Chino Commercial Bancorp’s earnings slide 50 percent compared to last year

     Chino Commercial Bancorp (OTCBB: CCBC.OB) said on Monday that its earnings slid more than 50 percent for the first six months this year compared to the same period in 2007, but it still avoided red on its balance sheet by more than $180,000.
     For the same six months, the Chino-based holding company of two-branch Chino Commercial Bank also reported loan loss provisions of almost $280,000 — more than quadruple the amount seen last year.
     No stock traded on Monday, and its price stayed at $17.00 a share. In October, shares reached $26.
     Two delinquent loans are to blame for Chino Commercial’s earnings drop — one being a business loan whose performance is getting hit by the real-estate market.
     “The other one is a construction loan on a housing tract,” said Dann Bowman, president and CEO. “They’re both real-estate secured.”
     Out of the bank’s $51-million loan portfolio, less than 2 percent is invested in residential real estate. Most loans are small business or commercial real-estate related.
     “There are clearly opportunities for expansion right now with other banks having trouble or possibly going away,” Bowman said. He didn’t mention names.
     Federal banking regulators have been eyeing Rancho Cucamonga-based PFF Bancorp, parent of PFF Bank & Trust, and Corona-based Vineyard National Bancorp, parent of Vineyard Bank.
     Both banks made big loans to home developers and builders who can’t repay what they borrowed. Between both, losses are amounting to hundreds of millions of dollars.
     Chino Commercial also said its total deposits dropped more than 5 percent from December to June from about $70.4 million to $66.4 million.
     Recently, the bank was recognized by U.S. Banker magazine as being one of the top 200 community banks in the country for the second consecutive year. The bank made the top-200 list because of its return on average equity (ROE) over the past three years of 13.5 percent this year and 12.69 percent in 2007.
     –matthew.wrye@inlandnewspapers.com

Press Release Source: Chino Commercial Bank

Chino Commercial Bancorp Reports Second Quarter Earnings
Monday July 21, 7:00 am ET

CHINO, Calif., July 21, 2008 (PRIME NEWSWIRE) — The Board of Directors of Chino Commercial Bancorp (OTC BB:CCBC.OBNews), 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, 2008 with net earnings of $146,405, a 35.0% reduction from $225,207 for the same quarter of 2007. The net earnings for the most recent quarter represents $0.19 per diluted share, as compared with $0.25 per diluted share, or a reduction of 34.5% from the same quarter last year. Earnings year-to-date was $187,876 or $0.25 per diluted share as compared with net earnings of $402,990 or $0.50 per diluted share for the same period last year.
 

Dann H. Bowman, President and Chief Executive Officer stated, “Despite earnings declining during the first half of the year due to higher provisions to Loan Loss Reserve, we are very pleased with the continued stability and earnings of the Bank overall. During a time when many organizations are suffering from credit problems, at the end of June the Bank had only two loans which were delinquent more than 30 days.”

Financial Condition

Total assets declined from $79.9 million to $76.0 million or 5.0% between December 31, 2007 and June 30, 2008, resulting from decreased investment securities and Federal funds sold, which are funded with reduced deposit balances of a number of the Company’s customers who are engaged in real estate related industries.

The Company experienced a decrease in interest-earning assets of $5.7 million or 8.0% to $66.2 million in the first half of 2008. Federal funds sold and Investment securities decreased $3.1 million and $2.1 million, respectively, in the first half of 2008. No new investment securities have been added in 2008, and the decreases were caused by maturities and principal payments from Mortgage-backed securities.

Loan demand has remained relatively stable; however, gross loans decreased $0.5 million, or 1.0% to $52.6 million at June 30, 2008, while undisbursed commitments decreased $1.4 million to $6.2 million at June 30, 2008.

Total deposits decreased from $70.4 million at December 31, 2007 to $66.4 million at June 30, 2008, or a 5.7% reduction. Total non-interest bearing deposits decreased from $42.3 million at December 31, 2007 to $37.7 million for the reporting period ended June 30, 2008, a 10.8% decrease. Interest-bearing liabilities increased $0.5 million or 1.8% to $28.6 million in the six months ended June 30, 2008 as compared to December 31, 2007. The slight increase in interest-bearing deposits is the result of the Company’s emphasis to attract new customers.

Earnings

The Company posted net interest income for the quarters ended June 30, 2008 and June 30, 2007 of $900,476 and $1,112,620, respectively. For six months ended June 30, the Company posted net interest income of $1,785,061 and $2,186,896 for 2008 and 2007, respectively. Average interest-earning assets were $66.3 million with average interest-bearing liabilities of $31.5 million, yielding a net interest margin of 5.42% for the six months ended June 30, 2008 as compared to average interest-bearing assets of $76.7 million with average interest-bearing liabilities of $29.9 million yielding a net interest margin of 5.75% for the six months ended June 30, 2007.

Non-interest income totaled $295,356 for the three months ended June 30, 2008, or a 28.8% increase from $229,289 earned during the second quarter of 2007. Non-interest income increased 26.9% for the six months ended June 30, 2008 totaling $559,744 as compared to $441,159 for the six months ended June 30, 2007. Service charges on deposit accounts accounted for the majority of the increase in non-interest income.

