Chino Commercial Bancorp Reports 3% Increase in Net Earnings

CHINO, Calif., Jan. 22, 2021 (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, 2020. Net earnings for the fourth quarter 2020, were $699 thousand, or an increase of 39.1%, as compared with earnings of $502 thousand for the same quarter last year. The increase in earnings is primarily attributed to the increase in loan interest and loan fee income. Net earnings per basic and diluted share was $0.31 for the fourth quarter of 2020, and $0.23 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer, stated: “Despite the difficulty being experienced in our community because of COVID, the Bank has performed well during this time. By assisting small business customers and households, we have experienced a 37% increase in total assets, a 35% increase in total loans, and a 2.7% increase in net after tax earnings. Loan quality also remains very strong, with the Bank having no loan delinquencies and no foreclosed properties at year-end.

“We believe that during tough times like these, the Bank’s value proposition stands out the most, and we may have many more opportunities to gain new banking relationships. 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 December 31, 2020, total assets were $314.8 million, an increase of $85.3 million or 37.2% over $229.5 million at December 31, 2019. Total deposits increased by 43.1% or $77.6 million to $257.7 million as of December 31, 2020, compared to $180.2 million as of December 31, 2019. At December 31, 2020, the Company’s core deposits represent 96.3% of the total deposits.

Gross loans increased by 35.5% or $51.3 million as of December 31, 2020 to $195.7 million, as compared with $144.4 million as of December 31, 2019. The Bank had one non-performing loan for the quarters ended December 31, 2020, and December 31, 2019. OREO properties remained at zero as of December 31, 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 396 PPP loans with an outstanding balance of $46.7 million as of December 31, 2020.

Earnings

The Company posted net interest income of $2.3 million for the three months ended December 31, 2020 and $2.0 million for the same quarter last year. Average interest-earning assets were $292.2 million with average interest-bearing liabilities of $136.3 million, yielding a net interest margin of 3.66% for the fourth quarter of 2020, as compared to the average interest-earning assets of $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.

Non-interest income totaled $440.2 thousand for the fourth quarter of 2020, or a decrease of 3.6% as compared with $456.6 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 $1.8 million for the three months ended December 31, 2020, and $1.7 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.1 million for the fourth quarter of 2020 and $1.0 million thousand for the same period last year.

Income tax expense was $275.3 thousand which represents an increase of $78 thousand or 39.8% for the three months ended December 31, 2020, as compared to $197.0 thousand for the three months ended December 31, 2019. The effective income tax rate for the fourth quarter of 2020 and 2019 were approximately 28.6% and 28.5% respectively, and for the nine months ending December 31, 2020 and 2019, the effective income tax rates were 28.3% and 28.2% 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, 2020 and December 31, 2019
	December 31, 2020				December 31, 2019
	(unaudited)				(audited)
ASSETS:
Cash and due from banks	$	58,075,217			$	4,363,753
Federal funds sold		-				32,415,000
Total cash and cash equivalents		58,075,217				36,778,753
Interest-bearing deposits in other banks		-				496,000
Investment securities available for sale		32,370,042				7,977,936
Investment securities held to maturity (fair value approximates
$19,556,250 at December 31, 2020 and $21,683,834 at December 31, 2019)		18,626,525				28,367,056
Total investments		50,996,567				36,840,992
Loans
Construction		1,014,462.00				-
Real estate		119,302,116				115,633,626
Commercial		75,237,752				28,522,543
Installment		110,475				232,328
Credit Cards		0				-
Gross loans		195,664,805				144,388,497
Unearned fees and discounts		(1,678,641	)			(438,380	)
Loans net of unearned fees and discount		193,986,164				143,950,117
Allowance for loan losses		(3,271,921	)			(2,391,765	)
Net loans		190,714,243				141,558,352
Fixed assets, net		6,145,711				6,401,773
Accrued interest receivable		1,013,732				619,856
Stock investments, restricted, at cost		1,554,200				1,440,900
Bank-owned life insurance		4,721,232				4,595,584
Other assets		1,618,716				1,270,936
Total assets	$	314,839,618			$	229,507,145
LIABILITIES:
Deposits
Non-interest bearing	$	145,433,815			$	88,412,668
Interest bearing
NOW and money market		76,774,420				64,520,387
Savings		21,466,856				12,209,281
Time deposits less than $250,000		9,563,300				9,537,555
Time deposits of $250,000 or greater		4,473,409				5,471,451
Total deposits		257,711,800				180,151,342
Accrued interest payable		137,487				203,246
Borrowings from Federal Home Loan Bank (FHLB)		25,000,000				20,000,000
Accrued expenses & other payables		1,674,150				1,686,979
Subordinated notes payable to subsidiary trust		3,093,000				3,093,000
Total liabilities		287,616,437				205,134,567
SHAREHOLDERS' EQUITY
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,230,808 shares at December 31, 2020 and December 31, 2019, respectively.
		10,502,558				10,502,557
Retained earnings		16,428,258				13,803,528
Accumulated other comprehensive income/(loss)		292,365				66,493
Total shareholders' equity		27,223,181				24,372,578
Total liabilities & shareholders' equity	$	314,839,618			$	229,507,145

CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
	For the three months ended							For the twelve months ended
	December 31							December 31
	2020			2019				2020			2019
	(unaudited)			(unaudited)				(unaudited)			(unaudited)
Interest income
Interest and fee income on loans	$	2,624,645		$	1,982,610			$	9,207,404		$	7,884,573
Interest on federal funds sold and FRB deposits		14,194			184,875				154,934			510,650
Interest on time deposits in banks		-			3,219				1,856			35,077
Interest on investment securities		225,264			167,707				912,489			1,078,908
Total interest income		2,864,103			2,338,411				10,276,683			9,509,208
Interest Expense
Interest on deposits		53,723			230,243				369,628			935,215
Other borrowings		124,947			139,476				511,815			413,749
Total interest expense		178,670			369,719				881,443			1,348,964
Net interest income		2,685,433			1,968,692				9,395,240			8,160,244
Provision for loan losses		400,000			-				770,000			40,000
Net interest income after provision for loan losses		2,285,433			1,968,692				8,625,240			8,120,244
Non-interest income
Service charges on deposit accounts		342,342			382,839				1,293,966			1,530,853
Other miscellaneous income		47,642			24,567				163,513			190,565
Dividend income from restricted stock		18,421			17,267				71,664			88,281
Income from bank-owned life insurance		31,840			31,901				125,648			110,699
Total non-interest income		440,245			456,574				1,654,791			1,920,398
Non-interest expenses
Salaries and employee benefits		1,064,780			1,002,259				4,058,653			3,941,211
Occupancy and equipment		160,415			155,473				623,102			632,501
Data and item processing		147,958			123,409				589,351			469,176
Advertising and marketing		33,869			30,867				144,167			97,035
Legal and professional fees		76,075			217,088				209,565			430,050
Regulatory assessments		33,480			(12,940	)			116,167			81,578
Insurance		10,567			10,295				38,380			37,911
Directors' fees and expenses		32,040			32,742				130,054			137,142
Other expenses		192,528			166,709				692,057			675,289
Total non-interest expenses		1,751,712			1,725,902				6,601,496			6,501,893
Income before income tax expense		973,966			699,364				3,678,535			3,538,749
Income tax expense		275,285			196,971				1,053,805			984,794
Net income	$	698,681		$	502,393			$	2,624,730		$	2,553,955
Basic earnings per share	$	0.31		$	0.23			$	1.18		$	1.14
Diluted earnings per share	$	0.31		$	0.23			$	1.18		$	1.14

		For the three months ended								For the nine months ended
		December 31								December 31
			2020				2019				2020				2019
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity			11.37	%			8.31	%			10.69	%			11.03	%
Annualized return on average assets			0.89	%			0.85	%			0.92	%			1.17	%
Net interest margin			3.66	%			4.41	%			3.81	%			4.46	%
Core efficiency ratio			56.04	%			71.16	%			59.74	%			64.50	%
Net chargeoffs/(recoveries) to average loans			0.008	%			0.002	%			-0.07	%			-0.05	%
AVERAGE BALANCES
(thousands, unaudited)
Average assets		$	313,827			$	235,723			$	284,525			$	219,167
Average interest-earning assets		$	292,210			$	177,259			$	246,617			$	183,108
Average gross loans		$	192,418			$	136,963			$	173,927			$	136,504
Average deposits		$	253,908			$	186,587			$	224,971			$	179,226
Average equity		$	24,583			$	24,182			$	24,551			$	23,156
CREDIT QUALITY		End of period
(unaudited)		December 31, 2020				December 31, 2019
Non-performing loans		$	119,836			$	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			1.67	%			1.66	%
Nonperforming assets as a percentage of total loans and OREO			0.06	%			0.08	%
Allowance for loan losses to non-performing loans			2730.33	%			1986.14	%
OTHER PERIOD-END STATISTICS
(unaudited)
Shareholders equity to total assets			8.65	%			10.62	%
Net loans to deposits			74.00	%			78.58	%
Non-interest bearing deposits to total deposits			56.43	%			49.08	%
Community Bank Leverage Ratio			11.44	%			13.74	%