News Column

Friendly Hills Bank Reports First Quarter Results

May 21, 2014

WHITTIER, Calif., May 21, 2014 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the "bank") (OTCBB:FHLB) reported results for the first quarter of 2014.

For the three month period ending March 31, 2014, the bank reported a profit of $183,000 or $0.11 per diluted share of common stock. This figure includes a $32,000 increase in the value of the interest rate caps and a $23,000 gain on securities sold. The bank reported a loss of $47,000 or ($0.03) per diluted share of common stock for the three months ended March 31, 2013. This figure includes a $33,000 increase in the value of the interest rate caps and a $99,000 provision for loan loss.

As of March 31, 2014, the bank reported total assets of $108.2 million, a 5% increase from $102.6 million as of March 31, 2013. The bank's loan portfolio, net of unearned income, decreased 4% from $60.9 million as of March 31, 2013, to $58.7 million as of March 31, 2014. The portfolio remains diversified with $24.1 million or 41% in Commercial & Industrial Loans to local businesses (including $17.1 million in Owner Occupied Commercial Real Estate Loans), $17.0 million or 29% in Residential Real Estate Loans to investors and $11.7 million or 20% in Commercial Real Estate Loans to investors. The bank has an additional $18.3 million in unfunded loan commitments.

The bank's overall deposit base has increased 7% in the twelve months ended March 31, 2014, from $80.8 million as of March 31, 2013, to $86.2 million as of March 31, 2014. Non-interest bearing deposits continue to form a substantial part of the deposit base (40%), growing from $33.4 million to $34.7 million as of March 31, 2014. During the same time period interest-bearing deposits increased from $47.4 million to $51.5 million on March 31, 2014.   The bank has no deposits which were sourced through brokers or other wholesale funding sources. 

At March 31, 2014, shareholders' equity was $12.9 million and the bank's total risk-based capital ratio was 19%, 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.

"We are pleased to report increased earnings for the start of the new year," commented Jeffrey K. Ball, Chief Executive Officer, "resulting primarily from an increase in net interest income. Although margins and quality loan growth continue to be a challenge with this prolonged low interest rate environment, we continue to manage the bank's exposure to future interest rate changes while remaining properly positioned for anticipated growth opportunities."

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)
       
 3/31/1412/31/133/31/13
ASSETS      
Cash and due from banks$ 3,757$ 3,217$ 2,923
Interest bearing deposits with other financial institutions 6,516 5,893 6,161
Cash and Cash Equivalents 10,273 9,110 9,084
Investment securities available-for-sale 35,844 37,750 29,011
Federal Home Loan Bank stock 600 646 605
Loans, net of unearned income 58,669 57,635 60,939
Allowance for loan losses (1,452) (1,457) (1,266)
Net Loans 57,217 56,178 59,673
Premises and equipment, net 548 561 620
Accrued interest receivable and other assets 3,714 3,667 3,631
Total Assets$ 108,196$ 107,912$ 102,624
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Liabilities      
Deposits      
Noninterest-bearing deposits$ 34,661$ 37,436$ 33,383
Interest-bearing deposits 51,545 48,911 47,398
Total Deposits 86,206 86,347 80,781
FHLB advances 8,750 8,750 8,750
Accrued interest payable and other liabilities 342 333 321
Total Liabilities 95,298 95,430 89,852
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 1,090 1,090 1,079
Accumulated deficit (4,112) (4,295) (4,715)
Accumulated other comprehensive income (loss) (38) (271) 450
Total Shareholders' Equity 12,898 12,482 12,772
Total Liabilities and Shareholders' Equity$ 108,196$ 107,912$ 102,624
       
Book Value Per Share$ 7.98$ 7.72$ 7.90
 
Friendly Hills Bank
Statements of Operations (Unaudited)
 (in thousands, except per share information)
     
  For the three

months ended

3/31/14
For the three

months ended

3/31/13
Interest Income$ 1,038$ 933
Interest Expense 103 112
Net Interest Income 935 821
Provision for Credit Losses 0 99
Net Interest Income after Provision for Credit Losses 935 722
     
Other Income 147 67
Operating Expenses 955 869
Gain on Investment Securities and Hedging Contracts 56 33
Earnings (Loss) before Provision for Income Taxes 183 (47)
Income Tax Expense 0 0
Net Earnings (Loss)$ 183$ (47)
     
Basic and Diluted Earnings (Loss) Per Share$ 0.11$ (0.03)

CONTACT: Jeffrey K. Ball (President & CEO) Daniel L. Erickson (EVP & CFO) (562) 947-1920



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Source: Friendly Hills Bank


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