For Release
October 20, 2008
OTC BB: “CCBC” |
CHINO COMMERCIAL BANCORP REPORTS THIRD QUARTER EARNINGS
Chino, California… The Board of Directors of Chino Commercial Bancorp, 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, 2008 with net earnings of $72,654, a 65.3% reduction from $209,476 for the same quarter of 2007. The net earnings for the most recent quarter represents $0.10 per diluted share, as compared with $0.27 per diluted share, or a reduction of 63.0% from the same quarter last year. Earnings year-to-date was $260,530 or $0.34 per diluted share as compared with net earnings of $612,466 or $0.77 per diluted share for the same period last year.
Dann H. Bowman, President and Chief Executive Officer stated, “Despite earnings declining during the third quarter 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 September the Bank had only two loans which were delinquent more than 60 days and only one loan on non-accrual.”
Financial Condition
Total assets declined from $79.9 million to $77.5 million or 3.1% between December 31, 2007 and September 30, 2008, resulting from decreased loan balances and investment securities, offset with increased Federal funds sold which are funded with deposit balances.
The Company experienced a decrease in interest-earning assets of $4.7 million or 6.5% to $71.9 million in the first three quarters of 2008. Loan demand and Investment securities decreased $5.1 million and $2.6 million, respectively, in the first nine months of 2008. Undisbursed loan commitments decreased $1.7 million to $5.9 million at September 30, 2008. No new investment securities have been added in 2008, and the decreases were caused by maturities and principal payments from Mortgage-backed securities. Federal funds sold increased $4.6 million or 41.9% as loans demand and deposits balances stabilized during the third quarter
Total deposits decreased from $70.4 million at December 31, 2007 to $67.8 million at September 30, 2008, or a 3.7% reduction. Total non-interest bearing deposits decreased from $42.3 million at December 31, 2007 to $34.8 million for the reporting period ended September 30, 2008, a 17.7% decrease. Interest-bearing liabilities increased $4.8 million or 17.2% to $33.0 million in the nine months ended September 30, 2008 as compared to December 31, 2007. The 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 September 30, 2008 and September 30, 2007 of $854,027 and $1,022,467, respectively. For the nine months ended September 30, the Company posted net interest income of $2,639,085 and $3,209,364 for 2008 and 2007, respectively. Average interest-earning assets were $66.4 million with average
interest-bearing liabilities of $32.3 million yielding a net interest margin of 5.31% for the nine months ended September 30, 2008 as compared to average interest-bearing assets of $76.6 million with average interest-bearing liabilities of $30.5 million yielding a net interest margin of 5.61% for the nine months ended September 30, 2007.
Non-interest income totaled $259,509 for the three months ended September 30, 2008, or a 1.3% increase from $256,077 earned during the third quarter of 2007. Non-interest income increased 17.5% for the nine months ended September 30, 2008 totaling $819,253 as compared to $697,236 for the nine months ended September 30, 2007. Service charges on deposit accounts accounted for the majority of the increase in non-interest income.
General and administrative expenses were $889,427 and $2,674,723 for the three and nine months ended September 30, 2008 as compared to $895,791 and $2,816,860 for the three and nine months ended September 30, 2007. The largest component of general and administrative expenses was salary and benefits expense of $467,413 for the third quarter of 2008 as compared to $461,870 for the three months ended September 30, 2007. Year-to-date comparisons of salary and benefits expense reports $1,444,704 for nine months ended September 30, 2008 and $1,440,026 for the same period in 2007.
Income tax expense was $31,731 and $124,957 for the three and nine months ended September 30, 2008, as compared to $127,718 and $371,071 for the same periods of 2007. The effective income tax rate for 2008 is approximately 32.4% and 2007 is approximately 37.7% . Of the $385,487 pre-tax income for the nine months ended September 30, 2008, approximately $83,300 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.
