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Exchange Bank Announces First Quarter EarningsExchange Bank (OTC: EXSR) today announced results for the first quarter of 2018 with a profit after tax of $11.10 million, compared to $6.63 million in the first quarter of 2017. This represents an increase of $4.47 million or 67.3% over the same period a year ago. The increase in earnings can be attributed to an increase in net interest income and nonrecurring earnings in the form of gains on the sale of other real estate owned (OREO). During the first quarter of 2018, the Bank successfully completed the disposition of other real estate held for sale, which contributed pretax gains of approximately $3.25 million. There was a similar gain on the sale of assets during the first quarter of 2017 totaling $1.38 million. Contributing to the increased profitability was the impact of a lower federal income tax rate which declined from 35% in 2017 to 21% in 2018. The Bank estimates that the effect of this lower income tax rate in 2018 contributed approximately $1.70 million to the net income after tax during the first quarter of 2018. "While this was another strong quarter of financial performance, as demonstrated by the increased net interest income, it is important to note that the unusual nature of the gains on the sale of other real estate owned totaling approximately $3.25 million is not anticipated in future periods. Conversely, the positive benefit from a lower federal income tax rate will continue to add value for years to come," said Greg Jahn, Executive Vice President and CFO. Exclusive of the non-recurring gain on the sale of OREO, the strength in pretax earnings was driven primarily by continued growth in loans and investments fueled by the strength of an extraordinary increase in deposits, leading to an increase in net interest income of approximately $3.0 million during the first quarter of 2018, a 15.5% increase over the similar quarter in 2017. Loans grew by $91 million over the 12 months ending March 31, 2018, an increase of 6.4%, while liquid investments grew by $378 million, an increase of 57%. This increase in interest earning assets was funded primarily by growth in deposits of approximately $463 million, an increase of 23.6% over 2017. The extraordinary growth in deposits occurred during the past six months and are to a large extent related to the inflow of insurance settlements received by the Bank's clients who suffered losses as a result of the unprecedented wildfires in the communities we serve. Absent the gain on sale of OREO in both 2017 and 2018, the Bank's non-interest income increased by approximately $400 thousand during the first quarter of 2018 compared to the similar quarter in 2017, and was driven by increases in gain on sale of Small Business Administration (SBA) loans, as well as income generated by the Bank's Trust and Investment business. "We remain committed to identifying ways in which we can support our community and colleagues after the most devastating wildfires in California history. We have developed a number of innovative and low cost loan products designed to help finance the rebuild efforts. We are grateful that our positive financial results leave us in a great position to assist the community as we move forward through rebuilding," said Gary Hartwick, President and CEO. Exchange Bank paid a quarterly cash dividend of $0.95 per share on common stock outstanding to shareholders on March 16, 2018. 50.44% of the cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College. Forward looking information 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. About Exchange Bank Headquartered in Sonoma County and founded in 1890, Exchange Bank is a premier community bank with assets of $2.6 billion. Exchange Bank provides a wide range of personal, commercial and trust and investment services with 18 branches in Sonoma County and a commercial and SBA lending office in Roseville and Marin, California. The Bank's legacy of financial leadership and community support is grounded in its core values of Commitment, Respect, Integrity and Teamwork. Exchange Bank is a 12-time winner of the North Bay Business Journal's Best Places to Work survey, a recipient of the 2018 North Bay Community Philanthropy Award and the 2017 Healthiest Companies in the North Bay Award. NorthBay biz magazine named Exchange Bank the 2018 Best Consumer Bank and Gold Medal Winner for Best Business Bank. The North Bay Bohemian's "Best of 2018" Readers Poll named Exchange Bank the Best Business Bank and Best Consumer Bank. Exchange Bank can also be found in the North Bay Business Journal's listing of leading SBA 7(a) Lenders, Wealth Management Advisors and Wine Industry Lenders. www.exchangebank.com. Member FDIC - Equal Housing Lender - Equal Opportunity Employer
Earnings per share is computed by dividing net income, by the weighted averaged number of shares outstanding during the year. Total average shares outstanding for both 2018 and 2017 was 1,714,344. View source version on businesswire.com: https://www.businesswire.com/news/home/20180425006628/en/ |
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