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Chino Commercial Bancorp Reports 48% Increase in Net Earnings

GlobeNewswire Friday, 19 July 2019
CHINO, Calif., July 19, 2019 (GLOBE NEWSWIRE) -- The Board of Directors of Chino Commercial Bancorp (OTC: CCBC), the parent company of Chino Commercial Bank, N.A., announced the results of operations for the Bank and the consolidated holding company, for the second quarter ended June 30, 2019, with net earnings of $787 thousand, or an increase of 48%, compared with net income of $531 thousand for the same quarter last year.  Net income per basic and diluted share was $0.35 for the second quarter of 2019 and $0.24 for the same quarter 2018, respectively.   

Dann H. Bowman, President and Chief Executive Officer stated, “The economic strength of the Inland Empire is supporting tremendous growth opportunities for the Bank, and the second quarter marked new record levels for total assets, loans, revenue and net earnings.  In general, this is a very good time for the Bank and we are pleased and excited about the future.

"Also, on May 15th the Board of Directors approved a 20% stock dividend. The dividend was issued on or about July 2, 2019 to shareholders of record as of June 14, 2019.  The dividend increased the number of outstanding shares of the Company by 371,676 bringing the total shares outstanding to 2,230,808. This is the Company’s fifth stock dividend since inception in 2000.”

Financial Condition

At June 30, 2019, total assets were $216.9 million, an increase of $14.9 million or 7.4% over $201.9 million at December 31, 2018.  Total deposits increased by 3.6% or $6.2 million during the second quarter to $177.2 million, compared to $171.0 million as of December 31, 2018. At June 30, 2019, the Company’s core deposits represent 94.3% of the total deposits.

Gross loans increased by 6.0% or $7.8 million as of June 30, 2019 to $140.0 million, as compared with $132.2 million as of December 31, 2018.  The Bank had one nonperforming loan for the quarter ended June 30, 2019, and none as of December 31, 2018, respectively.  OREO properties remained at zero as of June 30, 2019 and December 31, 2018, respectively.

Earnings

The Company posted net interest income of $2.1 million and $1.8 million for the three months ended June 30, 2019 and 2018, respectively, or an increase of $244 thousand or 13.4%.  Average interest-earning assets were $188.8 million with average interest-bearing liabilities of $107.6 million, yielding a net interest margin of 4.39% for the second quarter of 2019, as compared to the average interest-earning assets of $173.8 million with average interest-bearing liabilities of $88.6.0 million, yielding a net interest margin of 4.21% for the second quarter of 2018.

Non-interest income totaled $566 thousand for the second quarter of 2019, or an increase of 52.5% as compared with $371.4 thousand earned during the same quarter last year. Service charges on deposit accounts, the largest component of non-interest income, increased by $100 thousand or 33.5% to $398 thousand, primarily due to an increase in income from returned items, overdraft charges, and analysis fees.

General and administrative expenses were $1.6 million for the three months ended June 30, 2019, and $1.4 million for the same period last year.  The largest component of general and administrative expenses was salary and benefits expense of $960 thousand for the second quarter of 2019, as compared to $863 thousand for the same quarter last year. Occupancy and equipment expenses increased by $44 thousand or 36% to $165 thousand in the second quarter of 2019 from $122 thousand for the same period last year.  The increase in occupancy and equipment is mostly attributed to opening the Upland branch in the fourth quarter of 2018.

Income tax expense was $281 thousand which represents an increase of $69 thousand or 32.3% for the three months ended June 30, 2019 as compared to $212.4 thousand for the three months ended June 30, 2018. The effective income tax rate for the second quarters of 2019 and 2018 is approximately 26.3% and 28.6%, respectively. 

*Forward-Looking Statements*

The statements contained in this press release that are not historical facts are forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company.  Readers are cautioned not to unduly rely on forward-looking statements.  Actual results may differ from those projected. These forward-looking statements involve risks and uncertainties, including but not limited to, the health of the national and California economies, the Company’s ability to attract and retain skilled employees, customer service expectations, the Company’s ability to successfully deploy new technology and gain efficiencies therefrom, and changes in interest rates, loan portfolio performance, and other factors.

