CHINO, Calif., Oct. 20, 2003 (PRIMEZONE) -- The Board of Directors of Chino Commercial Bank, N.A. announced record earnings for the first nine months ended September 30, 2003, of $374,656, or $0.66 per diluted share, an increase of 241% from $109,630 or $0.20 per diluted share for the same period last year. Net income for the third quarter ended September 30, 2003 was $130,761 or $0.23 per diluted share, a 108% increase compared to $62,990 or $0.11 per diluted share for the third quarter of 2002.
Dann H. Bowman, President and Chief Executive Officer stated, "We are very pleased with the growth and earnings of the Bank, which continue to exceed expectations; and with the overwhelming response by customers and the community which have made the growth possible."
Financial Condition
At September 30, 2003, total assets were $59.6 million, an increase of $17.9 million or 43% from December 31, 2002.
Total loans increased to $26.7 million at September 30, 2003 from $21.9 million at December 31, 2002 or 22% increase and were up from $24.7 million at June 30, 2003. The growth was primarily in commercial real estate loans, which continue to increase as the Bank's marketing program focuses on this product.
Total deposits increased by 48% to $54.2 million at September 30, 2003 from $36.5 million at December 31, 2002. Non-interest bearing deposits increased by $17.3 million or 67% since December 31, 2002, and at quarter end represented 79% of total deposits.
Chino Commercial Bank's risk-based capital ratios were 16.52% for Tier 1 capital, 17.53% for Risk-based capital and 9.70% for Leverage capital on September 30, 2003.
Earnings
The Bank posted net interest income of $1,653,587 for the nine months ended September 30, 2003 as compared to $1,146,289 for the nine months ended September 30, 2002. Average interest-earning assets were $45.3 million with average interest-bearing liabilities of $11.2 million yielding a net interest margin of 4.88% for the nine months ended September 30, 2003 as compared to average interest-bearing assets of $29.7 million with average interest-bearing liabilities of $9.7 million yielding a net interest margin of 5.16% for the nine months ended September 30, 2002. The 28 basis points decline in the net interest margin was the result of the declining interest rate environment.
The Bank posted net interest income of $594,827 for the three months ended September 30, 2003 as compared to $438,873 for the three months ended September 30, 2002. Average interest-earning assets were $50.3 million with average interest-bearing liabilities of $11.6 million yielding a net interest margin of 4.74% for the third quarter of 2003 as compared to average interest-bearing assets of $32.7 million with average interest-bearing liabilities of $10.2 million yielding a net interest margin of 5.36% for the three months ended September 30, 2002.
Non-interest income, excluding gains on securities sold, totaled $424,944 or an increase of 28% over $331,509 earned during the first nine months of 2002. Service charges on deposit accounts increased 39% to $230,534 due to higher volume of deposit accounts. Income from Mortgage Banking increased by 18% to $192,061 due to the active refinance market. Gains on the sale of securities decreased from $9,958 in the nine months ended September 30, 2002 to zero in the same period in 2003.
The change in Non-interest income, excluding gains on securities sold, totaled $6,453 or 5% less than the third quarter of 2002. Service charges on deposit accounts increased 20% to $79,117 due to higher overdraft and return item charges. Income from Mortgage Banking declined by 30% to $46,995 primarily due to a slowdown in the refinance market during the third quarter of 2003. Gains on the sale of securities decreased from $9,958 in the third quarter 2002 to zero in the same period in 2003.
General and administrative expenses were $565,206 for the three months ended September 30, 2003 as compared to $472,934 for the three months ended September 30, 2002. General and administrative expenses were $1,628,375 for the nine months ended September 30, 2003 as compared to $1,296,726 for the nine months ended September 30, 2002. The largest component of general and administrative expenses was salary and benefits expense of $303,334 for the three months ended September 30, 2003 as compared to $222,292 for the three months ended September 30, 2002. Salary and benefits expense were $835,789 for the nine months ended September 30, 2003 as compared to $588,594 for the nine months ended September 30, 2002. The increase in Salary and benefits expenses is 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 $8,601 for the comparable three-month period and increased by $22,611 for the comparable nine-month period primarily due to increase of internal operational and information technology audits being conducted in 2003.
Other expenses increased by $33,532 for the comparable nine-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.
