Market Overview

Friendly Hills Bank Reports Second Quarter Results

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WHITTIER, Calif., Aug. 06, 2018 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the "bank") (OTC:FHLB) reported results for the second quarter of 2018.

For the six month period ending June 30, 2018, the bank reported net income of $380,000 or $0.19 per diluted share of common stock. The bank reported net income of $323,000 or $0.17 per diluted share of common stock for the six months ended June 30, 2017.    

As of June 30, 2018, the bank reported total assets of $154.5 million, a slight decrease from $155.1 million as of June 30, 2017. The bank's loan portfolio, net of unearned income, decreased 7% from $85.0 million as of June 30, 2017, to $79.1 million as of June 30, 2018. The portfolio remains diversified with $26.6 million or 33% in Commercial & Industrial Loans to local businesses (including $17.9 million in Owner Occupied Commercial Real Estate Loans), $22.9 million or 29% in Residential Real Estate Loans to investors and $23.5 million or 29% in Commercial Real Estate Loans to investors. The bank has an additional $26.8 million in unfunded loan commitments.

The bank's overall deposit base has decreased 1% in the twelve months ended June 30, 2018, from $117.3 million as of June 30, 2017, to $116.0 million as of June 30, 2018. Non-interest bearing deposits remain a substantial part of the deposit base (39%), despite decreasing from $45.9 million as of June 30, 2017, to $45.2 million as of June 30, 2018.  During the same time period interest-bearing deposits decreased from $71.4 million as of June 30, 2017, to $70.8 million on June 30, 2018.  

At June 30, 2018, shareholders' equity was $16.1 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 once again report an increase in earnings which are 18% higher than the same time period one year ago," commented Jeffrey K. Ball, Chief Executive Officer. "Net Interest Income and overall Net Income are benefiting from the overall increase in interest rates and lower effective tax rates.  The core deposit base remains robust providing a low cost of funds despite higher than normal volatility. The company continues to maintain a strong balance sheet with solid liquidity and capital ratios that are well above the regulatory standards for well capitalized banks. Although lower underwriting standards persist across the market, particularly from non-bank competition, we have held steadfast to our sound underwriting strategies in the interest of long-term shareholder value and the company's asset quality remains very high."

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 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)
               
      6/30/18   12/31/17   6/30/17
ASSETS            
Cash and due from banks $   4,268     $   12,634     $   3,746  
Interest bearing deposits with other financial institutions   17,327       5,130       20,408  
    Cash and Cash Equivalents   21,595       17,764       24,154  
Investment securities available-for-sale   47,157       53,131       39,857  
Federal Home Loan Bank stock   951       835       835  
Federal Reserve Bank stock   479       476       476  
Loans, net of unearned income   79,098       77,331       84,986  
Allowance for loan losses   (1,525 )     (1,525 )     (1,525 )
    Net Loans   77,573       75,806       83,461  
Premises and equipment, net   365       345         319  
Accrued interest receivable and other assets   6,332       6,109       5,996  
    Total Assets $ 154,452     $ 154,466     $ 155,098  
               
LIABILITIES AND SHAREHOLDERS' EQUITY          
Liabilities            
Deposits            
  Noninterest-bearing deposits $ 45,201     $   47,057     $   45,888  
  Interest-bearing deposits   70,793       66,856       71,408  
    Total Deposits   115,994       113,913       117,296  
FHLB advances   21,750       23,000       21,000  
Accrued interest payable and other liabilities   654       1,256       424  
    Total Liabilities   138,398         138,169        138,720  
Shareholders' Equity          
  Common stock, no par value, 10,000,000 shares authorized:          
  1,979,993 shares issued and outstanding   15,958       15,958       15,958  
  Additional paid-in-capital   1,293       1,091       1,091  
  Accumulated deficit   30       (350 )     (623 )
  Accumulated other comprehensive income (loss)   (1,227 )     (402 )     (48 )
    Total Shareholders' Equity   16,054       16,297       16,378  
    Total Liabilities and Shareholders' Equity $ 154,452     $ 154,466     $ 155,098  
               
Book Value Per Share $   8.11     $   8.40     $   8.45  
                       


 
Friendly Hills Bank
Statements of Operations (Unaudited)
 (in thousands, except per share information)
           
      For the three   For the three
      months ended   months ended
      6/30/18   6/30/17
Interest Income $  2,673     $  2,462  
Interest Expense   232       168  
  Net Interest Income   2,441       2,294  
Provision for Loan Losses   0       0  
  Net Interest Income after Provision for Loan Losses     2,441          2,294     
Noninterest Income   234       244  
Noninterest Expense   2,150       2,012  
Non-Recurring Items   1       0  
Income before Provision for Income Taxes   526       526  
(Provision) Benefit for Income Taxes   (146 )     (203 )
  Net Income $   380     $   323  
           
Basic and Diluted Earnings Per Share $   0.19     $   0.17  
               

Contacts:
Jeffrey K. Ball (President & CEO)
Viktor Uehlinger (EVP & CFO)
(562) 947-1920

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