GlobeNewswire Inc | Feb 12, 2021 09:00AM EST

February 12, 2021

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 Companys 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 Companys 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 Companys 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 BankBalance Sheets (Unaudited)(in thousands, except per share information)

12/31/20 12/31/19ASSETS Cash and due from Banks $ 2,596 $ 3,203 Interest bearing deposits with other financial 48,316 20,855 institutions 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 15,958 15,958 12/31/20 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? $ 204,362 $ 158,434 Equity Book Value Per Share $ 10.18 $ 9.53

Friendly Hills BankStatements of Operations (Unaudited)(in thousands, except per share information) For the For the twelve twelve months ended months ended 12/31/20 12/31/19Interest 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 5,282 5,363 LossesNoninterest 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