Friendly Hills Bank Reports Third Quarter Results

WHITTIER, Calif., Nov. 12, 2015 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “bank”) (OTCBB:FHLB) reported results for the third quarter of 2015.

For the nine month period ending September 30, 2015, the bank reported net income of $297,000 or $0.18 per diluted share of common stock. This figure includes a $22,000 increase in the value of the interest rate caps, a $31,000 gain on securities sold, and a $43,000 gain on other real estate owned. The bank reported net income of $1.7 million or $1.07 per diluted share of common stock for the nine months ended September 30, 2014. 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.

As of September 30, 2015, the bank reported total assets of $129.6 million, a 14% increase from $113.3 million as of September 30, 2014. The bank’s loan portfolio, net of unearned income, increased 18% from $58.5 million as of September 30, 2014, to $68.8 million as of September 30, 2015. The portfolio remains diversified with $33.1 million or 48% in Commercial & Industrial Loans to local businesses (including $18.9 million in Owner Occupied Commercial Real Estate Loans), $18.6 million or 27% in Residential Real Estate Loans to investors and $9.0 million or 13% in Commercial Real Estate Loans to investors. The bank has an additional $17.3 million in unfunded loan commitments.

The bank’s overall deposit base has increased 10% in the twelve months ended September 30, 2015, from $89.7 million as of September 30, 2014, to $98.6 million as of September 30, 2015. Non-interest bearing deposits continue to form a substantial part of the deposit base (45%), growing from $36.7 million to $44.1 million as of September 30, 2015. During the same time period interest-bearing deposits increased from $53.0 million to $54.5 million on September 30, 2015. The bank has no deposits which were sourced through brokers or other wholesale funding sources.

At September 30, 2015, shareholders’ equity was $15.4 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.

“We continue to experience an increasingly competitive loan market which has had a negative impact on our Net Interest Income,” commented Jeffrey K. Ball, Chief Executive Officer. “This primary source of revenue is also impacted by the low interest rate environment. Despite these conditions our team has done an excellent job in generating both loan and deposit growth while maintaining strict underwriting standards to support loan quality. Integration of our newly established payroll services is being completed in an effort to diversify our revenue sources and enhance future income. Meanwhile liquidity and capital remain very strong in support of further growth of the company.”

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 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)



Cash and due from banks$ 5,363 $ 4,912 $ 4,130
Interest bearing deposits with other financial institutions 4,156 5,617 5,741
Cash and Cash Equivalents 9,519 10,529 9,871
Investment securities available-for-sale 45,252 42,829 38,711
Federal Home Loan Bank stock 753 677 677
Federal Reserve Bank stock 455 393 393
Loans, net of unearned income 68,841 60,868 58,501
Allowance for loan losses (1,595) (1,595) (1,595)
Net Loans 67,246 59,273 56,906
Premises and equipment, net 248 362 496
Accrued interest receivable and other assets 6,149 5,840 6,290
Total Assets$129,622 $119,903 $113,344
Noninterest-bearing deposits$44,103 $ 39,220 $ 36,662
Interest-bearing deposits 54,541 56,339 53,039
Total Deposits 98,644 95,559 89,701
FHLB advances 15,000 8,750 8,750
Accrued interest payable and other liabilities 580 422 396
Total Liabilities 114,224 104,731 98,847
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 1,091 1,091
Accumulated deficit (1,748) (2,045) (2,561)
Accumulated other comprehensive income (loss) 97 168 9
Total Shareholders’ Equity 15,398 15,172 14,497
Total Liabilities and Shareholders’ Equity$129,622 $119,903 $113,344
Book Value Per Share$ 9.53 $ 9.39 $ 8.97

Friendly Hills Bank
Statements of Operations (Unaudited)
(in thousands, except per share information)
For the nine For the nine
months ended months ended
9/30/15 9/30/14
Interest Income$ 3,260 $ 3,085
Interest Expense 231 273
Net Interest Income 3,029 2,812
Provision for Loan Losses 0 0
Net Interest Income after Provision for Loan Losses 3,029 2,812
Noninterest Income 338 415
Noninterest Expense 2,997 2,867
Non-Recurring Items 96 75
Income before Provision for Income Taxes 466 435
(Provision) Benefit for Income Taxes (169) 1,300
Net Income$ 297 $ 1,734
Basic and Diluted Earnings Per Share$ 0.18 $ 1.07

Jeffrey K. Ball (President & CEO) Daniel L. Erickson (EVP & CFO) (562) 947-1920

Source:Friendly Hills Bank