Chino Commercial Bancorp Reports Quarterly and Full Year Earnings

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| Source: Chino Commercial Bancorp

CHINO, Calif., Jan. 19, 2018 (GLOBE NEWSWIRE) --

The Board of Directors of Chino Commercial Bancorp (OTC:CCBC), the parent company of Chino Commercial Bank, N.A., announced the net earnings for the Bank and the consolidated holding company, for the fourth quarter ended December 31, 2017, with net earnings before taxes of $588 thousand, or an increase of 9.1%, compared with earnings before taxes of $539 thousand for the same quarter last year.  Net after-tax income for the fourth quarter ending December 31, 2017 was $280 thousand, which represents a 14.9% decrease, compared with net income of $329 thousand for the same quarter last year.  The decrease in net income for the fourth quarter 2017 was attributable to a one-time deferred tax adjustment in order to comply with the Tax Reform Act signed into law in December 2017.  Net income per basic and diluted share for the fourth quarter of 2017 was $0.18 as compared to $0.27 for the same quarter last year. 

The Company’s net after-tax income for the full year ended December 31, 2017 increased 8.1% to $1.571 million as compared with net earnings of $1.453 million for the same period in 2016. Even though net after-tax earnings were higher in 2017 as compared with 2016, because of additional shares issued during the year, the basic and diluted earnings per share were $1.17 in 2017 as compared with $1.18 in 2016.

Dann H. Bowman, President and Chief Executive Officer, stated, “The Company had an excellent year in 2017, posting new record levels of Deposits, Loans, Revenue and Net Earnings.  The Tax Reform Act will reduce the corporate income tax rate beginning in 2018; however, for 2017 it resulted in a one-time increased tax burden, because of the reduction to the Company’s deferred tax asset.

"In 2017 the Company raised $4.4 million in additional capital and issued 318,088 shares of additional common stock. The capital raise was oversubscribed and will allow the Company to offer new products and expand into new markets. The Bank recently filed an application with the Office of the Comptroller of the Currency to establish a fourth branch office in Upland.  We are excited about expanding into this community, which we believe will significantly contribute to the Company’s growth and profitability.”

Financial Condition

At December 31, 2017, total assets were $192.8 million, an increase of $17.7 million or 10.1% over $175.1 million at December 31, 2016.  Total deposits increased by 8.4% or $11.6 million during the year to $149.1 million, compared to $137.6 million as of December 31, 2016. At December 31, 2017, the Company’s core deposits represent 90.8% of the total deposits.

Gross loans increased by 11.9% or $13.0 million as of December 31, 2017 to $122.6 million, as compared with $109.5 million as of December 31, 2016.  The Bank did not have any nonperforming loans for the quarter ended December 31, 2017, and one nonperforming loan as of December 31, 2016, respectively.  OREO properties remained at zero as of December 31, 2017 and December 31, 2016, respectively.

Earnings

The Company posted net interest income of $1.6 million and $1.5 million for the three months ended December 31, 2017 and 2016, respectively, or an increase of $158 thousand or 10.7%.  Average interest-earning assets were $179.4 million with average interest-bearing liabilities of $101.0 million, yielding a net interest margin of 3.62% for the fourth quarter of 2017, as compared to the average interest-earning assets of $161.8 million with average interest-bearing liabilities of $85.9 million, yielding a net interest margin of 3.64% for the fourth quarter of 2016.

Non-interest income totaled $372 thousand for the fourth quarter of 2017, or a decrease of 3.0% as compared with $383 thousand earned during the same quarter last year. Service charges on deposit accounts increased by $43 thousand or 18.0% to $241 thousand, primarily due to an increase in income from returned items, overdraft charges, and analysis fees. Dividend income from restricted stock decreased to $40.1 thousand for the fourth quarter of 2017, compared to $99 thousand for the same quarter in 2016, 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 fourth quarter of 2017 and 2016, respectively.

