Exchange Bank Announces Fourth Quarter and Year Ending 2015 Earnings

Jan 29, 2016, 16:09 ET from Exchange Bank

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.

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



RELATED LINKS

http://www.exchangebank.com