CHINO, Calif., Jan. 23, 2006 (PRIMEZONE) -- The Board of Directors of Chino Commercial Bank, N.A. (OTCBB:CKNA) announced the results of operations for the year ended December 31, 2005 with net income of $885,173, a 52.3% increase over net income of $581,381 for December 31, 2004. Net income per share for the year ended December 31, 2005 was $1.08 per share as compared to $0.71 per share for the year ended December 31, 2004. Net income per fully diluted share was $1.00 and $0.66 for the years ended December 31, 2005 and 2004, respectively.
Net income for the fourth quarter ended December 31, 2005 was $268,666 or $0.30 per diluted share, a 57.9% increase compared to $170,185 or $0.19 per diluted share for the fourth quarter of 2004.
Dann H. Bowman, President and Chief Executive Officer stated, "We are very pleased with the continued growth and profitability of the Bank as we complete our fifth full year end. Net earnings represent a return on beginning equity of 15.0% and a return of average assets of 1.05%. Deposit and Loan balances increased this year by 18.8% and 21.5%, respectively, allowing the Bank to show improved stability of earnings and efficiency. Along with this growth, at fiscal year end the Bank reported no loan delinquencies and no loan losses for the entire year."
Financial Condition
At December 31, 2005, total assets were $91.3 million, an increase of $14.2 million or 18.5% from December 31, 2004.
Total loans increased to $41.8 million at December 31, 2005 from $34.4 million at December 31, 2004 or an increase of 21.5%. The growth was primarily in real estate secured lending.
Total deposits increased by 18.8% to $84.0 million at December 31, 2005 from $70.7 million at December 31, 2004. Non-interest bearing deposits increased by $6.5 million or 11.6% since December 31, 2004, and at year end represented 74.5% of total deposits.
Chino Commercial Bank's risk-based capital ratios were 12.14% for Tier 1 capital, 13.20% for Risk-based capital and 7.54% for Leverage capital on December 31, 2005.
Earnings
The Bank posted net interest income of $4,001,071 for the year ended December 31, 2005 as compared to $2,914,252 for the year ended December 31, 2004. Average interest-earning assets were $78.0 million with average interest-bearing liabilities of $18.2 million yielding a net interest margin of 5.13% for the year ended December 31, 2005 as compared to average interest-bearing assets of $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. The 65 basis points increase in the net interest margin was the result of the higher average balances as the Bank continues to grow and the effect of upward repricing of the benchmark for Federal funds.
The Bank posted net interest income of $1,103,311 for the three months ended December 31, 2005 as compared to $816,772 for the three months ended December 31, 2004. Average interest-earning assets were $82.9 million with average interest-bearing liabilities of $21.6 million yielding a net interest margin of 5.32% for the fourth quarter of 2005 as compared to average interest-bearing assets of $70.1 million with average interest-bearing liabilities of $14.7 million yielding a net interest margin of 4.66% for the three months ended December 31, 2004.
Non-interest income totaled $553,272 or a decrease of 0.8% from $557,509 earned during the year ended December 31, 2004. Service charges on deposit accounts increased 7.5% to $461,678 due to higher volume of deposit accounts. Income from Mortgage Banking decreased by 73.3% to $17,697 due to reduced activity in the refinance market. Income from bank owned life insurance increased by 7.9% to $64,421 as the Bank purchased policies totaling $1.3 million at the end of January 2004.
Non-interest income totaled $134,745 or an 8.3% decline from the fourth quarter of 2004. Service charges on deposit accounts decreased 4.6% to $115,002 due to the lower volume of overdraft and return item charges. There was no income from Mortgage Banking during the fourth quarter of 2005 as compared to $12,273 in the fourth quarter 0f 2004.
