Exchange Bank Announces Third Quarter Earnings Increase 5%

SANTA ROSA, Calif., Oct. 19, 2016

The core earnings of the Bank are driven primarily by continued growth in loans which were funded by growth in deposits. Loan growth of $140 million or 11.3% during the 12 month period ending September 30, 2016 was funded by deposit growth of $127 million or 7.2%.This asset growth led to an increase in net interest income of approximately $900 thousand during the third quarter of 2016, a 5.3% increase over the similar quarter in 2015.

During the nine-months ending September 30, 2016, the Bank achieved net earnings of $16.05 million, compared to $15.9MM during the similar nine-month period in 2015. During the nine-months ending September 30, 2016 the Bank's core earnings as measured by net interest income increased $3.3 million over the similar nine-month period in 2015, an increase of 6.6%. Net earnings for the Bank rose by $144 thousand or approximately 1% year-over-year as this increase in net interest income was largely offset by the decline in the recapture of provision for loan loss which fell from $3.2 million for the nine-months ending September 30, 2015 to $900 thousand during the similar nine-month period ending September 30, 2016.

Exchange Bank paid a quarterly cash dividend of $0.70 per share on common stock outstanding to shareholders on September 16, 2016. 51% of the cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College.

FORWARD-LOOKING INFORMATION:

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