Friendly Hills Bank Reports Second Quarter Results

WHITTIER, Calif., Aug. 3, 2012 /PRNewswire/ -- Friendly Hills Bank (the "bank") (OTCBB: FHLB) reported results for the second quarter of 2012.

For the six month period ending June 30, 2012, the bank reported a profit of $172,000 or $0.11 per diluted share of common stock.  This figure includes a $20,000 increase in the value of the interest rate caps.  The bank reported a loss of $23,000 or $0.01 per diluted share of common stock for the six months ended June 30, 2011.  This figure includes a $173,000 provision for credit losses, a $62,000 decrease in the value of an interest rate cap, and a $41,000 loss on the sale of securities. 

As of June 30, 2012, the bank reported total assets of $98.9 million, a 1% decrease from $99.6 million as of June 30, 2011.  The bank's loan portfolio, net of unearned income, decreased 8% from $62.3 million as of June 30, 2011, to $57.3 million as of June 30, 2012.  The portfolio remains diversified with $27.5 million or 48% in Commercial & Industrial Loans to local businesses (including $17.1 million in Owner Occupied Commercial Real Estate Loans), $16.1 million or 28% in Residential Real Estate Loans to investors and $9.0 million or 16% in Commercial Real Estate Loans to investors.  The bank has an additional $13.8 million in unfunded loan commitments.

The bank's overall deposit base has decreased by 1% in the twelve months ended June 30, 2012, from $78.2 million as of June 30, 2011, to $77.1 million as of June 30, 2012.  Non-interest bearing deposits continue to form a substantial part of the deposit base (38.5%), growing from $26.3 million to $29.7 million as of June 30, 2012.  During the same time period interest-bearing deposits decreased from $51.9 million to $47.4 million on June 30, 2012.  The bank has no deposits which were sourced through brokers or other wholesale funding sources. 

At June 30, 2012, shareholders' equity was $12.9 million and the bank's total risk-based capital ratio was 20.3%, significantly exceeding the minimum "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.

"Low asset yields and opportunities for growth continue to be a significant challenge as we maintain our consistent underwriting standards through difficult market conditions," commented Jeffrey K. Ball, Chief Executive Officer.  "The current interest rate environment, coupled with a competitive market for qualifying loans, has resulted in lower yields on all asset classifications.  This has led to the prudent decrease in the bank's balance sheet – particularly in the form of interest bearing deposits.  We continue to benefit from a low cost of funds while tightly managing expenses and maintaining an appropriate interest rate risk profile through this current environment.  The bank remains well positioned in terms of capital, liquidity and reserves with a continued focus on long-term shareholder value."

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 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