CHINO, Calif., Oct. 25, 2004 (PRIMEZONE) -- The Board of Directors of Chino Commercial Bank, N.A. (OTCBB:CKNA) announced the results of operations for the nine months ended September 30, 2004 with net income of $411,196 a 9.8% increase over net income for the same period last year. Pre-tax earnings for the nine months ended September 30, 2004 were $644,775 a 72.1% increase over the pre-tax earnings for the same period last year. Dann H. Bowman, President and Chief Executive Officer stated, "We are very pleased with the continued growth and profitability of the Bank during the first three quarters of this year, which have surpassed last year's results. Effective January 1, 2004, the Bank became fully taxable with a net effective tax rate of 36.2%, even with this expense, the Bank is pleased to report an increase of 19.2% and 9.8% in net income after tax for the three and nine months ended September 30, 2004 as compared to the same periods for last year."
Net income per share for the nine months ended September 30, 2004 was $0.50 per share as compared to $0.46 per share for the nine months ended September 30, 2003. Net income per fully diluted share was $0.47 and $0.44 for the nine months ending September 30, 2004 and 2003 respectively. Mr. Bowman stated, "During the nine months ended September 30, 2004, average earning assets increased by 39.8% enhancing net interest income, while the Bank continued to pursue cost control measures on non-interest expenses."
The results of operations for the third quarter of 2004 reflect net income before taxes for the quarter of $244,336, an 86.8% increase over pre-tax net income of $130,761 for the same quarter last year. Net income for the three months ended September 30, 2004 was $155,970 or $0.20 per share, a 19.2% increase from net income of $130,761 or $0.16 per share for the three months ended September 30, 2003. Net income per fully diluted share was $0.18 and $0.15 for the quarters ending September 30, 2004 and 2003 respectively.
Total Assets increased by 34.1% to $78.6 million from $58.6 million at December 31, 2003. Total Deposits increased 36.1% to $72.3 million at September 30, 2004 as compared to $53.1 million at December 31, 2003. Total Loans increased 19.8% to $32.6 million at September 30, 2004 as compared to $27.2 million at December 31, 2003. On September 30, 2004, the Bank had no delinquencies greater than 30 days, nor non-accrual or non-performing loans and has no other real estate owned.
The increased earnings for the nine months ended September 30, 2004 were primarily due to an increase in the net interest margin of $443,893 or 26.8%. The Bank posted net interest income of $2,097,480 for the nine months ended September 30, 2004 as compared to $1,653,587 for the same period last year. These increases in income were partially offset by an increase in general and administrative expenses of $194,397 or 11.8% resulting primarily from an increase in Salary and benefits expense, Audit and professional fees and Other expenses. The Bank posted net interest income of $771,509 for the three months ended September 30, 2004 as compared to $594,827 for the same quarter last year. These increases in income were partially offset by an increase in general and administrative expenses of $83,436 resulting primarily from Other expenses.
Average interest-earning assets were $63.4 million with average interest-bearing liabilities of $13.4 million yielding a net interest margin of 4.42% for the nine months ended September 30, 2004 as compared to average interest-bearing assets of $45.3 million with average interest-bearing liabilities of $11.2 million yielding a net interest margin of 4.88% for the nine months ended September 30, 2003. The net interest margin continues to decline as investment securities are repriced in a lower interest rate environment.
Average interest-earning assets were $69.6 million with average interest-bearing liabilities of $14.3 million yielding a net interest margin of 4.43% for the three months ended September 30, 2004 as compared to average interest-bearing assets of $50.3 million with average interest-bearing liabilities of $11.6 million yielding a net interest margin of 4.74% for the three months ended September 30, 2003.
General and administrative expenses were $1,833,772 for the nine months ended September 30, 2004 as compared to $1,639,375 for the nine months ended September 30, 2003. The largest component of general and administrative expenses was salary and benefits expense of $908,506 for the nine months ended September 30, 2004 as compared to $835,789 for the nine months ended September 30, 2003. Salary and benefits increased due to higher average full-time equivalent staff, salary increases, accrued incentive compensation, temporary staffing expenses, and higher expenses relating to health insurance and workers' compensation for the nine months ended September 30, 2004 as compared to the nine months ended September 30, 2003. Also increased were Other expenses, primarily client service charges, which increased $53,498, Audit and professional fees expenses, which increased $30,142, and Advertising and marketing expenses, which increased $16,596.
