10/19/2020: CHINO COMMERCIAL BANCORP REPORTS 4% INCREASE IN QUARTERLY NET EARNINGS

CHINO COMMERCIAL BANCORP REPORTS 4% INCREASE IN QUARTERLY NET EARNINGS

Chino, California, October 16, 2020 – 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, 2020. Net earnings for the third quarter 2020, were $664 thousand, or an increase of 3.72%, as compared with earnings of $640 thousand for the same quarter last year. The moderate increase in earnings is primarily attributed to an increase in provision for loan losses due to current economic conditions created by the COVID-19 pandemic. Net earnings per basic and diluted share was $0.30 for the third quarter of 2020, and $0.29 for the same quarter 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, and year-to-date. We have seen a tremendous surge in demand for credit by our small business customers over the last six months, with total loans increasing by 34% year-to-date. Loan quality also remains very strong, with the Bank having no loan delinquencies and no foreclosed properties at quarter-end. Similarly, deposits have also increased by $62 million, or 34% year-to-date, which has allowed the Bank to meet the increased loan demands of its customers.

We believe that during tough times like these, the Bank’s value proposition stands out the most, and we may have many more opportunities to gain new banking relationships. We have a great team, a great market, and we are excited about the prospects for the Company over the next several years.”

Financial Condition

At September 30, 2020, total assets were $303.5 million, an increase of $74.0 million or 32.2% over $229.5 million at December 31, 2019. Total deposits increased by 34.4% or $61.9 million to
$242.0 million as of September 30, 2020, compared to $180.2 million as of December 31, 2019. At September 30, 2020, the Company’s core deposits represent 96.5% of the total deposits.
Gross loans increased by 33.9% or $48.9 million as of September 30, 2020 to $193.3 million, as compared with $144.4 million as of December 31, 2019. The Bank had one non-performing loan for the quarters ended September 30, 2020, and December 31, 2019. OREO properties remained at zero as of September 30, 2020 and December 31, 2019 respectively.

The increases in total assets, deposits and loans are attributed to Bank’s response to the overwhelming request of PPP loans. Overall, the Bank approved and funded 396 PPP loans with an outstanding balance of $50.2 million as of September 30, 2020.

Earnings

The Company posted net interest income of $2.4 million for the three months ended September 30, 2020 and $2.1 million for the same quarter last year. Average interest-earning assets were $304.4 million with average interest-bearing liabilities of $135.8 million, yielding a net interest margin of 3.31% for the third quarter of 2020, as compared to the average interest-earning assets of $179.2 million with average interest-bearing liabilities of $116.1 million, yielding a net interest margin of 4.63% for the third quarter of 2019.

Non-interest income totaled $396.0 thousand for the third quarter of 2020, or a decrease of 16.2% as compared with $473.0 thousand earned during the same quarter last year. The majority of the decrease is attribute to a significant decrease in overdraft fees.

General and administrative expenses were $1.6 million for the three months ended September 30, 2020, and $1.7 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $999.5 thousand for the third quarter of 2020 and $969.0 thousand for the same period last year.

Income tax expense was $266.0 thousand which represents an increase of $9.7 thousand or 3.82% for the three months ended September 30, 2020, as compared to $256.0 thousand for the three months ended September 30, 2019. The effective income tax rate for the third quarter of 2020 and 2019 were approximately 28.6% and 28.5% respectively, and for the nine months ending September 30, 2020 and 2019, the effective income tax rates were 28.8% and 27.7% 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.