Friendly Hills Bank Reports Second Quarter Results

WHITTIER, Calif., Aug. 14, 2020 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “bank”) (OTCBB: FHLB) reported results for the second quarter of 2020.

For the six month period ending June 30, 2020, the bank reported net income of $388,000 or $0.19 per diluted share of common stock. This figure includes a $150,000 provision for loan losses. The bank reported net income of $619,000 or $0.31 per diluted share of common stock for the six months ended June 30, 2019.

As of June 30, 2020, the bank reported total assets of $235.0 million, a 50% increase from $157.0 million as of June 30, 2019. The bank’s loan portfolio, net of unearned income, increased 43% from $98.2 million as of June 30, 2019, to $140.6 million as of June 30, 2020. This figure includes $47.7 million in Paycheck Protection Program loans. The portfolio remains diversified with $79.8 million or 56% in Commercial & Industrial Loans to local businesses (including $23.6 million in Owner Occupied Commercial Real Estate Loans), $37.4 million or 26% in Commercial Real Estate Loans to investors and $19.7 million or 14% in Residential Real Estate Loans to investors. The bank has an additional $21.9 million in unfunded loan commitments.

The bank’s overall deposit base has increased 37% in the twelve months ended June 30, 2020, from $116.0 million as of June 30, 2019, to $159.0 million as of June 30, 2020. Non-interest bearing deposits remain a substantial part of the deposit base (50%), increasing from $46.6 million as of June 30, 2019, to $79.2 million as of June 30, 2020. During the same time period, interest-bearing deposits increased from $69.4 million as of June 30, 2019, to $79.8 million on June 30, 2020.

At June 30, 2020, shareholders’ equity was $19.9 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.

“Market conditions continue to be very unstable as a result of the COVID-19 pandemic situation,” commented Jeffrey K. Ball, Chief Executive Officer. “The company has been very responsive to the needs of its clients and local businesses by being an active participant in the Paycheck Protection Program which is a primary factor in the loan growth we have experienced in the last few months. At the same time we have experienced significant growth in deposits as consumers and businesses look for safe places to hold their available funds. During more challenging times we often see business owners finding greater value in community bank relationships which we believe provides opportunities for selective growth. Interest rate margins are a primary driver of profitability and are expected to remain compressed for the foreseeable future. Government relief programs have provided substantial support for the local market but in recognition of the heightened risk environment we have prudently increased our loan loss reserves as capital and liquidity remain strong and well above regulatory guidelines.”

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.

Contacts:
Jeffrey K. Ball (President & CEO)
Viktor Uehlinger (EVP & CFO)
[phone]

Friendly Hills Bank
Balance Sheets (Unaudited)
(in thousands, except per share information)
			6/30/20				12/31/19				6/30/19
ASSETS
Cash and due from banks			$	3,999			$	3,203			$	4,558
Interest bearing deposits with other financial institutions				54,754				20,855				4,055
		Cash and Cash Equivalents		58,753				24,058				8,613
Investment securities available-for-sale				26,355				32,778				43,476
Investment securities held-to-maturity				2,000				0				0
Federal Home Loan Bank and other restricted stock				2,632				2,705				2,705
Loans, net of unearned income				140,643				93,988				98,163
Allowance for loan losses				(1,464	)			(1,332	)			(1,525	)
		Net Loans		139,179				92,656				96,638
Premises and equipment, net				502				313				614
Bank Owned Life Insurance				4,786				4,730				3,679
Deferred tax asset				(229	)			19				236
Accrued interest receivable and other assets				1,059				1,175				1,008
		Total Assets	$	235,037			$	158,434			$	156,969
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
	Noninterest-bearing deposits		$	79,226			$	54,281			$	46,483
	Interest-bearing deposits			79,751				63,932				69,492
		Total Deposits		158,977				118,213				115,975
Borrowed Funds				55,279				20,531				21,570
Accrued interest payable and other liabilities				868				644				934
		Total Liabilities		215,124				139,388				138,479
Shareholders’ Equity
	Common stock, no par value, 10,000,000 shares authorized:
	2,006,393 shares issued and outstanding as of 6/30/20 1,997,993 shares issued and outstanding as of 6/30/19			15,958				15,958				15,958
	Additional paid-in-capital			1,537				1,470				1,436
	Accumulated earnings			2,047				1,660				1,176
	Accumulated other comprehensive income (loss)			371				(42	)			(80	)
		Total Shareholders’ Equity		19,913				19,046				18,490
		Total Liabilities and Shareholders’ Equity	$	235,037			$	158,434			$	156,969
Book Value Per Share			$	9.92			$	9.53			$	9.25

Friendly Hills Bank
Statements of Operations (Unaudited)
(in thousands, except per share information)
			For the six				For the six
			months ended				months ended
			6/30/20				6/30/19
Interest Income			$	2,825			$	3,040
Interest Expense				373				289
	Net Interest Income			2,452				2,751
Provision for Loan Losses				150				0
	Net Interest Income after Provision for Loan Losses			2,302				2,751
Noninterest Income				328				247
Noninterest Expense				2,058				2,177
Non-Recurring Items				0				44
Income before Provision for Income Taxes				572				865
(Provision) Benefit for Income Taxes				(184	)			(246	)
	Net Income		$	388			$	619
Basic and Diluted Earnings Per Share			$	0.19			$	0.31