Chino Commercial Bancorp Reports 13% Increase in Net Earnings - Chino Commercial (OTC:CCBC)

CHINO, Calif., July 21, 2017 (GLOBE NEWSWIRE) -- The Board of Directors of Chino Commercial Bancorp 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, 2017 with net earnings of $420 thousand, or an increase of 13%, compared with net income of $372 thousand for the same quarter last year. Net income per basic share for the second quarter of 2017 was $0.34 as compared to $0.30 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer stated, "In addition to the excellent second quarter earnings results, the Bank was recently recognized by the Findley Reports on Financial Institutions by receiving their highest rating of 'Super Premier Performing.' The economic strength of the Inland Empire is supporting tremendous growth opportunities for the Bank. In general, this is a very good time for the Bank and we are pleased and excited about the future."

Financial Condition

At June 30, 2017, total assets were $180.3 million, an increase of $5.2 million or 3.0% over $175.1 million at December 31, 2016. Total deposits increased by 3.0% or $4.1 million during the year to $141.7 million, compared to $137.6 million as of December 31, 2016. At June 30, 2017, the Company's core deposits represent 97.0% of the total deposits.

Gross loans increased by 1.7% or $1.9 million as of June 30, 2017 to $111.4 million, as compared with $109.5 million as of December 31, 2016. The Bank did not have any nonperforming loans for the quarter ended June 30, 2017, and one nonperforming loan as of December 31, 2016, respectively. OREO properties remained at zero as of June 30, 2017 and December 31, 2016, respectively.

Earnings

The Company posted net interest income of $1.6 million and $1.5 million for the three months ended June 30, 2017 and 2016, respectively, or an increase of $102 thousand or 7.0%. Average interest-earning assets were $166.1 million with average interest-bearing liabilities of $95.3 million, yielding a net interest margin of 3.78% for the second quarter of 2017, as compared to the average interest-earning assets of $149.6 million with average interest-bearing liabilities of $77.7 million, yielding a net interest margin of 3.93% for the second quarter of 2016.

Non-interest income totaled $389 thousand for the second quarter of 2017, or a decrease of 9.2% as compared with $427 thousand earned during the same quarter last year. The majority of this decrease is attributed to $77 thousand of extraordinary income recorded in the same quarter last year. Without this extraordinary income the Company would have reported a $37 thousand or 10.8% increase in non-interest income for the second quarter of 2017. Service charges on deposit accounts increased by $48 thousand or 18.0% to $317 thousand primarily due to an increase in income from returned items and overdraft charges. Dividend income from restricted stock decreased to $28 thousand for the second quarter of 2017, compared to $38 thousand for the same quarter in 2016, due to the Federal Home Loan Bank change in dividend payout percentage policy. Income from bank-owned life insurance remained consistent at $25 thousand in the second quarter of 2017 and 2016, respectively.

General and administrative expenses were $1.3 million for the three months ended June 30, 2017, as compared to $1.1 million for the second quarter of 2016. The largest component of general and administrative expenses was salary and benefits expense of $772 thousand for the second quarter of 2017, as compared to $706 thousand for the same quarter last year. Regulatory assessments remained consistent at $37 thousand for the second quarter of 2017 and 2016, respectively. Advertising and marketing expenses increased by $13 thousand or 73.7% to $30 thousand in the second quarter of 2017 from $17 thousand for the same period last year. The Company engaged a marketing company to assist with advertising efforts during the second quarter of 2017.

Income tax expense was $273 thousand for the three months ended June 30, 2017 as compared to $238 thousand for the three months ended June 30, 2016. The effective income tax rate for the second quarter of 2017 and 2016 is approximately 39.4% and 39.0%, 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, customers' service expectations, the Company's ability to successfully deploy new technology and gain efficiencies there from, 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, 2017 and December 31, 2016

	June 30, 2017			December 31, 2016
	(unaudited)			(audited)
ASSETS:
Cash and due from banks	$	29,825,751		$	30,498,888
Total cash and cash equivalents		29,825,751			30,498,888

Interest-bearing deposits in other banks		2,232,000			2,480,000
Investment securities available for sale		3,531,430			3,924,102
Investment securities held to maturity (fair value approximates
$22,491,000 at June 30, 2017 and $18,240,000 at December 31, 2016)		22,496,275			18,407,741
Total investments		28,259,705			24,811,843
Loans
Commercial		17,993,486			21,822,341
Installment		514,395			424,818
Gross loans		111,447,642			109,553,786
Unearned fees and discounts		(347,223	)		(348,359	)
Loans net of unearned fees and discount		111,100,419			109,205,427
Allowance for loan losses		(1,916,446	)		(1,845,447	)
Net loans		109,183,973			107,359,980

Fixed assets, net		5,900,130			6,000,404
Accrued interest receivable		444,797			295,102
Stock investments, restricted, at cost		1,963,496			1,935,300
Bank-owned life insurance		3,336,195			3,285,963
Other assets		1,407,297			904,338
Total assets	$	180,321,344		$	175,091,818

LIABILITIES:
Deposits
Non-interest bearing	$	69,565,818		$	68,613,998
Interest bearing
NOW and money market		55,416,295			52,873,006
Savings		6,399,383			5,165,730
Time deposits less than $250,000		6,008,275			4,438,254
Time deposits of $250,000 or greater		4,270,436			6,471,260
Total deposits		141,660,207			137,562,248

