Chino Commercial Bancorp Reports 2012 Second Quarter Earnings

Jul 23, 2012, 05:00 ET from Chino Commercial Bank

CHINO, Calif., July 23, 2012 /PRNewswire/ -- 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 second quarter ended June 30, 2012 with net earnings of $124,196 a 348.7% increase from net loss of $49,945 for the second quarter of 2011. Net income for the most recent quarter represents $0.15 per basic share, as compared with losses of $0.07 per basic share from the same quarter last year. The Company's profit for the six months ended June 30, 2012 increased 114.0% to $328,154 or $0.41 per basic share as compared with net earnings of $153,360 or $0.20 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 of the Bank during the second quarter.  Though economic conditions are troubling on a global scale, locally, the business environment appears to be improving.  Residential real estate sales and valuations are showing signs of strength and many of our small business customers are reporting improved sales. At the end of the second quarter, the Bank reported only two delinquent loans. 

"We continue to remain optimistic about the economy of the Inland Empire and the customers we serve.  We are motivated and eager to continue lending to the businesses and consumers in our community."

Financial Condition

Balance sheet changes in the first half of 2012 include a slight increase in earning assets and a slight decline in deposits. Total deposits decreased by $983,903, or 1.0%, to $97.1 million at June 30, 2012 compared to December 31, 2011.  The decline was in interest bearing deposits which decreased 1.1 million or 2.3% to $49.8 million at June 30, 2012 from 50.9 million at December 31, 2011. This reduction was an intentional strategy to reduce higher yielding deposits. Non-interest bearing deposits increased 0.4% to 47.4 million at June 30, 2012 from $47.2 million at December 31, 2011.  The ratio of non-interest bearing deposits to total deposits increased from 48.1% at December 31, 2011 to 48.8% at June 30, 2012.

Total assets decreased slightly from $109.7 million at December 31, 2011 to $109.6 million at June 30, 2012, a 0.1% decrease.  Investments decreased from $26.0 million at December 31, 2011 to $23.0 million, or 11.3%, while gross loans increased slightly from $56.8 million to $57.5 million, and federal funds sold increased from $14.2 million to $16.6 million.  Overall, earning assets increased 0.2% in the six month period ended June 30, 2012.

The Bank's asset quality improved in the first half of 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 4.18% at June 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 generated $668,442.14 in additional paid in capital from the offering. The offering closed as of July 15, 2012.

Earnings

The Company posted net interest income of $878,636 and $907,439 for the three months ended June 30, 2012 and 2011, respectively. For the six months ended June 30, the Company posted net interest income of $1.8 million and $1.9 million for 2012 and 2011, respectively. Loan interest income decreased $25,863, or 2.9%, to $877,133 for the second quarter of 2012 compared with the second quarter of 2011. The decrease in interest income from loans was $155,462, or 8.1%, comparing the first half of 2012 with 2011.  For the six months ended June 30, 2012, investment income decreased $127,665, or 39.6%, to $195,062 as compared to the six months ended June 30, 2011.

Non-interest income totaled $310,957 for the three months ended June 30, 2012, or a 2.2% decrease from $318,062 earned during the second quarter of 2011. Non-interest income increased 10.6% for the six months ended June 30, 2012 to $786,775, as compared to $711,113 for the six months ended June 30, 2011.  The major contributor to the increase in the six-month period was other miscellaneous income due to reimbursement of legal expenses incurred in 2011.

General and administrative expenses were $994,626 and $2,040,602 for the three and six months ended June 30, 2012, respectively, as compared to $1,056,146 and $2,137,274 for the three and six months ended June 30, 2011. Legal and professional fees decreased $65,464 to $136,759 and regulatory assessments decreased $40,043 to $111,324 for the six months ended June 30, 2012 compared to the same period in 2011.

Income tax expense was $190,173 for the six months ended June 30, 2012, as compared to $67,851 for the six months ended June 30, 2011. The effective income tax rate for the six months ended June 30, 2012 and 2011 is approximately 36.7% and 30.7%, 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.

CHINO COMMERCIAL BANCORP

CONSOLIDATED BALANCE SHEET

June 30, 2012 and December 31, 2011



June 30, 2012


December 31, 2011


(unaudited)


(audited)

ASSETS:




Cash and due from banks

$  4,063,293


$    3,358,177

Federal funds sold

16,566,626


14,165,877

Total cash and cash equivalents

20,629,919


17,524,054





Interest-bearing deposits in other banks

14,579,252


13,339,252

Investment securities available for sale

2,590,575


2,972,420

Investment securities held to maturity (fair value approximates




$6,068,000 at June 30, 2012 and $9,861,000 at December 31, 2011)

5,870,239


9,652,630

Total investments

23,040,066


25,964,302

Loans




Real estate

45,344,094


46,184,898

Commercial

11,828,432


9,974,353

Installment

358,708


643,660

Gross loans

57,531,234


56,802,911

Unearned fees and discounts

(150,414)


(29,107)

Loans net of unearned fees and discount

57,380,820


56,773,804

Allowance for loan losses

(1,469,487)


(1,537,963)

 Net loans

55,911,333


55,235,841





Accrued interest receivable

252,474


275,976

Restricted stock

645,400


667,700

Fixed assets, net

6,353,647


6,443,753

Foreclosed assets

0


439,317

Prepaid & other assets

2,730,833


3,154,650

Total assets

$109,563,672


$  109,705,593





LIABILITIES:




Deposits




Non-interest bearing 

$ 47,354,353


$   47,188,644

Interest bearing




NOW and money market

31,554,261


32,241,986

Savings

2,142,784


1,809,536

Time deposits less than $100,000

4,505,578


4,700,126

Time deposits of $100,000 or greater

11,562,679


12,163,266

Total deposits

97,119,655


98,103,558





Accrued interest payable

185,938


139,646

Accrued expenses & other payables

683,340


897,363

Subordinated notes payable to subsidiary trust

3,093,000


3,093,000

Total liabilities

101,081,933


102,233,567

SHAREHOLDERS' EQUITY




Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 829,402 shares and 749,540 shares at June 30, 2012 and December 31, 2011, respectively.







