Exchange Bank Announces Second Quarter Earnings

SANTA ROSA, Calif., July 22, 2016

The core earnings of the Bank, absent the non-recurring elements of income and expense, are driven primarily by continued growth in loans which were funded by growth in deposits. Loan growth of $113 million or 9.3% during the 12 months ending June 30, 2016 was funded by deposit growth of $105 million or 6.1%.This asset growth led to an increase in net interest income of approximately $800 thousand during the second quarter of 2016, a 4.7% increase over the similar quarter in 2015.

During the six-months ending June 30, 2016, the Bank achieved net earnings of $10.66 million, compared to $10.77MM during the similar six-month period in 2015. During the six-months ending June 30, 2016 the Bank's core earnings as measured by net interest income increased $2.1 million over the similar six-month period in 2015, an increase of 6.3%. Earnings were generally flat year-over-year as this increase in net interest income was offset by  the decline in the recapture of provision for loan loss which fell from $2.9 million for the six-months ending June 30, 2015 to $900 thousand during the similar six month period ending June 30, 2016.

"Given the headwinds created by a slowing global economy and Treasury yields that have fallen recently to all-time lows, we are pleased with the results of the Bank. The ability to fund the credit needs of the communities we serve with net loan growth of $113 million is both the result of the dedication and hard work of our employees as well as the confidence the community places in Exchange Bank", stated Mr. Hartwick. "The challenges of operating in this historically low interest rate environment will be a difficult hurdle to overcome as we attempt to continue growing the Bank's earnings in future periods," said Greg Jahn Executive Vice President and CFO. 

Exchange Bank paid a quarterly cash dividend of $0.70 per share on common stock outstanding to shareholders on June 17, 2016. 51% of the cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College.

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