CHINO, Calif., Oct. 25, 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 third quarter ended September 30, 2023. Net earnings for the third quarter of 2023 were $718 thousand, or an increase of 8.1%, as compared with earnings of $664 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 $0.27 for the third quarter of 2023, and $0.25 for the same quarter last year.
Dann H. Bowman, President and Chief Executive Officer, stated, “As the economy emerges from the effects of the pandemic, the Bank continues to perform well. During the thirst quarter, the Bank posted record levels for total assets, and deposits. 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 eighteen months, we are optimistic about the opportunities for growth and expansion in the future.”
Financial Condition
At September 30, 2023, total assets were $370.2 million, an increase of $55.3 million or 17.6% over $314.8 million at December 31, 2020. Total deposits increased by $53.2 million or 20.6% to $310.9 million as of September 30, 2023, compared to $257.7 million as of December 31, 2020. At September 30, 2023, the Company’s core deposits represent 97.9% of the total deposits.
Gross loans decreased by 6.7 % or $13.1 million as of September 30, 2023 to $182.6 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 September 30, 2023, and December 31, 2020. OREO properties remained at zero as of September 30, 2023 and December 31, 2020 respectively.
Earnings
The Company posted net interest income of $2.6 million for the three months ended September 30, 2023 and $2.3 million for the same quarter last year. Average interest-earning assets were $334.5 million with average interest-bearing liabilities of $145.6 million, yielding a net interest margin of 2.91% for the third quarter of 2023, as compared to the average interest-earning assets of $283.4 million with average interest-bearing liabilities of $135.8 million, yielding a net interest margin of 3.31% for the third quarter of 2020.
Non-interest income totaled $544.6 thousand for the third quarter of 2023, or an increase of 37.5% as compared with $395.9 thousand earned during the same quarter last year. The majority of the increase is attribute to service charges on deposit accounts and other fees.
General and administrative expenses were $1.8 million for the three months ended September 30, 2023, and $1.6 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.1 million for the third quarter of 2023 and $999.5 thousand for the same period last year.
Income tax expense was $273.4 thousand which represents an increase of $8 thousand or 2.9% for the three months ended September 30, 2023, as compared to $265.5 thousand for the three months ended September 30, 2020. The effective income tax rate for the third quarter of 2023 and 2020 were approximately 27.6% and 28.6% 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.
| CHINO COMMERCIAL BANCORP | |||||||
| CONSOLIDATED BALANCE SHEET | |||||||
| September 30, 2023 and December 31, 2020 | |||||||
| September 30, 2023 | December 31, 2020 | ||||||
| (unaudited) | (audited) | ||||||
| ASSETS: | |||||||
| Cash and due from banks | $ | 123,449,196 | $ | 58,075,217 | |||
| Federal funds sold | – | – | |||||
| Total cash and cash equivalents | 123,449,196 | 58,075,217 | |||||
| Interest-bearing deposits in other banks | – | – | |||||
| Investment securities available for sale | 36,474,971 | 32,370,042 | |||||
| Investment securities held to maturity (fair value approximates | |||||||
| $14,403,447 at September 30, 2023 and $19,556,250 at December 31, 2020) | 13,785,218 | 18,626,525 | |||||
| Total investments | 50,260,189 | 50,996,567 | |||||
