UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934 |
Date of Report (Date of earliest event reported)January 20, 2009
CHINO COMMERCIAL BANCORP
(Exact name of registrant as specified in its charter) |
| CA | | 000-52098 | | 20-4797048 |
| (State of incorporation) | | (Commission File Number) | | (IRS Employer |
| | | | | Identification No.) |
| |
| 14345 Pipeline Avenue | | | | |
| Chino, California | | | | 91710 |
| Address of Principal Executive Offices | | | | Zip Code |
(909) 393-8880
Registrant’s telephone number, including area code |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the follow provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02 Results of Operations and Financial Condition
On January 19, 2008 the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
| Press release dated January 19, 2009 |
| | For Immediate Release
January 19, 2009
OTC BB: “CCBC” |
CHINO COMMERCIAL BANCORP REPORTS YEAR END RESULTS.
Chino, California… The Board of Directors of Chino Commercial Bancorp, the parent company of Chino Commercial Bank NA, announced the results of operations for the Bank and the consolidated holding company for the three and twelve months ended December 31, 2008. For the full year ended December 31, 2008 the company posted a consolidated net income of $308,948 a reduction from net income of $742,609 for 2007. Net income per basic share for the year ended December 31, 2008 was $0.44 as compared to $1.02 per share for the year ended December 31, 2007 or a reduction of 56.9% . Net income per fully diluted share was $0.41 as compared to $0.94 per diluted share for fiscal year 2007.
Net income for the fourth quarter ended December 31, 2008 was $45,936 or $0.06 per diluted share, as compared to $130,144 or $0.17 per diluted share for the fourth quarter of 2007.
Dann H. Bowman, President and Chief Executive Officer stated, “Despite lower net earnings in 2008, we are very pleased with the current condition of the Bank and its prospects for the next year. During 2008 the Bank made significant provisions to Loan Loss Reserve which reduced earnings; however, at year-end the Bank had no delinquent loans, and continues to be in a strong financial condition.
In part, because of the solid financial condition of the Bank and its low number of problem loans, the Board of Directors chose not to apply for Government support through the TARP program. The Bank currently has significant capacity to make new loans and serve the needs of its customers, so taking TARP money would be using taxpayer resources that could be used elsewhere.
Looking forward, we are optimistic about 2009 and beyond. The financial condition of the Bank is strong, and loan quality is good; and we see many opportunities for growth and expansion over the next several years.”
Financial Condition
Total deposits increased by 0.9% to $71.0 million at December 31, 2008 a slight increase from $70.4 million at December 31, 2007. Although we experienced a decrease in core deposits of 3.4%, from $68.2 million at December 31, 2007 to $65.9 million at December 31, 2008, our core deposits to total deposits remains very favorable at 92.9% .
At December 31, 2008, total assets were $83.4 million, a increase of $3.4 million or 4.3% from December 31, 2007.
Gross loans declined to $49.8 million at December 31, 2008 from $53.2 million at December 31, 2007 or a decrease of 6.4%, while total investments increased to $24.5 million from $11.3 million at December 31, 2007, a 116.2% increase.
Earnings
The Company posted net interest income of $3,425,701 for the year ended December 31, 2008 as compared to $4,170,211 for the year ended December 31, 2007. Average interest-earning assets were $68.3 million with average interest-bearing liabilities of $34.0 million yielding a net interest margin of 5.02% for the year ended December 31, 2008 as compared to average interest-bearing assets of $75.4 million with average interest-bearing liabilities of $31.6 million yielding a net interest margin of 5.53% for the year ended December 31, 2007. The 51 basis points decrease in the net interest margin was primarily a result of the higher average balances in interest-bearing liabilities and the effect of downward re-pricing of the benchmark for Federal funds rate and related Prime rate.
The Bank posted net interest income of $799,650 for the three months ended December 31, 2008 as compared to $960,846 for the three months ended December 31, 2007. Average interest-earning assets were $71.4 million with average interest-bearing liabilities of $39.1 million yielding a net interest margin of 4.46% for the fourth quarter of 2008 as compared to average interest-bearing assets of $71.8 million with average interest-bearing liabilities of $34.9 million yielding a net interest margin of 5.31% for the three months ended December 31, 2007.
Non-interest income totaled $1,092,529 or an increase of 16.8% from $935,103 earned during the year ended December 31, 2007. Service charges on deposit accounts increased 18.5% to $950,257 due to higher volume of returned items activity.
Non-interest income for the quarter ended December 31, 2008 totaled $273,276 or a 14.9% increase from the fourth quarter of 2007. Service charges on deposit accounts similarly increased 17.3% to $241,512 due to increased of overdraft and return item charges.
