EXCHANGE BANK (SANTA ROSA, CA) SANTA ROSA, Calif., Jan. 29, 2016 /PRNewswire/ -- Exchange Bank (OTC: EXSR) reported net income of $5.1 million in the fourth quarter of 2015, compared to $4.6 million for the same period in 2014, an increase of 12.5%. Net income for the year ending December 31, 2015, totaled $21.0 million, compared to $17.7 million a year ago, an increase of 18.6%. "2015 proved to be another year of significant improvement in the financial results and overall condition of the Bank," stated Gary Hartwick, President and CEO.
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This year's profitability was influenced by a number of nonrecurring events, which impacted both revenue and expense. As a result of the significant improvement in the Bank's credit quality, demonstrated by the $3.4 million in net recoveries of loans previously charged off, $3.2 million in provision for loan losses was reversed during the year. The Bank's level of reserves available to support potential future loan losses remains strong in comparison to industry peers and is supported by the continued improvement in asset quality. The difference between nonrecurring income as a result of the reversal of provision for loan loss, after tax, provided a positive effect of approximately $2.0 million to the Bank's net earnings for the year. Normalized core earnings for the Bank after removing all nonrecurring events would have been approximately $19.0 million, an increase of 7% over the $17.7 million earned for the year ending 2014. "We are proud of the Bank's continued level of profitability, notwithstanding the impact the unusual level of positive, nonrecurring events had on our earnings. However, due to the recent economic headwinds and the continued pressure on our net interest margin, it will be difficult to replicate the level of earnings achieved in 2015," stated Greg Jahn, Executive Vice President and CFO.
The core earnings of the Bank were driven primarily by continued growth in loans and investments, which were funded by a ten percent growth in deposits. This asset growth led to an increase in net interest income of approximately $3.7 million for the year ending December 31, 2015, a 9% increase over the similar year ending December 31, 2014. The Bank continued to witness meaningful growth in both loans and deposits during the 12 months ending December 31, 2015. Loans grew by approximately $57 million and investment securities by $58 million, funded by growth in deposits of approximately $170 million over totals reported as of December 31, 2014. Net loan growth of $58 million belies the true level of financing provided to the community in the form of consumer and business lending. Strong, new loan production for the year totaling in excess of $300 million was impacted by significant loan payoffs from our existing customer base reflecting the improvement in the financial condition of our borrowers and the local economy. The Bank's credit quality remains strong with non-accrual loans declining to 0.35% of total loans at December 31, 2015, from 0.94% of total loans a year ago. As a result of the significant improvement in asset quality, and net loan recoveries, the Bank did not make any provision for loan losses in 2015, while maintaining a strong ratio of loan loss reserves to total loans of 2.96%. "The Bank is grateful for the confidence our community has demonstrated in the Bank by its patronage and we intend to reward that confidence by continuing to invest our resources in the financing needs of consumers and small business, which fuel the economic prosperity of the communities we serve," stated Mr. Hartwick.
Exchange Bank paid a quarterly cash dividend of $0.60 per share on common stock outstanding to shareholders on December 11, 2015. Total dividends paid to Exchange Bank common shareholders during 2015 were $3.77 million and represented an increase of approximately 42% above total dividends of $2.66 million paid to common shareholders during 2014. The Doyle Trust, which funds the Doyle Scholarships at the Santa Rosa Junior College, receives 51% of all cash dividends paid by the Bank.
About Exchange Bank
Exchange Bank is headquartered in Santa Rosa and has $1.9 billion in assets. Founded in 1890, Exchange Bank provides a wide range of personal, commercial and Trust and Investment services with 18 branches and three commercial and SBA lending offices in offices in Roseville, San Jose and Lafayette, California. Exchangebank.com
EXCHANGE BANK
Condensed Consolidated Statements
(Unaudited)
December 31, 2015
CONDENSED STATEMENT OF CONDITION
--------------------------------
(in thousands)
2015 2014
---- ----
ASSETS
Cash and due
from banks $122,932 $97,243
Interest-bearing deposits
in other financial
institutions
76,000 52,000
Investment
Securities
available for
sale 495,250 437,427
Total investment
securities 495,250 437,427
------- -------
Loans
Real estate 875,284 792,155
Consumer 104,266 96,198
Commercial 299,355 333,598
------- -------
1,278,905 1,221,951
Less allowance
for loan losses 37,830 37,653
------ ------
Net loans 1,241,075 1,184,298
Bank premises
and equipment 16,478 16,232
Other assets 110,773 100,479
------- -------
$2,062,508 $1,887,679
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Non Interest
Bearing Demand $677,539 $617,410
Interest Bearing
Transaction 331,563 269,953
Money market 238,181 220,892
Savings 377,550 332,597
Time 214,144 227,547
------- -------
Total Deposits 1,838,977 1,668,399
Other borrowings 8,000 22,000
Other
liabilities 42,423 37,206
------ ------
Total
liabilities 1,889,400 1,727,605
--------- ---------
Stockholders'
equity 173,108 160,074
------- -------
$2,062,508 $1,887,679
========== ==========
EXCHANGE BANK
Condensed Consolidated Statements
(Unaudited)
December 31, 2015
STATEMENT OF INCOME
-------------------
(in thousands)
2015 2014 2015 2014
---- ---- ---- ----
Quarter ended Dec 31, Twelve months ended Dec
31,
Interest Income
Interest and fees
on loans $15,160 14,266 $59,379 56,953
Interest on
investments
securities 2,635 2,351 10,402 9,109
----- ----- ------ -----
Total interest
income 17,794 16,617 69,781 66,062
Interest expense
Interest on
deposits 223 351 1,018 1,504
Other interest
expense 96 389 753 1,007
--- --- --- -----
Total interest
expense 319 740 1,771 2,511
Net interest
income 17,475 15,877 68,010 63,551
Provision
(recapture) for
losses on loans - - (3,200) -
--- --- ------ ---
Net interest income after
provision for losses on
loans
17,475 15,877 71,210 63,551
Non interest
income 5,028 4,882 21,056 20,999
Non interest expense
Salary and
benefit costs 7,387 6,749 31,212 29,839
Other expenses 7,467 7,122 27,034 26,439
----- ----- ------ ------
14,854 13,871 58,246 56,278
Income before
income taxes 7,649 6,888 34,020 28,272
Provision for
income taxes 2,528 2,340 12,992 10,563
----- ----- ------ ------
Net income $5,121 4,548 $21,028 17,709
====== ===== ======= ======
In dollars
Basic/diluted
earnings per
common share1 $2.99 $2.65 $12.27 $10.25
Simple earnings
per share2 $2.99 $2.65 $12.27 $10.33
Dividends per
share $0.60 $0.45 $2.20 $1.55
------------- ----- ----- ----- -----
1 Earnings per share is computed
by dividing net income, less
preferred stock dividends, by
the weighted averaged number
of shares outstanding during
the year.
2 Simple earnings per share is
computed by dividing net
income by the weighted
average of shares outstanding
during the year.
Total average shares outstanding for
both 2015 and 2014 was 1,714,344
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SOURCE Exchange Bank
