Chino Commercial Bancorp Reports 34% Increase in Net Earnings
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.”
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.
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.
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 $268.5 thousand for the three months ended June 30, 2020. The effective income tax rate for the second quarter of 2021 and 2020 were approximately 28.3% and 29.3% respectively.
The statements contained in this press release that are not historical facts are forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Readers are cautioned not to unduly rely on forward-looking statements. Actual results may differ from those projected. These forward-looking statements involve risks and uncertainties, including but not limited to, the health of the national and California economies, the Company’s ability to attract and retain skilled employees, customers’ service expectations, the Company’s ability to successfully deploy new technology and gain efficiencies therefrom, and changes in interest rates, loan portfolio performance, and other factors.
Contact: Dann H. Bowman, President and CEO or Melinda M. Milincu, Vice President and CFO, Chino Commercial Bancorp and Chino Commercial Bank, N.A., 14245 Pipeline Avenue, Chino, CA. 91710, (909) 393-8880.
|CHINO COMMERCIAL BANCORP|
|CONSOLIDATED BALANCE SHEET|
|June 30, 2021 and December 31, 2020|
|June 30, 2021||December 31, 2020|
|Cash and due from banks||$||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|
|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||)|
|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|
|NOW and money market||77,243,129||76,774,242|
|Time deposits less than $250,000||10,169,696||4,473,409|
|Time deposits of $250,000 or greater||4,391,327||9,563,300|
|Accrued interest payable||147,013||137,487|
|Borrowings from Federal Home Loan Bank (FHLB)||15,000,000||25,000,000|
|Accrued expenses & other payables||1,724,977||1,674,150|
|Subordinated notes payable to subsidiary trust||3,093,000||3,093,000|
|Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,676,799 shares at June 30, 2021 and December 31, 2020, respectively.|
|Accumulated other comprehensive income/(loss)||(228,992||)||292,366|
|Total shareholders' equity||28,407,706||27,223,181|
|Total liabilities & shareholders' equity||$||353,314,579||$||314,839,618|
|CHINO COMMERCIAL BANCORP|
|CONSOLIDATED STATEMENTS OF NET INCOME|
|For the three months ended||For the six months ended|
|June 30||June 30|
|Interest and fee income on loans||$||2,536,482||$||2,212,961||$||5,184,945||$||4,281,406|
|Interest on federal funds sold and FRB deposits||23,835||12,982||40,100||125,913|
|Interest on time deposits in banks||-||-||-||1,856|
|Interest on investment securities||218,100||240,502||431,543||454,654|
|Total interest income||2,778,417||2,466,445||5,656,588||4,863,829|
|Interest on deposits||48,752||74,802||98,546||252,635|
|Total interest expense||204,570||201,619||376,428||514,107|
|Net interest income||2,573,847||2,264,826||5,280,160||4,349,722|
|Provision for loan losses||170,000||105,000||370,000||155,000|
|Net interest income after provision for loan losses||2,403,847||2,159,826||4,910,160||4,194,722|
|Service charges on deposit accounts||391,238||276,859||739,336||645,542|
|Other miscellaneous income||80,061||36,908||141,776||76,008|
|Dividend income from restricted stock||23,917||12,852||47,025||34,823|
|Income from bank-owned life insurance||31,162||31,195||61,726||62,230|
|Total non-interest income||526,378||357,814||989,863||818,603|
|Salaries and employee benefits||1,032,909||971,010||2,081,133||1,994,372|
|Occupancy and equipment||151,628||157,841||307,914||307,527|
|Data and item processing||164,107||152,588||320,655||287,076|
|Advertising and marketing||27,236||36,091||54,420||82,169|
|Legal and professional fees||46,167||46,750||90,432||91,390|
|Directors' fees and expenses||32,880||32,280||65,160||65,494|
|Total non-interest expenses||1,721,038||1,600,873||3,523,864||3,238,357|
|Income before income tax expense||1,209,187||916,767||2,376,159||1,774,968|
|Income tax expense||341,717||268,474||670,277||512,998|
|Basic earnings per share||$||0.32||$||0.24||$||0.64||$||0.47|
|Diluted earnings per share||$||0.32||$||0.24||$||0.64||$||0.47|
|For the three months ended||For the three months ended|
|June 30||June 30|
|KEY FINANCIAL RATIOS|
|Annualized return on average equity||13.00||%||10.12||%||12.69||%||10.01||%|
|Annualized return on average assets||0.99||%||0.94||%||1.01||%||0.99||%|
|Net interest margin||3.17||%||4.03||%||3.37||%||4.27||%|
|Core efficiency ratio||55.51||%||61.04||%||56.20||%||62.66||%|
|Net chargeoffs/(recoveries) to average loans||-0.008||%||-0.004||%||-0.016||%||-0.056||%|
|Average interest-earning assets||$||325,987||$||225,944||$||315,817||$||204,980|
|Average gross loans||$||196,470||$||171,676||$||196,228||$||158,084|
|CREDIT QUALITY||End of period|
|(unaudited)||June 30, 2021||December 31, 2020|
|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|
|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||%|