07/24/2020: CHINO COMMERCIAL BANCORP REPORTS SECOND QUARTER EARNINGS

Chino, California, July 17, 2020 – 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, 2020. Net earnings for the second quarter 2020, were $648 thousand, or a decrease of 17.60%, as compared with earnings of $787 thousand for the same quarter last year. The decrease in earnings is primarily attributed to an increase in provision for loan losses due to current economic conditions created by the COVID-19 pandemic. Net earnings per basic and diluted share was $0.29 for the second quarter of 2020, and $0.35 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer, stated: “Despite the turmoil caused by COVID 19, the Bank continues to perform well. During May and June, the Bank made over $33 million in loans to its small business customers, helping them to weather the economic down-turn and remain in business. In addition, the Bank granted across the board, loan payment deferments for three months to its borrowers, providing additional cash relief. Many of the loans provided were SBA PPP loans, which may qualify for debt forgiveness in the future.

We believe that during tough times like these, the Bank’s value proposition stands out the most. Values such as being responsive to our customers, returning phone calls and taking the time to understand each unique situation, make a difference. We have a great team, a great market, and we are excited about the prospects for the Company over the next several years.”

Financial Condition

At June 30, 2020, total assets were $304 million, an increase of $74.5 million or 32.5% over
$229.5 million at December 31, 2019. Total deposits increased by 35% or $63 million to $243 million as of June 30, 2020, compared to $180 million as of December 31, 2018. At June 30, 2020, the Company’s core deposits represent 96.4% of the total deposits.

Gross loans increased by 29.8% or $42.9 million as of June 30, 2020 to $145.6 million, as compared with $144.3 million as of December 31, 2019. The Bank had one non-performing loan for the quarters ended June 30, 2020, and December 31, 2019. OREO properties remained at zero as of June 30, 2020 and December 31, 2019 respectively.

The increases in total assets, deposits and loans are attributed to Bank’s response to the overwhelming request of PPP loans. Overall, the Bank approved and funded 389 PPP loans totaling
$49.7 million as of June 30, 2020.

Earnings

The Company posted net interest income of $2.3 million for the three months ended June 30, 2020 and $2.1 million for the same quarter last year. Average interest-earning assets were $226 million with average interest-bearing liabilities of $123.7 million, yielding a net interest margin of 4.03% for the second quarter of 2020, as compared to the average interest-earning assets of $188.8 million with average interest-bearing liabilities of $107.6 million, yielding a net interest margin of 4.39% for the second quarter of 2019.

Non-interest income totaled $357.8 thousand for the second quarter of 2020, or a decrease of 36.8 % as compared with $566.3 thousand earned during the same quarter last year. The majority of the decrease is attribute to a significant decrease in overdraft fees.

General and administrative expenses were $1.6 million for the three months ended June 30, 2020, and for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1 million for the second quarter of 2020 and 2019, respectively.

Income tax expense was $268 thousand which represents a decrease of $12 thousand or 4.41% for the three months ended June 30, 2020, as compared to $280 thousand for the three months ended June 30, 2019. The effective income tax rate for the second quarter of 2020 and 2019 were approximately 29.3% and 26.3% respectively, and for the six months ending June 30, 2020 and 2019, the effective income tax rates were 28.9% and 27.4% 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