Chino Commercial Bancorp Reports 104.1% Increase In Third Quarter Earnings

CHINO, Calif., Oct. 25, 2010 (GLOBE NEWSWIRE) -- The Board of Directors of Chino Commercial Bancorp (OTCBB: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, 2010 with net earnings of $194,041, a 104.1% increase from net income of $95,080 for the third quarter of last year. The net earnings for the most recent quarter represent $0.26 per diluted share, as compared with $0.13 per diluted share from the same quarter last year. The Company's profit year-to-date decreased 13.3% to $249,519 or $0.35 per diluted share as compared with net earnings of $287,878 or $0.39 per diluted share for the same period last year.

Dann H. Bowman, President and Chief Executive Officer, stated, "We are very pleased with the performance of the Bank during the third quarter. Not only did the Bank post a significant improvement in net earnings, but even more important was that we had no delinquent loans at the quarter-end. At this time in the economic cycle, we are very fortunate to be experiencing such strong performance and earnings."

Financial Condition

Balance sheet changes during the nine months of 2010 include a sizeable increase in deposits and a slight decrease in loans. Total deposits increased by $9.5 million, or 10.2%, to $101.7 million at September 30, 2010. Much of the growth was in demand deposits which increased $6.1 million, or 16.9%. Time deposits decreased $1.7 million or 6.9% during the nine months of 2010, ending at $22.6 million at September 30, 2010. Combined NOW and money market demand accounts increased to $4.7 million at September 30, 2010, a 15.2% increase from $31.1 million at December 31, 2009, while savings accounts increased 33.3% from $1.0 million at December 31, 2009 to $1.3 million at September 30, 2010.

Total assets increased from $103.6 million at December 31, 2009 to $112.7 million at September 30, 2010, an 8.8% increase. Gross Loans declined slightly from $61.4 million to $59.3 million, and investments increased from $33.3 million to $38.3 million.

The Company has experienced net loan losses thus far this year totaling $495,125, has three loans on non-accrual, and very few delinquent loans in the three quarters of 2010. Although on non-accrual, three loans totaling $1.5 million are current and paying as agreed.

Earnings

The Company posted net interest income for the quarters ended September 30, 2010 and September 30, 2009 of $1,005,347 and $1,015,974, respectively. For the nine months ended September 30, the Company posted net interest income of $2,935,421 and $2,732,607 for 2010 and 2009, respectively. Significant contributors to the increase in net interest income for the nine months ended September 30, 2010 were the increased interest and fees on loans and interest from investment securities. Loan interest decreased $68,918, or 6.1%, to $1,056,071 for the third quarter of 2010 compared with the third quarter of 2009. Year-to-date interest and fees income from loans increased $182,513, or 6.1%, comparing 2010 with 2009. Interest expense on deposits decreased $20,668, or 8.6%, comparing the quarters ended September 30, 2010 with 2009. On a year-to-date comparison, interest on deposits decreased $3,798, or 0.5% in 2010 compared to the same period in 2009. Interest from investments and due from banks increased $37,570, or 20.7% and $16,355, or 2.7% for the quarter and nine months ended September 30, 2010 compared to the same periods in 2009. Average interest-earning assets were $102.8 million with average interest-bearing liabilities of $65.4 million, yielding a net interest margin of 4.82% for the nine months ended September 30, 2010; as compared to average interest-bearing assets of $81.6 million with average interest-bearing liabilities of $49.0 million, yielding a net interest margin of 3.48% for the nine months ended September 30, 2009.

Non-interest income totaled $424,989 for the three months ended September 30, 2010, or a 54.4% increase from $275,322 earned during the third quarter of 2009. Non-interest income increased 33.8% for the nine months ended September 30, 2009 to $1,037,752, as compared to $775,483 for the nine months ended September 30, 2009. Affecting the increase in non-interest income through September 30, 2010 were a proceeds from the sale of repossessed equipment of $127,839 offset by the recognition of a net probable loss from the sales of Other Real Estate Owned for $27,500. Service charges on deposit accounts increased by $52,447 in the quarter-to-quarter and $157,751 in the year-to-year comparisons of periods ended September 30, 2010 and 2009.

General and administrative expenses were $1,105,290 and $3,079,333 for the three and nine months ended September 30, 2010, respectively, as compared to $861,595 and $2,646,238 for the three and nine months ended September 30, 2009. The increases in General and administrative expenses occurred mainly in Salaries and employee benefits, which increased due to the opening of a new branch in April 2010.

Income tax expense was $115,361 and $114,325 for the three and nine months ended September 30, 2009, as compared to $46,797 and $142,269 for the same periods of 2008. The effective income tax rate for 2010 and 2009 is approximately 31.4% and 33.1%, 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 there from, changes in interest rates, loan portfolio performance, and other factors detailed in the Company's SEC filings.
CHINO COMMERCIAL BANCORP
CONSOLIDATED BALANCE SHEET
September 30, 2010 and December 31, 2009
     
  September 30, 2010 December 31, 2009
  (unaudited) (audited)
ASSETS:    
Cash and due from banks  $ 5,291,152  $ 3,089,300
     
Interest-bearing deposits in other banks 20,235,252 25,433,602
Investment securities available for sale 4,923,101 5,567,855
Investment securities held to maturity (fair value approximates $14,403,000 at September 30, 2010 and $2,332,000 at December 31, 2009) 13,111,506 2,291,962
Total investments 38,269,859 33,293,419
Loans    
Real estate 49,945,608 50,931,354
Commercial 8,732,513 9,621,310
Installment 618,877 855,564
Gross loans 59,296,998 61,408,228
Unearned fees and discounts (20,819) (17,887)
Loans net of unearned fees and discount 59,276,179 61,390,341
Allowance for loan losses (1,312,397) (1,277,526)
 Net loans 57,963,782 60,112,815
     