General and administrative expenses were $879,843 for the three months ended December 31, 2008 or a decrease of 2.0% as compared to $897,515 for the three months ended December 31, 2007. General and administrative expenses were $3,573,902 for the year ended December 31, 2008 as compared to $3,714,375 for the year ended December 31, 2007. The largest component of general and administrative expenses was salary and benefits expense which totaled $479,931 for the three months ended December 31, 2008 as compared to $464,190 for the three months ended December 31, 2007. Salary and benefits expense were $1,924,635 for the year ended December 31, 2008 as compared to $1,904,215 for the year ended December 31, 2007. The increase in Salaries and benefits expenses for the year was reflective of salary increases, incentive compensation, and the increase in retirement plan accruals.
The consolidated Company’s income tax expense was $37,149 for the three months ended December 31, 2008 as compared to $97,837 for the three months ended December 31, 2007. Income tax expenses were $163,842 for the year ended December 31, 2008 as compared to $468,909 for the year ended December 31, 2007. The effective income tax rate for 2008 and 2007 was approximately 35% and 39%, respectively.
The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about the Bank’s plans, objectives, management’s expectations, intentions, relationships, opportunities, and technology and market condition statements. When used in these presentations, the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates,” or words of similar meaning, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may” are generally intended to identify forward-looking statements. These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Bank’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements for the reasons, among others, discussed in Bank’s Annual Report on Form 10-KSB for the year ended December 31, 2007, which include: changes in general business and economic conditions may significantly affect the Bank’s earnings; changes i n level of market interest rates; changes in credit risks of lending activities and competitive factors; effective income tax rates, relationships with major customers, extent and timing of legislative and regulatory actions and reforms. The Bank is not obligated to update and does not undertake to update any of its forward-looking statements made herein.
Contact: Dann H. Bowman, President and CEO or Sandra F. Pender, Senior Vice President and CFO, Chino Commercial Bank, N.A., 14345 Pipeline Avenue, Chino, Ca. 91710, (909) 393-8880.
| CHINO COMMERCIAL BANCORP |
| CONSOLIDATED BALANCE SHEET |
| December 31, 2008 and December 31, 2007 |
| |
| | | | December 31, 2008 | | | | December 31, 2007 | |
| | | | (unaudited) | | | | (audited) | |
| ASSETS: | | | | | | | | |
| Cash and due from banks | | $ | 3,877,897 | | | $ | 3,487,933 | |
| Federal funds sold | | | 0 | | | | 7,440,000 | |
| Cash and cash equivalents | | | 3,877,897 | | | | 10,927,933 | |
| |
| Interest-bearing deposits in other banks | | | 12,498,000 | | | | 99,000 | |
| |
| Investment securities available for sale | | | 8,791,651 | | | | 7,339,354 | |
| Investment securities held to maturity (fair value approximates | | | | | | | | |
| $3,186,000 at December 31, 2008 and $3,880,000 at December 31, 2007) | | | 3,167,401 | | | | 3,873,251 | |
| Total investments | | | 24,457,052 | | | | 11,311,605 | |
| Loans | | | | | | | | |
| Construction | | | 820,888 | | | | 2,606,750 | |
| Real estate | | | 38,206,584 | | | | 39,726,301 | |
| Commercial | | | 10,194,759 | | | | 10,062,969 | |
| Installment | | | 543,937 | | | | 790,535 | |
| Gross loans | | | 49,766,168 | | | | 53,186,555 | |
| Unearned fees and discounts | | | (77,542 | ) | | | (87,389 | ) |
| Loans net of unearned fees and discount | | | 49,688,626 | | | | 53,099,166 | |
| Allowance for loan losses | | | (702,409 | ) | | | (725,211 | ) |
| Net loans | | | 48,986,217 | | | | 52,373,955 | |
| |
| Accrued interest receivable | | | 313,428 | | | | 326,990 | |
| Restricted stock | | | 677,650 | | | | 654,250 | |
| Fixed assets, net | | | 1,980,476 | | | | 2,085,203 | |
| Other real estate | | | 653,131 | | | | 0 | |
| Prepaid & other assets | | | 2,447,295 | | | | 2,268,909 | |
| Total assets | | $ | 83,393,146 | | | $ | 79,948,845 | |
| |
| LIABILITIES: | | | | | | | | |
| Deposits | | | | | | | | |
| Non-interest bearing | | $ | 32,600,750 | | | $ | 42,270,696 | |
| Interest Bearing | | | | | | | | |
