Friendly Hills Bank Reports Fourth Quarter Results; Announces Dan McGregor as New Chief Credit Officer

WHITTIER, Calif., Feb. 10, 2017 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “bank”) (OTCBB:FHLB) reported results for the fourth quarter of 2016.

For the twelve month period ending December 31, 2016, the bank reported net income of $705,000 or $0.36 per diluted share of common stock. This figure includes a $200,000 tax benefit resulting from a reduction in the bank’s deferred tax valuation allowance and a $36,000 net gain on securities sold. The bank reported net income of $394,000 or $0.20 per diluted share of common stock for the twelve months ended December 31, 2015. This figure includes a $22,000 increase in the value of the interest rate caps and a $43,000 gain on other real estate owned.

As of December 31, 2016, the bank reported total assets of $143.2 million, a 14% increase from $125.6 million as of December 31, 2015. The bank’s loan portfolio, net of unearned income, increased 10% from $67.9 million as of December 31, 2015, to $75.0 million as of December 31, 2016. The portfolio remains diversified with $28.6 million or 38% in Commercial & Industrial Loans to local businesses (including $16.6 million in Owner Occupied Commercial Real Estate Loans), $18.2 million or 24% in Residential Real Estate Loans to investors and $23.1 million or 31% in Commercial Real Estate Loans to investors. The bank has an additional $22.8 million in unfunded loan commitments.

The bank’s overall deposit base has increased 19% in the twelve months ended December 31, 2016, from $96.9 million as of December 31, 2015, to $115.5 million as of December 31, 2016. Non-interest bearing deposits continue to form a substantial part of the deposit base (41%), growing from $42.5 million to $47.5 million as of December 31, 2016. During the same time period interest-bearing deposits increased from $54.4 million to $68.0 million on December 31, 2016. The bank has no deposits which were sourced through brokers or other wholesale funding sources.

At December 31, 2016, shareholders’ equity was $15.9 million and the bank’s total risk-based capital ratio was 17%, 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 bank had a very strong quarter in terms of growth which is attributable to improving economic conditions in our local markets,” commented Jeffrey K. Ball, Chief Executive Officer. “Most importantly we have been able to achieve this growth while maintaining a strong balance sheet with consistent underwriting standards and continued diversification of our loan portfolio. Our deposit base continues to be focused on core deposits which tend to have higher volatility but also provide a low cost funding source which we feel will continue to benefit the bank in a rising interest rate environment. To help us effectively manage this growth we are pleased to welcome Dan McGregor to our team as an Executive Vice President and Chief Credit Officer. Having worked over 30 years in the banking industry he brings tremendous experience in credit management and community banking which will be valuable as we continue to selectively grow the bank.”

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)
12/31/16 12/31/15
Cash and due from banks$4,747 $3,904
Interest bearing deposits with other financial institutions 14,818 4,529
Cash and Cash Equivalents 19,565 8,433
Investment securities available-for-sale 42,183 43,312
Federal Home Loan Bank stock
Federal Reserve Bank stock
Loans, net of unearned income 74,986 67,876
Allowance for loan losses (1,525) (1,595)
Net Loans 73,461 66,281
Premises and equipment, net 244 211
Accrued interest receivable and other assets 6,461 6,134
Total Assets$143,167 $125,579
Noninterest-bearing deposits$47,517 $42,531
Interest-bearing deposits 68,012 54,354
Total Deposits 115,529 96,885
FHLB advances 11,000 13,000
Accrued interest payable and other liabilities 772 452
Total Liabilities 127,301 110,337
Shareholders’ Equity
Common stock, no par value, 10,000,000 shares authorized:
1,939,200 shares issued and outstanding 15,958 15,958
Additional paid-in-capital 1,091 1,091
Accumulated deficit (946) (1,651)
Accumulated other comprehensive income (loss) (237) (156)
Total Shareholders’ Equity 15,866 15,242
Total Liabilities and Shareholders’ Equity$143,167 $125,579
Book Value Per Share$8.18 $7.86

Friendly Hills Bank
Statements of Operations (Unaudited)
(in thousands, except per share information)
For the twelve For the twelve
months ended months ended
12/31/16 12/31/15
Interest Income$4,577 $4,396
Interest Expense 318 305
Net Interest Income 4,259 4,091
Provision for Loan Losses 0 0
Net Interest Income after Provision for Loan Losses 4,259 4,091
Noninterest Income 447 459
Noninterest Expense 3,931 3,998
Non-Recurring Items 35 67
Income before Provision for Income Taxes 810 619
(Provision) Benefit for Income Taxes (105) (225)
Net Income$705 $394
Basic and Diluted Earnings Per Share$0.36 $0.20

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

Source:Friendly Hills Bank