10/18/2019: 25.5% YTD INCREASE IN NET EARNINGS

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 third quarter ended September 30, 2019, with net earnings of $640 thousand, or an increase of 7.5%, compared with net income of $595 thousand for the same quarter last year. Year to date net earnings were $2.1 million, or an increase of 25.5%, compared with net income of $1.6 million for the period ending September 30, 2018. Net income per basic and diluted share was $0.29 for the third quarter of 2019 and $0.27 for the same quarter 2018, respectively.

Dann H. Bowman, President and Chief Executive Officer, stated, “The Bank’s operating performance in the third quarter and year-to-date has been very strong. Credit quality remains solid with the Bank having no credit losses over the first three quarters of this year, and no foreclosed properties.

Economic conditions in the Inland Empire continue to improve and the business climate is very good. With the Bank’s strong balance sheet, we have the capacity to expand our lending within the community and continue to grow the organization.”

Financial Condition

At September 30, 2019, total assets were $235.5 million, an increase of $33.5 million or 16.6% over $201.9 million at December 31, 2018. Total deposits increased by 9.2% or $15.8 million during the third quarter to $186.8 million, compared to $171.0 million as of December 31, 2018. At September 30, 2019, the Company’s core deposits represent 94.5% of the total deposits.

Gross loans decreased by 1.1% or $1.4 million as of September 30, 2019 to $130.7 million, as compared with $132.2 million as of December 31, 2018, as a result of an unexpected increase in prepayments received during the third quarter. The Bank had one nonperforming loan for the quarter ended September 30, 2019, and none as of December 31, 2018, respectively. OREO properties remained at zero as of September 30, 2019 and December 31, 2018, respectively.

Earnings

The Company posted net interest income of $2.1 million and $1.8 million for the three months ended September 30, 2019 and 2018, respectively, or an increase of $241 thousand or 13.0%. Average interest- earning assets were $179.2 million with average interest-bearing liabilities of $116.1 million, yielding a net interest margin of 4.63% for the third quarter of 2019, as compared to the average interest-earning assets of $180.8 million with average interest-bearing liabilities of $95.0 million, yielding a net interest margin of 4.06% for the third quarter of 2018.

Non-interest income totaled $472.5 thousand for the third quarter of 2019, or an increase of 24.2% as compared with $380.6 thousand earned during the same quarter last year. Service charges on deposit accounts, the largest component of non-interest income, increased by $79.8 thousand or 25.4% to $314 thousand, primarily due to an increase in income from returned items, overdraft charges, and analysis fees.

General and administrative expenses were $1.7 million for the three months ended September 30, 2019, and $1.4 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $969 thousand for the third quarter of 2019, as compared to $863 thousand for the same quarter last year. Occupancy and equipment expenses increased by $27 thousand or 21% to $159 thousand in the third quarter of 2019 from $131 thousand for the same period last year. The increase in occupancy and equipment is mostly attributed to opening the Upland branch in the fourth quarter of 2018.

Income tax expense was $256 thousand which represents an increase of $17 thousand or 7% for the three months ended September 30, 2019 as compared to $239 thousand for the three months ended September 30, 2018. The effective income tax rate for the third quarters of 2019 and 2018 is approximately 28.5% and 28.6%, 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, customer 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.
Contact: Dann H. Bowman, President and CEO or Melinda M. Milincu, Vice President and CFO, Chino Commercial Bancorp and Chino Commercial Bank, N.A., 14245 Pipeline Avenue, Chino, Ca. 91710, (909) 393-8880.

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At Chino Commercial Bank, we take pride in knowing our customers personally, and their businesses closely. Our service is always one-on-one and never "one size fits all". If you are looking for a long-term relationship you can count on, look to Chino Commercial Bank.

- Dann H. Bowman, President & CEO