Chino Commercial Bancorp Reports 42% Increase in Net Earnings
July 22, 2022 at 10:03 pm IST
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CHINO, Calif., July 22, 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 second quarter ended June 30, 2022. Net earnings for the second quarter of 2022, were $1.2 million, or an increase of 42.4%, as compared with earnings of $867 thousand for the same quarter last year. Net earnings per basic and diluted share was $0.46 for the second quarter of 2022, and $0.32 for the same quarter last year.
Dann H. Bowman, President and Chief Executive Officer, stated, “Despite the setbacks of the last two years, the economy of the Inland Empire appears to be rebounding. We are excited about the opportunities for growth and expansion of the Bank as we offer new products and services to help small businesses to grow and prosper.”
Financial Condition
At June 30, 2022, total assets were $406.8 million, an increase of $28.3 million or 7.5% over $378.5 million at December 31, 2021. Total deposits increased by $28.2 million or 8.8% to $347.1 million as of June 30, 2022, compared to $318.9 million as of December 31, 2021. At June 30, 2022, the Company’s core deposits represent 98.4% of the total deposits.
Gross loans decreased by 2.1% or $3.7 million as of June 30, 2022 to $172 million as compared with $176.2 million at December 31, 2021, primarily attributed to continued payoffs of PPP loans. The Bank had two non-performing loans for the quarter ended June 30, 2022, and one non-performing loan as of December 31, 2021. OREO properties remained at zero as of June 30, 2022 and December 31, 2021 respectively.
Earnings
The Company posted net interest income of $3.3 million for the three months ended June 30, 2022 and $2.6 million for the same quarter last year. Average interest-earning assets were $385.4 million with average interest-bearing liabilities of $154.5 million, yielding a net interest margin of 3.43% for the second quarter of 2022, as compared to the average interest-earning assets of $326 million with average interest-bearing liabilities of $143.8 million, yielding a net interest margin of 3.17% for the second quarter of 2021.
Non-interest income totaled $594.5.3 thousand for the second quarter of 2022, or an increase of 12.9% as compared with $526.4 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 $1.9 million for the three months ended June 30, 2022, and $1.7 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.2 million for the second quarter of 2022 and $1.0 million for the same period last year.
Income tax expense was $492 thousand which represents an increase of $150 thousand or 44% for the three months ended June 30, 2022, as compared to $342 thousand for the three months ended June 30, 2021. The effective income tax rate for the second quarter of 2022 and 2021 were approximately 28.5% and 28.3% 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
June 30, 2022 and 2021
June 30, 2022
December 31, 2021
(unaudited)
(audited)
ASSETS:
Cash and due from banks
$
65,532,718
$
135,593,445
Federal funds sold
-
-
Total cash and cash equivalents
65,532,718
135,593,445
-
Investment securities available for sale
6,754,523
40,270,538
Investment securities held to maturity
147,370,317
12,435,291
Total investments
154,124,840
52,705,829
Loans
Construction
718,156
414,072
Real estate
139,783,238
125,894,826
Commercial
31,847,131
48,133,781
Installment
138,524
1,741,267
Gross loans
172,487,049
176,183,946
Unearned fees and discounts
(605,511
)
(1,419,084
)
Loans net of unearned fees and discount
171,881,538
174,764,862
Allowance for loan losses
(3,969,967
)
(3,888,480
)
Net loans
167,911,571
170,876,382
Fixed assets, net
5,760,131
5,897,342
Accrued interest receivable
1,021,469
877,104
Stock investments, restricted, at cost
2,045,200
7,871,339
Bank-owned life insurance
7,960,490
2,045,200
Other assets
2,490,260
2,647,812
Total assets
$
406,846,679
$
378,514,453
LIABILITIES:
Deposits
Non-interest bearing
$
214,792,565
$
195,274,304
Interest bearing
NOW and money market
91,053,995
85,144,889
Savings
30,443,494
25,147,965
Time deposits less than $250,000
8,223,753
3,695,546
Time deposits of $250,000 or greater
2,574,278
9,616,481
Total deposits
347,088,085
318,879,185
Accrued interest payable
117,711
130,327
Borrowings from Federal Home Loan Bank (FHLB)
15,000,000
15,000,000
Accrued expenses & other payables
1,597,793
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
376,896,589
348,920,217
SHAREHOLDERS' EQUITY
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,676,799 shares at June 30, 2022 and December 31, 2021, respectively.
