Chino Commercial Bancorp Reports 77% Increase In Net Earnings
October 21, 2022 at 12:40 pm EDT
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CHINO, Calif., Oct. 21, 2022 (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, 2022. Net earnings for the third quarter of 2022, were $1.3 million, or an increase of 77.2%, as compared with earnings of $718 thousand for the same quarter last year. Net earnings per basic and diluted share were $0.48 for the third quarter of 2022, and $0.27 for the same quarter last year.
Dann H. Bowman, President and Chief Executive Officer, stated, “The third quarter of 2022 marks a new record for the Company with total Deposits, total Revenue, and Net Earnings all reaching new record highs. The Bank’s value proposition remains very strong, and we continue to attract new customers every month.
Though the economy is showing signs of possible weakening, so far, we have not experienced a significant down-turn in credit quality. At the end of the quarter, the Bank had only one delinquent loan, no in-process foreclosures, and no OREO.”
Financial Condition
At September 30, 2022, total assets were $416.6 million, an increase of $38.1 million or 10.1% over $378.5 million at December 31, 2021. Total deposits increased by $37.0 million or 11.6% to $355.9 million as of September 30, 2022, compared to $318.9 million as of December 31, 2021. At September 30, 2022, the Company’s core deposits represent 98% of the total deposits.
Gross loans increased by 1.2% or $3.7 million as of September 30, 2022 to $178.3 million as compared with $176.2 million at December 31, 2021. The Bank had two non-performing loans for the quarter ended September 30, 2022, and one non-performing loan as of December 31, 2021. OREO properties remained at zero as of September 30, 2022 and December 31, 2021 respectively.
Earnings
The Company posted net interest income of $3.3 million for the three months ended September 30, 2022 and $2.5 million for the same quarter last year. Average interest-earning assets were $393.5 million with average interest-bearing liabilities of $160.2 million, yielding a net interest margin of 3.33% for the third quarter of 2022, as compared to the average interest-earning assets of $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.
Non-interest income totaled $608.3 thousand for the third quarter of 2022, or an increase of 11.7% as compared with $544.6 thousand earned during the same quarter last year. The majority of the increase was attributed to service charges on deposit accounts.
General and administrative expenses were $2.0 million for the three months ended September 30, 2022, and $1.8 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.3 million for the third quarter of 2022 and $1.1 million for the same period last year.
Income tax expense was $506.5 thousand which represents an increase of $233 thousand or 44% for the three months ended September 30, 2022, as compared to $273.4 thousand for the three months ended September 30, 2021. The effective income tax rate for the third quarter of 2022 and 2021 were approximately 28.5% and 27.6% 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, Senior 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, 2022 and 2021
September 30, 2022
December 31, 2021
(unaudited)
(audited)
ASSETS:
Cash and due from banks
$
57,195,216
$
135,593,445
Federal funds sold
-
-
Total cash and cash equivalents
57,195,216
135,593,445
Interest-bearing deposits in other banks
-
-
Investment securities available for sale
6,224,948
40,270,538
Investment securities held to maturity
160,080,875
12,435,291
Total investments
166,305,823
52,705,829
Loans
Construction
1,223,140
414,072
Real estate
145,313,932
125,894,826
Commercial
31,635,685
48,133,781
Installment
132,776
1,741,267
Gross loans
178,305,533
176,183,946
Unearned fees and discounts
(561,576
)
(1,419,084
)
Loans net of unearned fees and discount
177,743,957
174,764,862
Allowance for loan losses
(4,078,299
)
(3,888,480
)
Net loans
173,665,658
170,876,382
Fixed assets, net
5,695,525
5,897,342
Accrued interest receivable
1,022,524
877,104
Stock investments, restricted, at cost
2,045,200
7,871,339
Bank-owned life insurance
8,007,214
2,045,200
Other assets
2,661,018
2,647,812
Total assets
$
416,598,178
$
378,514,453
LIABILITIES:
Deposits
Non-interest bearing
$
219,895,119
$
195,274,304
Interest bearing
NOW and money market
93,212,934
85,144,889
Savings
31,908,897
25,147,965
Time deposits less than $250,000
7,913,244
3,695,546
Time deposits of $250,000 or greater
2,920,458
9,616,481
Total deposits
355,850,652
318,879,185
Accrued interest payable
179,785
130,327
Borrowings from Federal Home Loan Bank (FHLB)
15,000,000
15,000,000
Accrued expenses & other payables
1,573,362
1,817,705
Subordinated debt
10,000,000
10,000,000
Subordinated notes payable to subsidiary trust
3,093,000
3,093,000
Total liabilities
385,696,799
348,920,217
SHAREHOLDERS' EQUITY
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,676,799 shares at September 30, 2022 and December 31, 2021, respectively.
