Friendly Hills Bancorp Reports Financial Results for the Second Quarter of 2022

Rhea-AI Summary

Friendly Hills Bancorp (OTC Pink: FHLB) reported its second quarter 2022 results, highlighting substantial growth. Total assets increased to $306 million, and total loans surged by $50 million (56%) to $138 million since year-end 2021. Despite a net loss of $477 thousand, net interest income rose 21% due to strong loan growth. The bank maintained a solid risk-based capital ratio of 10.94%, considered ‘well-capitalized’. The loan portfolio remains diversified, with significant contributions from commercial and residential loans.

Positive

• Total assets increased to $306 million, up from $293 million at year-end 2021.
• Total loans rose by $50 million (56%) to $138 million since year-end 2021.
• Net interest income increased by $330 thousand (21%) compared to Q1 2022.
• Risk-based capital ratio at 10.94%, classified as 'well-capitalized'.
• Loan production led to net interest margin improvement from 2.35% in Q1 to 2.84% in Q2.

Negative

• Net loss of $477 thousand in Q2 2022, compared to a net loss of $130 thousand in Q1 2022.
• Noninterest expenses increased by $339 thousand, affecting overall profitability.

WHITTIER, Calif., July 29, 2022 (GLOBE NEWSWIRE) -- Friendly Hills Bancorp (the “Company”) (OTC Pink: FHLB), the holding company for Friendly Hills Bank (the “Bank”), today reported consolidated results for the second quarter of 2022. The comparability of financial information for the second quarter of 2022 to the same period of 2021 is affected by the acquisition of three branch offices with $82 million in deposits effective September 24, 2021, after which the related operating results are also reflected in these consolidated financials.

Second Quarter 2022 Highlights:

• Total assets ended the quarter at $306 million, up from $293 million at year end 2021 and $282 million at March 31, 2022.  
• Total loans have increased $50 million, or 56% to $138 million since year end 2021, and are up $39 million since March 31, 2022.
• Total deposits ended the quarter at $258 million, stable from the prior quarter and prior year end totals, with noninterest-bearing deposits continuing to reflect strong, relationship-based deposit funding sources at 51% of total deposits.
• Total risk-based capital ratio was 10.94% and considered “well-capitalized” - the highest regulatory capital category.

For the second quarter ended June 30, 2022, the Company reported a net loss of $477 thousand compared to a net loss of $130 thousand for the three months ended March 31, 2022. During the second quarter, net interest income increased $330 thousand, or 21%, compared to the first quarter of 2022, due to strong organic loan growth; however, comparisons to Q1 also reflect the execution of our long-term plan to invest in our infrastructure, including hiring key talent, which is reflected in noninterest expenses increasing by $339 thousand, and a nonrecurring gain of $470 thousand in Q1 from the prepayment of other borrowings. “Our second quarter results were highlighted by significant loan growth, continued strong credit quality, and expansion into the San Diego market. Our recently onboarded specialty lending group is fully operational, and we are excited to see a robust loan pipeline which bodes well for the second half of 2022,” said Nathan Rogge, President and Chief Executive Officer of Friendly Hills Bank.

“During the first six months of 2022, the Company delivered solid loan growth. Our lending portfolio increased from $89 million as of December 31, 2021, to $138 million as of June 30, 2022,” Rogge continued. The loan portfolio remains diversified with $53 million in Commercial Loans (including $35 million in Owner Occupied Commercial Real Estate Loans), $40 million in Other Commercial Real Estate Loans, and $35 million in Residential Real Estate Loans. The significant increase in loan production during the quarter resulted in net interest margin rising from 2.35% in Q1 to 2.84% in Q2, with net interest margin climbing to 3.16% during the month of June.

“As we enter the second half of the year, we are in a strong position to deliver long-term value for our shareholders while also being mindful of the current economic environment,” Rogge concluded.

