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Chino Commercial Bancorp Reports 26% Increase in Net Earnings

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CHINO, Calif., July 20, 2018 (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, 2018, with net earnings of $531 thousand, or an increase of 26.4%, compared with net income of $420 thousand for the same quarter last year.  Net income per basic and diluted share was $0.29 for the second quarter of 2018 and $0.23 for the same quarter last year.    

Dann H. Bowman, President and Chief Executive Officer, stated, "The second quarter results for the Bank were excellent.  The Bank achieved new record levels for Deposits, Loans, Revenue and Earnings.  The Upland branch is expected to be opened in the third quarter and we are pleased and excited about the business prospects in the Inland Empire, and in this area especially."

Financial Condition

At June 30, 2018, total assets were $201.0 million, an increase of $8.1 million or 4.2% over $192.8 million at December 31, 2017.  Total deposits increased by 13.5% or $20 million during the second quarter to $169.3 million, compared to $149.1 million as of December 31, 2017. At June 30, 2018, the Company's core deposits represent 95.0% of the total deposits.

Gross loans increased by 5.9% or $7.3 million as of June 30, 2018 to $129.9 million, as compared with $122.6 million as of December 31, 2017.  The Bank did not have any nonperforming loans for the quarters ended June 30, 2018, and December 31, 2017, respectively.  OREO properties remained at zero as of June 30, 2018 and December 31, 2017, respectively.

Earnings

The Company posted net interest income of $1.8 million and $1.6 million for the three months ended June 30, 2018 and 2017, respectively, or an increase of $260 thousand or 16.6%.  Average interest-earning assets were $173.8 million with average interest-bearing liabilities of $88.6 million, yielding a net interest margin of 4.21% for the second quarter of 2018, as compared to the average interest-earning assets of $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.

Non-interest income totaled $371 thousand for the second quarter of 2018, or a decrease of 4.4% as compared with $389 thousand earned during the same quarter last year. Service charges on deposit accounts decreased by $19.3 thousand or 6.1% to $298 thousand, primarily due to a decrease in income from returned items, overdraft charges, and analysis fees. Dividend income from restricted stock decreased to $24 thousand for the second quarter of 2018, compared to $28 thousand for the same quarter in 2017, due to the Federal Home Loan Bank change in dividend payout percentage policy. Income from Bank-owned life insurance remained consistent at about $25 thousand in the second quarter of 2018 and 2017, respectively.

General and administrative expenses were $1.4 million for the three months ended June 30, 2018, and 1.3 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $864 thousand for the second quarter of 2018, as compared to $772 thousand for the same quarter last year. Advertising and marketing expenses remained consistent at about $30 thousand in the second quarter of 2018 and 2017, respectively. 

Income tax expense was $212 thousand which represents a decrease of $61 thousand or 22.3% for the three months ended June 30, 2018 as compared to $273 thousand for the three months ended June 30, 2017. The effective income tax rate for the second quarter of 2018 and 2017 is approximately 28.6% and 39.4%, respectively.  The decrease in the income tax expense as well as the effective tax rate is entirely attributed to the the new Tax Reform Act signed into law in December 2017.

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 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, 2018 and December 31, 2017  
     
    June 30, 2018   December 31, 2017  
    (unaudited)   (audited)  
  ASSETS:        
  Cash and due from banks   34,248,782     $   34,157,668    
  Total cash and cash equivalents   34,248,782       34,157,668    
           
  Interest-bearing deposits in other banks   744,000         1,240,000    
  Investment securities available for sale   5,712,782       3,131,027    
  Investment securities held to maturity (fair value approximates        
  $20,889,000 at June 30, 2018 and $21,104,000 at December 31, 2017)   20,959,915       21,389,552    
  Total investments   27,416,697       25,760,579    
  Loans        
  Construction   0         -     
  Real estate   109,080,272       99,585,847    
  Commercial   20,502,509       22,679,268    
  Installment   302,895       337,455    
  Gross loans   129,885,676       122,602,570    
  Unearned fees and discounts   (394,084 )     (365,091 )  
  Loans net of unearned fees and discount   129,491,592       122,237,479    
  Allowance for loan losses   (2,230,784 )     (2,094,723 )  
   Net loans   127,260,808       120,142,756    
           
  Fixed assets, net   5,817,298       5,875,381    
  Accrued interest receivable   541,023       531,771    
  Stock investments, restricted, at cost   1,240,202       2,084,129    
  Bank-owned life insurance   3,435,766       3,386,754    
  Other assets   1,026,515       861,969    
  Total assets $   200,987,091     $   192,801,007    
           
  LIABILITIES:        
  Deposits        
  Non-interest bearing  $   78,186,662     $   74,766,694    
  Interest bearing        
  NOW and money market   70,543,178       47,030,167    
  Savings   9,394,315       7,897,948    
  Time deposits less than $250,000   7,694,910       5,727,789    
  Time deposits of $250,000 or greater   3,477,364       13,703,790    
  Total deposits   169,296,429       149,126,388    
           
  Accrued interest payable   39,005       65,160    
  Borrowings from Federal Home Loan Bank (FHLB)     7,000,000         20,000,000    
  Accrued expenses & other payables   1,072,149       1,012,535    
  Subordinated notes payable to subsidiary trust   3,093,000       3,093,000    
  Total liabilities   180,500,583       173,297,083    
           
  SHAREHOLDERS' EQUITY        
  Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 1,859,132 shares at June 30, 2018 and December 31, 2017, respectively.        
         
