Exchange Bank Announces Second Quarter Earnings

Jul 22, 2015, 17:40 ET from Exchange Bank

SANTA ROSA, Calif., July 22, 2015 /PRNewswire/ -- Today Exchange Bank (OTC:EXSR) announced results for the second quarter of 2015 with a profit after tax of $5.63 million, compared to $4.54 million in the second quarter of 2014. This represents an increase of $1.09 million or 24% over the same period a year ago. "Our earnings for the second quarter were strong as the underlying core earnings of the Bank reflect the continued improvement in Sonoma County's economy", stated Gary Hartwick, President and CEO.

This quarter's profitability was influenced by a number of nonrecurring events which impacted both revenue and expense. As a result of the significant improvement in our credit quality and the recovery of loans previously charged off, $2.5 million in provision for loan losses was reversed during the second quarter. The Bank's level of reserves to support future loan losses remains strong in comparison to industry standards and is supported by the continued improvement in asset quality. Offsetting this unexpected revenue, the Bank recognized a number of nonrecurring expenses totaling approximately $1.3MM relating to retirement benefits and the reduction of outstanding debt, which over the longer-term should both strengthen the balance sheet and increase the Bank's earnings potential. The difference between nonrecurring income and expense of $1.2MM is reduced by approximately $.5MM after the effect of income taxes, providing a net positive adjustment of approximately $.7MM to the Bank's net earnings for the quarter. Normalized core earnings for the bank after removing all nonrecurring events would have been approximately $4.9MM, an increase of approximately 6% over the $4.54MM earned in the second quarter of 2014. "We are proud of the Bank's continued level of profitability, notwithstanding the impact on the Bank's second quarter earnings of several large nonrecurring events", stated Mr. Hartwick.

The core earnings of the Bank, absent the non-recurring elements of income and expense, are 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 $1.5 million during the second quarter of 2015, a 9% increase over the similar quarter in 2014. The Bank continued to witness meaningful growth in both loans and deposits during the 12 months ending June 30, 2015. Loans grew by approximately $41 million and investment securities by $69 million, funded by growth in deposits of approximately $153 million over totals reported as of June 30, 2014. "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 $0.55 per share on common stock outstanding to shareholders on June 19, 2015. 51% of the cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College.

FORWARD-LOOKING INFORMATION:

The following appears in accordance with the Private Securities Litigation Reform Act of 1995:

This press release may contain forward-looking statements about the Company, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may."

Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors — many of which are beyond the Company's control — could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date forward-looking statements are made.

 

EXCHANGE BANK






Condensed Consolidated Statements

(Unaudited)






June 30, 2015






CONDENSED STATEMENT OF CONDITION








2015


2014



in thousands

ASSETS










Cash and due from banks


$   122,324


$     76,278






Interest-bearing deposits in other financial institutions


63,000


39,000






  Investment Securities available for sale


475,070


430,427






  Total investment securities


475,070


430,427






Loans





Real estate


800,610


787,974

Consumer


96,957


91,902

Commercial


316,143


292,559








1,213,710


1,172,435

Less allowance for loan losses


37,512


37,395






  Net loans


1,176,198


1,135,040






Bank premises and equipment


16,312


16,055

Other assets


69,747


66,353








$ 1,922,651


$ 1,763,153






LIABILITIES AND STOCKHOLDERS' EQUITY








Deposits





Non Interest Bearing Demand


$   648,014


$   562,308

Interest Bearing





  Transaction


279,143


237,921

  Money market


229,472


221,772

  Savings


356,745


319,088

  Time


215,709


235,020






  Total Deposits


1,729,083


1,576,109






Other borrowings


8,000


24,000

Other liabilities


16,914


7,532






  Total liabilities


1,753,997


1,607,641






Stockholders' equity


168,654


155,512








$ 1,922,651


$ 1,763,153

 

 

EXCHANGE BANK










Condensed Consolidated Statements

(Unaudited)

June 30, 2015










STATEMENT OF INCOME

(in thousands)











2015


2014


2015


2014



 Quarter ended June 30, 


 Six months ended June 30, 










Interest Income









Interest and fees on loans

$ 14,978


13,963


$ 29,589


27,746

Interest on investments securities

2,775


2,263


5,153


4,476

Interest on cash equivalents

-


-


-


-










  Total interest income


17,753


16,226


34,742


32,222










Interest expense









Interest on deposits


255


389


560


780

Other interest expense


382


205


562


409










  Total interest expense


637


594


1,122


1,189










Net interest income


17,116


15,632


33,620


31,033










Provision (recapture) for losses on loans

(2,500)


-


(2,900)


-










Net interest income after provision for losses on loans


19,616


15,632


36,520


31,033










Non interest income


5,020


5,434


10,621


10,635










Non interest expense









Salary and benefit costs


8,652


7,409


16,395


15,388

Other expenses


6,565


6,280


12,854


12,392












15,217


13,689


29,249


27,780










Income before income taxes

9,419


7,377


17,892


13,888










Provision for income taxes


3,784


2,834


7,123


5,282










Net income


$  5,635


4,543


$ 10,769


8,606















 In dollars 




Basic/diluted earnings per common share1

$    3.29


$  2.65


$    6.28


$  4.94

Simple earnings per share2

$    3.29


$  2.65


$    6.28


$  5.02











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


The consolidated financial statements include the accounts of the Bank and its wholly owned subsidiaries. Certain intercompany accounts and transactions have been eliminated.

 

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SOURCE Exchange Bank



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