3,441,723


2,760,812

Retained earnings

4,959,763


4,631,610

Accumulated other comprehensive income

80,253


79,604

Total shareholders' equity

8,481,739


7,472,026

Total liabilities & shareholders' equity

$109,563,672


$   109,705,593







 

CHINO COMMERCIAL BANCORP

CONSOLIDATED STATEMENTS OF NET INCOME

(unaudited)










For the three months ended


For the six months ended


June 30


June 30


2012


2011


2012


2011

Interest income








Investment securities and due from banks

$   87,527


$ 152,879


$ 195,062


$ 322,727

Interest on Federal funds sold

11,974


1,431


19,822


4,036

Interest and fee income on loans 

877,133


902,996


1,760,312


1,915,774

Total interest income

976,634


1,057,306


1,975,196


2,242,537

Interest expense








Deposits

80,733


98,829


165,602


213,726

Other interest expense

0


75


0


75

Other borrowings

17,265


50,963


35,468


101,925

Total interest expense

97,998


149,867


201,070


315,726

Net interest income

878,636


907,439


1,774,126


1,926,811

Provision for loan losses

1,972


273,917


1,972


279,439

Net interest income after








provision for loan losses

876,664


633,522


1,772,154


1,647,372

Non-interest income








Service charges on deposit accounts

279,348


289,420


590,841


594,076

Gain on sale of foreclosed assets

0


0


93,871


61,151

Other miscellaneous income

7,815


8,257


57,749


15,506

Dividend income from restricted stock

6,535


2,789


9,963


5,559

Income from bank-owned life insurance

17,259


17,596


34,351


34,821

Total non-interest income

310,957


318,062


786,775


711,113

Non-interest expenses








Salaries and employee benefits

546,560


520,894


1,119,842


1,108,294

Occupancy and equipment

100,967


112,221


207,065


226,802

Data and item processing

83,831


94,213


172,844


191,185

Advertising and marketing

11,850


11,083


24,906


27,236

Legal and professional fees

67,650


131,989


136,759


202,223

Regulatory assessments

55,460


75,920


111,324


151,367

Insurance

11,968


9,224


24,435


19,649

Directors' fees and expenses

27,495


21,175


53,040


36,776

Other expenses

88,845


79,427


190,387


173,742

Total non-interest expenses

994,626


1,056,146


2,040,602


2,137,274

Income before income tax expense

192,995


(104,562)


518,327


221,211

Income tax expense

68,799


(54,617)


190,173


67,851

Net income

$  124,196


$  (49,945)


$  328,154


$  153,360

Basic earnings per share  

$       0.15


$     (0.07)


$       0.41


$       0.20

Diluted earnings per share 

$       0.15


$     (0.07)


$       0.41


$       0.20











 

 

CHINO COMMERCIAL BANCORP



For the three months ended


For the six months ended


June 30


June 30


2012


2011


2012


2011

KEY FINANCIAL RATIOS








(unaudited)








Annualized return on average equity

5.92%


-2.85%


8.15%


4.35%

Annualized return on average assets

0.46%


-0.19%


0.61%


0.28%

Net interest margin

3.68%


4.00%


3.76%


4.09%

Core efficiency ratio

90.77%


90.71%


82.71%


82.94%

Net chargeoffs to average loans

0.12%


0.44%


0.13%


0.43%









AVERAGE BALANCES








(thousands, unaudited)








Average assets

$  108,365


$  104,653


$  107,752


$  108,905

Average interest-earning assets

$   96,025


$   91,075


$   94,919


$   94,891

Average gross loans

$   54,603


$   59,336


$   55,351


$   59,804

Average deposits

$   95,935


$   93,109


$   95,546


$   97,597

Average equity

$     8,397


$     7,007


$     8,058


$     7,047



 

 

CREDIT QUALITY

End of period

(unaudited)

June 30, 2012


December 31, 2011

Non-performing loans

$    2,407,384


$             3,605,142

Non-performing loans to total loans

4.18%


6.35%

Non-performing loans to total assets

2.20%


3.29%

Allowance for loan losses to total loans

2.55%


2.71%

Nonperforming assets as a percentage of total loans and OREO

4.18%


7.07%

Allowance for loan losses to non-performing loans

61.04%


42.66%





OTHER PERIOD-END STATISTICS




(unaudited)

June 30, 2012


December 31, 2011

Shareholders equity to total assets

7.74%


6.81%

Net Loans to deposits

57.57%


56.30%

Non-interest bearing deposits to total deposits

48.76%


48.10%

SOURCE Chino Commercial Bank