CHINO, Calif., Oct. 22, 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 third quarter ended September 30, 2007 with net diluted earnings per share of $0.27 as compared with $0.24 per diluted share, or an increase of 12.50% from the same quarter last year. Total net earnings for the quarter-end were $209,476 as compared with net earnings of $212,472 for the same quarter of 2006, a 1.41% reduction.
Dann H. Bowman, President and Chief Executive Officer stated, "The share repurchase plan approved by the Board of Directors last year is helping to increase earnings per share, even though higher operating expenses moderately reduced nominal profits in the third quarter and year-to-date. The Bank's loan quality remains very strong with no sub-prime loans on the books, and only one loan being charged off this year for $9,011. Overall, the Bank is performing well and we are pleased with our prospects for continued growth and expansion."
Earnings year-to-date were $612,466 or $0.77 per diluted shares for the nine months ended September 30, 1007, as compared with net earnings of $754,645 or $0.85 per diluted share for the same period last year. The slight reduction of income of $2,996 for the third quarter was attributed to a decrease in net interest income of $149,306 which was a result of increased interest-bearing deposit accounts and interest expense on trust preferred securities of $51,000. This was partially offset by a $78,502 increase in non-interest income. General and administrative expenses decreased $65,825 in the third quarter resulting from depreciation expense reductions as older furniture and equipment reached full depreciation, reduced legal and professional fee expenses, and a reduction in other expenses. These combined income and expense items, which were not experienced in 2006 lowered pre-tax earnings by roughly $5,800 in the third quarter.
Interest income increased $149,728 while interest expense increased $359,470 in the nine months ended September 30, 2007 compared to the same period in 2006. The reduction in income for the nine-month period is partially attributed to an increase in FDIC assessments from $6,997 in 2006 to $36,247 in 2007 and interest expense on trust preferred securities of $152,887, which were not present during the same nine-month period last year. The year-to-date earnings were also impacted by an increase in the provision for loan loss reserves of $33,199 over the same period last year. Income from service charges on deposit accounts increased by approximately $182,600 in the nine months ended September 30, 2007. These combined income and expense items, which were not experienced in 2006, lowered pre-tax earnings by roughly $251,400 year-to-date.
Net earnings for the nine months ended September 30, 2007 represent an annualized return on average equity of 13.40% and a return on average assets of 0.96% compared to net earnings for the nine months ended September 30, 2006, which represented a return on average equity of 13.75% and return on average assets of 1.13%.
Financial Condition
At September 30, 2007, total assets were $84.3 million, a decline of $6.2 million or 6.8% from December 31, 2006.
Loans increased $2.0 million during the nine months from $51.8 million at December 31, 2006 to an outstanding balance of $53.8 million at September 30, 2007. This represents a 3.8% increase in outstanding loans.
Total deposits declined by 5.9% to $74.8 million at September 30, 2007, a decrease from $79.5 million at December 31, 2006. The Company's core deposits represent 96.9% of the total deposits.
Earnings
The Company posted net interest income for quarters ended September 30, 2007 and September 30, 2006 of $1,022,467 and $1,171,773, respectively. For nine months ended September 30, the Company posted net interest income of $3,209,364 and $3,419,106 for 2007 and 2006, respectively. Average interest-earning assets were $75.9 million with average interest-bearing liabilities of $30.5 million, yielding a net interest margin of 5.64% for the nine months ended September 30, 2007 as compared to average interest-bearing assets of $79.7 million with average interest-bearing liabilities of $24.0 million, yielding a net interest margin of 5.72% for the nine months ended September 30, 2006.
Non-interest income totaled $256,077 for the three months ended September 30, 2007, or a 44.2% increase from $177,575 earned during the third quarter of 2006. Non-interest income increased 40.1% for the nine months ended September 30, 2007 totaling $697,236 as compared to $497,845 for the six months ended September 30, 2006. Service charges on deposit accounts accounted for the majority of the increase in non-interest income.
General and administrative expenses were $895,791 and $2,816,860 for the three and nine months ended September 30, 2007 as compared to $961,616 and $2,608,993 for the three and nine months ended September 30, 2006. The largest component of general and administrative expenses was salary and benefits expense of $461,870 for the third quarter of 2007 as compared to $432,901 for the three months ended September 30, 2006. Year-to-date comparisons of salary and benefits expense reports $1,440,026 for nine months ended September 2007 and $1,275,274 for the same period in 2006. The increase in Salaries and benefits expenses was reflective of staff increases, salary increases, incentive compensation, and the increase in retirement plan accruals.
Income tax expense was $127,718 and $371,071 for the three and nine months ended September 30, 2007 as compared to $130,506 and $480,309 for the same periods of 2006. The effective income tax rate for 2007 and 2006 is approximately 38%.
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.
