07/23/2018: 26% INCREASE IN NET EARNINGS

26% INCREASE IN NET EARNINGS

Chino, California, July 20, 2018 – 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, 2018, with net earnings of $531 thousand, or an increase of 26.4%, compared with net income of $420 thousand for the same quarter last year. Net income per basic and diluted share was $0.29 for the second quarter of 2018 and $0.23 for the same quarter last year.  

Dann H. Bowman, President and Chief Executive Officer, stated, “The second quarter results for the Bank were excellent. The Bank achieved new record levels for Deposits, Loans, Revenue and Earnings.  The Upland branch is expected to be opened in the third quarter and we are pleased and excited about the business prospects in the Inland Empire, and in this area especially.”

Financial Condition

At June 30, 2018, total assets were $201.0 million, an increase of $8.1 million or 4.2% over $192.8 million at December 31, 2017. Total deposits increased by 13.5% or $20 million during the second quarter to $169.3 million, compared to $149.1 million as of December 31, 2017. At June 30, 2018, the Company’s core deposits represent 95.0% of the total deposits.

Gross loans increased by 5.9% or $7.3 million as of June 30, 2018 to $129.9 million, as compared with $122.6 million as of December 31, 2017. The Bank did not have any nonperforming loans for the quarters ended June 30, 2018, and December 31, 2017, respectively.  OREO properties remained at zero as of June 30, 2018 and December 31, 2017, respectively.

Earnings

The Company posted net interest income of $1.8 million and $1.6 million for the three months ended June 30, 2018 and 2017, respectively, or an increase of $260 thousand or 16.6%. Average interest-earning assets were $173.8 million with average interest-bearing liabilities of $88.6 million, yielding a net interest margin of 4.21% for the second quarter of 2018, as compared to the average interest-earning assets of $166.1 million with average interest-bearing liabilities of $95.3 million, yielding a net interest margin of 3.78% for the second quarter of 2017.

Non-interest income totaled $371 thousand for the second quarter of 2018, or a decrease of 4.4% as compared with $389 thousand earned during the same quarter last year. Service charges on deposit accounts decreased by $19.3 thousand or 6.1% to $298 thousand, primarily due to a decrease in income from returned items, overdraft charges, and analysis fees. Dividend income from restricted stock decreased to $24 thousand for the second quarter of 2018, compared to $28 thousand for the same quarter in 2017, 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 second quarter of 2018 and 2017, respectively.

General and administrative expenses were $1.4 million for the three months ended June 30, 2018, and 1.3 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $864 thousand for the second quarter of 2018, as compared to $772 thousand for the same quarter last year. Advertising and marketing expenses remained consistent at about $30 thousand in the second quarter of 2018 and 2017, respectively.

Income tax expense was $212 thousand which represents a decrease of $61 thousand or 22.3% for the three months ended June 30, 2018 as compared to $273 thousand for the three months ended June 30, 2017. The effective income tax rate for the second quarter of 2018 and 2017 is approximately 28.6% and 39.4%, respectively.  The decrease in the income tax expense as well as the effective tax rate is entirely attributed to the the new 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.

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.