WHITTIER, Calif., May 20, 2021 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “bank”) (OTCBB: FHLB) reported results for the first quarter of 2021 and announced its intention to form a holding company.
For the three month period ending March 31, 2021, the bank reported net income of $240,000 or $0.12 per diluted share of common stock. The bank reported net income of $164,000 or $0.08 per diluted share of common stock for the three months ended March 31, 2020.
As of March 31, 2021, the bank reported total assets of $214.1 million, a 32% increase from $162.4 million as of March 31, 2020, and a 5% increase from $204.2 million as of December 31, 2020. The bank’s loan portfolio, net of unearned income, increased 28% from $99.6 million as of March 31, 2020, to $127.2 million as of March 31, 2021. This reflects a 3% increase from $123.2 million as of December 31, 2020. The portfolio remains diversified with $64.1 million or 50% in Commercial & Industrial Loans to local businesses (including $23.3 million in Owner Occupied Commercial Real Estate Loans), $37.9 million or 30% in Commercial Real Estate Loans to investors and $21.6 million or 17% in Residential Real Estate Loans to investors. At March 31, 2021, the bank has an additional $20.5 million in unfunded loan commitments.
The bank’s overall deposit base has increased 46% in the twelve months ended March 31, 2021, from $117.8 million as of March 31, 2020, to $171.4 million as of March 31, 2021. The bank’s overall deposit base has increased 6% from $161.5 million as of December 31, 2020. Non-interest bearing deposits remain a substantial part of the deposit base (52%), increasing from $51.7 million as of March 31, 2020, to $89.3 million as of March 31, 2021. During the same time period, interest-bearing deposits increased from $66.1 million as of March 31, 2020, to $82.1 million on March 31, 2021.
At March 31, 2021, shareholders’ equity was $20.7 million and the bank’s total risk-based capital ratio was 21%, 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 Board of Directors, and a majority of the bank’s shareholders, have also approved a holding company reorganization for the bank by which the bank will become a wholly-owned subsidiary of Friendly Hills Bancorp (“Bancorp”). If the transaction is approved by the bank’s appropriate federal and California state regulatory authorities, each of the outstanding shares of the bank’s common stock will be exchanged for one share of Bancorp’s common stock. As a result, the shares of Bancorp’s common stock will be owned directly by the bank’s shareholders in the same proportion as their existing ownership of Bank common stock immediately prior to the reorganization.
In addition, the bank also previously announced the signing of a definitive agreement with Southern California Bancorp, (OTC Pink: BCAL), the holding company for Bank of Southern California, N.A., whereby the bank will acquire three Bank of Southern California offices. The offices are located in Orange, Redlands and Santa Fe Springs, California subject to satisfaction of certain conditions, including federal and state regulatory approval.
“We are pleased to report a strong start to the new year with a substantial increase in earnings per share in comparison to the previous year,” commented Jeffrey K. Ball, Chief Executive Officer. “The continued growth of the bank, and fee income from participation in the Paycheck Protection Program, have helped to offset continued decreases in interest rate margins associated with the sustained presence of low market interest rates. With these continued conditions, and the long-term effects of the COVID-19 pandemic being uncertain, we remain focused on maintaining a strong balance sheet while finding strategic opportunities to expand our business. That strategy is reflected in our recent announcement that we are acquiring three additional branch offices from another bank (including a branch office in Santa Fe Springs, California which we intend to promptly consolidate into our existing Santa Fe Springs, California branch). These new offices will expand our footprint into additional markets which we feel provide great opportunity for our client focused strategy of relationship banking. Furthermore, the reorganization into a holding company structure, which we have considered for several years and which is a transaction independent from the branch purchase, will provide us with additional corporate and capital flexibility.”
Following the reorganization, it is expected that Bancorp’s common stock will trade under the same ticker symbol currently used by the Bank, “FHLB”.
The bank anticipates consummating the reorganization and branch office acquisitions in the third quarter of 2021.
