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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Chino Commercial Bancorp Reports 34% Increase in Net Earnings

July 16, 2021 GMT

CHINO, Calif., July 16, 2021 (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, 2021. Net earnings for the second quarter 2021, were $867 thousand, or an increase of 33.8%, as compared with earnings of $648 thousand for the same quarter last year. The increase in earnings is primarily attributed to the increase in loan interest and loan fee income. Net earnings per basic and diluted share was $0.32 for the second quarter of 2021, and $0.24 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer, stated, “The second quarter of 2021 marks continued improvement for the Company, with total Deposits, and Earnings reaching new record levels. The competitive market for the Bank is very strong, and as the economy of Southern California returns to pre-pandemic levels, we see even more opportunities in the future. We are also pleased to report that loan quality remains very strong, with the Bank having no delinquent loans at quarter-end, no pending foreclosures, and no OREO. Despite the challenges of the last year, we are optimistic about the opportunities for growth and expansion in the future.”

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Financial Condition

At June 30, 2021, total assets were $353.3 million, an increase of $38.5 million or 12.2% over $314.8 million at December 31, 2020. Total deposits increased by 14.4% or $37.2 million to $294.9 million as of June 30, 2021, compared to $257.7 million as of December 31, 2020. At June 30, 2021, the Company’s core deposits represent 97.5% of the total deposits.

Gross loans decreased by 1.7 % or $3.3 million as of June 30, 2021 to $192.4 million, as compared with $195.7 million as of December 31, 2020, primarily due to pay downs on loans made under the Payroll Protection Program. The Bank had one non-performing loan for the quarters ended June 30, 2021, and December 31, 2020. OREO properties remained at zero as of June 30, 2021 and December 31, 2020 respectively.

Much of the increases in total assets and deposits over the last 14 months is attributable to the Bank’s response to the overwhelming demand for SBA PPP loans to small businesses. Overall, since the program started the Bank approved and funded 688 PPP loans with an outstanding balance of $45.9 million as of June 30, 2021, a decrease of 21.1% or $12.3 million as compared $58.2 million outstanding as of March 31, 2021.

The Company issued a 20% stock dividend on July 6, 2021 to shareholders of record as of June 17, 2021. This dividend increased the number of shares outstanding by 445,991 bringing the total shares outstanding to 2,676,799.

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On May 21, 2021, the Company completed a $10 million subordinated note offering. The Notes have a maturity date of June 1, 2031 and carry a fixed rate of interest of 4.250% for the first five years. Thereafter, the Notes will pay interest at 3-month SOFR plus 356 basis points, resetting quarterly. The Notes include a right of prepayment without penalty on or after June 1, 2026. The Notes have been structured to qualify as Tier 2 capital for regulatory purposes.

Earnings

The Company posted net interest income of $2.6 million for the three months ended June 30, 2021 and $2.3 million for the same quarter last year. Average interest-earning assets were $325,987 million with average interest-bearing liabilities of $143.8 million, yielding a net interest margin of 3.17% for the second quarter of 2021, as compared to the average interest-earning assets of $225.9 million with average interest-bearing liabilities of $123.7 million, yielding a net interest margin of 4.03% for the second quarter of 2020.

Non-interest income totaled $526.3 thousand for the second quarter of 2021, or an increase of 47.1% as compared with $357.8 thousand earned during the same quarter last year. The majority of the increase is attribute to increases to income on deposit accounts and other fees.

General and administrative expenses were $1.7 million for the three months ended June 30, 2021, and $1.6 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.0 million for the second quarter of 2021 and $971 thousand for the same period last year.

Income tax expense was $341.7 thousand which represents an increase of $73 thousand or 27.3% for the three months ended June 30, 2021, as compared to $268.5 thousand for the three months ended June 30, 2020. The effective income tax rate for the second quarter of 2021 and 2020 were approximately 28.3% and 29.3% 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 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, 2021 and December 31, 2020
   
    June 30, 2021   December 31, 2020
    (unaudited)   (audited)
  ASSETS:      
  Cash and due from banks $ 100,937,665     $ 58,075,217  
  Federal funds sold   -       -  
  Total cash and cash equivalents   100,937,665       58,075,217  
         
  Interest-bearing deposits in other banks   -       -  
  Investment securities available for sale   34,049,096       32,370,042  
  Investment securities held to maturity (fair value approximates      
  $15,894,696 at June 30, 2021 and $19,556,250 at December 31, 2020)   15,187,264       18,626,525  
  Total investments   49,236,360       50,996,567  
  Loans      
  Construction   414,072.00       1,014,462  
  Real estate   120,008,857       119,302,116  
  Commercial   71,850,187       75,237,752  
  Installment   124,245       110,475  
  Credit Cards   -       -  
  Gross loans   192,397,361       195,664,805  
  Unearned fees and discounts   (2,028,154 )     (1,678,642 )
  Loans net of unearned fees and discount   190,369,207       193,986,163  
  Allowance for loan losses   (3,667,239 )     (3,271,921 )
  Net loans   186,701,968       190,714,242  
         
  Fixed assets, net   6,036,251       6,145,711  
  Accrued interest receivable   929,968       1,013,732  
  Stock investments, restricted, at cost   1,835,200       1,554,200  
  Bank-owned life insurance   4,782,958       4,721,232  
  Other assets   2,854,209       1,618,717  
  Total assets $ 353,314,579     $ 314,839,618  
         
  LIABILITIES:      
  Deposits      
  Non-interest bearing $ 178,220,559     $ 145,433,815  
  Interest bearing      
  NOW and money market   77,243,129       76,774,242  
  Savings   24,917,172       21,467,034  
  Time deposits less than $250,000   10,169,696       4,473,409  
  Time deposits of $250,000 or greater   4,391,327       9,563,300  
  Total deposits   294,941,883       257,711,800  
         
  Accrued interest payable   147,013       137,487  
  Borrowings from Federal Home Loan Bank (FHLB)   15,000,000       25,000,000  
  Accrued expenses & other payables   1,724,977       1,674,150  
  Subordinated debt   10,000,000       -  
  Subordinated notes payable to subsidiary trust   3,093,000       3,093,000  
  Total liabilities   324,906,873       287,616,437  
         
  SHAREHOLDERS' EQUITY      
  Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,676,799 shares at June 30, 2021 and December 31, 2020, respectively.      
       
