Chino Commercial Bancorp Reports 14.5% Increase in Full Year Earnings

CHINO, Calif., Jan. 30, 2020 (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 and year ended December 31, 2019.  Net earnings for the fourth quarter 2019, were $502 thousand, or an decrease of 15.62%, as compared with earnings of $595 thousand for the same quarter last year.  Net earnings for the fiscal year ended December 31, 2019 increased by 14.5% or by $323 thousand to $2.6 million, as compared to $2.2 million for fiscal year 2018.

Net earnings per basic and diluted share was $0.23 for the fourth quarter of 2019 as compared with $0.27 for the same quarter last year.  Net earnings per basic and diluted share was $1.14 for the year ended December 31, 2019, as compared with $1.00 as December 31, 2018, respectively.

Dann H. Bowman, President and Chief Executive Officer, stated: “We are very pleased with the performance of the Bank during 2019.  The Bank set new record levels for total Deposits, total Loans, Revenue and Net Earnings.  The economy of the Inland Empire continues to improve and expand, allowing for continued business growth into the future.  We have a great team, a great market, and we are excited about the prospects for the Company over the next few years.”

Financial Condition

At December 31, 2019, total assets were $230 million, an increase of $27.5 million or 13.6% over $202 million at December 31, 2018.  Total deposits increased by 5.3% or $9 million to $180 million as of December 31, 2019, compared to $171 million as of December 31, 2018. At December 31, 2019, the Company’s core deposits represent 94% of the total deposits.

Gross loans increased by 9.2% or $12 million as of December 31, 2019 to $144 million, as compared with $132 million as of December 31, 2018.  The Bank had one non-performing loan for the quarter ended December 31, 2019, and none as of December 31, 2018.  OREO properties remained at zero as of December 31, 2019 and December 31, 2018 respectively.

Earnings

For the year ended December 31, 2019, net interest income was $8.1 million, an increase of 11.4% or $834 thousand in comparison to $7.3 million as of December 31, 2018. The Company posted net interest income of $1.97 million and $1.93 million for the three months ended December 31, 2019 and 2018 respectively, or an increase of $40 thousand or 2.1%. Average interest-earning assets were $177.3 million with average interest-bearing liabilities of $119.4 million, yielding a net interest margin of 4.41% for the fourth quarter of 2019, as compared to the average interest-earning assets of $179.0 million with average interest-bearing liabilities of $91.5 million, yielding a net interest margin of 4.27% for the fourth quarter of 2018.

For the year ended December 31, 2019, non-interest income was $1.9 million, an increase of 22.9% or $358 thousand in comparison to $1.6 million as of December 31, 2018. Non-interest income totaled $457 thousand for the fourth quarter of 2019, or an increase of 7.6% as compared with $424 thousand earned during the same quarter last year. Service charges on deposit accounts increased over the fourth quarter by $39.6 thousand or 11.5% to $383 thousand, primarily due to an increase in income from returned items, overdraft charges, and analysis fees. Dividend income from restricted stock decreased to $17 thousand for the fourth quarter of 2019, compared to $35 thousand for the same quarter in 2018, due to the Federal Home Loan Bank and Pacific Coast Bankers Bank changes in dividend payout percentage policy. Income from Bank-owned life insurance increased by $7.2 thousand for the fourth quarter of 2019, compared to $25 thousand for the same quarter in 2018, due to a new life insurance policy added during 2019.

For the year ended December 31, 2019, general and administrative expenses were $6.5 million, an increase of 15.8% or $886 thousand in comparison to $5.6 million as of December 31, 2018. General and administrative expenses were $1.7 million for the three months ended December 31, 2019, and $1.5 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1 million for the fourth quarter of 2019, as compared to $973 thousand for the same quarter last year and $3.9 million and $3.6 million for the years ended December 2019 and 2018 respectively. Occupancy and equipment increase year over year by $110 thousand due to the opening of our new branch in Upland during the fourth quarter of 2018.