Contact: Dann H. Bowman, President and CEO or Melinda M. Milincu, Vice President and CFO, Chino Commercial Bancorp and Chino Commercial Bank, N.A., 14245 Pipeline Avenue, Chino, Ca. 91710, (909) 393-8880.
*CHINO COMMERCIAL BANCORP*   CONSOLIDATED BALANCE SHEET   June 30, 2019 and December 31, 2018         *June 30, 2019*   *December 31, 2018*     (unaudited)   (audited)   ASSETS:         Cash and due from banks   5,524,564   * * $   25,451,866     Federal funds sold   14,625,000         -      Total cash and cash equivalents   20,149,564       25,451,866         * *     Interest-bearing deposits in other banks   1,988,000         1,988,000     Investment securities available for sale   9,493,033       5,914,736     Investment securities held to maturity (fair value approximates $35,242,399 at June 30 2019 and $26,092,226 at December 31, 2018)   34,962,262       26,623,343     Total investments   46,443,295       34,526,079     Loans         Real estate   112,878,664       107,902,821     Commercial   26,958,138       24,029,989     Installment   226,760       241,077     Gross loans   140,063,562   * *   132,173,887     Unearned fees and discounts   (326,551 ) * *   (345,054 )   Loans net of unearned fees and discount   139,737,011   * *   131,828,833     Allowance for loan losses   (2,389,973 ) * *   (2,292,478 )    Net loans   137,347,038   * *   129,536,355         * *     Fixed assets, net   5,966,200   * *   6,063,350     Accrued interest receivable   683,502   * *   585,506     Stock investments, restricted, at cost   1,440,900       1,248,400     Bank-owned life insurance   3,532,250       3,484,885     Other assets   1,389,057       1,091,805     Total assets $   216,951,806     $   201,988,246               LIABILITIES:         Deposits   * *     Non-interest bearing  $   82,803,339     $   83,237,014     Interest bearing         NOW and money market   69,572,350       66,046,085     Savings   10,158,426       9,870,263     Time deposits less than $250,000   9,512,052       4,191,717     Time deposits of $250,000 or greater   5,158,089   * *   7,674,742     Total deposits   177,204,256   * *   171,019,821         * *     Accrued interest payable   166,636   * *   64,794     Borrowings from Federal Home Loan Bank (FHLB)     12,000,000         5,000,000     Accrued expenses & other payables   1,299,075       1,101,417     Subordinated notes payable to subsidiary trust   3,093,000   * *   3,093,000     Total liabilities   193,762,967   * *   180,279,032               SHAREHOLDERS' EQUITY         Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 1,859,132 shares at June 30, 2019 and December 31, 2018, respectively.                   10,502,557       10,502,557     Retained earnings   12,663,233       11,251,915     Accumulated other comprehensive income/(loss)   23,049   * *   (45,258 )   Total shareholders' equity   23,188,839       21,709,214     Total liabilities & shareholders' equity $   216,951,806     $   201,988,246                        

