Chino Commercial Bancorp Reports 5.5% Increase in Net Earnings

CHINO, Calif., April 21, 2017 (GLOBE NEWSWIRE) — The Board of Directors of Chino Commercial Bank, N.A. (OTC:CCBC) announced the results of operations for the quarter ended March 31, 2017 with net income of $411,914, or an increase of 5.5% over net income of $390,530 for March 31, 2016. Net income per basic and diluted share for the quarter ended March 31, 2017 was $0.33 as compared to $0.32 per share for the quarter ended March 31, 2016.   

Dann H. Bowman, President and Chief Executive Officer stated, “In addition to the excellent first 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; and the first quarter marked new record levels for total assets, loans, revenue and net earnings.  In general, this is a very good time for the Bank and we are pleased and excited about the future”

Financial Condition

At March 31, 2017, total assets were $185.3 million, an increase of $10.2 million or 5.9% over $175.1 million at December 31, 2016.  Total deposits increased by 7.2% or $9.9 million during the year to $147.5 million, compared to $137.6 million as of December 31, 2016. At March 31, 2017, the Company’s core deposits represent 97.1% of the total deposits.

Gross loans increased by 3.3% or $3.6 million as of March 31, 2017 to $113.1 million as compared with $109.6 million as of December 31, 2016.  The Bank had one nonperforming loan for the quarter ended March 31, 2017 and December 31, 2016, respectively.  OREO properties remained at zero as of March 31, 2017, and December 31, 2016, respectively.

Earnings

The Company posted net interest income of $1,527,669 and $1,400,128 for the three months ended March 31, 2017 and 2016, respectively, or an increase of $127,541 or 9.1%.  Average interest-earning assets were $164.8 million with average interest-bearing liabilities of $97.1 million, yielding a net interest margin of 3.76% for the first quarter of 2017, as compared to the average interest-earning assets of $147.7 million with average interest-bearing liabilities of $76.0 million, yielding a net interest margin of 3.81% for the first quarter of 2016.

Non-interest income totaled $379,856 for the first quarter of 2017, or an increase of 5.2% as compared with $360,959 earned during the same quarter last year. Service charges on deposit accounts increased 5.0% to $291,643 primarily due to an increase in income from returned items and overdraft charges. Dividend income from restricted stock increased to $45,081 for the first quarter of 2017, compared to $34,881 for the same quarter in 2016.  Income from bank-owned life insurance remained consistent at $25,022 in the first quarter of 2017 and $25,572 in the first quarter of 2016.

General and administrative expenses were $1,173,533 for the three months ended March 31, 2017, as compared to $1,118,217 for the first quarter of 2017. The largest component of general and administrative expenses was salary and benefits expense of $744,775 for the first quarter of 2017, as compared to $680,889 for the same quarter last year.  Regulatory assessments increased to $37,610 in the first quarter of 2017 in comparison with $30,311 in the first quarter of 2016.  Advertising and marketing expenses increased 27.6% to $21,844 in the first quarter of 2017 from $17,116 for the same period last year.

Income tax expense was $267,078 for the three months ended March 31, 2017 as compared to $251,294 for the three months ended March 31, 2016. The effective income tax rate for the first quarter of 2016 and 2015 is approximately 39.3% and 39.2%, 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  
March 31, 2017 and December 31, 2016  
         
  March 31, 2017   December 31, 2016  
  (unaudited)   (audited)  
ASSETS:        
Cash and due from banks   37,139,627     $ 30,498,888    
Total cash and cash equivalents   37,139,627       30,498,888    
         
Interest-bearing deposits in other banks   2,232,000       2,480,000    
Investment securities available for sale   3,753,782       3,924,102    
Investment securities held to maturity (fair value approximates        
$19,042,472 at March 31, 2017 and $18,240,000 at December 31, 2016)   19,191,568       18,407,741    
Total investments   25,177,350       24,811,843    
Loans        
Real estate   93,882,650       87,306,627    
Commercial   18,844,416       21,822,341    
Installment   399,330       424,818    
Gross loans   113,126,396       109,553,786    
Unearned fees and discounts   (352,799 )     (348,359 )  
Loans net of unearned fees and discount   112,773,597       109,205,427    
Allowance for loan losses   (1,908,975 )     (1,845,447 )  
 Net loans   110,864,622       107,359,980    
         
Fixed assets, net   5,946,157       6,000,404    
Accrued interest receivable   281,885       295,102    
Stock investments, restricted, at cost   1,935,300       1,935,300    
Bank-owned life insurance   3,310,986       3,285,963    
Other assets   678,908       904,338    
Total assets $ 185,334,835     $ 175,091,818    
         