10,502,558
10,502,557
Retained earnings
22,964,278
19,556,872
Accumulated other comprehensive income/(loss)
(2,565,457
)
(465,193
)
Total shareholders' equity
30,901,379
29,594,236
Total liabilities & shareholders' equity
$
416,598,178
$
378,514,453
CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
For the three months ended
For the nine months ended
September 30
September 30
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Interest income
Interest and fee income on loans
$
2,289,166
$
2,458,482
$
7,193,378
$
7,643,426
Interest on federal funds sold and FRB deposits
315,415
42,915
490,324
83,015
Interest on time deposits in banks
-
-
-
-
Interest on investment securities
1,004,274
206,101
2,196,498
637,644
Total interest income
3,608,855
2,707,498
9,880,200
8,364,085
Interest Expense
Interest on deposits
86,555
46,825
177,876
145,370
Other borrowings
222,041
207,096
641,264
486,770
Total interest expense
308,596
253,921
819,140
632,140
Net interest income
3,300,259
2,453,577
9,061,060
7,731,945
Provision for loan losses
100,000
185,000
150,000
555,000
Net interest income after provision for loan losses
3,200,259
2,268,577
8,911,060
7,176,945
Non-interest income
Service charges on deposit accounts
454,030
394,024
1,307,511
1,133,360
Other miscellaneous income
78,877
81,984
209,346
223,760
Dividend income from restricted stock
28,693
25,903
90,379
72,928
Income from bank-owned life insurance
46,724
42,669
135,876
104,395
Total non-interest income
608,324
544,580
1,743,112
1,534,443
Non-interest expenses
Salaries and employee benefits
1,266,765
1,092,730
3,702,106
3,173,864
Occupancy and equipment
166,159
153,998
478,881
461,912
Data and item processing
183,504
170,018
555,683
490,673
Advertising and marketing
21,952
29,035
106,939
91,121
Legal and professional fees
44,850
49,355
132,645
137,995
Regulatory assessments
56,630
37,761
145,727
107,801
Insurance
10,320
10,106
30,373
30,035
Directors' fees and expenses
32,160
31,920
96,360
97,080
Other expenses
247,373
246,677
647,176
753,192
Total non-interest expenses
2,029,713
1,821,600
5,895,890
5,343,673
Income before income tax expense
1,778,870
991,557
4,758,282
3,367,715
Income tax expense
506,530
273,434
1,350,354
943,711
Net income
$
1,272,340
$
718,123
$
3,407,928
$
2,424,004
Basic earnings per share
$
0.48
$
0.27
$
1.27
$
0.91
Diluted earnings per share
$
0.48
$
0.27
$
1.27
$
0.91
For the three months ended
For the nine months ended
September 30
September 30
2022
2021
2022
2021
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity
16.62
%
10.71
%
15.22
%
12.03
%
Annualized return on average assets
1.23
%
0.80
%
1.13
%
0.93
%
Net interest margin
3.33
%
2.91
%
3.17
%
3.21
%
Core efficiency ratio
51.93
%
60.76
%
54.57
%
57.67
%
Net chargeoffs/(recoveries) to average loans
-0.008
%
-0.011
%
-0.03
%
-0.03
%
AVERAGE BALANCES
(thousands, unaudited)
Average assets
$
413,023
$
360,266
$
402,883
$
346,155
Average interest-earning assets
$
393,530
$
334,456
$
382,177
$
322,099
Average gross loans
$
176,252
$
180,478
$
175,436
$
190,920
Average deposits
$
362,549
$
311,254
$
353,047
$
298,413
Average equity
$
30,620
$
26,830
$
29,859
$
26,867
CREDIT QUALITY
End of period
(unaudited)
September 30, 2022
December 31, 2021
Non-performing loans
$
411,992
$
115,434
Non-performing loans to total loans
0.23
%
0.07
%
Non-performing loans to total assets
0.10
%
0.03
%
Allowance for loan losses to total loans
2.29
%
2.21
%
Nonperforming assets as a percentage of total loans and OREO
Chino Commercial Bancorp serves as the holding company for Chino Commercial Bank (The Bank), which is a nationally chartered bank. The Bank offers personal banking and business banking services. The Bank's personal banking services, such as personal checking and savings, individual retirement account, online banking, mobile banking, Cash on delivery, debit cards, direct deposit, e-statements, electronic tax payment services, night depository, notary services and savings bonds. Its business banking offers business checking and savings, business loans, online cash management, business mobile banking, remote deposit capture, merchant services and medical professionals. Its Commercial loan products include lines of credit, letters of credit, term loans and equipment loans, commercial real estate loans, accounts receivable financing, factoring, equipment leasing and other working capital financing. Its Financing products include home improvement lines of credit and MasterCard debit cards.