GlobeNewswire Inc | Jul 17, 2020 11:00AM EDT

July 17, 2020

CHINO, Calif., July 17, 2020 (GLOBE NEWSWIRE) -- The Board of Directors of Chino Commercial Bancorp (OTC: CCBC), 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, 2020. Net earnings for the second quarter 2020, were $648 thousand, or a decrease of 17.60%, as compared with earnings of $787 thousand for the same quarter last year. The decrease in earnings is primarily attributed to an increase in provision for loan losses due to current economic conditions created by the COVID-19 pandemic. Net earnings per basic and diluted share was $0.29 for the second quarter of 2020, and $0.35 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer, stated: Despite the turmoil caused by COVID 19, the Bank continues to perform well. During May and June, the Bank made over $33 million in loans to its small business customers, helping them to weather the economic down-turn and remain in business. In addition, the Bank granted across the board, loan payment deferments for three months to its borrowers, providing additional cash relief. Many of the loans provided were SBA PPP loans, which may qualify for debt forgiveness in the future.

We believe that during tough times like these, the Banks value proposition stands out the most. Values such as being responsive to our customers, returning phone calls and taking the time to understand each unique situation, make a difference. We have a great team, a great market, and we are excited about the prospects for the Company over the next several years.

Financial Condition

At June 30, 2020, total assets were $304 million, an increase of $74.5 million or 32.5% over $229.5 million at December 31, 2019. Total deposits increased by 35% or $63 million to $243 million as of June 30, 2020, compared to $180 million as of December 31, 2018. At June 30, 2020, the Companys core deposits represent 96.4% of the total deposits.

Gross loans increased by 29.8% or $42.9 million as of June 30, 2020 to $145.6 million, as compared with $144.3 million as of December 31, 2019. The Bank had one non-performing loan for the quarters ended June 30, 2020, and December 31, 2019. OREO properties remained at zero as of June 30, 2020 and December 31, 2019 respectively.

The increases in total assets, deposits and loans are attributed to Banks response to the overwhelming request of PPP loans. Overall, the Bank approved and funded 389 PPP loans totaling $49.7 million as of June 30, 2020.

Earnings

The Company posted net interest income of $2.3 million for the three months ended June 30, 2020 and $2.1 million for the same quarter last year. Average interest-earning assets were $226 million with average interest-bearing liabilities of $123.7 million, yielding a net interest margin of 4.03% for the second quarter of 2020, as compared to the average interest-earning assets of $188.8 million with average interest-bearing liabilities of $107.6 million, yielding a net interest margin of 4.39% for the second quarter of 2019.

Non-interest income totaled $357.8 thousand for the second quarter of 2020, or a decrease of 36.8 % as compared with $566.3 thousand earned during the same quarter last year. The majority of the decrease is attribute to a significant decrease in overdraft fees.

General and administrative expenses were $1.6 million for the three months ended June 30, 2020, and for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $1 million for the second quarter of 2020 and 2019, respectively.

Income tax expense was $268 thousand which represents a decrease of $12 thousand or 4.41% for the three months ended June 30, 2020, as compared to $280 thousand for the three months ended June 30, 2019. The effective income tax rate for the second quarter of 2020 and 2019 were approximately 29.3% and 26.3% respectively, and for the six months ending June 30, 2020 and 2019, the effective income tax rates were 28.9% and 27.4% respectively.

Forward-Looking Statements

The statements contained in this press release that are not historical facts are forward-looking statements based on managements 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 Companys ability to attract and retain skilled employees, customers service expectations, the Companys ability to successfully deploy new technology and gain efficiencies therefrom, and changes in interest rates, loan portfolio performance, and other factors.

Contact: Dann H. Bowman, President and CEO or Melinda M. Milincu, Vice President and CFO, Chino Commercial Bancorp and Chino Commercial Bank, N.A., 14245 Pipeline Avenue, Chino, Ca. 91710, (909) 393-8880.

CHINO COMMERCIAL BANCORP CONSOLIDATED BALANCE SHEET June 30, 2020 and December 31, 2019 June 30, 2020 December 31, 2019 (unaudited) (audited) ASSETS: Cash and due from banks $ 67,677,789 $ 4,363,753 Federal funds sold - 32,415,000 Total cash and cash equivalents 67,677,789 36,778,753 Interest-bearing deposits in other - 496,000 banks Investment securities available for 17,095,449 7,977,936 sale Investment securities held to maturity (fair value approximates $23,730,210 at June 30, 2019 and 22,824,800 28,367,056 $28,625,251 at December 31, 2019) Total investments 39,920,249 36,840,992 Loans Construction - - Real estate 115,616,265 115,633,626 Commercial 71,654,016 28,522,543 Installment 102,157 232,328 Credit Cards 5,568 - Gross loans 187,378,006 144,388,497 Unearned fees and discounts (2,211,135 ) (438,380 ) Loans net of unearned fees and 185,166,871 143,950,117 discount Allowance for loan losses (2,622,866 ) (2,391,765 ) Net loans 182,544,005 141,558,352 Fixed assets, net 6,292,249 6,401,773 Accrued interest receivable 789,192 619,856 Stock investments, restricted, at 1,554,200 1,440,900 cost Bank-owned life insurance 4,657,814 4,595,584 Other assets 585,782 1,270,936 Total assets $ 304,021,280 $ 229,507,145 LIABILITIES: Deposits Non-interest bearing $ 141,571,928 $ 88,412,668 Interest bearing NOW and money market 72,506,000 64,520,387 Savings 16,610,552 12,209,281 Time deposits less than $250,000 8,883,737 9,537,555 Time deposits of $250,000 or greater 3,653,492 5,471,451 Total deposits 243,225,709 180,151,342 Accrued interest payable 144,928 203,246 Borrowings from Federal Home Loan 30,000,000 20,000,000 Bank (FHLB) Accrued expenses & other payables 1,622,981 1,686,979 Subordinated notes payable to 3,093,000 3,093,000 subsidiary trust Total liabilities 278,086,618 205,134,567 SHAREHOLDERS' EQUITY Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,230,808 shares at June 30, 2020 and December 31, 2019, respectively. 10,502,558 10,502,557

