Friendly Hills Bank Maintains Asset Quality With Continued Growth
May 07 2009 - 7:00AM
PR Newswire (US)
WHITTIER, Calif., May 7 /PRNewswire-FirstCall/ -- Friendly Hills
Bank (OTC Bulletin Board: FHLB) reported results for the first
quarter of 2009, its tenth full quarter of operations, since
opening on September 18, 2006. As of March 31, 2009, the bank
reported total assets of $66.6 million, a 35% increase from $49.2
million as of March 31, 2008, and a 5% increase from $63.5 million
as of December 31, 2008. The bank's overall deposit base has grown
over 52% in the twelve months ended March 31, 2009, from $34.5
million as of March 31, 2008, to $52.5 million as of March 31,
2009. Non-interest bearing deposits continue to form a substantial
part of the deposit base (37%), growing from $14.4 million to $19.2
million as of March 31, 2009. During the same time period interest
bearing deposits grew from $20.1 million to $33.3 million on March
31, 2009. The bank has no deposits which were sourced through
brokers or originated on the basis of above-market rate programs.
The bank's loan portfolio, net of an allowance for loan losses,
grew 57% from $22.8 million as of March 31, 2008, to $35.7 million
as of March 31, 2009. The portfolio remains diversified with $9.5
million or 26% in Commercial & Industrial Loans to local
businesses and $15.1 million or 41% in Commercial Real Estate
Loans. Owner Occupied properties represent the largest component of
the Commercial Real Estate Portfolio (24%) with $8.6 million
outstanding. The bank has an additional $15.1 million in unfunded
loan commitments with no delinquent loans, non-performing loans or
residential 'sub-prime' mortgage loans. The bank's primary source
of income is net interest income which increased by 13% from
$533,811 in the three months ended March 31, 2008, to $600,719 in
the three months ended March 31, 2009. For the most recent quarter
ending March 31, 2009, the bank reported a net loss of $419,216, or
($0.26) per diluted share of common stock. This figure includes a
loan loss provision of $174,281 for the three months ended March
31, 2009, which was 203% higher than the $57,470 provision for the
same period one year earlier. The bank reported a net loss of
$251,819, or ($0.16) per diluted share of common stock for the
three months ended March 31, 2008. The increase in reserves
reflects the growth in the loan portfolio and an increased
provision reflective of management's cautionary position towards
potential risks associated with current economic conditions. The
net loss numbers also reflect the impact of accounting rules that
require companies to include stock compensation as an expense. "The
first quarter of this year has presented a number of unique
challenges for the banking industry which have made us appreciative
of the conservative manner in which we are operating our
institution," commented Jeffrey K. Ball, Chief Executive Officer.
"While in a normal economic environment we would expect more
growth, current economic conditions have resulted in a more limited
growth rate allowing us to preserve our asset quality and a low
cost of funds. We are proud of our position in the midst of this
environment and are encouraged by the increasing opportunities for
growth with our Relationship Banking focus." "Despite having no
past due or non-accrual loans," continued Ball, "our Board of
Directors felt that it was appropriate to raise the bank's
allowance for loan losses from 1.50% to 2.00% of gross loans. This
increase reflects the continuing uncertainty of the current
economic environment and is a responsible measure in preserving the
long-term sustainability of our franchise. Recognizing that this
change would have a significant impact on the bank's continuing
progress towards the primary objective of achieving profitability,
we felt that it was an important step in our continuing focus on
overall risk management. The appropriateness of this provision is
continually being assessed to reflect any change in market
conditions. At the same time our capital and liquidity positions
are strong enough to support our continued growth." 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 http://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. Friendly
Hills Bank Balance Sheet (Unaudited) (in thousands, except per
share information) 3/31/09 12/31/08 3/31/08 Assets Cash and cash
equivalents $2,825 $2,678 $2,017 Fed funds sold 12,240 6,980 2,575
Investment securities available-for-sale 13,966 15,527 20,582
Loans, net of unearned income 36,449 36,987 23,073 Allowance for
loan losses (730) (555) (289) Net loans 35,719 36,432 22,784
Premises and equipment, net 1,215 1,259 931 Accrued interest
receivable and other assets 659 632 316 Total Assets $66,624
$63,508 $49,205 Liabilities Deposits Noninterest-bearing deposits
$19,193 $18,583 $14,439 Interest-bearing deposits 33,283 30,475
20,081 Accrued interest payable and other liabilities 242 155 94
Total Liabilities $52,718 $49,213 34,614 Stockholders' Equity
Common stock $15,958 $15,958 $15,958 Accumulated deficit (3,217)
(2,797) (2,267) Additional paid-in-capital 605 543 367 Accumulated
other comprehensive gain (loss) 560 591 533 Total Stockholders'
Equity 13,906 14,295 14,591 Total Liability & Stockholders'
Equity $66,624 $63,508 $49,205 Book Value Per Share $8.61 $8.85
$9.03 Friendly Hills Bank Statement of Operations (Unaudited) (in
thousands, except per share information) For the For the three
months three months ended ended 3/31/09 3/31/08 Interest Income
$717 $646 Interest Expense 116 112 Net Interest Income 601 534
Provision for Credit Losses 174 57 Net Interest Income after
Provision for Credit Losses 427 477 Other Income 33 27 Operating
Expenses 879 755 Loss before Provision for Income Taxes (419) (251)
Provision for Income Taxes (0) (1) Net Loss $(419) $(252) Basic and
Diluted Income (Loss) Per Share $(0.26) $(0.16) DATASOURCE:
Friendly Hills Bank CONTACT: Jeffrey K. Ball, Chief Executive
Officer, or George W. Peterson, Chief Financial Officer, both of
Friendly Hills Bank, +1-562-947-1920 Web Site:
http://www.friendlyhillsbank.com/
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