WHITTIER, Calif., Nov. 14, 2014 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the "bank") (OTCBB:FHLB) reported results for the third quarter of 2014.
For the nine month period ending September 30, 2014, the bank reported a profit of $1.7 million or $1.07 per diluted share of common stock. This figure includes a $1.3 million tax credit, a $58,000 increase in the value of the interest rate caps and a $17,000 net gain on securities sold. The $1.3 million tax benefit results from a reduction in the bank's deferred tax valuation allowance as it is more likely than not that the bank will utilize the benefit in the future. The bank reported a profit of $311,000 or $0.19 per diluted share of common stock for the nine months ended September 30, 2013. This figure includes a $181,000 gain on securities sold, a $99,000 provision for loan loss and a $97,000 increase in the value of the interest rate caps.
As of September 30, 2014, the bank reported total assets of $113.3 million, a 7% increase from $105.5 million as of September 30, 2013. The bank's loan portfolio, net of unearned income, decreased 2% from $60.0 million as of September 30, 2013, to $58.5 million as of September 30, 2014. The portfolio remains diversified with $31.5 million or 54% in Commercial & Industrial Loans to local businesses (including $20.9 million in Owner Occupied Commercial Real Estate Loans), $11.7 million or 20% in Residential Real Estate Loans to investors and $8.8 million or 15% in Commercial Real Estate Loans to investors. The bank has an additional $16.5 million in unfunded loan commitments.
The bank's overall deposit base has increased 7% in the twelve months ended September 30, 2014, from $83.8 million as of September 30, 2013, to $89.7 million as of September 30, 2014. Non-interest bearing deposits continue to form a substantial part of the deposit base (41%), growing from $36.0 million to $36.7 million as of September 30, 2014. During the same time period interest-bearing deposits increased from $47.8 million to $53.0 million on September 30, 2014. The bank has no deposits which were sourced through brokers or other wholesale funding sources.
At September 30, 2014, shareholders' equity was $14.5 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.
The bank also announced that the Federal Reserve Bank of San Francisco, acting under its delegated authority, has approved Friendly Hills Bank's application for membership in the Federal Reserve System. The membership became effective on September 29, 2014. State-chartered banks may choose to become members of the Federal Reserve System if they meet specific, high standards set by the Board of Governors.
"Our ability to recognize the deferred tax asset is an important milestone in the continued development of the bank," commented Jeffrey K. Ball, Chief Executive Officer. "It recognizes this important benefit of the bank as we continue to expand earnings with anticipated growth. Although current market conditions continue to be challenging in terms of generating quality loans at attractive interest rate margins, the bank is well positioned in terms of capital and liquidity to support further growth. As we continuously evaluate our strategic plans for the long-term enhancement of shareholder value, we feel that the Federal Reserve's primary mission of promoting economic growth complements our continued efforts to provide a quality banking alternative for the markets we serve."
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) | |||
|
9/30/14 |
12/31/13 |
9/30/13 |
|
| ASSETS | |||
| Cash and due from banks | $ 4,130 | $ 3,217 | $ 5,519 |
| Interest bearing deposits with other financial institutions | 5,741 | 5,893 | 5,930 |
| Cash and Cash Equivalents | 9,871 | 9,110 | 11,449 |
| Investment securities available-for-sale | 39,711 | 37,750 | 30,748 |
| Federal Home Loan Bank stock | 677 | 646 | 600 |
| Federal Reserve Bank stock | 393 | 0 | 0 |
| Loans, net of unearned income | 58,501 | 57,635 | 59,996 |
| Allowance for loan losses | (1,595) | (1,457) | (1,457) |
| Net Loans | 56,906 | 56,178 | 58,539 |
| Premises and equipment, net | 496 | 561 | 574 |
| Accrued interest receivable and other assets | 5,290 | 3,667 | 3,625 |
| Total Assets | $ 113,344 | $ 107,912 | $ 105,535 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||
| Liabilities | |||
| Deposits | |||
| Noninterest-bearing deposits | $ 36,662 | $ 37,436 | $ 36,039 |
| Interest-bearing deposits | 53,039 | 48,911 | 47,759 |
| Total Deposits | 89,701 | 86,347 | 83,798 |
| FHLB advances | 8,750 | 8,750 | 8,750 |
| Accrued interest payable and other liabilities | 396 | 333 | 329 |
| Total Liabilities | 98,847 | 95,430 | 92,877 |
| 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 | 1,091 | 1,090 | 1,086 |
| Accumulated deficit | (2,561) | (4,295) | (4,357) |
| Accumulated other comprehensive income (loss) | 9 | (271) | (29) |
| Total Shareholders' Equity | 14,497 | 12,482 | 12,658 |
| Total Liabilities and Shareholders' Equity | $ 113,344 | $ 107,912 | $ 105,535 |
| Book Value Per Share | $ 8.97 | $ 7.72 | $ 7.83 |
| Friendly Hills Bank | ||
| Statements of Operations (Unaudited) | ||
| (in thousands, except per share information) | ||
| For the nine | For the nine | |
| months ended | months ended | |
| 9/30/14 | 9/30/13 | |
| Interest Income | $ 3,085 | $ 2,831 |
| Interest Expense | 273 | 318 |
| Net Interest Income | 2,812 | 2,513 |
| Provision for Credit Losses | 0 | 99 |
| Net Interest Income after Provision for Credit Losses | 2,812 | 2,414 |
| Other Income | 415 | 233 |
| Operating Expenses | 2,867 | 2,614 |
| Net Gain on Investment Securities and Hedging Contracts | 75 | 279 |
| Earnings before Provision for Income Taxes | 435 | 312 |
| Income Tax (Expense) Benefit | 1,300 | (1) |
| Net Earnings | $ 1,734 | $ 311 |
| Basic and Diluted Earnings Per Share | $ 1.07 | $ 0.19 |