01/18/2019: 42% INCREASE IN FULL YEAR EARNINGS

42% INCREASE IN FULL YEAR EARNINGS

 Chino, California, January 18, 2019 – 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 fourth quarter and year ended December 31, 2018. Net earnings for the fourth quarter 2018, were $595 thousand, or an increase of 112%, as compared with earnings of $280 thousand for the same quarter last year. A significant portion of the increase in net income for the fourth quarter 2018 as compared with the same quarter 2017 was attributable to a one-time deferred tax adjustment in December 2017 which did not reoccur in 2018. Net earnings for the fiscal year ended December 31, 2018 increased by 42% or by $660 thousand to $2.2 million, as compared to $1.6 million for fiscal year 2017.

Net earnings per basic and diluted share was $0.32 for the fourth quarter of 2018 as compared with $0.15 for the same quarter last year. Net earnings per basic and diluted share was $1.20 for the year ended December 31, 2018, as compared with $0.84 as December 31, 2017, respectively.

Dann H. Bowman, President and Chief Executive Officer, stated, “The Company’s performance in 2018 was very strong, with the Bank reaching record levels of Deposits, Loans, Revenue and Net Earnings. Loan quality also remains very strong, with the Bank having no delinquent loans at year-end. In October the Bank opened its fourth location in Upland, at 300 N. Mountain Ave. We are very excited to have this new location and the acceptance from the community has been very positive.”

Financial Condition

At December 31, 2018, total assets were $202 million, an increase of $9 million or 5% over $193 million at December 31, 2017. Total deposits increased by 15% or $22 million to $171 million as of December 31, 2018, compared to $149 million as of December 31, 2017. At December 31, 2018, the Company’s core deposits represent 97% of the total deposits.

Gross loans increased by 8% or $10 million as of December 31, 2018 to $132 million, as compared with $123 million as of December 31, 2017. The Bank had no non-performing loans for the quarters ended December 31, 2018, and December 31, 2017 respectively. OREO properties remained at zero as of December 31, 2018 and December 31, 2017 respectively.

Earnings

For the year ended December 31, 2018, net interest income was $7.3 million, an increase of 15.3% or $974 thousand in comparison to $6.4 million as of December 31, 2017. The Company posted net interest income of $1.9 million and $1.6 million for the three months ended December 31, 2018 and 2017 respectively, or an increase of $291.7 thousand or 17.8%. Average interest-earning assets were $181.8 million with average interest-bearing liabilities of $91.5 million, yielding a net interest margin of 4.21% for the fourth quarter of 2018, as compared to the average interest-earning assets of $179.4 million with average interest-bearing liabilities of $101.0 million, yielding a net interest margin of 3.62% for the fourth quarter of 2017.

For the year ended December 31, 2018, non-interest income was $1.6 million, an increase of 2.2% or $33 thousand in comparison to $1.5 million as of December 31, 2017. Non-interest income totaled $424 thousand for the fourth quarter of 2018, or an increase of 14% as compared with $372 thousand earned during the same quarter last year. Service charges on deposit accounts increased over the fourth quarter by $58.5 thousand or 20.6% to $343 thousand, primarily due to an increase in income from returned items, overdraft charges, and analysis fees. Dividend income from restricted stock decreased to $35 thousand for the fourth quarter of 2018, compared to $41 thousand for the same quarter in 2017, due to the Federal Home Loan Bank change in dividend payout percentage policy. Income from Bank-owned life insurance remained consistent at about $25 thousand in the fourth quarter of 2018 and 2017 respectively.

For the year ended December 31, 2018, general and administrative expenses were $5.6 million, an increase of 13.4% or $662 thousand in comparison to $5.0 million as of December 31, 2017. General and administrative expenses were $1.5 million for the three months ended December 31, 2018, and $1.3 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $973 thousand for the fourth quarter of 2018, as compared to $803 thousand for the same quarter last year and $3.6 million and $3.1 million for the years ended December 2018 and 2017 respectively. Occupancy and equipment increase by $44.7 thousand due to the opening of our new branch in Upland during the fourth quarter of 2018.

For the year ended December 31, 2018, income tax expense was $893 thousand, a decrease of 22.2% or $255 thousand in comparison to $1.1 million as of December 31, 2017. Income tax expense was $239 thousand which represents a decrease of $68 thousand or 22.3% for the three months ended December 31, 2018, as compared to $307.3 thousand for the three months ended December 31, 2017. The effective income tax rate for the fourth quarter of 2018 and 2017 is approximately 28.6% and 52.3% respectively, and for the year ending December 31, 2018 and 2017, the effective income tax rates were 28.6% and 42.2% respectively. The decrease in the income tax expense, as well as the effective tax rate, are entirely attributed to the new Tax Reform Act signed into law in December 2017.

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.