Chino Commercial Bancorp Reports 26% Increase in Net Earnings
CHINO, Calif., July 20, 2018 (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, 2018, with net earnings of $531 thousand, or an increase of 26.4%, compared with net income of $420 thousand for the same quarter last year. Net income per basic and diluted share was $0.29 for the second quarter of 2018 and $0.23 for the same quarter last year.
Dann H. Bowman, President and Chief Executive Officer, stated, “The second quarter results for the Bank were excellent. The Bank achieved new record levels for Deposits, Loans, Revenue and Earnings. The Upland branch is expected to be opened in the third quarter and we are pleased and excited about the business prospects in the Inland Empire, and in this area especially.”
Financial Condition
At June 30, 2018, total assets were $201.0 million, an increase of $8.1 million or 4.2% over $192.8 million at December 31, 2017. Total deposits increased by 13.5% or $20 million during the second quarter to $169.3 million, compared to $149.1 million as of December 31, 2017. At June 30, 2018, the Company’s core deposits represent 95.0% of the total deposits.
Gross loans increased by 5.9% or $7.3 million as of June 30, 2018 to $129.9 million, as compared with $122.6 million as of December 31, 2017. The Bank did not have any nonperforming loans for the quarters ended June 30, 2018, and December 31, 2017, respectively. OREO properties remained at zero as of June 30, 2018 and December 31, 2017, respectively.
Earnings
The Company posted net interest income of $1.8 million and $1.6 million for the three months ended June 30, 2018 and 2017, respectively, or an increase of $260 thousand or 16.6%. Average interest-earning assets were $173.8 million with average interest-bearing liabilities of $88.6 million, yielding a net interest margin of 4.21% for the second quarter of 2018, as compared to the average interest-earning assets of $166.1 million with average interest-bearing liabilities of $95.3 million, yielding a net interest margin of 3.78% for the second quarter of 2017.
Non-interest income totaled $371 thousand for the second quarter of 2018, or a decrease of 4.4% as compared with $389 thousand earned during the same quarter last year. Service charges on deposit accounts decreased by $19.3 thousand or 6.1% to $298 thousand, primarily due to a decrease in income from returned items, overdraft charges, and analysis fees. Dividend income from restricted stock decreased to $24 thousand for the second quarter of 2018, compared to $28 thousand for the same quarter in 2017, due to the Federal Home Loan Bank change in dividend payout percentage policy. Income from Bank-owned life insurance remained consistent at about $25 thousand in the second quarter of 2018 and 2017, respectively.
General and administrative expenses were $1.4 million for the three months ended June 30, 2018, and 1.3 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $864 thousand for the second quarter of 2018, as compared to $772 thousand for the same quarter last year. Advertising and marketing expenses remained consistent at about $30 thousand in the second quarter of 2018 and 2017, respectively.
Income tax expense was $212 thousand which represents a decrease of $61 thousand or 22.3% for the three months ended June 30, 2018 as compared to $273 thousand for the three months ended June 30, 2017. The effective income tax rate for the second quarter of 2018 and 2017 is approximately 28.6% and 39.4%, respectively. The decrease in the income tax expense as well as the effective tax rate is entirely attributed to the the new Tax Reform Act signed into law in December 2017.
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 | |||||||||
| June 30, 2018 and December 31, 2017 | |||||||||
| June 30, 2018 | December 31, 2017 | ||||||||
| (unaudited) | (audited) | ||||||||
| ASSETS: | |||||||||
| Cash and due from banks | 34,248,782 | $ | 34,157,668 | ||||||
| Total cash and cash equivalents | 34,248,782 | 34,157,668 | |||||||
| Interest-bearing deposits in other banks | 744,000 | 1,240,000 | |||||||
