SANTA ROSA -- A growing loan portfolio, higher interest rates and improved asset quality helped first-quarter earnings for Santa Rosa's Exchange Bank increase 26.6 percent versus the same period one year ago, according to an announcement from the bank.

Chief among those gains was what the bank called "the first significant year-over-year increase in several years" to net interest income and its quarterly margin versus interest expenses -- two important measures of ongoing performance for community banks.

Exchange Bank had net interest income of $15.4 million for the three-month period ended March 31, up 5.3 percent from the same period in 2013 and 1.8 percent from the prior quarter. The bank's net interest margin, describing net interest income as a proportion of loans and investments, was 0.98 percent for the quarter, up from 0.95 percent in the last three months of 2013.

Exchange Bank had an after-tax profit of $4.06 million for the three-month period ended March 31. Loans grew by 11 percent, to $1.1 billion, and deposits grew by 7 percent, to $1.58 billion.

"Growing our loan portfolio remains a key priority at the bank, given our loan-to-deposit ratio of 72 percent," said Gary Hartwick, president and CEO, in the announcement.

Loan-to-deposit ratios in the bank's national peer group averaged just under 76 percent in the latest comparable data from year-end 2012 -- a higher number can suggest more loans generating income for the bank, while a lower number can suggests greater cash reserves.

Real estate loans grew by 10.74 percent over the 12-month period, with consumer loans up 3.47 percent and commercial loans up 13.57 percent. Real estate loans represented 67.7 percent of the portfolio, followed by commercial loans at 24.74 percent and consumer loans at 7.55 percent.

Exchange Bank made no provision for loan losses in the first quarter, having set aside $1.4 million during the first quarter of 2013.

The bank had $1.77 billion in assets at quarter-end, up from $1.69 billion one year prior. Its earnings were equivalent to $2.29 per diluted share, versus $1.68 during the same quarter last year.

The 35-cent quarterly dividend paid to shareholders on March 21 added $306,000 to the trust that administers the Doyle Scholarship at Santa Rosa Junior College, which owns 51 percent of Exchange Bank's common stock. The bank trades over the counter as EXSR.