Santa Rosa’s Exchange Bank reports 6% earnings rise in 1st half

Exchange Bank’s (OTC: EXSR) earnings rose 15.8% in the second quarter from a year before.

The Santa Rosa-based bank reported Thursday net income of $9.51 million, compared with $8.21 million for the same quarter in 2021. For the first half of this year, earnings totaled $17.77 million, up 6.3% from $16.71 million for the first six months of 2021.

Net interest income also increased year over year and quarter versus quarter.

“It’s more favorable than what we would have anticipated,” Chief Financial Officer Shari DeMaris said of this past quarter’s results. She pointed to the community bank’s advantage to deploy cash in its investment portfolio as a contributing factor to the good performance in today’s economy.

President and CEO Troy Sanderson echoed the same sentiment, adding the bank plans to “stay the course” in terms of strategy behind an economy wrestling with all types of issues ranging from inflation to a multi-year pandemic.

“We’re in good shape,” he said.

Sanderson cited the bank’s “control of credit quality” that has assisted in reducing risk and keeping the loan portfolio strong. The bank set aside $800,000 as a reserve to absorb any potential future losses on loans.

Exchange Bank has whittled away at managing forgiveness for its recipients of U.S. Small Business Administration’s Paycheck Protection Program loans, which were intended as a safety net for companies to retain their payrolls. Sanderson labels the program that funded $383 million in assistance to its clients as the financial institution’s crowning achievement based on the amount of effort that went into it and the level of stability it provided to its clients. Less than 10 loans valued at about $3 million are left on the books at this point.

Many of those customers who received those business loans turned around and deposited the funds in the bank, lifting deposit levels quarter after quarter during the pandemic.

Assets totaled $3.45 billion at the end of the quarter, barely changed from $3.43 billion a year earlier. Deposits topped $3.2 billion, up from $3 billion at the same time last year.

Keeping with the same theme, non-interest income — derived by fees — added up to $6 million for this past quarter. It was $5.94 million in the same quarter in 2021.

The community bank founded in 1890 manages 18 retail branches in Sonoma County, a commercial branch in Roseville as well as trust and investment offices in its home base of Santa Rosa, along with those in Roseville and the Silicon Valley.

Susan Wood covers law, cannabis, production, tech, energy, transportation, agriculture as well as banking and finance. For 27 years, Susan has worked for a variety of publications including the North County Times, Tahoe Daily Tribune and Lake Tahoe News. Reach her at 530-545-8662 or susan.wood@busjrnl.com.