CHINO, Calif., Jan. 21, 2008 (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 three and twelve months ended December 31, 2007. For the full year ended December 31, 2007 the company posted a consolidated net income of $747,948, a reduction from net income of $1,009,555 for 2006. Net income per basic share for the year ended December 31, 2007 was $1.04 as compared to $1.23 per share for the year ended December 31, 2006 or a reduction of 15.4%. Net income per fully diluted share was $0.95 as compared to $1.14 per diluted share for fiscal year 2006.
Net income for the fourth quarter ended December 31, 2007 was $135,483 or $0.18 per diluted share, as compared to $254,914 or $0.29 per diluted share for the fourth quarter of 2006.
Dann H. Bowman, President and Chief Executive Officer stated, "We are very pleased to report that despite troubles in the Economy and banking industry overall, Chino Commercial Bank had no loan delinquency at year end. In addition, during 2007 the Bank took proactive measures and provided an additional $192,253 in reserves for possible future loan losses.
"During 2007 the Bank allocated significantly higher provisions against loan losses, resulting in lower net earnings. Though reporting lower earnings is never pleasant, we believe that this proactive approach in reserving for possible future losses is the best long-run course of action for the Bank, our shareholders and our customers."
Financial Condition
At December 31, 2007, total assets were $79.9 million, a reduction of $10.5 million or 11.6% from December 31, 2006.
Gross loans increased to $53.2 million at December 31, 2007 from $51.8 million at December 31, 2006 or an increase of 2.7%. The growth was primarily in real estate secured lending.
Total deposits decreased by 11.4% to $70.4 million at December 31, 2007, a decline from $79.5 million at December 31, 2006. Although we experienced a decrease in core deposits of 10.9%, from 76.6 million at December 31, 2006 to $68.2 million at December 31, 2007, our core deposits to total deposits remains very favorable at 96.9%.
Earnings
The Company posted net interest income of $4,170,210 for the year ended December 31, 2007 as compared to $4,574,667 for the year ended December 31, 2006. Average interest-earning assets were $74.6 million with average interest-bearing liabilities of $31.6 million yielding a net interest margin of 5.59% for the year ended December 31, 2007 as compared to average interest-bearing assets of $78.9 million with average interest-bearing liabilities of $25.8 million yielding a net interest margin of 5.79% for the year ended December 31, 2006. The 20 basis points decrease in the net interest margin was primarily a result of the higher average balances in interest-bearing liabilities and the effect of downward re-pricing of the benchmark for Federal funds rate and related Prime rate.
The Bank posted net interest income of $960,845 for the three months ended December 31, 2007 as compared to $1,155,564 for the three months ended December 31, 2006. Average interest-earning assets were $70.9 million with average interest-bearing liabilities of $34.9 million, yielding a net interest margin of 5.39% for the fourth quarter of 2007, as compared to average interest-bearing assets of $79.9 million with average interest-bearing liabilities of $28.2 million yielding a net interest margin of 5.72% for the three months ended December 31, 2006.
Non-interest income totaled $935,103 or an increase of 32.8% from $704,130 earned during the year ended December 31, 2006. Service charges on deposit accounts increased 41.0% to $801,746 due to higher volume of returned items activity.
Non-interest income for the quarter ended December 31, 2007 totaled $237,868 or a 15.3% increase from the fourth quarter of 2006. Service charges on deposit accounts similarly increased 32.4% to $205,887 due to increased of overdraft and return item charges.
General and administrative expenses were $913,811 for the three months ended December 31, 2007 or a decrease of 4.9% as compared to $961,115 for the three months ended December 31, 2006. General and administrative expenses were $3,730,671 for the year ended December 31, 2007 as compared to $3,570,109 for the year ended December 31, 2006. The largest component of general and administrative expenses was salary and benefits expense which totaled $480,487 for the three months ended December 31, 2007 as compared to $503,920 for the three months ended December 31, 2006. Salary and benefits expense were $1,920,513 for the year ended December 31, 2007 as compared to $1,779,194 for the year ended December 31, 2006. The increase in Salaries and benefits expenses for the year was reflective of salary increases, incentive compensation, and the increase in retirement plan accruals. The fourth quarter reduction in salary was a result in a reduction in staff. Other components of general and administrative expenses that affected the increase for the year ended December 31, 2007 were Data and item processing, Advertising and marketing, and Legal and professional expenses which increased by $52,307, $54,669, and $39,567 for the comparable prior year's twelve month period. Other expenses decreased by $47,910 for the comparable three month period and decreased by $59,814 for the comparable twelve month period due primarily to decreased costs of courier and accounting services provided to certain large customers.
The consolidated Company's income tax expense was $76,201 for the three months ended December 31, 2007 as compared to $147,154 for the three months ended December 31, 2006. Income tax expenses were $447,273 for the year ended December 31, 2007 as compared to $627,464 for the year ended December 31, 2006. The effective income tax rate for 2007 and 2006 was approximately 39%.