    10,502,558       10,502,558    
  Retained earnings   10,061,183       9,020,564    
  Accumulated other comprehensive income/(loss)   (77,233 )     (19,198 )  
  Total shareholders' equity   20,486,508       19,503,924    
  Total liabilities & shareholders' equity $   200,987,091     $   192,801,007    
           


  CHINO COMMERCIAL BANCORP  
  CONSOLIDATED STATEMENTS OF NET INCOME  
     
    For the three months ended   For the year ended  
    June 30   June 30  
      2018       2017       2018       2017    
    (unaudited)   (unaudited)   (unaudited)   (audited)  
  Interest income                
  Interest and fee income on loans  $   1,746,249     $   1,491,361     $   3,406,126     $   2,959,072    
  Interest on federal funds sold and FRB deposits     96,963         73,484         194,687         133,613    
  Interest on time deposits in banks     3,153         6,956         7,109         14,013    
  Interest on investment securities     151,494         136,547       292,068         259,292    
  Total interest income   1,997,859       1,708,348       3,899,990       3,365,990    
                   
  Interest Expense                
  Interest on deposits   144,238       76,044       231,482       151,885    
  Other borrowings   30,689       69,244       120,325       123,377    
  Total interest expense   174,927       145,288       351,807       275,262    
  Net interest income   1,822,932       1,563,060       3,548,183       3,090,728    
  Provision for loan losses     80,000         -        130,000       55,000    
                   
  Net interest income after provision for loan losses   1,742,932       1,563,060       3,418,183       3,035,728    
                   
  Non-interest income                
  Service charges on deposit accounts   298,069       317,394       605,106       609,037    
  Other miscellaneous income   24,748       18,067       43,943       36,177    
  Dividend income from restricted stock   23,998       27,840       59,832       72,921    
  Income from bank-owned life insurance   24,559       25,210       49,012       50,232    
  Total non-interest income   371,374       388,511       757,893       768,367    
                   
  Non-interest expenses                
  Salaries and employee benefits   863,683       771,541       1,732,598       1,516,317    
  Occupancy and equipment   121,568       99,142       236,224       204,673    
  Data and item processing   96,653       85,765       188,288       161,847    
  Advertising and marketing   29,251       30,271       57,837       52,115    
  Legal and professional fees   39,955       73,424       73,153       110,859    
  Regulatory assessments   33,928       37,607       67,057       75,218    
  Insurance   9,005       8,685       17,563       16,689    
  Directors' fees and expenses   28,203       31,545       58,962       58,092    
  Other expenses   148,654       120,161       289,641       235,862    
  Total non-interest expenses   1,370,900       1,258,141       2,721,323       2,431,672    
  Income before income tax expense   743,406       693,430       1,454,753       1,372,423    
  Income tax expense   212,355       273,302       414,889       540,380    
  Net income $   531,051     $   420,128     $   1,039,864     $   832,043    
                   
  Basic earnings per share  $   0.29     $   0.23     $   0.56     $   0.45    
  Diluted earnings per share  $   0.29     $   0.23     $   0.56     $   0.45    
                   
             
  Tax rate   28.6 %     39.4 %     28.5 %     39.4 %  
                       
  Average shares outstanding   1,859,132       1,859,132         1,859,132       1,859,132    
  EPS   0.29       0.23         0.56         0.45    
                   

 

                     
      For the three months ended   For the year ended  
      June 30   June 30  
        2018       2017       2018       2017    
  KEY FINANCIAL RATIOS                  
  (unaudited)                  
  Annualized return on average equity     10.46 %     11.82 %     10.36 %     11.88 %  
  Annualized return on average assets     1.12 %     0.93 %     1.10 %     0.92 %  
  Net interest margin     4.21 %     3.78 %     4.12 %     3.77 %  
  Core efficiency ratio     62.48 %     64.47 %     63.20 %     63.01 %  
  Net chargeoffs/(recoveries) to average loans     -0.003 %     -0.01 %     -0.01 %     -0.02 %  
                     
  AVERAGE BALANCES                  
  (thousands, unaudited)                  
  Average assets   $   189,902     $   181,103     $   189,214     $   180,141    
  Average interest-earning assets   $   173,847     $   166,054     $   173,687     $   165,432    
  Average gross loans   $   127,898     $   111,967     $   125,313     $   111,056    
  Average deposits   $   165,030     $   142,353     $   156,091     $   141,145    
  Average equity   $   20,307     $   14,212     $   20,065     $   14,004    
                     
                     
                     
  CREDIT QUALITY   End of period          
  (unaudited)   June 30, 2018   December 31, 2017          
                     
  Non-performing loans   $   -     $   -            
                     
  Non-performing loans to total loans     0.00 %     0.00 %          
  Non-performing loans to total assets     0.00 %     0.00 %          
  Allowance for loan losses to total loans     1.72 %     1.71 %          
  Nonperforming assets as a percentage of total loans and OREO     0.00 %     0.00 %          
  Allowance for loan losses to non-performing loans     n/a       n/a            
                     
  OTHER PERIOD-END STATISTICS                  
  (unaudited)                  
  Shareholders equity to total assets     10.19 %     10.12 %          
  Net loans to deposits     75.17 %     80.56 %          
  Non-interest bearing deposits to total deposits     46.18 %     50.14 %          
  Total capital to total risk-weighted assets     18.42 %     18.43 %          
  Tier 1 capital to total risk-weighted assets     19.89 %     19.76 %          
  Tier 1 leverage ratio     14.44 %     13.41 %          
  Common equity tier 1     19.89 %     19.76 %          
                     

 

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