CHINO, Calif., April 24, 2007 (PRIME NEWSWIRE) -- The Board of Directors of Chino Commercial Bancorp (OTCBB:CCBC), the parent company of Chino Commercial Bank NA, announced the results of operations for the Bank and the consolidated holding company for the first quarter ended March 31, 2007 with net earnings of $177,784, a 30.3% reduction from $254,910 for the fourth quarter of 2006, and a 32.8% reduction from net income of $264,531 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 $77,174. Net income per basic share for the first quarter was $0.23 as compared to $0.31 per share for the fourth quarter ended December 31, 2006, and $0.32 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, despite having no delinquent or non-performing loans at the quarter-end. 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 the Bank ongoing.
"At quarter-end March 31, 2007 the Bank had no delinquent loans, no loans on non-accrual status, and experienced no credit losses year-to-date, and no credit losses for the past six years. The Bank has not originated, and has no exposure to sub-prime mortgage loans, or option ARM mortgages."
Net earnings for the first quarter represent a return on average equity of 10.53% and a return of average assets of 0.82%.
Financial Condition
At March 31, 2007, total assets were $92.7 million, an increase of $2.2 million or 2.5% from December 31, 2006, and an increase of $1.1 million or 1.2% from March 31, 2006.
Loans were relatively unchanged with a slight reduction during the first quarter of $165,000 from December 31, 2006 with a balance at March 31, 2007 of $51.6 million. Comparing the balances of March 31, 2006, the Company's loans increased to $7.3 million or 16.6% during the twelve month period. The growth was primarily in real estate secured lending.
Total deposits increased by 4.9% to $83.3 million at March 31, 2007, an increase from $79.5 million at December 31, 2006. Total deposits decreased 0.8% from March 31, 2006's balance of $84.0 million. The Company's core deposits represent 96.8% of the total deposits.
Earnings
The Company posted net interest income of $1,074,278 for the quarter ended March 31, 2007 as compared to $1,095,527 for the quarter ended March 31, 2006. Average interest-earning assets were $81.5 million with average interest-bearing liabilities of $29.0 million yielding a net interest margin of 5.30% for the quarter ended March 31, 2007, as compared to average interest-bearing assets of $81.1 million with average interest-bearing liabilities of $28.2 million yielding a net interest margin of 5.75% for the fourth quarter of 2006.
Non-interest income totaled $211,870 for the first quarter of 2007, or an increase of 38.5% from $152,951 earned during the year ended March 31, 2006. Service charges on deposit accounts increased 37.8% to $177,382 due to increased of overdraft and return item charges.
General and administrative expenses were $937,680 for the three months ended March 31, 2007 as compared to $803,238 for the three months ended March 31, 2006. The largest component of general and administrative expenses was salary and benefits expense of $481,853 for the first quarter of 2007 as compared to $409,178 for the three months ended March 31, 2006. The increase in Salaries and benefits expenses was reflective of 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 $25,077 for the comparable three month period due to a marketing campaign which the Company entered into during the first quarter. Audit and Professional fees increased $26,531 during the first quarter of 2007 due to additional costs incurred in the purchase of shares from stockholders and an increase in accruals to reflect timely recognition of audit and professional fees incurred during the first quarter. Other expenses increased by $19,423 for the comparable three month period due primarily due to increased Reserve for Undisbursed Credits of $11,281.
Income tax expense was $104,791 for the three months ended March 31, 2007 as compared to $171,959 for the three months ended March 31, 2006. The effective income tax rate for 2007 and 2006 is approximately 39%.
Forward-Looking Statements
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 Company'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 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 Bancorp'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 the Company's policies; (5) the continued availability of adequate funding sources. The Bank is not obligated to update and does not undertake to update any of its forward-looking statements made herein.
