Friendly Hills Bank Reports Solid First Quarter Results

WHITTIER, Calif., May 2, 2011 /PRNewswire/ -- Friendly Hills Bank (OTCBB: FHLB) reported results for the first quarter of 2011.  

For the three month period ending March 31, 2011, the bank reported a profit of $171,000 or $0.11 per diluted share of common stock.  This figure includes a $28,000 increase in the value of an interest rate cap which was purchased in 2010.  The provision for credit losses for the three months ended March 31, 2011, of $1,000 was 98% less than the $37,000 provision for the same period one year earlier.  The bank reported a profit of $507,000, or $0.31 per diluted share of common stock for the three months ended March 31, 2010.  This figure includes a $454,000 gain on the sale of investment securities.  

As of March 31, 2011, the bank reported total assets of $98.1 million, a 9% increase from $90.2 million as of March 31, 2010.  The bank's loan portfolio, net of unearned income, grew 5% from $59.5 million as of March 31, 2010, to $62.3 million as of March 31, 2011.  The portfolio remains diversified with $25.1 million or 40% in Commercial & Industrial Loans to local businesses (including $15.0 million in Owner Occupied Commercial Real Estate Loans), $20.5 million or 33% in Residential Real Estate Loans to investors and $12.4 million or 20% in Commercial Real Estate Loans to investors.  The bank has an additional $17.5 million in unfunded loan commitments.

The bank's overall deposit base has grown 8% in the twelve months ended March 31, 2011, from $71.2 million as of March 31, 2010, to $77.2 million as of March 31, 2011.  Non-interest bearing deposits continue to form a substantial part of the deposit base (33%), growing from $22.0 million to $25.7 million as of March 31, 2011.  During the same time period interest-bearing deposits grew from $49.2 million to $51.4 million on March 31, 2011.  The bank has no deposits which were sourced through brokers or other wholesale funding sources.

At March 31, 2011, shareholders' equity was $11.9 million and the bank's total risk-based capital ratio was 19.83%, 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.

"While making some difficult decisions in the past year which had a short-term impact on the bank's profitability," commented Jeffrey K. Ball, Chief Executive Officer, "we continued to grow and improve our operating efficiencies.  The long-term benefit of these decisions has resulted in a banking franchise which has demonstrated profitability while mitigating the increased risks associated with asset quality and changes in interest rates.  While there is still a heightened level of uncertainty in the current environment, we remain committed to the strength of our business model which focuses more on client relationships and less on transactional opportunities.  This strategy provides a sound platform for our Board of Directors to continue their focus on enhancing long-term shareholder value."

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