Chino Commercial Bancorp Reports 77% Increase In Net Earnings

Chino Commercial Bancorp

CHINO, Calif., Oct. 21, 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 third quarter ended September 30, 2022. Net earnings for the third quarter of 2022, were $1.3 million, or an increase of 77.2%, as compared with earnings of $718 thousand for the same quarter last year. Net earnings per basic and diluted share were $0.48 for the third quarter of 2022, and $0.27 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer, stated, “The third quarter of 2022 marks a new record for the Company with total Deposits, total Revenue, and Net Earnings all reaching new record highs. The Bank’s value proposition remains very strong, and we continue to attract new customers every month.

Though the economy is showing signs of possible weakening, so far, we have not experienced a significant down-turn in credit quality. At the end of the quarter, the Bank had only one delinquent loan, no in-process foreclosures, and no OREO.”

Financial Condition

At September 30, 2022, total assets were $416.6 million, an increase of $38.1 million or 10.1% over $378.5 million at December 31, 2021. Total deposits increased by $37.0 million or 11.6% to $355.9 million as of September 30, 2022, compared to $318.9 million as of December 31, 2021. At September 30, 2022, the Company’s core deposits represent 98% of the total deposits.

Gross loans increased by 1.2% or $3.7 million as of September 30, 2022 to $178.3 million as compared with $176.2 million at December 31, 2021. The Bank had two non-performing loans for the quarter ended September 30, 2022, and one non-performing loan as of December 31, 2021.   OREO properties remained at zero as of September 30, 2022 and December 31, 2021 respectively.

Earnings

The Company posted net interest income of $3.3 million for the three months ended September 30, 2022 and $2.5 million for the same quarter last year. Average interest-earning assets were $393.5 million with average interest-bearing liabilities of $160.2 million, yielding a net interest margin of 3.33% for the third quarter of 2022, as compared to the average interest-earning assets of $334.5 million with average interest-bearing liabilities of $145.6 million, yielding a net interest margin of 2.91% for the third quarter of 2021.

Non-interest income totaled $608.3 thousand for the third quarter of 2022, or an increase of 11.7% as compared with $544.6 thousand earned during the same quarter last year. The majority of the increase was attributed to service charges on deposit accounts.

General and administrative expenses were $2.0 million for the three months ended September 30, 2022, and $1.8 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.3 million for the third quarter of 2022 and $1.1 million for the same period last year.

Income tax expense was $506.5 thousand which represents an increase of $233 thousand or 44% for the three months ended September 30, 2022, as compared to $273.4 thousand for the three months ended September 30, 2021. The effective income tax rate for the third quarter of 2022 and 2021 were approximately 28.5% and 27.6% 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, Senior 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
	September 30, 2022 and 2021
		September 30, 2022				December 31, 2021
		(unaudited)				(audited)
	ASSETS:
	Cash and due from banks	$	57,195,216			$	135,593,445
	Federal funds sold		-				-
	Total cash and cash equivalents		57,195,216				135,593,445
	Interest-bearing deposits in other banks		-				-
	Investment securities available for sale		6,224,948				40,270,538
	Investment securities held to maturity		160,080,875				12,435,291
	Total investments		166,305,823				52,705,829
	Loans
	Construction		1,223,140				414,072
	Real estate		145,313,932				125,894,826
	Commercial		31,635,685				48,133,781
	Installment		132,776				1,741,267
	Gross loans		178,305,533				176,183,946
	Unearned fees and discounts		(561,576	)			(1,419,084	)
	Loans net of unearned fees and discount		177,743,957				174,764,862
	Allowance for loan losses		(4,078,299	)			(3,888,480	)
	Net loans		173,665,658				170,876,382
	Fixed assets, net		5,695,525				5,897,342
	Accrued interest receivable		1,022,524				877,104
	Stock investments, restricted, at cost		2,045,200				7,871,339
	Bank-owned life insurance		8,007,214				2,045,200
	Other assets		2,661,018				2,647,812
	Total assets	$	416,598,178			$	378,514,453
	LIABILITIES:
	Deposits
	Non-interest bearing	$	219,895,119			$	195,274,304
	Interest bearing
	NOW and money market		93,212,934				85,144,889
	Savings		31,908,897				25,147,965
	Time deposits less than $250,000		7,913,244				3,695,546
	Time deposits of $250,000 or greater		2,920,458				9,616,481
	Total deposits		355,850,652				318,879,185
	Accrued interest payable		179,785				130,327
	Borrowings from Federal Home Loan Bank (FHLB)		15,000,000				15,000,000
	Accrued expenses & other payables		1,573,362				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		385,696,799				348,920,217
	SHAREHOLDERS' EQUITY
	Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,676,799 shares at September 30, 2022 and December 31, 2021, respectively.		10,502,558				10,502,557
	Retained earnings		22,964,278				19,556,872
	Accumulated other comprehensive income/(loss)		(2,565,457	)			(465,193	)
	Total shareholders' equity		30,901,379				29,594,236
	Total liabilities & shareholders' equity	$	416,598,178			$	378,514,453

CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
	For the three months ended						For the nine months ended
	September 30						September 30
		2022			2021			2022			2021
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Interest income
Interest and fee income on loans	$	2,289,166		$	2,458,482		$	7,193,378		$	7,643,426
Interest on federal funds sold and FRB deposits		315,415			42,915			490,324			83,015
Interest on time deposits in banks		-			-			-			-
Interest on investment securities		1,004,274			206,101			2,196,498			637,644
Total interest income		3,608,855			2,707,498			9,880,200			8,364,085
Interest Expense
Interest on deposits		86,555			46,825			177,876			145,370
Other borrowings		222,041			207,096			641,264			486,770
Total interest expense		308,596			253,921			819,140			632,140
Net interest income		3,300,259			2,453,577			9,061,060			7,731,945
Provision for loan losses		100,000			185,000			150,000			555,000
Net interest income after provision for loan losses		3,200,259			2,268,577			8,911,060			7,176,945
Non-interest income
Service charges on deposit accounts		454,030			394,024			1,307,511			1,133,360
Other miscellaneous income		78,877			81,984			209,346			223,760
Dividend income from restricted stock		28,693			25,903			90,379			72,928
Income from bank-owned life insurance		46,724			42,669			135,876			104,395
Total non-interest income		608,324			544,580			1,743,112			1,534,443
Non-interest expenses
Salaries and employee benefits		1,266,765			1,092,730			3,702,106			3,173,864
Occupancy and equipment		166,159			153,998			478,881			461,912
Data and item processing		183,504			170,018			555,683			490,673
Advertising and marketing		21,952			29,035			106,939			91,121
Legal and professional fees		44,850			49,355			132,645			137,995
Regulatory assessments		56,630			37,761			145,727			107,801
Insurance		10,320			10,106			30,373			30,035
Directors' fees and expenses		32,160			31,920			96,360			97,080
Other expenses		247,373			246,677			647,176			753,192
Total non-interest expenses		2,029,713			1,821,600			5,895,890			5,343,673
Income before income tax expense		1,778,870			991,557			4,758,282			3,367,715
Income tax expense		506,530			273,434			1,350,354			943,711
Net income	$	1,272,340		$	718,123		$	3,407,928		$	2,424,004
Basic earnings per share	$	0.48		$	0.27		$	1.27		$	0.91
Diluted earnings per share	$	0.48		$	0.27		$	1.27		$	0.91

		For the three months ended								For the nine months ended
		September 30								September 30
			2022				2021				2022				2021
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity			16.62	%			10.71	%			15.22	%			12.03	%
Annualized return on average assets			1.23	%			0.80	%			1.13	%			0.93	%
Net interest margin			3.33	%			2.91	%			3.17	%			3.21	%
Core efficiency ratio			51.93	%			60.76	%			54.57	%			57.67	%
Net chargeoffs/(recoveries) to average loans			-0.008	%			-0.011	%			-0.03	%			-0.03	%
AVERAGE BALANCES
(thousands, unaudited)
Average assets		$	413,023			$	360,266			$	402,883			$	346,155
Average interest-earning assets		$	393,530			$	334,456			$	382,177			$	322,099
Average gross loans		$	176,252			$	180,478			$	175,436			$	190,920
Average deposits		$	362,549			$	311,254			$	353,047			$	298,413
Average equity		$	30,620			$	26,830			$	29,859			$	26,867
CREDIT QUALITY		End of period
(unaudited)		September 30, 2022				December 31, 2021
Non-performing loans		$	411,992			$	115,434
Non-performing loans to total loans			0.23	%			0.07	%
Non-performing loans to total assets			0.10	%			0.03	%
Allowance for loan losses to total loans			2.29	%			2.21	%
Nonperforming assets as a percentage of total loans and OREO			0.23	%			0.07	%
Allowance for loan losses to non-performing loans			989.90	%			3368.57	%
OTHER PERIOD-END STATISTICS
(unaudited)
Shareholders equity to total assets			7.42	%			7.82	%
Net loans to deposits			48.80	%			53.59	%
Non-interest bearing deposits to total deposits			61.79	%			61.24	%
Total capital to total risk-weighted assets			23.53	%			18.30	%
Tier 1 capital to total risk-weighted assets			27.18	%			20.16	%
Company Leverage Ratio			8.85	%			8.84	%