Friendly Hills Bank Reports Profit for First Quarter 2010

WHITTIER, Calif., April 29 /PRNewswire-FirstCall/ -- Friendly Hills Bank (OTC Bulletin Board: FHLB) reported results for the first quarter of 2010, after completing its third full year of operations since opening on September 18, 2006.  

For the three month period ending March 31, 2010, the bank reported a profit of $507,000 or $0.31 per diluted share of common stock.  This figure includes a $454,000 gain on the sale of investment securities.  The provision for credit losses for the three months ended March 31, 2010, of $37,000 was 79% less than the $174,000 provision for the same period one year earlier.  The prior year provision was impacted by the increase in the Bank's allowance for loan losses from 1.50% to 2.00% of gross loans as part of the Bank's overall risk management process.  The bank reported a net loss of $419,000, or ($0.26) per diluted share of common stock for the three months ended March 31, 2009.  

As of March 31, 2010, the bank reported total assets of $90.2 million, a 35% increase from $66.6 million as of March 31, 2009.  The bank's loan portfolio, net of unearned income, grew 63% from $36.4 million as of March 31, 2009, to $59.5 million as of March 31, 2010.  The portfolio remains diversified with $10.6 million or 18% in Commercial & Industrial Loans to local businesses, $22.0 million or 37% in Residential Real Estate Loans to investors and $23.4 million or 39% in Commercial Real Estate Loans.  Owner Occupied properties represent the largest component of the Commercial Real Estate Portfolio (25%) with $14.7 million outstanding.  The bank has an additional $20.2 million in unfunded loan commitments.

The bank's overall deposit base has grown over 36% in the twelve months ended March 31, 2010, from $52.5 million as of March 31, 2009, to $71.2 million as of March 31, 2010.  Non-interest bearing deposits continue to form a substantial part of the deposit base (31%), growing from $19.2 million to $22.0 million as of March 31, 2010.  During the same time period interest-bearing deposits grew from $33.3 million to $49.2 million on March 31, 2010.   The bank has no deposits which were sourced through brokers or other wholesale funding sources.

At March 31, 2010, shareholders' equity was $13.1 million and the bank's total risk-based regulatory capital ratio was 21.42%, significantly exceeding the "well-capitalized" level of 10% prescribed under regulatory requirements. The bank also continues to maintain substantial liquidity positions, retaining significant balances of liquidity as well as available collateralized borrowings and other potential sources of liquidity.

"Although the current environment remains very challenging in the financial services industry, we are pleased to report that the Bank has attained profitability," commented Jeffrey K. Ball, Chief Executive Officer.  "While our financial performance during the most recent quarter was enhanced by a one-time gain from the sale of certain securities in our investment portfolio, the underlying business of the bank was profitable while maintaining a Loan Loss Allowance at 2% of Gross Loans.  Furthermore, we have achieved this goal while maintaining a sound capital position to support the continued growth of the company.  We remain focused on our business model of consistent loan underwriting and quality service as other banks have proven themselves to be less reliable for small business owners and professionals in the markets that we serve.  These conditions have provided unique opportunities for the establishment of quality banking relationships as we focus on the consistent development of our franchise.  While uncertainty continues to hamper economic growth and conditions remain a challenge, we remain focused on our core strategies and are proud to provide a sound alternative for the business community.  We are focused on the development of shareholder value and feel that the bank is properly positioned for the current environment and related opportunities."

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 Southern California.  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 with an additional branch office at 12070 East Telegraph Road, Suite #100 in Santa Fe Springs, California.  For more information on the bank, 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 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.

SOURCE Friendly Hills Bank

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