Friendly Hills Bank Reports First Quarter Results

WHITTIER, Calif., May 09, 2018 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “bank”) (OTCBB:FHLB) reported results for the first quarter of 2018.

For the three month period ending March 31, 2018, the bank reported net income of $192,000 or $0.10 per diluted share of common stock. The bank reported net income of $162,000 or $0.08 per diluted share of common stock for the three months ended March 31, 2017.

As of March 31, 2018, the bank reported total assets of $155.7 million, the same figure as of March 31, 2017. The bank’s loan portfolio, net of unearned income, decreased 2% from $83.0 million as of March 31, 2017, to $81.4 million as of March 31, 2018. The portfolio remains diversified with $28.3 million or 34% in Commercial & Industrial Loans to local businesses (including $17.2 million in Owner Occupied Commercial Real Estate Loans), $21.8 million or 27% in Residential Real Estate Loans to investors and $26.0 million or 32% in Commercial Real Estate Loans to investors. The bank has an additional $24.3 million in unfunded loan commitments.

The bank’s overall deposit base has decreased 9% in the twelve months ended March 31, 2018, from $123.2 million as of March 31, 2017, to $112.2 million as of March 31, 2018. Non-interest bearing deposits remain a substantial part of the deposit base (38%), despite decreasing from $51.5 million as of March 31, 2017, to $42.6 million as of March 31, 2018. During the same time period interest-bearing deposits decreased from $71.7 million as of March 31, 2017, to $69.6 million on March 31, 2018.

At March 31, 2018, shareholders’ equity was $16.1 million and the bank’s total risk-based capital ratio was 18%, 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.

“It is normal for the bank to experience volatility in its deposit base due to the high concentration of core deposits in our balance sheet,” commented Jeffrey K. Ball, Chief Executive Officer. “We did experience an unusually higher amount of volatility right at the end of the quarter which is not associated with any meaningful decrease in deposit relationships. The bank continues to maintain a strong balance sheet as reflected in asset quality, deposit strength and a sufficient capital base for continued long-term growth in shareholder value. Meanwhile, increased earnings are primarily associated with higher asset yields from rising interest rates and the benefits of the lower effective corporate income tax rate.”

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)

			3/31/18			12/31/17			3/31/17
ASSETS
Cash and due from banks			$	4,058		$	12,634		$	3,872
Interest bearing deposits with other financial institutions				15,013			5,130			21,868
		Cash and Cash Equivalents		19,071			17,764			25,740
Investment securities available-for-sale				48,857			53,131			40,883
Federal Home Loan Bank stock				835			835			779
Federal Reserve Bank stock				479			476			476
Loans, net of unearned income				81,402			77,331			82,965
Allowance for loan losses				(1,525	)		(1,525	)		(1,525	)
		Net Loans		79,877			75,806			81,440
Premises and equipment, net				334			345			285
Accrued interest receivable and other assets				6,269			6,109			6,077
		Total Assets	$	155,722		$	154,466		$	155,680

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
	Noninterest-bearing deposits		$	42,599		$	47,057		$	51,508
	Interest-bearing deposits			69,609			66,856			71,683
		Total Deposits		112,208			113,913			123,191
FHLB advances				26,750			23,000			16,000
Accrued interest payable and other liabilities				697			1,256			446
		Total Liabilities		139,655			138,169			139,637
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			(79	)		(350	)		(783	)
	Accumulated other comprehensive income (loss)			(1,105	)		(402	)		(223	)
		Total Shareholders’ Equity		16,067			16,297			16,043
		Total Liabilities and Shareholders’ Equity	$	155,722		$	154,466		$	155,680

Book Value Per Share			$	8.11		$	8.40		$	8.27

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

		For the three			For the three
		months ended			months ended
		3/31/18			3/31/17
Interest Income		$	1,327		$	1,210
Interest Expense			122			83
	Net Interest Income		1,205			1,127
Provision for Loan Losses			0			0
	Net Interest Income after Provision for Loan Losses		1,205			1,127
Noninterest Income			121			133
Noninterest Expense			1,061			996
Non-Recurring Items			1			0
Income before Provision for Income Taxes			266			264
(Provision) Benefit for Income Taxes			(74	)		(102	)
	Net Income	$	192		$	162

Basic and Diluted Earnings Per Share		$	0.10		$	0.08

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

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Friendly Hills Bank Reports First Quarter Results

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