Chino Commercial Bancorp Reports Second Quarter Earnings
July 21, 2023 at 12:01 pm EDT
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CHINO, Calif., July 21, 2023 (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, 2023. Net earnings for the second quarter of 2023, were $1.3 million, or an increase of 2.53%, as compared with earnings of $1.2 million for the same quarter last year. Net earnings per basic and diluted share was $0.39 for the second quarter of 2023, and $0.38 for the same quarter last year.
Net earnings year to date increased by 12.3% or by $300 thousand to $2.4 million, as compared to $2.1 million for the same period last year. Net earnings per basic and diluted share was $0.76 for the period ending June 30, 2023 and $0.76 for the same period last year.
Dann H. Bowman, President and Chief Executive Officer, stated, “The fundamentals of the Company remain strong, with the Bank having only one delinquent loan at quarter-end, and revenue up significantly over the same period last year. The Net Interest Margin for the Bank, as a percent, has contracted slightly as deposits re-price faster than earning assets, however, this compression has been partially overcome through increased total assets. In general, we are optimistic about the opportunities for growth and expansion over the next several years. We believe the economic engine of the Inland Empire is strong and diverse, and the Bank is well positioned to help small business customers in our market.”
Financial Condition
At June 30, 2023, total assets were $453.4 million, an increase of $53.5 million or 13.4% over $399.8 million at December 31, 2022. Total deposits decreased by $6.7 million or 2.0% to $330.8 million as of June 30, 2023, compared to $337.5 million as of December 31, 2022. At June 30, 2022, the Company’s core deposits represent 97.7% of the total deposits.
Gross loans decreased by $4.3 million or 2.37% to $177.0 million as of June 30, 2022, compared to $181.2 million as of December 31, 2022. The Bank had three non-performing loans for the quarter ended June 30, 2023, and two non-performing loans as of December 31, 2022. OREO properties remained at zero as of June 30, 2023 and December 31, 2022 respectively.
Earnings
The Company posted net interest income of $3.2 million for the three months ended June 30, 2023 and $3.3 million for the same quarter last year. The decrease is primarily attributed to non-reoccurring PPP loan fees recognized in the second quarter of 2022. Average interest-earning assets were $431.5 million with average interest-bearing liabilities of $224.3 million, yielding a net interest margin of 3.00% for the second quarter of 2023, as compared to the average interest-earning assets of $383.4 million with average interest-bearing liabilities of $157.5 million, yielding a net interest margin of 3.48% for the second quarter of 2022.
Non-interest income totaled $645.8 thousand for the second quarter of 2023, or an increase of 15.10% as compared with $561.0 thousand earned during the same quarter last year. The majority of the increase is attributed to service charges on deposit accounts and other fees.
General and administrative expenses were $2.2 million for the three months ended June 30, 2023, and $1.9 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.4 million for the second quarter of 2023 and $1.2 million for the same period last year.
Income tax expense was $504 thousand, which represents an increase of $11 thousand or 2.4% for the three months ended June 30, 2023, as compared to $492 thousand for the three months ended June 30, 2022. The effective income tax rate for the second quarter of 2022 and 2021 were approximately 28.5%, for both periods.
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.
Chino Commercial Bankcorp and Subsidiary
Consolidated Statements of Financial Condition
As of
6/30/2023
12/31/2022
unaudited
audited
Assets
Cash and due from banks
$
99,055,945
$
36,436,018
Cash and cash equivalents
99,055,945
36,436,018
Fed Funds Sold
4,647
-
4,647
-
Investment securities available for sale , net of zero allowance for credit losses
6,517,757
6,347,231
Investment securities held to maturity , net of zero allowance for credit losses
155,865,013
160,668,959
Total Investments
162,382,770
167,016,191
Loans held for investment, net of allowance for credit losses of
$4,444,921 in 2023, and $4,100,516 in 2022
172,014,468
176,555,783
Stock investments, restricted, at cost
