Friendly Hills Bank Reports Second Quarter Results

WHITTIER, Calif., Aug. 07, 2017 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “bank”) (OTCBB:FHLB) reported results for the second quarter of 2017.

For the six month period ending June 30, 2017, the bank reported net income of $323,000 or $0.17 per diluted share of common stock. The bank reported net income of $206,000 or $0.11 per diluted share of common stock for the six months ended June 30, 2016. This figure includes a $36,000 net gain on securities sold.

As of June 30, 2017, the bank reported total assets of $155.1 million, a 9% increase from $141.7 million as of June 30, 2016. The bank’s loan portfolio, net of unearned income, increased 8% from $78.3 million as of June 30, 2016, to $85.0 million as of June 30, 2017. The portfolio remains diversified with $31.9 million or 38% in Commercial & Industrial Loans to local businesses (including $19.3 million in Owner Occupied Commercial Real Estate Loans), $23.0 million or 27% in Residential Real Estate Loans to investors and $22.6 million or 27% in Commercial Real Estate Loans to investors. The bank has an additional $20.9 million in unfunded loan commitments.

The bank’s overall deposit base has increased 4% in the twelve months ended June 30, 2017, from $112.3 million as of June 30, 2016, to $117.3 million as of June 30, 2017. Non-interest bearing deposits continue to form a substantial part of the deposit base (39%), decreasing from $57.7 million to $45.9 million as of June 30, 2017. During the same time period interest-bearing deposits increased from $54.6 million to $71.4 million on June 30, 2017. The bank has no deposits which were sourced through brokers or other wholesale funding sources.

At June 30, 2017, shareholders’ equity was $16.4 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 experienced a drop in deposits during the second quarter which was caused by cyclicality and was not the result of any specific trends,” commented Jeffrey K. Ball, Chief Executive Officer. “With such a large percentage of the deposit base being in core deposits it is not unusual for the bank to experience such volatility which usually occurs within our reporting period and not at quarter-end. We are able to mitigate this risk with a sound liquidity strategy that includes a variety of funding sources and a comfortable loan-to-deposit ratio of 72%. Overall, the bank’s balance sheet continues to be strong with plenty of liquidity and capital to support further growth opportunities.”

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)
6/30/17 12/31/16 6/30/16
Cash and due from banks$3,746 $4,747 $3,516
Interest bearing deposits with other financial institutions 20,408 14,818 22,088
Cash and Cash Equivalents 24,154 19,565 25,604
Investment securities available-for-sale 39,857 42,183 31,912
Federal Home Loan Bank stock 835 779 779
Federal Reserve Bank stock 476 474 457
Loans, net of unearned income 84,986 74,986 78,334
Allowance for loan losses (1,525) (1,525) (1,525)
Net Loans 83,461 73,461 76,809
Premises and equipment, net 319 244 234
Accrued interest receivable and other assets 5,996 6,156 5,877
Total Assets$155,098 $142,862 $141,672
Noninterest-bearing deposits$45,888 $47,517 $57,716
Interest-bearing deposits 71,408 68,012 54,614
Total Deposits 117,296 115,529 112,330
FHLB advances 21,000 11,000 13,000
Accrued interest payable and other liabilities 424 467 542
Total Liabilities 138,720 126,996 125,872
Shareholders’ Equity
Common stock, no par value, 10,000,000 shares authorized:
1,939,193 shares issued and outstanding 15,958 15,958 15,958
Additional paid-in-capital 1,091 1,091 1,091
Accumulated deficit (623) (946) (1,445)
Accumulated other comprehensive income (loss) (48) (237) 196
Total Shareholders’ Equity 16,378 15,866 15,800
Total Liabilities and Shareholders’ Equity$155,098 $142,862 $141,672
Book Per Share$8.45 $8.18 $8.15

Friendly Hills Bank
Statements of Operations (Unaudited)
(in thousands, except per share information)
For the six For the six
months ended months ended
6/30/17 6/30/16
Interest Income$2,462 $2,205
Interest Expense (168) (153)
Net Interest Income 2,294 2,052
Provision for Loan Losses 0 0
Net Interest Income after Provision for Loan Losses 2,294 2,052
Noninterest Income 244 229
Noninterest Expense (2,012) (1,992)
Non-Recurring Items 0 36
Income before Provision for Income Taxes 526 325
(Provision) Benefit for Income Taxes (203) (119)
Net Income$323 $206
Basic and Diluted Earnings Per Share$0.17 $0.11

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

Source:Friendly Hills Bank