CHINO, Calif., Oct. 24, 2011 /PRNewswire/ -- 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 third quarter ended September 30, 2011 with net income of $120,113, a 38.1% reduction from net income of $194,041 for the same quarter last year. The net income for the most recent quarter represents $0.16 per diluted share, as compared with earnings of $0.26 per diluted share from the same quarter last year. The Company's profit year-to-date increased 9.6% to $273,474 or $0.37 per diluted share as compared with net earnings of $249,519 or $0.35 per dilute share for the same period last year.
Dann H. Bowman, President and Chief Executive Officer stated, "The fundamental economic conditions in the Inland Empire appear to be improving. At September 30, 2011 the Bank had only one delinquent loan, which has subsequently been paid in full. Similarly, the Bank also had only one foreclosed property and no pending foreclosures.
Many of our small business customers are beginning to see improved sales levels, and moderately better business conditions. We are pleased that we are in a strong position to help the small business customers in the Inland Empire, which are the engines for job creation in our community."
Financial Condition
The Company's total assets were $106.2 million at September 30, 2011, a decrease of $7.7 million, or 6.8% as compared to total assets of $113.9 million at December 31, 2010. The most significant changes in the Company's balance sheet during the nine months ended September 30, 2011 are outlined below:
Total deposits decreased from $103.0 million at December 31, 2010 to $94.9 million at September 30, 2011, a 7.8% decrease. Noninterest-bearing deposits increased to $44.7 million at September 30, 2011, an increase of $2.8 million or 6.7% from December 31, 2010. Total interest-bearing deposits decreased from $61.1 million at December 31, 2010 to $50.2 million at September 30, 2011, a 17.8% decrease in the nine months of 2011. This was done by design to eliminate higher yielding deposits. The ratio of non-interest bearing deposits to total deposits increased from 40.7% at December 31, 2010 to 47.1% at September 30, 2011.
The Company experienced a decrease in interest-earning assets of 8.7% to $92.6 million in the nine months of 2011, primarily in total investments which decreased to $25.5 million at September 30, 2011, compared to $36.2 million at December 31, 2010. This was caused by the liquidation of lower-yielding interest earning deposits in other banks to pay off higher-yielding interest bearing deposits. The reduction in assets was also part of a managed strategy to enable the Bank to maintain its tier 1 leverage capital ratio at or above 9.0% as agreed with bank regulators pending a capital raise which is expected to commence in the fourth quarter of 2011.
Nonperforming assets were comprised of 14 loans and one foreclosed property totaling $4.8 million at September 30, 2011, compared to 11 loans and one foreclosed property totaling $4.7 million at December 31, 2010. The Company's nonperforming assets at September 30, 2011 and December 31, 2010 were 8.36% and 7.67%, respectively, of the total loans and OREO. Allowance for loan losses to non-performing loans was 35.30% and 34.60% at September 30, 2011 and December 31, 2010, respectively. All but one of the loans classified as nonperforming as of September 30, 2011, totaling $277,012, are current and paying as agreed.
Earnings
The Company decreased its provision for loan losses 85.8% or $13,423 to $2,221 for the three months ended September 30, 2011 and reduced its provision 46.9% or $248,336 to $281,660 for the nine months ended September 30, 2011. The decreased provisions in 2011 were primarily the result of a reduction in loan charge-offs.
The Company posted net interest income for the quarters ended September 30, 2011 and September 30, 2010 of $870,314 and $1,005,347, respectively. For the nine months ended September 30, the Company posted net interest income of $2,797,124 and $2,935,421 for 2011 and 2010, respectively. Loan interest income decreased $178,601, or 16.9%, to $877,470 for third quarter of 2011 compared with the third quarter of 2010. The decrease in interest income from loans was $378,269, or 11.9%, comparing the nine months ended September 30, 2011 with the same period in 2010. For the nine months ended September 30, 2011, investment income decreased $160,640 or 26.1% to $455,931 as compared to the nine months ended September 30, 2010.
Interest expense on deposits decreased $124,688, or 57.0%, comparing the quarters ended September 30, 2011 with September 30, 2010. On a year-to-date comparison, interest on deposits decreased $394,226, or 56.2%, in 2011 compared to the same period in 2010. Interest from investments decreased $82,977, or 38.4% for the quarter ended September 30, 2011 compared to the same period in 2010.
