Friendly Hills Bank (the "bank") (OTCBB: FHLB) reported results for
the first quarter of 2013.
For the three month period ending March 31, 2013, the bank
reported a loss of $47,000 or ($0.03) per diluted share of common
stock. This figure includes a $33,000 increase in the value of the
interest rate caps and a $99,000 provision for loan loss. The bank
reported a profit of $75,000 or $0.05 per diluted share of common
stock for the three months ended March 31, 2012. This figure
includes an $8,000 increase in the value of an interest rate
cap.
As of March 31, 2013, the bank reported total assets of $102.6
million, a 4% increase from $98.8 million as of March 31, 2012. The
bank's loan portfolio, net of unearned income, increased 6% from
$57.6 million as of March 31, 2012, to $60.9 million as of March
31, 2013. The portfolio remains diversified with $27.7 million or
46% in Commercial & Industrial Loans to local businesses
(including $17.4 million in Owner Occupied Commercial Real Estate
Loans), $16.4 million or 27% in Residential Real Estate Loans to
investors and $12.2 million or 20% in Commercial Real Estate Loans
to investors. The bank has an additional $15.3 million in unfunded
loan commitments.
The bank's overall deposit base has increased 5% in the twelve
months ended March 31, 2013, from $77.1 million as of March 31,
2012, to $80.8 million as of March 31, 2013. Non-interest bearing
deposits continue to form a substantial part of the deposit base
(41%), growing from $29.3 million to $33.4 million as of March 31,
2013. During the same time period interest-bearing deposits
decreased slightly from $47.8 million to $47.4 million on March 31,
2013. The bank has no deposits which were sourced through brokers
or other wholesale funding sources.
At March 31, 2013, shareholders' equity was $12.8 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.
"First quarter earnings were negatively impacted by the
continued narrowing of interest rate margins resulting from the
current economic environment," commented Jeffrey K. Ball, Chief
Executive Officer. "Despite 4% growth of the overall bank and a 6%
increase in loans, Interest Income was $145,000, or 14%, lower than
the same period last year. This was partially offset by an $18,000,
or 14%, reduction in Interest Expense and an $81,000, or 9%,
reduction in Operating Expenses over the same time period.
Meanwhile, as our local economy remains soft, we have increased our
loan loss provision as part of our continued risk management
process. Although disappointed by the short-term impact of these
factors, we feel that the bank remains in a strong position for
future growth with sufficient capital and liquidity to support
long-term 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 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)
---------------------------------------------------------------------------
3/31/13 12/31/12 3/31/12
-------- -------- -------
ASSETS
Cash and due from banks $ 2,923 $ 3,679 $ 3,003
Interest bearing deposits with other financial
institutions 6,161 7,515 9,932
-------- -------- -------
Cash and Cash Equivalents 9,084 11,194 12,935
Investment securities available-for-sale 29,011 29,906 25,082
Federal Home Loan Bank stock 605 605 610
Loans, net of unearned income 60,939 59,991 57,595
Allowance for loan losses (1,266) (1,168) (1,813)
-------- -------- -------
Net Loans 59,673 58,823 55,782
Premises and equipment, net 620 627 724
Accrued interest receivable and other assets 3,631 3,552 3,647
-------- -------- -------
Total Assets $102,624 $104,707 $98,780
======== ======== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing deposits $ 33,383 $ 33,698 $29,260
Interest-bearing deposits 47,398 49,092 47,807
-------- -------- -------
Total Deposits 80,781 82,790 77,067
FHLB advances 8,750 8,750 8,750
Accrued interest payable and other liabilities 321 326 247
-------- -------- -------
Total Liabilities 89,852 91,866 86,064
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 1,079 1,076 1,060
Accumulated deficit (4,715) (4,668) (4,738)
Accumulated other comprehensive income 450 475 436
-------- -------- -------
Total Shareholders' Equity 12,772 12,841 12,716
-------- -------- -------
Total Liabilities and Shareholders'
Equity $102,624 $104,707 $98,780
======== ======== =======
Book Value Per Share $ 7.90 $ 7.95 $ 7.87
======== ======== =======
Friendly Hills Bank
Statements of Operations (Unaudited)
(in thousands, except per share information)
----------------------------------------------------------------------------
For the For the
three three
months months
ended ended
3/31/13 3/31/12
--------- ---------
Interest Income $ 933 $ 1,078
Interest Expense 112 130
--------- ---------
Net Interest Income 821 948
Provision for Credit Losses 99 0
--------- ---------
Net Interest Income after Provision for Credit Losses 722 948
Other Income 67 69
Operating Expenses 869 950
Gain on Hedging Contracts 33 8
--------- ---------
Earnings before Provision for Income Taxes (47) 75
Income Tax Expense 0 0
--------- ---------
Net Earnings $ (47) $ 75
--------- ---------
Basic and Diluted Earnings Per Share $ (0.03) $ 0.05
========= =========
Friendly Hills Bancorp (PK) (USOTC:FHLB)
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