Safe and Sound

Chino Commercial Bank, N.A.

Chino, CA
5
Star Rating
Chino Commercial Bank, N.A. is a Chino, CA-based, FDIC-insured bank dating back to 2000. The bank holds equity of $21.1 million on $192.7 million in assets, according to December 31, 2017, regulatory filings.

U.S. bank customers have $150.5 million on deposit at 3 offices in CA run by 43 full-time employees. With that footprint, the bank holds loans and leases worth $120.1 million, including $115.5 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, Chino Commercial Bank, N.A. exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank did on the three key criteria Bankrate used to grade American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial fortitude, capital is essential. It works as a bulwark against losses and affords protection for accountholders when a bank is experiencing financial instability. When it comes to safety and soundness, more capital is preferred.

Chino Commercial Bank, N.A. finished below the national average of 13.13 on our test to measure capital adequacy, achieving a score of 12 out of a possible 30 points.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Chino Commercial Bank, N.A.'s Tier 1 capital ratio was 16.04 percent, exceeding the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to financial headwinds.

Overall, Chino Commercial Bank, N.A. held equity amounting to 10.95 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as past-due mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these types of assets could eventually force a bank to use capital to cover losses, decreasing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, Chino Commercial Bank, N.A. scored 40 out of a possible 40 points, above the national average of 37.49 points.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, none of Chino Commercial Bank, N.A.'s loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.01 percent.

Banks keep a reserve to deal with problem assets known as an "allowance for loan and lease losses." Comparing how large that reserve is to the total amount of problematic loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Chino Commercial Bank, N.A.'s loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand financial trouble. Losses, on the other hand, diminish a bank's ability to do those things.

Chino Commercial Bank, N.A. scored 18 out of a possible 30 on Bankrate's earnings test, above the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Chino Commercial Bank, N.A. was 9.76 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $1.7 million on total equity of $21.1 million. The bank had an annualized return on average assets, or ROA, of 0.93 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.