Friendly Hills Bank (the "bank") (OTCBB: FHLB) reported results for
the second quarter of 2013.
For the six month period ending June 30, 2013, the bank reported
a profit of $258,000 or $0.16 per diluted share of common stock.
This figure includes a $68,000 increase in the value of interest
rate caps, a $181,000 gain on securities sold, and a $99,000
provision for loan losses. The bank reported a profit of $172,000
or $0.11 per diluted share of common stock for the six months ended
June 30, 2012. This figure includes a $20,000 increase in the value
of interest rate caps.
As of June 30, 2013, the bank reported total assets of $99.7
million, a 1% increase from $98.9 million as of June 30, 2012. The
bank's loan portfolio, net of unearned income, increased 2% from
$57.3 million as of June 30, 2012, to $58.6 million as of June 30,
2013. The portfolio remains diversified with $26.1 million or 43%
in Commercial & Industrial Loans to local businesses (including
$16.3 million in Owner Occupied Commercial Real Estate Loans),
$14.7 million or 25% in Residential Real Estate Loans to investors
and $13.1 million or 22% in Commercial Real Estate Loans to
investors. The bank has an additional $16.3 million in unfunded
loan commitments.
The bank's overall deposit base has increased 1% in the twelve
months ended June 30, 2013, from $77.1 million as of June 30, 2012,
to $78.0 million as of June 30, 2013. Non-interest bearing deposits
continue to form a substantial part of the deposit base (42%),
growing from $29.7 million to $33.0 million as of June 30, 2013.
During the same time period interest-bearing deposits decreased 5%
from $47.4 million to $45.0 million on June 30, 2013. The bank has
no deposits which were sourced through brokers or other wholesale
funding sources.
At June 30, 2013, shareholders' equity was $12.6 million and the
bank's total risk-based capital ratio was 19%, significantly
exceeding the "well-capitalized" level of 10% prescribed under
current 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.
"The continued narrowing of interest rate margins has had a
significant impact on the Company's primary revenue driver which is
Net Interest Income," commented Jeffrey K. Ball, Chief Executive
Officer. "While we have partially offset this trend with growth in
the loan portfolio, Net Interest Income before Provision for Credit
Losses has dropped 11% over the first six months of this year in
comparison to the same period last year. We have offset this
decline in revenue over the first six months of the year by
reducing our Operating Expenses by 7% compared to the same time
period a year ago. We continue to source quality loan opportunities
while maintaining our strong underwriting standards with sufficient
capital and liquidity to support our focus on long-term shareholder
value."
The bank also announced that its Chief Executive Officer,
Jeffrey K. Ball, has been elected Chairman of the California
Bankers Association and began serving a one year term in May. The
California Bankers Association is one of the largest state trade
associations in the country and represents over 200 institutions of
all sizes doing business in the State of California.
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.
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Friendly Hills Bank
Balance Sheets (Unaudited)
(in thousands, except per share information)
----------------------------------------------------------------------------
6/30/13 12/31/12 6/30/12
-------- -------- --------
ASSETS
Cash and due from banks $ 3,342 $ 3,679 $ 2,499
Interest bearing deposits with other financial
institutions 7,874 7,515 10,750
-------- -------- --------
Cash and Cash Equivalents 11,216 11,194 13,249
Investment securities available-for-sale 26,421 29,906 25,282
Federal Home Loan Bank stock 600 605 605
Loans, net of unearned income 58,598 59,991 57,348
Allowance for loan losses (1,346) (1,168) (1,812)
-------- -------- --------
Net Loans 57,252 58,823 55,536
Premises and equipment, net 597 627 690
Accrued interest receivable and other assets 3,605 3,552 3,552
-------- -------- --------
Total Assets $ 99,691 $104,707 $ 98,914
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing deposits $ 32,997 $ 33,698 $ 29,687
Interest-bearing deposits 44,992 49,092 47,377
-------- -------- --------
Total Deposits 77,989 82,790 77,064
FHLB advances 8,750 8,750 8,750
Accrued interest payable and other liabilities 325 326 245
-------- -------- --------
Total Liabilities 87,064 91,866 86,059
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 1,083 1,076 1,066
Accumulated deficit (4,410) (4,668) (4,640)
Accumulated other comprehensive income (4) 475 471
-------- -------- --------
Total Shareholders' Equity 12,627 12,841 12,855
-------- -------- --------
Total Liabilities and Shareholders'
Equity $ 99,691 $104,707 $ 98,914
======== ======== ========
Book Value Per Share $ 7.81 $ 7.95 $ 7.95
======== ======== ========
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Friendly Hills Bank
Statements of Operations (Unaudited)
(in thousands, except per share information)
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For the six For the six
months ended months ended
6/30/13 6/30/12
------------- -------------
Interest Income $ 1,884 $ 2,125
Interest Expense 215 256
------------- -------------
Net Interest Income 1,669 1,869
Provision for Credit Losses 99 0
------------- -------------
Net Interest Income after Provision for
Credit Losses 1,570 1,869
Other Income 163 139
Operating Expenses 1,723 1,855
Investment Securities and Hedging Contracts
Gains 249 20
------------- -------------
Earnings before Provision for Income Taxes 259 173
Income Tax Expense (1) (1)
------------- -------------
Net Earnings $ 258 $ 172
------------- -------------
Basic and Diluted Earnings Per Share $ 0.16 $ 0.11
============= =============
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