Chino Commercial Bancorp Reports Second Quarter Earnings

CHINO, Calif., July 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 second quarter ended June 30, 2020.  Net earnings for the second quarter 2020, were $648 thousand, or a decrease of 17.60%, as compared with earnings of $787 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 conditions created by the COVID-19 pandemic.  Net earnings per basic and diluted share was $0.29 for the second quarter of 2020, and $0.35 for the same quarter last year. 

Dann H. Bowman, President and Chief Executive Officer, stated: “Despite the turmoil caused by COVID 19, the Bank continues to perform well.  During May and June, the Bank made over $33 million in loans to its small business customers, helping them to weather the economic down-turn and remain in business. In addition, the Bank granted across the board, loan payment deferments for three months to its borrowers, providing additional cash relief.  Many of the loans provided were SBA PPP loans, which may qualify for debt forgiveness in the future.

We believe that during tough times like these, the Bank’s value proposition stands out the most.  Values such as being responsive to our customers, returning phone calls and taking the time to understand each unique situation, make a difference.  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 June 30, 2020, total assets were $304 million, an increase of $74.5 million or 32.5% over $229.5 million at December 31, 2019.  Total deposits increased by 35% or $63 million to $243 million as of June 30, 2020, compared to $180 million as of December 31, 2018.  At June 30, 2020, the Company’s core deposits represent 96.4% of the total deposits.

Gross loans increased by 29.8% or $42.9 million as of June 30, 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 June 30, 2020, and December 31, 2019.  OREO properties remained at zero as of June 30, 2020 and December 31, 2019 respectively.

The increases in total assets, deposits and loans are attributed to Bank’s response to the overwhelming request of PPP loans.  Overall, the Bank approved and funded 389 PPP loans totaling $49.7 million as of June 30, 2020.

Earnings

The Company posted net interest income of $2.3 million for the three months ended June 30, 2020 and $2.1 million for the same quarter last year.  Average interest-earning assets were $226 million with average interest-bearing liabilities of $123.7 million, yielding a net interest margin of 4.03% for the second quarter of 2020, as compared to the average interest-earning assets of $188.8 million with average interest-bearing liabilities of $107.6 million, yielding a net interest margin of 4.39% for the second quarter of 2019.

Non-interest income totaled $357.8 thousand for the second quarter of 2020, or a decrease of 36.8 % as compared with $566.3 thousand earned during the same quarter last year.  The majority of the decrease is attribute to a significant decrease in overdraft fees.

General and administrative expenses were $1.6 million for the three months ended June 30, 2020, and for the same period last year.  The largest component of general and administrative expenses was salary and benefits expense of $1 million for the second quarter of 2020 and 2019, respectively.

Income tax expense was $268 thousand which represents a decrease of $12 thousand or 4.41% for the three months ended June 30, 2020, as compared to $280 thousand for the three months ended June 30, 2019.  The effective income tax rate for the second quarter of 2020 and 2019 were approximately 29.3% and 26.3% respectively, and for the six months ending June 30, 2020 and 2019, the effective income tax rates were 28.9% and 27.4% 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
	June 30, 2020 and December 31, 2019
		June 30, 2020				December 31, 2019
		(unaudited)				(audited)
	ASSETS:
	Cash and due from banks	$	67,677,789			$	4,363,753
	Federal funds sold		-				32,415,000
	Total cash and cash equivalents		67,677,789				36,778,753
	Interest-bearing deposits in other banks		-				496,000
	Investment securities available for sale		17,095,449				7,977,936
	Investment securities held to maturity (fair value approximates
	$23,730,210 at June 30, 2019 and $28,625,251 at December 31, 2019)		22,824,800				28,367,056
	Total investments		39,920,249				36,840,992
	Loans
	Construction		-				-
	Real estate		115,616,265				115,633,626
	Commercial		71,654,016				28,522,543
	Installment		102,157				232,328
	Credit Cards		5,568				-
	Gross loans		187,378,006				144,388,497
	Unearned fees and discounts		(2,211,135	)			(438,380	)
	Loans net of unearned fees and discount		185,166,871				143,950,117
	Allowance for loan losses		(2,622,866	)			(2,391,765	)
	Net loans		182,544,005				141,558,352
	Fixed assets, net		6,292,249				6,401,773
	Accrued interest receivable		789,192				619,856
	Stock investments, restricted, at cost		1,554,200				1,440,900
	Bank-owned life insurance		4,657,814				4,595,584
	Other assets		585,782				1,270,936
	Total assets	$	304,021,280			$	229,507,145
	LIABILITIES:
	Deposits
	Non-interest bearing	$	141,571,928			$	88,412,668
	Interest bearing
	NOW and money market		72,506,000				64,520,387
	Savings		16,610,552				12,209,281
	Time deposits less than $250,000		8,883,737				9,537,555
	Time deposits of $250,000 or greater		3,653,492				5,471,451
	Total deposits		243,225,709				180,151,342
	Accrued interest payable		144,928				203,246
	Borrowings from Federal Home Loan Bank (FHLB)		30,000,000				20,000,000
	Accrued expenses & other payables		1,622,981				1,686,979
	Subordinated notes payable to subsidiary trust		3,093,000				3,093,000
	Total liabilities		278,086,618				205,134,567
	SHAREHOLDERS' EQUITY
	Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,230,808 shares at June 30, 2020 and December 31, 2019, respectively.
			10,502,558				10,502,557
	Retained earnings		15,065,498				13,803,528
	Accumulated other comprehensive income/(loss)		366,606				66,493
	Total shareholders' equity		25,934,662				24,372,578
	Total liabilities & shareholders' equity	$	304,021,280			$	229,507,145