Non-interest income totaled $327,655 for the three months ended September 30, 2011, or a 22.9% decrease from $424,989 earned in the third quarter of 2010. The decrease in non-interest income was due to a gain on sale of repossessed equipment of $127,839 partially offset by the recognition of the provision to the valuation allowance on OREO for $29,700 in the third quarter of 2010 that was not repeated in the same quarter of 2011. Non-interest income increased 0.1% for the nine months ended September 30, 2011 to $1,038,768, as compared to $1,037,752 for the nine months ended September 30, 2010. The major contributor to the increase was service charges on deposit accounts. The increase was due to increased activity as the Company has not increased its per-item service charges.
Non-interest expenses were $1,011,489 for the three months ended September 30, 2011 as compared to $1,105,290 for the three months ended September 30, 2010, an 8.5% decrease. Non-interest expenses increased $69,428 to $3,148,761 for the nine months of 2011 compared to the same period in 2010. The largest component of non-interest expense was salaries and benefits expense of $538,909 for the third quarter and $1,647,203 for the nine months of 2011 compared to $543,501 and $1,637,951 for the same periods in 2010, representing an 0.8% decrease and a 0.6% increase, respectively.
Legal and other professional fees increased 1.4% and 62.2% or $1,486 and $119,266, respectively, during the three and nine months ended September 30, 2011 compared to the same periods in 2010 as a result of increased loan collection activity, regulatory matters, and complexity of SEC related filings.
Regulatory assessments expense decreased $30,438 or 53.9% in the third quarter of 2011 versus 2010 and increased $15,179 or 9.4% in the nine months of 2011 versus 2010 due to anticipated increased assessment rates that were accrued and reversed as the increase did not materialize.
Other components of non-interest expense that affected the changes were occupancy and equipment expenses which decreased $25,676 for the three month period ended September 30, 2011 compared to the same period in 2010, due to the differences between rental expense in 2010 and depreciation expense in 2011 for the Company's recently-purchased main office. Occupancy and equipment expenses increased $9,656 for the nine month period ended September 30, 2011 compared to the same period in 2010, due to the opening of the Rancho Cucamonga Branch in April 2010. The prior year would include only six months occupancy expense, while 2011 includes nine months occupancy expense for the new facility. Data and item processing expenses decreased slightly by $4,616, or 5.1% for the comparable three month and $14,729, or 5.6% for the comparable nine month period due to the additional branch.
Income tax expenses were $64,146 and $131,997 for the three and nine months ended September 30, 2011, as compared to income tax expenses of $115,361 and $114,325 for the same periods of 2010.
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 | |
September 30, 2011 and December 31, 2010 | |
| |
| September 30, 2011 |
| December 31, 2010 | |
| (unaudited) |
| (audited) | |
ASSETS: |
|
|
| |
Cash and due from banks | $ 4,247,020 |
| $ 3,041,114 | |
Federal Funds Sold | 10,265,998 |
| 4,660,527 | |
Total cash and cash equivalents | 14,513,018 |
| 7,701,641 | |
|
|
|
| |
Interest-bearing deposits in other banks | 11,693,252 |
| 19,378,252 | |
