CHINO, Calif., April 21, 2023 (GLOBE NEWSWIRE) — 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.
Chino Commercial Bankcorp and Subsidiary Consolidated Statements of Financial Condition March 31, 2023 and 2022 31-Mar-23 31-Dec-22 unaudited audited Assets Cash and due from banks $ 78,176,981 $ 36,436,018 Cash and cash equivalents 78,176,981 36,436,018 Investment securities available for sale, net of zero allowance for credit losses 6,529,327 6,347,231 Investment securities held to maturity, net of zero allowance for credit losses 161,396,993 160,668,959 Total Investments 167,926,320 167,016,191 Loans held for investment, net of allowance for credit losses of $4,518,359 in 2023, and $4,100,516 in 2022 173,229,811 176,555,783 Stock investments, restricted, at cost 2,045,200 2,045,200 Fixed assets, net 5,562,561 5,626,850 Accrued interest receivable 1,250,737 1,153,613 Bank owned life insurance 8,100,801 8,054,491 Other assets 2,987,057 2,947,830 Total assets $ 439,279,468 $ 399,835,974 Liabilities Deposits Noninterest-bearing 191,963,504 204,189,323 Interest-bearing 126,854,885 133,263,940 Total deposits 318,818,389 337,453,262 Federal Home Loan Bank advances 15,000,000 15,000,000 Federal Reserve bank borrowings 57,000,000 – Subordinated debt 10,000,000 10,000,000 Subordinated notes payable to subsidiary trust 3,093,000 3,093,000 Accrued interest payable 267,004 124,947 Other liabilities 1,684,100 1,815,062 Total liabilities 405,862,492 367,486,270 Shareholders’ Equity Common stock, no par value, 10,000,000 shares authorized and 2,676,799 shares issued and outstanding at March 31, 2023 and December 31, 2022 10,502,558 10,502,558 Retained earnings 25,155,080 24,269,527 Accumulated other comprehensive loss – unrecognized loss on available for sale, net of taxes (2,240,661 ) (2,422,382 ) Total shareholders’ equity 33,416,976 32,349,703 Total liabilities and shareholders’ equity $ 439,279,468 $ 399,835,974
Chino Commercial Bankcorp and Subsidiary Consolidated Statements of Net Income March 31, 2023 and 2022 3/31/2023 3/31/2022 unaudited unaudited Interest Income Interest and fees on loans 2,390,159 2,313,197 Interest on investment securities 1,133,586 349,414 Other interest income 405,234 81,413 Total interest income 3,928,979 2,744,024 Interest Expense Interest on deposits 376,861 42,517 Interest on borrowings 371,403 206,504 Total interest expense 748,264 249,021 Net Interest Income 3,180,716 2,495,003 Provision For Loan Losses 2,136 (204,595 ) Net Interest Income After Provision For Loan Losses 3,178,580 2,699,598 Noninterest Income Service charges and fees on deposit accounts 359,899 302,488 Interchange fees 103,159 106,757 Earnings from bank-owned life insurance 46,311 44,133 Other miscellaneous income 85,394 58,688 Total noninterest income 594,763 512,066 Noninterest Expense Salaries and employee benefits 1,352,935 1,244,311 Occupancy and equipment 153,591 159,763 Other expenses 634,466 555,466 Total noninterest expense 2,140,992 1,959,540 Income before income tax expense 1,632,350 1,252,124 Provision for income taxes 463,901 351,911 Net Income $ 1,168,449 $ 900,213 Basic earnings per share $ 0.44 $ 0.34 Diluted earnings per share $ 0.44 $ 0.34
Chino Commercial Bankcorp and Subsidiary Financial Highlights March 31, 2023 and 2022 Key Financial Ratios 3/31/2023 3/31/2022 (unaudited) Annualized return on average equity 14.26 % 12.23 % Annualized return on average assets 1.16 % 0.92 % Net interest margin 3.37 % 4.17 % Core efficiency ratio 56.71 % 65.16 % Net chargeoffs/(recoveries) to average loans -0.008 % -0.0001 Average Balances (thousands, unaudited) Average assets 401,948 389,889 Average interest-earning assets 382,782 242,900 Average interest-bearing liabilities 168,672 152,877 Average gross loans 181,642 170,405 Average deposits 328,562 330,352 Average equity 32,770 29,454 End of period 3/31/2023 12/31/2022 Credit Quality Non-performing loans 527,388 404,095 Non-performing loans to total loans 0.30 % 0.22 % Non-performing loans to total assets 0.12 % 0.10 % Allowance for credit losses to total loans 2.54 % 2.26 % Nonperforming assets as a percentage of total loans and OREO 0.30 % 0.22 % Allowance for credit losses to non-performing loans 856.74 % 1014.74 % Other Period-end Statistics Shareholders equity to total assets 7.61 % 8.09 % Net loans to deposits 54.16 % 52.32 % Non-interest bearing deposits to total deposits 60.34 % 60.51 % Company Leverage Ratio 9.64 % 9.27 %.