General and administrative expenses were $1.3 million for the three months ended December 31, 2017, and December 31, 2016, respectively. The largest component of general and administrative expenses was salary and benefits expense of $803 thousand for the fourth quarter of 2017, as compared to $791 thousand for the same quarter last year. Regulatory assessments remained consistent at about $38 thousand for the fourth quarter of 2017 and 2016, respectively. Advertising and marketing expenses increased by $28 thousand or 122.7% to $50 thousand in the fourth quarter of 2017 from $23 thousand for the same period last year.  The Company engaged a marketing company to assist with advertising efforts during 2017.

Income tax expense was $307 thousand which represents an increase of $98 thousand or 47.03% for the three months ended December 31, 2017 as compared to $209 thousand for the three months ended December 31, 2016. The effective income tax rate for the fourth quarter of 2017 and 2016 is approximately 52.3% and 38.8%, respectively.  The increase in the income tax expense as well as the effective tax rate is entirely attributed to the deferred tax adjustment recorded to comply with the 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.

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, 2017 and December 31, 2016 
  
 December 31, 2017 December 31, 2016 
 (unaudited) (audited) 
ASSETS:        
Cash and due from banks 34,157,668  $30,498,888  
Total cash and cash equivalents 34,157,668   30,498,888  
         
Interest-bearing deposits in other banks 1,240,000   2,480,000  
Investment securities available for sale 3,131,027   3,924,102  
Investment securities held to maturity (fair value approximates        
$21,104,000 at December 31, 2017 and $18,240,000 at December 31, 2016) 21,389,552   18,407,741  
Total investments 25,760,579   24,811,843  
Loans        
Real estate 99,585,847   87,306,627  
Commercial 22,679,268   21,822,341  
Installment 337,455   424,818  
Gross loans 122,602,570   109,553,786  
Unearned fees and discounts (365,091)  (348,359) 
Loans net of unearned fees and discount 122,237,479   109,205,427  
Allowance for loan losses (2,094,723)  (1,845,447) 
Net loans 120,142,756   107,359,980  
         
Fixed assets, net 5,875,381   6,000,404  
Accrued interest receivable 531,771   295,102  
Stock investments, restricted, at cost 2,084,129   1,935,300  
Bank-owned life insurance 3,386,754   3,285,963  
Other assets 861,969   904,338  
Total assets$  192,801,007  $  175,091,818  
         
LIABILITIES:        
Deposits        
Non-interest bearing $  74,766,694  $  68,613,998  
Interest bearing        
NOW and money market 47,030,167   52,873,006  
Savings 7,897,948   5,165,730  
Time deposits less than $250,000 5,727,789   4,438,254  
Time deposits of $250,000 or greater 13,703,790   6,471,260  
Total deposits 149,126,388   137,562,248  
         
Accrued interest payable 65,160   27,902  
Borrowings from Federal Home Loan Bank (FHLB)   20,000,000     20,000,000  
Accrued expenses & other payables 1,012,535   872,374  
Subordinated notes payable to subsidiary trust 3,093,000   3,093,000  
Total liabilities 173,297,083   161,555,524  
         
SHAREHOLDERS' EQUITY        
Common stock, authorized 10,000,000 shares with no par value, issued and        
outstanding 1,549,420 shares at December 31, 2017 and 1,231,332 issued        
and outstanding at December 31, 2016, respectively. 10,502,558   6,089,466  
Retained earnings 9,020,564   7,449,608  
Accumulated other comprehensive income/(loss) (19,198)  (2,780) 
Total shareholders' equity 19,503,924   13,536,294  
Total liabilities & shareholders' equity$  192,801,007  $  175,091,818  
         
         

 

CHINO COMMERCIAL BANCORP 
CONSOLIDATED STATEMENTS OF NET INCOME 
  
 For the three months ended For the year ended 
 December 31 December 31 
  2017   2016   2017   2016  
 (unaudited) (unaudited) (unaudited) (audited) 
Interest income                
Interest and fee income on loans$1,562,601  $1,418,399  $6,086,085  $5,465,664  
Interest on federal funds sold and FRB deposits 117,777   40,673   359,557   129,894  
Interest on time deposits in banks 5,353   7,945   26,398   38,596  
Interest on investment securities 145,098   121,584   552,510   545,090  
Total interest income 1,830,829   1,588,601   7,024,550   6,179,244  
                 
