Friendly Hills Bank Reports Fourth Quarter Results; Announces the Appointment of Jeffrey K. Ball to the Board of Directors of the Federal Home Loan Bank of San Francisco

WHITTIER, Calif., Feb. 09, 2018 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “Company”) (OTCBB:FHLB) reported results for the fourth quarter of 2017.

For the twelve month period ending December 31, 2017, the Company reported net income of $596,000 or $0.31 per diluted share of common stock. This figure includes a $130,000 increase in deferred tax and AOCI tax bill adjustments as the result of a change in the federal tax rate which was recognized as additional income tax expense in December, 2017. The Company reported net income of $705,000 or $0.36 per diluted share of common stock for the twelve months ended December 31, 2016. This figure includes a $200,000 tax benefit resulting from a reduction in the Company’s deferred tax valuation allowance and a $36,000 net gain on securities sold.

As of December 31, 2017, the Company reported total assets of $154.5 million, an 8% increase from $142.9 million as of December 31, 2016. The Company’s loan portfolio, net of unearned income, increased 3% from $75.0 million as of December 31, 2016, to $77.3 million as of December 31, 2017. The portfolio remains diversified with $27.0 million or 35% in Commercial & Industrial Loans to local businesses (including $16.6 million in Owner Occupied Commercial Real Estate Loans), $19.6 million or 25% in Residential Real Estate Loans to investors and $24.0 million or 31% in Commercial Real Estate Loans to investors. The Company has an additional $26.4 million in unfunded loan commitments.

The Company’s overall deposit base has decreased 1% in the twelve months ended December 31, 2017, from $115.5 million as of December 31, 2016, to $113.9 million as of December 31, 2017. Non-interest bearing deposits continue to form a substantial part of the deposit base (41%), decreasing from $47.5 million to $47.1 million as of December 31, 2017. During the same time period interest-bearing deposits decreased from $68.0 million to $66.9 million on December 31, 2017. The Company has no deposits which were sourced through brokers or other wholesale funding sources.

At December 31, 2017, shareholders’ equity was $16.3 million and the Company’s total risk-based capital ratio was 18%, significantly exceeding the “well-capitalized” level of 10% prescribed under regulatory requirements. The Company also continues to maintain a substantial liquidity position supplemented by the availability of collateralized borrowings and other potential sources of liquidity.

“We are pleased to report another strong year of performance for the company with a 46% increase in Pretax Income which was attributable to increases in both Net Interest Income and Fee Income,” commented Jeffrey K. Ball, Chief Executive Officer. “We continued to experience higher than normal volatility in our deposit base which we attribute to our large concentration in core deposits and increased economic activity in our region. We manage that volatility with strong overall liquidity and diverse sources of funding. Meanwhile asset quality continues to be strong with a capital base that is sufficient to support the continued growth of the company.”

The Company is also pleased to announce that Jeffrey K. Ball, President and Chief Executive Officer, was recently appointed to the Board of Directors of the Federal Home Loan Bank of San Francisco (“FHLBSF”). Mr. Ball was appointed by the Board of Directors of the FHLBSF to complete the remaining three years of a four year term for a director who recently retired. The FHLBSF is one of 11 regional Federal Home Loan Banks which provides wholesale funding for its members and targeted grant and loan programs targeting affordable housing and economic development.

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 Company 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 Company is headquartered in Whittier, California with an additional branch office in Santa Fe Springs, California. For more information on the Company, 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 Company, 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 Company'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)

12/31/17
12/31/16
ASSETS
Cash and due from Banks$ 12,634 $ 4,747
Interest bearing deposits with other financial institutions 5,130 14,818
Cash and Cash Equivalents 17,764 19,565
Investment securities available-for-sale 53,131 42,183
Federal Home Loan Bank stock
Federal Reserve Bank stock
835
476
779
474
Loans, net of unearned income 77,331 74,986
Allowance for loan losses (1,525) (1,525)
Net Loans 75,806 73,461
Premises and equipment, net 345 244
Accrued interest receivable and other assets 6,109 6,156
Total Assets$ 154,466 $ 142,862
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
Noninterest-bearing deposits$ 47,057 $ 47,517
Interest-bearing deposits 66,856 68,012
Total Deposits 113,913 115,529
Federal Home Loan Bank advances 23,000 11,000
Accrued interest payable and other liabilities 1,256 467
Total Liabilities 138,169 126,996
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 (350) (946)
Accumulated other comprehensive income (loss) (402) (237)
Total Shareholders’ Equity 16,297 15,866
Total Liabilities and Shareholders’ Equity$ 154,466 $ 142,862
Book Value Per Share$ 8.40 $ 8.18


Friendly Hills Bank
Statements of Operations (Unaudited)
(in thousands, except per share information)
For the twelve For the twelve
months ended months ended
12/31/17 12/31/16
Interest Income$ 5,105 $ 4,577
Interest Expense 349 318
Net Interest Income 4,756 4,259
Provision for Loan Losses 0 0
Net Interest Income after Provision for Loan Losses 4,756 4,259
Noninterest Income 524 447
Noninterest Expense 4,094 3,931
Non-Recurring Items 0 35
Income before Provision for Income Taxes 1,186 810
(Provision) Benefit for Income Taxes (591) (105)
Net Income $ 596 $ 705
Basic and Diluted Earnings Per Share$ 0.31 $ 0.36


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

Source:Friendly Hills Bank