|By Marketwired .||
|May 16, 2014 08:15 AM EDT||
SUZHOU, CHINA -- (Marketwired) -- 05/16/14 -- China Commercial Credit, Inc. (NASDAQ: CCCR), a microfinance company providing financial services to small-to-medium enterprises (SMEs), farmers and individuals in Jiangsu Province, today reported that, for the three months ended March 31, 2014, the company reported net income of $1,093,633, or $.10 per share, on revenue of $2,054,009. This compares with net income of $1,569,868, or $.17 per share, on revenue of $2,670,253 in the like year-ago quarter. Total weighted average shares outstanding were 10,434,862 in the first quarter of 2014 versus 9,000,000 in the first quarter of 2013.
The decrease in first quarter net income was primarily the result of an increase of approximately $354,000 in the provision for financial guarantee services over the same provision in the first quarter of last year. The provision for loan losses for direct lending increased by approximately $100,000 over the provision recorded in the first quarter of 2013. During the 2014 first quarter, the company repaid bank lenders for certain defaulted loans it had guaranteed but anticipates it will recover most of the repayment amounts within the current year and that default repayments will decrease in subsequent quarters.
The current year first quarter was also impacted by a reduction of approximately $113,000 in commissions and fees from the company's traditional loan guarantee service, mainly the result of a transition from CCC's traditional guarantee services to an online guarantee services platform operated by the Finance Office of Jiangsu Province. The Company believes this new state-owned portal will generate commissions and fees for loan guarantees more than double those derived from CCC's traditional guarantee services.
In addition to the state-owned platform, CCC's wholly-owned subsidiary, Pride Lending Club, has begun operating its own P2P platform to match borrowers with lenders and guarantors. Pride Lending Club does not use its own capital to make loans on the P2P platform and therefore is not exposed to any credit risk. In certain transactions, Wujiang Luxiang may act as a guarantor for loans on the P2P platform and will make provisions for such guarantee services in accordance with the methods for its traditional guarantee services.
The company also announced the closing of its recently completed secondary public offering of common shares and warrants. Net proceeds of approximately $5.5 million will be used to fund the operations of CCC's wholly-owned subsidiary, Pride Financial Leasing (PFL), which will lease machinery and equipment to government and commercial entities across China.
CCC chief executive Mr. Huichun Qin said that funds derived from the secondary offering are expected to be deployed by PFL by the end of the current quarter and that the subsidiary is already in discussions regarding several promising leasing opportunities. He said that CCC is permitted to further fund PFL with bank loans up to ten times the total of PFL's registered capital.
Mr. Qin added that he expects "significant incremental revenue" from both PFL and Pride Lending Club that will contribute to improved operating results for the balance of 2014. He noted that these two subsidiaries are not limited to operating in Jiangsu Province, but instead offer CCCR, for the first time, the opportunity to target customers nationwide.
Notice Regarding Secondary Public Offering
The offering of these securities is made only by means of a prospectus. A registration statement relating to the shares of common stock has been declared effective by the Securities and Exchange Commission on May 7, 2014. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Copies of the final prospectus relating to the offering may be obtained for free by visiting the U.S. Securities and Exchange Commission website at http://www.sec.gov.
About China Commercial Credit
China Commercial Credit (http://www.chinacommercialcredit.com), founded in 2008, provides business loans and loan guarantee services to more than 260 small-to-medium enterprises (SMEs), farmers and individuals in China's Jiangsu Province. Due to recent legislation and banking reform in China, these SMEs, farmers and individuals -- which historically had been excluded from borrowing funds from State-owned and commercial banks -- are now able to borrow money at competitive rates from microfinance lenders. According to 2012 data, SMEs account for eight of ten jobs in China and comprise nearly 60 percent of the nation's GDP.
Utilizing proceeds of the recently completed secondary public offering, the company intends to commence its financial leasing business. It also recently launched a peer-to-peer online lending platform designed to pair SME borrowers with willing lenders.
Investors wishing to receive CCC's corporate communications as they become available may go to http://www.ir-site.com/china-commercial-credit/default.asp and register under Email Alerts. The company's blog, "From The CEO," also appears at the same site. Each new blog post will be listed under Asia Voice at http://asia-irpr.com/ and announced on Asia IR/PR's twitter account @Asia_IRPR - where readers may link directly to the post.