Interest Expense                
Interest on deposits 107,280   73,516   366,492   268,336  
Other borrowings 87,061   36,216   305,524   142,676  
Total interest expense 194,341   109,732   672,016   411,012  
Net interest income 1,636,488   1,478,869   6,352,534   5,768,232  
Provision for loan losses 100,000   40,000   210,000   199,950  
                 
Net interest income after provision for loan losses 1,536,488   1,438,869   6,142,534   5,568,282  
                 
Non-interest income                
Service charges on deposit accounts 284,681   241,256   1,202,933   1,062,812  
Other miscellaneous income 21,323   16,521   75,684   180,347  
Dividend income from restricted stock 40,681   99,694   149,983   221,499  
Income from bank-owned life insurance 25,336   25,891   100,791   102,716  
Total non-interest income 372,021   383,362   1,529,391   1,567,374  
                 
Non-interest expenses                
Salaries and employee benefits 803,215   791,133   3,051,474   2,882,535  
Occupancy and equipment 110,354   102,348   424,856   416,781  
Data and item processing 88,103   86,049   335,582   316,821  
Advertising and marketing 50,321   22,598   127,371   76,074  
Legal and professional fees 46,706   46,227   196,082   184,900  
Regulatory assessments 37,929   37,611   150,753   141,000  
Insurance 9,102   8,608   34,475   34,180  
Directors' fees and expenses 29,638   26,983   120,214   108,013  
Other expenses 145,455   162,168   512,940   594,311  
Total non-interest expenses 1,320,823   1,283,725   4,953,747   4,754,615  
Income before income tax expense 587,686   538,506   2,718,178   2,381,041  
Income tax expense 307,328   209,030   1,147,224   927,938  
Net income$  280,358  $  329,476  $  1,570,954  $  1,453,103  
                 
Basic earnings per share $  0.18  $  0.27  $  1.17  $  1.18  
Diluted earnings per share $  0.18  $  0.27  $  1.17  $  1.18  
                 
                 
Tax rate 52.3%  38.8%  42.2%  39.0% 
                 
                 

 

  For the three months ended For the year ended 
  December 31 December 31 
   2017   2016   2017   2016  
KEY FINANCIAL RATIOS                 
(unaudited)                 
Annualized return on average equity  6.25%  9.82%  10.45%  11.31% 
Annualized return on average assets  0.58%  0.75%  0.84%  0.85% 
Net interest margin  3.62%  3.64%  3.70%  3.70% 
Core efficiency ratio  65.76%  68.93%  62.85%  64.82% 
Net chargeoffs/(recoveries) to average loans  -0.01%  -0.01%  -0.04%  0.02% 
                  
AVERAGE BALANCES                 
(thousands, unaudited)                 
Average assets $  194,156  $  176,301  $  186,548  $  170,152  
Average interest-earning assets $  179,445  $  161,809  $  171,802  $  155,719  
Average gross loans $  117,395  $  106,639  $  113,587  $  101,710  
Average deposits $  149,863  $  143,072  $  144,370  $  136,436  
Average equity $  17,946  $  13,416  $  15,037  $  12,848  
                  
                  
                  
CREDIT QUALITY End of period     
(unaudited) December 31, 2017 December 31, 2016     
          
Non-performing loans $  -  $  521,696      
                  
Non-performing loans to total loans  0.00%  0.48%         
Non-performing loans to total assets  0.00%  0.30%         
Allowance for loan losses to total loans  1.71%  1.68%         
Nonperforming assets as a percentage of total loans and OREO  0.00%  0.48%         
Allowance for loan losses to non-performing loans  n/a   353.74%         
                  
OTHER PERIOD-END STATISTICS                 
(unaudited)                 
Shareholders equity to total assets  10.12%  7.73%         
Net loans to deposits  80.56%  78.04%         
Non-interest bearing deposits to total deposits  50.14%  49.88%         
Total capital to total risk-weighted assets  18.43%  15.37%         
Tier 1 capital to total risk-weighted assets  19.76%  15.32%         
Tier 1 leverage ratio  13.41%  10.24%         
Common equity tier 1  19.76%  15.32%