CHINO, Calif., Jan. 26, 2004 (PRIMEZONE) -- The Board of Directors of Chino Commercial Bank, N.A. (OTCBB:CKNA) announced record earnings for the year ending December 31, 2003, of $500,509, or $0.88 per diluted share, an increase of 147% from $202,962 or $0.37 per diluted share for the year ended 2002. Net income for the fourth quarter ended December 31, 2003 was $125,853 or $0.22 per diluted share, a 35% increase compared to $93,332 or $0.17 per diluted share for the fourth quarter of 2002.
Dann H. Bowman, President and Chief Executive Officer stated, "This year has been an excellent year for the Bank in terms of growth in loans, deposits and earnings. The Bank has achieved a return on average equity of 9.66% and a return on average assets of .99% for 2003 and the stock price has increased from $13.00 to $22.25 during 2003. We are very pleased with these achievements and the continued growth and earnings of the Bank, which continue to exceed expectations."
Financial Condition
At December 31, 2003, total assets were $58.6 million, an increase of $16.9 million or 41% from December 31, 2002.
Total loans increased to $27.2 million at December 31, 2003 from $21.9 million at December 31, 2002 or an increase of 24%. The growth was primarily in commercial real estate loans, which continue to increase as the Bank's marketing program focuses on this product. The Bank also reclassified $2.9 million of consumer real estate loans held for sale to held for investment during the fourth quarter of 2003. A mark-to-market adjustment to bring these loans to the lower of cost or market of $66,636 was recorded against earnings during the fourth quarter of 2003.
Total deposits increased by 45% to $53.1 million at December 31, 2003 from $36.5 million at December 31, 2002. Non-interest bearing deposits increased by $15.1 million or 59% since December 31, 2002, and at year end represented 77% of total deposits.
Chino Commercial Bank's risk-based capital ratios were 16.64% for Tier 1 capital, 17.74% for Risk-based capital and 9.48% for Leverage capital on December 31, 2003.
Earnings
The Bank posted net interest income of $2,265,467 for the year ended December 31, 2003 as compared to $1,623,470 for the year ended December 31, 2002. Average interest-earning assets were $47.1 million with average interest-bearing liabilities of $11.8 million yielding a net interest margin of 4.81% for the year ended December 31, 2003 as compared to average interest-bearing assets of $32.2 million with average interest-bearing liabilities of $10.2 million yielding a net interest margin of 5.05% for the year ended December 31, 2002. The 24 basis points decline in the net interest margin was the result of the declining interest rate environment.
The Bank posted net interest income of $611,880 for the three months ended December 31, 2003 as compared to $477,181 for the three months ended December 31, 2002. Average interest-earning assets were $52.4 million with average interest-bearing liabilities of $13.3 million yielding a net interest margin of 4.67% for the fourth quarter of 2003 as compared to average interest-bearing assets of $35.1 million with average interest-bearing liabilities of $11.5 million yielding a net interest margin of 5.44% for the three months ended December 31, 2002.
Non-interest income, excluding gains on securities sold, totaled 478,902 or an decrease of 1% over $485,587 earned during the year ended December 31, 2002. Service charges on deposit accounts increased 41% to $332,859 due to higher volume of deposit accounts. Income from Mortgage Banking decreased by 42% to $142,362 due to the $66,636 mark-to-market adjustment and reduced activity in the refinance market during the second half of 2003. Gains on the sale of securities decreased from $9,958 for the year ended 2002 to zero for the year ended 2003.
The change in Non-interest income, excluding gains on securities sold, totaled $100,120 or 65% less than the fourth quarter of 2002. Service charges on deposit accounts increased 47% to $102,325 due to higher overdraft and return item charges. Income from Mortgage Banking declined by 160% to a loss of $49,699 due to the mark-to-market adjustment recorded during the fourth quarter of 2003 and reduced activity in the refinance market.
General and administrative expenses were $569,642 for the three months ended December 31, 2003 as compared to $487,427 for the three months ended December 31, 2002. General and administrative expenses were $2,198,017 for the year ended December 31, 2003 as compared to $1,784,153 for the year ended December 31, 2002. The largest component of general and administrative expenses was salary and benefits expense of $287,643 for the three months ended December 31, 2003 as compared to $232,207 for the three months ended December 31, 2002. Salary and benefits expense were $1,123,432 for the year ended December 31, 2003 as compared to $820,801 for the year ended December 31, 2002. The increase in Salary and benefits expenses are reflective of the increase in full-time employees, which expanded over the past year from sixteen employees to twenty-one employees. Other components of salary and benefits impacting the increase were incentive compensation and the increase in health and workers compensation expenses. Other components of general and administrative expenses that affected the increase were Audit and Professional fees which increased by $4,468 for the comparable three month period and increased by $27,079 for the comparable twelve month period primarily due to increase of internal operational and information technology audits being conducted in 2003. Other expenses increased by $18,872 for the comparable three month period and increased by $62,921 for the comparable twelve month period due primarily to courier costs and client service charges, that were effected by an increase in escrow deposits, as well as, seminar and training expenses and a $8,000 operating loss recorded during the fourth quarter of 2003.
