Friendly Hills Bank (the "bank") (OTCBB: FHLB) reported results for
the first quarter of 2012, after completing its fifth full year of
operations since opening on September 18, 2006.
For the three month period ending March 31, 2012, the bank
reported a profit of $75,000 or $0.05 per diluted share of common
stock. This figure includes an $8,000 increase in the value of the
interest rate caps. The bank reported a profit of $171,000 or $0.11
per diluted share of common stock for the three months ended March
31, 2011. This figure includes a $28,000 increase in the value of
an interest rate cap.
As of March 31, 2012, the bank reported total assets of $98.8
million, a 1% increase from $98.1 million as of March 31, 2011. The
bank's loan portfolio, net of unearned income, decreased 7% from
$62.3 million as of March 31, 2011, to $57.6 million as of March
31, 2012. The portfolio remains diversified with $24.8 million or
43% in Commercial & Industrial Loans to local businesses
(including $14.4 million in Owner Occupied Commercial Real Estate
Loans), $19.0 million or 33% in Residential Real Estate Loans to
investors and $9.1 million or 16% in Commercial Real Estate Loans
to investors. The bank has an additional $13.3 million in unfunded
loan commitments.
The bank's overall deposit base has decreased slightly in the
twelve months ended March 31, 2012, from $77.2 million as of March
31, 2011, to $77.1 million as of March 31, 2012. Non-interest
bearing deposits continue to form a substantial part of the deposit
base (38.0%), growing from $25.7 million to $29.3 million as of
March 31, 2012. During the same time period interest-bearing
deposits decreased from $51.4 million to $47.8 million on March 31,
2012. The bank has no deposits which were sourced through brokers
or other wholesale funding sources.
At March 31, 2012, shareholders' equity was $12.7 million and
the bank's total risk-based capital ratio was 20.5%, 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.
"While we are pleased with the continued core profitability of
the company," commented Jeffrey K. Ball, Chief Executive Officer,
"we remain concerned about overall market conditions. Asset yields
on new business continue to provide diminishing returns for
relative risk providing less opportunity to leverage the bank's low
cost deposit base. From a risk management perspective we continue
to view these conditions as unsustainable. We remain prudent in
maintaining our underwriting standards at the risk of continued
reductions in the balance sheet. This strategy is consistent with
our focus on a longer term outlook for shareholder value. This
includes prudent management of our expenses in order to maintain
profitability as the bank remains well positioned in terms of
capital, liquidity and reserves. Our board continues to prioritize
long term shareholder value with its commitment to further
leveraging the strength of our relationship-focused approach to
financial services."
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 at 16011 E. Whittier Blvd. in Whittier, California
with an additional branch office at 12070 East Telegraph Road,
Suite #100 in Santa Fe Springs, 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)
3/31/12 12/31/11 3/31/11
---------- ---------- ----------
ASSETS
Cash and due from banks $ 3,028 $ 2,305 $ 2,788
Interest bearing deposits with other
financial institutions 9,907 4,575 4,900
---------- ---------- ----------
Cash and Cash Equivalents 12,935 6,880 7,688
Investment securities available-for-sale 25,082 26,826 27,246
Federal Home Loan Bank stock 610 610 521
Loans, net of unearned income 57,595 60,916 62,264
Allowance for loan losses (1,813) (1,677) (1,371)
---------- ---------- ----------
Net Loans 55,782 59,239 60,893
Premises and equipment, net 724 739 836
Accrued interest receivable and other
assets 3,647 3,673 894
---------- ---------- ----------
Total Assets $ 98,780 $ 97,967 $ 98,078
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing deposits $ 29,260 $ 27,111 $ 25,744
Interest-bearing deposits 47,807 49,269 51,441
---------- ---------- ----------
Total Deposits 77,067 76,380 77,185
FHLB advances 8,750 8,750 8,750
Accrued interest payable and other
liabilities 247 247 260
---------- ---------- ----------
Total Liabilities 86,064 85,377 86,195
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 1,060 1,053 1,016
Accumulated deficit (4,738) (4,813) (4,790)
Accumulated other comprehensive income 436 392 (301)
---------- ---------- ----------
Total Shareholders' Equity 12,716 12,590 11,883
---------- ---------- ----------
Total Liabilities and
Shareholders' Equity $ 98,780 $ 97,967 $ 98,078
========== ========== ==========
Book Value Per Share $ 7.87 $ 7.79 $ 7.35
========== ========== ==========
Friendly Hills Bank
Statements of Operations (Unaudited)
(in thousands, except per share information)
For the three For the three
months ended months ended
3/31/12 3/31/11
------------- -------------
Interest Income $ 1,078 $ 1,160
Interest Expense 130 160
------------- -------------
Net Interest Income 948 1,000
Provision for Credit Losses 0 1
------------- -------------
Net Interest Income after Provision for
Credit Losses 948 999
Other Income 69 37
Operating Expenses 950 893
Gain on Hedging Contracts 8 28
------------- -------------
Earnings before Provision for Income Taxes 75 171
Income Tax Expense 0 0
------------- -------------
Net Earnings $ 75 $ 171
------------- -------------
Basic and Diluted Earnings Per Share $ 0.05 $ 0.11
============= =============
Contacts: Jeffrey K. Ball (President & CEO) Daniel L.
Erickson (EVP & CFO) (562) 947-1920
Friendly Hills Bancorp (PK) (USOTC:FHLB)
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