General and administrative expenses were $753,250 for the three months ended December 31, 2005 as compared to $642,636 for the three months ended December 31, 2004. General and administrative expenses were $2,965,458 for the year ended December 31, 2005 as compared to $2,476,404 for the year ended December 31, 2004. The largest component of general and administrative expenses was salary and benefits expense of $385,900 for the three months ended December 31, 2005 as compared to $326,003 for the three months ended December 31, 2004. Salary and benefits expense were $1,451,897 for the year ended December 31, 2005 as compared to $1,234,509 for the year ended December 31, 2004. The increase in Salary and benefits expenses are reflective of the staff and salary increases, incentive compensation and the increase in retirement plan accruals. Other components of general and administrative expenses that affected the increase were Advertising and Marketing expenses which increased by $20,049 for the comparable three month period and increased by $50,305 for the comparable twelve month period due primarily to various marketing campaigns. Other expenses increased by $17,938 for the comparable three month period and increased by $175,525 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 $173,640 for the three months ended December 31, 2005 as compared to $102,749 for the three months ended December 31, 2004. Income tax expenses were $566,619 for the year ended December 31, 2005 as compared to $336,328 for the year ended December 31, 2004. The effective income tax rate increased from approximately 37% for the year ended 2004 to 39% for the year ended 2005 as various tax credits expired during the year in 2004.
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, 2005, 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,
2005 2004
----------- -----------
(unaudited)
ASSETS:
Cash and due from banks $ 5,328,842 $ 2,374,688
Federal Funds sold 11,370,000 10,925,000
----------- -----------
Cash and cash equivalents 16,698,842 13,299,688
Interest-bearing deposits at banks 6,030,000 6,271,000
Investment Securities available for sale 16,311,377 15,562,826
Investment Securities held to maturity
(fair value approximates $5,764,134 at
December 31, 2005 and $4,859,395 at
December 31, 2004) 5,850,687 4,801,024
Federal Reserve Bank stock, at cost 159,600 159,600
Federal Home Loan Bank stock, at cost 362,600 283,500
Pacific Coast Bankers' Bank stock,
at cost 50,000 50,000
Loans
Construction 2,790,712 3,520,772
Real estate 30,444,344 23,886,582
Commercial 8,295,573 6,534,464
Installment 633,504 635,609
Farm/Agriculture 330,920 346,261
Unearned fees, net (144,106) (119,328)
Allowance for loan losses (544,140) (407,046)
----------- -----------
Loans, net 41,806,807 34,397,314
----------- -----------
Fixed assets, net 1,936,168 389,965
Accrued interest receivable 314,849 258,528
Prepaid & other assets 1,811,979 1,612,617
----------- -----------
Total Assets $91,332,909 $77,086,062
=========== ===========
LIABILITIES:
Deposits
Non-interest bearing $62,610,963 $56,112,375
Interest bearing
Money market & NOW 16,793,824 10,231,507
Savings 913,249 926,275
Time deposits of $100,000 or
greater, due in one year 2,216,104 1,802,181
Time deposits less than
$100,000, due in one year 1,487,803 1,668,794
----------- -----------
Total Deposits 84,021,943 70,741,132
----------- -----------
Accrued interest payable 28,858 20,642
Accrued expenses & other payables 588,068 422,994
----------- -----------
Total Liabilities 84,638,869 71,184,768
----------- -----------
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, 2005 and
December 31, 2004, respectively 2,728,230 2,728,230
Additional paid-in capital 2,590,600 2,590,600
Accumulated earnings 1,497,818 612,645
Accumulated other comprehensive income (122,608) (30,181)
----------- -----------
Total Stockholders' Equity 6,694,040 5,901,294
----------- -----------
Total Liabilities & Equity $91,332,909 $77,086,062
=========== ===========
CHINO COMMERCIAL BANK
STATEMENTS OF OPERATIONS
For the For the
Three months ending Year ending
December 31, December 31,
--------------------- ---------------------
2005 2004 2005 2004
--------- --------- --------- ---------
(unaudited) (unaudited)
Interest Income
Interest Income