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
September 30, December 31,
2003 2002
------------- -------------
(unaudited)
ASSETS:
Cash and Due from Banks $ 5,863,235 1,839,367
Federal Funds Sold 9,235,000 2,095,000
------------- -------------
Cash and Cash
equivalents 15,098,235 3,934,367
Interest-bearing
deposits at banks 2,289,000 1,685,000
Investment Securities
available for sale 8,633,046 10,683,120
Investment Securities
held to maturity
(fair value
approximates
$5,858,106 at
September 30, 2003 and
$2,590,224 at
December 31, 2002) 5,816,787 2,517,031
Federal Reserve Bank
stock, at cost 154,450 144,700
Federal Home Loan Bank
stock, at cost 166,400 113,200
Pacific Coast Bankers'
Bank stock, at cost 50,000 50,000
Loans
Loans held for sale 5,494,206 4,151,145
Construction 420,681 238,997
Real estate 14,969,813 11,581,157
Commercial 5,210,072 5,272,802
Farm/Agriculture 363,630 373,365
Installment 619,853 470,121
Unearned fees and
discounts (59,674) (20,419)
Allowance for loan
losses (319,529) (205,615)
------------- -------------
Total Loans 26,699,052 21,861,553
------------- -------------
Fixed Assets, net 438,317 441,866
Accrued Interest
Receivable 191,522 162,861
Prepaid & Other Assets 76,469 68,667
------------- -------------
Total Assets $ 59,613,278 41,662,365
============= =============
LIABILITIES:
Deposits
Non-interest Bearing $ 42,936,113 25,655,491
Interest Bearing
Money market & NOW 7,593,810 7,407,219
Savings 606,040 432,811
Time deposits of
$100,000 or greater,
due in one year 1,548,590 1,382,281
Time deposits less
than $100,000,
due in one year 1,506,943 1,657,526
------------- -------------
Total Deposits 54,191,496 36,535,328
------------- -------------
Accrued Interest Payable 15,980 19,649
Accrued Expenses &
Other Payables 200,047 171,326
------------- -------------
Total Liabilities 54,407,523 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 shares at
September 30, 2003
and December 31, 2002,
respectively. 2,728,230 2,728,230
Additional paid-in
capital 2,590,893 2,590,893
Accumulated deficit (94,589) (469,245)
Accumulated other
comprehensive income
(loss) (18,779) 86,184
------------- -------------
Total Equity 5,205,755 4,936,062
------------- -------------
Total Liabilities
& Equity $ 59,613,278 41,662,365
============= =============
CHINO COMMERCIAL BANK
Selected Financial Highlights
For the three months For the nine months
ended September 30, ended September 30,
-----------------------------------------------------
2003 2002 2003 2002
---------- ------------ -------------- ------------
Selected
Operating Data:
Net interest
income $594,827 438,873 1,653,587 1,146,289
Provision for
loan losses 25,500 46,000 75,500 81,400
Non-interest
income 126,640 143,051 424,944 341,467
Non-interest
expense 565,206 472,934 1,628,375 1,296,726
Net income $130,761 $ 62,990 374,656 109,630
Share Data:
Basic income
per share $ 0.24 0.12 0.69 0.20
Diluted Income
per share $ 0.23 0.11 0.66 0.20
Weighted
average
common shares
outstanding
Basic 545,646 545,646 545,646 545,646
Diluted 571,486 551,663 566,421 550,019
Performance
Ratios:
Return on
average assets 0.97% 0.72% 1.03% 0.45%
Return on
beginning
equity 10.60% 5.42% 10.12% 3.14%
Equity to
total assets
at the end
of the period 8.73% 11.85% 8.73% 11.85%
Net interest
spread 3.56% 3.84% 3.59% 3.58%
Net interest
margin 4.74% 5.36% 4.88% 5.16%
Average
interest
-earning
assets to
average
-bearing
liabilities 432.42% 321.16% 403.62% 305.09%
Core efficiency
ratio 78.47% 82.52% 78.34% 87.75%
Non-interest
expense to
average assets 4.20% 5.39% 4.47% 5.37%
Selected Balance
Sheet Data: 9/30/2003 12/31/2002
Total assets $ 59,613,278 41,662,365
Investment
securities
held to
maturity 5,816,787 2,517,031
Investment
securities
available for
sale 8,633,046 10,683,120
Loan
receivable,
net 26,699,052 21,861,553
Deposits 54,191,496 36,535,328
Non-interest
bearing
deposits 42,936,113 25,655,491
Stockholders'
equity $ 5,205,755 4,936,062
Regulatory
capital ratios:
Average equity
to average
assets 9.77% 13.92%
Leverage capital 9.70% 12.04%
Tier I risk
based 16.52% 19.35%
Risk-based
capital 17.53% 20.17%
Asset Quality
Ratios:
Allowance for
loan losses
as a percent
of gross
loans
receivable 1.18% 1.15%
Net charge-offs
to average
loans -0.16% 0.02%
Non-performing
loans to total
loans 0.87% n/a
Number of
full-service
customer
facilities 1 1