CHINO COMMERCIAL BANCORP
STATEMENTS OF FINANCIAL CONDITION
March 31, 2007 and December 31, 2006
2007 2006
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ASSETS: (unaudited)
Cash and Due from Banks $ 4,367,398 $ 4,201,391
Federal Funds Sold 16,460,000 10,775,000
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Cash and Cash equivalents 20,827,398 14,976,391
Interest-bearing deposits at banks 1,246,000 2,541,000
Investment Securities available for sale 10,002,655 11,839,152
Investment Securities held to maturity
(fair value approximates $4,481,000 at
March 31, 2007 and $4,696,000 at
December 31, 2006) 4,567,602 4,784,277
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Total investments 15,816,257 19,164,429
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Loans
Construction 1,378,718 1,925,067
Real estate 38,017,981 37,521,967
Commercial 11,377,458 11,655,290
Installment 834,359 670,765
Unearned fees and discounts (141,275) (136,046)
Allowance for loan losses (681,701) (615,808)
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Total Loans 50,785,540 51,021,235
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Restricted stock 633,600 627,500
Fixed Assets, net 2,196,841 2,222,503
Accrued Interest Receivable 303,165 385,764
Prepaid & Other Assets 2,135,968 2,076,976
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Total Assets $92,698,769 $90,474,798
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LIABILITIES:
Deposits
Non-interest Bearing $56,268,332 $53,845,147
Interest Bearing
NOW and Money market 21,631,577 19,907,277
Savings 908,790 1,001,135
Time deposits less than $100,000 1,893,123 1,818,235
Time deposits of $100,000 or greater 2,647,015 2,882,341
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Total Deposits 83,348,837 79,454,135
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Accrued Interest Payable 65,279 61,477
Accrued Expenses & Other Payables 438,495 412,745
Subordinated Debentures 3,093,000 3,093,000
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Total Liabilities 86,945,611 83,021,357
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STOCKHOLDERS' EQUITY
Common Stock, authorized 10,000,000 shares
with no par value, issued and outstanding
722,468 shares and 808,214 shares at
March 31, 2007 and December 31, 2006,
respectively 3,122,637 5,022,984
Retained earnings 2,685,156 2,507,373
Accumulated other comprehensive loss (54,635) (76,916)
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Total Equity 5,753,158 7,453,441
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Total Liabilities & Equity $92,698,769 $90,474,798
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CHINO COMMERCIAL BANCORP
STATEMENTS OF OPERATIONS
(unaudited)
For the Quarter Ended
March 31, March 31,
2007 2006
---------- ----------
Interest Income
Interest Income - Securities $ 191,235 $ 286,680
Interest Income - Fed Funds 116,830 77,874
Interest and fee income on Loans 977,172 811,179
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Total Interest Income 1,285,237 1,175,733
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Interest Expense
Interest Expense - Deposits 159,696 79,906
Interest Expense - Other Borrowings 51,263 300
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Total Interest Expense 210,959 80,206
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Net interest income 1,074,278 1,095,527
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Provision for loan losses 65,893 8,750
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Net interest income after provision for
loan losses 1,008,385 1,086,777
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Non-interest income
Service Charges on Deposit Accounts 177,682 128,948
Other miscellaneous fee income 9,110 3,128
Dividend Income from Restricted Stock 8,875 6,194
Income from Bank Owned Life Insurance 16,203 14,681
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Total Non-interest income 211,870 152,951
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General & Administrative Expenses
Salaries & Benefits 481,853 409,178
Occupancy & Equipment 93,241 104,639
Data & Item Processing 66,590 63,050
Advertising & Marketing 39,526 14,449
Audit & Professional fees 70,353 43,822
Insurance 6,358 6,144
Directors' fees and expenses 20,451 22,071
Other expenses 159,308 139,885
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Total general & administrative expenses 937,680 803,238
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Income before income tax expense 282,575 436,490
Income tax expense 104,791 171,959
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Total income $ 177,784 $ 264,531
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Basic Earnings per share $ 0.23 $ 0.32
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Diluted Earnings per share $ 0.21 $ 0.30
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CHINO COMMERCIAL BANCORP
Selected Financial Highlights
For the Quarter Ended
March 31, March 31,
2007 2006
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Selected Operating Data: (unaudited)
Net interest income $ 1,074,278 $ 1,081,927
Provision for loan losses 65,893 8,750
Non-interest income 211,870 146,757
Non-interest expense 937,680 803,238
Net income 177,784 264,531
Share Data:
Basic income per share $ .23 $ 0.32
Diluted Income per share $ .21 $ 0.30
Weighted average common shares
outstanding
Basic 722,468 818,453
Diluted 834,495 883,992
Performance Ratios:
Return on average assets 0.82% 1.22%
Return on average equity 10.53% 15.38%
Equity to total assets at the end of the
period 6.21% 7.33%
Net interest spread 2.54% 4.56%
Net interest margin 5.27% 5.61%
Average interest-earning assets to
average-bearing liabilities 281.51% 354.51%
Core efficiency ratio 72.91% 64.29%
Non-interest expense to average assets 4.32% 3.69%
Selected Balance Sheet Data: March 31, December 31,
2007 2006
----------- -----------
Total assets $92,698,769 $90,474,798
Investment securities held to maturity 4,567,602 4,784,277
Investment securities available for
sale 10,002,655 11,839,152
Loan receivable, net 51,608,516 51,021,235
Deposits 83,348,837 79,454,135
Non-interest bearing deposits 56,268,332 53,845,147
Stockholders' equity 5,753,158 7,453,441
Regulatory capital ratios:
Average equity to average assets 7.77% 8.16%
Leverage capital 10.47% 11.05%
Tier I risk based 14.23% 15.89%
Risk-based capital 16.14% 16.92%
Asset Quality Ratios:
Allowance for loan losses as a percent
of gross loans receivable 1.32% 1.24%
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 2 2