Accrued interest payable		27,705			27,902
Borrowings from Federal Home Loan Bank (FHLB)		20,000,000			20,000,000
Accrued expenses & other payables		1,164,749			872,374
Subordinated notes payable to subsidiary trust		3,093,000			3,093,000
Total liabilities		165,945,661			161,555,524

SHAREHOLDERS' EQUITY
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 1,231,332 shares at June 30, 2017 and December 31, 2016, respectively.		6,089,466			6,089,466
Retained earnings		8,281,651			7,449,608
Accumulated other comprehensive income/(loss)		4,566			(2,780	)
Total shareholders' equity		14,375,683			13,536,294
Total liabilities & shareholders' equity	$	180,321,344		$	175,091,818

CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
(unaudited)
	For the three months ended						For the year ended
	June 30						June 30
	2017			2016			2017			2016
Interest income
Interest and fee income on loans	$	1,491,361		$	1,382,543		$	2,959,072		$	2,692,647
Interest on federal funds sold and FRB deposits		73,484			26,703			133,613			53,036
Interest on time deposits in banks		6,956			9,929			14,013			20,379
Interest on investment securities		136,547			140,819			259,292			288,658
Total interest income		1,708,348			1,559,994			3,365,990			3,054,720

Interest Expense
Interest on deposits		76,044			65,082			151,885			125,430
Other borrowings		69,244			34,181			123,377			68,432
Total interest expense		145,288			99,263			275,262			193,862
Net interest income		1,563,060			1,460,731			3,090,728			2,860,858
Provision for loan losses		-			131,364			55,000			126,300

Net interest income after provision for loan losses		1,563,060			1,329,367			3,035,728			2,734,558

Non-interest income
Service charges on deposit accounts		317,394			268,928			609,037			546,801
Other miscellaneous income		18,067			95,313			36,177			117,946
Dividend income from restricted stock		27,840			37,962			72,921			72,843
Income from bank-owned life insurance		25,210			25,597			50,232			51,168
Total non-interest income		388,511			427,800			768,367			788,758

Non-interest expenses
Salaries and employee benefits		771,541			706,355			1,516,317			1,387,244
Occupancy and equipment		99,142			99,125			204,673			202,953
Data and item processing		85,765			77,128			119,445			189,667
Advertising and marketing		30,271			17,426			52,115			34,542
Legal and professional fees		73,424			40,101			110,859			87,531
Regulatory assessments		37,607			36,539			75,218			66,850
Insurance		8,685			8,539			16,689			17,010
Directors' fees and expenses		31,545			27,129			58,092			53,839
Other expenses		120,161			135,288			219,443			232,321
Total non-interest expenses		1,258,141			1,147,630			2,372,851			2,271,957
Income before income tax expense		693,430			609,537			1,431,244			1,251,359
Income tax expense		273,302			237,697			540,380			488,991
Net income	$	420,128		$	371,840		$	890,864		$	762,368

Basic earnings per share	$	0.34		$	0.30		$	0.72		$	0.62
Diluted earnings per share	$	0.34		$	0.30		$	0.72		$	0.62


Tax rate		39.4	%		39.0	%		37.8	%		39.1	%

	For the three months ended						For the year ended
	June 30						June 30
	2017			2016			2017			2016
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity		11.82	%		11.70	%		12.72	%		12.18	%
Annualized return on average assets		0.93	%		0.90	%		0.99	%		0.93	%
Net interest margin		3.78	%		3.93	%		3.77	%		3.88	%
Core efficiency ratio		64.47	%		60.77	%		61.49	%		62.25	%
Net chargeoffs/(recoveries) to average loans		-0.01	%		0.06	%		-0.02	%		0.05	%

AVERAGE BALANCES
(thousands, unaudited)
Average assets	$	181,103		$	165,504		$	180,141		$	163,906
Average interest-earning assets	$	166,054		$	149,635		$	165,432		$	148,096
Average gross loans	$	111,967		$	98,736		$	111,056		$	96,382
Average deposits	$	142,353		$	132,349		$	141,145		$	131,014
Average equity	$	14,212		$	12,717		$	14,004		$	12,516



CREDIT QUALITY	End of period
(unaudited)	June 30, 2017			December 31, 2016

Non-performing loans	$	-		$	521,696

Non-performing loans to total loans		0.00	%		0.48	%
Non-performing loans to total assets		0.00	%		0.30	%
Allowance for loan losses to total loans		1.72	%		1.68	%
Nonperforming assets as a percentage of total loans and OREO		0.00	%		0.48	%
Allowance for loan losses to non-performing loans		n/a			353.74	%

OTHER PERIOD-END STATISTICS
(unaudited)
Shareholders equity to total assets		7.97	%		7.73	%
Net loans to deposits		77.07	%		78.04	%
Non-interest bearing deposits to total deposits		49.11	%		49.88	%
Total capital to total risk-weighted assets		15.55	%		15.37	%
Tier 1 capital to total risk-weighted assets		15.69	%		15.32	%
Tier 1 leverage ratio		10.58	%		10.24	%
Common equity tier 1		15.69	%		15.32	%

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