General and administrative expenses were $922,549 and $1,785,298 for the three and the six months ended June 30, 2008 as compared to $983,390 and $1,921,068 for the three and six months ended June 30, 2007. The largest component of general and administrative expenses was salary and benefits expense of $499,499 for the second quarter of 2008 as compared to $496,303 for the three months ended June 30, 2007. Year-to-date comparisons of salary and benefits expense reports $977,291 for six months ended June 2008 and $978,156 for the same period in 2007.

Income tax expense was $83,105 and $93,227 for the three and six months ended June 30, 2008, as compared to $138,561 and $243,353 for the same periods of 2007. The effective income tax rate for 2008 is approximately 33.1% and 2007 is approximately 38%. Of the $281,103 pre-tax income for the six months ended June 30, 2008, approximately $55,000 was tax exempt.

Forward-Looking Statements

The statements contained in this press release that are not historical facts are forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Readers are cautioned not to unduly rely on forward-looking statements. Actual results may differ from those projected. These forward-looking statements involve risks and uncertainties including but not limited to the health of the national and California economies, the Company’s ability to attract and retain skilled employees, customers’ service expectations, the Company’s ability to successfully deploy new technology and gain efficiencies there from, changes in interest rates, loan portfolio performance, and other factors detailed in the Company’s SEC filings.

                     CHINO COMMERCIAL BANCORP
                    CONSOLIDATED BALANCE SHEET
                June 30, 2008 and December 31, 2007

                                            June 30,    December 31,
                                              2008          2007
                                          ------------  ------------
                                           (unaudited)    (audited)
 ASSETS:
 Cash and due from banks                  $  5,169,686  $  3,487,933
 Federal funds sold                          4,360,000     7,440,000
                                          ------------  ------------
  Cash and cash equivalents                  9,529,686    10,927,933

 Interest-bearing deposits in other
  banks                                         99,000        99,000

 Investment securities available for
  sale                                       5,594,612     7,339,354
 Investment securities held to maturity
  (fair value approximates $3,488,000 at
  June 30, 2008 and $3,880,000 at
  December 31, 2007)                         3,485,424     3,873,251
                                          ------------  ------------
   Total investments                         9,179,036    11,311,605
                                          ------------  ------------
 Loans
  Construction                                 316,604     2,606,750
  Real estate                               41,057,739    39,726,301
  Commercial                                10,677,794    10,062,969
  Installment                                  597,292       790,535
                                          ------------  ------------
   Gross loans                              52,649,429    53,186,555
  Unearned fees and discounts                  (83,301)      (87,389)
                                          ------------  ------------
   Loans net of unearned fees and
    discount                                52,566,128    53,099,166
  Allowance for loan losses                   (670,786)     (725,211)
                                          ------------  ------------
   Net loans                                51,895,342    52,373,955
                                          ------------  ------------

 Restricted stock                              666,350       654,250
 Accrued interest receivable                   296,668     2,085,203
 Fixed assets, net                           2,005,290       326,990
 Prepaid & other assets                      2,401,272     2,268,909
                                          ------------  ------------
   Total assets                           $ 75,973,644  $ 79,948,845
                                          ============  ============
 LIABILITIES:
 Deposits
  Non-interest bearing                    $ 37,721,424  $ 42,270,696
  Interest Bearing
   NOW and money market                     22,048,872    22,711,556
   Savings                                   1,114,807     1,202,965
   Time deposits less than $100,000          2,430,769     2,054,915
   Time deposits of $100,000 or greater      3,050,431     2,156,778
                                          ------------  ------------
    Total deposits                          66,366,303    70,396,910
                                          ------------  ------------

 Accrued interest payable                       58,224        63,962
 Accrued expenses & other payables             507,025       509,389
 Subordinated debentures                     3,093,000     3,093,000
                                          ------------  ------------
    Total liabilities                       70,024,552    74,063,261
                                          ------------  ------------
 STOCKHOLDERS' EQUITY
  Common stock, authorized 10,000,000
   shares with no par value, issued and
   outstanding 699,798 shares and 704,278
   shares at June 30, 2008 and December
   31, 2007, respectively.                   2,539,714 	   2,639,462
  Retained earnings                          3,413,164     3,249,982
  Accumulated other comprehensive loss          (3,786)       (3,860)
                                          ------------  ------------
   Total equity                              5,949,092     5,885,584
                                          ------------  ------------
    Total liabilities & stockholders'
     equity                               $ 75,973,644  $ 79,948,845
                                          ============  ============

                   CHINO COMMERCIAL BANCORP
               CONSOLIDATED STATEMENTS OF INCOME
                          (unaudited)

