CHINO, Calif., April 20, 2011 (GLOBE 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 first quarter ended March 31, 2011 with net earnings of $204,305, a 392.4% increase from net income of $41,285 for the first quarter of last year. The improvement in earnings resulted from a combination of recognized gain on sale of OREO, as well as a lower provision to Loan Loss Reserve, based on moderately improving loan quality and lower average balances. Net income per basic share for the first quarter was $0.21 as compared to $0.06 for the first quarter last year.
Dann H. Bowman, President and Chief Executive Officer, stated, "We are very pleased with the performance of the Bank during the first quarter. Economic conditions appear to be slowly improving, and many of our small business customers are reporting better than expected operating results. At the end of the first quarter the Bank reported only one delinquent loan, and suffered no loan losses in the quarter.
We continue to remain optimistic about the economy of the Inland Empire and the business customers we serve. At a time when other lenders may be cutting back, we are motivated and eager to keep lending to the small businesses in our community."
Financial Condition
At March 31, 2011, total assets were $114.8 million, an increase of $0.9 million or 0.8% from December 31, 2010, and an increase of $4.0 million or 3.7% from March 31, 2010. This is a direct result of the growth of the Bank's deposits.
Total deposits increased by 0.7% to $103.8 million at March 31, 2011, an increase from $103.0 million at December 31, 2010. Total deposits increased 3.3% from March 31, 2010's balance of $100.4 million. At March 31, 2011, the Company's core deposits represent 86.7% of the total deposits.
Loans decreased $1.1 million or 1.9% during the first quarter from December 31, 2010 with a remaining balance of $59.4 million at March 31, 2011. Comparing the balances of March 31, 2010, the Company's loans decreased $1.1 million or 1.9% during the twelve month period. The Bank's asset quality improved in the first quarter as the level of OREO declined from $516 thousand to -0- and the level of Nonperforming assets to total loans and OREO improved from 7.68% at December 31, 2010 to 6.88% at March 31, 2011.
Earnings
The Company posted net interest income of $1,019,371 for the quarter ended March 31, 2011 as compared to $952,763 for the quarter ended March 31, 2010, due to decreased average balances in interest-bearing deposits. Average interest-earning assets were $94.6 million with average interest-bearing liabilities of $60.4 million, yielding a net interest margin of 4.37% for the first quarter of 2011; as compared to the average interest-earning assets of $93.6 million with average interest-bearing liabilities of $62.3 million, yielding a net interest margin of 4.13% for the first quarter of 2010.
Non-interest income totaled $393,053 for the first quarter of 2011, or an increase of 33.8% from $293,835 earned during the first quarter of 2010. Gain on sale of foreclosed assets increased to $61,000 in the first quarter of 2011, compared to a $149 gain recognized in the first quarter of 2010. Service charges on deposit accounts increased 13.8% to $304,657 due to increased return item and overdraft charges.
The provision for loan losses decreased by $258,163 to $5,522 in the first quarter of 2011, compared to $263,685 in the first quarter of 2010. The reduction in provision was based upon a moderate improvement in asset quality, and a general reduction in total loans, coupled with no credit losses in the quarter.
General and administrative expenses were $1,081,129 for the three months ended March 31, 2011 as compared to $928,926 for the first quarter of 2010. The largest component of general and administrative expenses was salary and benefits expense of $587,399 for the first quarter of 2011 as compared to $524,022 for the three months ended March 31, 2010. Other expense categories increased due to the Rancho Cucamonga office that opened on April 5, 2010. Directors fees decreased $1,722 due to the retirement of one director in September 2010. Other expenses decreased by $7,407 for the comparable three-month period due mainly to expenses of other real estate incurred prior to the sale.
Income tax expense was $122,468 for the three months ended March 31, 2011 as compared to $12,702 for the three months ended March 31, 2010. The effective income tax rate for the first quarter of 2011 and 2010 is approximately 38% and 25%, respectively.
