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Chino Commercial Bancorp Reports 27% Increase in Net Earnings

CHINO, Calif., Oct. 20, 2017 (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 third quarter ended September 30, 2017 with net earnings of $459 thousand, or an increase of 27%, compared with net income of $361 thousand for the same quarter last year. Net income per basic share for the third quarter of 2017 was $0.33 as compared to $0.29 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer stated, “In addition to the excellent third quarter earnings results, the Company also recently completed a successful stock offering, in which demand for the shares exceeded the amount of stock available. With the increase in capital and the strength of the local economy, we are very pleased and optimistic regarding growth opportunities for the Bank. In general, this is a very good time for the Bank and we are very excited about the future.”

Financial Condition

At September 30, 2017, total assets were $198.3 million, an increase of $23.2 million or 13.2% over $175.1 million at December 31, 2016. Total deposits increased by 12.5% or $17.3 million during the year to $154.8 million, compared to $137.6 million as of December 31, 2016. At September 30, 2017, the Company’s core deposits represent 90.5% of the total deposits.

Gross loans increased by 6.3% or $6.9 million as of September 30, 2017 to $116.4 million, as compared with $109.5 million as of December 31, 2016. The Bank did not have any nonperforming loans for the quarter ended September 30, 2017, and one nonperforming loan as of December 31, 2016, respectively. OREO properties remained at zero as of September 30, 2017 and December 31, 2016, respectively.

Earnings

The Company posted net interest income of $1.6 million and $1.4 million for the three months ended September 30, 2017 and 2016, respectively, or an increase of $197 thousand or 13.8%. Average interest-earning assets were $176.7 million with average interest-bearing liabilities of $101.2 million, yielding a net interest margin of 3.65% for the third quarter of 2017, as compared to the average interest-earning assets of $161.8 million with average interest-bearing liabilities of $81.3 million, yielding a net interest margin of 3.51% for the third quarter of 2016.

Non-interest income totaled $389 thousand for the third quarter of 2017, or a decrease of 1.6% as compared with $395 thousand earned during the same quarter last year. Service charges on deposit accounts increased by $8 thousand or 2.8% to $309 thousand, primarily due to an increase in income from returned items and overdraft charges. Dividend income from restricted stock decreased to $36 thousand for the third quarter of 2017, compared to $49 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 about $25 thousand in the third quarter of 2017 and 2016, respectively.

General and administrative expenses were $1.2 million for the three months ended September 30, 2017, and September 30, 2016, respectively. The largest component of general and administrative expenses was salary and benefits expense of $732 thousand for the third quarter of 2017, as compared to $704 thousand for the same quarter last year. Regulatory assessments remained consistent at about $37 thousand for the third quarter of 2017 and 2016, respectively. Advertising and marketing expenses increased by $6 thousand or 31.7% to $25 thousand in the third quarter of 2017 from $19 thousand for the same period last year. The Company engaged a marketing company to assist with advertising efforts during 2017.

Income tax expense was $300 thousand for the three months ended September 30, 2017 as compared to $230 thousand for the three months ended September 30, 2016. The effective income tax rate for the third quarter of 2017 and 2016 is approximately 39.5% and 38.9%, 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 therefrom, 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
September 30, 2017 and December 31, 2016
September 30, 2017 December 31, 2016
(unaudited) (audited)
ASSETS:
Cash and due from banks 43,683,972 $30,498,888
Total cash and cash equivalents 43,683,972 30,498,888
Interest-bearing deposits in other banks 2,232,000 2,480,000
Investment securities available for sale 3,320,992 3,924,102
Investment securities held to maturity (fair value approximates $22,090,000 at September 30, 2017 and $18,240,000 at December 31, 2016) 22,191,147 18,407,741
Total investments 27,744,139 24,811,843
Loans
Real estate 97,711,885 87,306,627
Commercial 18,223,393 21,822,341
Installment 479,720 424,818
Gross loans 116,414,998 109,553,786
Unearned fees and discounts (359,786) (348,359)
Loans net of unearned fees and discount 116,055,212 109,205,427
Allowance for loan losses (1,980,787) (1,845,447)
Net loans 114,074,425 107,359,980
Fixed assets, net 5,862,851 6,000,404
Accrued interest receivable 441,474 295,102
Stock investments, restricted, at cost 1,962,226 1,935,300
Bank-owned life insurance 3,361,418 3,285,963
Other assets 1,158,428 904,338
Total assets$198,288,933 $175,091,818
LIABILITIES:
Deposits
Non-interest bearing$76,143,930 $68,613,998
Interest bearing
NOW and money market 50,998,655 52,873,006
Savings 7,348,894 5,165,730
Time deposits less than $250,000 5,690,422 4,438,254
Time deposits of $250,000 or greater 14,642,767 6,471,260
Total deposits 154,824,668 137,562,248
Accrued interest payable 69,094 27,902
Borrowings from Federal Home Loan Bank (FHLB) 20,000,000 20,000,000
Accrued expenses & other payables 1,058,103 872,374
Subordinated notes payable to subsidiary trust 3,093,000 3,093,000
Total liabilities 179,044,865 161,555,524
SHAREHOLDERS' EQUITY
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 1,549,420 shares at September 30, 2017 and 1,231,332 issued and outstanding at December 31, 2016, respectively. 10,502,558 6,089,466
Retained earnings 8,740,206 7,449,608
Accumulated other comprehensive income/(loss) 1,304 (2,780)
Total shareholders' equity 19,244,068 13,536,294
Total liabilities & shareholders' equity$198,288,933 $175,091,818


CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
(unaudited)
For the three months ended For the year ended
September 30 September 30
2017
2016
2017
2016
Interest income
Interest and fee income on loans$1,564,413 $1,354,618 $4,523,485 $4,047,265
Interest on federal funds sold and FRB deposits 108,167 36,165 241,780 89,201
Interest on time deposits in banks 7,032 10,272 21,045 30,651
Interest on investment securities 148,121 134,864 407,413 423,522
Total interest income 1,827,733 1,535,919 5,193,723 4,590,639
Interest Expense
Interest on deposits 107,328 69,390 259,212 194,820
Other borrowings 95,086 38,028 218,462 106,459
Total interest expense 202,414 107,418 477,674 301,279
Net interest income 1,625,319 1,428,501 4,716,049 4,289,360
Provision for loan losses 55,000.0 30,000 110,000 164,370
Net interest income after provision for loan losses 1,570,319 1,398,501 4,606,049 4,124,990
Non-interest income
Service charges on deposit accounts 309,215 300,936 918,252 847,737
Other miscellaneous income 18,184 19,700 54,361 137,646
Dividend income from restricted stock 36,381 48,962 109,302 121,805
Income from bank-owned life insurance 25,223 25,657 75,455 76,825
Total non-interest income 389,003 395,255 1,157,370 1,184,013
Non-interest expenses
Salaries and employee benefits 731,943 704,158 2,248,259 2,091,401
Occupancy and equipment 109,829 111,480 314,502 314,434
Data and item processing 85,632 76,524 247,479 285,305
Advertising and marketing 24,934 18,935 77,050 53,477
Legal and professional fees 38,518 51,143 149,376 138,674
Regulatory assessments 37,607 36,539 112,824 103,389
Insurance 8,685 8,562 25,374 25,572
Directors' fees and expenses 32,484 27,192 90,576 81,030
Other expenses 131,619 168,047 367,484 373,185
Total non-interest expenses 1,201,251 1,202,580 3,632,924 3,466,467
Income before income tax expense 758,071 591,176 2,130,495 1,842,536
Income tax expense 299,516 229,917 839,896 718,908
Net income$458,555 $361,259 $1,290,599 $1,123,628
Basic earnings per share$0.33 $0.29 $1.01 $0.91
Diluted earnings per share$0.33 $0.29 $1.01 $0.91
Tax rate 39.5% 38.9% 39.4% 39.0%


For the three months ended For the year ended
September 30 September 30
2017
2016
2017
2016
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity 11.29% 11.05% 11.66% 11.79%
Annualized return on average assets 0.96% 0.82% 0.94% 0.89%
Net interest margin 3.65% 3.51% 3.73% 3.73%
Core efficiency ratio 59.64% 65.94% 61.85% 63.33%
Net chargeoffs/(recoveries) to average loans -0.01% -0.01% -0.03% 0.03%
AVERAGE BALANCES
(thousands, unaudited)
Average assets $191,547 $176,458 $183,985 $168,120
Average interest-earning assets $176,693 $161,774 $169,227 $153,680
Average gross loans $114,760 $104,499 $112,304 $100,087
Average deposits $145,223 $140,514 $142,519 $134,204
Average equity $16,246 $13,076 $14,760 $12,704
CREDIT QUALITY End of period
(unaudited) September 30, 2017 December 31, 2016
Non-performing loans $- $536,696
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 1.70% 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 9.71% 7.73%
Net loans to deposits 73.68% 78.04%
Non-interest bearing deposits to total deposits 49.18% 49.88%
Total capital to total risk-weighted assets 18.82% 15.37%
Tier 1 capital to total risk-weighted assets 20.18% 15.32%
Tier 1 leverage ratio 13.40% 10.24%
Common equity tier 1 20.18% 15.32%

Source:Chino Commercial Bancorp