Friendly Hills Bank Reports First Quarter Results

WHITTIER, Calif., May 12, 2020 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “bank”) (OTCBB: FHLB) reported results for the first quarter of 2020.

For the three month period ending March 31, 2020, the bank reported net income of $164,000 or $0.08 per diluted share of common stock. The bank reported net income of $301,000 or $0.15 per diluted share of common stock for the three months ended March 31, 2019.

As of March 31, 2020, the bank reported total assets of $162.4 million, a 3% increase from $158.3 million as of March 31, 2019. The bank’s loan portfolio, net of unearned income, increased 12% from $89.0 million as of March 31, 2019, to $99.6 million as of March 31, 2020. The portfolio remains diversified with $34.8 million or 35% in Commercial & Industrial Loans to local businesses (including $24.5 million in Owner Occupied Commercial Real Estate Loans), $40.1 million or 40% in Commercial Real Estate Loans to investors and $19.8 million or 20% in Residential Real Estate Loans to investors. The bank has an additional $19.6 million in unfunded loan commitments.

The bank’s overall deposit base has decreased 4% in the twelve months ended March 31, 2020, from $123.0 million as of March 31, 2019, to $117.8 million as of March 31, 2020. Non-interest bearing deposits remain a substantial part of the deposit base (44%), increasing from $46.7 million as of March 31, 2019, to $51.7 million as of March 31, 2020. During the same time period, interest-bearing deposits decreased from $76.3 million as of March 31, 2019, to $66.1 million on March 31, 2020.

At March 31, 2020, shareholders’ equity was $19.9 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.

“Over the past twelve months the company has grown Book Value per Share by over 13% from $8.79 as of March 31, 2019, to $9.95 as of March 31, 2020,” commented Jeffrey K. Ball, Chief Executive Officer. “This growth is attributable to the selective expansion of our loan portfolio and consistent profitability which is reflective of a strong balance sheet. Current market conditions are highly unstable as a result of the COVID-19 pandemic situation with market interest rates moving into record low territory. This has a negative impact on interest rate margins and further emphasizes our consistent approach to loan underwriting with strong asset quality. It is too early to assess the impact of this situation on the overall economy. But we feel that the bank is well positioned for this continued uncertainty with a strong capital and liquidity position. During challenging times the value of community bank relationships are more emphasized and we are well positioned to seek selective growth opportunities while serving our local communities.”

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)

			3/31/20			12/31/19			3/31/19
ASSETS
Cash and due from banks			$	3,325		$	3,203		$	4,852
Interest bearing deposits with other financial institutions				20,083			20,855			5,580
		Cash and Cash Equivalents		23,408			24,058			10,432
Investment securities available-for-sale				29,543			32,778			51,911
Investment securities held-to-maturity				2,000			0			0
Federal Home Loan Bank and other restricted stock				2,705			2,705			2,590
Loans, net of unearned income				99,620			93,988			89,044
Allowance for loan losses				(1,332	)		(1,332	)		(1,525	)
		Net Loans		98,288			92,656			87,519
Premises and equipment, net				532			313			634
Bank Owned Life Insurance				4,758			4,730			3,658
Deferred tax asset				162			19			548
Accrued interest receivable and other assets				1,000			1,175			1,028
		Total Assets	$	162,396		$	158,434		$	158,320

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
	Noninterest-bearing deposits		$	51,684		$	54,281		$	46,693
	Interest-bearing deposits			66,097			63,932			76,336
		Total Deposits		117,781			118,213			123,029
FHLB advances				23,511			20,531			16,590
Accrued interest payable and other liabilities				1,229			644			1,147
		Total Liabilities		142,521			139,388			140,766
Shareholders’ Equity
	Common stock, no par value, 10,000,000 shares authorized:
	1,997,993 shares issued and outstanding as of 3/31/19			15,958			15,958			15,958
	Additional paid-in-capital			1,487			1,470			1,419
	Accumulated deficit			1,824			1,660			858
	Accumulated other comprehensive income (loss)			606			(42	)		(681	)
		Total Shareholders’ Equity		19,876			19,046			17,554
		Total Liabilities and Shareholders’ Equity	$	162,396		$	158,434		$	158,320

Book Value Per Share			$	9.95		$	9.53		$	8.79

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

		For the three			For the three
		months ended			months ended
		3/31/20			3/31/19
Interest Income		$	1,423		$	1,518
Interest Expense			178			138
	Net Interest Income		1,245			1,380
Provision for Loan Losses			0			0
	Net Interest Income after Provision for Loan Losses		1,245			1,380
Noninterest Income			137			126
Noninterest Expense			1,159			1,085
Non-Recurring Items			0			0
Income before Provision for Income Taxes			223			421
(Provision) Benefit for Income Taxes			(59	)		(120	)
	Net Income	$	164		$	301

Basic and Diluted Earnings Per Share		$	0.08		$	0.15

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

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