10/07/2021: CHINO COMMERCIAL BANCORP REPORTS 34% INCREASE IN NET EARNINGS

CHINO COMMERCIAL BANCORP REPORTS 34% INCREASE IN NET EARNINGS

Chino, California, July 16, 2021 – 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 second quarter ended June 30, 2021. Net earnings for the second quarter 2021, were $867 thousand, or an increase of 33.8%, as compared with earnings of $648 thousand for the same quarter last year. The increase in earnings is primarily attributed to the increase in loan interest and loan fee income. Net earnings per basic and diluted share was $0.32 for the second quarter of 2021, and $0.24 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer, stated, “The second quarter of 2021 marks continued improvement for the Company, with total Deposits, and Earnings reaching new record levels. The competitive market for the Bank is very strong, and as the economy of Southern California returns to pre-pandemic levels, we see even more opportunities in the future. We are also pleased to report that loan quality remains very strong, with the Bank having no delinquent loans at quarter-end, no pending foreclosures, and no OREO. Despite the challenges of the last year, we are optimistic about the opportunities for growth and expansion in the future”

Financial Condition

At June 30, 2021, total assets were $353.3 million, an increase of $38.5 million or 12.2% over $314.8 million at December 31, 2020. Total deposits increased by 14.4% or $37.2 million to $294.9 million as of June 30, 2021, compared to $257.7 million as of December 31, 2020. At June 30, 2021, the Company’s core deposits represent 97.5% of the total deposits.

Gross loans decreased by 1.7 % or $3.3 million as of June 30, 2021 to $192.4 million, as compared with $195.7 million as of December 31, 2020, primarily due to pay downs on loans made under the Payroll Protection Program. The Bank had one non-performing loan for the quarters ended June 30, 2021, and December 31, 2020. OREO properties remained at zero as of June 30, 2021 and December 31, 2020 respectively.

Much of the increases in total assets and deposits over the last 14 months is attributable to the Bank’s response to the overwhelming demand for SBA PPP loans to small businesses. Overall, since the program started the Bank approved and funded 688 PPP loans with an outstanding balance of $45.9 million as of June 30, 2021, a decrease of 21.1% or $12.3 million as compared $58.2 million outstanding as of March 31, 2021.

The Company issued a 20% stock dividend on July 6, 2021 to shareholders of record as of June 17, 2021. This dividend increased the number of shares outstanding by 445,991 bringing the total shares outstanding to 2,676,799.

On May 21, 2021, the Company completed a $10 million subordinated note offering. The Notes have a maturity date of June 1, 2031 and carry a fixed rate of interest of 4.250% for the first five years. Thereafter, the Notes will pay interest at 3-month SOFR plus 356 basis points, resetting quarterly. The Notes include a right of prepayment without penalty on or after June 1, 2026. The Notes have been structured to qualify as Tier 2 capital for regulatory purposes.

Earnings

The Company posted net interest income of $2.6 million for the three months ended June 30, 2021 and $2.3 million for the same quarter last year. Average interest-earning assets were $325,987 million with average interest-bearing liabilities of $143.8 million, yielding a net interest margin of 3.17% for the second quarter of 2021, as compared to the average interest-earning assets of $225.9 million with average interest-bearing liabilities of $123.7 million, yielding a net interest margin of 4.03% for the second quarter of 2020.

Non-interest income totaled $526.3 thousand for the second quarter of 2021, or an increase of 47.1% as compared with $357.8 thousand earned during the same quarter last year. The majority of the increase is attribute to increases to income on deposit accounts and other fees.

General and administrative expenses were $1.7 million for the three months ended June 30, 2021, and $1.6 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1.0 million for the second quarter of 2021 and $971 thousand for the same period last year.
Income tax expense was $341.7 thousand which represents an increase of $73 thousand or 27.3% for the three months ended June 30, 2021, as compared to $268.5 thousand for the three months ended June 30, 2020. The effective income tax rate for the second quarter of 2021 and 2020 were approximately 28.3% and 29.3% 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.

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