Accrued interest receivable 355,727 326,206
Restricted stock 643,350 677,650
Fixed assets, net 5,870,079 3,100,183
Other real estate owned 1,035,255 24,861
Prepaid & other assets 3,276,705 2,956,242
Total assets  $ 112,705,909  $ 103,580,676
     
LIABILITIES:    
Deposits    
Non-interest bearing   $ 41,939,034  $ 35,872,495
Interest Bearing    
NOW and money market 35,885,849 31,148,654
Savings 1,336,972 1,003,290
Time deposits less than $100,000 6,626,503 6,722,558
Time deposits of $100,000 or greater 15,956,990 17,541,461
Total deposits 101,745,348 92,288,458
     
Accrued interest payable 106,557 125,823
Borrowings from Federal Home Loan Bank (FHLB) 0 994,000
Accrued expenses & other payables 752,597 612,667
Subordinated notes payable to subsidiary trust 3,093,000 3,093,000
Total liabilities 105,697,502 97,113,948
STOCKHOLDERS' EQUITY    
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 749,890 shares and 699,061 shares at September 30, 2010 and December 31, 2009, respectively.  2,771,322  2,498,664
Retained earnings 4,134,427 3,884,907
Accumulated other comprehensive income 102,658 83,157
Total stockholders' equity 7,008,407 6,466,728
Total liabilities & stockholders' equity  $ 112,705,909  $ 103,580,676
CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
         
  For the three months ended September 30 For the nine months ended September 30
  2010 2009 2010 2009
Interest income        
Investment securities and due from banks  $ 218,940  $ 181,370  $ 619,330  $ 602,975
Interest on Federal funds sold 0 46 0 102
Interest and fee income on loans  1,056,071 1,124,989 3,171,514 2,989,001
Total interest income 1,275,011 1,306,405 3,790,844 3,592,078
Interest expense        
Deposits 218,701 239,369 701,966 705,764
Interest on Federal funds purchased 0 0 18 115
Interest on FHLB borrowings 0 99 551 704
Other borrowings 50,963 50,963 152,888 152,888
Total interest expense 269,664 290,431 855,423 859,471
Net interest income 1,005,347 1,015,974 2,935,421 2,732,607
Provision for loan losses 15,644 287,824 529,996 431,705
Net interest income after provision for loan losses 989,703 728,150 2,405,425 2,300,902
Non-interest income        
Service charges on deposit accounts 300,166 247,719 862,307 704,556
Other miscellaneous income 104,394 6,889 119,218 13,943
Dividend income from restricted stock 2,961 3,791 4,418 6,606
Income from bank-owned life insurance 17,468 16,923 51,809 50,378
Total non-interest income 424,989 275,322 1,037,752 775,483
General and administrative expenses        
Salaries and employee benefits 543,501 450,624 1,637,951 1,383,099
Occupancy and equipment 124,668 86,239 316,138 242,522
Data and item processing 91,393 77,134 263,233 218,900
Advertising and marketing 16,347 15,777 45,228 49,569
Legal and professional fees 107,375 47,714 191,818 137,900
Regulatory Assessments 56,489 48,947 162,239 167,670
Insurance 9,958 8,096 27,950 23,540
Directors' fees and expenses 16,541 18,963 50,959 54,621
Other expenses 139,018 108,101 383,817 368,417
Total general & administrative expenses 1,105,290 861,595 3,079,333 2,646,238
Income before income tax expense (benefit) 309,402 141,877 363,844 430,147
Income tax expense (benefit) 115,361 46,797 114,325 142,269
Net income   $ 194,041  $ 95,080  $ 249,519  $ 287,878
Basic earnings per share   $ 0.26  $ 0.14  $ 0.35  $ 0.41
Diluted earnings per share   $ 0.26  $ 0.13  $ 0.35  $ 0.39
CHINO COMMERCIAL BANCORP
         
  For the three months ended September 30 For the nine months ended September 30
  2010 2009 2010 2010
KEY FINANCIAL RATIOS        
(unaudited)        
Return on average equity 11.36% 6.16% 7.58% 6.20%
Return on average assets 0.67% 0.39% 0.29% 0.42%
Net interest margin 3.92% 4.57% 3.82% 4.48%
efficiency ratio 77.27% 66.72% 77.50% 75.43%
Net chargeoffs to average loans 0.03% 0.01% 0.81% 0.01%
         
AVERAGE BALANCES        
(thousands, unaudited)        
Average assets  $ 115,921  $ 98,459  $ 116,695  $ 91,347
Average interest-earning assets  $ 101,743  $ 88,173  $ 102,786  $ 81,605
Average gross loans  $ 60,019  $ 61,834  $ 60,838  $ 54,670
Average deposits  $ 105,039  $ 87,848  $ 102,459  $ 80,536
Average equity  $ 6,831  $ 6,232  $ 6,582  $ 6,193
         
         
CREDIT QUALITY   End of period
(unaudited     September 30, 2010 December 31, 2009
Non-performing loans      $ 1,524,878  $ 1,493,919
Non-performing loans to total loans     2.57% 2.43%
Non-performing loans to total assets     1.35% 1.44%
Allowance for loan losses to loans     2.21% 2.08%
         
OTHER PERIOD-END STATISTICS        
(unaudited     September 30, 2010 December 31, 2009
Shareholders equity to total assets     6.22% 6.24%
Loans to deposits     58.28% 66.54%
Non-interest bearing deposits to total deposits     41.22% 38.87%
CONTACT:  Chino Commercial Bank, N.A.          Dann H. Bowman, President and CEO          Sandra F. Pender, Senior Vice President and CFO          (909) 393-8880          14345 Pipeline Avenue          Chino, Ca. 91710

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