CHINO, Calif., Jan. 24, 2005 (PRIMEZONE) -- The Board of Directors of Chino Commercial Bank, N.A. (OTCBB:CKNA) announced the results of operations for the year ended December 31, 2004 with net income of $581,381, a 16.2% increase over net income for the same period last year. Pre-tax earnings for the year ended December 31, 2004 were $917,709, a 109.3% increase over the pre-tax earnings for the same period last year. Net income per share for the year ended December 31, 2004 was $0.71 per share as compared to $0.61 per share for the year ended December 31, 2003. Net income per fully diluted share was $0.66 and $0.59 for the years ended December 31, 2004 and 2003 respectively.
Net income for the fourth quarter ended December 31, 2004 was $170,185 or $0.18 per diluted share, a 35% increase compared to $125,853 or $0.13 per diluted share for the fourth quarter of 2003.
Dann H. Bowman, President and Chief Executive Officer stated, "We are very pleased with the continued growth and profitability of the Bank. Despite being the first year earnings were fully taxable, net income during 2004 increased considerably over last year. Net earnings represent a return on beginning equity of 10.91%, and during the year the stock increased from a split adjusted price of $14.83 to $20.50 at year end, an appreciation of 38%. The consistent and steady growth in Deposits and Loans has allowed the Bank to show improved stability of earnings and efficiency. We are also pleased to report that the Bank ended the year with no loan delinquency and no loan losses."
Financial Condition
At December 31, 2004, total assets were $77.1 million, an increase of $18.5 million or 32% from December 31, 2003.
Total loans increased to $34.4 million at December 31, 2004 from $27.2 million at December 31, 2003 or an increase of 26%. The growth was primarily in real estate secured lending as both commercial real estate loans and construction loans increased.
Total deposits increased by 33% to $70.7 million at December 31, 2004 from $53.1 million at December 31, 2003. Non-interest bearing deposits increased by $15.3 million or 37.6% since December 31, 2003, and at year end represented 79% of total deposits.
Chino Commercial Bank's risk-based capital ratios were 13.80% for Tier 1 capital, 14.81% for Risk-based capital and 8.36% for Leverage capital on December 31, 2004.
Earnings
The Bank posted net interest income of $2,914,252 for the year ended December 31, 2004 as compared to $2,265,464 for the year ended December 31, 2003. Average interest-earning assets were $65.0 million with average interest-bearing liabilities of $13.7 million yielding a net interest margin of 4.48% for the year ended December 31, 2004 as compared to average interest-bearing assets of $47.1 million with average interest-bearing liabilities of $11.8 million yielding a net interest margin of 4.81% for the year ended December 31, 2003. The 33 basis points decline in the net interest margin was the result of the higher average balances in short-term investments that earn at a lower interest rate.
The Bank posted net interest income of $816,772 for the three months ended December 31, 2004 as compared to $611,880 for the three months ended December 31, 2003. Average interest-earning assets were $70.1 million with average interest-bearing liabilities of $14.7 million yielding a net interest margin of 4.66% for the fourth quarter of 2004 as compared to average interest-bearing assets of $52.4 million with average interest-bearing liabilities of $13.3 million yielding a net interest margin of 4.67% for the three months ended December 31, 2003.
Non-interest income totaled $557,509 or an increase of 16.4% over $478,903 earned during the year ended December 31, 2003. Service charges on deposit accounts increased 29% to $429,622 due to higher volume of deposit accounts. Income from Mortgage Banking decreased by 53% to $66,207 due to reduced activity in the refinance market. Income from bank owned life insurance increased to $59,687 as the Bank purchased policies totaling $1.3 million in January 2004.
Non-interest income totaled $146,892 or 172% greater than the fourth quarter of 2003. Service charges on deposit accounts increased 18% to $120,601 due to the volume of overdraft and return item charges. Income from Mortgage Banking increased by 125% to $12,273. The loss of $49,699 in the fourth quarter of 2003 was due to a mark-to-market adjustment recorded on loans reclassified as held to maturity.
General and administrative expenses were $642,636 for the three months ended December 31, 2004 as compared to $558,484 for the three months ended December 31, 2003. General and administrative expenses were $2,476,404 for the year ended December 31, 2004 as compared to $2,208,772 for the year ended December 31, 2003. The largest component of general and administrative expenses was salary and benefits expense of $326,003 for the three months ended December 31, 2004 as compared to $287,643 for the three months ended December 31, 2003. Salary and benefits expense were $1,234,509 for the year ended December 31, 2004 as compared to $1,123,433 for the year ended December 31, 2003. The increase in Salary and benefits expenses are reflective of the salary increases, incentive compensation and the increase in health and workers compensation expenses. Other components of general and administrative expenses that affected the increase were Audit and Professional fees which increased by $2,605 for the comparable three month period and increased by $32,747 for the comparable twelve month period primarily due to the increase of internal operational and information technology audits being conducted in 2004. Other expenses increased by $37,047 for the comparable three month period and increased by $79,629 for the comparable twelve month period due primarily to courier costs and client service charges that were affected by an increase in escrow deposits.
