GlobeNewswire Inc | Oct 16, 2020 11:00AM EDT

October 16, 2020

CHINO, Calif., Oct. 16, 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 third quarter ended September 30, 2020. Net earnings for the third quarter 2020, were $664 thousand, or an increase of 3.72%, as compared with earnings of $640 thousand for the same quarter last year. The moderate increase 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 $0.30 for the third quarter of 2020, and $0.29 for the same quarter last year.

Dann H. Bowman, President and Chief Executive Officer, stated: We are very pleased with the performance of the Bank during the third quarter, and year-to-date. We have seen a tremendous surge in demand for credit by our small business customers over the last six months, with total loans increasing by 34% year-to-date. Loan quality also remains very strong, with the Bank having no loan delinquencies and no foreclosed properties at quarter-end. Similarly, deposits have also increased by $62 million, or 34% year-to-date, which has allowed the Bank to meet the increased loan demands of its customers.

We believe that during tough times like these, the Banks value proposition stands out the most, and we may have many more opportunities to gain new banking relationships. 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 September 30, 2020, total assets were $303.5 million, an increase of $74.0 million or 32.2% over $229.5 million at December 31, 2019. Total deposits increased by 34.4% or $61.9 million to $242.0 million as of September 30, 2020, compared to $180.2 million as of December 31, 2019. At September 30, 2020, the Companys core deposits represent 96.5% of the total deposits.

Gross loans increased by 33.9% or $48.9 million as of September 30, 2020 to $193.3 million, as compared with $144.4 million as of December 31, 2019. The Bank had one non-performing loan for the quarters ended September 30, 2020, and December 31, 2019. OREO properties remained at zero as of September 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 396 PPP loans with an outstanding balance of $50.2 million as of September 30, 2020.

Earnings

The Company posted net interest income of $2.4 million for the three months ended September 30, 2020 and $2.1 million for the same quarter last year. Average interest-earning assets were $304.4 million with average interest-bearing liabilities of $135.8 million, yielding a net interest margin of 3.31% for the third quarter of 2020, as compared to the average interest-earning assets of $179.2 million with average interest-bearing liabilities of $116.1 million, yielding a net interest margin of 4.63% for the third quarter of 2019.

Non-interest income totaled $396.0 thousand for the third quarter of 2020, or a decrease of 16.2% as compared with $473.0 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 September 30, 2020, and $1.7 million for the same period last year. The largest component of general and administrative expenses was salary and benefits expense of $999.5 thousand for the third quarter of 2020 and $969.0 thousand for the same period last year.

Income tax expense was $266.0 thousand which represents an increase of $9.7 thousand or 3.82% for the three months ended September 30, 2020, as compared to $256.0 thousand for the three months ended September 30, 2019. The effective income tax rate for the third quarter of 2020 and 2019 were approximately 28.6% and 28.5% respectively, and for the nine months ending September 30, 2020 and 2019, the effective income tax rates were 28.8% and 27.7% 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 September 30, 2020 and December 31, 2019 September December 31, 2019 30, 2020 (unaudited) (audited) ASSETS: Cash and due from banks $ 58,947,773 $ 4,363,753 Federal funds sold - 32,415,000 Total cash and cash equivalents 58,947,773 36,778,753 Interest-bearing deposits in other - 496,000 banks Investment securities available for 20,898,615 7,977,936 sale Investment securities held to maturity (fair value approximates $21,683,834 at September 30, 2019 and 20,746,017 28,367,056 $28,625,251 at December 31, 2019) Total investments 41,644,632 36,840,992 Loans Construction 504,317.00 - Real estate 116,703,080 115,633,626 Commercial 75,976,104 28,522,543 Installment 125,276 232,328 Credit Cards 605 - Gross loans 193,309,382 144,388,497 Unearned fees and discounts (1,980,007 ) (438,380 ) Loans net of unearned fees and 191,329,375 143,950,117 discount Allowance for loan losses (2,854,821 ) (2,391,765 ) Net loans 188,474,554 141,558,352 Fixed assets, net 6,217,571 6,401,773 Accrued interest receivable 857,321 619,856 Stock investments, restricted, at 1,554,200 1,440,900 cost Bank-owned life insurance 4,689,392 4,595,584 Other assets 1,120,288 1,270,936 Total assets $ 303,505,731 $ 229,507,145 LIABILITIES: Deposits Non-interest bearing $ 137,441,270 $ 88,412,668 Interest bearing NOW and money market 72,437,052 64,520,387 Savings 19,060,564 12,209,281 Time deposits less than $250,000 9,723,027 9,537,555 Time deposits of $250,000 or greater 3,372,125 5,471,451 Total deposits 242,034,038 180,151,342 Accrued interest payable 119,202 203,246 Borrowings from Federal Home Loan 30,000,000 20,000,000 Bank (FHLB) Accrued expenses & other payables 1,717,161 1,686,979 Subordinated notes payable to 3,093,000 3,093,000 subsidiary trust Total liabilities 276,963,401 205,134,567 SHAREHOLDERS' EQUITY Common stock, authorized 10,000,000 shares with no par value, issued and outstanding 2,230,808 shares at September 30, 2020 and December 31, 2019, respectively. 10,502,558 10,502,557