Forward-Looking Statements
The statements contained in this 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. The forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and readers are cautioned not to unduly rely on such forward-looking statements. Actual results and performance in future periods may be materially different from any future results or performance suggested by the forward-looking statements in this release. Factors that might cause such differences include, but are not limited to, the health of the national and California economies, the Company's ability to attract and retain skilled employees, competition in the financial services market for both deposits and loans; the Company's ability to increase its customer base; customers' service expectations, the Company's ability to successfully deploy new technology and gain efficiencies therefrom, the success of branch expansion, changes in interest rates, loan portfolio performance, the Company's ability to enhance its earnings capacity, and other factors detailed in the Company's SEC filings, including the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's most recent Form 10-K.
| CHINO COMMERCIAL BANCORP | ||
| CONSOLIDATED BALANCE SHEET | ||
| March 31, 2011 and December 31, 2010 | ||
| March 31, 2011 | December 31, 2010 | |
| (unaudited) | (audited) | |
| ASSETS: | ||
| Cash and due from banks | $ 5,701,774 | $ 3,041,114 |
| Federal Funds Sold | 9,054,487 | 4,660,527 |
| Total cash and cash items | $ 14,756,261 | $ 7,701,641 |
| Interest-bearing deposits in other banks | 15,661,252 | 19,378,252 |
| Investment securities available for sale | 4,564,141 | 4,706,994 |
| Investment securities held to maturity (fair value approximates $2,142,000 at March 31, 2011 and $12,302,000 at December 31, 2010) | 11,506,166 | 12,153,915 |
| Total investments | 31,731,559 | 36,239,161 |
| Loans | ||
| Real estate | 51,064,779 | 51,459,881 |
| Commercial | 7,700,304 | 8,411,117 |
| Installment | 667,377 | 649,455 |
| Gross loans | 59,432,460 | 60,520,453 |
| Unearned fees and discounts | (31,918) | (27,204) |
| Loans net of unearned fees and discount | 59,400,542 | 60,493,249 |
| Allowance for loan losses | (1,447,675) | (1,442,153) |
| Net loans | 57,952,867 | 59,051,096 |
| Accrued interest receivable | 426,626 | 382,943 |
| Restricted stock | 609,950 | 626,250 |
| Fixed assets, net | 6,488,770 | 6,342,670 |
| Foreclosed assets | 0 | 516,534 |
| Prepaid & other assets | 2,875,098 | 3,053,531 |
| Total assets | $ 114,841,131 | $ 113,913,826 |
| LIABILITIES: | ||
| Deposits | ||
| Non-interest bearing | $ 50,314,030 | $ 41,909,584 |
| Interest Bearing | ||
| NOW and money market | 31,958,312 | 36,241,586 |
| Savings | 2,088,028 | 2,085,092 |
| Time deposits less than $100,000 | 5,553,271 | 6,377,430 |
| Time deposits of $100,000 or greater | 13,840,493 | 16,385,864 |
| Total deposits | 103,754,134 | 102,999,556 |
| Accrued interest payable | 77,683 | 104,967 |
| Borrowings from Federal Home Loan Bank (FHLB) | 0 | 0 |
| Accrued expenses & other payables | 689,551 | 700,046 |
| Subordinated notes payable to subsidiary trust | 3,093,000 | 3,093,000 |
| Total liabilities | 107,614,368 | 106,897,569 |
| STOCKHOLDERS' EQUITY | ||
| Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 748,314 shares at March 31, 2011 and at December 31, 2010. | 2,750,285 | 2,750,285 |
| Retained earnings | 4,393,513 | 4,190,207 |