For the year ended December 31, 2019, income tax expense was $985 thousand, a decrease of 10.3% or $92 thousand in comparison to $893 million as of December 31, 2018. Income tax expense was $197 thousand which represents a decrease of $41 thousand or 17.5% for the three months ended December 31, 2019, as compared to $239 thousand for the three months ended December 31, 2018. The effective income tax rate for the fourth quarter of 2019 and 2018 is approximately 28.2% and 28.6% respectively, and for the year ending December 31, 2019 and 2018, the effective income tax rates were 27.8% and 28.6% 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, Vice President and CFO, Chino Commercial Bancorp and Chino Commercial Bank, N.A., 14245 Pipeline Avenue, Chino, Ca. 91710, [phone].

	CHINO COMMERCIAL BANCORP
	CONSOLIDATED BALANCE SHEET
	December 31, 2019 and December 31, 2018
		December 31, 2019				December 31, 2018
		(unaudited)				(audited)
	ASSETS:
	Cash and due from banks	$	4,363,753			$	25,451,866
	Federal funds sold		32,415,000				-
	Total cash and cash equivalents		36,778,753				25,451,866
	Interest-bearing deposits in other banks		496,000				1,988,000
	Investment securities available for sale		7,977,936				5,914,736
	Investment securities held to maturity (fair value approximates
	$28,625,251 at December 31, 2019 and $26,092,226 at December 31, 2018)		28,367,056				26,623,343
	Total investments		36,840,992				34,526,079
	Loans
	Construction		-				-
	Real estate		115,633,626				107,902,821
	Commercial		28,522,543				24,029,989
	Installment		232,328				241,077
	Gross loans		144,388,497				132,173,887
	Unearned fees and discounts		(438,380	)			(345,054	)
	Loans net of unearned fees and discount		143,950,117				131,828,833
	Allowance for loan losses		(2,391,765	)			(2,292,478	)
	Net loans		141,558,352				129,536,355
	Fixed assets, net		6,401,773				6,063,350
	Accrued interest receivable		619,856				585,506
	Stock investments, restricted, at cost		1,440,900				1,248,400
	Bank-owned life insurance		4,595,584				3,484,885
	Other assets		1,270,936				1,091,805
	Total assets	$	229,507,146			$	201,988,246
	LIABILITIES:
	Deposits
	Non-interest bearing	$	88,412,668			$	83,237,014
	Interest bearing
	NOW and money market		64,520,387				66,046,085
	Savings		12,209,281				9,870,263
	Time deposits less than $250,000		9,537,555				4,191,717
	Time deposits of $250,000 or greater		5,471,451				7,674,742
	Total deposits		180,151,342				171,019,821
	Accrued interest payable		203,246				64,794
	Borrowings from Federal Home Loan Bank (FHLB)		20,000,000				5,000,000
	Accrued expenses & other payables		1,686,981				1,101,417
	Subordinated notes payable to subsidiary trust		3,093,000				3,093,000
	Total liabilities		205,134,569				180,279,032
	SHAREHOLDERS' EQUITY
	Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,230,808 shares at December 31, 2019 and December 31, 2018, respectively.
			10,502,557				10,502,557
	Retained earnings		13,803,528				11,251,915
	Accumulated other comprehensive income/(loss)		66,492				(45,258	)
	Total shareholders' equity		24,372,577				21,709,214
	Total liabilities & shareholders' equity	$	229,507,146			$	201,988,246