Contact: Dann H. Bowman, President and CEO or Sandra F. Pender, Vice President and CFO, Chino Commercial Bank, N.A., 14345 Pipeline Avenue, Chino, Ca. 91710, (909) 393-8880.
| CHINO COMMERCIAL BANCORP |
| CONSOLIDATED BALANCE SHEET |
| September 30, 2008 and December 31, 2007 |
| |
| | | September 30, 2008 | | December 31, 2007 |
| | | (unaudited) | | (audited) |
| ASSETS: | | | | |
| Cash and due from banks | | $ 5,010,809 | | $ 3,487,933 |
| Federal funds sold | | 10,500,000 | | 7,440,000 |
| Cash and cash equivalents | | 15,510,809 | | 10,927,933 |
| |
| Interest-bearing deposits in other banks | | 99,000 | | 99,000 |
| |
| Investment securities available for sale | | 5,255,055 | | 7,339,354 |
| Investment securities held to maturity (fair value approximates | | | | |
| $3,333,000 at September 30, 2008 and $3,880,000 at December 31, 2007) | | 3,323,939 | | 3,873,251 |
| Total investments | | 8,677,994 | | 11,311,605 |
| Loans | | | | |
| Construction | | 605,229 | | 2,606,750 |
| Real estate | | 36,686,193 | | 39,726,301 |
| Commercial | | 10,209,252 | | 10,062,969 |
| Installment | | 575,426 | | 790,535 |
| Gross loans | | 48,076,100 | | 53,186,555 |
| Unearned fees and discounts | | (67,841) | | (87,389) |
| Loans net of unearned fees and discount | | 48,008,259 | | 53,099,166 |
| Allowance for loan losses | | (662,180) | | (725,211) |
| Net loans | | 47,346,079 | | 52,373,955 |
| |
| Accrued interest receivable | | 258,599 | | 326,990 |
| Restricted stock | | 673,250 | | 654,250 |
| Fixed assets, net | | 1,982,540 | | 2,085,203 |
| Prepaid & other assets | | 3,017,706 | | 2,268,909 |
| Total assets | | $ 77,466,977 | | $ 79,948,845 |
| |
| LIABILITIES: | | | | |
| Deposits | | | | |
| Non-interest bearing | $ 34,783,525 | | $ 42,270,696 |
| Interest Bearing | | | | |
| NOW and money market | | 24,663,984 | | 22,711,556 |
| Savings | | 1,104,082 | | 1,202,965 |
| Time deposits less than $100,000 | | 2,983,045 | | 2,054,915 |
| Time deposits of $100,000 or greater | | 4,223,904 | | 2,156,778 |
| Total deposits | | 67,758,540 | | 70,396,910 |
| |
| Accrued interest payable | | 56,700 | | 63,962 |
| Accrued expenses & other payables | | 559,088 | | 509,389 |
| Subordinated debentures | | 3,093,000 | | 3,093,000 |
| Total liabilities | | 71,467,328 | | 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 September 30, | | | | |
| 2008 and December 31, 2007, respectively. | | 2,539,714 | | 2,639,462 |
| Retained earnings | | 3,485,818 | | 3,249,982 |
| Accumulated other comprehensive loss | | (25,883) | | (3,860) |
| Total equity | | 5,999,649 | | 5,885,584 |
| Total liabilities & stockholders' equity | | $ 77,466,977 | | $ 79,948,845 |
| CHINO COMMERCIAL BANCORP |
| CONSOLIDATED STATEMENTS OF INCOME |
| (unaudited) |
| |
| | | For the three months ended | | For the six months ended |
| | | September 30 | | September 30 |
| | | 2008 | | 2007 | | 2008 | | 2007 |
| Interest income | | | | | | | | |
| Investment securities and due from banks | | $ 102,966 | | $ 143,782 | | $ 341,064 | | $ 496,815 |
| Interest on Federal funds sold | | 35,855 | | 120,811 | | 66,832 | | 380,695 |
| Interest and fee income on loans | | 948,483 | | 1,010,948 | | 2,932,847 | | 3,013,734 |
| Total interest income | | 1,087,304 | | 1,275,541 | | 3,340,743 | | 3,891,244 |
| Interest expense | | | | | | | | |
| Deposits | | 182,314 | | 201,811 | | 547,797 | | 528,093 |
| Interest on Federal funds purchased | | 0 | | 0 | | 973 | | 0 |
| Other borrowings | | 50,963 | | 51,263 | | 152,888 | | 153,787 |
| Total interest expense | | 233,277 | | 253,074 | | 701,658 | | 681,880 |
| Net interest income | | 854,027 | | 1,022,467 | | 2,639,085 | | 3,209,364 |