10,502,558
10,502,557
Retained earnings
21,691,938
19,556,872
Accumulated other comprehensive income/(loss)
(2,244,406
)
(465,193
)
Total shareholders' equity
29,950,090
29,594,236
Total liabilities & shareholders' equity
$
406,846,679
$
378,514,453
CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
For the three months ended
For the six months ended
June 30
June 30
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Interest income
Interest and fee income on loans
$
2,591,015
$
2,536,482
$
4,904,212
$
5,184,945
Interest on federal funds sold and FRB deposits
121,723
23,835
174,910
40,100
Interest on time deposits in banks
-
-
-
-
Interest on investment securities
842,810
218,100
1,192,224
431,543
Total interest income
3,555,548
2,778,417
6,271,346
5,656,588
Interest Expense
Interest on deposits
48,804
48,752
91,321
98,546
Other borrowings
212,719
155,818
419,222
277,882
Total interest expense
261,523
204,570
510,543
376,428
Net interest income
3,294,025
2,573,847
5,760,803
5,280,160
Provision for loan losses
250,000
170,000
50,000
370,000
Net interest income after provision for loan losses
3,044,025
2,403,847
5,710,803
4,910,160
Non-interest income
Service charges on deposit accounts
444,237
391,238
853,482
739,336
Other miscellaneous income
71,781
80,061
130,469
141,777
Dividend income from restricted stock
33,460
23,917
61,686
47,025
Income from bank-owned life insurance
45,018
31,162
89,151
61,726
Total non-interest income
594,496
526,378
1,134,788
989,864
Non-interest expenses
Salaries and employee benefits
1,191,030
1,032,909
2,435,342
2,081,133
Occupancy and equipment
152,959
151,628
312,722
307,914
Data and item processing
190,698
164,107
372,179
320,655
Advertising and marketing
25,704
27,236
75,521
54,420
Legal and professional fees
43,770
46,167
87,795
90,432
Regulatory assessments
46,430
36,561
89,098
70,041
Insurance
10,124
10,106
20,053
19,929
Directors' fees and expenses
32,040
32,880
64,200
65,160
Other expenses
219,000
219,444
409,791
514,181
Total non-interest expenses
1,911,755
1,721,038
3,866,701
3,523,865
Income before income tax expense
1,726,766
1,209,187
2,978,890
2,376,159
Income tax expense
491,913
341,717
843,824
670,277
Net income
$
1,234,853
$
867,470
$
2,135,066
$
1,705,882
Basic earnings per share
$
0.46
$
0.32
$
0.80
$
0.64
Diluted earnings per share
$
0.46
$
0.32
$
0.80
$
0.64
For the three months ended
For the six months ended
June 30
June 30
2022
2021
2022
2021
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity
17.68
%
13.00
%
15.00
%
12.69
%
Annualized return on average assets
1.22
%
0.99
%
1.07
%
1.01
%
Net interest margin
3.43
%
3.17
%
3.09
%
3.37
%
Core efficiency ratio
49.16
%
55.51
%
56.07
%
56.20
%
Net chargeoffs/(recoveries) to average loans
-0.011
%
-0.008
%
-0.02
%
-0.02
%
AVERAGE BALANCES
(thousands, unaudited)
Average assets
$
405,447
$
350,226
$
397,719
$
338,983
Average interest-earning assets
$
385,416
$
325,987
$
376,406
$
315,817
Average gross loans
$
175,736
$
196,470
$
175,021
$
196,228
Average deposits
$
355,910
$
303,611
$
348,217
$
291,780
Average equity
$
27,942
$
26,684
$
28,466
$
26,886
CREDIT QUALITY
End of period
(unaudited)
June 30, 2022
December 31, 2021
Non-performing loans
$
453,427
$
115,434
Non-performing loans to total loans
0.26
%
0.07
%
Non-performing loans to total assets
0.11
%
0.03
%
Allowance for loan losses to total loans
2.30
%
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.