3,126,100
2,045,200
Fixed assets, net
5,518,847
5,626,850
Accrued interest receivable
1,102,968
1,153,613
Bank owned life insurance
8,148,613
8,054,491
Other assets
2,012,556
2,947,830
Total assets
$
453,366,914
$
399,835,974
Liabilities
Deposits
Noninterest-bearing
187,740,177
204,189,323
Interest-bearing
143,061,127
133,263,940
Total deposits
330,801,304
337,453,262
Federal Home Loan Bank advances
15,000,000
15,000,000
Federal Reserve Bank borrowings
57,000,000
-
Subordinated debt
10,000,000
10,000,000
Subordinated notes payable to subsidiary trust
3,093,000
3,093,000
Accrued interest payable
853,137
124,947
Other liabilities
1,893,419
1,815,062
Total liabilities
418,640,860
367,486,270
Shareholders' Equity
Common stock, no par value, 10,000,000 shares authorized
and 3,211,981 shares issued and outstanding
at June 30, 2023 and December 31, 2022
10,502,558
10,502,558
Retained earnings
26,421,206
24,269,527
Accumulated other comprehensive loss - unrecognized
loss on available for sale, net of taxes
(2,197,710
)
(2,422,382
)
Total shareholders' equity
34,726,053
32,349,703
Total liabilities and shareholders' equity
$
453,366,914
$
399,835,974
Chino Commercial Bankcorp and Subsidiary
Consolidated Statements of Net Income
For the three month ended
For the six month ended
30-Jun
30-Jun
2023
2022
2023
2022
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Interest Income
Interest and fees on loans
2,388,004
2,591,015
4,778,163
4,904,212
Interest on investment securities
1,144,162
842,810
2,277,748
1,192,224
Other interest income
1,174,803
155,183
1,580,037
236,595
Total interest income
4,706,968
3,589,007
8,635,948
6,333,031
Interest Expense
Interest on deposits
616,992
48,804
993,852
91,321
Interest on borrowings
864,373
212,719
1,235,776
419,222
Total interest expense
1,481,364
261,522
2,229,628
510,543
Net Interest Income
3,225,604
3,327,485
6,406,320
5,822,488
Provision For Loan Losses
(90,520
)
247,125
(88,384
)
42,530
Net Interest Income After Provision For Loan Losses
3,316,124
3,080,360
6,494,704
5,779,958
Noninterest Income
Service charges and fees on deposit accounts
399,977
316,619
759,877
619,107
Interchange fees
105,226
127,618
208,385
234,375
Earnings from bank-owned life insurance
47,812
45,018
94,123
89,151
Other miscellaneous income
92,755
71,780
178,149
130,468
Total noninterest income
645,770
561,035
1,240,533
1,073,101
Noninterest Expense
Salaries and employee benefits
1,366,733
1,191,030
2,719,668
2,435,342
Occupancy and equipment
150,482
152,959
304,074
312,722
Other expenses
675,019
570,640
1,309,485
1,126,106
Total noninterest expense
2,192,234
1,914,629
4,333,226
3,874,169
Income before income tax expense
1,769,660
1,726,766
3,402,010
2,978,890
Provision for income taxes
503,534
491,913
967,435
843,824
Net Income
$
1,266,126
$
1,234,853
$
2,434,575
$
2,135,066
Basic earnings per share
$
0.39
$
0.38
$
0.76
$
0.66
Diluted earnings per share
$
0.39
$
0.38
$
0.76
$
0.66
Chino Commercial Bankcorp and Subsidiary
Financial Highlights
For the three month ended
Key Financial Ratios
2023
2022
2023
2022
(unaudited)
Annualized return on average equity
14.88
%
16.70
%
14.58
%
14.44
%
Annualized return on average assets
1.12
%
1.22
%
1.14
%
1.07
%
Net interest margin
3.00
%
3.48
%
1.75
%
3.12
%
Core efficiency ratio
56.63
%
49.24
%
56.18
%
56.18
%
Net chargeoffs/(recoveries) to average loans
-0.010
%
-0.011
%
-0.011
%
-0.022
%
Average Balances
(thousands, unaudited)
Average assets
452,401
405,447
427,314
397,719
Average interest-earning assets
431,476
383,414
406,246
376,011
Average interest-bearing liabilities
224,283
157,531
196,631
155,217
Average gross loans
177,412
175,736
179,516
175,021
Average deposits
330,835
345,793
329,648
338,115
Average equity
34,028
29,579
33,402
29,517
End of period
6/30/2023
12/31/2022
Credit Quality
Non-performing loans
520,726
404,095
Non-performing loans to total loans
0.29
%
0.22
%
Non-performing loans to total assets
0.11
%
0.10
%
Allowance for credit losses to total loans
2.51
%
2.26
%
Nonperforming assets as a percentage of total loans and OREO
0.29
%
0.22
%
Allowance for credit losses to non-performing loans
853.60
%
1014.74
%
Other Period-end Statistics
Shareholders equity to total assets
7.66
%
7.92
%
Net loans to deposits
52.00
%
52.32
%
Non-interest bearing deposits to total deposits
56.75
%
60.51
%
Company Leverage Ratio
8.85
%
8.12
%
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 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.