| Investment securities available for sale | 5,712,782 | 3,131,027 | |||||||
| Investment securities held to maturity (fair value approximates | |||||||||
| $20,889,000 at June 30, 2018 and $21,104,000 at December 31, 2017) | 20,959,915 | 21,389,552 | |||||||
| Total investments | 27,416,697 | 25,760,579 | |||||||
| Loans | |||||||||
| Construction | 0 | - | |||||||
| Real estate | 109,080,272 | 99,585,847 | |||||||
| Commercial | 20,502,509 | 22,679,268 | |||||||
| Installment | 302,895 | 337,455 | |||||||
| Gross loans | 129,885,676 | 122,602,570 | |||||||
| Unearned fees and discounts | (394,084 | ) | (365,091 | ) | |||||
| Loans net of unearned fees and discount | 129,491,592 | 122,237,479 | |||||||
| Allowance for loan losses | (2,230,784 | ) | (2,094,723 | ) | |||||
| Net loans | 127,260,808 | 120,142,756 | |||||||
| Fixed assets, net | 5,817,298 | 5,875,381 | |||||||
| Accrued interest receivable | 541,023 | 531,771 | |||||||
| Stock investments, restricted, at cost | 1,240,202 | 2,084,129 | |||||||
| Bank-owned life insurance | 3,435,766 | 3,386,754 | |||||||
| Other assets | 1,026,515 | 861,969 | |||||||
| Total assets | $ | 200,987,091 | $ | 192,801,007 | |||||
| LIABILITIES: | |||||||||
| Deposits | |||||||||
| Non-interest bearing | $ | 78,186,662 | $ | 74,766,694 | |||||
| Interest bearing | |||||||||
| NOW and money market | 70,543,178 | 47,030,167 | |||||||
| Savings | 9,394,315 | 7,897,948 | |||||||
| Time deposits less than $250,000 | 7,694,910 | 5,727,789 | |||||||
| Time deposits of $250,000 or greater | 3,477,364 | 13,703,790 | |||||||
| Total deposits | 169,296,429 | 149,126,388 | |||||||
| Accrued interest payable | 39,005 | 65,160 | |||||||
| Borrowings from Federal Home Loan Bank (FHLB) | 7,000,000 | 20,000,000 | |||||||
| Accrued expenses & other payables | 1,072,149 | 1,012,535 | |||||||
| Subordinated notes payable to subsidiary trust | 3,093,000 | 3,093,000 | |||||||
| Total liabilities | 180,500,583 | 173,297,083 | |||||||
| SHAREHOLDERS' EQUITY | |||||||||
| Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 1,859,132 shares at June 30, 2018 and December 31, 2017, respectively. | |||||||||
| 10,502,558 | 10,502,558 | ||||||||
| Retained earnings | 10,061,183 | 9,020,564 | |||||||
| Accumulated other comprehensive income/(loss) | (77,233 | ) | (19,198 | ) | |||||
| Total shareholders' equity | 20,486,508 | 19,503,924 | |||||||
| Total liabilities & shareholders' equity | $ | 200,987,091 | $ | 192,801,007 | |||||
| CHINO COMMERCIAL BANCORP | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF NET INCOME | |||||||||||||||||
| For the three months ended | For the year ended | ||||||||||||||||
| June 30 | June 30 | ||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (audited) | ||||||||||||||
| Interest income | |||||||||||||||||
| Interest and fee income on loans | $ | 1,746,249 | $ | 1,491,361 | $ | 3,406,126 | $ | 2,959,072 | |||||||||
| Interest on federal funds sold and FRB deposits | 96,963 | 73,484 | 194,687 | 133,613 | |||||||||||||
| Interest on time deposits in banks | 3,153 | 6,956 | 7,109 | 14,013 | |||||||||||||
| Interest on investment securities | 151,494 | 136,547 | 292,068 | 259,292 | |||||||||||||
| Total interest income | 1,997,859 | 1,708,348 | 3,899,990 | 3,365,990 | |||||||||||||
| Interest Expense | |||||||||||||||||
| Interest on deposits | 144,238 | 76,044 | 231,482 | 151,885 | |||||||||||||
| Other borrowings | 30,689 | 69,244 | 120,325 | 123,377 | |||||||||||||
| Total interest expense | 174,927 | 145,288 | 351,807 | 275,262 | |||||||||||||
| Net interest income | 1,822,932 | 1,563,060 | 3,548,183 | 3,090,728 | |||||||||||||
| Provision for loan losses | 80,000 | - | 130,000 | 55,000 | |||||||||||||
| Net interest income after provision for loan losses | 1,742,932 | 1,563,060 | 3,418,183 | 3,035,728 | |||||||||||||
| Non-interest income | |||||||||||||||||
| Service charges on deposit accounts | 298,069 | 317,394 | 605,106 | 609,037 | |||||||||||||
| Other miscellaneous income | 24,748 | 18,067 | 43,943 | 36,177 | |||||||||||||
| Dividend income from restricted stock | 23,998 | 27,840 | 59,832 | 72,921 | |||||||||||||