| Loans | |||||||
| Construction | 414,072 | 1,014,462 | |||||
| Real estate | 120,111,335 | 119,302,116 | |||||
| Commercial | 61,901,808 | 75,237,752 | |||||
| Installment | 158,798 | 110,475 | |||||
| Credit Cards | 0 | – | |||||
| Gross loans | 182,586,013 | 195,664,805 | |||||
| Unearned fees and discounts | (1,615,273 | ) | (1,678,642 | ) | |||
| Loans net of unearned fees and discount | 180,970,740 | 193,986,163 | |||||
| Allowance for loan losses | (3,877,017 | ) | (3,271,921 | ) | |||
| Net loans | 177,093,723 | 190,714,242 | |||||
| Fixed assets, net | 5,953,847 | 6,145,711 | |||||
| Accrued interest receivable | 819,094 | 1,013,732 | |||||
| Stock investments, restricted, at cost | 2,045,200 | 1,554,200 | |||||
| Bank-owned life insurance | 7,825,628 | 4,721,232 | |||||
| Other assets | 2,721,997 | 1,618,717 | |||||
| Total assets | $ | 370,168,874 | $ | 314,839,618 | |||
| LIABILITIES: | |||||||
| Deposits | |||||||
| Non-interest bearing | $ | 191,195,134 | $ | 145,433,815 | |||
| Interest bearing | |||||||
| NOW and money market | 80,027,619 | 76,774,242 | |||||
| Savings | 25,939,170 | 21,467,034 | |||||
| Time deposits less than $250,000 | 10,074,332 | 4,473,409 | |||||
| Time deposits of $250,000 or greater | 3,646,335 | 9,563,300 | |||||
| Total deposits | 310,882,590 | 257,711,800 | |||||
| Accrued interest payable | 202,379 | 137,487 | |||||
| Borrowings from Federal Home Loan Bank (FHLB) | 15,000,000 | 25,000,000 | |||||
| Accrued expenses & other payables | 1,847,228 | 1,674,150 | |||||
| Subordinated debt | 10,000,000 | – | |||||
| Subordinated notes payable to subsidiary trust | 3,093,000 | 3,093,000 | |||||
| Total liabilities | 341,025,197 | 287,616,437 | |||||
| SHAREHOLDERS’ EQUITY | |||||||
| Common stock, authorized 10,000,000 shares with no par value, issued and | |||||||
| outstanding 2,676,799 shares at September 30, 2023 and December 31, 2020, | |||||||
| respectively. | 10,502,558 | 10,502,557 | |||||
| Retained earnings | 18,849,889 | 16,428,258 | |||||
| Accumulated other comprehensive income/(loss) | (208,770 | ) | 292,366 | ||||
| Total shareholders’ equity | 29,143,677 | 27,223,181 | |||||
| Total liabilities & shareholders’ equity | $ | 370,168,874 | $ | 314,839,618 | |||
| CHINO COMMERCIAL BANCORP | ||||||||||||
| CONSOLIDATED STATEMENTS OF NET INCOME | ||||||||||||
| For the three months ended | For the nine months ended | |||||||||||
| September 30 | September 30 | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Interest income | ||||||||||||
| Interest and fee income on loans | $ | 2,458,482 | $ | 2,301,354 | $ | 7,643,426 | $ | 6,582,760 | ||||
| Interest on federal funds sold and FRB deposits | 42,915 | 14,828 | 83,015 | 140,741 | ||||||||
| Interest on time deposits in banks | – | – | – | 1,856 | ||||||||
| Interest on investment securities | 206,101 | 232,571 | 637,644 | 687,225 | ||||||||
| Total interest income | 2,707,498 | 2,548,753 | 8,364,085 | 7,412,582 | ||||||||
| Interest Expense | ||||||||||||
| Interest on deposits | 46,825 | 63,271 | 145,370 | 315,906 | ||||||||
| Other borrowings | 207,096 | 125,396 | 486,770 | 386,868 | ||||||||
| Total interest expense | 253,921 | 188,667 | 632,140 | 702,774 | ||||||||
| Net interest income | 2,453,577 | 2,360,086 | 7,731,945 | 6,709,808 | ||||||||
| Provision for loan losses | 185,000 | 215,000 | 555,000 | 370,000 | ||||||||
| Net interest income after provision for loan losses | 2,268,577 | 2,145,086 | 7,176,945 | 6,339,808 | ||||||||
| Non-interest income | ||||||||||||
| Service charges on deposit accounts | 394,024 | 306,081 | 1,133,360 | 951,624 | ||||||||