LIABILITIES:        
Deposits        
Non-interest bearing  $ 72,583,231     $ 68,613,998    
Interest bearing        
NOW and money market   58,354,775       52,873,006    
Savings   5,890,136       5,165,730    
Time deposits less than $250,000   6,314,105       4,438,254    
Time deposits of $250,000 or greater   4,319,520       6,471,260    
Total deposits   147,461,767       137,562,248    
         
Accrued interest payable   30,673       27,902    
Borrowings from Federal Home Loan Bank (FHLB)   20,000,000       20,000,000    
Accrued expenses & other payables   807,039       872,374    
Subordinated notes payable to subsidiary trust   3,093,000       3,093,000    
Total liabilities   171,392,479       161,555,524    
         
SHAREHOLDERS’ EQUITY        
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 1,231,332 shares at March 31, 2017 and December 31, 2016, respectively.        
       
  6,089,466       6,089,466    
Retained earnings   7,861,522       7,449,608    
Accumulated other comprehensive income/(loss)   (8,632 )     (2,780 )  
Total shareholders’ equity   13,942,356       13,536,294    
Total liabilities & shareholders’ equity $ 185,334,835     $ 175,091,818    
         

 

   
CHINO COMMERCIAL BANCORP  
CONSOLIDATED STATEMENTS OF NET INCOME  
(unaudited)  
  For the three months ended  
  March 31  
    2017       2016    
Interest income        
Interest and fee income on loans  $ 1,467,711     $ 1,310,104    
Interest on federal funds sold and FRB deposits   60,129       26,333    
Interest on time deposits in banks   7,057       10,450    
Interest on investment securities   122,745       147,839    
Total interest income   1,657,642       1,494,726    
         
Interest Expense        
Interest on deposits   75,841       60,347    
Other borrowings   54,132       34,251    
Total interest expense   129,973       94,598    
Net interest income   1,527,669       1,400,128    
Provision for loan losses   55,000       1,046    
         
Net interest income after provision for loan losses   1,472,669       1,399,082    
         
Non-interest income        
Service charges on deposit accounts   291,643       277,873    
Other miscellaneous income   18,110       22,633    
Dividend income from restricted stock   45,081       34,881    
Income from bank-owned life insurance   25,022       25,572    
Total non-interest income   379,856       360,959    
         
Non-interest expenses        
Salaries and employee benefits   744,775       680,889    
Occupancy and equipment   105,532       103,828    
Data and item processing   76,081       77,120    
Advertising and marketing   21,844       17,116    
Legal and professional fees   37,434       47,430    
Regulatory assessments   37,610       30,311    
Insurance   8,005       8,471    
Directors’ fees and expenses   26,548       26,709    
Other expenses   115,704       126,343    
Total non-interest expenses   1,173,533       1,118,217    
Income before income tax expense   678,992       641,824    
Income tax expense   267,078       251,294    
Net income $ 411,914     $ 390,530    
         
Basic earnings per share  $ 0.33     $ 0.32    
Diluted earnings per share  $ 0.33     $ 0.32    
         
Tax rate   39.3 %     39.2 %  
         

 

       
    For the three months ended  
    March 31  
      2017       2016    
KEY FINANCIAL RATIOS          
(unaudited)          
Annualized return on average equity     12.18%     12.68%  
Annualized return on average assets     0.92%     0.96%  
Net interest margin     3.76%     3.81%  
Core efficiency ratio     61.52%     63.50%  
Net charge offs/(recoveries) to average loans     -0.01%     -0.01%  
           
AVERAGE BALANCES          
(thousands, unaudited)          
Average assets   $ 179,168   $ 161,960  
Average interest-earning assets   $ 164,802   $ 147,688  
Average gross loans   $ 110,136   $ 95,183  
Average deposits   $ 139,925   $ 129,679  
Average equity   $ 13,532   $ 12,316  
           
           
           
CREDIT QUALITY   End of period  
(unaudited)   March 31, 2017   December 31, 2016  
           
Non-performing loans   $ 521,696   $  
           
Non-performing loans to total loans     0.46%     0.00%  
Non-performing loans to total assets     0.28%     0.00%  
Allowance for loan losses to total loans     1.69%     1.68%  
Nonperforming assets as a percentage of total loans and OREO     0.46%     0.00%  
Allowance for loan losses to non-performing loans     365.92%   n/a  
           
OTHER PERIOD-END STATISTICS          
(unaudited)          
Shareholders equity to total assets     7.52%     7.73%  
Net loans to deposits     75.18%     78.04%  
Non-interest bearing deposits to total deposits     49.22%     49.88%  
Total capital to total risk-weighted assets     15.78%     15.37%  
Tier 1 capital to total risk-weighted assets     15.85%     15.32%  
Tier 1 leverage ratio     10.64%     10.24%  
Common equity tier 1     15.85%     15.32%