CHINO, Calif., July 19, 2004 (PRIMEZONE) -- The Board of Directors of Chino Commercial Bank, N.A. (OTCBB:CKNA) announced the results of operations for the six months ended June 30, 2004 with net income of $255,226, a 4.6% increase over net income for the same period last year. Pre-tax earnings for the six months ended June 30, 2004 were $400,439 a 64.1% increase over the pre-tax earnings for the same period last year. Dann H. Bowman, President and Chief Executive Officer stated, "Effective January 1, 2004, the Bank became fully taxable with a net effective tax rate of 36.2%; even with this expense, the Bank is pleased to report an increase of 4.6% in net income after tax."
Net income per share for the six months ended June 30, 2004 was $0.31 per share as compared to $0.30 per share for the six months ended June 30, 2003. Net income per fully diluted share was $0.29 and $0.29 for the six months ending June 30, 2004 and 2003 respectively. Mr. Bowman stated, "During the second quarter, the Bank completed its first stock split. This was a three-for-two stock split which has been perceived extremely well by the market."
The results of operations for the second quarter of 2004 reflect net income before taxes for the quarter of $212,950, a 66.6% increase over pre-tax, net income of $127,798 for the same quarter last year. Net income for the three months ended June 30, 2004 was $137,471 or $0.17 per share, a 7.6% increase from net income of $127,798 or $0.16 per share for the three months ended June 30, 2003. Net income per fully diluted share was $0.16 and $0.15 for the quarters ending June 30, 2004 and 2003 respectively.
Total Assets increased by 59.5% to $93.5 million from $58.6 million at December 31, 2003. Total Deposits increased 65.0% to $87.6 million at June 30, 2004 as compared to $53.1 million at December 31, 2003. Total Loans increased 9.6% to $29.8 million at June 30, 2004 as compared to $27.2 million at December 31, 2003. On June 30, 2004, the Bank has had no delinquencies greater than 30 days, non-accrual or non-performing loans or other real estate owned.
The increased earnings for the six months ended June 30, 2004 were primarily due to an increase in the net interest margin of $267,211. The Bank posted net interest income of $1,325,971 for the six months ended June 30, 2004 as compared to $1,058,760 for the same period last year. These increases in income were partially offset by an increase in general and administrative expenses of $121,961 resulting from an increase in Salary and benefits expense and Audit and professional fees. The Bank posted net interest income of $700,288 for the three months ended June 30, 2004 as compared to $542,801 for the same quarter last year. These increases in income were partially offset by an increase in general and administrative expenses of $73,981 resulting from increases in salary and benefits expense, marketing, audit and professional fees, and other expenses.
Average interest-earning assets were $60.0 million with average interest-bearing liabilities of $13.0 million yielding a net interest margin of 4.42% for the six months ended June 30, 2004 as compared to average interest-bearing assets of $42.9 million with average interest-bearing liabilities of $11.0 million yielding a net interest margin of 4.94% for the six months ended June 30, 2003. The net interest margin continues to decline as investment securities are repriced in a lower interest rate environment.
Average interest-earning assets were $67.1 million with average interest-bearing liabilities of $13.8 million yielding a net interest margin of 4.17% for the three months ended June 30, 2004 as compared to average interest-bearing assets of $45.2 million with average interest-bearing liabilities of $11.0 million yielding a net interest margin of 4.82% for the three months ended June 30, 2003.
General and administrative expenses were $1,185,130 for the six months ended June 30, 2004 as compared to $1,063,169 for the six months ended June 30, 2003. The largest component of general and administrative expenses was salary and benefits expense of $602,078 for the six months ended June 30, 2004 as compared to $532,455 for the six months ended June 30, 2003. Salary and benefits increased due to higher average full-time equivalent staff, salary increases, accrued incentive compensation, temporary staffing expenses, and higher expenses relating to health insurance and workers' compensation for the six months ended June 30, 2004 as compared to the six months ended June 30, 2003. Also increased were Audit and professional fees expenses, which increased $27,677, and Advertising and marketing expenses, which increased $12,184.
General and administrative expenses were $616,053 for the three months ended June 30, 2004 as compared to $542,072 for the three months ended June 30, 2003. The largest component of general and administrative expenses was salary and benefits expense of $294,264 for the second quarter of 2004 as compared to $275,968 for the second quarter of 2003. Salary and benefits increased due to higher average full-time equivalent staff, salary increases, accrued incentive compensation, temporary staffing expenses, and higher expenses relating to health insurance and workers' compensation for the second quarter of 2004 as compared to second quarter of 2003. Other expenses increased by $21,263 for the comparable three-month period due to primarily to client service charges. Also increased were Audit and professional fees expenses, which increased $16,705, and Advertising and marketing expenses, which increased $8,676.