Investment securities available for sale | 3,300,162 |
| 4,706,994 | |
Investment securities held to maturity (fair value approximates |
|
|
| |
$10,783,000 at September 30, 2011 and $12,302,000 at December 31, 2010) | 10,473,853 |
| 12,153,915 | |
Total investments | 25,467,267 |
| 36,239,161 | |
Loans |
|
|
| |
Real estate | 47,444,517 |
| 51,459,881 | |
Commercial | 8,774,804 |
| 8,411,117 | |
Installment | 665,715 |
| 649,455 | |
Gross loans | 56,885,036 |
| 60,520,453 | |
Unearned fees and discounts | (26,467) |
| (27,204) | |
Loans net of unearned fees and discount | 56,858,569 |
| 60,493,249 | |
Allowance for loan losses | (1,537,195) |
| (1,442,153) | |
Net loans | 55,321,374 |
| 59,051,096 | |
|
|
|
| |
Accrued interest receivable | 276,861 |
| 382,943 | |
Restricted stock | 667,700 |
| 626,250 | |
Fixed assets, net | 6,500,191 |
| 6,342,670 | |
Foreclosed assets | 439,317 |
| 516,534 | |
Prepaid & other assets | 2,989,232 |
| 3,053,531 | |
Total assets | $ 106,174,960 |
| $ 113,913,826 | |
|
|
|
| |
LIABILITIES: |
|
|
| |
Deposits |
|
|
| |
Non-interest bearing | $ 44,706,172 |
| $ 41,909,584 | |
Interest Bearing |
|
|
| |
NOW and money market | 30,883,549 |
| 36,241,586 | |
Savings | 1,670,988 |
| 2,085,092 | |
Time deposits less than $100,000 | 4,998,019 |
| 6,377,430 | |
Time deposits of $100,000 or greater | 12,656,416 |
| 16,385,864 | |
Total deposits | 94,915,144 |
| 102,999,556 | |
|
|
|
| |
Accrued interest payable | 109,425 |
| 104,967 | |
Accrued expenses & other payables | 759,295 |
| 700,046 | |
Subordinated notes payable to subsidiary trust | 3,093,000 |
| 3,093,000 | |
Total liabilities | 98,876,864 |
| 106,897,569 | |
STOCKHOLDERS' EQUITY |
|
|
| |
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 748,314 shares at September 30, 2011 and at December 31, 2010. |
|
|
| |
|
|
| |
2,750,285 |
| 2,750,285 | |
Retained earnings | 4,463,681 |
| 4,190,208 | |
Accumulated other comprehensive income | 84,130 |
| 75,764 | |
Total stockholders' equity | 7,298,096 |
| 7,016,257 | |
Total liabilities & stockholders' equity | $ 106,174,960 |
| $ 113,913,826 | |
| | | |
CHINO COMMERCIAL BANCORP | |
CONSOLIDATED STATEMENTS OF INCOME | |
(unaudited) | |
| |
| For the three months ended |
| For the six months ended | |
| September 30, |
| September 30, | |
| 2011 |
| 2010 |
| 2011 |
| 2010 | |
Interest income |
|
|
|
|
| |
Investment securities and due from banks | $ 133,204 |
| $ 216,181 |
| $ 455,931 |
| $ 616,571 | |
Interest on Federal funds sold | 4,616 |
| 2,759 |
| 8,651 |
| 2,759 | |
Interest and fee income on loans | 877,470 |
| 1,056,071 |
| 2,793,245 |
| 3,171,514 | |
Total interest income | 1,015,290 |
| 1,275,011 |
| 3,257,827 |
| 3,790,844 | |
Interest expense |
|
|
|
|
|
|
| |
Deposits | 94,013 |
| 218,701 |
| 307,740 |
| 701,966 | |
Other interest expense | 0 |
| 0 |
| 75 |
| 569 | |
Other borrowings | 50,963 |
| 50,963 |
| 152,888 |
| 152,888 | |
Total interest expense | 144,976 |
| 269,664 |
| 460,703 |
| 855,423 | |
Net interest income | 870,314 |
| 1,005,347 |
| 2,797,124 |
| 2,935,421 | |
Provision for loan losses | 2,221 |
| 15,644 |
| 281,660 |
| 529,996 | |
Net interest income after |
|
|
|
|
|
|
| |
provision for loan losses | 868,093 |
| 989,703 |
| 2,515,464 |
| 2,405,425 | |
Non-interest income |
|
|
|
|
|
|
| |
Service charges on deposit accounts | 298,241 |
| 300,166 |
| 892,317 |
| 862,307 | |
Gain on sale of foreclosed assets | 0 |
| (29,700) |
| 61,151 |
| (29,551) | |
Other miscellaneous income | 9,299 |