| Provision for loan losses | | 119,724 | | 45,559 | | 398,128 | | 106,203 |
| Net interest income after | | | | | | | | |
| provision for loan losses | | 734,303 | | 976,908 | | 2,240,957 | | 3,103,161 |
| Non-interest income | | | | | | | | |
| Service charges on deposit accounts | | 223,922 | | 223,438 | | 708,745 | | 595,859 |
| Other miscellaneous fee income | | 9,412 | | 9,607 | | 27,131 | | 26,410 |
| Dividend income from restricted stock | | 9,978 | | 7,639 | | 36,461 | | 28,152 |
| Income from bank owned life insurance | | 16,197 | | 15,393 | | 46,916 | | 46,815 |
| Total non-interest income | | 259,509 | | 256,077 | | 819,253 | | 697,236 |
| General and administrative expenses | | | | | | | | |
| Salaries and employee benefits | | 467,413 | | 461,870 | | 1,444,704 | | 1,440,026 |
| Occupancy and equipment | | 95,552 | | 77,122 | | 261,912 | | 257,445 |
| Data and item processing | | 80,659 | | 85,827 | | 245,726 | | 243,934 |
| Advertising and marketing | | 19,889 | | 37,837 | | 60,504 | | 113,208 |
| Legal and professional fees | | 49,142 | | 53,904 | | 144,763 | | 162,064 |
| Regulatory Assessments | | 22,039 | | 22,070 | | 63,337 | | 69,280 |
| Insurance | | 7,898 | | 8,141 | | 23,894 | | 22,686 |
| Directors' fees and expenses | | 19,417 | | 19,382 | | 57,718 | | 59,633 |
| Other expenses | | 127,418 | | 129,638 | | 372,165 | | 448,584 |
| Total general & administrative expenses | | 889,427 | | 895,791 | | 2,674,723 | | 2,816,860 |
| Income before income tax expense | | 104,385 | | 337,194 | | 385,487 | | 983,537 |
| Income tax expense | | 31,731 | | 127,718 | | 124,957 | | 371,071 |
| Total income | | $ 72,654 | | $ 209,476 | | $ 260,530 | | $ 612,466 |
| Basic earnings per share | | $ 0.10 | | $ 0.29 | | $ 0.37 | | $ 0.83 |
| Diluted earnings per share | | $ 0.10 | | $ 0.27 | | $ 0.34 | | $ 0.77 |
| CHINO COMMERCIAL BANCORP |
| Other Financial Information |
| |
| |
| CREDIT QUALITY | | | | End of period | | |
| (unaudited) | | September 30, 2008 | | December 31, 2007 |
| Non-Performing Loans | | $ 461,049 | | $ - |
| Non-Performing Loans to Total Loans | | | | 0.96% | | | | n/a |
| Non-Performing Loans to Total Assets | | | | 0.60% | | | | n/a |
| Allowance for Loan Losses to Loans | | | | 1.38% | | | | 1.36% |
| |
| OTHER PERIOD-END STATISTICS | | | | End of period | | |
| (unaudited) | | September 30, 2008 | | December 31, 2007 |
| Shareholders Equity to Total Assets | | | | 7.74% | | | | 7.36% |
| Loans to Deposit | | | | 70.95% | | | | 75.55% |
| Non-Interest Bearing Deposits to Total Deposits | | | | 51.33% | | | | 60.05% |
| | | For the three months ended | | For the nine months ended |
| | | September 30 | | September 30 |
| | | 2008 | | 2007 | | 2008 | | 2007 |
| |
| KEY FINANCIAL RATIOS | | | | | | | | |
| (unaudited) | | | | | | | | |
| Return on Average Equity | | 5.02% | | 15.89% | | 13.41% | | 31.61% |
| Return on Average Assets | | 0.38% | | 1.00% | | 1.04% | | 2.14% |
| Net Interest Margin | | 5.13% | | 5.51% | | 7.95% | | 5.63% |
| Efficiency Ratio | | 79.87% | | 70.06% | | 77.34% | | 72.11% |
| Net Chargeoffs to Average Loans | | 0.80% | | 0.02% | | 0.63% | | 0.02% |
| |
| AVERAGE BALANCES | | | | | | | | |
| (thousands, unaudited) | | | | | | | | |
| Average Assets | | $ 75,750 | | $ 84,065 | | $ 75,052 | | $ 85,775 |
| Average Interest-Earning Assets | | $ 66,587 | | $ 74,795 | | $ 66,427 | | $ 76,552 |
| Average Gross Loans | | $ 50,226 | | $ 52,182 | | $ 52,583 | | $ 51,289 |
| Average Deposits | | $ 65,839 | | $ 74,337 | | $ 65,213 | | $ 75,692 |
| Average Equity | | $ 5,786 | | $ 5,274 | | $ 5,830 | | $ 5,813 |