    10,502,558       10,502,557  
  Retained earnings   18,134,140       16,428,258  
  Accumulated other comprehensive income/(loss)   (228,992 )     292,366  
  Total shareholders' equity   28,407,706       27,223,181  
  Total liabilities & shareholders' equity $ 353,314,579     $ 314,839,618  
         
CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
               
  For the three months ended   For the six months ended
  June 30   June 30
    2021   2020     2021     2020
  (unaudited)   (unaudited)   (unaudited)   (unaudited)
Interest income              
Interest and fee income on loans $ 2,536,482 $ 2,212,961 $ 5,184,945 $ 4,281,406
Interest on federal funds sold and FRB deposits   23,835     12,982     40,100     125,913
Interest on time deposits in banks   -     -     -     1,856
Interest on investment securities   218,100     240,502     431,543     454,654
Total interest income   2,778,417     2,466,445     5,656,588     4,863,829
               
Interest Expense              
Interest on deposits   48,752     74,802     98,546     252,635
Other borrowings   155,818     126,817     277,882     261,472
Total interest expense   204,570     201,619     376,428     514,107
Net interest income   2,573,847     2,264,826     5,280,160     4,349,722
Provision for loan losses   170,000     105,000     370,000     155,000
               
Net interest income after provision for loan losses   2,403,847     2,159,826     4,910,160     4,194,722
               
Non-interest income              
Service charges on deposit accounts   391,238     276,859     739,336     645,542
Other miscellaneous income   80,061     36,908     141,776     76,008
Dividend income from restricted stock   23,917     12,852     47,025     34,823
Income from bank-owned life insurance   31,162     31,195     61,726     62,230
Total non-interest income   526,378     357,814     989,863     818,603
               
Non-interest expenses              
Salaries and employee benefits   1,032,909     971,010     2,081,133     1,994,372
Occupancy and equipment   151,628     157,841     307,914     307,527
Data and item processing   164,107     152,588     320,655     287,076
Advertising and marketing   27,236     36,091     54,420     82,169
Legal and professional fees   46,167     46,750     90,432     91,390
Regulatory assessments   36,561     30,947     70,041     49,207
Insurance   10,106     8,412     19,929     17,246
Directors' fees and expenses   32,880     32,280     65,160     65,494
Other expenses   219,444     164,954     514,180     343,876
Total non-interest expenses   1,721,038     1,600,873     3,523,864     3,238,357
Income before income tax expense   1,209,187     916,767     2,376,159     1,774,968
Income tax expense   341,717     268,474     670,277     512,998
Net income $ 867,470   $ 648,293   $ 1,705,882 $ 1,261,970
               
Basic earnings per share $ 0.32   $ 0.24   $ 0.64   $ 0.47
Diluted earnings per share $ 0.32   $ 0.24   $ 0.64   $ 0.47
               
    For the three months ended   For the three months ended
    June 30   June 30
      2021       2020       2021       2020  
KEY FINANCIAL RATIOS                
(unaudited)                
Annualized return on average equity     13.00 %     10.12 %     12.69 %     10.01 %
Annualized return on average assets     0.99 %     0.94 %     1.01 %     0.99 %
Net interest margin     3.17 %     4.03 %     3.37 %     4.27 %
Core efficiency ratio     55.51 %     61.04 %     56.20 %     62.66 %
Net chargeoffs/(recoveries) to average loans     -0.008 %     -0.004 %     -0.016 %     -0.056 %
                 
AVERAGE BALANCES                
(thousands, unaudited)                
Average assets   $ 350,226     $ 275,931     $ 338,983     $ 254,818  
Average interest-earning assets   $ 325,987     $ 225,944     $ 315,817     $ 204,980  
Average gross loans   $ 196,470     $ 171,676     $ 196,228     $ 158,084  
Average deposits   $ 303,611     $ 218,505     $ 291,780     $ 201,238  
Average equity   $ 26,684     $ 25,631     $ 26,886     $ 25,215  
                 
                 
                 
CREDIT QUALITY   End of period        
(unaudited)   June 30, 2021   December 31, 2020        
                 
Non-performing loans   $ 119,797     $ 107,672          
                 
Non-performing loans to total loans     0.06 %     0.06 %        
Non-performing loans to total assets     0.03 %     0.03 %        
Allowance for loan losses to total loans     1.91 %     1.67 %        
Nonperforming assets as a percentage of total loans and OREO     0.06 %     0.06 %        
Allowance for loan losses to non-performing loans     3061.21 %     3038.79 %        
                 
OTHER PERIOD-END STATISTICS                
(unaudited)                
Shareholders equity to total assets     8.04 %     8.65 %        
Net loans to deposits     63.30 %     74.00 %        
Non-interest bearing deposits to total deposits     60.43 %     56.43 %        
Company Leverage Ratio     9.06 %     11.44 %