OREANDA-NEWS. 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, 2016 with net earnings of $371,840, or an increase of 5.2%, compared with net income of $353,552 for the same quarter last year. Net income per basic share for the second quarter of 2016 was $0.30 as compared to $0.29 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer, stated, “The second quarter of 2016 marks a new record for the Company with total Deposits, total Loans and total Revenue all reaching new highs.  The competitive market for the Bank is very good and as the economy in Southern California continues to improve we are optimistic regarding the potential for further expansion in our markets. 

Financial Condition

At June 30, 2016, total assets were $178.6 million, an increase of $17.2 million or 10.6% over $161.4 million at December 31, 2015.  Total deposits increased by 8.7% or $11.3 million during the year  to $141.6 million, compared to $130.3 million as of December 31, 2015. At June 30, 2016, the Company’s core deposits represent 95.4% of the total deposits.

Gross loans increased by 10.4% or $9.7 million as of June 30, 2016 to $103.0 million as compared with $93.2 million as of December 31, 2015.  The Bank’s loan quality remained consistent during the second quarter as nonperforming assets and OREO were both at zero as of June 30, 2016, and December 31, 2015, respectively.

Earnings

The Company posted net interest income of $1,460,731 and $1,247,489 for the three months ended June 30, 2016 and 2015, respectively, or an increase of $213,242 or 17.1%. Average interest-earning assets were $149.6 million with average interest-bearing liabilities of $77.7 million, yielding a net interest margin of 3.93% for the second quarter of 2016; as compared to the average interest-earning assets of $131.5 million with average interest-bearing liabilities of $67.8 million, yielding a net interest margin of 3.85% for the second quarter of 2015.

Non-interest income totaled $427,800 for the second quarter of 2016, or an increase of 9.8% as compared with $389,686 earned during the same quarter last year. Service charges on deposit accounts decreased 10.8% to $268,928 due to a decrease in income from returned items and overdraft charges. Dividend income from restricted stock decreased to $37,962 for the second quarter of 2016, compared to $43,105 for the same quarter in 2015 due to special dividend payout during the second quarter of 2015 from the Federal Home Loan Bank.  Income from bank-owned life insurance remained consistent at $25,597 in the second quarter of 2016 and $25,525 in the second quarter of 2015.

General and administrative expenses were $1,147,630 for the three months ended June 30, 2016, as compared to $1,061,226 for the second quarter of 2015. The largest component of general and administrative expenses was salary and benefits expense of $706,355 for the second quarter of 2016, as compared to $650,690 for the same quarter last year.  Regulatory assessments increased to $36,539 in the second quarter of 2016 in comparison with $30,683 in the second quarter of 2015.  Advertising and marketing expenses increased 18.1% to $17,426 in the second quarter of 2016 from $14,757 for the same period last year.

Income tax expense was $237,697 for the three months ended June 30, 2016 as compared to $220,057 for the three months ended June 30, 2015. The effective income tax rate for the second quarter of 2016 and 2015 is approximately 39.0% and 38.4%, respectively.

CHINO COMMERCIAL BANCORP  
CONSOLIDATED BALANCE SHEET  
June 30, 2016 and December 31, 2015  
   
  June 30, 2016   December 31, 2015  
  (unaudited)   (audited)  
ASSETS:        
Cash and due from banks $   34,165,233     $   24,898,140    
Total cash and cash equivalents   34,165,233       24,898,140    
         
Interest-bearing deposits in other banks   4,216,000         4,960,000    
Investment securities available for sale   4,728,757       4,931,068    
Investment securities held to maturity (fair value approximates        
$22,597,000 at June 30, 2016 and $23,115,000 at December 31, 2015)   22,225,641       23,100,106    
Total investments   31,170,398       32,991,174    
Loans        
Real estate   83,972,643       72,756,410    
Commercial   18,509,423       20,053,905    
Installment   488,381       433,764    
Gross loans   102,970,447       93,244,079    
Unearned fees and discounts   (353,575 )     (251,911 )  
Loans net of unearned fees and discount   102,616,872       92,992,168    
Allowance for loan losses   (1,749,671 )     (1,667,204 )  
 Net loans   100,867,201       91,324,964    
         
Fixed assets, net   5,913,364       6,021,446    
Accrued interest receivable   278,256       395,685    
Stock investments, restricted, at cost   1,766,500       1,766,500    
Bank-owned life insurance   3,234,415       3,183,247    
Other assets   1,173,816       803,048    
Total assets $   178,569,183     $   161,384,204    
         
LIABILITIES:        
Deposits        
Non-interest bearing  $   84,690,309     $   74,431,378    
Interest bearing        
NOW and money market   42,078,516       40,980,418    
Savings   4,840,621       4,815,198    
Time deposits less than $250,000   3,516,649       3,913,644    
Time deposits of $250,000 or greater   6,511,429       6,208,083    
Total deposits   141,637,524       130,348,721    
         
Accrued interest payable   25,593       25,229    
Borrowings from Federal Home Loan Bank (FHLB)     20,000,000         15,000,000    
Accrued expenses & other payables   934,095       843,691    
Subordinated notes payable to subsidiary trust   3,093,000       3,093,000    
Total liabilities   165,690,212       149,310,641    
         
