Chino Commercial Bancorp Reports First Quarter Earnings

CHINO, Calif., April 17, 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 first quarter ended March 31, 2020.  Net earnings for the first quarter 2020, were $614 thousand, or an decrease of 1.73%, as compared with earnings of $625 thousand for the same quarter last year. The decrease in earnings is primarily attributed to an increase in provision for loan losses due to current economic condition created by the COVID-19 pandemic. Net earnings per basic and diluted share was $0.28 for the first quarter of 2020, same as for the same quarter last year. 

Dann H. Bowman, President and Chief Executive Officer, stated: “The beginning of the year started out very strong, however, the current economic, political and health conditions in our community are very troubling.  With the statewide 'Shelter at Home' order in place, initial jobless claims hit an all time record of 6.6 million last week.  The CARE Act allocated roughly $2 Trillion to be sent to individuals and businesses, however, the process for distribution seems to be getting a slow start.

“Because the Bank specializes in providing services to small businesses, we have experienced significant demand for the new SBA Payroll Protection Program loans (PPP).  In the last 10 days requests for PPP loans have become overwhelming, however, we are stepping up to the challenge and are providing the credit needed by our customers during these tough times.  In the end, I believe we will emerge from this experience, even stronger and more capable than we were before.  We have a great team, a great market, and we are excited about the prospects for the Company over the next several years.”

Financial Condition

At March 31, 2020, total assets were $233 million, an increase of $3.5 million or 1.6% over $229.5 million at December 31, 2019.  Total deposits increased by 1.7% or $3 million to $183 million as of March 31, 2020, compared to $180 million as of December 31, 2018. At March 31, 2020, the Company’s core deposits represent 95.6% of the total deposits.

Gross loans increased by 1% or $1.2 million as of March 31, 2020 to $145.6 million, as compared with $144.3 million as of December 31, 2019.  The Bank had one non-performing loan for the quarters ended March 31, 2020, and December 31, 2019.  OREO properties remained at zero as of March 31, 2020 and December 31, 2019 respectively.

Earnings

The Company posted net interest income of $2 million for the three months ended March 31, 2020 and 2019 respectively.  Average interest-earning assets were $184 million with average interest-bearing liabilities of $114.7 million, yielding a net interest margin of 4.56% for the first quarter of 2020, as compared to the average interest-earning assets of $184 million with average interest-bearing liabilities of $98.6 million, yielding a net interest margin of 4.46% for the first quarter of 2019.

Non-interest income totaled $460 thousand for the first quarter of 2020, or an increase of 1.3% as compared with $425 thousand earned during the same quarter last year.

General and administrative expenses were $1.6 million for the three months ended March 31, 2020, 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 first quarter of 2020 and 2019, respectively.

Income tax expense was $244 thousand which represents a decrease of $10 thousand or 1.73% for the three months ended March 31, 2020, as compared to $251 thousand for the three months ended March 31, 2019. The effective income tax rate for the first quarter of 2020 and 2018 is approximately 28.5% and 28.7% respectively, and for the year ending March 31, 2020 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
	March 31, 2020 and December 31, 2019
		March 31, 2020				December 31, 2019
		(unaudited)				(audited)
	ASSETS:
	Cash and due from banks	$	4,507,178			$	4,363,753
	Federal funds sold		28,170,000				32,415,000
	Total cash and cash equivalents		32,677,178				36,778,753
	Interest-bearing deposits in other banks		-				496,000
	Investment securities available for sale		17,528,015				7,977,936
	Investment securities held to maturity (fair value approximates
	$26,500,168 at March 31, 2019 and $28,625,251 at December 31, 2019)		25,878,009				28,367,056
	Total investments		43,406,024				36,840,992
	Loans
	Construction		-				-
	Real estate		117,668,667				115,633,626
	Commercial		27,878,781				28,522,543
	Installment		111,323				232,328
	Credit Cards		2,709				-
	Gross loans		145,661,480				144,388,497
	Unearned fees and discounts		(441,684	)			(438,380	)
	Loans net of unearned fees and discount		145,219,796				143,950,117
	Allowance for loan losses		(2,524,666	)			(2,391,765	)
	Net loans		142,695,130				141,558,352
	Fixed assets, net		6,352,334				6,401,773
	Accrued interest receivable		664,413				619,856
	Stock investments, restricted, at cost		1,440,900				1,440,900
	Bank-owned life insurance		4,626,619				4,595,584
	Other assets		1,210,261				1,270,936
	Total assets	$	233,072,859			$	229,507,145
	LIABILITIES:
	Deposits
	Non-interest bearing	$	95,260,169			$	88,412,668
	Interest bearing
	NOW and money market		63,257,086				64,520,387
	Savings		12,226,414				12,209,281
	Time deposits less than $250,000		9,387,549				9,537,555
	Time deposits of $250,000 or greater		3,121,585				5,471,451
	Total deposits		183,252,803				180,151,342
	Accrued interest payable		155,810				203,246
	Borrowings from Federal Home Loan Bank (FHLB)		20,000,000				20,000,000
	Accrued expenses & other payables		1,465,993				1,686,979
	Subordinated notes payable to subsidiary trust		3,093,000				3,093,000
	Total liabilities		207,967,606				205,134,567
	SHAREHOLDERS' EQUITY
			10,502,557				10,502,557
	Retained earnings		14,417,205				13,803,528
	Accumulated other comprehensive income/(loss)		185,491				66,493
	Total shareholders' equity		25,105,253				24,372,578
	Total liabilities & shareholders' equity	$	233,072,859			$	229,507,145

