CHINO, Calif., April 21, 2008 (PRIME NEWSWIRE) -- 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 first quarter ended March 31, 2008 with net earnings of $41,471, a 68.1% reduction from $130,144 for the fourth quarter of 2007, and a 76.7% reduction from net income of $177,783 for the first quarter of last year. The reduction in net income was caused in part by a significant out of pattern provision to Loan Loss Reserve during the first quarter of $234,631. Net income per basic share for the first quarter was $0.06 as compared to $0.18 per share for the fourth quarter ended December 31, 2007, and $0.23 for the first quarter last year.
Dann H. Bowman, President and Chief Executive Officer stated, "The Bank made a significant provision to Loan Loss Reserve during the first quarter, even though no actual credit losses were recognized. Looking at a number of economic events occurring in and around the real estate industries, the Bank is taking a proactive and conservative approach to credit quality by making this provision. Though the provision resulted in lower earnings during the first quarter, in the long run we believe that these conservative credit practices will be a benefit to the Bank ongoing.
"At quarter-end March 31, 2008 the Bank had three loans on non-accrual status, and experienced no credit losses year-to-date, and no credit losses for the past seven years. The Bank has not originated, and has no exposure to sub-prime mortgage loans, or option ARM mortgages."
Financial Condition
At March 31, 2008, total assets were $72.2 million, a decrease of $7.8 million or 9.7% from December 31, 2007, and a decrease of $20.5 million or 22.1% from March 31, 2007. This is a direct result of the declining balances in real estate industry related accounts
Loans increased $89,001 during the first quarter from December 31, 2007 with a balance at March 31, 2008 of $53.3 million. Comparing the balances of March 31, 2007, the Company's loans increased $1.7 million or 3.2% during the twelve month period. The growth was primarily in real estate secured lending.
Total deposits decreased by 11.0% to $62.7 million at March 31, 2008, a decrease from $70.4 million at December 31, 2007. Total deposits decreased 24.8% from March 31, 2007's balance of $83.3 million. At March 31, 2008, the Company's core deposits represent 96.7% of the total deposits.
Earnings
The Company posted net interest income of $884,585 for the quarter ended March 31, 2008 as compared to $1,074,278 for the quarter ended March 31, 2007, due to decreased average balances in investment securities and Federal funds sold.
Non-interest income totaled $264,387 for the first quarter of 2008, or an increase of 24.8% from $211,870 earned during the first quarter of 2007. Service charges on deposit accounts increased 30.9% to $232,558 due to increased overdraft and return item charges.
The provision for loan losses increased $168,738 to $234,631 or 256.1% in the first quarter of 2008, compared to $65,893 in the first quarter of 2007.
General and administrative expenses were $862,748 for the three months ended March 31, 2008 as compared to $937,681 for the first quarter of 2007. The largest component of general and administrative expenses was salary and benefits expense of $477,792 for the first quarter of 2008 as compared to $481,853 for the three months ended March 31, 2007. The slight decrease in salaries and benefits expenses was reflective of a reduction of full time equivalent staff during the first quarter of 2008 compared to the first quarter of 2007. Advertising and marketing expenses decreased by $11,697 or 29.6% for the comparable three-month period. Other expenses decreased by $55,718 for the comparable three-month period due decreased in courier expense, stationery and office supplies expense, and primarily due to decreased Reserve for Undisbursed Credits of $24,631.
Income tax expense was $10,122 for the three months ended March 31, 2008 as compared to $104,791 for the three months ended March 31, 2007. The effective income tax rate for 2007 and 2006 is approximately 39%.
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 there from, changes in interest rates, loan portfolio performance, and other factors detailed in the Company's SEC filings.
CHINO COMMERCIAL BANCORP
CONSOLIDATED BALANCE SHEET
March 31, 2008 and December 31, 2007
(unaudited)
March 31, December 31,
2008 2007
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ASSETS:
Cash and due from banks $ 4,118,859 $ 3,463,092
Federal funds sold 230,000 7,440,000
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Cash and cash equivalents 4,348,859 10,903,092
Interest-bearing deposits in other banks 124,084 123,841
Investment securities available for sale 6,581,462 7,339,354
Investment securities held to maturity
(fair value approximates $3,766,000 at
March 31, 2008 and $3,880,000 at
December 31, 2007) 3,699,368 3,873,251
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Total investments securities 10,280,830 11,336,446
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Loans
Construction 2,548,039 2,606,750
Real estate 40,155,063 39,726,301
Commercial 9,930,892 10,062,969
Installment 641,562 790,535
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Gross Loans 53,275,556 53,186,555
Unearned fees and discounts (85,939) (87,389)
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Loans net of unearned fees and discounts 53,189,617 53,099,166
Allowance for loan losses (1,029,860) (725,211)
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Net loans 52,159,757 52,373,955
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Restricted stock 660,150 654,250
Fixed assets, net 2,042,317 2,085,203
Accrued interest receivable 272,607 326,990
Prepaid & other assets 2,290,179 2,268,909
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Total assets $72,178,783 $79,948,845
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LIABILITIES:
Deposits
Non-interest bearing $32,814,110 $42,270,696
Interest Bearing
NOW and money market 24,382,342 22,711,556
Savings 1,263,530 1,202,965
Time deposits less than $100,000 2,151,118 2,054,915
Time deposits of $100,000 or greater 2,070,185 2,156,778
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Total deposits 62,681,285 70,396,910
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Accrued interest payable 56,301 63,962
Other liabilities 499,062 509,389
Subordinated debentures 3,093,000 3,093,000
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Total liabilities 66,329,648 74,063,261
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STOCKHOLDERS' EQUITY
Common stock, authorized 10,000,000
shares with no par value, issued and
outstanding 699,798 shares and 704,278
shares at March 31, 2008 and
December 31, 2007, respectively. 2,539,714 2,639,462
Retained earnings 3,266,759 3,249,982
Accumulated other comprehensive loss 42,662 (3,860)
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Total equity 5,849,135 5,885,584
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Total liabilities & equity $72,178,783 $79,948,845
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CHINO COMMERCIAL BANCORP
STATEMENTS OF INCOME
(unaudited)
For the Quarter Ended
March 31,
2008 2007
------------ ------------
Interest income
Investment securities and
due from banks $ 125,801 $ 191,235
Federal funds sold 24,991 116,830
Interest and fee income on loans 984,455 977,172
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Total interest income 1,135,247 1,285,237
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Interest expense
Deposits 199,615 159,696
Other borrowings 51,047 51,263
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Total interest expense 250,662 210,959
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Net interest income 884,585 1,074,278
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Provision for loan losses 234,631 65,893
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Net interest income after provision
for loan losses 649,954 1,008,385
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Non-interest income
Service charges on deposit accounts 232,558 177,682
Other miscellaneous fee income 8,473 9,110
Dividend income from restricted stock 8,244 8,875
Income from bank owned life insurance 15,112 16,203
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Total non-interest income 264,387 211,870
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General and administrative expenses
Salaries and employee benefits 477,792 481,853
Occupancy and equipment 83,781 93,241
Data and item processing 76,558 66,590
Advertising and marketing 27,829 39,526
Legal and professional fees 65,793 70,353
Insurance 8,228 6,358
Directors' fees and expenses 19,176 20,451
Other expenses 103,591 159,309
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Total general &
administrative expenses 862,748 937,681
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Income before income tax expense 51,593 282,574
Income tax expense 10,122 104,791
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Total income $ 41,471 $ 177,783
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Basic earnings per share $ 0.06 $ 0.23
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Diluted earnings per share $ 0.05 $ 0.21
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