Income tax expense was $102,749 for the three months ended December 31, 2004 and $336,328 for the year ended December 31, 2004. Beginning January 2004, the Bank began recording tax expense on a monthly basis. An Income tax benefit was recorded during the fourth quarter of 2003 for $61,957. This benefit reflects the remaining net operating loss carry-forward tax benefit that the Bank recorded as a deferred asset in the period ending December 31, 2003.
The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about the Bank's plans, objectives, management's expectations, intentions, relationships, opportunities, and technology and market condition statements. When used in these presentations, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "or words of similar meaning, or future or conditional verbs, such as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Bank's control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements for the reasons, among others, discussed in Bank's Annual Report on Form 10-KSB for the year ended December 31, 2003, which include: changes in general business and economic conditions may significantly affect the Bank's earnings; changes in level of market interest rates; changes in credit risks of lending activities and competitive factors; effective income tax rates, relationships with major customers, extent and timing of legislative and regulatory actions and reforms. The Bank is not obligated to update and does not undertake to update any of its forward-looking statements made herein.
CHINO COMMERCIAL BANK
STATEMENT OF FINANCIAL CONDITION
December 31, December 31,
2004 2003
----------- -----------
(unaudited)
ASSETS:
Cash and due from banks $ 2,374,688 3,588,715
Federal Funds sold 10,925,000 9,350,000
----------- -----------
Cash and cash equivalents 13,299,688 12,938,715
Interest-bearing deposits at banks 6,271,000 2,388,000
Investment Securities available for sale 15,562,826 9,463,551
Investment Securities held to maturity
(fair value approximates $4,859,395 at
December 31, 2004 and $5,378,919 at
December 31, 2003) 4,801,024 5,327,521
Federal Reserve Bank stock, at cost 159,600 154,450
Federal Home Loan Bank stock, at cost 283,500 168,100
Pacific Coast Bankers' Bank stock, at cost 50,000 50,000
Loans
Loans held for sale 0 126,558
Construction 3,520,772 468,101
Real estate 23,886,582 19,639,383
Commercial 6,534,464 6,475,819
Installment 635,609 596,534
Farm/Agriculture 346,261 360,269
Unearned fees, net (119,328) (122,260)
Allowance for loan losses (407,046) (329,398)
----------- -----------
Loans, net 34,397,314 27,215,006
----------- -----------
Fixed assets, net 389,965 438,393
Accrued interest receivable 258,528 189,574
Prepaid & other assets 1,612,617 267,698
----------- -----------
Total Assets $77,086,062 58,601,008
=========== ===========
LIABILITIES:
Deposits
Non-interest bearing $56,112,375 40,769,746
Interest bearing
Money market 10,231,507 9,124,289
Savings 926,275 565,012
Time deposits of $100,000 or greater,
due in one year 1,802,181 897,603
Time deposits less than $100,000,
due in one year 1,668,794 1,736,483
----------- -----------
Total Deposits 70,741,132 53,093,133
----------- -----------
Accrued interest payable 20,642 12,580
Accrued expenses & other payables 422,994 165,301
----------- -----------
Total Liabilities 71,184,768 53,271,014
----------- -----------
STOCKHOLDERS' EQUITY
Common Stock, authorized 10,000,000 shares
with a par value of $3.33 per share;
issued and outstanding 818,453 at
December 31, 2004 and December 31, 2003,
respectively 2,728,230 2,728,230
Additional paid-in capital 2,590,600 2,590,893
Accumulated earnings (deficit) 612,645 31,264
Accumulated other comprehensive income (30,181) (20,393)
----------- -----------
Total Stockholders' Equity 5,901,294 5,329,994
----------- -----------
Total Liabilities & Equity $77,086,062 58,601,008
=========== ===========
CHINO COMMERCIAL BANK
STATEMENTS OF OPERATIONS
For the For the
three months ending year ending
December 31, December 31,
------------------ ----------------------
2004 2003 2004 2003
-------- -------- ---------- ----------
(unaudited) (unaudited)
Interest Income
Interest Income
- Securities $233,873 $143,802 $ 777,001 $ 639,703
