Chino Commercial Bancorp Reports 39% Increase In Third Quarter Earnings

CHINO, Calif., Oct. 21, 2013 /PRNewswire/ -- The Board of Directors of Chino Commercial Bancorp ("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 third quarter ended September 30, 2013 with net earnings of $214,950, or an increase of 39.7%, as compared with net income of $153,816 for the same quarter last year. Net income per basic and diluted share for the third quarter 2013 was $0.26 as compared to $0.19 for the same quarter last year. The Company's profit for the nine months ended September 30, 2013 increased 33.8% to $644,758 or $0.77 per basic and diluted share as compared with net earnings of $481,970 or $0.60 per basic and diluted share for the same period in 2012.

Dann H. Bowman, President and Chief Executive Officer, stated, "We are very pleased with the performance of the Bank during the third quarter.  Economic conditions appear to be rapidly improving in the Inland Empire, and many of our small business customers are reporting better than expected operating results.  At the end of the third quarter the Company reported no delinquent loans, no foreclosures and has experienced no credit losses so far this year.

In addition to the excellent financial performance of the Bank during the third quarter, Management recently announced the termination of the Formal Agreement with their primary regulator the Office of the Comptroller of the Currency.  We are very pleased with the action taken by the OCC and we are gratified that our primary regulator has recognized the significant progress we have made in addressing the requirements of the Formal Agreement.

At this time the Bank is well positioned to take advantage of market opportunities and expand its lending to the businesses and consumers in our community."

Financial Condition 

At September 30, 2013, total assets were $114.9 million, which was an increase of $220,796 or 0.2% from $114.6 million at December 31, 2012. Deposits decreased slightly by 0.6% to $101.6 million at September 30, 2013 from $102.2 million at December 31, 2012. At September 30, 2013, the Company's core deposits represent 90.3% of the total deposits.

Loans net of unearned fees increased 1.4% in the nine months ended September 30, 2013 to $62.6 million from $61.8 million at December 31, 2012. The Company's asset quality improved in the nine months ended September 30, 2013, as the level of nonperforming assets to total loans and OREO decreased from 1.96% at December 31, 2012 to 0.69% at September 30, 2013.

Earnings

The Company posted net interest income of $944,563 and $923,873 for the three months ended September 30, 2013 and 2012, respectively, or an increase of $20,690 or 2.2%. For the nine months ended September 30, 2013 the Company posted net interest income of $3.0 million compared to $2.7 million for the same period in 2012, or an increase of $310,963 or 11.5%. Two loans on non-accrual status paid off in June 2013, resulting in $134,500 of the reported increased income from loans.

Income from earning assets decreased slightly by $4,056 for the third quarter of 2013 compared to the same period last year, and increased $247,255 for the nine months ended September 30, 2013 compared to same period in 2012. The interest earned in addition to the paid-off loan was due to increased average balances in interest-earning assets. Average interest-earning assets for the quarter ended September 30, 2013 were $104.8 million with average interest-bearing liabilities of $52.6 million, yielding a net interest margin of 3.58% for the third quarter of 2013; as compared to the average interest-earning assets of $98.3 million with average interest-bearing liabilities of $54.7 million, yielding a net interest margin of 3.74% for the same period in 2012. Average interest-earning assets for the nine months ended September 30, 2013 were $104.8 million with average interest-bearing liabilities of $55.0 million, yielding a net interest margin of 3.84%, compared to average interest-earning assets of $96.1 million with average interest-bearing liabilities of $53.7 million, yielding a net interest margin of 3.75% for the same period in 2012.

Non-interest income totaled $421,492 for the third quarter of 2013, or an increase of 34.1% from $314,333 earned during the third quarter of 2012. For the nine months ended September 30, 2013, non-interest income totaled $1,106,241 or a 0.5% increase from $1,101,108 earned during the same period in 2012. In the nine months ended September 30, 2012, the Company experienced a gain on sale of foreclosed assets of $93,871 while in the same period of 2013 the Company had no OREO and therefore no gain on sale.

General and administrative expenses were $1,025,979 for the three months ended September 30, 2013, as compared to $995,743 for the third quarter of 2012; and were $3,083,514 and $3,036,344 for the nine months ended September 30, 2013 and 2012, respectively. The largest component of general and administrative expenses was salary and benefits expense of $552,905 and $1,681,065 for the three and nine months ended September 30, 2013, respectively; as compared to $513,382 and $1,633,223 for the three and nine months ended September 30, 2012, respectively.

Income tax expense was $124,879 for the third quarter of 2013 as compared to $88,571 for the same period in 2012, resulting in effective income tax rates of approximately 36.7% and 36.5%, respectively. Income tax expense for the nine months ended September 30, 2013 and 2012 were $385,279 and $278,744, respectively. The income tax rates were 37.4% and 36.6% for the nine months ended September 30, 2013 and 2012, respectively.

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.

SOURCE Chino Commercial Bancorp