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Chino Commercial Bancorp Reports 5% Increase In Second Quarter Earnings

CHINO, Calif., July 22, 2016 (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, 2016 with net earnings of $371,840, or an increase of 5.2%, compared with net income of $353,552 for the same quarter last year. Net income per basic share for the second quarter of 2016 was $0.30 as compared to $0.29 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer, stated, “The second quarter of 2016 marks a new record for the Company with total Deposits, total Loans and total Revenue all reaching new highs. The competitive market for the Bank is very good and as the economy in Southern California continues to improve we are optimistic regarding the potential for further expansion in our markets.

Financial Condition

At June 30, 2016, total assets were $178.6 million, an increase of $17.2 million or 10.6% over $161.4 million at December 31, 2015. Total deposits increased by 8.7% or $11.3 million during the year to $141.6 million, compared to $130.3 million as of December 31, 2015. At June 30, 2016, the Company’s core deposits represent 95.4% of the total deposits.

Gross loans increased by 10.4% or $9.7 million as of June 30, 2016 to $103.0 million as compared with $93.2 million as of December 31, 2015. The Bank’s loan quality remained consistent during the second quarter as nonperforming assets and OREO were both at zero as of June 30, 2016, and December 31, 2015, respectively.

Earnings

The Company posted net interest income of $1,460,731 and $1,247,489 for the three months ended June 30, 2016 and 2015, respectively, or an increase of $213,242 or 17.1%. Average interest-earning assets were $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; as compared to the average interest-earning assets of $131.5 million with average interest-bearing liabilities of $67.8 million, yielding a net interest margin of 3.85% for the second quarter of 2015.

Non-interest income totaled $427,800 for the second quarter of 2016, or an increase of 9.8% as compared with $389,686 earned during the same quarter last year. Service charges on deposit accounts decreased 10.8% to $268,928 due to a decrease in income from returned items and overdraft charges. Dividend income from restricted stock decreased to $37,962 for the second quarter of 2016, compared to $43,105 for the same quarter in 2015 due to special dividend payout during the second quarter of 2015 from the Federal Home Loan Bank. Income from bank-owned life insurance remained consistent at $25,597 in the second quarter of 2016 and $25,525 in the second quarter of 2015.

General and administrative expenses were $1,147,630 for the three months ended June 30, 2016, as compared to $1,061,226 for the second quarter of 2015. The largest component of general and administrative expenses was salary and benefits expense of $706,355 for the second quarter of 2016, as compared to $650,690 for the same quarter last year. Regulatory assessments increased to $36,539 in the second quarter of 2016 in comparison with $30,683 in the second quarter of 2015. Advertising and marketing expenses increased 18.1% to $17,426 in the second quarter of 2016 from $14,757 for the same period last year.

Income tax expense was $237,697 for the three months ended June 30, 2016 as compared to $220,057 for the three months ended June 30, 2015. The effective income tax rate for the second quarter of 2016 and 2015 is approximately 39.0% and 38.4%, 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, 2016 and December 31, 2015
June 30, 2016 December 31, 2015
(unaudited) (audited)
ASSETS:
Cash and due from banks$ 34,165,233 $ 24,898,140
Total cash and cash equivalents 34,165,233 24,898,140
Interest-bearing deposits in other banks 4,216,000 4,960,000
Investment securities available for sale 4,728,757 4,931,068
Investment securities held to maturity (fair value approximates
$22,597,000 at June 30, 2016 and $23,115,000 at December 31, 2015) 22,225,641 23,100,106
Total investments 31,170,398 32,991,174
Loans
Real estate 83,972,643 72,756,410
Commercial 18,509,423 20,053,905
Installment 488,381 433,764
Gross loans 102,970,447 93,244,079
Unearned fees and discounts (353,575) (251,911)
Loans net of unearned fees and discount 102,616,872 92,992,168
Allowance for loan losses (1,749,671) (1,667,204)
Net loans 100,867,201 91,324,964
Fixed assets, net 5,913,364 6,021,446
Accrued interest receivable 278,256 395,685
Stock investments, restricted, at cost 1,766,500 1,766,500
Bank-owned life insurance 3,234,415 3,183,247
Other assets 1,173,816 803,048
Total assets$ 178,569,183 $ 161,384,204
LIABILITIES:
Deposits
Non-interest bearing $ 84,690,309 $ 74,431,378
Interest bearing
NOW and money market 42,078,516 40,980,418
Savings 4,840,621 4,815,198
Time deposits less than $250,000 3,516,649 3,913,644
Time deposits of $250,000 or greater 6,511,429 6,208,083
Total deposits 141,637,524 130,348,721
Accrued interest payable 25,593 25,229
Borrowings from Federal Home Loan Bank (FHLB) 20,000,000 15,000,000
Accrued expenses & other payables 934,095 843,691
Subordinated notes payable to subsidiary trust 3,093,000 3,093,000
Total liabilities 165,690,212 149,310,641
SHAREHOLDERS' EQUITY
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 1,231,332 shares at June 30, 2016 and December 31, 2015, respectively. 6,089,466 6,089,466
Retained earnings 6,758,873 6,000,577
Accumulated other comprehensive income/(loss) 30,632 (16,480)
Total shareholders' equity 12,878,971 12,073,563
Total liabilities & shareholders' equity$ 178,569,183 $ 161,384,204

CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
(unaudited)
For the three months ended For the year ended
June 30 June 30
2016 2015 2016 2015
Interest income
Interest and fee income on loans $ 1,382,543 $ 1,202,183 $ 2,692,647 $ 2,387,628
Interest on federal funds sold and FRB deposits 26,703 10,102 53,036 11,214
Interest on time deposits in banks 9,929 22,994 20,379 53,189
Interest on investment securities 140,819 89,933 288,658 170,579
Total interest income 1,559,994 1,325,212 3,054,720 2,622,610
Interest Expense
Interest on deposits 65,082 57,621 125,430 113,439
Other borrowings 34,181 20,102 68,432 36,470
Total interest expense 99,263 77,723 193,862 149,909
Net interest income 1,460,731 1,247,489 2,860,858 2,472,701
Provision for loan losses 131,364 2,340 131,364 3,798
Net interest income after provision for loan losses 1,329,367 1,245,149 2,729,494 2,468,903
Non-interest income
Service charges on deposit accounts 268,928 301,395 546,801 607,397
Other miscellaneous income 95,313 19,661 117,946 38,535
Dividend income from restricted stock 37,962 43,105 72,843 61,479
Income from bank-owned life insurance 25,597 25,525 51,168 50,943
Total non-interest income 427,800 389,686 788,758 758,354
Non-interest expenses
Salaries and employee benefits 706,355 650,690 1,387,244 1,314,229
Occupancy and equipment 99,125 99,280 202,953 202,281
Data and item processing 95,226 96,081 189,667 189,419
Advertising and marketing 17,426 14,757 34,542 26,285
Legal and professional fees 40,101 37,390 87,531 82,626
Regulatory assessments 36,539 30,683 66,850 61,202
Insurance 8,539 8,471 17,010 16,336
Directors' fees and expenses 27,129 27,663 53,839 54,080
Other expenses 117,190 96,211 226,211 190,547
Total non-interest expenses 1,147,630 1,061,226 2,265,847 2,137,005
Income before income tax expense 609,537 573,609 1,252,405 1,090,252
Income tax expense 237,697 220,057 488,991 417,831
Net income$ 371,840 $ 353,552 $ 763,414 $ 672,421
Basic earnings per share $ 0.30 $ 0.29 $ 0.62 $ 0.55
Diluted earnings per share $ 0.30 $ 0.29 $ 0.62 $ 0.55

For the three months ended For the year ended
June 30 June 30
2016 2015 2016 2015
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity 11.70% 12.64% 24.40% 24.04%
Annualized return on average assets 0.90% 0.97% 1.86% 1.93%
Net interest margin 3.93% 3.85% 7.77% 7.99%
Core efficiency ratio 60.77% 64.82% 62.08% 66.14%
Net chargeoffs/(recoveries) to average loans 0.06% -0.01% 0.05% -0.02%
AVERAGE BALANCES
(thousands, unaudited)
Average assets $ 165,504 $ 145,442 $ 163,906 $ 139,180
Average interest-earning assets $ 149,635 $ 131,473 $ 148,096 $ 125,516
Average gross loans $ 98,736 $ 87,189 $ 96,382 $ 86,865
Average deposits $ 132,349 $ 119,383 $ 131,014 $ 116,207
Average equity $ 12,717 $ 11,321 $ 12,516 $ 11,190
CREDIT QUALITY End of period
(unaudited) June 30, 2016 December 31, 2015
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 1.70% 1.79%
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 7.21% 7.48%
Net Loans to deposits 71.22% 70.06%
Non-interest bearing deposits to total deposits 59.79% 57.10%
Total capital to total risk-weighted assets 15.43% 16.15%
Tier 1 capital to total risk-weighted assets 15.23% 15.82%
Tier 1 leverage ratio 10.34% 9.79%
Common equity tier 1 15.23% 15.82%


Source:Chino Commercial Bancorp