FORWARD-LOOKING STATEMENTS
The statements contained in this release that are not historical facts are forward-looking statements based upon management's current expectations and beliefs concerning future developments and their potential effect on Chino Commercial Bank. There can be no assurances that future developments affecting Chino Commercial Bank will be the same as those anticipated by management.
Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties. These include, but are not limited to, the following risks; (1) changes in performance of the financial markets; (2) changes in the demand for and market acceptance of Chino Commercial Bank's products and services; (3) changes in general economic conditions including interest rates, presence of competitors with greater financial resources, and the impact of competitive products and pricing; (4) the effect of Chino Commercial Bank's policies; (5) the continued availability of adequate funding sources.
CHINO COMMERCIAL BANK
STATEMENT OF FINANCIAL CONDITION
June 30, December 31,
2004 2003
------------ ------------
(unaudited)
ASSETS:
Cash and Due from Banks $ 3,202,592 3,588,715
Federal Funds Sold 29,920,000 9,350,000
------------ -----------
Cash and Cash
equivalents 33,122,592 12,938,715
Interest-bearing
deposits at banks 6,066,000 2,388,000
Investment Securities
available for sale 16,096,232 9,463,551
Investment Securities held
to maturity (fair value
approximates
$5,562,246 at June 30, 2004
and $5,378,920 at
December 31, 2003) 5,590,962 5,327,521
Federal Reserve Bank stock,
at cost 159,600 154,450
Federal Home Loan Bank
stock, at cost 277,800 168,100
Pacific Coast Bankers'
Bank stock, at cost 50,000 50,000
Loans
Loans held for sale 0 126,558
Construction 1,915,056 468,101
Real estate 21,131,346 19,639,383
Commercial 6,316,926 6,475,819
Farm/Agriculture 353,415 360,269
Installment 585,795 596,534
Unearned fees and
discounts (113,776) (122,260)
Allowance for loan losses (367,828) (351,828)
--------------- --------------
Total Loans 29,820,934 27,192,576
--------------- --------------
Fixed Assets, net 414,299 438,393
Accrued Interest Receivable 244,772 189,574
Prepaid & Other Assets 1,634,788 267,698
--------------- --------------
Total Assets $ 93,477,979 58,578,578
=============== ==============
LIABILITIES:
Deposits
Non-interest Bearing $ 62,478,011 40,769,746
Interest Bearing
Money market & NOW 21,050,803 9,124,289
Savings 702,280 565,012
Time deposits of $100,000
or greater, due in one year 1,702,736 897,603
Time deposits less than
$100,000, due in one year 1,706,220 1,736,483
------------- -------------
Total Deposits 87,640,050 53,093,133
------------- -------------
Accrued Interest Payable 18,593 12,580
Accrued Expenses & Other
Payables 297,454 142,871
-------------- -------------
Total Liabilities 87,956,097 53,248,584
-------------- -------------
STOCKHOLDERS' EQUITY
Common Stock, authorized 10,000,000 shares with a
par value of $3.33 per share; issued and outstanding
818,469 and 818,469 at June 30, 2004
and December 31, 2003,
respectively. 2,728,230 2,728,230
Additional paid-in capital 2,590,600 2,590,893
Retained earnings 286,490 31,264
Accumulated other
comprehensive
loss (83,438) (20,393)
-------------- --------------
Total Equity 5,521,882 5,329,994
-------------- -------------
Total Liabilities & Equity $ 93,477,979 58,578,578
============== ==============
CHINO COMMERCIAL BANK
STATEMENT OF OPERATIONS
(unaudited)
For the three months For the six months
ending June 30, ending June 30,
2004 2003 2004 2003
-------- -------- -------- --------
Interest Income
Interest
Income -
Securities $171,102 165,517 316,712 332,101
Interest
Income -
Fed Funds 41,237 21,344 59,468 32,842
Interest and
fee income
on Loans 529,571 403,420 1,028,410 790,764
-------- ------- --------- ---------
Total Interest Income 741,910 590,281 1,404,590 1,155,707
-------- ------- --------- ---------
Interest Expense
Interest
Expense -
