Friendly Hills Bank Reports Year End Results

WHITTIER, Calif., Feb. 4, 2011 /PRNewswire/ -- Friendly Hills Bank (OTC Bulletin Board: FHLB) reported results for the year ended December 31, 2010, after completing its fourth full year of operations since opening on September 18, 2006.  

For the twelve month period ending December 31, 2010, the bank reported a loss of $654,000 or ($0.40) per diluted share of common stock.  This figure includes a $537,000 gain on the sale of investment securities and a $149,000 decrease in the value of an interest rate cap which was purchased during the second quarter.  The provision for credit losses for the twelve months ended December 31, 2010, of $1,082,000 was 7% more than the $1,007,000 provision for the same period one year earlier.  The bank reported a net loss of $1,510,000, or ($0.93) per diluted share of common stock for the twelve months ended December 31, 2009.  

As of December 31, 2010, the bank reported total assets of $94.7 million, a 17% increase from $81.0 million as of December 31, 2009.  The bank's loan portfolio, net of unearned income, grew 6% from $57.7 million as of December 31, 2009, to $61.3 million as of December 31, 2010.  The portfolio remains diversified with $23.7 million or 39% in Commercial & Industrial Loans to local businesses (including $14.2 million in Owner Occupied Commercial Real Estate Loans), $19.3 million or 32% in Residential Real Estate Loans to investors and $14.3 million or 23% in Commercial Real Estate Loans to investors.  The bank has an additional $19.2 million in unfunded loan commitments.

The bank's overall deposit base has grown 9% in the twelve months ended December 31, 2010, from $67.9 million as of December 31, 2009, to $73.8 million as of December 31, 2010.  Non-interest bearing deposits continue to form a substantial part of the deposit base (31%), growing from $22.1 million to $22.9 million as of December 31, 2010.  During the same time period interest-bearing deposits grew from $45.8 million to $50.9 million on December 31, 2010.   The bank has no deposits which were sourced through brokers or other wholesale funding sources.

At December 31, 2010, shareholders' equity was $11.8 million and the bank's total risk-based capital ratio was 19.70%, 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 this past year was very challenging for the financial services industry as a whole," commented Jeffrey K. Ball, Chief Executive Officer, "the bank demonstrated strong resilience to market pressures and further solidified the value of its community bank model.  Maintaining its perspective on long-term shareholder value, our Board of Directors' continued their emphasis on risk management – most notably in credit risk and interest rate risk.  This perspective resulted in specific actions which negatively impacted earnings in the short-term.  But we feel that those difficult decisions will serve to strengthen the bank and its opportunities for the long term.  In the meantime, we have grown to a base level of operating profitability which is reflected in the fact that the sum of Net Interest Income and Non-Interest Income exceeded Non-Interest Expenses through the year.  This accomplishment is attributable to the consistent focus of our traditional community bank model - a strategy which emphasizes client relationships with less reliance on transactional opportunities.  While we anticipate that there will be a continued environment of heightened uncertainty in our national and local economies, we are confident in the bank's position to meet those challenges as reflected in our current level of capital, liquidity and human resources.  As we enter our fifth full year of business, we appreciate the continued support of our shareholders, clients and communities that we serve."

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