	CHINO COMMERCIAL BANCORP
	CONSOLIDATED STATEMENTS OF NET INCOME
		For the three months ended						For the six months ended
		June 30						June 30
			2020			2019			2020			2019
		(unaudited)			(unaudited)			(unaudited)			(unaudited)
	Interest income
	Interest and fee income on loans	$	2,212,961		$	1,976,912		$	4,281,406		$	3,928,793
	Interest on federal funds sold and FRB deposits		12,982			69,291			125,913			139,702
	Interest on time deposits in banks		-			12,019			1,856			23,906
	Interest on investment securities		240,502			346,401			454,654			612,633
	Total interest income		2,466,445			2,404,623			4,863,829			4,705,034
	Interest Expense
	Interest on deposits		74,802			236,598			252,635			453,614
	Other borrowings		126,817			101,539			261,472			150,970
	Total interest expense		201,619			338,137			514,107			604,584
	Net interest income		2,264,826			2,066,486			4,349,722			4,100,450
	Provision for loan losses		105,000			-			155,000			40,000
	Net interest income after provision for loan losses		2,159,826			2,066,486			4,194,722			4,060,450
	Non-interest income
	Service charges on deposit accounts		276,859			398,023			645,542			754,088
	Other miscellaneous income		36,908			120,424			76,008			143,398
	Dividend income from restricted stock		12,852			23,973			34,823			46,447
	Income from bank-owned life insurance		31,195			23,854			62,230			47,366
	Total non-interest income		357,814			566,274			818,603			991,299
	Non-interest expenses
	Salaries and employee benefits		971,010			959,657			1,994,372			1,969,985
	Occupancy and equipment		157,841			165,273			307,527			318,405
	Data and item processing		152,588			119,999			287,076			224,898
	Advertising and marketing		36,091			47,037			82,169			53,355
	Legal and professional fees		46,750			32,807			91,390			66,225
	Regulatory assessments		30,947			32,541			49,207			61,976
	Insurance		8,412			9,108			17,246			18,112
	Directors' fees and expenses		32,280			33,051			65,494			66,820
	Other expenses		164,954			165,605			343,876			328,584
	Total non-interest expenses		1,600,873			1,565,078			3,238,357			3,108,360
	Income before income tax expense		916,767			1,067,682			1,774,968			1,943,389
	Income tax expense		268,474			280,874			512,998			532,071
	Net income	$	648,293		$	786,808		$	1,261,970		$	1,411,318
	Basic earnings per share	$	0.29		$	0.35		$	0.57		$	0.63
	Diluted earnings per share	$	0.29		$	0.35		$	0.57		$	0.63

		For the three months ended								For the six months ended
		June 30								June 30
			2020				2019				2020				2019
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity			10.12	%			13.81	%			10.01	%			12.59	%
Annualized return on average assets			0.94	%			1.49	%			0.99	%			1.37	%
Net interest margin			4.03	%			4.39	%			4.27	%			4.40	%
Core efficiency ratio			61.04	%			59.45	%			62.66	%			61.05	%
Net chargeoffs/(recoveries) to average loans			-0.004	%			-0.030	%			-0.06	%			-0.04	%
AVERAGE BALANCES
(thousands, unaudited)
Average assets		$	275,931			$	211,083			$	254,818			$	206,331
Average interest-earning assets		$	225,944			$	188,824			$	204,980			$	188,073
Average gross loans		$	171,676			$	138,658			$	158,084			$	137,775
Average deposits		$	218,505			$	174,089			$	201,238			$	172,984
Average equity		$	25,631			$	22,794			$	25,215			$	22,427
CREDIT QUALITY		End of period
(unaudited)		June 30, 2020				December 31, 2019
Non-performing loans		$	120,423			$	120,423
Non-performing loans to total loans			0.06	%			0.08	%
Non-performing loans to total assets			0.04	%			0.05	%
Allowance for loan losses to total loans			1.40	%			1.73	%
Nonperforming assets as a percentage of total loans and OREO			0.06	%			0.08	%
Allowance for loan losses to non-performing loans			2178.05	%			1986.14	%
OTHER PERIOD-END STATISTICS
(unaudited)
Shareholders equity to total assets			8.53	%			10.62	%
Net loans to deposits			75.05	%			78.58	%
Non-interest bearing deposits to total deposits			58.21	%			49.08	%
Community Bank Leverage Ratio			9.27	%			13.74	%