WHITTIER, Calif., Nov. 13, 2020 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “bank”) (OTCBB: FHLB) reported results for the third quarter of 2020.

For the nine month period ending September 30, 2020, the bank reported net income of $622,000 or $0.31 per diluted share of common stock. This figure includes a $150,000 provision for loan losses. The bank reported net income of $933,000 (including a $50,000 gain on securities sold) or $0.48 per diluted share of common stock for the nine months ended September 30, 2019.

As of September 30, 2020, the bank reported total assets of $236.3 million, a 47% increase from $160.2 million as of September 30, 2019. The bank’s loan portfolio, net of unearned income, increased 36% from $102.9 million as of September 30, 2019, to $139.9 million as of September 30, 2020. This figure includes $47.7 million in Paycheck Protection Program loans. The portfolio remains diversified with $79.0 million or 56% in Commercial & Industrial Loans to local businesses (including $23.7 million in Owner Occupied Commercial Real Estate Loans), $37.7 million or 27% in Commercial Real Estate Loans to investors and $20.3 million or 14% in Residential Real Estate Loans to investors. The bank has an additional $20.0 million in unfunded loan commitments.

The bank’s overall deposit base has increased 33% in the twelve months ended September 30, 2020, from $119.8 million as of September 30, 2019, to $159.6 million as of September 30, 2020. Non-interest bearing deposits remain a substantial part of the deposit base (48%), increasing from $53.5 million as of September 30, 2019, to $75.9 million as of September 30, 2020. During the same time period, interest-bearing deposits increased from $66.4 million as of September 30, 2019, to $83.7 million on September 30, 2020.

At September 30, 2020, shareholders’ equity was $20.1 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 company continues to maintain strong liquidity as the significant increases in deposits from earlier in the year remain sustainable,” commented Jeffrey K. Ball, Chief Executive Officer. “We have been able to serve this larger deposit base with control of our operating expenses and sufficient capital well above regulatory guidelines to handle the associated growth. Opportunities to invest that additional liquidity have been more challenging given market conditions and our desire to control risk exposure. This has resulted in reduced margins while asset quality remains strong as we continue to monitor market conditions and the needs of our client base. We still expect interest rate margins to be compressed for the foreseeable future. Contributing to this margin compression are the Paycheck Protection Program loans which accrue interest at just 1.00% and we are working diligently with those borrowers to submit their forgiveness applications to the Small Business Administration in an effort to accelerate the repayment of those low earning assets. We are proud of the work we have done under that CARES Act program to get the money into our local economy as quickly and efficiently as possible.”

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)
  9/30/20 12/31/19 9/30/19
Cash and due from banks $2,076  $3,203  $5,309 
Interest bearing deposits with other financial institutions  61,506   20,855   9,821 
Cash and Cash Equivalents  63,582   24,058   15,130 
Investment securities available-for-sale  22,767   32,778   34,436 
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  139,888   93,988   102,912 
Allowance for loan losses  (1,464)  (1,332)  (1,525)
Net Loans  138,424   92,656   101,387 
Premises and equipment, net  896   313   578 
Bank Owned Life Insurance  4,815   4,730   4,702 
Deferred tax asset  65   19   305 
Accrued interest receivable and other assets  1,154   1,175   1,003 
Total Assets $236,335  $158,434  $160,246 
Noninterest-bearing deposits $75,881  $54,281  $53,472 
Interest-bearing deposits  83,707   63,932   66,370 
Total Deposits  159,588   118,213   119,842 
Borrowed Funds  55,670   20,531   20,551 
Accrued interest payable and other liabilities  1,015   644   993 
Total Liabilities  216,273   139,388   141,386 
Shareholders’ Equity      
Common stock, no par value, 10,000,000 shares authorized:      
2,006,393 shares issued and outstanding as of 9/30/20
  15,958   15,958   15,958 
1,997,993 shares issued and outstanding as of 9/30/19            
Additional paid-in-capital  1,553   1,470   1,454 
Accumulated earnings  2,282   1,660   1,490 
Accumulated other comprehensive income (loss)  269   (42)  (42)
Total Shareholders’ Equity  20,062   19,046   18,860 
Total Liabilities and Shareholders’ Equity $236,335  $158,434  $160,246 
Book Value Per Share $10.00  $9.53  $9.44 

Friendly Hills Bank
Statements of Operations (Unaudited)
(in thousands, except per share information)
  For the nine For the nine
  months ended months ended
  9/30/20 9/30/19
Interest Income $4,330  $4,632 
Interest Expense  576   478 
Net Interest Income  3,754   4,154 
Provision for Loan Losses  150   0 
Net Interest Income after Provision for Loan Losses  3,604   4,154 
Noninterest Income  440   379 
Noninterest Expense  3,193   3,280 
Non-Recurring Items  0   50 
Income before Provision for Income Taxes  851   1,303 
(Provision) Benefit for Income Taxes  (229)  (370)
Net Income $622  $933 
Basic and Diluted Earnings Per Share $0.31  $0.48 

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