Chino Commercial Bancorp Reports 42% Increase in Net Earnings

Chino Commercial Bancorp

CHINO, Calif., July 22, 2022 (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, 2022. Net earnings for the second quarter of 2022, were $1.2 million, or an increase of 42.4%, as compared with earnings of $867 thousand for the same quarter last year. Net earnings per basic and diluted share was $0.46 for the second quarter of 2022, and $0.32 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer, stated, “Despite the setbacks of the last two years, the economy of the Inland Empire appears to be rebounding. We are excited about the opportunities for growth and expansion of the Bank as we offer new products and services to help small businesses to grow and prosper.”

Financial Condition

At June 30, 2022, total assets were $406.8 million, an increase of $28.3 million or 7.5% over $378.5 million at December 31, 2021. Total deposits increased by $28.2 million or 8.8% to $347.1 million as of June 30, 2022, compared to $318.9 million as of December 31, 2021. At June 30, 2022, the Company’s core deposits represent 98.4% of the total deposits.

Gross loans decreased by 2.1% or $3.7 million as of June 30, 2022 to $172 million as compared with $176.2 million at December 31, 2021, primarily attributed to continued payoffs of PPP loans. The Bank had two non-performing loans for the quarter ended June 30, 2022, and one non-performing loan as of December 31, 2021.   OREO properties remained at zero as of June 30, 2022 and December 31, 2021 respectively.

Earnings

The Company posted net interest income of $3.3 million for the three months ended June 30, 2022 and $2.6 million for the same quarter last year. Average interest-earning assets were $385.4 million with average interest-bearing liabilities of $154.5 million, yielding a net interest margin of 3.43% for the second quarter of 2022, as compared to the average interest-earning assets of $326 million with average interest-bearing liabilities of $143.8 million, yielding a net interest margin of 3.17% for the second quarter of 2021.

Non-interest income totaled $594.5.3 thousand for the second quarter of 2022, or an increase of 12.9% as compared with $526.4 thousand earned during the same quarter last year. The majority of the increase is attributed to service charges on deposit accounts and other fees.

General and administrative expenses were $1.9 million for the three months ended June 30, 2022, and $1.7 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.2 million for the second quarter of 2022 and $1.0 million for the same period last year.

Income tax expense was $492 thousand which represents an increase of $150 thousand or 44% for the three months ended June 30, 2022, as compared to $342 thousand for the three months ended June 30, 2021. The effective income tax rate for the second quarter of 2022 and 2021 were approximately 28.5% and 28.3% 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, 2022 and 2021
	June 30, 2022				December 31, 2021
	(unaudited)				(audited)
ASSETS:
Cash and due from banks	$	65,532,718			$	135,593,445
Federal funds sold		-				-
Total cash and cash equivalents		65,532,718				135,593,445
		-
Investment securities available for sale		6,754,523				40,270,538
Investment securities held to maturity		147,370,317				12,435,291
Total investments		154,124,840				52,705,829
Loans
Construction		718,156				414,072
Real estate		139,783,238				125,894,826
Commercial		31,847,131				48,133,781
Installment		138,524				1,741,267
Gross loans		172,487,049				176,183,946
Unearned fees and discounts		(605,511	)			(1,419,084	)
Loans net of unearned fees and discount		171,881,538				174,764,862
Allowance for loan losses		(3,969,967	)			(3,888,480	)
Net loans		167,911,571				170,876,382
Fixed assets, net		5,760,131				5,897,342
Accrued interest receivable		1,021,469				877,104
Stock investments, restricted, at cost		2,045,200				7,871,339
Bank-owned life insurance		7,960,490				2,045,200
Other assets		2,490,260				2,647,812
Total assets	$	406,846,679			$	378,514,453
LIABILITIES:
Deposits
Non-interest bearing	$	214,792,565			$	195,274,304
Interest bearing
NOW and money market		91,053,995				85,144,889
Savings		30,443,494				25,147,965
Time deposits less than $250,000		8,223,753				3,695,546
Time deposits of $250,000 or greater		2,574,278				9,616,481
Total deposits		347,088,085				318,879,185
Accrued interest payable		117,711				130,327
Borrowings from Federal Home Loan Bank (FHLB)		15,000,000				15,000,000
Accrued expenses & other payables		1,597,793				1,817,705
Subordinated debt		10,000,000				10,000,000
Subordinated notes payable to subsidiary trust		3,093,000				3,093,000
Total liabilities		376,896,589				348,920,217
SHAREHOLDERS' EQUITY
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,676,799 shares at June 30, 2022 and December 31, 2021, respectively.		10,502,558				10,502,557
Retained earnings		21,691,938				19,556,872
Accumulated other comprehensive income/(loss)		(2,244,406	)			(465,193	)
Total shareholders' equity		29,950,090				29,594,236
Total liabilities & shareholders' equity	$	406,846,679			$	378,514,453

CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
	For the three months ended						For the six months ended
	June 30						June 30
		2022			2021			2022			2021
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Interest income
Interest and fee income on loans	$	2,591,015		$	2,536,482		$	4,904,212		$	5,184,945
Interest on federal funds sold and FRB deposits		121,723			23,835			174,910			40,100
Interest on time deposits in banks		-			-			-			-
Interest on investment securities		842,810			218,100			1,192,224			431,543
Total interest income		3,555,548			2,778,417			6,271,346			5,656,588
Interest Expense
Interest on deposits		48,804			48,752			91,321			98,546
Other borrowings		212,719			155,818			419,222			277,882
Total interest expense		261,523			204,570			510,543			376,428
Net interest income		3,294,025			2,573,847			5,760,803			5,280,160
Provision for loan losses		250,000			170,000			50,000			370,000
Net interest income after provision for loan losses		3,044,025			2,403,847			5,710,803			4,910,160
Non-interest income
Service charges on deposit accounts		444,237			391,238			853,482			739,336
Other miscellaneous income		71,781			80,061			130,469			141,777
Dividend income from restricted stock		33,460			23,917			61,686			47,025
Income from bank-owned life insurance		45,018			31,162			89,151			61,726
Total non-interest income		594,496			526,378			1,134,788			989,864
Non-interest expenses
Salaries and employee benefits		1,191,030			1,032,909			2,435,342			2,081,133
Occupancy and equipment		152,959			151,628			312,722			307,914
Data and item processing		190,698			164,107			372,179			320,655
Advertising and marketing		25,704			27,236			75,521			54,420
Legal and professional fees		43,770			46,167			87,795			90,432
Regulatory assessments		46,430			36,561			89,098			70,041
Insurance		10,124			10,106			20,053			19,929
Directors' fees and expenses		32,040			32,880			64,200			65,160
Other expenses		219,000			219,444			409,791			514,181
Total non-interest expenses		1,911,755			1,721,038			3,866,701			3,523,865
Income before income tax expense		1,726,766			1,209,187			2,978,890			2,376,159
Income tax expense		491,913			341,717			843,824			670,277
Net income	$	1,234,853		$	867,470		$	2,135,066		$	1,705,882
Basic earnings per share	$	0.46		$	0.32		$	0.80		$	0.64
Diluted earnings per share	$	0.46		$	0.32		$	0.80		$	0.64

	For the three months ended								For the six months ended
	June 30								June 30
		2022				2021				2022				2021
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity		17.68	%			13.00	%			15.00	%			12.69	%
Annualized return on average assets		1.22	%			0.99	%			1.07	%			1.01	%
Net interest margin		3.43	%			3.17	%			3.09	%			3.37	%
Core efficiency ratio		49.16	%			55.51	%			56.07	%			56.20	%
Net chargeoffs/(recoveries) to average loans		-0.011	%			-0.008	%			-0.02	%			-0.02	%
AVERAGE BALANCES
(thousands, unaudited)
Average assets	$	405,447			$	350,226			$	397,719			$	338,983
Average interest-earning assets	$	385,416			$	325,987			$	376,406			$	315,817
Average gross loans	$	175,736			$	196,470			$	175,021			$	196,228
Average deposits	$	355,910			$	303,611			$	348,217			$	291,780
Average equity	$	27,942			$	26,684			$	28,466			$	26,886
CREDIT QUALITY	End of period
(unaudited)	June 30, 2022				December 31, 2021
Non-performing loans	$	453,427			$	115,434
Non-performing loans to total loans		0.26	%			0.07	%
Non-performing loans to total assets		0.11	%			0.03	%
Allowance for loan losses to total loans		2.30	%			2.21	%
Nonperforming assets as a percentage of total loans and OREO		0.26	%			0.07	%
Allowance for loan losses to non-performing loans		875.55	%			3368.57	%
OTHER PERIOD-END STATISTICS
(unaudited)
Shareholders equity to total assets		7.36	%			7.82	%
Net loans to deposits		48.38	%			53.59	%
Non-interest bearing deposits to total deposits		61.88	%			61.24	%
Total capital to total risk-weighted assets		22.74	%			18.30	%
Tier 1 capital to total risk-weighted assets		26.12	%			20.16	%
Company Leverage Ratio		8.16	%			8.84	%