Chino Commercial Bancorp Reports 85% Increase In Net Earnings

Chino Commercial Bancorp

CHINO, Calif., Jan. 20, 2023 (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 fourth quarter ended December 31, 2022. Net earnings for the fourth quarter of 2022, were $1.3 million, or an increase of 84.6%, as compared with earnings of $706 thousand for the same quarter last year. Net earnings per basic and diluted share was $0.49 for the fourth quarter of 2022, and $0.26 for the same quarter last year.

Net earnings for the fiscal year ended December 31, 2022 increased by 50.5% or by $1.6 million to $4.7 million, as compared to $3.1 million for fiscal year 2021. Net earnings per basic and diluted share was $1.76 for the fiscal year 2021, and $1.17 for fiscal year 2021.

Dann H. Bowman, President and Chief Executive Officer, stated “Despite the rapidly rising interest rate environment, 2022 was a very good year for the Bank, in setting new records for Deposits, Revenue and Earnings and Earnings Per Share. We do see some weakness in the economy over the next 18 months, however, even this has the potential to create opportunities to expand the customer base and grow the company. 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 innovate as we navigate through challenging times.”

Financial Condition

At December 31, 2022, total assets were $399.7 million, an increase of $21.1 million or 5.6% over $378.5 million at December 31, 2021. Total deposits increased by $18.6 million or 5.8% to $337.5 million as of December 31, 2022, compared to $318.9 million as of December 31, 2021. At December 31, 2022, the Company’s core deposits represent 98.3% of the total deposits.

Gross loans increased by 2.8% or $5.0 million as of December 31, 2022 to $181.1 million as compared with $176.2 million at December 31, 2021. The Bank had two non-performing loans for the quarter ended December 31, 2022, and one non-performing loan as of December 31, 2021.   OREO properties remained at zero as of December 31, 2022 and December 31, 2021 respectively.

Earnings

The Company posted net interest income of $3.4 million for the three months ended December 31, 2022 and $2.6 million for the same quarter last year. Average interest-earning assets were $408.4 million with average interest-bearing liabilities of $158.7 million, yielding a net interest margin of 3.52% for the fourth quarter of 2022, as compared to the average interest-earning assets of $374.9 million with average interest-bearing liabilities of $145.9 million, yielding a net interest margin of 2.63% for the fourth quarter of 2021.

Non-interest income totaled $614.6 thousand for the fourth quarter of 2022, or an increase of 1.4% as compared with $606.2 thousand earned during the same quarter last year. The majority of the increase is attributed to service charges on deposit accounts.

General and administrative expenses were $2.2 million for the three months ended December 31, 2022, and $2.0 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.4 million for the fourth quarter of 2022 and $1.2 million for the same period last year.

Income tax expense was $513.8 thousand which represents an increase of $254.7 thousand or 98.3% for the three months ended December 31, 2022, as compared to $259.1 thousand for the three months ended December 31, 2021. The effective income tax rate for the fourth quarter of 2022 and 2021 were approximately 28.2% and 26.8% 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
	December 31, 2022 and 2021
		December 31, 2022				December 31, 2021
		(unaudited)				(audited)
	ASSETS:
	Cash and due from banks	$	36,436,018			$	135,593,445
	Federal funds sold		-				-
	Total cash and cash equivalents		36,436,018				135,593,445
	Interest-bearing deposits in other banks		-				-
	Investment securities available for sale		6,347,231				40,270,538
	Investment securities held to maturity		160,668,959				12,435,291
	Total investments		167,016,190				52,705,829
	Loans
	Construction		2,252,407				414,072
	Real estate		146,467,077				125,894,826
	Commercial		32,272,185				48,133,781
	Installment		156,688				1,741,267
	Credit Cards		0				-
	Gross loans		181,148,357				176,183,946
	Unearned fees and discounts		(492,058	)			(1,419,084	)
	Loans net of unearned fees and discount		180,656,299				174,764,862
	Allowance for loan losses		(4,100,516	)			(3,888,480	)
	Net loans		176,555,783				170,876,382
	Fixed assets, net		5,628,950				5,897,342
	Accrued interest receivable		1,153,613				877,104
	Stock investments, restricted, at cost		2,045,200				7,871,339
	Bank-owned life insurance		8,054,491				2,045,200
	Other assets		2,763,767				2,647,812
	Total assets	$	399,654,012			$	378,514,453
	LIABILITIES:
	Deposits
	Non-interest bearing	$	204,189,323			$	195,274,304
	Interest bearing
	NOW and money market		95,203,888				85,144,889
	Savings		27,195,883				25,147,965
	Time deposits less than $250,000		8,193,190				3,695,546
	Time deposits of $250,000 or greater		2,670,980				9,616,481
	Total deposits		337,453,264				318,879,185
	Accrued interest payable		124,947				130,327
	Borrowings from Federal Home Loan Bank (FHLB)		15,000,000				15,000,000
	Accrued expenses & other payables		1,633,098				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		367,304,309				348,920,217
	SHAREHOLDERS' EQUITY
	Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,676,799 shares at December 31, 2022 and December 31, 2021, respectively.		10,502,558				10,502,557
	Retained earnings		24,269,527				19,556,872
	Accumulated other comprehensive income/(loss)		(2,422,382	)			(465,193	)
	Total shareholders' equity		32,349,703				29,594,236
	Total liabilities & shareholders' equity	$	399,654,012			$	378,514,453

CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
	For the three months ended						For the twelve months ended
	December 31						December 31
		2022			2021			2022			2021
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Interest income
Interest and fee income on loans	$	2,376,312		$	2,271,284		$	9,569,690		$	9,914,710
Interest on federal funds sold and FRB deposits		356,363			47,599			846,687			130,615
Interest on time deposits in banks		-			-			-			-
Interest on investment securities		1,127,397			242,681			3,323,894			880,324
Total interest income		3,860,072			2,561,564			13,740,271			10,925,649
Interest Expense
Interest on deposits		185,046			42,090			362,922			187,460
Other borrowings		233,400			207,193			874,663			693,963
Total interest expense		418,446			249,283			1,237,585			881,423
Net interest income		3,441,626			2,312,281			12,502,686			10,044,226
Provision for loan losses		-			-			150,000			555,000
Net interest income after provision for loan losses		3,441,626			2,312,281			12,352,686			9,489,226
Non-interest income
Service charges on deposit accounts		453,361			412,268			1,760,872			1,545,628
Other miscellaneous income		82,695			119,487			292,040			343,246
Dividend income from restricted stock		31,262			28,693			121,641			101,622
Income from bank-owned life insurance		47,276			45,711			183,152			150,107
Total non-interest income		614,594			606,159			2,357,705			2,140,603
Non-interest expenses
Salaries and employee benefits		1,398,248			1,234,412			5,100,354			4,408,276
Occupancy and equipment		158,265			157,939			637,146			619,851
Data and item processing		187,819			173,749			743,502			664,422
Advertising and marketing		34,101			26,664			152,684			126,457
Legal and professional fees		77,250			900			209,895			138,895
Regulatory assessments		53,918			41,768			199,645			149,569
Insurance		10,713			10,106			41,086			40,141
Directors' fees and expenses		37,470			32,520			133,830			129,600
Other expenses		279,416			274,294			915,470			1,018,813
Total non-interest expenses		2,237,200			1,952,352			8,133,612			7,296,024
Income before income tax expense		1,819,020			966,088			6,576,779			4,333,805
Income tax expense		513,771			259,105			1,864,125			1,202,816
Net income	$	1,305,249		$	706,983		$	4,712,654		$	3,130,989
Basic earnings per share	$	0.49		$	0.26		$	1.76		$	1.17
Diluted earnings per share	$	0.49		$	0.26		$	1.76		$	1.17

		For the three months ended								For the twelve months ended
		December 31								December 31
			2022				2021				2022				2021
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity			19.02	%			10.68	%			16.81	%			11.70	%
Annualized return on average assets			1.28	%			0.75	%			1.17	%			0.89	%
Net interest margin			3.52	%			2.63	%			3.26	%			3.06	%
Core efficiency ratio			55.15	%			66.90	%			54.73	%			59.88	%
Net chargeoffs/(recoveries) to average loans			-0.008	%			-0.008	%			-0.04	%			-0.03	%
AVERAGE BALANCES
(thousands, unaudited)
Average assets		$	408,424			$	374,871			$	404,283			$	353,393
Average interest-earning assets		$	388,271			$	348,574			$	383,713			$	328,772
Average gross loans		$	180,687			$	175,748			$	176,759			$	187,096
Average deposits		$	357,027			$	325,436			$	354,050			$	305,234
Average equity		$	27,450			$	26,488			$	28,040			$	26,772
CREDIT QUALITY		End of period
(unaudited)		December 31, 2022				December 31, 2021
Non-performing loans		$	404,095			$	115,434
Non-performing loans to total loans			0.22	%			0.07	%
Non-performing loans to total assets			0.10	%			0.03	%
Allowance for loan losses to total loans			2.26	%			2.21	%
Nonperforming assets as a percentage of total loans and OREO			0.22	%			0.07	%
Allowance for loan losses to non-performing loans			1014.74	%			3368.57	%
OTHER PERIOD-END STATISTICS
(unaudited)
Shareholders equity to total assets			8.09	%			7.82	%
Net loans to deposits			52.32	%			53.59	%
Non-interest bearing deposits to total deposits			60.51	%			61.24	%
Total capital to total risk-weighted assets			24.33	%			18.30	%
Tier 1 capital to total risk-weighted assets			28.24	%			20.16	%
Company Leverage Ratio			9.27	%			8.84	%
Common equity tier 1			28.24	%			20.16	%