An Income tax benefit was recorded during the fourth quarter of 2003 for $61,957. This benefit reflects the remaining net operating loss carry-forward tax benefit that the Bank recorded as a deferred asset in the period ending December 31, 2003.
The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about the Bank's plans, objectives, management's expectations, intentions, relationships, opportunities, and technology and market condition statements. When used in these presentations, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "or words of similar meaning, or future or conditional verbs, such as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Bank's control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements for the reasons, among others, discussed in Bank's Annual Report on Form 10-KSB for the year ended December 31, 2002, which include: changes in general business and economic conditions may significantly affect the Bank's earnings; changes in level of market interest rates; changes in credit risks of lending activities and competitive factors; effective income tax rates, relationships with major customers, extent and timing of legislative and regulatory actions and reforms. The Bank is not obligated to update and does not undertake to update any of its forward-looking statements made herein.
CHINO COMMERCIAL BANK
STATEMENT OF FINANCIAL CONDITION
December 31, December 31,
2003 2002
------------ ------------
(unaudited)
ASSETS:
Cash and due from banks $ 3,588,715 1,839,367
Federal Funds sold 9,350,000 2,095,000
------------ ------------
Cash and cash equivalents 12,938,715 3,934,367
Interest-bearing deposits
at banks 2,388,000 1,685,000
Investment Securities available
for sale 9,463,551 10,683,120
Investment Securities held to
maturity (fair value approximates
$5,378,919 at December 31, 2003 and
$2,596,649 at December 31, 2002) 5,327,521 2,517,031
Federal Reserve Bank stock, at cost 154,450 144,700
Federal Home Loan Bank stock, at cost 168,100 113,200
Pacific Coast Bankers' Bank stock,
at cost 50,000 50,000
Loans
Loans held for sale 126,558 4,151,145
Construction 468,101 238,997
Real estate 19,639,383 11,581,157
Commercial 6,475,819 5,272,802
Installment 596,534 470,121
Farm/Agriculture 360,269 373,365
Unearned fees, net (122,260) (20,419)
Allowance for loan losses (351,828) (205,615)
------------ ------------
Loans, net 27,192,576 21,861,553
------------ ------------
Fixed assets, net 438,393 441,866
Accrued interest receivable 189,574 162,861
Prepaid & other assets 267,698 68,667
------------ ------------
Total Assets $ 58,578,578 41,662,365
============ ============
LIABILITIES:
Deposits
Non-interest bearing $ 40,772,019 25,655,491
Interest bearing
Money market 9,069,617 7,407,219
Savings 617,411 432,811
Time deposits of $100,000 or
greater, due in one year 897,603 1,382,281
Time deposits less than
$100,000, due in one year 1,736,483 1,657,526
------------ ------------
Total Deposits 53,093,133 36,535,328
------------ ------------
Accrued interest payable 12,580 19,649
Accrued expenses & other payables 142,871 171,326
------------ ------------
Total Liabilities 53,248,584 36,726,303
------------ ------------
STOCKHOLDERS' EQUITY
Common Stock, authorized
10,000,000 shares with a par value
of $5 per share; issued and
outstanding 545,646 and 545,646 at
December 31, 2003 and December 31,
2002, respectively 2,728,230 2,728,230
Additional paid-in capital 2,590,893 2,590,893
Accumulated earnings (deficit) 31,264 (469,245)
Accumlated other comprehensive
income (20,393) 86,184
------------ ------------
Total Stockholders' Equity 5,329,994 4,936,062
------------ ------------
Total Liabilities & Equity $ 58,578,578 41,662,365
============ ============
CHINO COMMERCIAL BANK
STATEMENT OF OPERATIONS
(unaudited)
For the For the
three months ending twelve months ending
------------------- -----------------------
December 31, December 31,
2003 2002 2003 2002
-------- -------- ---------- ----------
Interest Income
Interest Income
- Securities $143,802 164,743 639,702 695,880
Interest Income
- Fed Funds 21,550 17,273 73,563 49,260
