Friendly Hills Bank Reports Second Quarter Results

Date : 08/08/2013 @ 12:00PM
Source : Marketwired
Stock : Friendly Hills Bank (whittier, Ca) (PC) (FHLB)
Quote : 9.6  -0.1 (-1.03%) @ 9:05PM

Friendly Hills Bank Reports Second Quarter Results

Friendly Hills Bank (Whittier, (USOTC:FHLB)
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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.


----------------------------------------------------------------------------
                            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
                                               ========  ========  ========


----------------------------------------------------------------------------
                            Friendly Hills Bank
                    Statements of Operations (Unaudited)
                (in thousands, except per share information)
----------------------------------------------------------------------------

                                                For the six    For the six
                                                months ended   months ended
                                                  6/30/13        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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