Chino Commercial Bancorp Reports 85% Increase In Net Earnings
January 20, 2023 at 11:46 pm IST
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CHINO, Calif., Jan. 20, 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 fourth quarter ended December 31, 2022. Net earnings for the fourth quarter of 2022, were $1.3 million, or an increase of 84.6%, as compared with earnings of $706 thousand for the same quarter last year. Net earnings per basic and diluted share was $0.49 for the fourth quarter of 2022, and $0.26 for the same quarter last year.
Net earnings for the fiscal year ended December 31, 2022 increased by 50.5% or by $1.6 million to $4.7 million, as compared to $3.1 million for fiscal year 2021. Net earnings per basic and diluted share was $1.76 for the fiscal year 2021, and $1.17 for fiscal year 2021.
Dann H. Bowman, President and Chief Executive Officer, stated “Despite the rapidly rising interest rate environment, 2022 was a very good year for the Bank, in setting new records for Deposits, Revenue and Earnings and Earnings Per Share. We do see some weakness in the economy over the next 18 months, however, even this has the potential to create opportunities to expand the customer base and grow the company. 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 innovate as we navigate through challenging times.”
Financial Condition
At December 31, 2022, total assets were $399.7 million, an increase of $21.1 million or 5.6% over $378.5 million at December 31, 2021. Total deposits increased by $18.6 million or 5.8% to $337.5 million as of December 31, 2022, compared to $318.9 million as of December 31, 2021. At December 31, 2022, the Company’s core deposits represent 98.3% of the total deposits.
Gross loans increased by 2.8% or $5.0 million as of December 31, 2022 to $181.1 million as compared with $176.2 million at December 31, 2021. The Bank had two non-performing loans for the quarter ended December 31, 2022, and one non-performing loan as of December 31, 2021. OREO properties remained at zero as of December 31, 2022 and December 31, 2021 respectively.
Earnings
The Company posted net interest income of $3.4 million for the three months ended December 31, 2022 and $2.6 million for the same quarter last year. Average interest-earning assets were $408.4 million with average interest-bearing liabilities of $158.7 million, yielding a net interest margin of 3.52% for the fourth quarter of 2022, as compared to the average interest-earning assets of $374.9 million with average interest-bearing liabilities of $145.9 million, yielding a net interest margin of 2.63% for the fourth quarter of 2021.
Non-interest income totaled $614.6 thousand for the fourth quarter of 2022, or an increase of 1.4% as compared with $606.2 thousand earned during the same quarter last year. The majority of the increase is attributed to service charges on deposit accounts.
General and administrative expenses were $2.2 million for the three months ended December 31, 2022, and $2.0 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 fourth quarter of 2022 and $1.2 million for the same period last year.
Income tax expense was $513.8 thousand which represents an increase of $254.7 thousand or 98.3% for the three months ended December 31, 2022, as compared to $259.1 thousand for the three months ended December 31, 2021. The effective income tax rate for the fourth quarter of 2022 and 2021 were approximately 28.2% and 26.8% 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
December 31, 2022 and 2021
December 31, 2022
December 31, 2021
(unaudited)
(audited)
ASSETS:
Cash and due from banks
$
36,436,018
$
135,593,445
Federal funds sold
-
-
Total cash and cash equivalents
36,436,018
135,593,445
Interest-bearing deposits in other banks
-
-
Investment securities available for sale
6,347,231
40,270,538
Investment securities held to maturity
160,668,959
12,435,291
Total investments
167,016,190
52,705,829
Loans
Construction
2,252,407
414,072
Real estate
146,467,077
125,894,826
Commercial
32,272,185
48,133,781
Installment
156,688
1,741,267
Credit Cards
0
-
Gross loans
181,148,357
176,183,946
Unearned fees and discounts
(492,058
)
(1,419,084
)
Loans net of unearned fees and discount
180,656,299
174,764,862
Allowance for loan losses
(4,100,516
)
(3,888,480
)
Net loans
176,555,783
170,876,382
Fixed assets, net
5,628,950
5,897,342
Accrued interest receivable
1,153,613
877,104
Stock investments, restricted, at cost
2,045,200
7,871,339
Bank-owned life insurance
8,054,491
2,045,200
Other assets
2,763,767
2,647,812
Total assets
$
399,654,012
$
378,514,453
LIABILITIES:
Deposits
Non-interest bearing
$
204,189,323
$
195,274,304
Interest bearing
NOW and money market
95,203,888
85,144,889
Savings
27,195,883
25,147,965
Time deposits less than $250,000
8,193,190
3,695,546
Time deposits of $250,000 or greater
2,670,980
9,616,481
Total deposits
337,453,264
318,879,185
Accrued interest payable
124,947
130,327
Borrowings from Federal Home Loan Bank (FHLB)
15,000,000
15,000,000
Accrued expenses & other payables
1,633,098
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
367,304,309
348,920,217
SHAREHOLDERS' EQUITY
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,676,799 shares at December 31, 2022 and December 31, 2021, respectively.
