Chino Commercial Bancorp Reports 34% Increase in Net Earnings

CHINO, Calif., July 16, 2021 (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, 2021. Net earnings for the second quarter 2021, were $867 thousand, or an increase of 33.8%, as compared with earnings of $648 thousand for the same quarter last year. The increase in earnings is primarily attributed to the increase in loan interest and loan fee income. Net earnings per basic and diluted share was $0.32 for the second quarter of 2021, and $0.24 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer, stated, “The second quarter of 2021 marks continued improvement for the Company, with total Deposits, and Earnings reaching new record levels. The competitive market for the Bank is very strong, and as the economy of Southern California returns to pre-pandemic levels, we see even more opportunities in the future. We are also pleased to report that loan quality remains very strong, with the Bank having no delinquent loans at quarter-end, no pending foreclosures, and no OREO. Despite the challenges of the last year, we are optimistic about the opportunities for growth and expansion in the future.”

Financial Condition

At June 30, 2021, total assets were $353.3 million, an increase of $38.5 million or 12.2% over $314.8 million at December 31, 2020. Total deposits increased by 14.4% or $37.2 million to $294.9 million as of June 30, 2021, compared to $257.7 million as of December 31, 2020. At June 30, 2021, the Company’s core deposits represent 97.5% of the total deposits.

Gross loans decreased by 1.7 % or $3.3 million as of June 30, 2021 to $192.4 million, as compared with $195.7 million as of December 31, 2020, primarily due to pay downs on loans made under the Payroll Protection Program. The Bank had one non-performing loan for the quarters ended June 30, 2021, and December 31, 2020. OREO properties remained at zero as of June 30, 2021 and December 31, 2020 respectively.

Much of the increases in total assets and deposits over the last 14 months is attributable to the Bank’s response to the overwhelming demand for SBA PPP loans to small businesses. Overall, since the program started the Bank approved and funded 688 PPP loans with an outstanding balance of $45.9 million as of June 30, 2021, a decrease of 21.1% or $12.3 million as compared $58.2 million outstanding as of March 31, 2021.

The Company issued a 20% stock dividend on July 6, 2021 to shareholders of record as of June 17, 2021. This dividend increased the number of shares outstanding by 445,991 bringing the total shares outstanding to 2,676,799.

On May 21, 2021, the Company completed a $10 million subordinated note offering. The Notes have a maturity date of June 1, 2031 and carry a fixed rate of interest of 4.250% for the first five years. Thereafter, the Notes will pay interest at 3-month SOFR plus 356 basis points, resetting quarterly. The Notes include a right of prepayment without penalty on or after June 1, 2026. The Notes have been structured to qualify as Tier 2 capital for regulatory purposes.

Earnings

The Company posted net interest income of $2.6 million for the three months ended June 30, 2021 and $2.3 million for the same quarter last year. Average interest-earning assets were $325,987 million with average interest-bearing liabilities of $143.8 million, yielding a net interest margin of 3.17% for the second quarter of 2021, as compared to the average interest-earning assets of $225.9 million with average interest-bearing liabilities of $123.7 million, yielding a net interest margin of 4.03% for the second quarter of 2020.

Non-interest income totaled $526.3 thousand for the second quarter of 2021, or an increase of 47.1% as compared with $357.8 thousand earned during the same quarter last year. The majority of the increase is attribute to increases to income on deposit accounts and other fees.

General and administrative expenses were $1.7 million for the three months ended June 30, 2021, and $1.6 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.0 million for the second quarter of 2021 and $971 thousand for the same period last year.

Income tax expense was $341.7 thousand which represents an increase of $73 thousand or 27.3% for the three months ended June 30, 2021, as compared to $268.5 thousand for the three months ended June 30, 2020. The effective income tax rate for the second quarter of 2021 and 2020 were approximately 28.3% and 29.3% 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, 2021 and December 31, 2020
		June 30, 2021				December 31, 2020
		(unaudited)				(audited)
	ASSETS:
	Cash and due from banks	$	100,937,665			$	58,075,217
	Federal funds sold		-				-
	Total cash and cash equivalents		100,937,665				58,075,217
	Interest-bearing deposits in other banks		-				-
	Investment securities available for sale		34,049,096				32,370,042
	Investment securities held to maturity (fair value approximates
	$15,894,696 at June 30, 2021 and $19,556,250 at December 31, 2020)		15,187,264				18,626,525
	Total investments		49,236,360				50,996,567
	Loans
	Construction		414,072.00				1,014,462
	Real estate		120,008,857				119,302,116
	Commercial		71,850,187				75,237,752
	Installment		124,245				110,475
	Credit Cards		-				-
	Gross loans		192,397,361				195,664,805
	Unearned fees and discounts		(2,028,154	)			(1,678,642	)
	Loans net of unearned fees and discount		190,369,207				193,986,163
	Allowance for loan losses		(3,667,239	)			(3,271,921	)
	Net loans		186,701,968				190,714,242
	Fixed assets, net		6,036,251				6,145,711
	Accrued interest receivable		929,968				1,013,732
	Stock investments, restricted, at cost		1,835,200				1,554,200
	Bank-owned life insurance		4,782,958				4,721,232
	Other assets		2,854,209				1,618,717
	Total assets	$	353,314,579			$	314,839,618
	LIABILITIES:
	Deposits
	Non-interest bearing	$	178,220,559			$	145,433,815
	Interest bearing
	NOW and money market		77,243,129				76,774,242
	Savings		24,917,172				21,467,034
	Time deposits less than $250,000		10,169,696				4,473,409
	Time deposits of $250,000 or greater		4,391,327				9,563,300
	Total deposits		294,941,883				257,711,800
	Accrued interest payable		147,013				137,487
	Borrowings from Federal Home Loan Bank (FHLB)		15,000,000				25,000,000
	Accrued expenses & other payables		1,724,977				1,674,150
	Subordinated debt		10,000,000				-
	Subordinated notes payable to subsidiary trust		3,093,000				3,093,000
	Total liabilities		324,906,873				287,616,437
	SHAREHOLDERS' EQUITY
	Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,676,799 shares at June 30, 2021 and December 31, 2020, respectively.
			10,502,558				10,502,557
	Retained earnings		18,134,140				16,428,258
	Accumulated other comprehensive income/(loss)		(228,992	)			292,366
	Total shareholders' equity		28,407,706				27,223,181
	Total liabilities & shareholders' equity	$	353,314,579			$	314,839,618

CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF NET INCOME
	For the three months ended						For the six months ended
	June 30						June 30
		2021			2020			2021			2020
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Interest income
Interest and fee income on loans	$	2,536,482		$	2,212,961		$	5,184,945		$	4,281,406
Interest on federal funds sold and FRB deposits		23,835			12,982			40,100			125,913
Interest on time deposits in banks		-			-			-			1,856
Interest on investment securities		218,100			240,502			431,543			454,654
Total interest income		2,778,417			2,466,445			5,656,588			4,863,829
Interest Expense
Interest on deposits		48,752			74,802			98,546			252,635
Other borrowings		155,818			126,817			277,882			261,472
Total interest expense		204,570			201,619			376,428			514,107
Net interest income		2,573,847			2,264,826			5,280,160			4,349,722
Provision for loan losses		170,000			105,000			370,000			155,000
Net interest income after provision for loan losses		2,403,847			2,159,826			4,910,160			4,194,722
Non-interest income
Service charges on deposit accounts		391,238			276,859			739,336			645,542
Other miscellaneous income		80,061			36,908			141,776			76,008
Dividend income from restricted stock		23,917			12,852			47,025			34,823
Income from bank-owned life insurance		31,162			31,195			61,726			62,230
Total non-interest income		526,378			357,814			989,863			818,603
Non-interest expenses
Salaries and employee benefits		1,032,909			971,010			2,081,133			1,994,372
Occupancy and equipment		151,628			157,841			307,914			307,527
Data and item processing		164,107			152,588			320,655			287,076
Advertising and marketing		27,236			36,091			54,420			82,169
Legal and professional fees		46,167			46,750			90,432			91,390
Regulatory assessments		36,561			30,947			70,041			49,207
Insurance		10,106			8,412			19,929			17,246
Directors' fees and expenses		32,880			32,280			65,160			65,494
Other expenses		219,444			164,954			514,180			343,876
Total non-interest expenses		1,721,038			1,600,873			3,523,864			3,238,357
Income before income tax expense		1,209,187			916,767			2,376,159			1,774,968
Income tax expense		341,717			268,474			670,277			512,998
Net income	$	867,470		$	648,293		$	1,705,882		$	1,261,970
Basic earnings per share	$	0.32		$	0.24		$	0.64		$	0.47
Diluted earnings per share	$	0.32		$	0.24		$	0.64		$	0.47

		For the three months ended								For the three months ended
		June 30								June 30
			2021				2020				2021				2020
KEY FINANCIAL RATIOS
(unaudited)
Annualized return on average equity			13.00	%			10.12	%			12.69	%			10.01	%
Annualized return on average assets			0.99	%			0.94	%			1.01	%			0.99	%
Net interest margin			3.17	%			4.03	%			3.37	%			4.27	%
Core efficiency ratio			55.51	%			61.04	%			56.20	%			62.66	%
Net chargeoffs/(recoveries) to average loans			-0.008	%			-0.004	%			-0.016	%			-0.056	%
AVERAGE BALANCES
(thousands, unaudited)
Average assets		$	350,226			$	275,931			$	338,983			$	254,818
Average interest-earning assets		$	325,987			$	225,944			$	315,817			$	204,980
Average gross loans		$	196,470			$	171,676			$	196,228			$	158,084
Average deposits		$	303,611			$	218,505			$	291,780			$	201,238
Average equity		$	26,684			$	25,631			$	26,886			$	25,215
CREDIT QUALITY		End of period
(unaudited)		June 30, 2021				December 31, 2020
Non-performing loans		$	119,797			$	107,672
Non-performing loans to total loans			0.06	%			0.06	%
Non-performing loans to total assets			0.03	%			0.03	%
Allowance for loan losses to total loans			1.91	%			1.67	%
Nonperforming assets as a percentage of total loans and OREO			0.06	%			0.06	%
Allowance for loan losses to non-performing loans			3061.21	%			3038.79	%
OTHER PERIOD-END STATISTICS
(unaudited)
Shareholders equity to total assets			8.04	%			8.65	%
Net loans to deposits			63.30	%			74.00	%
Non-interest bearing deposits to total deposits			60.43	%			56.43	%
Company Leverage Ratio			9.06	%			11.44	%