11/14/2012: INCREASE IN THIRD QUARTER EARNINGS
Chino, California, October 22, 2012 – 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, 2012 with net earnings of $153,816 or a 28.1% increase from net earnings
of $120,113 for the third quarter of 2011. Net income for the most recent quarter represents
$0.19 per basic share, as compared with $0.16 per basic share from the same quarter last year.
The Company’s profit for the nine months ended September 30, 2012 increased 76.2% to
$481,970 or $0.60 per basic share as compared with net earnings of $273,474 or $0.37 per basic
share for the same period in 2011.
Dann H. Bowman, President and Chief Executive Officer, stated, “We are very pleased
with the performance and earnings of the Bank during the third quarter. Not only were earnings
up 28% over the same period last year, but loan quality has improved with the Bank having only
two delinquent loans at quarter-end. Year-to-date earnings reflect an annualized return on
beginning equity of 8.60%, which in this low rate environment is an excellent return to our
shareholders.
The economy in the Inland Empire appears to be improving, with real estate values rising
moderately and residential foreclosure rates decreasing. Business conditions are improving with
many of our small business customers and we are motivated and eager to provide financing for
the businesses and consumers in our community.”
Financial Condition
Total assets increased from $109.7 million at December 31, 2011 to $119.3 million at
September 30, 2012, or an 8.7% increase. Investments decreased from $26.0 million at
December 31, 2011 to $23.4 million, or 10.0%, while gross loans increased from $56.8 million
to $59.4 million, and federal funds sold increased from $14.2 million to $24.4 million. Overall,
earning assets increased 10.6% in the nine month period ended September 30, 2012.
The Bank’s asset quality improved in the nine months ended September 30, 2012 as
$439,317.26 in OREO was sold and the level of nonperforming assets to total loans and OREO
moved from 7.07% at December 31, 2011 to 3.90% at September 30, 2012. Net charged-off
loans were $101,692 for the nine months ended September 30, 2012 compared to $186,619 for
the same period of 2011. Nonperforming loans decreased from $4.4 million at September 30,
2011 to $2.3 million at September 30, 2012, a reduction of 47%.
Balance sheet changes in the nine months ended September 30, 2012 include an increase
in earning assets and an increase in deposits. Total deposits increased by $8.7 million or 8.8% to
$106.8 million at September 30, 2012, compared to $98.1 million December 31, 2011. Time
deposits decreased 1.0 million or 5.8% to $15.9 million at September 30, 2012 from 16.9 million
at December 31, 2011. This reduction was an intentional strategy to reduce higher yielding
deposits. Non-interest bearing deposits increased 8.2% to $51.1 million at September 30, 2012
from $47.2 million at December 31, 2011; and NOW and money market accounts increased
17.5% to 37.9 million at September 30, 2012 from $32.2 million at December 31, 2011. The
ratio of non-interest bearing deposits to total deposits decreased slightly from 48.1% at
December 31, 2011 to 47.8% at September 30, 2012.
On September 16, 2011, the Company filed a registration statement on Form S-1 with the
SEC in connection with a secondary stock offering to existing shareholders which commenced in
the fourth quarter of 2011 and was extended to the general public in early 2012. The Company
has received $668,442.14 in additional paid in capital from the offering. The offering closed on
July 15, 2012.
Earnings
The Company posted net interest income of $923,873 and $870,314 for the three months
ended September 30, 2012 and 2011, respectively. For the nine months ended September 30, the
Company posted net interest income of $2.7 million and $2.8 million for 2012 and 2011,
respectively. Interest and fee income from loans increased $53,794, or 6.1% to $931,264 for the
third quarter of 2012 compared with the third quarter of 2011. The decrease in interest income
from loans was $101,670, or 3.6%, comparing the nine months ended September 30, 2012 with
same period in 2011. For the nine months ended September 30, 2012, investment income
decreased $178,172, or 39.1%, to $277,759 as compared to the nine months ended September 30,
2011.
Non-interest income totaled $314,333 for the three months ended September 30, 2012, or
a 4.1% decrease from $327,655 earned during the third quarter of 2011. Non-interest income
increased 6.0% for the nine months ended September 30, 2012 to $1.1 million, as compared to
$1.0 million for the nine months ended September 30, 2011. The major contributor to the
increase in the nine-month period was other miscellaneous income due to reimbursement of legal
expenses incurred in 2011.
The provision for loan losses decreased to $76 during the third quarter of 2012, a
decrease of $2,145, as compared to $2,221 for the three months ended September 30, 2011. The
Company provided $2,048 to the allowance for loan losses during the nine months ended
September 30, 2012, a reduction from $281,660 for the same period in 2011. The lower
provision for the nine months ended September 30, 2012 was due to a lower level of charge-offs
during the period as compared to the first half of 2011 as well as a decrease in nonperforming
assets.
General and administrative expenses were $995,743 and $3,036,344 for the three and
nine months ended September 30, 2012, respectively, as compared to $1,011,489 and $3,148,761
for the three and nine months ended September 30, 2011. Legal and professional fees decreased
$98,101 to $212,983 and regulatory assessments decreased $11,223 to $166,195 for the nine
months ended September 30, 2012 compared to the same period in 2011.
Income tax expense was $278,744 for the nine months ended September 30, 2012, as
compared to $131,997 for the nine months ended September 30, 2011. The effective income tax
rate for the nine months ended September 30, 2012 and 2011 is approximately 36.6% and 32.6%,
respectively.
Forward-Looking Statements
The statements contained in this 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. The forward-looking statements are
not guarantees of future performance and involve significant risks and uncertainties, and readers
are cautioned not to unduly rely on such forward-looking statements. Actual results and
performance in future periods may be materially different from any future results or performance
suggested by the forward-looking statements in this release. Factors that might cause such
differences include, but are not limited to, the health of the National and California economies,
the Company’s ability to attract and retain skilled employees, competition in the financial
services market for both deposits and loans, the Company’s ability to increase its customer base,
customers’ service expectations, the Company’s ability to successfully deploy new technology
and gain efficiencies therefrom, the success of branch expansion, changes in interest rates, loan
portfolio performance, the Company’s ability to enhance its earnings capacity, and other factors
detailed in the Company’s SEC filings, including the “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” sections of the
Company’s most recent Form 10-K.
Contact: Dann H. Bowman, President and CEO or Sandra F. Pender, Senior Vice President and CFO, Chino Commercial Bank, N.A., 14245 Pipeline Avenue, Chino, Ca. 91710, (909) 393-8880.
