Friendly Hills Bank Reports Third Quarter Results

WHITTIER, Calif., Nov. 8, 2011 /PRNewswire/ -- Friendly Hills Bank (the "bank") (OTCBB: FHLB) announced unaudited financial results for the third quarter of 2011.  

For the nine month period ending September 30, 2011, the bank reported a profit of $6,000 or zero dollars per diluted share of common stock.  This figure includes a $169,000 provision for credit losses, $51,000 loss on the sale of investment securities, and a $165,000 decrease in the value of interest rate caps.  The bank reported a loss of $794,000 or $0.49 per diluted share of common stock for the nine months ended September 30, 2010.  This figure included a $1,082,000 provision for credit losses, a $514,000 gain on the sale of investment securities, and a $206,000 decrease in the value of an interest rate cap.  

Excluding the provision for credit losses, investment securities gains and losses, and adjustments to the carrying value of interest rate caps, the bank reported net income of $391,000 for the nine months ended September 30, 2011 compared to a loss of $21,000 for the same period in 2010.

As of September 30, 2011, the bank reported total assets of $100.9 million, a 2% increase from $98.6 million as of September 30, 2010.  The bank's loan portfolio, net of unearned income, decreased 1% from $61.6 million as of September 30, 2010, to $61.1 million as of September 30, 2011.  The portfolio remains diversified with $26.0 million or 42% in Commercial & Industrial Loans to local businesses (including $16.7 million in Owner Occupied Commercial Real Estate Loans), $20.1 million or 33% in Residential Real Estate Loans to investors and $10.1 million or 16.5% in Commercial Real Estate Loans to investors.  The bank has an additional $13.7 million in unfunded loan commitments.

The bank's overall deposit base has grown 3% in the twelve months ended September 30, 2011, from $77.1 million as of September 30, 2010, to $79.4 million as of September 30, 2011.  Non-interest bearing deposits continue to form a substantial part of the deposit base (35.5%), growing from $23.8 million to $28.2 million as of September 30, 2011.  During the same time period interest-bearing deposits decreased from $53.3 million to $51.2 million on September 30, 2011.   The bank has no deposits which were sourced through brokers or other wholesale funding sources.  

At September 30, 2011, shareholders' equity was $12.5 million and the bank's total risk-based capital ratio was 20.27%, 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.

"Despite significant challenges posed by the current economic environment," commented Jeffrey K. Ball, Chief Executive Officer, "we are encouraged by the continued growth in the core earnings of the bank.  We continue to stay focused on enhancing the long term shareholder value of the company by employing strategies intended to mitigate certain uncontrollable risks while maintaining the strong underwriting standards and expense limitations we have always employed.  With profitable core operations, a sound balance sheet and excess capital, we are well positioned for both the challenges and opportunities of our marketplace."

Company Profile:

Friendly Hills Bank is a community bank which was formed to primarily serve the markets of Southeast 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