Whittier, California – Friendly Hills Bancorp (the “Company”) (OTC Pink: FHLB), the holding company for Friendly Hills Bank (the “Bank”), today reported consolidated results for the third quarter of 2022, highlighted by continued strong loan portfolio growth. The Company also reported the successful completion of a private placement of common stock, raising a total of $14.1 million, the majority of which was closed in the third quarter of 2022.
Highlights:
- Total loans ended the quarter at $177 million, increasing $88 million or 99% since year end 2021, and are up $38 million since June 30, 2022.
- The Company completed a private placement of common stock at the end of October, raising gross proceeds of $14.1 million, before issuance costs, with $10.1 million being closed in the third quarter of 2022, and the remainder closed in October 2022.
- The Company believes it has achieved strong momentum in San Diego, with loan growth in San Diego representing $30 million of the total quarterly growth, further demonstrating the business community’s desire for a local community bank that offers true relationship banking.
- Total assets ended the quarter at $329 million, up from $293 million at year end 2021 and $306 million at June 30, 2022.
- Noninterest-bearing deposits account for 47% of total deposits, reflecting continued strong, relationship-based deposits in the form of checking and savings accounts.
- Net interest margin improved to 3.36% in Q3 from 2.84% in Q2.
- The Bank ended the third quarter with a leverage capital ratio of 9.16% and total risk-based capital ratio was 13.3%, considered “well-capitalized” – the highest regulatory capital category.
For the third quarter ended September 30, 2022, the Company reported a net loss of $165 thousand compared to a net loss of $477 thousand for the three months ended June 30, 2022. The loan growth generated by the Bank this year is driving significant improvement in net interest income, which increased $570 thousand, or 30%, in the third quarter compared to the second quarter of 2022, and net interest margin improved to 3.36% in Q3 from 2.84% in Q2. Comparisons to Q2 also reflect the execution of our long-term plan to invest in our infrastructure, including hiring key talent, which is reflected in noninterest expenses increasing by $129 thousand during the third quarter, a portion of such noninterest expenses relate to the sale of our payroll division, which was completed October 1, 2022. “Our third quarter results were again highlighted by significant loan growth and reflect the success of implementing our growth strategy and alignment of our focus on small business banking in our target markets. We believe our continued robust loan pipeline is encouraging for another strong quarter to finish out 2022,” said Nathan Rogge, President and Chief Executive Officer of Friendly Hills Bank.
“During the first nine months of 2022, the Company delivered on its strategy to drive significant loan growth. Our lending portfolio increased from $88 million as of December 31, 2021, to $177 million as of September 30, 2022,” Rogge continued. The loan portfolio remains diversified with $76 million in Commercial Loans (including $47 million in Owner Occupied Commercial Real Estate Loans), $40 million in Other Commercial Real Estate Loans, and $41 million in Residential Real Estate Loans.
The Company also announced the completion of a private offering of common stock, which raised gross proceeds of $14.1 million, before offering expenses, representing 1,704,229 new shares of common stock at a price of $8.25 per share. A total of $10.1 million of the offering was closed in September and is reflected in the September results, while the remainder of the offering was completed in October. The Company intends to use the net proceeds from the offering for general corporate purposes to support its continued growth, including contributions to Friendly Hills Bank and future strategic opportunities.
“We are pleased with the results of our private placement, which represents a strong vote of confidence by local business owners and leaders that see the value of a Southern California-based community bank with local decision making. As we push towards the end of 2022, we anticipate that this new capital will put us in a position to continue to implement our plan and deliver meaningful long-term shareholder value while also being mindful of the current economic environment,” Rogge concluded.
ABOUT FRIENDLY HILLS BANK
Friendly Hills Bank, a wholly owned subsidiary of Friendly Hills Bancorp (OTC Pink: FHLB), is a growing community bank catering to individuals, professionals, and small-to-medium sized businesses throughout Southern California. With a history that spans 16 years, the Bank offers a personalized approach, access to decision makers, a broad range of solutions, and a commitment to delivering an exceptional customer experience. Friendly Hills Bank operates locations in Los Angeles County, Orange County, San Diego County, and the Inland Empire. For more information, visit www.friendlyhillsbank.com or call 562.947.1920.
FORWARD-LOOKING STATEMENTS
This news release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, and Friendly Hills Bancorp intends for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely. Forward-looking statements relate to, among other things, our business plan, expectations and strategies, including, but not limited to, our expansion in the San Diego market, and can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” and similar expressions. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. Factors that might cause such differences include, but are not limited to: the effects of the Covid-19 pandemic; successfully realizing the benefits of our business strategy and plans,; changes in general economic and financial market conditions, either nationally or locally, in areas in which Friendly Hills Bank conducts its operations; effects of inflation and changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; impact of any natural disasters, including earthquakes; effect of governmental supervision and regulation, including any regulatory or other enforcement actions; legislation or regulatory changes which adversely affect Friendly Hills Bank’s operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events, or circumstances after the date of such statements except as required by law.
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