Friendly Hills Bank Reports Strong Deposit Growth

WHITTIER, Calif., July 23  /PRNewswire-FirstCall/ -- Friendly Hills Bank (OTC:FHLB) (BULLETIN BOARD: FHLB)  reported results for the second quarter of 2007, its third full quarter of operations.  The bank opened for business on September 18, 2006.  As of June 30, 2007, the bank reported total assets of $37.1 million, an increase of 13% from $32.7 million on March 31, 2007.

The bank's deposits grew to $22.7 million or 27% from $17.8 million as of March 31, 2007.  Noninterest-bearing deposits increased from $8.7 million on March 31, 2007 to $10.5 million as of June 30, 2007, an increase of 21%. Interest bearing deposits advanced 33% from $9.2 million on March 31, 2007 to $12.2 million on June 30, 2007.

The bank's loan portfolio continued to grow, increasing $4.8 million from March 31, 2007, or 84% to $10.5 million at June 30, 2007.  Of the $10.5 million in loans, $5.7 million or 54% are commercial and industrial loans to local businesses.  The bank has an additional $8.4 million in unfunded loan commitments and no residential 'sub prime' mortgage loans.

For the six months ended June 30, 2007, the bank reported a net loss of $607,000, which includes a loan loss provision of $76,000, or ($0.38) per share of common stock.  For the three months ended June 30, 2007, the bank reported a net loss of $303,000, including a loan loss provision of $50,000, or ($0.19) per share of common stock.  These numbers also reflect the impact of accounting rules that requires companies to include stock compensation as an expense.

"We have been very pleased with the continued growth of the bank." commented Jeffrey K. Ball, Chief Executive Officer of the Bank. "We believe our strong relationships with the local communities have helped increase not only our deposits but also our commercial loans which are relationship driven. We believe this establishes a strong foundation for the continued growth and development of the bank."

Friendly Hills Bank is a community bank which was formed to primarily serve the Southern California communities of Whittier, La Habra, Santa Fe Springs and La Habra Heights, as well as the surrounding markets of Los Angeles and Orange Counties.  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 at 16011 E. Whittier Blvd. in Whittier, California.  For more information on the Bank, please visit http:/// http://www.friendlyhillsbank.com/ or call 562-947-1920.

                             Friendly Hills Bank
                                Balance Sheet
                                 (Unaudited)



                                                 3/31/07         6/30/07
  Assets

  Cash and cash equivalents                   $ 1,344,566      $ 1,473,621
  Fed funds sold                               16,015,000       15,005,000
  Investment securities available-for-sale      8,454,737        8,989,077
  Loans, net of unearned income                 5,773,660       10,622,050
    Allowance for loan losses                     (82,775)        (132,916)
    Net loans                                   5,690,885       10,489,135
  Premises and equipment, net                   1,074,361        1,036,538
  Accrued interest receivable and other
     assets                                       160,953          152,956
    Total Assets                              $32,740,502      $37,146,326

  Liabilities
  Deposits
     Noninterest-bearing deposits             $ 8,666,339      $10,497,259
     Interest-bearing deposits                  9,161,699       12,180,439
  Accrued interest payable and other
  liabilities                                      78,855           69,266
     Total Liabilities                         17,906,863       22,746,964

  Stockholders' Equity
  Common stock                                 15,957,620       15,957,620
  Accumulated deficit                          (1,249,074)      (1,552,537)
  Additional paid-in-capital                      139,602          195,102
  Accumulated other comprehensive loss            (14,539)        (200,823)
     Total Stockholders' Equity                14,833,609       14,399,362
     Total Liability & Stockholders'
      Equity                                  $32,740,502      $37,146,326



                             Friendly Hills Bank
                           Statement of Operations
                                 (Unaudited)


                                                For the three   For the six
                                                months ended    months ended
                                                   3/31/07         6/30/07

  Interest Income                               $  378,724      $  836,720

  Interest Expense                                  56,113         143,157
    Net Interest Income                            322,611         693,563

  Provision for Credit Losses                       26,089          76,230
    Net Interest Income after Provision for
     Credit Losses                                 296,522         617,333

  Other Income                                      13,300          20,086

  Operating Expenses                               613,590       1,243,840

  Loss before Provision for Income Taxes          (303,768)       (606,421)

  Provision for Income Taxes                                          (808)
      Net Loss                                    (303,768)      $(607,229)


  Basic Income (Loss) Per Share                  $   (0.19)      $   (0.38)


  Book Value Per Share                           $    9.18       $    8.91

  Shares Outstanding                             1,616,000       1,616,000




The numbers in this press release are unaudited. Certain statements in this press release, including statements 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, regulatory matters and those discussed in filings by the Bank with the Federal Deposit Insurance Corporation. 

DATASOURCE: Friendly Hills Bank



CONTACT:  Jeffrey K. Ball, Chief Executive Officer, or George W.

Peterson, Chief Financial Officer, both of Friendly Hills Bank,

[phone]



Web site:  http://www.friendlyhillsbank.com/ 

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