*CHINO COMMERCIAL BANCORP*   CONSOLIDATED STATEMENTS OF NET INCOME         For the three months ended   For the year ended     *June 30* * * *June 30*     *2019* * * *2018* * * *2019* * * *2018*     (unaudited)   (unaudited)   (unaudited)   (audited)   Interest income                 Interest and fee income on loans  $   1,976,912   $   1,746,249   $   3,928,793   $   3,406,126   Interest on federal funds sold and FRB deposits     69,291       96,963       139,702       194,687   Interest on time deposits in banks     12,019       3,153       23,906       7,109   Interest on investment securities     346,401       151,494     612,633       292,068   Total interest income   2,404,623     1,997,859     4,705,034     3,899,990                     Interest Expense                 Interest on deposits   236,598     144,238     453,614     231,482   Other borrowings   101,539     30,689     150,970     120,325   Total interest expense   338,137     174,927     604,584     351,807   Net interest income   2,066,486     1,822,932     4,100,450     3,548,183   Provision for loan losses     -        80,000     40,000     130,000                     Net interest income after provision for loan losses   2,066,486     1,742,932     4,060,450     3,418,183                     Non-interest income                 Service charges on deposit accounts   398,023     298,069     754,088     605,106   Other miscellaneous income   120,424     24,746     143,398     43,942   Dividend income from restricted stock   23,973     23,998     46,447     59,832   Income from bank-owned life insurance   23,854     24,559     47,366     49,012   Total non-interest income   566,274     371,372     991,299     757,892                     Non-interest expenses                 Salaries and employee benefits   959,657     863,683     1,969,985     1,732,598   Occupancy and equipment   165,273     121,568     318,405     236,224   Data and item processing   119,999     96,653     224,898     188,288   Advertising and marketing   47,037     29,251     53,355     57,837   Legal and professional fees   32,807     39,955     66,225     73,153   Regulatory assessments   32,541     33,928     61,976     67,057   Insurance   9,108     9,005     18,112     17,563   Directors' fees and expenses   33,051     28,203     66,820     58,962   Other expenses   165,605     148,652     328,584     289,640   Total non-interest expenses   1,565,078     1,370,898     3,108,360     2,721,322   Income before income tax expense   1,067,682     743,406     1,943,389     1,454,753   Income tax expense   280,874     212,355     532,071     414,889   Net income $   786,808   $   531,051   $   1,411,318   $   1,039,864                     Basic earnings per share  $   0.35   $   0.24   $   0.63   $   0.47   Diluted earnings per share  $   0.35   $   0.24   $   0.63   $   0.47                    

                    *CHINO COMMERCIAL BANCORP*   * * * * * * * * * * * * * * * *         For the three months ended   For the year ended       June 30   June 30         2019       2018       2019       2018     KEY FINANCIAL RATIOS                   (unaudited)                   Annualized return on average equity     13.81 %     10.46 %     12.59 %     10.36 %   Annualized return on average assets     1.49 %     1.12 %     1.37 %     1.10 %   Net interest margin     4.39 %     4.21 %     4.40 %     4.12 %   Core efficiency ratio     59.45 %     62.48 %     61.05 %     63.20 %   Net chargeoffs/(recoveries) to average loans     -0.030 %     -0.003 %     -0.04 %     -0.01 %                       AVERAGE BALANCES                   (thousands, unaudited)                   Average assets   $   211,083     $   189,902     $   206,331     $   189,214     Average interest-earning assets   $   188,824     $   173,847     $   188,073     $   173,687     Average gross loans   $   138,658     $   127,898     $   137,775     $   125,313     Average deposits   $   174,089     $   165,030     $   172,984     $   156,091     Average equity   $   22,794     $   20,307     $   22,427     $   20,065                                             CREDIT QUALITY   End of period           (unaudited)   June 30, 2019   December 31, 2018                               Non-performing loans   $   129,111     $   -                                 Non-performing loans to total loans     0.09%     0.00%           Non-performing loans to total assets     0.06%     0.00%           Allowance for loan losses to total loans     1.71%     1.73%           Nonperforming assets as a percentage of total loans and OREO     0.00%     0.00%           Allowance for loan losses to non-performing loans     1851.10%     n/a                               OTHER PERIOD-END STATISTICS                   (unaudited)                   Shareholders equity to total assets     10.69%     10.75%           Net loans to deposits     77.51%     75.74%           Non-interest bearing deposits to total deposits     46.73%     48.67%           Total capital to total risk-weighted assets     18.77%     19.19%           Tier 1 capital to total risk-weighted assets     20.60%     20.93%           Tier 1 leverage ratio     14.63%     14.80%           Common equity tier 1     20.60%     20.93%          
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