First Mountain Bancorp Announces Third Quarter and Year-to-Date 2008 Results

BIG BEAR LAKE, Calif.--(BUSINESS WIRE)--First Mountain Bancorp (OTCBB:FMBP) today reported a quarterly consolidated net loss of $200,587 or a loss per basic share of $0.13 for the quarter ended September 30, 2008, compared to net income of $391,269, or basic earnings per share of $ 0.25 for the third quarter of 2007. Consolidated net income for the nine months ended September 30, 2008, was $78,005, or $ 0.05 per basic share, compared to $1,214,758, or $0.78 per basic share, for the same period in 2007. The decline in earnings between the respective quarters and nine months was mainly attributed to additions to the Company’s loan loss reserves (Allowance for Loan Losses, or ALL), and a narrowing of the net interest margin.

The Company added $825,000 to its ALL during the third quarter as a result of the impairment of a $2.1 million land development loan in our local market area in the subsidiary bank’s portfolio, the only loan of this type in the portfolio. The Bank had a total of 4 non-performing loans at September 30, 2008, representing $3.6 million in outstanding balances, or 3.3% of its loan portfolio. The land development loan represents 58% of all non-performing assets. At September 30, 2008, the allowance for loan losses totaled $2,536,512, and represented 2.29% of outstanding loans, compared to a ratio of 1.16% at December 31, 2007.

“As we have previously reported, the Company has never originated sub-prime mortgages, and we pride ourselves on our conservative underwriting standards. The deterioration in the value of our one land development loan, which is a participation with four other local community banks, has significantly reduced earnings, but we remain profitable, year to date in spite of that loan. We believe non-performing assets are very manageable and our core earnings remain strong considering the current economic environment as indicated by the pre-tax operating revenues of $434,113 prior to the allowance additions, compared to pre-tax operating revenues of $613,869 in the third quarter of 2007,” stated Jack Briner, Chief Executive Officer.

First Mountain Bancorp also reported total consolidated assets of $141,738,721 at September 30, 2008, compared to $152,999,304 at December 31, 2007, total outstanding loans of $110,900,067 at quarter end, compared to the year-end 2007 balance of $116,570,178, and total deposits of $124,363,282 and $135,650,066, at September 30, 2008 and December 31, 2007, respectively. The Company attributes much of these declines in assets and deposits to overall economic and financial factors which have led to the recent historic actions by the federal government to improve confidence in the financial markets and in the banking sector.

Total consolidated capital was $16,630,246 at September 30, 2008, which represented a total risk-based capital ratio of 14.4%. The Company continues to be “well capitalized,” the highest designation under regulatory guidelines, and its risk-based capital level significantly exceeded the regulatory requirements.

Liquidity, or the ability to meet current cash needs, has recently become an important yardstick for measuring the strength of financial institutions. At September 30, 2008, the Company had $13 million in immediately accessible funds, untapped fed funds lines of $11.5 million, and longer term borrowing lines of $30.7 million, for a total liquidity capacity of $55.2 million.

“Not only is our liquidity position strong but, from my observation, the recent increase in the FDIC deposit insurance from $100,000 to $250,000 and the insuring of all non-interest bearing deposits has had a very calming effect on Bank customers and consumers in general,” commented Mr. Briner.

On October 10, 2008, the Company paid its eighth consecutive annual dividend in the form of stock.

At September 30, 2008, the Company reported a book value per share of $10.66, on 1,560,262 shares outstanding, after giving effect to the stock dividend.

First Mountain Bancorp is the parent holding company of First Mountain Bank, which is headquartered in Big Bear Lake and has four offices serving the Big Bear and high desert areas of Southern California. For further information contact Jack Briner, CEO or Dennis Saunders, President/CFO at (909) 866-5861.

