Chino Commercial Bancorp Reports 8% Increase in Net Earnings

CHINO, Calif., Oct. 25, 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 third quarter ended September 30, 2021. Net earnings for the third quarter of 2021 were $718 thousand, or an increase of 8.1%, as compared with earnings of $664 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 $0.27 for the third quarter of 2021, and $0.25 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer, stated, “As the economy emerges from the effects of the pandemic, the Bank continues to perform well. During the thirst quarter, the Bank posted record levels for total assets, and deposits. We are also pleased to report that loan quality remains very strong, with the Bank having no delinquent loans at quarter-end, no pending foreclosures, and no OREO. Despite the challenges of the last eighteen months, we are optimistic about the opportunities for growth and expansion in the future.”

Financial Condition

At September 30, 2021, total assets were $370.2 million, an increase of $55.3 million or 17.6% over $314.8 million at December 31, 2020. Total deposits increased by $53.2 million or 20.6% to $310.9 million as of September 30, 2021, compared to $257.7 million as of December 31, 2020. At September 30, 2021, the Company’s core deposits represent 97.9% of the total deposits.

Gross loans decreased by 6.7 % or $13.1 million as of September 30, 2021 to $182.6 million, as compared with $195.7 million as of December 31, 2020, primarily due to pay downs on loans made under the Payroll Protection Program. The Bank had one non-performing loan for the quarters ended September 30, 2021, and December 31, 2020. OREO properties remained at zero as of September 30, 2021 and December 31, 2020 respectively.

Earnings

The Company posted net interest income of $2.6 million for the three months ended September 30, 2021 and $2.3 million for the same quarter last year. Average interest-earning assets were $334.5 million with average interest-bearing liabilities of $145.6 million, yielding a net interest margin of 2.91% for the third quarter of 2021, as compared to the average interest-earning assets of $283.4 million with average interest-bearing liabilities of $135.8 million, yielding a net interest margin of 3.31% for the third quarter of 2020.

Non-interest income totaled $544.6 thousand for the third quarter of 2021, or an increase of 37.5% as compared with $395.9 thousand earned during the same quarter last year. The majority of the increase is attribute to service charges on deposit accounts and other fees.

General and administrative expenses were $1.8 million for the three months ended September 30, 2021, and $1.6 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 third quarter of 2021 and $999.5 thousand for the same period last year.

Income tax expense was $273.4 thousand which represents an increase of $8 thousand or 2.9% for the three months ended September 30, 2021, as compared to $265.5 thousand for the three months ended September 30, 2020. The effective income tax rate for the third quarter of 2021 and 2020 were approximately 27.6% 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, (909) 393-8880.

CHINO COMMERCIAL BANCORP
CONSOLIDATED BALANCE SHEET
September 30, 2021 and December 31, 2020
	September 30, 2021				December 31, 2020
	(unaudited)				(audited)
ASSETS:
Cash and due from banks	$	123,449,196			$	58,075,217
Federal funds sold		-				-
Total cash and cash equivalents		123,449,196				58,075,217
Interest-bearing deposits in other banks		-				-
Investment securities available for sale		36,474,971				32,370,042
Investment securities held to maturity (fair value approximates
$14,403,447 at September 30, 2021 and $19,556,250 at December 31, 2020)		13,785,218				18,626,525
Total investments		50,260,189				50,996,567
Loans
Construction		414,072				1,014,462
Real estate		120,111,335				119,302,116
Commercial		61,901,808				75,237,752
Installment		158,798				110,475
Credit Cards		0				-
Gross loans		182,586,013				195,664,805
Unearned fees and discounts		(1,615,273	)			(1,678,642	)
Loans net of unearned fees and discount		180,970,740				193,986,163
Allowance for loan losses		(3,877,017	)			(3,271,921	)
Net loans		177,093,723				190,714,242
Fixed assets, net		5,953,847				6,145,711
Accrued interest receivable		819,094				1,013,732
Stock investments, restricted, at cost		2,045,200				1,554,200
Bank-owned life insurance		7,825,628				4,721,232
Other assets		2,721,997				1,618,717
Total assets	$	370,168,874			$	314,839,618
LIABILITIES:
Deposits
Non-interest bearing	$	191,195,134			$	145,433,815
Interest bearing
NOW and money market		80,027,619				76,774,242
Savings		25,939,170				21,467,034
Time deposits less than $250,000		10,074,332				4,473,409
Time deposits of $250,000 or greater		3,646,335				9,563,300
Total deposits		310,882,590				257,711,800
Accrued interest payable		202,379				137,487
Borrowings from Federal Home Loan Bank (FHLB)		15,000,000				25,000,000
Accrued expenses & other payables		1,847,228				1,674,150
Subordinated debt		10,000,000				-
Subordinated notes payable to subsidiary trust		3,093,000				3,093,000
Total liabilities		341,025,197				287,616,437
SHAREHOLDERS' EQUITY
Common stock, authorized 10,000,000 shares with no par value, issued and
outstanding 2,676,799 shares at September 30, 2021 and December 31, 2020,
respectively.		10,502,558				10,502,557
Retained earnings		18,849,889				16,428,258
Accumulated other comprehensive income/(loss)		(208,770	)			292,366
Total shareholders' equity		29,143,677				27,223,181
Total liabilities & shareholders' equity	$	370,168,874			$	314,839,618

CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
	For the three months ended						For the nine months ended
	September 30						September 30
	2021			2020			2021			2020
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Interest income
Interest and fee income on loans	$	2,458,482		$	2,301,354		$	7,643,426		$	6,582,760
Interest on federal funds sold and FRB deposits		42,915			14,828			83,015			140,741
Interest on time deposits in banks		-			-			-			1,856
Interest on investment securities		206,101			232,571			637,644			687,225
Total interest income		2,707,498			2,548,753			8,364,085			7,412,582
Interest Expense
Interest on deposits		46,825			63,271			145,370			315,906
Other borrowings		207,096			125,396			486,770			386,868
Total interest expense		253,921			188,667			632,140			702,774
Net interest income		2,453,577			2,360,086			7,731,945			6,709,808
Provision for loan losses		185,000			215,000			555,000			370,000
Net interest income after provision for loan losses		2,268,577			2,145,086			7,176,945			6,339,808
Non-interest income
Service charges on deposit accounts		394,024			306,081			1,133,360			951,624
Other miscellaneous income		81,984			39,864			223,761			115,872
Dividend income from restricted stock		25,903			18,421			72,928			53,243
Income from bank-owned life insurance		42,669			31,578			104,395			93,808
Total non-interest income		544,580			395,944			1,534,444			1,214,547
Non-interest expenses
Salaries and employee benefits		1,092,730			999,501			3,173,864			2,993,873
Occupancy and equipment		153,998			155,160			461,912			462,687
Data and item processing		170,018			154,317			490,673			441,393
Advertising and marketing		29,035			20,802			91,121			107,167
Legal and professional fees		49,355			42,100			137,995			133,490
Regulatory assessments		37,761			33,480			107,801			82,687
Insurance		10,106			10,567			30,035			27,813
Directors' fees and expenses		31,920			32,520			97,080			98,014
Other expenses		246,677			162,981			753,192			502,659
Total non-interest expenses		1,821,600			1,611,428			5,343,673			4,849,783
Income before income tax expense		991,557			929,602			3,367,716			2,704,572
Income tax expense		273,434			265,522			943,711			778,520
Net income	$	718,123		$	664,080		$	2,424,005		$	1,926,052
Basic earnings per share	$	0.27		$	0.25		$	0.91		$	0.72
Diluted earnings per share	$	0.27		$	0.25		$	0.91		$	0.72

		For the three months ended								For the nine months ended
		September 30								September 30
			2021				2020				2021				2020
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity			10.71	%			10.06	%			12.03	%			10.03	%
Annualized return on average assets			0.80	%			0.87	%			0.93	%			0.94	%
Net interest margin			2.91	%			3.31	%			3.21	%			3.87	%
Core efficiency ratio			60.76	%			58.47	%			57.67	%			61.20	%
Net chargeoffs/(recoveries) to average loans			-0.011	%			-0.007	%			-0.03	%			-0.06	%
AVERAGE BALANCES
(thousands, unaudited)
Average assets		$	360,266			$	304,432			$	346,155			$	274,626
Average interest-earning assets		$	334,456			$	283,374			$	322,099			$	231,302
Average gross loans		$	180,478			$	186,761			$	190,920			$	167,713
Average deposits		$	311,254			$	242,964			$	298,413			$	215,248
Average equity		$	26,830			$	26,394			$	26,867			$	25,609
CREDIT QUALITY		End of period
(unaudited)	September 30, 2021					December 31, 2020
Non-performing loans		$	118,448			$	107,672
Non-performing loans to total loans			0.06	%			0.06	%
Non-performing loans to total assets			0.03	%			0.03	%
Allowance for loan losses to total loans			2.12	%			1.67	%
Nonperforming assets as a percentage of total loans and OREO			0.06	%			0.06	%
Allowance for loan losses to non-performing loans			3273.18	%			3038.79	%
OTHER PERIOD-END STATISTICS
(unaudited)
Shareholders equity to total assets			7.87	%			8.65	%
Net loans to deposits			56.96	%			74.00	%
Non-interest bearing deposits to total deposits			61.50	%			56.43	%
Total capital to total risk-weighted assets			20.97	%			18.30	%
Tier 1 capital to total risk-weighted assets			23.77	%			20.16	%
Company Leverage Ratio			9.01	%			11.44	%