The company's 2014 first quarter report on Form 10-Q will be available online at www.sec.gov or by visiting the investor relations section of the China Commercial Credit website at http://www.ir-site.com/china-commercial-credit/default.asp.
This press release contains forward-looking statements within the meaning of United States securities laws. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in our expectations. You should review the factors described in the section entitled "Risk Factors" in our prospectus filed with the SEC on May 9, 2014 and other documents we file from time to time with the SEC. We qualify all of our forward-looking statements by these cautionary statements.
CHINA COMMERCIAL CREDIT, INC. CONSOLIDATED BALANCE SHEETS March 31, December 31, 2014 2013 (Unaudited) ASSETS Cash $ 5,197,772 $ 9,405,865 Restricted cash 7,202,559 10,784,960 Loans receivable, net of allowance for loan losses $1,948,400 and $1,375,948 for March 31, 2014 and December 31, 2013, respectively 87,350,379 88,827,465 Due from non-controlling shareholder 1,143,886 - Interest receivable 1,706,950 1,124,734 Tax receivable, net 1,072,339 820,526 Property and equipment, net 224,941 254,795 Guarantee paid on behalf of guarantee service customers 5,447,488 1,082,486 Other assets 763,801 702,617 Total Assets $110,110,115 $113,003,448 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Short-term bank loans $ 16,225,337 $ 16,360,721 Deposits payable 6,893,294 9,659,362 Unearned income from financial guarantee services 208,400 482,029 Accrual for financial guarantee services 891,434 588,740 Other current liabilities 205,512 629,073 Deferred tax liability 330,856 333,617 Total Liabilities 24,754,833 28,053,542 Shareholders' Equity Series A Preferred Stock (par value $0.001 per share, 1,000,000 shares authorized at March 31, 2014 and December 31, 2013, respectively; nil and nil shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively) $ - $ - Series B Preferred Stock (par value $0.001 per share, 5,000,000 shares authorized at March 31, 2014 and December 31, 2013, respectively; nil and nil shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively) - - Common stock (par value $0.001 per share, 100,000,000 shares authorized; 10,446,426 and 10,430,657 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively) 10,446 10,431 Subscription receivable (1,062) (1,062) Additional paid-in capital 52,823,462 52,704,107 Statutory reserve 5,628,451 5,442,150 Retained earnings 21,208,021 20,300,689 Accumulated other comprehensive income 5,677,523 6,493,591 Total Shareholders' Equity 85,355,282 84,949,906 Total Liabilities and Shareholders' Equity $110,110,115 $113,003,448 CHINA COMMERCIAL CREDIT, INC CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2014 2013 (Unaudited) (Unaudited) Interest income Interests and fees on loans $ 2,856,474 $ 2,912,078 Interests on deposits with banks 42,448 97,167 Total interest and fees income 2,898,922 3,009,245 Interest expense Interest expense on short-term bank loans (245,190) (306,155) Net interest income 2,653,732 2,703,090 Provision for loan losses (588,180) (488,216) Net interest income after provision for loan losses 2,065,552 2,214,874 Commissions and fees on financial guarantee services 298,310 411,209 Under/(over) provision on financial guarantee services (309,853) 44,170 Commission (loss)/income and fees on guarantee services, net (11,543) 455,379 Net Revenue 2,054,009 2,670,253 Non-interest income Government incentive - 25,775 Other non-interest income 120,960 - Total non-interest income 120,960 25,775 Non-interest expense Salaries and employee surcharge (186,135) (197,944) Rental expenses (65,750) (64,037) Business taxes and surcharge (112,612) (114,447) Other operating expenses (532,114) (450,864) Total non-interest expense (896,611) (827,292) Income Before Taxes 1,278,358 1,868,736 Income tax expense (184,725) (298,868) Net Income 1,093,633 1,569,868 Earnings per Share- Basic and Diluted $ 0.105 $ 0.174 Weighted Average Shares Outstanding-Basic and Diluted 10,434,862 9,000,000 Net Income 1,093,633 1,569,868 Other comprehensive income Foreign currency translation adjustment (807,627) 371,361 Comprehensive Income $ 286,006 $ 1,941,229