                          For the three months   For the six months
                                 ended                 ended
                                June 30               June 30
                            2008       2007       2008       2007
                         ---------- ---------- ---------- ----------
 Interest income
  Investment securities
   and due from banks    $  112,298 $  161,798 $  238,098 $  353,033
  Interest on Federal
   funds sold                 5,987    143,054     30,978    259,884
  Interest and fee
   income on loans          999,910  1,025,614  1,984,365  2,002,785
                         ---------- ---------- ---------- ----------
   Total interest income  1,118,195  1,330,466  2,253,441  2,615,702
                         ---------- ---------- ---------- ----------
 Interest expense
  Deposits                  165,867    166,584    365,482    326,281
  Interest on Federal
   funds purchased              889          0        973          0
  Other borrowings           50,963     51,262    101,925    102,525
                         ---------- ---------- ---------- ----------
   Total interest
    expense                 217,719    217,846    468,380    428,806
                         ---------- ---------- ---------- ----------
    Net interest income     900,476  1,112,620  1,785,061  2,186,896
                         ---------- ---------- ---------- ----------
 Provision for loan
  losses                     43,773     (5,249)   278,404     60,644
                         ---------- ---------- ---------- ----------
    Net interest income
     after provision for
     loan losses            856,703  1,117,869  1,506,657  2,126,252
                         ---------- ---------- ---------- ----------
 Non-interest income
  Service charges on
   deposit accounts         252,265    194,739    484,823    372,421
  Other miscellaneous
   fee income                 9,246      7,693     17,719     16,803
  Dividend income from
   restricted stock          18,238     11,638     26,483     20,513
  Income from bank owned
   life insurance            15,607     15,219     30,719     31,422
                         ---------- ---------- ---------- ----------
   Total non-interest
    income                  295,356    229,289    559,744    441,159
                         ---------- ---------- ---------- ----------
 General and
  administrative
  expenses
  Salaries and employee
   benefits                 499,499    496,303    977,291    978,156
  Occupancy and
   equipment                 82,578     87,083    166,359    180,323
  Data and item
   processing                82,390     85,142    165,066    158,106
  Advertising and
   marketing                 12,786     35,845     40,615     75,371
  Legal and professional
   fees                      50,309     51,103     95,621    108,159
  Regulatory Assessments     20,817     33,914     41,298     47,210
  Insurance                   7,768      8,187     15,996     14,545
  Directors' fees and
   expenses                  19,125     19,800     38,301     40,250
  Other expenses            147,277    166,013    244,751    318,948
                         ---------- ---------- ---------- ----------
   Total general &
    administrative
    expenses                922,549    983,390  1,785,298  1,921,068
                         ---------- ---------- ---------- ----------
 Income before income
  tax expense               229,510    363,768    281,103    646,343
 Income tax expense          83,105    138,561     93,227    243,353
                         ---------- ---------- ---------- ----------
   Total income          $  146,405 $  225,207 $  187,876 $  402,990
                         ========== ========== ========== ==========
 Basic earnings per
  share                  $     0.21 $     0.31 $     0.27 $     0.54
                         ========== ========== ========== ==========
 Diluted earnings per
  share                  $     0.19 $     0.29 $     0.25 $     0.50
                         ========== ========== ========== ==========

                         CHINO COMMERCIAL BANCORP
                        Other Financial Information


 CREDIT QUALITY                        End of period   December 31,
 (unaudited)                           June 30, 2008       2007
                                       -------------   -----------
 Non-Performing Loans                  $   1,236,831   $        --
                                       =============   ===========
 Non-Performing Loans to Total Loans           2.35%          n/a
 Non-Performing Loans to Total Assets          1.63%          n/a
 Allowance for Loan Losses to Loans            1.27%         1.36%

 OTHER PERIOD-END STATISTICS           End of period   December 31,
  (unaudited)                          June 30, 2008       2007
                                       -------------   -----------
 Shareholders Equity to Total Assets            7.83%         7.36%
 Loans to Deposit                              79.33%        75.55%
 Non-Interest Bearing Deposits to Total
  Deposits                                     56.84%        60.05%

                           For the three months  For the six months
                                  ended                ended
                                 June 30              June 30
                              2008      2007       2008      2007
                            --------  --------   --------  --------

 KEY FINANCIAL RATIOS
 (unaudited)
 Return on Average Equity      10.03%    16.45%      6.42%    13.24%
 Return on Average Assets       0.80%     1.06%      0.50%     0.94%
 Net Interest Margin            5.51%     5.84%      5.39%     5.69%
 Efficiency Ratio              77.15%    73.28%     76.14%    73.10%
 Net Chargeoffs to Average
  Loans                         0.74%     0.00%      0.62%     0.00%

 AVERAGE BALANCES
 (thousands, unaudited)
 Average Assets             $ 73,541  $ 85,316   $ 74,516  $ 86,080
 Average Interest-Earning
  Assets                    $ 65,324  $ 76,089   $ 66,260  $ 76,738
 Average Gross Loans        $ 54,137  $ 50,378   $ 53,688  $ 50,700
 Average Deposits           $ 63,767  $ 76,489   $ 64,696  $ 76,386
 Average Equity             $  5,841  $  5,475   $  5,851  $  6,086


Contact:

          Chino Commercial Bank, N.A.
          Dann H. Bowman, President and CEO
          Sandra F. Pender, Vice President and CFO
          (909) 393-8880
          14345 Pipeline Avenue, 
          Chino, Ca. 91710

Source: Chino Commercial Bank

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