Friendly Hills Bank Reports Fourth Quarter Results

Rhea-AI Summary

Friendly Hills Bank (OTCBB: FHLB) reported a net income of $1.0 million, or $0.51 per diluted share, for 2020, marking a slight decline from $1.1 million in 2019. Total assets surged by 29% to $204.4 million, driven by a 31% increase in the loan portfolio, which reached $123.2 million. Non-interest-bearing deposits rose by 45% to $79.0 million, contributing to a total deposit growth of 37%. The bank's total risk-based capital ratio stood at a strong 20%. Despite profitability, narrowing interest rate margins due to monetary policies have impacted earnings.

Positive

• Net income of $1.0 million for 2020 despite pandemic challenges.
• Total assets increased by 29% to $204.4 million.
• Loan portfolio grew 31% to $123.2 million, supported by Paycheck Protection Program loans.
• Deposit base expanded by 37%, with non-interest bearing deposits rising by 45%.
• Strong total risk-based capital ratio of 20%, exceeding regulatory requirements.

Negative

• Net income decreased from $1.1 million in 2019 to $1.0 million in 2020.
• Narrowing interest rate margins negatively affecting profitability.

WHITTIER, Calif., Feb. 12, 2021 (GLOBE NEWSWIRE) -- Friendly Hills Bank (the “Company”) (OTCBB: FHLB) reported results for the fourth quarter of 2020.

For the twelve month period ending December 31, 2020, the Company reported net income of $1.0 million or $0.51 per diluted share of common stock. This figure includes a $150,000 provision for loan losses. The Company reported net income of $1.1 million or $0.55 per diluted share of common stock for the twelve months ended December 31, 2019, which included a $125,000 provision for loan losses.

As of December 31, 2020, the Company reported total assets of $204.4 million, a 29% increase from $158.4 million as of December 31, 2019. The Company’s loan portfolio, net of unearned income, increased 31% from $94.0 million as of December 31, 2019, to $123.2 million as of December 31, 2020. This figure includes $28.8 million in Paycheck Protection Program loans. The portfolio remains diversified with $59.2 million or 48% in Commercial & Industrial Loans to local businesses (including $23.5 million in Owner Occupied Commercial Real Estate Loans), $20.7 million or 17% in Residential Real Estate Loans to investors and $39.4 million or 32% in Commercial Real Estate Loans to investors. The Company has an additional $20.9 million in unfunded loan commitments.

The Company’s overall deposit base has increased 37% in the twelve months ended December 31, 2020, from $118.2 million as of December 31, 2019, to $161.5 million as of December 31, 2020. Non-interest bearing deposits remain a substantial part of the deposit base (49%), increasing from $54.3 million to $79.0 million as of December 31, 2020. During the same time period, interest-bearing deposits increased from $63.9 million to $82.5 million on December 31, 2020. The Company has no deposits which were sourced through brokers.

At December 31, 2020, shareholders’ equity was $20.4 million and the Company’s total risk-based capital ratio was 20%, significantly exceeding the “well-capitalized” level of 10% prescribed under regulatory requirements. Book value per share increased 7% from $9.53 as of December 31, 2019, to $10.18 per share as of December 31, 2020. The Company also continues to maintain a substantial liquidity position, which is supplemented by the availability of collateralized borrowings and other potential sources of liquidity.

“We are pleased to report record growth and continued profitability for the past year,” commented Jeffrey K. Ball, Chief Executive Officer. “Through the COVID-19 pandemic, we have focused on maintaining a strong balance sheet. That strength is reflected in our ability to accommodate the recent growth in deposits without the need for additional capital. We raised our loan loss reserves during the year in response to the uncertainty caused by the pandemic but asset quality continues to remain strong. Profitability related to the growth in deposits has been offset by narrowing interest rate margins, which are the result of current monetary policies, which are outside of our control and expected to continue for the near-term. During the past year, the Bank was a local leader in the Paycheck Protection Program, which has proven to be essential for many of our local businesses and we are continuing that leadership into the newest round of funding for that government loan program.”

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 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 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)
			12/31/20				12/31/19
ASSETS
Cash and due from Banks			$	2,596			$	3,203
Interest bearing deposits with other financial institutions				48,316				20,855
		Cash and Cash Equivalents		50,912				24,058
Investment securities available-for-sale				20,070				32,778
Investment securities held-to-maturity				2,000				0
Federal Home Loan Bank and other restricted stock				2,632				2,705
Loans, net of unearned income				123,230				93,988
Allowance for loan losses				(1,464	)			(1,332	)
		Net Loans		121,766				92,656
Premises and equipment, net				851				313
Bank Owned Life Insurance				4,843				4,730
Deferred tax asset				154				19
Accrued interest receivable and other assets				1,134				1,175
		Total Assets	$	204,362			$	158,434
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
	Noninterest-bearing deposits		$	78,997			$	54,281
	Interest-bearing deposits			82,532				63,932
		Total Deposits		161,529				118,213
Borrowed Funds				21,111				20,531
Accrued interest payable and other liabilities				1,288				644
		Total Liabilities		183,928				139,388
Shareholders’ Equity
	Common stock, no par value, 10,000,000 shares authorized:
	2,006,393 shares issued and outstanding as of 12/31/20			15,958				15,958
	1,997,993 shares issued and outstanding as of 12/31/19
	Additional paid-in-capital			1,570				1,470
	Accumulated deficit			2,682				1,660
	Accumulated other comprehensive income (loss)			224				(42	)
		Total Shareholders’ Equity		20,434				19,046
		Total Liabilities and Shareholders’ Equity	$	204,362			$	158,434
Book Value Per Share			$	10.18			$	9.53

Friendly Hills Bank
Statements of Operations (Unaudited)
(in thousands, except per share information)
			For the twelve				For the twelve
			months ended				months ended
			12/31/20				12/31/19
Interest Income			$	6,167			$	6,144
Interest Expense				735				656
	Net Interest Income			5,432				5,488
Provision for Loan Losses				150				125
	Net Interest Income after Provision for Loan Losses			5,282				5,363
Noninterest Income				604				537
Noninterest Expense				4,477				4,416
Non-Recurring Items				0				50
Income before Provision for Income Taxes				1,409				1,534
(Provision) Benefit for Income Taxes				(387	)			(431	)
	Net Income		$	1,022			$	1,103
Basic and Diluted Earnings Per Share			$	0.51			$	0.55

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

FAQ

What were Friendly Hills Bank's earnings for 2020?

Friendly Hills Bank reported net income of $1.0 million for 2020.

How much did Friendly Hills Bank's total assets increase?

Total assets increased by 29% to $204.4 million.

What is the stock symbol for Friendly Hills Bank?

The stock symbol for Friendly Hills Bank is FHLB.

What was the loan portfolio growth for Friendly Hills Bank?

The loan portfolio grew by 31%, reaching $123.2 million.

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

The total risk-based capital ratio was 20%, well above the 10% regulatory requirement.