Friendly Hills Bank Continues Growth Through Third Quarter; Announces Hiring of Chief Financial Officer
November 09 2009 - 7:00AM
PR Newswire (US)
WHITTIER, Calif., Nov. 9 /PRNewswire-FirstCall/ -- Friendly Hills
Bank (OTC:FHLB) (BULLETIN BOARD: FHLB) reported results for the
third quarter of 2009, its twelfth full quarter of operations,
since opening on September 18, 2006. As of September 30, 2009, the
bank reported total assets of $76.9 million, a 26% increase from
$60.9 million as of September 30, 2008. The bank's overall deposit
base has grown over 35% in the twelve months ended September 30,
2009, from $46.9 million as of September 30, 2008, to $63.2 million
as of September 30, 2009. Non-interest bearing deposits continue to
form a substantial part of the deposit base (32%), growing from
$17.4 million to $20.0 million as of September 30, 2009. During the
same time period, interest bearing deposits grew from $29.5 million
to $43.2 million on September 30, 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 28% from $36.8 million as of
September 30, 2008, to $47.0 million as of September 30, 2009. The
portfolio remains diversified with $11.8 million or 25% in
Commercial & Industrial Loans to local businesses and $18.3
million or 38% in Commercial Real Estate Loans. Owner Occupied
properties represent the largest component of the Commercial Real
Estate Portfolio (57%) with $10.3 million outstanding. The bank has
an additional $22.2 million in unfunded loan commitments. While the
bank's loan portfolio is 28% larger than it was a year ago, net
interest income increased by 12% from $1.8 million in the nine
months ended September 30, 2008, to $2.1 million in the nine months
ended September 30, 2009. Net interest income is the bank's primary
source of income and the lower rate of income growth is reflective
of the significant drop in interest rates in comparison to the same
time period a year ago. For the most recent nine month period
ending September 30, 2009, the bank reported a net loss of
$1,036,282 or ($0.64) per diluted share of common stock. This
figure includes a loan loss provision of $485,687 for the nine
months ended September 30, 2009, which was 105% higher than the
$237,313 provision for the same period one year earlier. The bank
reported a net loss of $578,916, or ($0.36) per diluted share of
common stock for the nine months ended September 30, 2008. The
increase in the allowance for loan losses 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 a special deposit insurance assessment which was
imposed on all insured institutions by the Federal Deposit
Insurance Corporation and the recurring effect of accounting rules
that require companies to include stock compensation as an expense.
Total accrual for the special assessment was $23,800 for the nine
months ending September 30, 2009, and there was no special
assessment in the prior year. The bank also announces that Daniel
L. Erickson has joined the executive management team as Executive
Vice President/Chief Financial Officer. Mr. Erickson brings an
extensive amount of experience in financial, technological and
operational management with community banks. "The current economic
environment presents a number of challenges to community banks
across the country and ours is no exception," commented Jeffrey K.
Ball, Chief Executive Officer. "While we continue to actively
manage our loan portfolio, and remain pleased with the continued
performance of our borrowers, many businesses in our market area
are struggling and we expect this to be a continuing challenge
going into the next year. As part of our active management of the
loan portfolio we have taken action in restructuring one of our
borrower relationships and placed the related loans on non-accrual
status until performance under the new structure is demonstrated.
We feel that this was a prudent action given the continued
uncertainty of the local economy and we remain confident in the
repayment capability of all of our borrowers. "Another impact of
the current environment," continued Ball, "is the change in
interest rates which has resulted in a year-over-year decline in
our Net Interest Margin. This has resulted in the growth of our Net
Interest Income not keeping pace with the rate of growth for the
overall bank and our loan portfolio. However, we remain focused on
maintaining a low cost of funds in our deposit base which is the
result of our continued focus on relationship development. And with
the addition of Mr. Erickson we are confident that we will be able
to better utilize the bank's liquidity position to maximize
earnings within our defined risk parameters while enhancing the
operational efficiency of our institution. Despite the challenges
of the current economic environment, the bank continues to
demonstrate the growth needed for our primary focus of attaining
profitability." 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) 9/30/09 12/31/08 9/30/08 ------- -------- -------
Assets Cash and cash equivalents $4,393 $2,678 $2,145 Fed funds
sold 7,430 6,980 5,090 Investment securities available -for-sale
16,565 15,527 15,443 Loans, net of unearned income 48,012 36,987
37,305 ------ ------ ------ Allowance for loan losses (977) (555)
(469) ---- ---- ---- Net loans 47,035 36,432 36,837 Premises and
equipment, net 1,061 1,259 1,069 Accrued interest receivable and
other assets 419 632 343 --- --- --- Total Assets $76,903 $63,508
$60,926 ======= ======= ======= Liabilities Deposits
Noninterest-bearing deposits $19,980 $18,583 $17,434
Interest-bearing deposits 43,184 30,475 29,482 ------ ------ ------
Total Deposits 63,164 49,058 46,916 Accrued interest payable and
other liabilities 307 155 109 --- --- --- Total Liabilities $63,471
$49,213 47,025 Stockholders' Equity Common stock $15,958 $15,958
$15,958 Accumulated deficit (3,834) (2,797) (2,593) Additional
paid-in-capital 728 543 493 Accumulated other comprehensive gain
(loss) 580 591 43 --- --- --- Total Stockholders' Equity 13,432
14,295 13,901 ------ ------ ------ Total Liability &
Stockholders' Equity $76,903 $63,508 $60,926 ------- -------
------- Book Value Per Share $8.31 $8.85 $8.60 Friendly Hills Bank
Statement of Operations (Unaudited) (in thousands, except per share
information) For the nine For the nine months ended months ended
9/30/09 9/30/08 -------------- -------------- Interest Income
$2,409 $2,153 Interest Expense 355 314 --- --- Net Interest Income
2,054 1,839 Provision for Credit Losses 485 237 Net Interest Income
after Provision for Credit Losses 1,569 1,602 Other Income 112 90
Operating Expenses 2,716 2,307 ----- ----- Gain (Loss) on
Securities (0) 37 --- --- Loss before Provision for Income Taxes
(1,035) (578) Provision for Income Taxes (1) (1) --- --- Net Loss
$(1,036) $(579) ======= ===== Basic and Diluted Income (Loss) Per
Share $(0.64) $(0.36) ====== ====== DATASOURCE: Friendly Hills Bank
CONTACT: Jeffrey K. Ball, Chief Executive Officer, or Daniel L.
Erickson, Chief Financial Officer, both of Friendly Hills Bank,
+1-562-947-1920 Web Site: http://www.friendlyhillsbank.com/
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