Interest Income
- Fed Funds 43,746 21,550 138,011 73,562
Interest and fee income
on Loans 587,188 495,664 2,170,806 1,743,153
-------- -------- ---------- ----------
Total Interest Income 864,807 661,016 3,085,818 2,456,418
-------- -------- ---------- ----------
Interest Expense
Interest Expense
- Deposits 48,035 49,136 171,566 190,954
-------- -------- ---------- ----------
Total Interest Expense 48,035 49,136 171,566 190,954
-------- -------- ---------- ----------
Total net interest
income 816,772 611,880 2,914,252 2,265,464
-------- -------- ---------- ----------
Provision for loan
losses 48,094 43,458 77,648 97,043
-------- -------- ---------- ----------
Total net interest
income after provision
for loan losses 768,678 568,422 2,836,604 2,168,421
-------- -------- ---------- ----------
Non-interest income
Service Charges on
Deposit Accounts 120,601 102,325 429,622 332,858
Other miscellaneous
fee income (2,295) 1,332 1,993 4,985
Income from Mortgage
Banking 12,273 (49,699) 66,207 141,060
Income from Bank owned
life insurance 16,313 -- 59,687 --
-------- -------- ---------- ----------
Total Non-interest
income 146,892 53,958 557,509 478,903
-------- -------- ---------- ----------
General & Administrative
Expenses
Salaries & Benefits 326,003 287,643 1,234,509 1,123,433
Occupancy & Equipment 65,979 61,712 254,320 249,509
Data & Item Processing 47,536 45,118 191,533 175,040
Advertising & Marketing 14,105 16,230 77,639 63,168
Audit & Professional fees 38,558 35,953 172,185 139,438
Insurance 6,012 5,655 23,106 19,624
Directors' fees and
expenses 17,590 16,367 66,034 61,111
Other expenses 126,853 89,806 457,078 377,449
-------- -------- ---------- ----------
Total general & admin-
istrative expenses 642,636 558,484 2,476,404 2,208,772
-------- -------- ---------- ----------
Income before income
tax expense 272,934 63,896 917,709 438,552
Income tax expense 102,749 (61,957) 336,328 (61,957)
-------- -------- ---------- ----------
Net income $170,185 $125,853 $ 581,381 $ 500,509
======== ======== ========== ==========
Basic Earnings per share $ 0.19 $ 0.15 $ 0.71 $ 0.61
======== ======== ========== ==========
Diluted Earnings
per share $ 0.18 $ 0.13 $ 0.66 $ 0.59
======== ======== ========== ==========
CHINO COMMERCIAL BANK
Selected Financial Highlights
For the three months For the year ended
ended December 31, December 31,
------------------------------------------
2004 2003 2004 2003
-------- -------- --------- ---------
Selected Operating Data:
Net interest income $816,772 611,880 2,914,252 2,265,464
Provision for loan
losses 48,094 43,458 77,648 97,043
Non-interest income 146,892 53,958 557,509 478,903
Non-interest expense 642,636 558,484 2,476,404 2,208,772
Net income $170,185 125,853 581,381 500,509
Share Data:
Basic income per share $ 0.19 0.15 0.71 0.61
Diluted Income per share $ 0.18 0.13 0.66 0.59
Weighted average common
shares outstanding
Basic 818,453 818,453 818,453 818,453
Diluted 883,672 864,872 881,338 853,173
Performance Ratios:
Return on average assets 0.89% 0.89% 0.82% 0.99%
Return on average equity 11.54% 9.49% 10.26% 9.66%
Equity to total assets at
the end of the period 7.66% 9.10% 7.66% 9.10%
Net interest spread 3.64% 3.58% 3.49% 3.59%
Net interest margin 4.66% 4.67% 4.48% 4.81%
Average interest-earning
assets to average-
bearing liabilities 477.83% 393.78% 473.56% 400.99%
Core efficiency ratio 66.70% 83.78% 71.31% 80.50%
Non-interest expense
to average assets 3.37% 3.95% 3.50% 4.37%
Selected Balance Sheet Data: 12/31/2004 12/31/2003
Total assets $77,086,062 58,601,008
Investment securities
held to maturity 4,801,024 5,327,521
Investment securities
available for sale 15,562,826 9,463,551
Loan receivable, net 34,397,314 27,215,006
Deposits 70,741,132 53,093,133
Non-interest bearing
deposits 56,112,375 40,769,746
Stockholders' equity $ 5,901,294 5,329,994
Regulatory capital ratios:
Average equity to
average assets 8.00% 10.26%
Leverage capital 8.36% 9.48%
Tier I risk based 13.80% 16.64%
Risk-based capital 14.81% 17.74%
Asset Quality Ratios:
Allowance for loan losses
as a percent of gross
loans receivable 1.17% 1.27%
Net charge-offs to
average loans n/a -0.16%
Non-performing loans to
total loans n/a n/a
Number of full-service
customer facilities 1 1