CHINO, Calif., July 21, 2008 (PRIME NEWSWIRE) -- The Board of Directors of Chino Commercial Bancorp (OTCBB:CCBC), the parent company of Chino Commercial Bank, N.A., announced the results of operations for the Bank and the consolidated holding company for the second quarter ended June 30, 2008 with net earnings of $146,405, a 35.0% reduction from $225,207 for the same quarter of 2007. The net earnings for the most recent quarter represents $0.19 per diluted share, as compared with $0.25 per diluted share, or a reduction of 34.5% from the same quarter last year. Earnings year-to-date was $187,876 or $0.25 per diluted share as compared with net earnings of $402,990 or $0.50 per diluted share for the same period last year.
Dann H. Bowman, President and Chief Executive Officer stated, "Despite earnings declining during the first half of the year due to higher provisions to Loan Loss Reserve, we are very pleased with the continued stability and earnings of the Bank overall. During a time when many organizations are suffering from credit problems, at the end of June the Bank had only two loans which were delinquent more than 30 days."
Financial Condition
Total assets declined from $79.9 million to $76.0 million or 5.0% between December 31, 2007 and June 30, 2008, resulting from decreased investment securities and Federal funds sold, which are funded with reduced deposit balances of a number of the Company's customers who are engaged in real estate related industries.
The Company experienced a decrease in interest-earning assets of $5.7 million or 8.0% to $66.2 million in the first half of 2008. Federal funds sold and Investment securities decreased $3.1 million and $2.1 million, respectively, in the first half of 2008. No new investment securities have been added in 2008, and the decreases were caused by maturities and principal payments from Mortgage-backed securities.
Loan demand has remained relatively stable; however, gross loans decreased $0.5 million, or 1.0% to $52.6 million at June 30, 2008, while undisbursed commitments decreased $1.4 million to $6.2 million at June 30, 2008.
Total deposits decreased from $70.4 million at December 31, 2007 to $66.4 million at June 30, 2008, or a 5.7% reduction. Total non-interest bearing deposits decreased from $42.3 million at December 31, 2007 to $37.7 million for the reporting period ended June 30, 2008, a 10.8% decrease. Interest-bearing liabilities increased $0.5 million or 1.8% to $28.6 million in the six months ended June 30, 2008 as compared to December 31, 2007. The slight increase in interest-bearing deposits is the result of the Company's emphasis to attract new customers.
Earnings
The Company posted net interest income for the quarters ended June 30, 2008 and June 30, 2007 of $900,476 and $1,112,620, respectively. For six months ended June 30, the Company posted net interest income of $1,785,061 and $2,186,896 for 2008 and 2007, respectively. Average interest-earning assets were $66.3 million with average interest-bearing liabilities of $31.5 million, yielding a net interest margin of 5.42% for the six months ended June 30, 2008 as compared to average interest-bearing assets of $76.7 million with average interest-bearing liabilities of $29.9 million yielding a net interest margin of 5.75% for the six months ended June 30, 2007.
Non-interest income totaled $295,356 for the three months ended June 30, 2008, or a 28.8% increase from $229,289 earned during the second quarter of 2007. Non-interest income increased 26.9% for the six months ended June 30, 2008 totaling $559,744 as compared to $441,159 for the six months ended June 30, 2007. Service charges on deposit accounts accounted for the majority of the increase in non-interest income.
General and administrative expenses were $922,549 and $1,785,298 for the three and the six months ended June 30, 2008 as compared to $983,390 and $1,921,068 for the three and six months ended June 30, 2007. The largest component of general and administrative expenses was salary and benefits expense of $499,499 for the second quarter of 2008 as compared to $496,303 for the three months ended June 30, 2007. Year-to-date comparisons of salary and benefits expense reports $977,291 for six months ended June 2008 and $978,156 for the same period in 2007.
Income tax expense was $83,105 and $93,227 for the three and six months ended June 30, 2008, as compared to $138,561 and $243,353 for the same periods of 2007. The effective income tax rate for 2008 is approximately 33.1% and 2007 is approximately 38%. Of the $281,103 pre-tax income for the six months ended June 30, 2008, approximately $55,000 was tax exempt.
