Exchange Bank reported net income of $4.5 million for the second quarter of 2014 compared to $3.8 million for the same period in 2013, an increase of $732,000 or 19 percent.
The bank's net income for the first six months ending June 30 totaled $8.6 million compared to $7 million in the same period a year ago.
"I am pleased with our operating results and grateful that our performance is due to our loyal customers and the exceptional work of our dedicated employees," said Gary Hartwick, president and chief executive officer of Exchange Bank.
The bank continues to have steady growth in both loans and deposits. Total gross loans increased $111 million, or 10.5 percent, from the prior year quarter-end to $1.172 billion as of June 30. Deposits totaled $1.576 billion at June 30, an increase of $90 million, or 6 percent, over a year ago.
"The bank's core earnings continue to improve as demonstrated by the increase in net interest income, driven by loan growth year over year of 10.5 percent," Mr. Hartwick said.
For the six months ending June 30, 2014, net interest income totaled $31 million compared to $29.3 million in the prior year, an increase of $1.7 million or 6 percent. The increase from the same period a year ago is directly attributable to the increase in the bank's loan portfolio.
Net income before income taxes for the six months ending June 30, 2014 totaled $13.9 million compared to $10.8 million at June 30, 2013, an increase of $3.1 million or 29 percent.
Credit quality continued to improve with non-accrual loans representing 1.75 percent of total loans at June 30, 2014, down from 2.63 percent at year-end and 3.36 percent at June 30, 2013. As a result of the steadily improving asset quality, the bank did not make any provision for loan losses for the first six months of 2014, while maintaining a relatively high ratio of loan loss reserves to total loans of 3.19 percent. The provision for loan losses was $2.25 million for the same period in 2013.
Exchange Bank paid a quarterly cash dividend of 35 cents per share on common stock outstanding to shareholders on June 20, 2014. Fifty-one percent of the cash dividend goes to the Doyle Trust, which funds the Doyle Scholarships at the Santa Rosa Junior College.