Chino Commercial Bancorp Reports 6% Increase In Net Earnings

Chino Commercial Bancorp

CHINO, Calif., April 19, 2024 (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 first quarter ended March 31, 2024.

Net earnings for the first quarter of 2024, were $1.24 million, which represents an increase of $75.2 thousand or 6.4% in comparison with the same quarter last year. Net earnings per basic and diluted share were $0.39 for the first quarter of 2024 and $0.36 for the same quarter in 2023, respectively.

Dann H. Bowman, President and Chief Executive Officer, stated, “We are very pleased with the Bank’s performance in Q1’24. Loan quality remains very strong, with the Bank having only one delinquent loan at quarter-end, and no pending foreclosures, or OREO. Despite rising costs of doing business, so far, our small business customers have been able to adjust, and in several cases we have even seen improved financial performance. At this time the Bank has adequate capital and liquidity to continue to lend to its customers, and is expanding lending in the Inland Empire.

In 2023 the Bank became a member of the Card Brand Association and began to directly process Merchant Services for its customers. Not only does this service introduce an additional non-interest source of revenue, but the Bank has also been able to provide significant savings and transparency to a number of our small business customers. Since the Pandemic of 2020, efficient and cost effective processing of electronic payments has become a very important part of managing cash flow and business operations. In the future we can envision expanding this service outside of our immediate market; and the revenue from this service becoming an increasingly important part of the Bank’s business model.

In March, the Bank received preliminary approval from the OCC to open a new branch office in Corona. During March the Bank also completed the purchase of a commercial office building, at 1035 Montecito Avenue, Corona, CA, which will serve as the new Corona branch office. The Corona branch will be the Bank’s fifth location, and is expected to open in 4Q’24.”

Financial Condition

At March 31, 2024, total assets were $461.5 million, an increase of $15.1 million or 3.38% over $446.4 million at December 31, 2023. Total deposits increased by $15.4 million or 4.8% to $335.2 million as of March 31, 2024, compared to $319.8 million as of December 31, 2023. At March 31, 2024, the Company’s core deposits represent 98.08% of the total deposits.

Gross loans increased by $1.5 million or 1.0% to $180.5 million as of March 31, 2024, compared to $179.0 million as of December 31, 2023. The Bank had three non-performing loans for the quarter ended March 31, 2024, and as of December 31, 2023.   OREO properties remained at zero as of March 31, 2024 and December 31, 2023 respectively.

Earnings

The Company posted net interest income of $3.3 million for the three months ended March 31, 2024 and $3.2 million or the same quarter last year, respectively. Average interest-earning assets were $469.3 million with average interest-bearing liabilities of $276.9 million, yielding a net interest margin of 2.87% for the first quarter of 2024, as compared to the average interest-earning assets of $380.3 million with average interest-bearing liabilities of $168.7 million, yielding a net interest margin of 3.39% for the first quarter of 2023.

Non-interest income totaled $773.5 thousand for the first quarter of 2024, or an increase of 30.05% as compared with $594.8 thousand earned during the same quarter last year. The majority of the increase is attributed to the Company’s merchant services processing revenue that reached $132.8 thousand, representing an increase of $91.8 thousand during the first quarter as compared to $41.0 thousand for the same period last year.

General and administrative expenses were $2.4 million for the three months ended March 31, 2024, and $2.1 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.5 million for the first quarter of 2023 and $1.4 million for the same period last year.

Income tax expense was $490 thousand, which represents an increase of $25 thousand or 5.47% for the three months ended March 31, 2024, as compared to $464 thousand for the same quarter last year. The effective income tax rate for the first quarter of 2024 was approximately 28.2%, and 28.4% for the same quarter last year.

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.