- Securities $ 277,341 $ 233,873 $ 985,773 $ 777,001
Interest Income
- Fed Funds 123,700 43,746 386,707 138,011
Interest and fee income
on Loans 781,875 587,188 2,888,186 2,170,806
--------- --------- --------- ---------
Total Interest
Income 1,182,916 864,807 4,260,666 3,085,818
---------- --------- --------- ---------
Interest Expense
Interest Expense
- Deposits 79,605 48,035 259,595 171,566
--------- --------- --------- ---------
Total Interest
Expense 79,605 48,035 259,595 171,566
--------- --------- --------- ---------
Total net interest
income 1,103,311 816,772 4,001,071 2,914,252
--------- --------- --------- ---------
Provision for loan
losses 42,500 48,094 137,093 77,648
--------- --------- --------- ---------
Total net interest
income after
provision for loan
losses 1,060,811 768,678 3,863,978 2,836,604
--------- --------- --------- ---------
Non-interest income
Service Charges on
Deposit Accounts 115,002 120,601 461,678 429,622
Other miscellaneous
fee income 3,309 (2,295) 9,476 1,993
Income from Mortgage
Banking -- 12,273 17,697 66,207
Income from Bank owned
life insurance 16,434 16,313 64,421 59,687
--------- --------- --------- ---------
Total Non-interest
income 134,745 146,892 553,272 557,509
--------- --------- --------- ---------
General & Administrative
Expenses
Salaries & Benefits 385,900 326,003 1,451,897 1,234,509
Occupancy & Equipment 69,245 65,979 263,418 254,320
Data & Item Processing 60,881 47,536 223,603 191,533
Advertising & Marketing 34,154 14,105 127,944 77,639
Audit & Professional
fees 30,895 38,558 163,546 172,185
Insurance 6,197 6,012 24,198 23,106
Directors' fees and
expenses 21,187 17,590 78,249 66,034
Other expenses 144,791 126,853 632,603 457,078
--------- --------- --------- ---------
Total general &
administrative
expenses 753,250 642,636 2,965,458 2,476,404
--------- --------- --------- ---------
Income before income
tax expense 442,306 272,934 1,451,792 917,709
Income tax expense 173,640 102,749 566,619 336,328
--------- --------- --------- ---------
Net income $ 268,666 $ 170,185 $ 885,173 $ 581,381
========= ========= ========= =========
Basic Earnings
per share $ 0.33 $ 0.21 $ 1.08 $ 0.71
========= ========= ========= =========
Diluted Earnings
per share $ 0.30 $ 0.19 $ 1.00 $ 0.66
========= ========= ========= =========
CHINO COMMERCIAL BANK
Selected Financial Highlights
For the For the
Three months ended Year ended
December 31, December 31,
-------------------- --------------------
2005 2004 2005 2004
---------- -------- --------- ---------
Selected Operating Data:
Net interest income $1,103,311 816,772 4,001,071 2,914,252
Provision for loan
losses 42,500 48,094 137,093 77,648
Non-interest income 134,745 146,892 553,272 557,509
Non-interest expense 753,250 642,636 2,965,458 2,476,404
Net income $ 268,666 170,185 885,173 581,381
Share Data:
Basic income per share $ 0.33 0.19 1.08 0.71
Diluted Income per share $ 0.30 0.18 1.00 0.66
Weighted average common
shares outstanding
Basic 818,453 818,453 818,453 818,453
Diluted 884,444 883,672 884,212 881,338
Performance Ratios:
Return on average assets 1.19% 0.89% 1.05% 0.82%
Return on average equity 16.27% 11.54% 14.03% 10.26%
Equity to total assets
at the end of the period 7.33% 7.66% 7.33% 7.66%
Net interest spread 4.24% 3.64% 4.04% 3.49%
Net interest margin 5.32% 4.66% 5.13% 4.48%
Average interest-earning
assets to average-
bearing liabilities 384.62% 477.83% 428.44% 473.56%
Core efficiency ratio 60.82% 66.70% 65.11% 71.31%
Non-interest expense to
average assets 3.34% 3.37% 3.51% 3.50%
Selected Balance Sheet Data: 12/31/2005 12/31/2004
Total assets $91,332,909 77,086,062
Investment securities held to maturity 5,850,687 4,801,024
Investment securities available for sale 16,311,377 15,562,826
Loan receivable, net 41,806,807 34,397,314
Deposits 84,021,943 70,741,132
Non-interest bearing deposits 62,610,963 56,112,375
Stockholders' equity $ 6,694,040 5,901,294
Regulatory capital ratios:
Average equity to average assets 7.46% 8.00%
Leverage capital 7.54% 8.36%
Tier I risk based 12.14% 13.80%
Risk-based capital 13.21% 14.81%
Asset Quality Ratios:
Allowance for loan losses as a percent
of gross loans receivable 1.28% 1.17%
Net charge-offs to average loans n/a n/a
Non-performing loans to total loans n/a n/a
Number of full-service customer facilities 1 1