| Income from bank-owned life insurance | 24,559 | 25,210 | 49,012 | 50,232 | |||||||||||||
| Total non-interest income | 371,374 | 388,511 | 757,893 | 768,367 | |||||||||||||
| Non-interest expenses | |||||||||||||||||
| Salaries and employee benefits | 863,683 | 771,541 | 1,732,598 | 1,516,317 | |||||||||||||
| Occupancy and equipment | 121,568 | 99,142 | 236,224 | 204,673 | |||||||||||||
| Data and item processing | 96,653 | 85,765 | 188,288 | 161,847 | |||||||||||||
| Advertising and marketing | 29,251 | 30,271 | 57,837 | 52,115 | |||||||||||||
| Legal and professional fees | 39,955 | 73,424 | 73,153 | 110,859 | |||||||||||||
| Regulatory assessments | 33,928 | 37,607 | 67,057 | 75,218 | |||||||||||||
| Insurance | 9,005 | 8,685 | 17,563 | 16,689 | |||||||||||||
| Directors' fees and expenses | 28,203 | 31,545 | 58,962 | 58,092 | |||||||||||||
| Other expenses | 148,654 | 120,161 | 289,641 | 235,862 | |||||||||||||
| Total non-interest expenses | 1,370,900 | 1,258,141 | 2,721,323 | 2,431,672 | |||||||||||||
| Income before income tax expense | 743,406 | 693,430 | 1,454,753 | 1,372,423 | |||||||||||||
| Income tax expense | 212,355 | 273,302 | 414,889 | 540,380 | |||||||||||||
| Net income | $ | 531,051 | $ | 420,128 | $ | 1,039,864 | $ | 832,043 | |||||||||
| Basic earnings per share | $ | 0.29 | $ | 0.23 | $ | 0.56 | $ | 0.45 | |||||||||
| Diluted earnings per share | $ | 0.29 | $ | 0.23 | $ | 0.56 | $ | 0.45 | |||||||||
| Tax rate | 28.6 | % | 39.4 | % | 28.5 | % | 39.4 | % | |||||||||
| Average shares outstanding | 1,859,132 | 1,859,132 | 1,859,132 | 1,859,132 | |||||||||||||
| EPS | 0.29 | 0.23 | 0.56 | 0.45 | |||||||||||||
| For the three months ended | For the year ended | |||||||||||||||||
| June 30 | June 30 | |||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||
| KEY FINANCIAL RATIOS | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Annualized return on average equity | 10.46 | % | 11.82 | % | 10.36 | % | 11.88 | % | ||||||||||
| Annualized return on average assets | 1.12 | % | 0.93 | % | 1.10 | % | 0.92 | % | ||||||||||
| Net interest margin | 4.21 | % | 3.78 | % | 4.12 | % | 3.77 | % | ||||||||||
| Core efficiency ratio | 62.48 | % | 64.47 | % | 63.20 | % | 63.01 | % | ||||||||||
| Net chargeoffs/(recoveries) to average loans | -0.003 | % | -0.01 | % | -0.01 | % | -0.02 | % | ||||||||||
| AVERAGE BALANCES | ||||||||||||||||||
| (thousands, unaudited) | ||||||||||||||||||
| Average assets | $ | 189,902 | $ | 181,103 | $ | 189,214 | $ | 180,141 | ||||||||||
| Average interest-earning assets | $ | 173,847 | $ | 166,054 | $ | 173,687 | $ | 165,432 | ||||||||||
| Average gross loans | $ | 127,898 | $ | 111,967 | $ | 125,313 | $ | 111,056 | ||||||||||
| Average deposits | $ | 165,030 | $ | 142,353 | $ | 156,091 | $ | 141,145 | ||||||||||
| Average equity | $ | 20,307 | $ | 14,212 | $ | 20,065 | $ | 14,004 | ||||||||||
| CREDIT QUALITY | End of period | |||||||||||||||||
| (unaudited) | June 30, 2018 | December 31, 2017 | ||||||||||||||||
| Non-performing loans | $ | - | $ | - | ||||||||||||||
| Non-performing loans to total loans | 0.00 | % | 0.00 | % | ||||||||||||||
| Non-performing loans to total assets | 0.00 | % | 0.00 | % | ||||||||||||||
| Allowance for loan losses to total loans | 1.72 | % | 1.71 | % | ||||||||||||||
| Nonperforming assets as a percentage of total loans and OREO | 0.00 | % | 0.00 | % | ||||||||||||||
| Allowance for loan losses to non-performing loans | n/a | n/a | ||||||||||||||||
| OTHER PERIOD-END STATISTICS | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Shareholders equity to total assets | 10.19 | % | 10.12 | % | ||||||||||||||
| Net loans to deposits | 75.17 | % | 80.56 | % | ||||||||||||||
| Non-interest bearing deposits to total deposits | 46.18 | % | 50.14 | % | ||||||||||||||
| Total capital to total risk-weighted assets | 18.42 | % | 18.43 | % | ||||||||||||||
| Tier 1 capital to total risk-weighted assets | 19.89 | % | 19.76 | % | ||||||||||||||
| Tier 1 leverage ratio | 14.44 | % | 13.41 | % | ||||||||||||||
| Common equity tier 1 | 19.89 | % | 19.76 | % | ||||||||||||||