Chino Commercial Bankcorp and Subsidiary
Consolidated Statements of Financial Condition
					As of
					3/31/2024				12/31/2023
					unaudited				audited
Assets
	Cash and due from banks				$	44,803,814			$	35,503,719
		Cash and cash equivalents				44,803,814				35,503,719
	Fed funds sold					30,175				25,218
						30,175				25,218
	Investment securities available for sale , net of zero allowance for credit losses					6,615,525				6,736,976
	Investment securities held to maturity , net of zero allowance for credit losses					210,812,408				208,506,305
			Total investments			217,427,933				215,243,282
	Loans held for investment, net of allowance for credit losses of
		$4,443,654 in 2023, and $4,465,622 in 2023				175,570,771				174,352,293
	Stock investments, restricted, at cost					3,126,100				3,126,100
	Fixed assets, net					7,225,018				5,466,358
	Accrued interest receivable					1,596,955				1,439,178
	Bank owned life insurance					8,303,469				8,247,174
	Other assets					3,398,462				3,010,916
				Total assets	$	461,482,698			$	446,414,237
Liabilities
	Deposits
	Noninterest-bearing					175,979,729				167,131,411
	Interest-bearing					159,203,159				152,669,374
				Total deposits		335,182,888				319,800,785
	Federal Home Loan Bank advances					8,000,000				15,000,000
	Federal Reserve Bank borrowings					64,000,000				57,000,000
	Subordinated debt					10,000,000				10,000,000
	Subordinated notes payable to subsidiary trust					3,093,000				3,093,000
	Accrued interest payable					722,181				2,156,153
	Other liabilities					1,789,798				1,876,474
				Total liabilities		422,787,867				408,926,412
Shareholders' Equity
	Common stock, no par value, 10,000,000 shares authorized
		and 3,211,970 shares issued and outstanding
		at March 31, 2024 and December 31, 2023				10,502,558				10,502,557
	Retained earnings					30,164,405				28,920,732
	Accumulated other comprehensive loss - unrecognized
		loss on available for sale, net of taxes				(1,972,133	)			(1,935,464	)
				Total shareholders' equity		38,694,830				37,487,824
				Total liabilities and shareholders' equity	$	461,482,698			$	446,414,237

Chino Commercial Bankcorp and Subsidiary
Consolidated Statements of Net Income
			For the three month ended
			31-Mar
				2024				2023
			(unaudited)				(unaudited)
Interest income
	Interest and fees on loans			2,727,801				2,390,159
	Interest on investment securities			1,936,105				1,133,586
	Other interest income			1,030,948				405,234
		Total interest income		5,694,854				3,928,979
Interest expense
	Interest on deposits			1,032,935				376,861
	Interest on borrowings			1,312,693				371,403
		Total interest expense		2,345,628				748,264
Net interest income				3,349,226				3,180,716
Provision for loan losses				(2,933	)			2,136
Net interest income after provision for loan losses				3,352,159				3,178,580
Noninterest income
	Service charges and fees on deposit accounts			439,857				359,899
	Interchange fees			92,271				103,159
	Earnings from bank-owned life insurance			56,295				46,311
	Merchant services processing			132,768				40,955
	Other miscellaneous income			52,272				44,439
		Total noninterest income		773,464				594,763
Noninterest expense
	Salaries and employee benefits			1,501,427				1,352,935
	Occupancy and equipment			160,581				153,591
	Merchant services processing			71,209				10,671
	Other expenses			659,466				623,795
		Total noninterest expense		2,392,683				2,140,992
Income before income tax expense				1,732,939				1,632,350
Provision for income taxes				489,266				463,901
Net income			$	1,243,673			$	1,168,449
Basic earnings per share			$	0.39			$	0.36
Diluted earnings per share			$	0.39			$	0.36

Chino Commercial Bankcorp and Subsidiary
Financial Highlights
	For the three month ended
	31-Mar
Key Financial Ratios	2024			2023
(unaudited)
Annualized return on average equity	13.07	%		14.26	%
Annualized return on average assets	1.01	%		1.16	%
Net interest margin	2.87	%		3.39	%
Core efficiency ratio	58.04	%		56.71	%
Net chargeoffs/(recoveries) to average loans	-0.010	%		-0.008	%
Average Balances
(thousands, unaudited)
Average assets	494,406			401,948
Average interest-earning assets	469,307			380,256
Average interest-bearing liabilities	276,918			168,672
Average gross loans	182,133			181,162
Average deposits	318,818			328,448
Average equity	38,073			32,770
	End of period
	3/31/2024			12/31/2023
Credit Quality
Non-performing loans	475,062			492,242
Non-performing loans to total loans	0.26	%		0.27	%
Non-performing loans to total assets	0.10	%		0.11	%
Allowance for credit losses to total loans	2.46	%		2.49	%
Nonperforming assets as a percentage of total loans and OREO	0.26	%		0.27	%
Allowance for credit losses to non-performing loans	935.38	%		905.82	%
Other Period-end Statistics
Shareholders equity to total assets	8.38	%		8.40	%
Net loans to deposits	52.38	%		54.52	%
Non-interest bearing deposits to total deposits	52.50	%		52.26	%
Company leverage ratio	8.85	%		9.26	%

CONTACT: Contact: Dann H. Bowman, President and CEO or Melinda M. Milincu, Senior Vice President and CFO, Chino Commercial Bancorp and Chino Commercial Bank, N.A., 14245 Pipeline Avenue, Chino, CA. 91710, (909) 393-8880.