Exchange Bank posts increase in profits

Santa Rosa-based Exchange Bank on Thursday reported a 26 percent increase in profits for the first quarter compared to the same period a year ago, thanks to an increase in loans and deposits.

The company, the area’s largest community bank, recorded an after-tax profit of $5.13 million, which was an increase of $1.07 million from the same three months in 2014.

The growth was driven primarily by net interest in income of $1.1 million from loans and deposits during the quarter, which was a 7 percent increase from the first quarter in 2014.

Loans increased by about $78 million and deposits increased by $115 million, a jump of 7 percent in each category from the first three months of 2014.

“The bank remains committed to funding the growth of our community by meeting the needs of small business and consumers, as our local economy continues to experience growing optimism,” Gary Hartwick, president and CEO, said in a statement.

The bank also reported it was able to recapture $400,000 during the quarter from bad loans it previously charged off, a one-time result given the strong performance of its loan reserve program that stood at $37.5 million at the end of March. Exchange Bank did not make any provision for such loan losses in the first quarter of 2014.

Greg Jahn, vice president and chief financial officer, said in a statement the bank was pleased with “the unexpected positive impact to earnings” from the loan loss reserve program. Jahn added that the growth in loans and deposits “represents a sustainable source of future revenue.”

Exchange Bank paid a quarterly cash dividend of 50 cents a share on common stock outstanding to shareholders on March 21. Approximately 51 percent of the cash dividend goes to the Frank P. Doyle and Polly O’Meara Doyle Trust, which funds the Doyle Scholarships at Santa Rosa Junior College.

You can reach Staff Writer Bill Swindell at 521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.