| Other miscellaneous income | 81,984 | 39,864 | 223,761 | 115,872 | ||||||||
| Dividend income from restricted stock | 25,903 | 18,421 | 72,928 | 53,243 | ||||||||
| Income from bank-owned life insurance | 42,669 | 31,578 | 104,395 | 93,808 | ||||||||
| Total non-interest income | 544,580 | 395,944 | 1,534,444 | 1,214,547 | ||||||||
| Non-interest expenses | ||||||||||||
| Salaries and employee benefits | 1,092,730 | 999,501 | 3,173,864 | 2,993,873 | ||||||||
| Occupancy and equipment | 153,998 | 155,160 | 461,912 | 462,687 | ||||||||
| Data and item processing | 170,018 | 154,317 | 490,673 | 441,393 | ||||||||
| Advertising and marketing | 29,035 | 20,802 | 91,121 | 107,167 | ||||||||
| Legal and professional fees | 49,355 | 42,100 | 137,995 | 133,490 | ||||||||
| Regulatory assessments | 37,761 | 33,480 | 107,801 | 82,687 | ||||||||
| Insurance | 10,106 | 10,567 | 30,035 | 27,813 | ||||||||
| Directors’ fees and expenses | 31,920 | 32,520 | 97,080 | 98,014 | ||||||||
| Other expenses | 246,677 | 162,981 | 753,192 | 502,659 | ||||||||
| Total non-interest expenses | 1,821,600 | 1,611,428 | 5,343,673 | 4,849,783 | ||||||||
| Income before income tax expense | 991,557 | 929,602 | 3,367,716 | 2,704,572 | ||||||||
| Income tax expense | 273,434 | 265,522 | 943,711 | 778,520 | ||||||||
| Net income | $ | 718,123 | $ | 664,080 | $ | 2,424,005 | $ | 1,926,052 | ||||
| Basic earnings per share | $ | 0.27 | $ | 0.25 | $ | 0.91 | $ | 0.72 | ||||
| Diluted earnings per share | $ | 0.27 | $ | 0.25 | $ | 0.91 | $ | 0.72 | ||||
| For the three months ended | For the nine months ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| KEY FINANCIAL RATIOS | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Annualized return on average equity | 10.71 | % | 10.06 | % | 12.03 | % | 10.03 | % | ||||||||
| Annualized return on average assets | 0.80 | % | 0.87 | % | 0.93 | % | 0.94 | % | ||||||||
| Net interest margin | 2.91 | % | 3.31 | % | 3.21 | % | 3.87 | % | ||||||||
| Core efficiency ratio | 60.76 | % | 58.47 | % | 57.67 | % | 61.20 | % | ||||||||
| Net chargeoffs/(recoveries) to average loans | -0.011 | % | -0.007 | % | -0.03 | % | -0.06 | % | ||||||||
| AVERAGE BALANCES | ||||||||||||||||
| (thousands, unaudited) | ||||||||||||||||
| Average assets | $ | 360,266 | $ | 304,432 | $ | 346,155 | $ | 274,626 | ||||||||
| Average interest-earning assets | $ | 334,456 | $ | 283,374 | $ | 322,099 | $ | 231,302 | ||||||||
| Average gross loans | $ | 180,478 | $ | 186,761 | $ | 190,920 | $ | 167,713 | ||||||||
| Average deposits | $ | 311,254 | $ | 242,964 | $ | 298,413 | $ | 215,248 | ||||||||
| Average equity | $ | 26,830 | $ | 26,394 | $ | 26,867 | $ | 25,609 | ||||||||
| CREDIT QUALITY | End of period | |||||||||||||||
| (unaudited) | September 30, 2023 | December 31, 2020 | ||||||||||||||
| Non-performing loans | $ | 118,448 | $ | 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 | 2.12 | % | 1.67 | % | ||||||||||||
| Nonperforming assets as a percentage of total loans and OREO | 0.06 | % | 0.06 | % | ||||||||||||
| Allowance for loan losses to non-performing loans | 3273.18 | % | 3038.79 | % | ||||||||||||
| OTHER PERIOD-END STATISTICS | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Shareholders equity to total assets | 7.87 | % | 8.65 | % | ||||||||||||
| Net loans to deposits | 56.96 | % | 74.00 | % | ||||||||||||
| Non-interest bearing deposits to total deposits | 61.50 | % | 56.43 | % | ||||||||||||
| Total capital to total risk-weighted assets | 20.97 | % | 18.30 | % | ||||||||||||
| Tier 1 capital to total risk-weighted assets | 23.77 | % | 20.16 | % | ||||||||||||
| Company Leverage Ratio | 9.01 | % | 11.44 | % | ||||||||||||
