WHITTIER, Calif., July 24 /EMWNews/ -- Friendly Hills Bank

(OTC Bulletin Board: FHLB) reported results for the second quarter of 2008,

its seventh full quarter of operations, since opening on September 18,

2006. As of June 30, 2008, the bank reported total assets of $55.5 million,

a 22% increase from $45.5 million as of December 31, 2007.



    The bank's overall deposit base has grown over 34% in the current year

from $31.0 million as of December 31, 2007, to $41.6 million as of June 30,

2008. Non-interest bearing core deposits continue to form a substantial

part of the deposit base (35%) growing from $12.9 million at year-end to

$14.5 million as of June 30, 2008. During the same time period interest

bearing deposits advanced over 50% from $18.0 million to $27.1 million on

June 30, 2008. The bank has no deposits which were sourced through brokers

or originated on the basis of above-market rate programs.



    The bank's loan portfolio, net of an allowance for loan losses, also

continued to grow, increasing over 61% from $18.3 million as of December

31, 2007, to $29.5 million as of June 30, 2008. The portfolio remains

diversified with $8.9 million or 32% in Commercial & Industrial Loans to

local businesses and $14.6 million or 49.5% in Commercial Real Estate

Loans. Owner Occupied properties represent the largest component of the

Commercial Real Estate Portfolio (over 52%) with $7.6 million outstanding

as of June 30, 2008. The bank has an additional $14.3 million in unfunded

loan commitments and no non- performing loans or residential 'sub-prime'

mortgage loans.



    The bank's primary generator of income is Net Interest Income which

increased by over 65% from $693,563 in the six months ending June 30, 2007,

to $1,146,744 in the six months ending June 30, 2008. This increase was a

contributing factor in the bank reducing its net loss by 28% from $607,229,

or ($0.38) per share of common stock for the six months ending June 30,

2007, to $438,919, or ($0.27) per share of common stock. These figures

include a loan loss provision of $142,199 for the six months ending June

30, 2008, which was 86% higher than the $76,230 provision for the same

period one year earlier. The increase in reserves reflects the growth in

the loan portfolio as the bank maintained its Allowance for Loan Losses at

1.25% of loans outstanding. The net loss numbers also reflect the impact of

accounting rules that require companies to include stock compensation as an

expense.



    "We are proud of the bank's growth in the midst of a challenging

economic environment and credit our great staff of employees for this

achievement", commented Jeffrey K. Ball, Chief Executive Officer. "Most

notably the bank has made significant strides in the development of its

loan portfolio while preserving the strength of our deposit base. This

growth, which has been achieved while maintaining our diligent underwriting

standards, was a significant factor in the improvement of our Net Interest

Income. While we are mindful of the many challenges facing the industry, we

are seeing the results of our positioning the bank with a consultative

relationship approach to commercial banking which provides us with a unique

advantage during these uncertain times. We have developed our deposit base

to provide a low cost of funds without the need for brokered deposits or

above-market rate promotions. A conservative approach which we feel will be

enhanced by the market's emerging concern for bank safety and appreciation

of our style of sophisticated relationship management."



    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://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

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, and regulatory matters.










                             Friendly Hills Bank

                                Balance Sheet

                                 (Unaudited)



                                    6/30/08         12/31/07        6/30/07

    Assets

    Cash and cash equivalents      $3,048,483      $1,357,598     $1,473,621

    Fed funds sold                  5,970,000       7,365,000     15,005,000

    Investment securities

     available-for-sale            15,705,340      17,339,953      8,989,077

    Loans, net of unearned income  29,836,647      18,492,128     10,622,050

     Allowance for loan losses       (373,470)       (231,271)      (132,916)

     Net loans                     29,463,177      18,260,857     10,489,134

    Premises and equipment, net       947,024         960,604      1,036,538

    Accrued interest receivable and

     other assets                     331,346         218,938        152,956

     Total Assets                 $55,465,370     $45,502,950    $37,146,326



    Liabilities

    Deposits

      Noninterest-bearing

       deposits                   $14,532,655     $12,935,372    $10,497,259

      Interest-bearing deposits    27,078,142      18,025,171     12,180,439

    Accrued interest payable and

     other liabilities                 97,690          94,926         69,266

      Total Liabilities           $41,708,487     $31,055,469     22,746,964



    Stockholders' Equity

    Common stock                  $15,957,620     $15,957,620    $15,957,620

    Accumulated deficit            (2,453,244)     (2,014,323)    (1,552,537)

    Additional paid-in-capital        429,591         303,591        195,102

    Accumulated other comprehensive

     gain (loss)                     (177,084)        200,593       (200,823)

      Total Stockholders' Equity   13,756,883      14,447,481     14,399,362

      Total Liability &

       Stockholders' Equity       $55,465,370     $45,502,950    $37,146,326







                             Friendly Hills Bank

                           Statement of Operations

                                 (Unaudited)



                                            For the six           For the six

                                            months ended          months ended

                                               6/30/08               6/30/07



    Interest Income                          $1,350,253             $836,720



    Interest Expense                            203,509              143,157

     Net Interest Income                      1,146,744              693,563



    Provision for Credit Losses                 142,199               76,230

     Net Interest Income after Provision for

      Credit Losses                           1,004,545              617,333



    Other Income                                 58,336               20,086



    Operating Expenses                        1,537,930            1,243,840



    Gain (Loss) on Securities                    36,934                    -

    Loss before Provision for Income Taxes     (438,115)            (606,421)



    Provision for Income Taxes                     (804)                (808)

      Net Loss                                $(438,919)           $(607,229)



    Basic Income (Loss) Per Share                $(0.27)              $(0.38)



    Book Value Per Share                          $8.51                $8.91



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