SHAREHOLDERS' EQUITY        
Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 1,231,332 shares at June 30, 2016 and December 31, 2015, respectively.   6,089,466       6,089,466    
Retained earnings   6,758,873       6,000,577    
Accumulated other comprehensive income/(loss)   30,632       (16,480 )  
Total shareholders' equity   12,878,971       12,073,563    
Total liabilities & shareholders' equity $   178,569,183     $   161,384,204    
         
CHINO COMMERCIAL BANCORP  
CONSOLIDATED STATEMENTS OF NET INCOME  
(unaudited)  
   
  For the three months ended   For the year ended  
  June 30   June 30  
    2016       2015       2016       2015    
Interest income                
Interest and fee income on loans  $   1,382,543     $   1,202,183     $   2,692,647     $   2,387,628    
Interest on federal funds sold and FRB deposits     26,703         10,102         53,036         11,214    
Interest on time deposits in banks     9,929         22,994         20,379         53,189    
Interest on investment securities     140,819         89,933         288,658         170,579    
Total interest income   1,559,994       1,325,212       3,054,720       2,622,610    
                 
Interest Expense                
Interest on deposits   65,082       57,621       125,430       113,439    
Other borrowings   34,181       20,102       68,432       36,470    
Total interest expense   99,263       77,723       193,862       149,909    
Net interest income   1,460,731       1,247,489       2,860,858       2,472,701    
Provision for loan losses   131,364       2,340       131,364       3,798    
                 
Net interest income after provision for loan losses   1,329,367       1,245,149       2,729,494       2,468,903    
                 
Non-interest income                
Service charges on deposit accounts   268,928       301,395       546,801       607,397    
Other miscellaneous income   95,313       19,661       117,946       38,535    
Dividend income from restricted stock   37,962       43,105       72,843       61,479    
Income from bank-owned life insurance   25,597       25,525       51,168       50,943    
Total non-interest income   427,800       389,686       788,758       758,354    
                 
Non-interest expenses                
Salaries and employee benefits   706,355       650,690       1,387,244       1,314,229    
Occupancy and equipment   99,125       99,280       202,953       202,281    
Data and item processing   95,226       96,081       189,667       189,419    
Advertising and marketing   17,426       14,757       34,542       26,285    
Legal and professional fees   40,101       37,390       87,531       82,626    
Regulatory assessments   36,539       30,683       66,850       61,202    
Insurance   8,539       8,471       17,010       16,336    
Directors' fees and expenses   27,129       27,663       53,839       54,080    
Other expenses   117,190       96,211       226,211       190,547    
Total non-interest expenses   1,147,630       1,061,226       2,265,847       2,137,005    
Income before income tax expense   609,537       573,609       1,252,405       1,090,252    
Income tax expense   237,697       220,057       488,991       417,831    
Net income $   371,840     $   353,552     $   763,414     $   672,421    
                 
Basic earnings per share  $   0.30     $   0.29     $   0.62     $   0.55    
Diluted earnings per share  $   0.30     $   0.29     $   0.62     $   0.55    
                 
    For the three months ended   For the year ended  
    June 30   June 30  
      2016       2015       2016       2015    
KEY FINANCIAL RATIOS                  
(unaudited)                  
Annualized return on average equity     11.70 %     12.64 %     24.40 %     24.04 %  
Annualized return on average assets     0.90 %     0.97 %     1.86 %     1.93 %  
Net interest margin     3.93 %     3.85 %     7.77 %     7.99 %  
Core efficiency ratio     60.77 %     64.82 %     62.08 %     66.14 %  
Net chargeoffs/(recoveries) to average loans     0.06 %     -0.01 %     0.05 %     -0.02 %  
                   
AVERAGE BALANCES                  
(thousands, unaudited)                  
Average assets   $   165,504     $   145,442     $   163,906     $   139,180    
Average interest-earning assets   $   149,635     $   131,473     $   148,096     $   125,516    
Average gross loans   $   98,736     $   87,189     $   96,382     $   86,865    
Average deposits   $   132,349     $   119,383     $   131,014     $   116,207    
Average equity   $   12,717     $   11,321     $   12,516     $   11,190    
                   
                   
                   
CREDIT QUALITY   End of period          
(unaudited)   June 30, 2016   December 31, 2015          
                   
Non-performing loans   $   -     $   -            
                   
Non-performing loans to total loans     0.00 %     0.00 %          
Non-performing loans to total assets     0.00 %     0.00 %          
Allowance for loan losses to total loans     1.70 %     1.79 %          
Nonperforming assets as a percentage of total loans and OREO     0.00 %     0.00 %          
Allowance for loan losses to non-performing loans     n/a       n/a            
                           
OTHER PERIOD-END STATISTICS                          
(unaudited)                          
Shareholders equity to total assets     7.21 %     7.48 %          
Net Loans to deposits     71.22 %     70.06 %          
Non-interest bearing deposits to total deposits     59.79 %     57.10 %          
Total capital to total risk-weighted assets     15.43 %     16.15 %          
Tier 1 capital to total risk-weighted assets     15.23 %     15.82 %          
Tier 1 leverage ratio     10.34 %     9.79 %          
Common equity tier 1     15.23 %     15.82 %