Chino Commercial Bank's Earnings More Than Double


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


            

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