10,502,558
10,502,557
Retained earnings
24,269,527
19,556,872
Accumulated other comprehensive income/(loss)
(2,422,382
)
(465,193
)
Total shareholders' equity
32,349,703
29,594,236
Total liabilities & shareholders' equity
$
399,654,012
$
378,514,453
CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
For the three months ended
For the twelve months ended
December 31
December 31
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Interest income
Interest and fee income on loans
$
2,376,312
$
2,271,284
$
9,569,690
$
9,914,710
Interest on federal funds sold and FRB deposits
356,363
47,599
846,687
130,615
Interest on time deposits in banks
-
-
-
-
Interest on investment securities
1,127,397
242,681
3,323,894
880,324
Total interest income
3,860,072
2,561,564
13,740,271
10,925,649
Interest Expense
Interest on deposits
185,046
42,090
362,922
187,460
Other borrowings
233,400
207,193
874,663
693,963
Total interest expense
418,446
249,283
1,237,585
881,423
Net interest income
3,441,626
2,312,281
12,502,686
10,044,226
Provision for loan losses
-
-
150,000
555,000
Net interest income after provision for loan losses
3,441,626
2,312,281
12,352,686
9,489,226
Non-interest income
Service charges on deposit accounts
453,361
412,268
1,760,872
1,545,628
Other miscellaneous income
82,695
119,487
292,040
343,246
Dividend income from restricted stock
31,262
28,693
121,641
101,622
Income from bank-owned life insurance
47,276
45,711
183,152
150,107
Total non-interest income
614,594
606,159
2,357,705
2,140,603
Non-interest expenses
Salaries and employee benefits
1,398,248
1,234,412
5,100,354
4,408,276
Occupancy and equipment
158,265
157,939
637,146
619,851
Data and item processing
187,819
173,749
743,502
664,422
Advertising and marketing
34,101
26,664
152,684
126,457
Legal and professional fees
77,250
900
209,895
138,895
Regulatory assessments
53,918
41,768
199,645
149,569
Insurance
10,713
10,106
41,086
40,141
Directors' fees and expenses
37,470
32,520
133,830
129,600
Other expenses
279,416
274,294
915,470
1,018,813
Total non-interest expenses
2,237,200
1,952,352
8,133,612
7,296,024
Income before income tax expense
1,819,020
966,088
6,576,779
4,333,805
Income tax expense
513,771
259,105
1,864,125
1,202,816
Net income
$
1,305,249
$
706,983
$
4,712,654
$
3,130,989
Basic earnings per share
$
0.49
$
0.26
$
1.76
$
1.17
Diluted earnings per share
$
0.49
$
0.26
$
1.76
$
1.17
For the three months ended
For the twelve months ended
December 31
December 31
2022
2021
2022
2021
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity
19.02
%
10.68
%
16.81
%
11.70
%
Annualized return on average assets
1.28
%
0.75
%
1.17
%
0.89
%
Net interest margin
3.52
%
2.63
%
3.26
%
3.06
%
Core efficiency ratio
55.15
%
66.90
%
54.73
%
59.88
%
Net chargeoffs/(recoveries) to average loans
-0.008
%
-0.008
%
-0.04
%
-0.03
%
AVERAGE BALANCES
(thousands, unaudited)
Average assets
$
408,424
$
374,871
$
404,283
$
353,393
Average interest-earning assets
$
388,271
$
348,574
$
383,713
$
328,772
Average gross loans
$
180,687
$
175,748
$
176,759
$
187,096
Average deposits
$
357,027
$
325,436
$
354,050
$
305,234
Average equity
$
27,450
$
26,488
$
28,040
$
26,772
CREDIT QUALITY
End of period
(unaudited)
December 31, 2022
December 31, 2021
Non-performing loans
$
404,095
$
115,434
Non-performing loans to total loans
0.22
%
0.07
%
Non-performing loans to total assets
0.10
%
0.03
%
Allowance for loan losses to total loans
2.26
%
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.