FIRST MOUNTAIN BANCORP
STATEMENT OF CONDITION - (Consolidated)
				September 30, 2008					December 31, 2007
Assets				(Unaudited)
Cash and due from banks				$	5,877,774				$	4,744,437
Fed funds					5,173,682					10,165,000
Investment securities					13,363,786					14,152,411
Gross loans					110,900,067					116,570,178
Less: Allowance for loan losses					(2,536,512	)				(1,347,235	)
Net loans					108,363,555					115,222,943
Bank premises and equipment					2,420,155					2,570,815
Other assets					6,539,769					6,143,698
Total Assets				$	141,738,721				$	152,999,304
Liabilities
Noninterest-bearing deposits				$	37,178,385				$	43,206,198
Interest-bearing deposits					87,184,897					92,443,868
Total deposits					124,363,282					135,650,066
Advances from FHLB					-					-
Other liabilities					745,193					771,400
Total Liabilities					125,108,475					136,421,466
Stockholders' Equity
Common stock					11,866,317					11,318,472
Retained earnings					4,765,132					5,232,127
Accumulated other comprehensive income/(loss)					(1,203	)				27,239
Total Stockholders' Equity					16,630,246					16,577,838
Total Liabilities and Stockholders' Equity				$	141,738,721				$	152,999,304

STATEMENT OF INCOME - (Consolidated) (Unaudited)
			For the three months ended								For the nine months ended
				09/30/08				09/30/07				09/30/08				09/30/07
Interest income			$	2,188,989			$	2,680,589			$	6,804,634			$	7,997,277
Interest expense				495,433				771,164				1,745,729				2,211,425
Net interest income before
provision for loan losses				1,693,556				1,909,425				5,058,905				5,785,852
Provision for loan losses				825,000				-				1,238,000				106,000
Net interest income				868,556				1,909,425				3,820,905				5,679,852
Other operating income				279,591				269,936				794,463				883,870
Operating expenses				1,539,034				1,565,492				4,640,963				4,658,164
Income (loss) before income taxes				(390,887	)			613,869				(25,595	)			1,905,558
Provision for income tax expense (benefit)				(190,300	)			222,600				(103,600	)			690,800
Net Income (loss)			$	(200,587	)		$	391,269			$	78,005			$	1,214,758
Earnings/(loss) per share - basic			$	(0.13	)		$	0.25			$	0.05			$	0.78
Earnings/(loss) per share - dilutive			$	(0.13	)		$	0.25			$	0.05			$	0.76

			For the three months ended						For the nine months ended
			9/30/2008			9/30/2007				9/30/2008				9/30/2007
Performance Ratios:
Return on Average Assets			-0.56	%		1.04	%			0.07	%			1.06	%
Return on Average Equity			-4.79	%		9.52	%			0.62	%			10.12	%
Average yield on interest-earning assets			6.566	%		7.472	%			6.710	%			7.488	%
Average cost of interest-bearing liabilities			1.581	%		2.243	%			1.823	%			2.163	%
Net interest spread			4.985	%		5.229	%			4.887	%			5.325	%
Net interest margin			5.080	%		5.321	%			4.988	%			5.417	%
										9/30/2008				12/31/2007
Capital Ratios (Bank):
Total Risk-Based Capital Ratio										14.4	%			13.4	%
Tier 1 Risk-Based Capital Ratio										13.2	%			12.3	%
Tier 1 Leverage Ratio										11.6	%			10.8	%
Asset Quality:
Number of non-performing loans										4				1
Total number of loans outstanding										475				496
Total number of foreclosed properties										1				-
Total non-performing loans (in dollars)									$	3,585,859			$	1,924
Total foreclosed properties (OREO)									$	67,400			$	-
Total non-performing assets									$	3,653,259			$	1,924
Ratio of non-performing assets to total loans and OREO:
In terms of number										0.84	%			0.20	%
In terms of dollars										3.29	%			0.002	%
Allowance for Loan Losses:
Total Balance									$	2,536,512			$	1,347,235
As a percent of non-performing assets										69.43	%			70022.61	%
As a percent of total loans outstanding										2.29	%			1.16	%
Stock Information:
Number of consecutive years of stock dividends										8
Shares outstanding - adjusted for stock dividend										1,560,262				1,560,262
Book value per share									$	10.66			$	10.63