Deposits 41,622 47,480 78,619 96,947
Interest
Expense -
Borrowings -- -- -- --
-------- ------- --------- ---------
Total Interest
Expense 41,622 47,480 78,619 96,947
-------- ------- --------- ---------
Total net interest
income 700,288 542,801 1,325,971 1,058,760
-------- ------- --------- ---------
Provision for
loan losses 16,000 12,000 16,000 50,000
-------- ------- --------- ---------
Total net interest
income after provision
for loan losses 684,288 530,801 1,309,971 1,008,760
-------- ------- --------- ---------
Non-interest income
Service Charges on
Deposit Accounts 96,573 80,193 199,839 151,417
Other miscellaneous
fee income 1,416 1,089 2,834 1,821
Income from Mortgage
Banking 30,416 57,787 45,861 145,066
Income from Bank owned
life insurance 16,310 27,064
-------- ------- --------- ---------
Total Non-interest
income 144,715 139,069 275,598 298,304
-------- ------- --------- ---------
General & Administrative Expenses
Salaries &
Benefits 294,264 275,968 602,078 532,455
Occupancy &
Equipment 64,117 62,109 122,649 123,321
Data & Item
Processing 48,338 41,963 95,009 85,610
Advertising &
Marketing 24,665 15,989 45,053 32,869
Audit & Professional
fees 51,925 35,220 95,066 67,389
Insurance 5,657 4,789 11,312 8,962
Directors' fees and
expenses 15,202 15,412 30,710 29,792
Other expenses 111,885 90,622 183,253 182,771
-------- ------- --------- ---------
Total general &
administrative
expenses 616,053 542,072 1,185,130 1,063,169
-------- ------- --------- ---------
Net income before
income tax expense 212,950 127,798 400,439 243,895
Income tax expense 75,479 -- 145,213 --
-------- ------- --------- ---------
Total income $137,471 127,798 255,226 $243,895
======== ======= ========= =========
Basic Earnings per
share $ 0.17 $ 0.16 $ 0.31 $ 0.30
======== ======= ========= =========
Diluted Earnings per
share $ 0.16 $ 0.15 $ 0.29 $ 0.29
======== ======= ========= =========
CHINO COMMERCIAL BANK
Selected Financial Highlights
For the three months For the six months
ended June 30, ended June 30,
-------------------------------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Selected
Operating Data:
Net interest
income $ 700,288 $ 542,801 $ 1,325,971 $ 1,058,760
Provision for
loan losses 16,000 12,000 16,000 50,000
Non-interest
income 144,715 139,069 275,598 298,304
Non-interest
expense 616,053 542,072 1,185,130 1,063,169
Net income $ 137,471 $ 127,798 $ 255,226 $ 243,895
Share Data:
Basic income
per share $ 0.17 $ 0.16 $ 0.31 $ 0.30
Diluted Income
per share $ 0.16 $ 0.15 $ 0.29 $ 0.29
Weighted average
common shares
outstanding
Basic 818,469 818,469 818,469 818,469
Diluted 881,238 852,201 878,335 846,432
Performance Ratios:
Return on
average
assets 0.75% 1.05% 0.78% 1.06%
Return on
average equity 9.97% 9.95% 9.31% 9.60%
Equity to total
assets at the
end of the
period 5.91% 8.31% 5.91% 8.31%
Net interest
spread 3.20% 3.49% 3.47% 3.62%
Net interest
margin 4.17% 4.82% 4.42% 4.94%
Average
interest-earning
assets to
average-bearing
liabilities 487.15% 411.52% 462.99% 388.45%
Core efficiency
ratio 72.90% 79.47% 73.97% 78.33%
Non-interest
expense to
average assets 3.38% 4.47% 3.63% 4.63%
Selected Balance
Sheet Data: 6/30/2004 12/31/2003
--------- ---------
Total assets $ 93,477,979 $ 58,578,578
Investment
securities
held to
maturity 5,590,962 5,327,521
Investment
securities
available for
sale 16,096,232 9,463,551
Loans
receivable,
net 29,820,934 27,192,576
Deposits 87,640,050 53,093,133
Non-interest
bearing
deposits 62,478,011 40,769,746
Stockholders'
equity $ 5,521,882 $ 5,329,994
Regulatory capital ratios:
Average
equity to
average assets 8.40% 10.26%
Leverage
capital 7.69% 9.48%
Tier I risk
based 13.20% 16.64%
Risk-based
capital 14.07% 17.74%
Asset Quality Ratios:
Allowance for
loan losses
as a percent
of gross loans
receivable 1.21% 1.27%
Net charge-offs
to average
loans -- -0.16%
Non-performing
loans to
total loans n/a n/a
Number of full-
service customer
facilities 1 1