	CHINO COMMERCIAL BANCORP
	CONSOLIDATED STATEMENTS OF NET INCOME
		For the three months ended
		March 31
			2020			2019
		(unaudited)			(unaudited)
	Interest income
	Interest and fee income on loans	$	2,068,444		$	1,951,881
	Interest on federal funds sold and FRB deposits		112,930			70,411
	Interest on time deposits in banks		1,856			11,887
	Interest on investment securities		214,152			266,232
	Total interest income		2,397,382			2,300,411
	Interest Expense
	Interest on deposits		177,833			217,017
	Other borrowings		134,654			49,431
	Total interest expense		312,487			266,448
	Net interest income		2,084,895			2,033,963
	Provision for loan losses		50,000			40,000
	Net interest income after provision for loan losses		2,034,895			1,993,963
	Non-interest income
	Service charges on deposit accounts		368,683			356,065
	Other miscellaneous income		39,100			22,975
	Dividend income from restricted stock		21,971			22,474
	Income from bank-owned life insurance		31,035			23,512
	Total non-interest income		460,789			425,026
	Non-interest expenses
	Salaries and employee benefits		1,023,362			1,010,328
	Occupancy and equipment		149,686			153,132
	Data and item processing		134,488			104,899
	Advertising and marketing		42,604			6,318
	Legal and professional fees		44,640			33,418
	Regulatory assessments		18,261			29,435
	Insurance		8,834			9,005
	Directors' fees and expenses		33,214			33,769
	Other expenses		182,394			162,978
	Total non-interest expenses		1,637,483			1,543,282
	Income before income tax expense		858,201			875,707
	Income tax expense		244,524			251,197
	Net income	$	613,677		$	624,510
	Basic earnings per share	$	0.28		$	0.28
	Diluted earnings per share	$	0.28		$	0.28

			For the three months ended
			March 31
				2020				2019
	KEY FINANCIAL RATIOS
	(unaudited)
	Annualized return on average equity			9.89%				11.33%
	Annualized return on average assets			1.05%				1.24%
	Net interest margin			4.56%				4.46%
	Core efficiency ratio			64.32%				62.76%
	Net chargeoffs/(recoveries) to average loans			-0.056%				-0.010%
	AVERAGE BALANCES
	(thousands, unaudited)
	Average assets		$	233,703			$	201,500
	Average interest-earning assets		$	184,016			$	184,800
	Average gross loans		$	144,491			$	136,882
	Average deposits		$	183,970			$	171,868
	Average equity		$	24,809			$	22,051
	CREDIT QUALITY		End of period
	(unaudited)		March 31, 2020				December 31, 2019
	Non-performing loans		$	120,423			$	120,423
	Non-performing loans to total loans			0.08%				0.08%
	Non-performing loans to total assets			0.05%				0.05%
	Allowance for loan losses to total loans			1.73%				1.73%
	Nonperforming assets as a percentage of total loans and OREO			0.08%				0.08%
	Allowance for loan losses to non-performing loans			2096.51%				1986.14%
	OTHER PERIOD-END STATISTICS
	(unaudited)
	Shareholders equity to total assets			10.77%				10.62%
	Net loans to deposits			77.87%				78.58%
	Non-interest bearing deposits to total deposits			51.98%				49.08%
	Tier 1 leverage ratio			14.21%				13.74%