CHINO COMMERCIAL BANCORP
CONSOLIDATED BALANCE SHEET
September 30, 2007 and December 31, 2006
September 30, December 31,
2007 2006
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Unaudited Audited
ASSETS:
Cash and due from banks $ 4,770,730 $ 4,201,391
Federal funds sold and Due from banks time 8,483,000 13,316,000
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Cash and cash equivalents 13,253,730 17,517,391
Interest-bearing deposits in other banks
Investment securities available for sale 8,652,588 11,839,152
Investment securities held to maturity (fair
value approximates $4,032,000 at September
30, 2007 and $4,696,000 at December 31,
2006) 4,065,866 4,784,277
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Total investments 12,718,454 16,623,429
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Loans
Construction 2,140,784 1,925,067
Real estate 40,035,309 37,521,967
Commercial 10,801,353 11,655,290
Installment 780,977 670,765
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Gross loans 53,758,423 51,773,089
Unearned fees and discounts (103,830) (136,046)
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Loans net of unearned fees and discount 53,654,593 51,637,043
Allowance for loan losses (712,999) (615,808)
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Net loans 52,941,594 51,021,235
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Restricted stock 648,650 627,500
Accrued interest receivable 320,134 385,764
Fixed assets, net 2,130,305 2,222,503
Prepaid & other assets 2,272,387 2,076,976
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Total assets $84,285,254 $90,474,798
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LIABILITIES:
Deposits
Non-interest bearing $44,779,682 $53,845,147
Interest Bearing 29,992,856 25,608,988
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Total deposits 74,772,538 79,454,135
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Accrued interest payable 50,515 61,477
Accrued expenses & other payables 507,066 412,745
Subordinated debentures 3,093,000 3,093,000
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Total liabilities 78,423,119 83,021,357
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STOCKHOLDERS' EQUITY
Common stock, authorized 10,000,000 shares
with no par value, issued and outstanding
714,732 shares and 808,214 shares at
September 30, 2007 and December 31, 2006,
respectively 2,772,681 5,022,984
Retained earnings 3,119,838 2,507,373
Accumulated other comprehensive loss (30,384) (76,916)
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Total equity 5,862,135 7,453,441
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Total liabilities & equity $84,285,254 $90,474,798
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CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
For the three For the nine
months ended months ended
September 30 September 30
2007 2006 2007 2006
---------- ---------- ---------- ----------
Interest income
Interest on
investment
securities $ 140,237 $ 207,770 $ 454,288 $ 642,514
Interest on Federal
funds and Due from
banks time 124,356 135,459 423,222 468,019
Interest and fee
income on loans 1,010,948 954,770 3,013,734 2,630,983
---------- ---------- ---------- ----------
Total interest
income 1,275,541 1,297,999 3,891,244 3,741,516
---------- ---------- ---------- ----------
Interest expense
Deposits 201,811 125,166 528,093 320,750
Other borrowings 51,263 1,060 153,787 1,660
---------- ---------- ---------- ----------
Total interest
expense 253,074 126,226 681,880 322,410
---------- ---------- ---------- ----------
Net interest income 1,022,467 1,171,773 3,209,364 3,419,106
---------- ---------- ---------- ----------
Provision for loan
losses 45,559 44,754 106,203 73,004
---------- ---------- ---------- ----------
Net interest income
after provision for
loan losses 976,908 1,127,019 3,103,161 3,346,102
---------- ---------- ---------- ----------
Non-interest income
Service charges on
deposit accounts 223,438 149,386 595,859 413,260
Other miscellaneous
fee income 9,607 7,161 26,410 15,082
Dividend income from
restricted stock 7,639 7,366 28,152 23,916
Income from bank owned
life insurance 15,393 13,662 46,815 45,587
---------- ---------- ---------- ----------
Total non-interest
income 256,077 177,575 697,236 497,845
---------- ---------- ---------- ----------
General and
administrative
expenses
Salaries and employee
benefits 461,870 432,901 1,440,026 1,275,274
Occupancy and
equipment 77,122 105,556 257,445 307,509
Data and item
processing 79,197 60,536 224,555 183,247
Advertising and
marketing 37,837 30,700 113,208 70,678
Legal and professional
fees 75,974 116,397 231,344 205,760
Insurance 8,141 6,217 22,686 18,557
Directors' fees and
expenses 19,382 21,950 59,633 66,306
Other expenses 136,268 187,359 467,963 481,662
---------- ---------- ---------- ----------
Total general &
administrative
expenses 895,791 961,616 2,816,860 2,608,993
---------- ---------- ---------- ----------
Income before income
tax expense 337,194 342,978 983,537 1,234,954
Income tax expense 127,718 130,506 371,071 480,309
---------- ---------- ---------- ----------
Total income $ 209,476 $ 212,472 $ 612,466 $ 754,645
========== ========== ========== ==========
Basic earnings per
share $ 0.29 $ 0.26 $ 0.83 $ 0.92
========== ========== ========== ==========
Diluted earnings per
share $ 0.27 $ 0.24 $ 0.77 $ 0.85
========== ========== ========== ==========