CHINO, Calif., April 21, 2023 (GLOBE NEWSWIRE) -- The Board of Directors of Chino Commercial Bancorp (OTC: 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, 2023. Net earnings for the first quarter of 2023, were $1.2 million, or an increase of 29.8%, as compared with earnings of $900 thousand for the same quarter last year. Net earnings per basic and diluted share was $0.44 for the first quarter of 2023, and $0.34 for the same quarter last year.
Dann H. Bowman, President and Chief Executive Officer, stated, "Despite the recent negative news concerning several very large banks, which were involved in tech start-ups and crypto currencies the conditions of our Bank and the local economy remain strong. Earnings for the first quarter of 2023 were up over the same quarter last year, and loan quality remains very strong.
We remain focused on the trend and direction of commercial real estate vacancy, and the demand for Office and Retail space. Rising costs of labor and goods are putting additional pressure on retail margins, and demand for office space over the near term may continue to soften as remote work and shared workspaces become more common. However, despite these headwinds, we are optimistic regarding the opportunities for growth and expansion in the Inland Empire."
Financial Condition
At March 31, 2023, total assets were $439.3 million, an increase of $39.4 million or 10.0% over $399.8 million at December 31, 2022. Total deposits decreased by $18.6 million or 5.5% to $318.8 million as of March 31, 2023, compared to $337.5 million as of December 31, 2022. At March 31, 2022, the Company's core deposits represent 98.3% of the total deposits.
Gross loans increased by $2.0 million or 1.08% to $178.2 million as of March 31, 2022, compared to $176.3 million as of December 31, 2022. The Bank had two non-performing loans for the quarter ended March 31, 2023, and December 31, 2022. OREO properties remained at zero as of March 31, 2023 and December 31, 2022 respectively.
Effective January1, 2023, the Company adopted ASU 2016-13 Financial Instrument - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The Company recorded a net decrease to retained earnings of $401.6 thousand as of January 1, 2023 for the cumulative effect of adopting ASC 326.
Earnings
The Company posted net interest income of $3.1 million for the three months ended March 31, 2023 and $2.7 million for the same quarter last year. Average interest-earning assets were $382.8 million with average interest-bearing liabilities of $168.7 million, yielding a net interest margin of 3.37% for the first quarter of 2023, as compared to the average interest-earning assets of $242.9 million with average interest-bearing liabilities of $152.9 million, yielding a net interest margin of 4.17% for the first quarter of 2022.
Non-interest income totaled $594.8 thousand for the first quarter of 2023, or an increase of 16.2% as compared with $512.0 thousand earned during the same quarter last year. The majority of the increase is attribute to service charges on deposit accounts and other fees.
General and administrative expenses were $2.1 million for the three months ended March 31, 2023, and $2.0 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.4 million for the first quarter of 2023 and $1.2 million for the same period last year.
Income tax expense was $463 thousand, which represents an increase of $112 thousand or 31.8% for the three months ended March 31, 2023, as compared to $351.9 thousand for the three months ended March 31, 2022. The effective income tax rate for the first quarter of 2022 and 2021 were approximately 28.4% and 28.1% 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 therefrom, and changes in interest rates, loan portfolio performance, and other factors.
| Chino Commercial Bankcorp and Subsidiary | |||||||
| Consolidated Statements of Financial Condition | |||||||
| March 31, 2023 and 2022 | |||||||
| 31-Mar-23 | 31-Dec-22 | ||||||
| unaudited | audited | ||||||
| Assets | |||||||
| Cash and due from banks | $ | 78,176,981 | $ | 36,436,018 | |||
| Cash and cash equivalents | 78,176,981 | 36,436,018 | |||||
| Investment securities available for sale, net of zero allowance for credit losses | 6,529,327 | 6,347,231 | |||||
| Investment securities held to maturity, net of zero allowance for credit losses | 161,396,993 | 160,668,959 | |||||
| Total Investments | 167,926,320 | 167,016,191 | |||||
| Loans held for investment, net of allowance for credit losses of | |||||||
| $4,518,359 in 2023, and $4,100,516 in 2022 | 173,229,811 | 176,555,783 | |||||
| Stock investments, restricted, at cost | 2,045,200 | 2,045,200 | |||||
| Fixed assets, net | 5,562,561 | 5,626,850 | |||||