General and administrative expenses were $648,642 for the three months ended September 30, 2004 as compared to $565,206 for the three months ended September 30, 2003. The largest component of general and administrative expenses was salary and benefits expense of $306,428 for the third quarter of 2004 as compared to $303,334 for the third quarter of 2003. Other expenses increased by $64,016 for the comparable three-month period due to primarily to increased client service charges and contributions to the reserve for off balance sheet credit commitments.
FORWARD-LOOKING STATEMENTS
The statements contained in this release that are not historical facts are forward-looking statements based upon management's current expectations and beliefs concerning future developments and their potential effect on Chino Commercial Bank. There can be no assurances that future developments affecting Chino Commercial Bank will be the same as those anticipated by management.
Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties. These include, but are not limited to, the following risks; (1) changes in performance of the financial markets; (2) changes in the demand for and market acceptance of Chino Commercial Bank's products and services; (3) changes in general economic conditions including interest rates, presence of competitors with greater financial resources, and the impact of competitive products and pricing; (4) the effect of Chino Commercial Bank's policies; (5) the continued availability of adequate funding sources.
CHINO COMMERCIAL BANK STATEMENT OF FINANCIAL CONDITION September 30, December 31, 2004 2003 ----------- ---------- (unaudited) ASSETS: Cash and Due from Banks $ 6,562,526 3,588,715 Federal Funds Sold 8,205,000 9,350,000 ----------- ----------- Cash and Cash equivalents 14,767,526 12,938,715 Interest-bearing deposits at banks 6,866,000 2,388,000 Investment Securities available for sale 15,447,443 9,463,551 Investment Securities held to maturity (fair value approximates $6,218,357 at September 30, 2004 and $5,378,920 at December 31, 2003) 6,126,574 5,327,521 Federal Reserve Bank stock, at cost 159,600 154,450 Federal Home Loan Bank stock, at cost 281,000 168,100 Pacific Coast Bankers' Bank stock, at cost 50,000 50,000 Loans Loans held for sale -- 126,558 Construction 3,611,587 468,101 Real estate 22,686,617 19,639,383 Commercial 5,718,314 6,475,819 Farm/Agriculture 349,916 360,269 Installment 715,266 596,534 Unearned fees and discounts (117,173) (122,260) Allowance for loan losses (358,952) (329,399) ----------- ----------- Total Loans 32,605,575 27,215,005 ----------- ----------- Fixed Assets, net 417,947 438,393 Accrued Interest Receivable 244,939 189,574 Prepaid & Other Assets 1,618,309 267,698 ----------- ----------- Total Assets $78,584,913 58,601,007 =========== =========== LIABILITIES: Deposits Non-interest Bearing $57,865,854 40,769,746 Interest Bearing Money market & NOW 10,362,468 9,124,289 Savings 747,005 565,012 Time deposits of $100,000 or greater, due in one year 1,601,243 897,603 Time deposits less than $100,000, due in one year 1,700,256 1,736,483 ----------- ---------- Total Deposits 72,276,826 53,093,133 ----------- ---------- Accrued Interest Payable 13,909 12,580 Accrued Expenses & Other Payables 518,510 165,300 ----------- ---------- Total Liabilities 72,809,245 53,271,013 ----------- ---------- STOCKHOLDERS' EQUITY Common Stock, authorized 10,000,000 shares with a par value of $3.33 per share and $5.00 per share; issued and outstanding 818,453 and 545,646 shares at September 30, 2004 and December 31, 2003, respectively 2,728,230 2,728,230 Additional paid-in capital 2,590,600 2,590,893 Retained earnings 442,460 31,264 Accumulated other comprehensive income (loss) 14,378 (20,393) ----------- ---------- Total Equity 5,775,668 5,329,994 ----------- ---------- Total Liabilities & Equity $78,584,913 58,601,007 =========== ========== See accompanying notes to the financial statements. CHINO COMMERCIAL BANK STATEMENT OF OPERATIONS (unaudited) For the For the Three months ended Nine months ended September 30, September 30, 2004 2003 2004 2003 -------- ------- --------- --------- Interest Income Interest Income - Securities $226,416 163,799 543,128 495,900 Interest Income - Fed Funds 34,797 19,171 94,265 52,013 Interest and fee income on Loans 555,208 456,727 1,583,618 1,247,491 -------- ------- --------- --------- Total Interest Income 816,421 639,697 2,221,011 1,795,404 -------- ------- --------- --------- Interest Expense Interest Expense - Deposits 44,912 44,870 123,531 141,817 -------- ------- --------- --------- Total Interest Expense 44,912 44,870 123,531 141,817 -------- ------- --------- --------- Total net interest income 771,509 594,827 2,097,480 1,653,587 -------- ------- --------- --------- Provision for loan losses 13,550 25,500 29,550 64,500 -------- ------- --------- --------- Total net interest income after provision for loan losses 757,959 569,327 2,067,930 1,589,087 -------- ------- --------- --------- Non-interest income Service Charges on Deposit Accounts 109,182 79,117 309,021 230,534 Other miscellaneous fee income 1,454 528 4,288 2,349 Income from Mortgage Banking 8,073 46,995 53,934 192,061 Income from Bank owned life insurance 16,310 -- 43,374 -- -------- ------- --------- --------- Total Non-interest income 135,019 126,640 410,617 424,944 -------- ------- --------- --------- General & Administrative Expenses Salaries & Benefits 306,428 303,334 908,506 835,789 Occupancy & Equipment 65,692 64,476 188,341 187,797 Data & Item Processing 48,988 44,312 143,997 129,922 Advertising & Marketing 18,481 14,069 63,534 46,938 Audit & Professional fees 38,561 36,096 133,627 103,485 Insurance 5,782 5,007 17,094 13,969 Directors' fees and expenses 17,734 14,952 48,444 44,744 Other expenses 146,976 82,960 330,229 276,731 -------- ------- --------- --------- Total general & administrative expenses 648,642 565,206 1,833,772 1,639,375 -------- ------- --------- --------- Net income before income tax expense 244,336 130,761 644,775 374,656 Income tax expense 88,366 -- 233,579 -- -------- ------- --------- --------- Total income $155,970 130,761 411,196 374,656 ======== ======= ========= ========= Basic Earnings per share $ 0.20 0.16 0.50 0.46 ======== ======= ========= ========= Diluted Earnings per share $ 0.18 0.15 0.47 0.44 ======== ======= ========= ========= See accompanying notes to the financial statements. CHINO COMMERCIAL BANK Selected Financial Highlights For the For the Three months ended Nine months ended September 30, September 30, ------------------ ---------------------- 2004 2003 2004 2003 -------- -------- ---------- ---------- Selected Operating Data: Net interest income $771,509 $594,827 $2,097,480 $1,653,587 Provision for loan losses 13,550 25,500 29,550 64,500 Non-interest income 135,019 126,640 410,617 424,944 Non-interest expense 648,642 565,206 1,833,772 1,639,375 Net income $155,970 $130,761 $ 411,196 374,656 Share Data: Basic income per share $ 0.20 $ 0.16 $ 0.50 $ 0.46 Diluted Income per share $ 0.18 $ 0.15 $ 0.47 $ 0.44 Weighted average common shares outstanding Basic 818,453 818,453 818,453 818,453 Diluted 884,262 857,213 880,496 849,616 Performance Ratios: Return on average assets 0.81% 0.97% 0.79% 1.03% Return on average equity 10.92% 9.94% 9.81% 9.72% Equity to total assets at the end of the period 7.35% 8.73% 7.35% 8.73% Net interest spread 3.44% 3.56% 3.44% 3.59% Net interest margin 4.43% 4.74% 4.42% 4.88% Average interest-earning assets to average- bearing liabilities 486.89% 432.42% 472.60% 403.62% Core efficiency ratio 71.55% 78.36% 73.10% 78.31% Non-interest expense to average assets 3.39% 4.20% 3.54% 4.47% Selected Balance Sheet Data: 9/30/2004 12/31/2003 ------------ ------------ Total assets $ 78,584,913 $ 58,601,007 Investment securities held to maturity 6,126,574 5,327,521 Investment securities available for sale 15,447,443 9,463,551 Loans receivable, net 32,605,575 27,215,005 Deposits 72,276,826 53,093,133 Non-interest bearing deposits 57,865,854 40,769,746 Stockholders' equity $ 5,775,668 $ 5,329,994 Regulatory capital ratios: Average equity to average assets 8.09% 10.26% Leverage capital 7.51% 9.48% Tier I risk based 13.90% 16.64% Risk-based capital 14.87% 17.74% Asset Quality Ratios: Allowance for loan losses as a percent of gross loans receivable 1.09% 1.20% 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