Retained earnings 15,065,498 13,803,528 Accumulated other comprehensive 366,606 66,493 income/(loss) Total shareholders' equity 25,934,662 24,372,578 Total liabilities & shareholders' $ 304,021,280 $ 229,507,145 equity

CHINO COMMERCIAL BANCORP CONSOLIDATED STATEMENTS OF NET INCOME For the three months ended For the six months ended June 30 June 30 2020 2019 2020 2019 (unaudited) (unaudited) (unaudited) (unaudited) Interest income Interest and fee income on $ 2,212,961 $ 1,976,912 $ 4,281,406 $ 3,928,793 loans Interest on federal funds 12,982 69,291 125,913 139,702 sold and FRB deposits Interest on time deposits - 12,019 1,856 23,906 in banks Interest on investment 240,502 346,401 454,654 612,633 securities Total interest 2,466,445 2,404,623 4,863,829 4,705,034 income Interest Expense Interest on 74,802 236,598 252,635 453,614 deposits Other 126,817 101,539 261,472 150,970 borrowings Total interest 201,619 338,137 514,107 604,584 expense Net interest 2,264,826 2,066,486 4,349,722 4,100,450 income Provision for 105,000 - 155,000 40,000 loan losses Net interest income after 2,159,826 2,066,486 4,194,722 4,060,450 provision for loan losses Non-interest income Service charges on 276,859 398,023 645,542 754,088 deposit accounts Other miscellaneous 36,908 120,424 76,008 143,398 income Dividend income from 12,852 23,973 34,823 46,447 restricted stock Income from bank-owned 31,195 23,854 62,230 47,366 life insurance Total non-interest 357,814 566,274 818,603 991,299 income Non-interest expenses Salaries and employee 971,010 959,657 1,994,372 1,969,985 benefits Occupancy and 157,841 165,273 307,527 318,405 equipment Data and item 152,588 119,999 287,076 224,898 processing Advertising 36,091 47,037 82,169 53,355 and marketing Legal and professional 46,750 32,807 91,390 66,225 fees Regulatory 30,947 32,541 49,207 61,976 assessments Insurance 8,412 9,108 17,246 18,112 Directors' fees and 32,280 33,051 65,494 66,820 expenses Other 164,954 165,605 343,876 328,584 expenses Total non-interest 1,600,873 1,565,078 3,238,357 3,108,360 expenses Income before income tax 916,767 1,067,682 1,774,968 1,943,389 expense Income tax 268,474 280,874 512,998 532,071 expense Net income $ 648,293 $ 786,808 $ 1,261,970 $ 1,411,318 Basic earnings per $ 0.29 $ 0.35 $ 0.57 $ 0.63 share Diluted earnings per $ 0.29 $ 0.35 $ 0.57 $ 0.63 share

For the three months ended For the six months ended June 30 June 30 2020 2019 2020 2019 KEY FINANCIAL RATIOS(unaudited) Annualizedreturn on 10.12 % 13.81 % 10.01 % 12.59 % average equityAnnualizedreturn on 0.94 % 1.49 % 0.99 % 1.37 % average assetsNet interest 4.03 % 4.39 % 4.27 % 4.40 % marginCore efficiency 61.04 % 59.45 % 62.66 % 61.05 % ratioNet chargeoffs/(recoveries) to -0.004 % -0.030 % -0.06 % -0.04 % average loans AVERAGE BALANCES (thousands, unaudited)Average assets $ 275,931 $ 211,083 $ 254,818 $ 206,331 Averageinterest-earning $ 225,944 $ 188,824 $ 204,980 $ 188,073 assetsAverage gross $ 171,676 $ 138,658 $ 158,084 $ 137,775 loansAverage deposits $ 218,505 $ 174,089 $ 201,238 $ 172,984 Average equity $ 25,631 $ 22,794 $ 25,215 $ 22,427 CREDIT QUALITY End of period (unaudited) June 30, 2020 December 31, 2019 Non-performing $ 120,423 $ 120,423 loans Non-performingloans to total 0.06 % 0.08 % loansNon-performingloans to total 0.04 % 0.05 % assetsAllowance forloan losses to 1.40 % 1.73 % total loansNonperformingassets as apercentage of 0.06 % 0.08 % total loans andOREOAllowance forloan losses to 2178.05 % 1986.14 % non-performingloans OTHER PERIOD-END STATISTICS(unaudited) Shareholdersequity to total 8.53 % 10.62 % assetsNet loans to 75.05 % 78.58 % depositsNon-interestbearing deposits 58.21 % 49.08 % to totaldepositsCommunity Bank 9.27 % 13.74 % Leverage Ratio