ABOUT FRIENDLY HILLS BANK

Friendly Hills Bank, a wholly owned subsidiary of Friendly Hills Bancorp (OTC Pink: FHLB), is a growing community bank catering to individuals, professionals, and small-to-medium sized businesses throughout Southern California. With a history that spans 16 years, the bank offers a personalized approach, access to decision makers, a broad range of solutions, and a commitment to delivering an exceptional customer experience. Friendly Hills Bank operates locations in Los Angeles County, Orange County, San Diego County, and the Inland Empire. For more information, visit friendlyhillsbank.com or call 562.947.1920.

FORWARD-LOOKING STATEMENTS

This news release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, and Friendly Hills Bancorp intends for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” and similar expressions. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events, or circumstances after the date of such statements except as required by law.

Contacts

Investor Relations Contact
Jim Burgess
858.461.7302
jburgess@friendlyhillsbank.com

Media Relations Contact
Amanda Conover
562.501.9062
aconover@friendlyhillsbank.com

--- Summary Financial Table Follows ---

Friendly Hills Bancorp
Consolidated Balance Sheets (Unaudited)
(in thousands, except per share information)
			6/30/2022				12/31/2021				6/30/2021
ASSETS
Cash and due from banks			$	6,241			$	6,499			$	3,926
Interest bearing deposits with other financial institutions				27,214				58,529				87,585
Cash and cash equivalents				33,455				65,028				91,511
Debt securities				121,890				126,858				17,743
Loans				138,443				88,923				106,439
Allowance for loan losses				(1,800	)			(1,800	)			(1,800	)
Loans, net				136,643				87,123				104,639
Restricted stock and equity securities				2,982				2,632				2,632
Premises, equipment and right of use asset, net				2,394				2,313				765
Bank owned life insurance				5,005				4,951				4,897
Goodwill and core deposit intangible				1,753				1,788				384
Accrued interest receivable and other assets				2,306				2,326				757
Total Assets			$	306,428			$	293,019			$	223,328
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
Noninterest-bearing deposits			$	131,104			$	134,625			$	91,197
Interest-bearing deposits				127,217				122,935				89,135
Total deposits				258,321				257,560				180,332
FHLB advances				25,000				12,000				20,500
Accrued interest payable and other liabilities				3,669				3,730				1,599
Total Liabilities				286,990				273,290				202,431
Total Shareholders' Equity				19,438				19,729				20,897
Total Liabilities and Shareholders' Equity			$	306,428			$	293,019			$	223,328
Common Shares Outstanding				2,058,393				2,006,393				2,006,393
Book Value Per Share			$	9.44			$	9.83			$	10.42
Friendly Hills Bancorp
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share information)
			For the three				For the three				For the six
			months ended				months ended				months ended
			6/30/2022				3/31/2022				6/30/2022
Interest income			$	1,984			$	1,699			$	3,683
Interest expense				71				116				187
Net Interest Income				1,913				1,583				3,496
Provision for loan losses				-				-				-
Net Interest Income After Provision for Loan Losses		1,913						1,583				3,496
Noninterest income				199				680				879
Noninterest expense				2,804				2,465				5,269
Income (Loss) before Provision for Income Taxes				(692	)			(202	)			(894	)
Provision for (benefit from) income taxes				(215	)			(72	)			(287	)
Net Income (Loss)			$	(477	)		$	(130	)		$	(607	)
Earnings (Loss) Per Share Basic			$	(0.23	)		$	(0.06	)		$	(0.30	)

FAQ

What were the total assets reported by Friendly Hills Bancorp for Q2 2022?

Total assets for Q2 2022 were reported at $306 million.

How did total loans change for Friendly Hills Bancorp in Q2 2022?

Total loans increased by $50 million, or 56%, to $138 million since year-end 2021.

What was the net loss for Friendly Hills Bancorp in Q2 2022?

The net loss reported for Q2 2022 was $477 thousand.

What is the risk-based capital ratio of Friendly Hills Bancorp?

The risk-based capital ratio is 10.94%, which is considered 'well-capitalized'.

How much did net interest income increase in Q2 2022?

Net interest income increased by $330 thousand, or 21%, compared to Q1 2022.