| Accrued interest receivable | 1,250,737 | 1,153,613 | |||||
| Bank owned life insurance | 8,100,801 | 8,054,491 | |||||
| Other assets | 2,987,057 | 2,947,830 | |||||
| Total assets | $ | 439,279,468 | $ | 399,835,974 | |||
| Liabilities | |||||||
| Deposits | |||||||
| Noninterest-bearing | 191,963,504 | 204,189,323 | |||||
| Interest-bearing | 126,854,885 | 133,263,940 | |||||
| Total deposits | 318,818,389 | 337,453,262 | |||||
| Federal Home Loan Bank advances | 15,000,000 | 15,000,000 | |||||
| Federal Reserve bank borrowings | 57,000,000 | - | |||||
| Subordinated debt | 10,000,000 | 10,000,000 | |||||
| Subordinated notes payable to subsidiary trust | 3,093,000 | 3,093,000 | |||||
| Accrued interest payable | 267,004 | 124,947 | |||||
| Other liabilities | 1,684,100 | 1,815,062 | |||||
| Total liabilities | 405,862,492 | 367,486,270 | |||||
| Shareholders' Equity | |||||||
| Common stock, no par value, 10,000,000 shares authorized | |||||||
| and 2,676,799 shares issued and outstanding | |||||||
| at March 31, 2023 and December 31, 2022 | 10,502,558 | 10,502,558 | |||||
| Retained earnings | 25,155,080 | 24,269,527 | |||||
| Accumulated other comprehensive loss - unrecognized | |||||||
| loss on available for sale, net of taxes | (2,240,661 | ) | (2,422,382 | ) | |||
| Total shareholders' equity | 33,416,976 | 32,349,703 | |||||
| Total liabilities and shareholders' equity | $ | 439,279,468 | $ | 399,835,974 | |||
| Chino Commercial Bankcorp and Subsidiary | ||||||
| Consolidated Statements of Net Income | ||||||
| March 31, 2023 and 2022 | ||||||
| 3/31/2023 | 3/31/2022 | |||||
| unaudited | unaudited | |||||
| Interest Income | ||||||
| Interest and fees on loans | 2,390,159 | 2,313,197 | ||||
| Interest on investment securities | 1,133,586 | 349,414 | ||||
| Other interest income | 405,234 | 81,413 | ||||
| Total interest income | 3,928,979 | 2,744,024 | ||||
| Interest Expense | ||||||
| Interest on deposits | 376,861 | 42,517 | ||||
| Interest on borrowings | 371,403 | 206,504 | ||||
| Total interest expense | 748,264 | 249,021 | ||||
| Net Interest Income | 3,180,716 | 2,495,003 | ||||
| Provision For Loan Losses | 2,136 | (204,595 | ) | |||
| Net Interest Income After Provision For Loan Losses | 3,178,580 | 2,699,598 | ||||
| Noninterest Income | ||||||
| Service charges and fees on deposit accounts | 359,899 | 302,488 | ||||
| Interchange fees | 103,159 | 106,757 | ||||
| Earnings from bank-owned life insurance | 46,311 | 44,133 | ||||
| Other miscellaneous income | 85,394 | 58,688 | ||||
| Total noninterest income | 594,763 | 512,066 | ||||
| Noninterest Expense | ||||||
| Salaries and employee benefits | 1,352,935 | 1,244,311 | ||||
| Occupancy and equipment | 153,591 | 159,763 | ||||
| Other expenses | 634,466 | 555,466 | ||||
| Total noninterest expense | 2,140,992 | 1,959,540 | ||||
| Income before income tax expense | 1,632,350 | 1,252,124 | ||||
| Provision for income taxes | 463,901 | 351,911 | ||||
| Net Income | $ | 1,168,449 | $ | 900,213 | ||
| Basic earnings per share | $ | 0.44 | $ | 0.34 | ||
| Diluted earnings per share | $ | 0.44 | $ | 0.34 | ||
| Chino Commercial Bankcorp and Subsidiary | |||||
| Financial Highlights | |||||
| March 31, 2023 and 2022 | |||||
| Key Financial Ratios | 3/31/2023 | 3/31/2022 | |||
| (unaudited) | |||||
| Annualized return on average equity | 14.26 | % | 12.23 | % | |
| Annualized return on average assets | 1.16 | % | 0.92 | % | |
| Net interest margin | 3.37 | % | 4.17 | % | |
| Core efficiency ratio | 56.71 | % | 65.16 | % | |
| Net chargeoffs/(recoveries) to average loans | -0.008 | % | -0.0001 | ||
| Average Balances | |||||
| (thousands, unaudited) | |||||
| Average assets | 401,948 | 389,889 | |||
| Average interest-earning assets | 382,782 | 242,900 | |||
| Average interest-bearing liabilities | 168,672 | 152,877 | |||
| Average gross loans | 181,642 | 170,405 | |||
| Average deposits | 328,562 | 330,352 | |||
| Average equity | 32,770 | 29,454 | |||
| End of period | |||||
| 3/31/2023 | 12/31/2022 | ||||
| Credit Quality | |||||
| Non-performing loans | 527,388 | 404,095 | |||
| Non-performing loans to total loans | 0.30 | % | 0.22 | % | |
| Non-performing loans to total assets | 0.12 | % | 0.10 | % | |
| Allowance for credit losses to total loans | 2.54 | % | 2.26 | % | |
| Nonperforming assets as a percentage of total loans and OREO | 0.30 | % | 0.22 | % | |
| Allowance for credit losses to non-performing loans | 856.74 | % | 1014.74 | % | |
| Other Period-end Statistics | |||||
| Shareholders equity to total assets | 7.61 | % | 8.09 | % | |
| Net loans to deposits | 54.16 | % | 52.32 | % | |
| Non-interest bearing deposits to total deposits | 60.34 | % | 60.51 | % | |
| Company Leverage Ratio | 9.64 | % | 9.27 | % | |
