Friendly Hills Bank Reports Second Quarter Results

WHITTIER, Calif., Nov. 07, 2018 (GLOBE NEWSWIRE) — Friendly Hills Bank (the “Bank”) (OTCBB: FHLB) reported results for the third quarter of 2018.

For the nine month period ending September 30, 2018, the Bank reported net income of $587,000 or $0.30 per diluted share of common stock.  The Bank reported net income of $525,000 or $0.27 per diluted share of common stock for the nine months ended September 30, 2017.    

As of September 30, 2018, the Bank reported total assets of $155.4 million, a 2% increase from $152.8 million as of September 30, 2017.  The Bank’s loan portfolio, net of unearned income, decreased 5% from $82.2 million as of September 30, 2017, to $78.0 million as of September 30, 2018.  The portfolio remains diversified with $27.0 million or 35% in Commercial & Industrial Loans to local businesses (including $17.8 million in Owner Occupied Commercial Real Estate Loans), $22.3 million or 29% in Residential Real Estate Loans to investors and $22.7 million or 29% in Commercial Real Estate Loans to investors.  The Bank has an additional $26.7 million in unfunded loan commitments.

The Bank’s overall deposit base has decreased 3% in the twelve months ended September 30, 2018, from $123.8 million as of September 30, 2017, to $120.5 million as of September 30, 2018.  Non-interest bearing deposits remain a substantial part of the deposit base (42%), despite decreasing from $50.4 million as of September 30, 2017, to $50.1 million as of September 30, 2018.  During the same time period interest-bearing deposits decreased from $73.4 million as of September 30, 2017, to $70.4 million on September 30, 2018.  

At September 30, 2018, shareholders’ equity was $16.1 million and the Bank’s total risk-based capital ratio was 20%, 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 continues to experience high volatility in its deposit base as a result of having the majority of its funding in core deposits,” commented Jeffrey K. Ball, Chief Executive Officer.  “We have been able to maintain a very low cost of funds during this rising rate environment which will have longer term benefits for the Bank as rates begin to stabilize.  Meanwhile the Bank continues to be well positioned by maintaining a strong balance sheet with solid liquidity and capital ratios that are well above the regulatory standards for well capitalized banks.  Asset quality also remains very high as a result of our consistent underwriting standards.”

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)
      9/30/18  

12/31/17

 

9/30/17

ASSETS            
Cash and due from banks $   3,512     $   12,634     $   3,942  
Interest bearing deposits with other financial institutions   21,902       5,130       9,403  
  Cash and Cash Equivalents   25,414       17,764       13,345  
Investment securities available-for-sale   45,371       53,131       51,122  
Federal Home Loan Bank stock   951       835       835  
Federal Reserve Bank stock   479       476       476  
Loans, net of unearned income   77,965       77,331       82,181  
Allowance for loan losses   (1,525 )     (1,525 )     (1,525 )
    Net Loans   76,440       75,806       80,656  
Premises and equipment, net   352       345         346  
Accrued interest receivable and other assets   6,415       6,109       5,971  
    Total Assets $ 155,422     $ 154,466     $ 152,751  
               
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Liabilities            
Deposits            
  Noninterest-bearing deposits $ 50,111     $   47,057     $   50,374  
  Interest-bearing deposits   70,395       66,856       73,427  
    Total Deposits   120,506       113,913       123,801  
FHLB advances   17,750       23,000       11,000  
Accrued interest payable and other liabilities   1,035       1,256       1,458  
    Total Liabilities   139,291         138,169        136,259  
Shareholders’ Equity          
  Common stock, no par value, 10,000,000 shares authorized:          
  1,979,993 shares issued and outstanding   15,958       15,958       15,958  
  Additional paid-in-capital   1,293       1,091       1,091  
  Accumulated deficit   237       (350 )     (421 )
  Accumulated other comprehensive income (loss)   (1,357 )     (402 )     (136 )
    Total Shareholders’ Equity   16,131       16,297       16,492  
    Total Liabilities and Shareholders’ Equity $ 155,422     $ 154,466     $ 152,751  
               
Book Value Per Share $   8.15     $   8.40     $   8.50  

Friendly Hills Bank
Statements of Operations (Unaudited)
 (in thousands, except per share information)
           
      For the nine   For the nine
      months ended   months ended
      9/30/18   9/30/17
Interest Income $  4,017     $  3,768  
Interest Expense   342       256  
  Net Interest Income   3,675       3,512  
Provision for Loan Losses   0       0  
  Net Interest Income after Provision for Loan Losses     3,675              3,512  
                 
Noninterest Income   350       413  
Noninterest Expense   3,214       3,068  
Non-Recurring Items   1       0  
Income before Provision for Income Taxes   812       857  
(Provision) Benefit for Income Taxes   (225 )     (332 )
  Net Income $   587     $   525  
           
Basic and Diluted Earnings Per Share $   0.30     $   0.27  


Contacts:

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