Exchange Bank, which last month reinstated a stock dividend that finances the Doyle scholarships at Santa Rosa Junior College, on Thursday reported its 14th straight quarterly profit.

Sonoma County's largest community bank earned $3.2 million in the third quarter, an increase of 7 percent from a year earlier.

Deposits increased 7 percent from last year to $1.4 billion. However, the bank's loans declined 2 percent to slightly more than $1 billion.

Those numbers show the cautiousness of consumers and small businesses in taking out new loans, said William R. Schrader, the bank's president and CEO. The economy has improved but still is "just barely getting back on its legs," he said.

Schrader predicted slow but steady improvement for both the county's economy and the bank's performance next year.

"We're very pleased with the track the bank is on right now," he said.

The 122-year-old bank on Sept. 21 paid its first stock dividend in nearly five years. It halted the dividend in 2008 and went on to lose more than $22 million in that year and 2009.

Officials have estimated the new dividend amounts to about $850,000 annually to the Frank P. Doyle and Polly O'Meara Trust, the bank's largest shareholder. The trust finances the Doyle scholarships for SRJC students.

The bank's non-performing assets, both loans and real estate, declined 35 percent from a year earlier to $34.3 million. Total assets increased 5 percent to $1.6 billion.

Officials said Thursday that the county's wine, tourism and technology sectors have shown gains this year. However, the owners of many smaller companies appear reluctant to expand because of uncertainties about such government policies as health care and taxes.

"Small businesses are still on the sidelines," said Greg Jahn, the bank's chief financial officer.