Friendly Hills Bank Reports Fourth Quarter Results; Announces Appointment of Michael J. Foley to Board

Whittier, California, UNITED STATES

WHITTIER, Calif., Feb. 08, 2019 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “Company”) (OTCBB: FHLB) reported results for the fourth quarter of 2018. 

For the twelve month period ending December 31, 2018, the Company reported net income of $907,000 or $0.46 per diluted share of common stock. The Company reported net income of $596,000 or $0.31 per diluted share of common stock for the twelve months ended December 31, 2017. 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.

As of December 31, 2018, the Company reported total assets of $153.0 million, a 1% decrease from $154.5 million as of December 31, 2017.  The Company’s loan portfolio, net of unearned income, increased 11% from $77.3 million as of December 31, 2017, to $86.1 million as of December 31, 2018.  The portfolio remains diversified with $26.8 million or 31% in Commercial & Industrial Loans to local businesses (including $16.7 million in Owner Occupied Commercial Real Estate Loans), $21.9 million or 25% in Residential Real Estate Loans to investors and $31.5 million or 37% in Commercial Real Estate Loans to investors.  The Company has an additional $25.8 million in unfunded loan commitments.

The Company’s overall deposit base has increased 7% in the twelve months ended December 31, 2018, from $113.9 million as of December 31, 2017, to $122.2 million as of December 31, 2018.  Non-interest bearing deposits remain a substantial part of the deposit base (36%), although decreasing from $47.1 million to $44.3 million as of December 31, 2018.  During the same time period interest-bearing deposits increased from $66.9 million to $77.9 million on December 31, 2018.   The Company has no deposits which were sourced through brokers. 

At December 31, 2018, shareholders’ equity was $17.0 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 earnings growth for the Company in 2018,” commented Jeffrey K. Ball, Chief Executive Officer.  “This growth in earnings was attributable to an increase in loans outstanding and the continued strength of our core deposit base.  Asset quality continues to be very strong with solid overall liquidity and diverse sources of funding supplemented by a strong capital base which can support continued opportunistic growth.”

The Company is also pleased to announce the appointment of Michael J. Foley as a Director of the Company.  Mr. Foley is an Executive Managing Director with Cushman and Wakefield focused on Industrial properties in the Southern California Region.  Mr. Foley has over 35 years of experience working in the Commercial Real Estate market serving a variety of industries.  “We are delighted to have Mike join our Board of Directors,” commented Willam C. Greenbeck, Chairman of the Board.  “He brings a tremendous amount of knowledge from his many years of business experience and will be a valuable contributor to our oversight of the Company’s continued development.”  Mr. Foley’s appointment to the board became effective on December 3, 2018.

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 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)
   12/31/18 12/31/17
Cash and due from Banks$  4,288  $  12,634 
Interest bearing deposits with other financial institutions 2,440   5,130 
  Cash and Cash Equivalents 6,728   17,764 
Investment securities available-for-sale 53,462   53,131 
Federal Home Loan Bank stock
Federal Reserve Bank stock
Loans, net of unearned income 86,135   77,331 
Allowance for loan losses (1,525)  (1,525)
  Net Loans 84,610   75,806 
Premises and equipment, net 335   345 
Accrued interest receivable and other assets 6,477   6,109 
  Total Assets$  153,042  $  154,466 
 Noninterest-bearing deposits$  44,310  $  47,057 
 Interest-bearing deposits 77,931   66,856 
  Total Deposits 122,241   113,913 
Federal Home Loan Bank advances 12,750   23,000 
Accrued interest payable and other liabilities 1,057   1,256 
  Total Liabilities 136,048     138,169 
Shareholders’ Equity   
 Common stock, no par value, 10,000,000 shares authorized:   
 1,979,993 shares issued and outstanding 15,958   15,958 
 Additional paid-in-capital 1,293   1,091 
 Accumulated deficit 557   (350)
 Accumulated other comprehensive income (loss) (814)  (402)
  Total Shareholders’ Equity 16,994   16,297 
  Total Liabilities and Shareholders’ Equity$  153,042  $  154,466 
Book Value Per Share$  8.58  $  8.40 

Friendly Hills Bank
Statements of Operations (Unaudited)
 (in thousands, except per share information)
   For the twelve For the twelve
   months ended months ended
   12/31/18 12/31/17
Interest Income$ 5,500  $ 5,105 
Interest Expense 469   349 
 Net Interest Income 5,031   4,756 
Provision for Loan Losses 0   0 
 Net Interest Income after Provision for Loan Losses   5,031      4,756 
Noninterest Income 468   524 
Noninterest Expense 4,241   4,094 
Non-Recurring Items 1   0 
Income before Provision for Income Taxes 1,259   1,186 
(Provision) Benefit for Income Taxes (352)  (591)
 Net Income$  907  $   596 
Basic and Diluted Earnings Per Share$ 0.46  $ 0.31 

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