| NOW and money market | | | 28,434,407 | | | | 22,711,556 | |
| Savings | | | 1,064,668 | | | | 1,202,965 | |
| Time deposits less than $100,000 | | | 3,842,310 | | | | 2,054,915 | |
| Time deposits of $100,000 or greater | | | 5,055,617 | | | | 2,156,778 | |
| Total deposits | | | 70,997,752 | | | | 70,396,910 | |
| |
| |
| Accrued interest payable | | | 56,061 | | | | 63,962 | |
| Borrowings from Federal Home Loan Bank | | | 2,400,000 | | | | 0 | |
| Accrued expenses & other payables | | | 665,580 | | | | 509,389 | |
| Subordinated debentures | | | 3,093,000 | | | | 3,093,000 | |
| Total liabilities | | | 77,212,393 | | | | 74,063,261 | |
| STOCKHOLDERS' EQUITY | | | | | | | | |
| Common stock, authorized 10,000,000 shares with no par value, issued | | | | | | | | |
| and outstanding 708,420 shares and 704,278 shares at December 31, | | | | | | | | |
| 2008 and December 31, 2007, respectively. | | | 2,599,673 | | | | 2,639,462 | |
| Retained earnings | | | 3,552,105 | | | | 3,249,982 | |
| Accumulated other comprehensive loss | | | 28,975 | | | | (3,860 | ) |
| Total equity | | | 6,180,753 | | | | 5,885,584 | |
| Total liabilities & stockholders' equity | | $ | 83,393,146 | | | $ | 79,948,845 | |
| | | | CHINO COMMERCIAL BANCORP |
| | | CONSOLIDATED STATEMENTS OF INCOME |
| | | | (unaudited) |
| |
| | | | For the three months ended | | | For the year ended |
| | | | December 31 | | | December 31 |
| | | | 2008 | | | 2007 | | | 2008 | | | 2007 |
| Interest income | | | | | | | | | | | | |
| Investment securities and due from banks | | $ | 148,104 | | $ | 135,202 | | $ | 489,168 | | $ | 632,016 |
| Interest on Federal funds sold | | | 15,868 | | | 69,497 | | | 82,700 | | | 450,192 |
| Interest and fee income on loans | | | 907,322 | | | 1,050,301 | | | 3,827,135 | | | 4,064,036 |
| Total interest income | | | 1,071,294 | | | 1,255,000 | | | 4,399,003 | | | 5,146,244 |
| Interest expense | | | | | | | | | | | | |
| Deposits | | | 220,527 | | | 242,991 | | | 768,324 | | | 771,083 |
| Interest on Federal funds purchased | | | 89 | | | 0 | | | 1,063 | | | 0 |
| Interest on FHLB borrowings | | | 65 | | | 0 | | | 65 | | | 0 |
| Other borrowings | | | 50,963 | | | 51,163 | | | 203,850 | | | 204,950 |
| Total interest expense | | | 271,644 | | | 294,154 | | | 973,302 | | | 976,033 |
| Net interest income | | | 799,650 | | | 960,846 | | | 3,425,701 | | | 4,170,211 |
| Provision for loan losses | | | 109,998 | | | 73,218 | | | 471,538 | | | 179,421 |
| Net interest income after | | | | | | | | | | | | |
| provision for loan losses | | | 689,652 | | | 887,628 | | | 2,954,163 | | | 3,990,790 |
| Non-interest income | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 241,512 | | | 205,887 | | | 950,257 | | | 801,746 |
| Other miscellaneous fee income | | | 8,843 | | | 7,415 | | | 35,974 | | | 33,824 |
| Dividend income from restricted stock | | | 6,920 | | | 9,105 | | | 43,381 | | | 37,257 |
| Income from bank owned life insurance | | | 16,001 | | | 15,461 | | | 62,917 | | | 62,276 |
| Total non-interest income | | | 273,276 | | | 237,868 | | | 1,092,529 | | | 935,103 |
| General and administrative expenses | | | | | | | | | | | | |
| Salaries and employee benefits | | | 479,931 | | | 464,190 | | | 1,924,635 | | | 1,904,215 |
| Occupancy and equipment | | | 84,070 | | | 82,587 | | | 345,982 | | | 340,032 |
| Data and item processing | | | 77,439 | | | 87,451 | | | 323,164 | | | 331,385 |
| Advertising and marketing | | | 15,778 | | | 39,776 | | | 76,282 | | | 152,984 |
| Legal and professional fees | | | 46,301 | | | 44,954 | | | 191,064 | | | 207,019 |
| Regulatory Assessments | | | 23,609 | | | 22,437 | | | 86,946 | | | 91,717 |
| Insurance | | | 7,746 | | | 8,048 | | | 31,639 | | | 30,734 |
| Directors' fees and expenses | | | 19,657 | | | 19,401 | | | 77,375 | | | 79,034 |
| Other expenses | | | 125,312 | | | 128,671 | | | 516,815 | | | 577,255 |
| Total general & administrative expenses | | | 879,843 | | | 897,515 | | | 3,573,902 | | | 3,714,375 |
| Income before income tax expense | | | 83,085 | | | 227,981 | | | 472,790 | | | 1,211,518 |
| Income tax expense | | | 37,149 | | | 97,837 | | | 163,842 | | | 468,909 |
| Net income | | $ | 45,936 | | $ | 130,144 | | $ | 308,948 | | $ | 742,609 |
| Basic earnings per share | | $ | 0.07 | | $ | 0.18 | | $ | 0.44 | | $ | 1.02 |
| Diluted earnings per share | | $ | 0.06 | | $ | 0.17 | | $ | 0.41 | | $ | 0.94 |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | By:/s/ Sandra F. Pender
Sandra F. Pender
Senior Vice President and Chief Financial Officer |
