Friendly Hills Bank Reports First Quarter Results


WHITTIER, Calif., May 09, 2018 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “bank”) (OTCBB:FHLB) reported results for the first quarter of 2018.

For the three month period ending March 31, 2018, the bank reported net income of $192,000 or $0.10 per diluted share of common stock.  The bank reported net income of $162,000 or $0.08 per diluted share of common stock for the three months ended March 31, 2017.    

As of March 31, 2018, the bank reported total assets of $155.7 million, the same figure as of March 31, 2017.  The bank’s loan portfolio, net of unearned income, decreased 2% from $83.0 million as of March 31, 2017, to $81.4 million as of March 31, 2018.  The portfolio remains diversified with $28.3 million or 34% in Commercial & Industrial Loans to local businesses (including $17.2 million in Owner Occupied Commercial Real Estate Loans), $21.8 million or 27% in Residential Real Estate Loans to investors and $26.0 million or 32% in Commercial Real Estate Loans to investors.  The bank has an additional $24.3 million in unfunded loan commitments.

The bank’s overall deposit base has decreased 9% in the twelve months ended March 31, 2018, from $123.2 million as of March 31, 2017, to $112.2 million as of March 31, 2018.  Non-interest bearing deposits remain a substantial part of the deposit base (38%), despite decreasing from $51.5 million as of March 31, 2017, to $42.6 million as of March 31, 2018.  During the same time period interest-bearing deposits decreased from $71.7 million as of March 31, 2017, to $69.6 million on March 31, 2018.  

At March 31, 2018, shareholders’ equity was $16.1 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.

“It is normal for the bank to experience volatility in its deposit base due to the high concentration of core deposits in our balance sheet,” commented Jeffrey K. Ball, Chief Executive Officer. “We did experience an unusually higher amount of volatility right at the end of the quarter which is not associated with any meaningful decrease in deposit relationships.  The bank continues to maintain a strong balance sheet as reflected in asset quality, deposit strength and a sufficient capital base for continued long-term growth in shareholder value.  Meanwhile, increased earnings are primarily associated with higher asset yields from rising interest rates and the benefits of the lower effective corporate income tax rate.”

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)
        
   3/31/18 12/31/17 3/31/17
ASSETS      
Cash and due from banks$  4,058  $  12,634  $  3,872 
Interest bearing deposits with other financial institutions 15,013   5,130   21,868 
  Cash and Cash Equivalents 19,071   17,764   25,740 
Investment securities available-for-sale 48,857   53,131   40,883 
Federal Home Loan Bank stock 835   835   779 
Federal Reserve Bank stock 479   476   476 
Loans, net of unearned income 81,402   77,331   82,965 
Allowance for loan losses (1,525)  (1,525)  (1,525)
  Net Loans 79,877   75,806   81,440 
Premises and equipment, net 334   345     285 
Accrued interest receivable and other assets 6,269   6,109   6,077 
  Total Assets$155,722  $154,466  $155,680 
        
LIABILITIES AND SHAREHOLDERS’ EQUITY     
Liabilities      
Deposits      
 Noninterest-bearing deposits$42,599  $  47,057  $  51,508 
 Interest-bearing deposits 69,609   66,856   71,683 
  Total Deposits 112,208   113,913   123,191 
FHLB advances 26,750   23,000   16,000 
Accrued interest payable and other liabilities 697   1,256   446 
  Total Liabilities 139,655     138,169    139,637 
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 (79)  (350)  (783)
 Accumulated other comprehensive income (loss) (1,105)  (402)  (223)
  Total Shareholders’ Equity 16,067   16,297   16,043 
  Total Liabilities and Shareholders’ Equity$155,722  $154,466  $155,680 
        
Book Value Per Share$  8.11  $  8.40  $  8.27 
            


Friendly Hills Bank
Statements of Operations (Unaudited)
 (in thousands, except per share information)
      
   For the three For the three
   months ended months ended
   3/31/18 3/31/17
Interest Income$ 1,327  $ 1,210 
Interest Expense 122   83 
 Net Interest Income 1,205   1,127 
Provision for Loan Losses 0   0 
 Net Interest Income after Provision for Loan Losses   1,205      1,127 
Noninterest Income 121   133 
Noninterest Expense 1,061   996 
Non-Recurring Items 1   0 
Income before Provision for Income Taxes 266   264 
(Provision) Benefit for Income Taxes (74)  (102)
 Net Income$  192  $  162 
      
Basic and Diluted Earnings Per Share$  0.10  $  0.08 


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