholders’ equity was $15.1 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.

Effective April 1, 2015, the bank established a payroll division which provides payroll and timekeeping solutions to small business clients. To facilitate this expansion of product lines the bank acquired the service contracts of a local payroll provider and employed the operations staff of the same entity.

“Despite challenging market conditions attributable to the continued low interest rate environment the bank was able to attain meaningful growth in both loans and deposits during the second quarter,” commented Jeffrey K. Ball, Chief Executive Officer. “This growth is expected to improve the core earnings of the bank and is complimented by the additional fee income associated with our recent expansion into payroll services. Integration of the payroll services is progressing well and we anticipate strong revenue synergy opportunities which will help to diversify our revenue sources beyond traditional net interest income. This is a meaningful component in our effort to increase earnings and build sustainable shareholder value.”

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)
   6/30/15 12/31/14 6/30/14
ASSETS      
Cash and due from banks$  4,058  $  4,912  $  4,981 
Interest bearing deposits with other financial institutions 9,515   5,617   5,682 
  Cash and Cash Equivalents 13,573   10,529   10,663 
Investment securities available-for-sale 43,030   42,829   38,916 
Federal Home Loan Bank stock 753   677   677 
Federal Reserve Bank stock 455   393   0 
Loans, net of unearned income 67,796   60,868   56,815 
Allowance for loan losses (1,595)  (1,595)  (1,587)
  Net Loans 66,201   59,273   55,228 
Premises and equipment, net 288   362     526 
Accrued interest receivable and other assets 5,180   5,840   3,964 
  Total Assets$129,480  $119,903  $109,974 
        
LIABILITIES AND SHAREHOLDERS’ EQUITY     
Liabilities      
Deposits      
 Noninterest-bearing deposits$47,207  $  39,220  $  36,036 
 Interest-bearing deposits 53,672   56,339   51,710 
  Total Deposits 100,879   95,559   87,746 
FHLB advances 13,000   8,750   8,750 
Accrued interest payable and other liabilities 466   422   376 
  Total Liabilities 114,345     104,731    96,872 
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   1,091   1,091 
 Accumulated deficit (1,871)  (2,045)  (4,028)
 Accumulated other comprehensive income (loss) (43)  168   81 
  Total Shareholders’ Equity 15,135   15,172   13,102 
  Total Liabilities and Shareholders’ Equity$129,480  $119,903  $109,974 
        
Book Value Per Share$  9.37  $  9.39  $  8.11 


Friendly Hills Bank
Statements of Operations (Unaudited)
 (in thousands, except per share information)
      
   For the six For the six
   months ended months ended
   6/30/15 6/30/14
Interest Income$ 2,128  $ 2,077 
Interest Expense (159)  (187)
 Net Interest Income 1,969   1,890 
Provision for Loan Losses 0   0 
 Net Interest Income after Provision for Loan Losses   1,969      1,890 
        
Noninterest Income 177   143 
Noninterest Expense (1,974)  (1,895)
Non-Recurring Items 96   130 
Income before Provision for Income Taxes 268   268 
Provision for Income Taxes (94)  0 
 Net Income$  174  $   268 
      
Basic and Diluted Earnings Per Share$ 0.11  $ 0.17 


            

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