Retained earnings 15,729,577 13,803,528 Accumulated other comprehensive 310,195 66,493 income/(loss) Total shareholders' equity 26,542,330 24,372,578 Total liabilities & shareholders' $ 303,505,731 $ 229,507,145 equity

CHINO COMMERCIAL BANCORP CONSOLIDATED STATEMENTS OF NET INCOME For the three months ended For the nine months ended September 30 September 30 2020 2019 2020 2019 (unaudited) (unaudited) (unaudited) (unaudited) Interest income Interest and fee income on $ 2,301,354 $ 1,973,170 $ 6,582,760 $ 5,901,963 loans Interest on federal funds 14,828 186,073 140,741 325,775 sold and FRB deposits Interest on time deposits - 7,953 1,856 31,858 in banks Interest on investment 232,571 298,567 687,225 911,201 securities Total interest 2,548,753 2,465,763 7,412,582 7,170,797 income Interest Expense Interest on 63,271 251,358 315,906 704,973 deposits Other 125,396 123,303 386,868 274,273 borrowings Total interest 188,667 374,661 702,774 979,246 expense Net interest 2,360,086 2,091,102 6,709,808 6,191,551 income Provision for 215,000 - 370,000 40,000 loan losses Net interest income after 2,145,086 2,091,102 6,339,808 6,151,551 provision for loan losses Non-interest income Service charges on 306,081 393,926 951,624 1,148,014 deposit accounts Other miscellaneous 39,864 22,603 115,869 165,999 income Dividend income from 18,421 24,567 53,243 71,014 restricted stock Income from bank-owned 31,578 31,433 93,808 78,798 life insurance Total non-interest 395,944 472,529 1,214,544 1,463,825 income Non-interest expenses Salaries and employee 999,501 968,967 2,993,873 2,938,952 benefits Occupancy and 155,160 158,623 462,687 477,028 equipment Data and item 154,317 120,869 441,393 345,767 processing Advertising 20,802 12,813 107,167 66,168 and marketing Legal and professional 42,100 146,738 133,490 212,962 fees Regulatory 33,480 32,541 82,687 94,517 assessments Insurance 10,567 9,504 27,813 27,616 Directors' fees and 32,520 37,580 98,014 104,400 expenses Other 162,981 179,999 502,659 508,580 expenses Total non-interest 1,611,428 1,667,634 4,849,783 4,775,990 expenses Income before income tax 929,602 895,997 2,704,569 2,839,386 expense Income tax 265,522 255,752 778,520 787,823 expense Net income $ 664,080 $ 640,245 $ 1,926,049 $ 2,051,563 Basic earnings per $ 0.30 $ 0.29 $ 0.86 $ 0.92 share Diluted earnings per $ 0.30 $ 0.29 $ 0.86 $ 0.92 share

For the three months ended For the nine months ended September 30 September 30 2020 2019 2020 2019 KEY FINANCIAL RATIOS(unaudited) Annualizedreturn on 10.06 % 10.94 % 10.03 % 12.00 % average equityAnnualizedreturn on 0.87 % 1.12 % 0.94 % 1.28 % average assetsNet interest 3.31 % 4.63 % 3.87 % 4.47 % marginCore efficiency 58.47 % 65.05 % 61.20 % 62.39 % ratioNet chargeoffs/(recoveries) to -0.007 % -0.013 % -0.06 % -0.05 % average loans AVERAGE BALANCES (thousands, unaudited)Average assets $ 304,432 $ 227,861 $ 274,626 $ 213,618 Averageinterest-earning $ 283,374 $ 179,188 $ 231,302 $ 185,080 assetsAverage gross $ 186,761 $ 133,543 $ 167,713 $ 136,350 loansAverage deposits $ 242,964 $ 184,145 $ 215,248 $ 176,746 Average equity $ 26,394 $ 23,419 $ 25,609 $ 22,792 CREDIT QUALITY End of period (unaudited) September December 30, 2020 31, 2019 Non-performing $ 120,129 $ 120,423 loans Non-performingloans to total 0.06 % 0.08 % loansNon-performingloans to total 0.04 % 0.05 % assetsAllowance forloan losses to 1.48 % 1.73 % total loansNonperformingassets as apercentage of 0.06 % 0.08 % total loans andOREOAllowance forloan losses to 2376.46 % 1986.14 % non-performingloans OTHER PERIOD-END STATISTICS(unaudited) Shareholdersequity to total 8.75 % 10.62 % assetsNet loans to 77.87 % 78.58 % depositsNon-interestbearing deposits 56.79 % 49.08 % to totaldepositsTotal capital tototal 19.45 % 18.30 % risk-weightedassetsTier 1 capitalto total 21.70 % 20.16 % risk-weightedassetsCommunity Bank 11.49 % 13.74 % Leverage Ratio