Forward-Looking Statements
The statements contained in this press release that are not historical facts are forward-looking statements based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Readers are cautioned not to unduly rely on forward-looking statements. Actual results may differ from those projected. These forward-looking statements involve risks and uncertainties including but not limited to the health of the national and California economies, the Company's ability to attract and retain skilled employees, customers' service expectations, the Company's ability to successfully deploy new technology and gain efficiencies there from, changes in interest rates, loan portfolio performance, and other factors detailed in the Company's SEC filings.
CHINO COMMERCIAL BANCORP
CONSOLIDATED BALANCE SHEET
June 30, 2008 and December 31, 2007
June 30, December 31,
2008 2007
------------ ------------
(unaudited) (audited)
ASSETS:
Cash and due from banks $ 5,169,686 $ 3,487,933
Federal funds sold 4,360,000 7,440,000
------------ ------------
Cash and cash equivalents 9,529,686 10,927,933
Interest-bearing deposits in other
banks 99,000 99,000
Investment securities available for
sale 5,594,612 7,339,354
Investment securities held to maturity
(fair value approximates $3,488,000 at
June 30, 2008 and $3,880,000 at
December 31, 2007) 3,485,424 3,873,251
------------ ------------
Total investments 9,179,036 11,311,605
------------ ------------
Loans
Construction 316,604 2,606,750
Real estate 41,057,739 39,726,301
Commercial 10,677,794 10,062,969
Installment 597,292 790,535
------------ ------------
Gross loans 52,649,429 53,186,555
Unearned fees and discounts (83,301) (87,389)
------------ ------------
Loans net of unearned fees and
discount 52,566,128 53,099,166
Allowance for loan losses (670,786) (725,211)
------------ ------------
Net loans 51,895,342 52,373,955
------------ ------------
Restricted stock 666,350 654,250
Accrued interest receivable 296,668 2,085,203
Fixed assets, net 2,005,290 326,990
Prepaid & other assets 2,401,272 2,268,909
------------ ------------
Total assets $ 75,973,644 $ 79,948,845
============ ============
LIABILITIES:
Deposits
Non-interest bearing $ 37,721,424 $ 42,270,696
Interest Bearing
NOW and money market 22,048,872 22,711,556
Savings 1,114,807 1,202,965
Time deposits less than $100,000 2,430,769 2,054,915
Time deposits of $100,000 or greater 3,050,431 2,156,778
------------ ------------
Total deposits 66,366,303 70,396,910
------------ ------------
Accrued interest payable 58,224 63,962
Accrued expenses & other payables 507,025 509,389
Subordinated debentures 3,093,000 3,093,000
------------ ------------
Total liabilities 70,024,552 74,063,261
------------ ------------
STOCKHOLDERS' EQUITY
Common stock, authorized 10,000,000
shares with no par value, issued and
outstanding 699,798 shares and 704,278
shares at June 30, 2008 and December
31, 2007, respectively. 2,539,714 2,639,462
Retained earnings 3,413,164 3,249,982
Accumulated other comprehensive loss (3,786) (3,860)
------------ ------------
Total equity 5,949,092 5,885,584
------------ ------------
Total liabilities & stockholders'
equity $ 75,973,644 $ 79,948,845
============ ============
CHINO COMMERCIAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
For the three months For the six months
ended ended
June 30 June 30
2008 2007 2008 2007
---------- ---------- ---------- ----------
Interest income
Investment securities
and due from banks $ 112,298 $ 161,798 $ 238,098 $ 353,033
Interest on Federal
funds sold 5,987 143,054 30,978 259,884
Interest and fee
income on loans 999,910 1,025,614 1,984,365 2,002,785