	CHINO COMMERCIAL BANCORP
	CONSOLIDATED STATEMENTS OF NET INCOME
		For the three months ended							For the year ended
		December 31							December 31
			2019				2018			2019			2018
		(unaudited)				(unaudited)			(unaudited)			(audited)
	Interest income
	Interest and fee income on loans	$	1,982,610			$	1,828,378		$	7,884,573		$	7,012,709
	Interest on federal funds sold and FRB deposits		184,875				104,132			510,650			422,577
	Interest on time deposits in banks		3,219				12,151			35,077			27,899
	Interest on investment securities		167,707				204,829			1,078,908			659,707
	Total interest income		2,338,411				2,149,490			9,509,208			8,122,892
	Interest Expense
	Interest on deposits		230,243				189,493			935,215			612,912
	Other borrowings		139,476				31,785			413,749			183,636
	Total interest expense		369,719				221,278			1,348,964			796,548
	Net interest income		1,968,692				1,928,212			8,160,244			7,326,344
	Provision for loan losses		-				-			40,000			150,000
	Net interest income after provision for loan losses		1,968,692				1,928,212			8,120,244			7,176,344
	Non-interest income
	Service charges on deposit accounts		382,839				343,216			1,530,853			1,262,496
	Other miscellaneous income		24,567				21,159			190,567			86,647
	Dividend income from restricted stock		17,267				35,101			88,281			115,362
	Income from bank-owned life insurance		31,901				24,666			110,699			98,130
	Total non-interest income		456,574				424,142			1,920,400			1,562,635
	Non-interest expenses
	Salaries and employee benefits		1,002,259				973,047			3,941,211			3,568,823
	Occupancy and equipment		155,473				155,086			632,501			522,458
	Data and item processing		123,409				102,410			469,176			390,485
	Advertising and marketing		30,867				7,075			97,035			90,359
	Legal and professional fees		217,088				37,955			430,050			150,218
	Regulatory assessments		(12,940	)			34,435			81,578			135,419
	Insurance		10,295				9,032			37,911			35,599
	Directors' fees and expenses		32,742				29,266			137,142			117,710
	Other expenses		166,708				169,824			675,289			604,653
	Total non-interest expenses		1,725,901				1,518,130			6,501,893			5,615,724
	Income before income tax expense		699,365				834,224			3,538,751			3,123,255
	Income tax expense		196,971				238,860			984,794			892,659
	Net income	$	502,394			$	595,364		$	2,553,957		$	2,230,596
	Basic earnings per share	$	0.23			$	0.27		$	1.14		$	1.00
	Diluted earnings per share	$	0.23			$	0.27		$	1.14		$	1.00

			For the three months ended								For the year ended
			December 31								December 31
				2019				2018				2019				2018
	KEY FINANCIAL RATIOS
	(unaudited)
	Annualized return on average equity			8.31	%			11.43	%			11.03	%			12.34	%
	Annualized return on average assets			0.85	%			1.22	%			1.17	%			1.16	%
	Net interest margin			4.41	%			4.27	%			4.46	%			4.14	%
	Core efficiency ratio			71.16	%			64.54	%			64.50	%			63.18	%
	Net chargeoffs/(recoveries) to average loans			0.002	%			-0.013	%			-0.05	%			-0.02	%
	AVERAGE BALANCES
	(thousands, unaudited)
	Average assets		$	235,723			$	195,986			$	219,167			$	193,120
	Average interest-earning assets		$	177,259			$	179,009			$	183,108			$	176,829
	Average gross loans		$	136,963			$	129,717			$	136,504			$	127,705
	Average deposits		$	186,587			$	170,063			$	179,226			$	162,393
	Average equity		$	24,182			$	20,830			$	23,156			$	18,074
	CREDIT QUALITY		End of period
	(unaudited)		December 31, 2019				December 31, 2018
	Non-performing loans		$	120,423			$	-
	Non-performing loans to total loans			0.08	%			0.00	%
	Non-performing loans to total assets			0.05	%			0.00	%
	Allowance for loan losses to total loans			1.66	%			1.73	%
	Nonperforming assets as a percentage of total loans and OREO			0.08	%			0.00	%
	Allowance for loan losses to non-performing loans			1986.14	%			n/a
	OTHER PERIOD-END STATISTICS
	(unaudited)
	Shareholders equity to total assets			10.62	%			10.75	%
	Net loans to deposits			78.58	%			75.74	%
	Non-interest bearing deposits to total deposits			49.08	%			48.67	%
	Total capital to total risk-weighted assets			18.30	%			19.19	%
	Tier 1 capital to total risk-weighted assets			20.16	%			20.93	%
	Tier 1 leverage ratio			13.74	%			14.80	%
	Common equity tier 1			20.16	%			20.93	%