Interest and fee
income on Loans 495,664 353,020 1,743,155 1,106,570
-------- -------- ---------- ----------
Total Interest
Income 661,016 535,036 2,456,420 1,851,710
-------- -------- ---------- ----------
Interest Expense
Interest Expense
- Deposits 49,136 57,855 190,953 210,261
Interest Expense
- Borrowings -- -- -- 17,979
-------- -------- ---------- ----------
Total Interest
Expense 49,136 57,855 190,953 228,240
-------- -------- ---------- ----------
Total net
interest
income 611,880 477,181 2,265,467 1,623,470
-------- -------- ---------- ----------
Provision for
loan losses 32,300 50,500 107,800 131,900
-------- -------- ---------- ----------
Total net interest
income after
provision for
loan losses 579,580 426,681 2,157,667 1,491,570
-------- -------- ---------- ----------
Non-interest income
Service Charges
on Deposit Accounts 102,325 69,547 332,859 235,662
Other miscellaneous
fee income 1,332 1,164 3,681 4,048
Income from
Mortgage Banking (49,699) 83,367 142,362 245,877
Gain on the Sale
of Securities -- -- -- 9,958
-------- -------- ---------- ----------
Total Non-interest
income 53,958 154,078 478,902 495,545
-------- -------- ---------- ----------
General & Administrative
Expenses
Salaries & Benefits 287,643 232,207 1,123,432 820,801
Occupancy & Equipment 61,712 61,640 249,509 239,851
Data & Item Processing 45,118 45,305 175,040 176,656
Advertising &
Marketing 16,230 14,413 63,168 56,217
Audit & Professional
fees 35,953 31,485 139,438 112,359
Insurance 5,655 3,918 19,624 13,384
Other expenses 117,331 98,459 427,806 364,885
-------- -------- ---------- ----------
Total general &
administrative
expenses 569,642 487,427 2,198,017 1,784,153
-------- -------- ---------- ----------
Income tax expense
(benefit) (61,957) -- (61,957) --
-------- -------- ---------- ----------
Total income
(loss) $125,853 $ 93,332 $ 500,509 $ 202,962
======== ======== ========== ==========
Basic Earnings
(loss) per share $ 0.23 $ 0.17 $ 0.92 $ 0.37
======== ======== ========== ==========
Diluted Earnings
(loss) per share $ 0.22 $ 0.17 $ 0.88 $ 0.37
======== ======== ========== ==========
CHINO COMMERCIAL BANK
Selected Financial Highlights
For the three months For the year ended
ended December 31, December 31,
------------------ ---------------------
2003 2002 2003 2002
-------- -------- --------- ---------
Selected Operating Data:
Net interest income $611,880 477,181 2,265,467 1,623,470
Provision for loan losses 32,300 50,500 107,800 131,900
Non-interest income 53,958 154,078 478,902 495,545
Non-interest expense 569,642 487,427 2,198,017 1,784,153
Net income $125,853 93,332 500,509 202,962
Share Data:
Basic income per share $ 0.23 0.17 0.92 0.37
Diluted Income per share $ 0.21 0.17 0.88 0.37
Weighted average common
shares outstanding
Basic 545,646 545,646 545,646 545,646
Diluted 576,581 552,390 568,782 550,643
Performance Ratios:
Return on average assets 0.89% 0.93% 0.99% 0.59%
Return on average equity 9.49% 7.57% 9.66% 4.26%
Equity to total assets
at the end of the period 9.10% 11.85% 9.10% 11.85%
Net interest spread 3.58% 4.11% 3.59% 3.52%
Net interest margin 4.67% 5.44% 4.81% 5.05%
Average interest-earning
assets to average-bearing
liabilities 393.78% 303.89% 400.99% 315.68%
Core efficiency ratio 85.59% 78.42% 80.10% 84.59%
Non-interest expense to
average assets 4.04% 4.84% 4.35% 5.21%
Selected Balance Sheet Data: 12/31/2003 12/31/2002
Total assets $58,578,578 41,662,365
Investment securities held to maturity 5,327,521 2,517,031
Investment securities available for sale 9,463,551 10,683,120
Loan receivable, net 27,192,576 21,861,553
Deposits 53,093,133 36,535,328
Non-interest bearing deposits 40,772,019 25,655,491
Stockholders' equity $ 5,329,994 4,936,062
Regulatory capital ratios:
Average equity to average assets 10.26% 13.92%
Leverage capital 9.48% 12.04%
Tier I risk based 16.64% 19.35%
Risk-based capital 17.74% 20.17%
Asset Quality Ratios:
Allowance for loan losses as a percent
of gross loans receivable 1.27% 1.15%
Net charge-offs to average loans -0.16% 0.02%
Non-performing loans to total loans n/a n/a
Number of full-service customer facilities 1 1