SANTA ROSA -- Exchange Bank's board of directors has approved a 17 percent increase to the bank's quarterly cash dividend, its second increase since the institution announced the resumption of its regular shareholder dividend in August 2012.
The bank will pay 35 cents per share on March 21 to shareholders of record as of March 7, the Santa Rosa-based institution announced. The increase amounts to an additional five cents per share, equal to an earlier increase approved on the one-year anniversary of the dividend's restoration in August 2013.
With 51 percent of those shares held in a trust that administers the Doyle Scholarship at Santa Rosa Junior College, the increased dividend will fund approximately $306,000 towards new scholarships every quarter, according to information from the bank's latest statement of condition.
The dividend represents an annualized yield of 1.81 percent based on a current stock price of $77.31. Exchange Bank trades over the counter as EXSR.
"The board recognizes substantial improvement in our credit quality and the quality of our balance sheet, as well as the dependability of our earnings," said William Schrader, president and chief executive.
The bank reported what its executives said was the first year of meaningful post-recession loan growth -- an important measure for community banks --in 2013. Loan volume was up 8.2 percent for the year, along with improvements in asset quality and a 28 percent increase in annual earnings. Exchange Bank had $1.78 billion in assets as of Dec. 31, 2013.
Exchange Bank suspended its quarterly shareholder dividend in 2008 during the height of the financial crisis, after paying an all-time annual peak of $6.10 to shareholders in 2007.
While the bank's position improved in the following years, a technicality connected to the $45 million it received through 2008's federal Troubled Asset Relief Program remained a barrier to restoring the dividend. The U.S. Department of the Treasury effectively released that barrier after auctioning its special TARP shares in the bank on the private market in July 2012.
[caption id="attachment_87377" align="alignleft" width="79"] Bill Schrader[/caption]