| 134,094 |
| 24,805 |
| 148,769 | |
Dividend income from restricted stock | 2,783 |
| 2,961 |
| 8,342 |
| 4,418 | |
Income from bank-owned life insurance | 17,332 |
| 17,468 |
| 52,153 |
| 51,809 | |
Total non-interest income | 327,655 |
| 424,989 |
| 1,038,768 |
| 1,037,752 | |
General and administrative expenses |
|
|
|
|
|
|
| |
Salaries and employee benefits | 538,909 |
| 543,501 |
| 1,647,203 |
| 1,637,951 | |
Occupancy and equipment | 98,992 |
| 124,668 |
| 325,794 |
| 316,138 | |
Data and item processing | 86,777 |
| 91,393 |
| 277,962 |
| 263,233 | |
Advertising and marketing | 14,947 |
| 16,347 |
| 42,183 |
| 45,228 | |
Legal and professional fees | 108,861 |
| 107,375 |
| 311,084 |
| 191,818 | |
Regulatory assessments | 26,051 |
| 56,489 |
| 177,418 |
| 162,239 | |
Insurance | 10,587 |
| 9,958 |
| 30,236 |
| 27,950 | |
Directors' fees and expenses | 17,321 |
| 16,541 |
| 54,097 |
| 50,959 | |
Other expenses | 109,044 |
| 139,018 |
| 282,784 |
| 383,817 | |
Total general & administrative expenses | 1,011,489 |
| 1,105,290 |
| 3,148,761 |
| 3,079,333 | |
Income before income tax expense | 184,259 |
| 309,402 |
| 405,471 |
| 363,844 | |
Income tax expense | 64,146 |
| 115,361 |
| 131,997 |
| 114,325 | |
Net income | $ 120,113 |
| $ 194,041 |
| $ 273,474 |
| $ 249,519 | |
Basic earnings per share | $ 0.16 |
| $ 0.26 |
| $ 0.37 |
| $ 0.35 | |
Diluted earnings per share | $ 0.16 |
| $ 0.26 |
| $ 0.37 |
| $ 0.35 | |
| | | | | | | |
CHINO COMMERCIAL BANCORP | |
Other Financial Information | |
| |
CREDIT QUALITY | End of period | |
(unaudited) | September 30, 2011 |
| December 31, 2010 | |
Non-performing loans | $ 4,354,071 |
| $ 4,167,573 | |
Non-performing loans to total loans | 7.65% |
| 6.89% | |
Non-performing loans to total assets | 4.10% |
| 3.66% | |
Allowance for loan losses to total loans | 2.70% |
| 2.38% | |
Nonperforming assets as a percentage of total loans and OREO | 8.36% |
| 7.67% | |
Allowance for loan losses to non-performing loans | 35.30% |
| 34.60% | |
|
|
|
| |
OTHER PERIOD-END STATISTICS |
|
|
| |
(unaudited) | September 30, 2011 |
| December 31, 2010 | |
Shareholders equity to total assets | 6.87% |
| 6.16% | |
Loans to deposits | 59.93% |
| 58.76% | |
Non-interest bearing deposits to total deposits | 47.10% |
| 40.69% | |
| | | |
| For the three months ended |
| For the nine months ended | |
| September 30 |
| September 30 | |
| 2011 |
| 2010 |
| 2011 |
| 2010 | |
KEY FINANCIAL RATIOS |
|
|
|
|
|
|
| |
(unaudited) |
|
|
|
|
|
|
| |
Annualized return on average equity | 6.65% |
| 11.30% |
| 5.07% |
| 5.04% | |
Annualized return on average assets | 0.46% |
| 0.67% |
| 0.34% |
| 0.29% | |
Net interest margin | 3.78% |
| 3.92% |
| 3.99% |
| 3.94% | |
Core efficiency ratio | 84.43% |
| 82.98% |
| 83.42% |
| 79.47% | |
Net chargeoffs to average loans | -0.12% |
| 0.03% |
| 0.31% |
| 0.82% | |
|
|
|
|
|
|
|
| |
AVERAGE BALANCES |
|
|
|
|
|
|
| |
(thousands, unaudited) |
|
|
|
|
|
|
| |
Average assets | $ 104,712 |
| $ 115,921 |
| $ 107,492 |
| $ 113,362 | |
Average interest-earning assets | $ 91,289 |
| $ 101,743 |
| $ 93,678 |
| $ 99,488 | |
Average gross loans | $ 58,679 |
| $ 60,019 |
| $ 59,425 |
| $ 60,651 | |
Average deposits | $ 93,509 |
| $ 105,039 |
| $ 96,219 |
| $ 101,726 | |
Average equity | $ 7,227 |
| $ 6,872 |
| $ 7,193 |
| $ 6,596 | |
| | | | | | | |
CONTACT: Dann H. Bowman, President and CEO, or Sandra F. Pender, Senior Vice President and CFO, Chino Commercial Bank, N.A., +1-909-393-8880
