Chino Commercial Bancorp Reports 9.5% Increase In Net Earnings

CHINO, Calif., Jan. 20, 2017 (GLOBE NEWSWIRE) -- The Board of Directors of Chino Commercial Bank, N.A. (OTC:CCBC) announced the results of operations for the year ended December 31, 2016 with net income of $1,453,103, or an increase of 9.5% over net income of $1,327,370 for December 31, 2015. Net income per basic and diluted share for the year ended December 31, 2016 was $1.18 as compared to $1.08 per share for the year ended December 31, 2015.

Net income for the fourth quarter ended December 31, 2016 was $329,476, or an increase of 3.4%, as compared with net income of $318,620 for the same quarter last year. Net income per basic and diluted share for the fourth quarter of 2016 was $0.27 as compared to $0.26 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer stated, “We are very pleased with the performance of the Bank in 2016. This year the Bank set new records for total deposits, loans and earnings. The Company’s net earnings for fiscal year 2016 were up over 9.4%, representing a return on beginning equity of 12%. Deposit and Loan balances increased during the year by 5.5% and 17.5% respectively, allowing the Bank to show improved stability of earnings and efficiency.”

Financial Condition

At December 31, 2016, total assets were $175.1 million, an increase of $13.7 million or 8.5% over $161.4 million at December 31, 2015. Total deposits increased by 5.5% or $7.2 million during the year to $137.6 million, compared to $130.3 million as of December 31, 2015. At December 31, 2016, the Company’s core deposits represent 96.8% of the total deposits.

Gross loans increased by 17.5% or $16.3 million as of December 31, 2016 to $109.5 million as compared with $93.2 million as of December 31, 2015. The Bank had one nonperforming loan at the end of the fourth qurter and no nonperforming loans as of December 31, 2015. OREO properties remained at zero as of December 31, 2016, and December 31, 2015, respectively.

Earnings

The Company posted net interest income of $1,478,873 and $1,355,351 for the three months ended December 31, 2016 and 2015, respectively, or an increase of $123,522 or 9.1%. Average interest-earning assets were $161.8 million with average interest-bearing liabilities of $85.9 million, yielding a net interest margin of 3.64% for the fourth quarter of 2016, as compared to the average interest-earning assets of $150.7 million with average interest-bearing liabilities of $75.4 million, yielding a net interest margin of 3.57% for the fourth quarter of 2015.

Non-interest income totaled $383,362 for the fourth quarter of 2016, or an increase of 2.2% as compared with $375,022 earned during the same quarter last year. Service charges on deposit accounts decreased 12.5% to $241,256 primarily due to a decrease in income from returned items and overdraft charges. Dividend income from restricted stock increased to $99,694 for the fourth quarter of 2016, compared to $51,951 for the same quarter in 2015. Income from bank-owned life insurance remained consistent at $25,891 in the fourth quarter of 2016 and $25,875 in the fourth quarter of 2015.

General and administrative expenses were $1,283,729 for the three months ended December 31, 2016, as compared to $1,176,051 for the fourth quarter of 2015. The largest component of general and administrative expenses was salary and benefits expense of $791,133 for the fourth quarter of 2016, as compared to $690,496 for the same quarter last year. Regulatory assessments increased to $37,611 in the fourth quarter of 2016 in comparison with $33,767 in the fourth quarter of 2015. Advertising and marketing expenses increased 37.5% to $22,598 in the fourth quarter of 2016 from $16,438 for the same period last year.

Income tax expense was $209,030 for the three months ended December 31, 2016 as compared to $197,455 for the three months ended December 31, 2015. The effective income tax rate for the fourth quarter of 2016 and 2015 is approximately 38.8% and 38.3%, 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
December 31, 2016 and December 31, 2015
December 31, 2016 December 31, 2015
(unaudited) (audited)
ASSETS:
Cash and due from banks 30,498,888 $24,898,140
Total cash and cash equivalents 30,498,888 24,898,140
Interest-bearing deposits in other banks 2,480,000 4,960,000
Investment securities available for sale 3,924,102 4,931,068
Investment securities held to maturity (fair value approximates
$18,240,000 at December 31, 2016 and $23,115,000 at December 31, 2015) 18,407,741 23,100,106
Total investments 24,811,843 32,991,174
Loans
Real estate 87,306,627 72,756,410
Commercial 21,822,341 20,053,905
Installment 424,818 433,764
Gross loans 109,553,786 93,244,079
Unearned fees and discounts (348,359) (251,911)
Loans net of unearned fees and discount 109,205,427 92,992,168
Allowance for loan losses (1,845,447) (1,667,204)
Net loans 107,359,980 91,324,964
Fixed assets, net 6,000,404 6,021,446
Accrued interest receivable 295,102 395,685
Stock investments, restricted, at cost 1,935,300 1,766,500
Bank-owned life insurance 3,285,963 3,183,247
Other assets 904,338 803,048
Total assets$175,091,818 $161,384,204
LIABILITIES:
Deposits
Non-interest bearing$68,613,998 $74,431,378
Interest bearing
NOW and money market 52,873,006 40,980,418
Savings 5,165,730 4,815,198
Time deposits less than $250,000 6,471,260 3,913,644
Time deposits of $250,000 or greater 4,438,254 6,208,083
Total deposits 137,562,248 130,348,721
Accrued interest payable 27,902 25,229
Borrowings from Federal Home Loan Bank (FHLB) 20,000,000 15,000,000
Accrued expenses & other payables 872,374 843,691
Subordinated notes payable to subsidiary trust 3,093,000 3,093,000
Total liabilities 161,555,524 149,310,641
SHAREHOLDERS' EQUITY
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 1,231,332 shares at December 31, 2016 and December 31, 2015, respectively. 6,089,466 6,089,466
Retained earnings 7,449,608 6,000,577
Accumulated other comprehensive income/(loss) (2,780) (16,480)
Total shareholders' equity 13,536,294 12,073,563
Total liabilities & shareholders' equity$175,091,818 $161,384,204

CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
(unaudited)
For the three months ended For the year ended
December 31 December 31
2016 2015 2016 2015
Interest income
Interest and fee income on loans$1,418,399 $1,262,845 $5,465,664 $4,879,254
Interest on federal funds sold and FRB deposits 40,677 20,931 129,893 48,306
Interest on time deposits in banks 7,945 13,056 38,596 81,249
Interest on investment securities 121,584 142,525 545,090 445,896
Total interest income 1,588,605 1,439,357 6,179,243 5,454,705
Interest Expense
Interest on deposits 73,516 59,969 268,336 232,831
Other borrowings 36,216 24,037 142,675 83,065
Total interest expense 109,732 84,006 411,011 315,896
Net interest income 1,478,873 1,355,351 5,768,232 5,138,809
Provision for loan losses 40,000 38,247 202,410 42,288
Net interest income after provision for loan losses 1,438,873 1,317,104 5,565,822 5,096,521
Non-interest income
Service charges on deposit accounts 241,256 275,640 1,088,993 1,148,730
Other miscellaneous income 16,521 21,556 154,167 81,434
Dividend income from restricted stock 99,694 51,951 221,499 151,381
Income from bank-owned life insurance 25,891 25,875 102,716 102,453
Total non-interest income 383,362 375,022 1,567,375 1,483,998
Non-interest expenses
Salaries and employee benefits 791,133 690,496 2,882,535 2,655,057
Occupancy and equipment 102,348 114,130 416,781 424,715
Data and item processing 106,385 99,441 391,691 386,793
Advertising and marketing 22,598 16,438 76,074 56,437
Legal and professional fees 46,227 42,934 184,900 158,540
Regulatory assessments 37,611 33,767 141,000 126,580
Insurance 8,608 8,471 34,180 33,278
Directors' fees and expenses 26,983 26,460 108,013 107,310
Other expenses 141,836 143,914 516,982 479,978
Total non-interest expenses 1,283,729 1,176,051 4,752,156 4,428,688
Income before income tax expense 538,506 516,075 2,381,041 2,151,831
Income tax expense 209,030 197,455 927,938 824,461
Net income$329,476 $318,620 $1,453,103 $1,327,370
Basic earnings per share$0.27 $0.26 $1.18 $1.08
Diluted earnings per share$0.27 $0.26 $1.18 $1.08
Tax rate 38.8% 38.3% 39.0% 38.3%

For the three months ended For the year ended
December 31 December 31
2016 2015 2016 2015
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity 10.62% 10.63% 10.73% 11.54%
Annualized return on average assets 0.75% 0.77% 0.85% 0.88%
Net interest margin 3.64% 3.57% 3.70% 3.77%
Core efficiency ratio 68.93% 67.97% 64.78% 66.87%
Net chargeoffs/(recoveries) to average loans -0.01% -0.01% 0.02% -0.10%
AVERAGE BALANCES
(thousands, unaudited)
Average assets $176,301 $164,614 $170,152 $150,004
Average interest-earning assets $161,809 $150,657 $155,719 $136,231
Average gross loans $106,639 $88,730 $101,710 $87,066
Average deposits $143,072 $132,235 $136,436 $122,691
Average equity $12,414 $11,988 $13,541 $11,504
CREDIT QUALITY End of period
(unaudited) December 31, 2016 December 31, 2015
Non-performing loans $521,696 $-
Non-performing loans to total loans 0.48% 0.00%
Non-performing loans to total assets 0.30% 0.00%
Allowance for loan losses to total loans 1.68% 1.79%
Nonperforming assets as a percentage of total loans and OREO 0.48% 0.00%
Allowance for loan losses to non-performing loans 353.74% n/a
OTHER PERIOD-END STATISTICS
(unaudited)
Shareholders equity to total assets 7.73% 7.48%
Net Loans to deposits 78.04% 70.06%
Non-interest bearing deposits to total deposits 49.88% 57.10%
Total capital to total risk-weighted assets 10.11% 16.15%
Tier 1 capital to total risk-weighted assets 15.31% 15.82%
Tier 1 leverage ratio 10.24% 9.79%
Common equity tier 1 15.31% 15.82%



Source:Chino Commercial Bancorp