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. 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 concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, failure to receive regulatory approval or shareholder approval of the reorganization or branch purchase, a decision by the Board of Directors to abandon the reorganization, changes in the federal, state and local economies, decline in loan production, loss of clients, adverse regulatory and litigation developments, the ability to control costs and expenses, interest rate changes, the effects of COVID-19 on our business, borrowers, clients and employees, financial policies of the United States government, natural disasters and the impact of competition in our market area. The Bank disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any forward-looking statements contained in this release to reflect future events or developments except as required by law.
| Friendly Hills Bank | |||||||||||||
| Balance Sheets (Unaudited) | |||||||||||||
| (in thousands, except per share information) | |||||||||||||
3/31/21 | 12/31/20 | 3/31/20 | |||||||||||
| ASSETS | |||||||||||||
| Cash and due from banks | $ | 3,200 | $ | 2,596 | $ | 3,325 | |||||||
| Interest bearing deposits with other financial institutions | 56,252 | 48,316 | 20,083 | ||||||||||
| Cash and Cash Equivalents | 59,452 | 50,912 | 23,408 | ||||||||||
| Investment securities available-for-sale | 17,744 | 20,070 | 29,543 | ||||||||||
| Investment securities held-to-maturity | 2,000 | 2,000 | 2,000 | ||||||||||
| Federal Home Loan Bank and other restricted stock | 2,632 | 2,632 | 2,705 | ||||||||||
| Loans, net of unearned income | 127,186 | 123,230 | 99,620 | ||||||||||
| Allowance for loan losses | (1,603 | ) | (1,464 | ) | (1,332 | ) | |||||||
| Net Loans | 125,583 | 121,766 | 98,288 | ||||||||||
| Premises and equipment, net | 249 | 264 | 297 | ||||||||||
| Bank Owned Life Insurance | 4,870 | 4,842 | 4,758 | ||||||||||
| Accrued interest receivable and other assets | 1,592 | 1,722 | 1,397 | ||||||||||
| Total Assets | $ | 214,122 | $ | 204,208 | $ | 162,396 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||
| Liabilities | |||||||||||||
| Deposits | |||||||||||||
| Noninterest-bearing deposits | $ | 89,340 | $ | 78,997 | $ | 51,684 | |||||||
| Interest-bearing deposits | 82,055 | 82,532 | 66,097 | ||||||||||
| Total Deposits | 171,395 | 161,529 | 117,781 | ||||||||||
| FHLB Advances | 20,500 | 20,500 | 23,250 | ||||||||||
| Accrued interest payable and other liabilities | 1,480 | 1,664 | 1,489 | ||||||||||
| Total Liabilities | 193,375 | 183,693 | 142,520 | ||||||||||
| Shareholders’ Equity | |||||||||||||
| Common stock, no par value, 10,000,000 shares authorized: | |||||||||||||
| 2,006,393 shares issued and outstanding as of 12/31/20 | |||||||||||||
| 1,997,993 shares issued and outstanding as of 12/31/19 | 15,958 | 15,958 | 15,958 | ||||||||||
| Additional paid-in-capital | 1,587 | 1,570 | 1,487 | ||||||||||
| Accumulated deficit | 2,922 | 2,682 | 1,824 | ||||||||||
| Accumulated other comprehensive income (loss) | 280 | 305 | 607 | ||||||||||
| Total Shareholders’ Equity | 20,747 | 20,515 | 19,876 | ||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 214,122 | $ | 204,208 | $ | 162,396 | |||||||
| Book Value Per Share | $ | 10.34 | $ | 10.22 | $ | 9.95 | |||||||
| Friendly Hills Bank | |||||||||
| Statements of Operations (Unaudited) | |||||||||
| (in thousands, except per share information) | |||||||||
| For the three | For the three | ||||||||
| months ended | months ended | ||||||||
| 3/31/21 | 3/31/20 | ||||||||
| Interest Income | $ | 1,474 | $ | 1,423 | |||||
| Interest Expense | 135 | 178 | |||||||
| Net Interest Income | 1,339 | 1,245 | |||||||
| Provision for Loan Losses | 0 | 0 | |||||||
| Net Interest Income after Provision for Loan Losses | 1,339 | 1,245 | |||||||
| Noninterest Income | 118 | 137 | |||||||
| Noninterest Expense | 1,126 | 1,159 | |||||||
| Non-Recurring Items | 0 | 0 | |||||||
| Income before Provision for Income Taxes | 331 | 223 | |||||||
| (Provision) Benefit for Income Taxes | (91 | ) | (59 | ) | |||||
| Net Income | $ | 240 | $ | 164 | |||||
| Basic and Diluted Earnings Per Share | $ | 0.12 | $ | 0.08 | |||||
Contacts:
Jeffrey K. Ball (President & CEO)
Viktor Uehlinger (EVP & CFO)
(562) 947-1920