---------- ---------- ---------- ----------
Total interest income 1,118,195 1,330,466 2,253,441 2,615,702
---------- ---------- ---------- ----------
Interest expense
Deposits 165,867 166,584 365,482 326,281
Interest on Federal
funds purchased 889 0 973 0
Other borrowings 50,963 51,262 101,925 102,525
---------- ---------- ---------- ----------
Total interest
expense 217,719 217,846 468,380 428,806
---------- ---------- ---------- ----------
Net interest income 900,476 1,112,620 1,785,061 2,186,896
---------- ---------- ---------- ----------
Provision for loan
losses 43,773 (5,249) 278,404 60,644
---------- ---------- ---------- ----------
Net interest income
after provision for
loan losses 856,703 1,117,869 1,506,657 2,126,252
---------- ---------- ---------- ----------
Non-interest income
Service charges on
deposit accounts 252,265 194,739 484,823 372,421
Other miscellaneous
fee income 9,246 7,693 17,719 16,803
Dividend income from
restricted stock 18,238 11,638 26,483 20,513
Income from bank owned
life insurance 15,607 15,219 30,719 31,422
---------- ---------- ---------- ----------
Total non-interest
income 295,356 229,289 559,744 441,159
---------- ---------- ---------- ----------
General and
administrative
expenses
Salaries and employee
benefits 499,499 496,303 977,291 978,156
Occupancy and
equipment 82,578 87,083 166,359 180,323
Data and item
processing 82,390 85,142 165,066 158,106
Advertising and
marketing 12,786 35,845 40,615 75,371
Legal and professional
fees 50,309 51,103 95,621 108,159
Regulatory Assessments 20,817 33,914 41,298 47,210
Insurance 7,768 8,187 15,996 14,545
Directors' fees and
expenses 19,125 19,800 38,301 40,250
Other expenses 147,277 166,013 244,751 318,948
---------- ---------- ---------- ----------
Total general &
administrative
expenses 922,549 983,390 1,785,298 1,921,068
---------- ---------- ---------- ----------
Income before income
tax expense 229,510 363,768 281,103 646,343
Income tax expense 83,105 138,561 93,227 243,353
---------- ---------- ---------- ----------
Total income $ 146,405 $ 225,207 $ 187,876 $ 402,990
========== ========== ========== ==========
Basic earnings per
share $ 0.21 $ 0.31 $ 0.27 $ 0.54
========== ========== ========== ==========
Diluted earnings per
share $ 0.19 $ 0.29 $ 0.25 $ 0.50
========== ========== ========== ==========
CHINO COMMERCIAL BANCORP
Other Financial Information
CREDIT QUALITY End of period December 31,
(unaudited) June 30, 2008 2007
------------- -----------
Non-Performing Loans $ 1,236,831 $ --
============= ===========
Non-Performing Loans to Total Loans 2.35% n/a
Non-Performing Loans to Total Assets 1.63% n/a
Allowance for Loan Losses to Loans 1.27% 1.36%
OTHER PERIOD-END STATISTICS End of period December 31,
(unaudited) June 30, 2008 2007
------------- -----------
Shareholders Equity to Total Assets 7.83% 7.36%
Loans to Deposit 79.33% 75.55%
Non-Interest Bearing Deposits to Total
Deposits 56.84% 60.05%
For the three months For the six months
ended ended
June 30 June 30
2008 2007 2008 2007
-------- -------- -------- --------
KEY FINANCIAL RATIOS
(unaudited)
Return on Average Equity 10.03% 16.45% 6.42% 13.24%
Return on Average Assets 0.80% 1.06% 0.50% 0.94%
Net Interest Margin 5.51% 5.84% 5.39% 5.69%
Efficiency Ratio 77.15% 73.28% 76.14% 73.10%
Net Chargeoffs to Average
Loans 0.74% 0.00% 0.62% 0.00%
AVERAGE BALANCES
(thousands, unaudited)
Average Assets $ 73,541 $ 85,316 $ 74,516 $ 86,080
Average Interest-Earning
Assets $ 65,324 $ 76,089 $ 66,260 $ 76,738
Average Gross Loans $ 54,137 $ 50,378 $ 53,688 $ 50,700
Average Deposits $ 63,767 $ 76,489 $ 64,696 $ 76,386
Average Equity $ 5,841 $ 5,475 $ 5,851 $ 6,086