04/21/2023: CHINO COMMERCIAL BANCORP REPORTS 30% INCREASE IN NET EARNINGS
CHINO COMMERCIAL BANCORP REPORTS 30% INCREASE IN NET EARNINGS
Chino, California, April 21, 2023 – 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 first quarter ended March 31, 2023. Net earnings for the first quarter of 2023, were $1.2 million, or an increase of 29.8%, as compared with earnings of $900 thousand for the same quarter last year. Net earnings per basic and diluted share was $0.44 for the first quarter of 2023, and $0.34 for the same quarter last year.
Dann H. Bowman, President and Chief Executive Officer, stated, “Despite the recent negative news concerning several very large banks, which were involved in tech start-ups and crypto currencies the conditions of our Bank and the local economy remain strong. Earnings for the first quarter of 2023 were up over the same quarter last year, and loan quality remains very strong.
We remain focused on the trend and direction of commercial real estate vacancy, and the demand for Office and Retail space. Rising costs of labor and goods are putting additional pressure on retail margins, and demand for office space over the near term may continue to soften as remote work and shared workspaces become more common. However, despite these headwinds, we are optimistic regarding the opportunities for growth and expansion in the Inland Empire.”
Financial Condition
At March 31, 2023, total assets were $439.3 million, an increase of $39.4 million or 10.0% over $399.8 million at December 31, 2022. Total deposits decreased by $18.6 million or 5.5% to $318.8 million as of March 31, 2023, compared to $337.5 million as of December 31, 2022. At March 31, 2022, the Company’s core deposits represent 98.3% of the total deposits.
Gross loans increased by $2.0 million or 1.08% to $178.2 million as of March 31, 2022, compared to $176.3 million as of December 31, 2022. The Bank had two non-performing loans for the quarter ended March 31, 2023, and December 31, 2022. OREO properties remained at zero as of March 31, 2023 and December 31, 2022 respectively.
Effective January1, 2023, the Company adopted ASU 2016-13 Financial Instrument – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The Company recorded a net decrease to retained earnings of $401.6 thousand as of January 1, 2023 for the cumulative effect of adopting ASC 326.
Earnings
The Company posted net interest income of $3.1 million for the three months ended March 31, 2023 and $2.7 million for the same quarter last year. Average interest-earning assets were $382.8 million with average interest-bearing liabilities of $168.7 million, yielding a net interest margin of 3.37% for the first quarter of 2023, as compared to the average interest-earning assets of $242.9 million with average interest-bearing liabilities of $152.9 million, yielding a net interest margin of 4.17% for the first quarter of 2022.
Non-interest income totaled $594.8 thousand for the first quarter of 2023, or an increase of 16.2% as compared with $512.0 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 $2.1 million for the three months ended March 31, 2023, 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 first quarter of 2023 and $1.2 million for the same period last year.
Income tax expense was $463 thousand, which represents an increase of $112 thousand or 31.8% for the three months ended March 31, 2023, as compared to $351.9 thousand for the three months ended March 31, 2022. The effective income tax rate for the first quarter of 2022 and 2021 were approximately 28.4% and 28.1% 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 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.
