FHLB Friendly Hills Bancorp (PK)

WHITTIER, Calif., Jan. 31, 2012 /PRNewswire/ -- Friendly Hills Bank (the "bank") (OTCBB: FHLB) reported results for the year ended December 31, 2011, after completing its fifth full year of operations since opening on September 18, 2006.  

For the twelve month period ending December 31, 2011, the bank reported a profit of $149,000 or $0.09 per diluted share of common stock.  This figure includes a $169,000 provision for loan losses, $48,000 loss on the sale of investment securities, and a $147,000 decrease in the value of interest rate caps.  The bank reported a loss of $654,000 or $0.40 per diluted share of common stock for the twelve months ended December 31, 2010.  This figure includes a $1,182,000 provision for loan losses, a $537,000 gain on the sale of investment securities, and a $149,000 decrease in the value of an interest rate cap.  

Excluding the provision for loan losses, investment securities gains and losses, and adjustments to the carrying value of interest rate caps ("Core Earnings"), the bank reported net income of $513,000 for the twelve months ended December 31, 2011 compared to a profit of $140,000 for the same period in 2010.

As of December 31, 2011, the bank reported total assets of $98.0 million, a 4% increase from $94.6 million as of December 31, 2010.  The bank's loan portfolio, net of unearned income, decreased 1% from $61.3 million as of December 31, 2010, to $60.9 million as of December 31, 2011.  The portfolio remains diversified with $26.5 million or 44% in Commercial & Industrial Loans to local businesses (including $15.8 million in Owner Occupied Commercial Real Estate Loans), $19.6 million or 32% in Residential Real Estate Loans to investors and $9.9 million or 16% in Commercial Real Estate Loans to investors.  The bank has an additional $12.0 million in unfunded loan commitments.

The bank's overall deposit base has grown 3% in the twelve months ended December 31, 2011, from $73.8 million as of December 31, 2010, to $76.4 million as of December 31, 2011.  Non-interest bearing deposits continue to form a substantial part of the deposit base (35.5%), growing from $22.9 million to $27.1 million as of December 31, 2011.  During the same time period interest-bearing deposits decreased from $50.9 million to $49.3 million on December 31, 2011.  The bank has no deposits which were sourced through brokers or other wholesale funding sources.  

At December 31, 2011, shareholders' equity was $12.6 million and the bank's total risk-based capital ratio was 19.5%, 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.

"The environment for community banks presented some significant challenges over the past year," commented Jeffrey K. Ball, Chief Executive Officer, "but we remain confident in the future opportunities for our company.  At the beginning of the past year our Board of Directors supported management's recommendation to prioritize profitability over growth.  This decision was driven by the economic conditions of our market and resulted in a modest 4% increase in the size of the balance sheet with a 266% increase in the Core Earnings of the company.  While the environment remains challenging, the company is well positioned to pursue additional opportunities for earnings growth with sufficient capital and liquidity to support further enhancement of our relationship driven model."

"Since establishing our company the economics of community banking have changed dramatically," Ball continued.  "Margins are slimmer, regulations are more restrictive with higher costs for monitoring and compliance while the business environment in our market area is less robust.  Our Board of Directors has responded to these changing conditions while remaining committed to the delivery of shareholder value.  Maintaining our focus on a consultative approach while broadening our product offering are key strategies we have identified in maintaining a community bank platform which can deliver meaningful profitability for our shareholders.  We appreciate the continued support of our clients, our employees and our investors as we remain committed to making Friendly Hills Bank the best place to do business, the best place to work and the best place to invest".

Company Profile:

Friendly Hills Bank is a community bank which was formed to primarily serve the Southern California communities of eastern 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