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, 2006, 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 BANCORP
STATEMENTS OF FINANCIAL CONDITION
December 31, December 31,
2007 2006
------------ ------------
ASSETS: Unaudited Audited
Cash and due from banks $ 3,487,933 $ 4,201,391
Federal funds sold and Due from banks
time 7,539,000 13,316,000
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Cash and cash equivalents 11,026,933 17,517,391
Investment securities available for
sale 7,339,354 11,839,152
Investment securities held to
maturity (fair value approximates
$3,880,000 at December 31, 2007 and
$4,696,000 at December 31, 2006) 3,873,251 4,784,277
------------ ------------
Total investments 11,212,605 16,623,429
------------ ------------
Loans
Construction 2,606,750 1,925,067
Real estate 39,726,301 37,521,967
Commercial 10,062,969 11,655,290
Installment 790,535 670,765
------------ ------------
Gross loans 53,186,555 51,773,089
Unearned fees and discounts (87,389) (136,046)
------------ ------------
Loans net of unearned fees and
discount 53,099,166 51,637,043
Allowance for loan losses (725,211) (615,808)
------------ ------------
Net loans 52,373,955 51,021,235
------------ ------------
Restricted stock 654,250 627,500
Fixed assets, net 2,085,203 2,222,503
Accrued interest receivable 326,990 385,764
Prepaid & other assets 2,269,497 2,076,976
------------ ------------
Total assets $ 79,949,433 $ 90,474,798
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LIABILITIES:
Deposits
Non-interest bearing $ 42,270,696 $ 53,845,147
Interest Bearing
Money market & NOW 22,711,556 19,907,277
Savings 1,202,965 1,001,135
Time deposits less than $100,000 2,054,915 1,818,235
Time deposits of $100,000 or greater 2,156,778 2,882,341
------------ ------------
Total deposits 70,396,910 79,454,135
------------ ------------
Accrued interest payable 63,962 61,477
Accrued expenses & other payables 533,682 412,745
Subordinated debentures 3,093,000 3,093,000
------------ ------------
Total liabilities 74,087,554 83,021,357
------------ ------------
STOCKHOLDERS' EQUITY
Common stock, authorized 10,000,000
shares with no par value, issued
and outstanding 704,278 shares and
808,214 shares at December 31, 2007
and December 31, 2006, respectively
2,610,418 5,022,984
Retained earnings 3,255,321 2,507,373
Accumulated other comprehensive loss (3,860) (76,916)
------------ ------------
Total stockholders' equity 5,861,879 7,453,441
------------ ------------
Total liabilities & equity $ 79,949,433 $ 90,474,798
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CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
For the three
months ended For the year ended
December 31 December 31
2007 2006 2007 2006
---------- ---------- ---------- ----------
Interest income
Interest on investment
securities $ 133,640 $ 193,705 $ 587,928 $ 839,570
Interest on Federal
funds and Due from
banks time 71,058 143,643 494,280 608,309
Interest and fee income
on loans 1,050,301 1,007,680 4,064,035 3,638,661
---------- ---------- ---------- ----------
Total interest income 1,254,999 1,345,028 5,146,243 5,086,540
---------- ---------- ---------- ----------
Interest expense
Deposits 242,991 153,490 771,083 474,239
Other borrowings 51,163 35,974 204,950 37,634
---------- ---------- ---------- ----------
Total interest expense 294,154 189,464 976,033 511,873
---------- ---------- ---------- ----------
Net interest income 960,845 1,155,564 4,170,210 4,574,667
---------- ---------- ---------- ----------
Provision for loan losses 73,218 (1,336) 179,421 71,669
---------- ---------- ---------- ----------
Net interest income
after provision for
loan losses 887,627 1,156,900 3,990,789 4,502,998
---------- ---------- ---------- ----------
Non-interest income
Service charges on
deposit accounts 205,887 155,532 801,746 568,794
Other miscellaneous fee
income 7,415 23,339 33,824 38,420
Dividend income from
restricted stock 9,105 9,473 37,257 33,390
Income from bank owned
life insurance 15,461 17,939 62,276 63,526
---------- ---------- ---------- ----------
Total non-interest
income 237,868 206,283 935,103 704,130
---------- ---------- ---------- ----------
General and administrative
expenses
Salaries and employee
benefits 480,487 503,920 1,920,513 1,779,194
Occupancy and equipment 82,587 97,811 340,032 405,320
Data and item processing 80,985 69,985 305,539 253,232
Advertising and marketing 39,776 25,842 152,984 98,315
Legal and professional
fees 67,391 53,408 298,736 259,169
Insurance 8,048 5,701 30,734 24,258
Directors' fees and
expenses 19,401 21,402 79,034 87,708
Other expenses 135,136 183,046 603,099 662,913
---------- ---------- ---------- ----------
Total general &
administrative
expenses 913,811 961,115 3,730,671 3,570,109
---------- ---------- ---------- ----------
Income before income tax
expense 211,684 402,068 1,195,221 1,637,019
Income tax expense 76,201 147,154 447,273 627,464
---------- ---------- ---------- ----------
Total income $ 135,483 $ 254,914 $ 747,948 $1,009,555
========== ========== ========== ==========
Basic earnings per share $ 0.19 $ 0.31 $ 1.03 $ 1.23
========== ========== ========== ==========
Diluted earnings per
share $ 0.18 $ 0.29 $ 0.95 $ 1.14
========== ========== ========== ==========