SANTA ROSA -- Improving loan quality has helped Santa Rosa's Exchange Bank to realize a profit of $11.43 million for the first nine months of 2013 -- up 27 percent compared to the same period last year, the bank announced.

The bank had an after-tax profit of $4.41 million for the three-month period ended Sept. 30, up from $3.21 million in the third quarter of 2012. Deposits have increased by $114 million, to $1.53 billion, and loans have risen by $37 million, to $1.05 billion.

Fewer charge-offs and strong loan recoveries have helped support the bank's earnings over the course of the year. A loss provision of $250,000 for the third quarter was a fraction of the $2.1 million the bank set aside for the third quarter of last year.

While loans have grown, interest income has declined 7.7 percent comparing the two nine-month periods. Interest expense has also decreased, by 4.6 percent.

Exchange Bank had $1.73 billion in total assets at the end of the quarter, up from $1.63 billion as of Sept. 30 last year. The bank earned $6.23 per diluted share for the first nine months of the year, an increase from $4.22 last year.

The bank noted the impact of a non-reoccurring investment gain in its $1.3 million increase in non-interest income comparing those two quarters.

Exchange Bank paid a quarterly cash dividend of 30 cents per share to its common shareholders on Sept. 20. The bank had increased its dividend by 20 percent in August, and those quarterly payments now provide around $262,294 to the trust funding the Doyle Scholarship at Santa Rosa Junior College.