| Accumulated other comprehensive income | 82,965 | 75,765 |
| Total stockholders' equity | 7,226,763 | 7,016,257 |
| Total liabilities & stockholders' equity | $ 114,841,131 | $ 113,913,826 |
| CHINO COMMERCIAL BANCORP | ||
| CONSOLIDATED STATEMENTS OF INCOME | ||
| (unaudited) | ||
| For the three months ended | ||
| March 31, | ||
| 2011 | 2010 | |
| Interest income | ||
| Investment securities and due from banks | $ 169,848 | $ 168,592 |
| Interest on Federal funds sold | 2,605 | 0 |
| Interest and fee income on loans | 1,012,779 | 1,076,447 |
| Total interest income | 1,185,232 | 1,245,039 |
| Interest expense | ||
| Deposits | 114,898 | 241,283 |
| Interest on Federal funds purchased | 0 | 0 |
| Interest on FHLB borrowings | 0 | 30 |
| Other borrowings | 50,963 | 50,963 |
| Total interest expense | 165,861 | 292,276 |
| Net interest income | 1,019,371 | 952,763 |
| Provision for loan losses | 5,522 | 263,685 |
| Net interest income after provision for loan losses | 1,013,849 | 689,078 |
| Non-interest income | ||
| Service charges on deposit accounts | 304,657 | 267,641 |
| Other miscellaneous income | 68,401 | 6,083 |
| Dividend income from restricted stock | 2,770 | 3,137 |
| Income from bank-owned life insurance | 17,225 | 16,974 |
| Total non-interest income | 393,053 | 293,835 |
| General and administrative expenses | ||
| Salaries and employee benefits | 587,399 | 524,022 |
| Occupancy and equipment | 114,581 | 85,848 |
| Data and item processing | 96,972 | 80,040 |
| Advertising and marketing | 16,153 | 13,818 |
| Legal and professional fees | 70,233 | 45,016 |
| Regulatory Assessments | 75,447 | 52,193 |
| Insurance | 10,425 | 8,941 |
| Directors' fees and expenses | 15,601 | 17,323 |
| Other expenses | 94,318 | 101,725 |
| Total general & administrative expenses | 1,081,129 | 928,926 |
| Income before income tax expense | 325,773 | 53,987 |
| Income tax expense | 122,468 | 12,702 |
| Net income | $ 203,305 | $ 41,285 |
| Basic earnings per share | $ 0.27 | $ 0.06 |
| Diluted earnings per share | $ 0.27 | $ 0.06 |
| CHINO COMMERCIAL BANCORP | ||
| For the three months ended | ||
| March 31 | ||
| 2011 | 2010 | |
| KEY FINANCIAL RATIOS | ||
| (unaudited) | ||
| Return on average equity | 11.48% | 2.56% |
| Return on average assets | 0.72% | 0.15% |
| Net interest margin | 4.37% | 4.13% |
| Core efficiency ratio | 80.00% | 74.52% |
| Net chargeoffs to average loans | 0.00% | 0.24% |
| AVERAGE BALANCES | ||
| (thousands, unaudited) | ||
| Average assets | $ 113,206 | $ 108,030 |
| Average interest-earning assets | $ 94,649 | $ 93,617 |
| Average gross loans | $ 60,277 | $ 61,213 |
| Average deposits | $ 102,136 | $ 97,564 |
| Average equity | $ 7,086 | $ 6,460 |
| CREDIT QUALITY | End of period | |
| (unaudited) | March 31, 2011 | December 31, 2010 |
| Non-performing loans | $ 4,087,364 | $ 4,167,573 |
| OREO | 0 | 516,534 |
| Total non-performing assets | $ 4,087,364 | $ 4,684,107 |
| Non-performing loans to total loans | 6.88% | 6.89% |
| Non-performing assets to total loans and OREO | 6.88% | 7.67% |
| Non-performing loans to total assets | 3.56% | 3.66% |
| Allowance for loan losses to loans | 2.44% | 2.38% |
| OTHER PERIOD-END STATISTICS | ||
| (unaudited) | March 31, 2011 | December 31, 2010 |
| Shareholders equity to total assets | 6.29% | 6.16% |
| Loans to deposits | 57.28% | 58.76% |
| Non-interest bearing deposits to total deposits | 48.49% | 40.69% |