News Room 2019 Archive

Press Releases from 2019

December 20, 2019 – Exchange Bank donates $20,000 to the Redwood Empire Food Bank in honor of its customers and business partners – 12.20.19
November 26, 2019 – Exchange Bank Declares Increase to Quarterly Cash Dividend – 11.26.19
October 23, 2019 – Exchange Bank Announces Third Quarter Earnings – 10.23.19
August 23, 2019 – Exchange Bank Declares Quarterly Cash Dividend – 8.23.19
July 30, 2019 – Exchange Bank Announces Chad Barbieri as Vice President and SBA Business Development Officer
July 25, 2019 – Exchange Bank Announces Second Quarter Earnings
July 8, 2019 – Exchange Bank Announces Kevin Smart as Senior Vice President, Residential Mortgage Manager
May 29, 2019 – Exchange Bank Declares Increase to Quarterly Cash Dividend – 5.29.19
April 25, 2019 – Exchange Bank Expands to Silicon Valley through Trust Business Acquisition, Adding Two Trust Professionals in San Mateo
April 23, 2019 – Exchange Bank Earnings Remain Strong in First Quarter
February 22, 2019 – Exchange Bank Declares Increase to Quarterly Cash Dividend – 2.22.19
February 17, 2019 – Exchange Bank Announces the Acquisition of American Trust and Savings Bank’s California Trust and Wealth Management Business
January 29, 2019 – Exchange Bank Announces Fourth Quarter and Year Ending 2018 Earnings
January 18, 2019 – Exchange Bank Donates $20,000 to the Redwood Empire Food Bank in Honor of its Customers and Business Partners

December 20, 2019

Contact: Carolyn Cole-Schweizer, Corporate Communications & Social Media
707.541.1250

Exchange Bank donates $20,000 to the Redwood Empire Food Bank in honor of its customers and business partners

Santa Rosa, CA – (December 20, 2019) – On December 20, 2019, Exchange Bank (OTC: EXSR) presented a check for $20,000 to the Redwood Empire Food Bank.

Presenting the check on Friday at the Redwood Empire Food Bank in Santa Rosa was Exchange Bank President and CEO Gary Hartwick. The check was presented to Redwood Empire Food Bank CEO David Goodman.

“On behalf of our loyal customers and business partners, we are proud to make this donation to the Redwood Empire Food Bank,” said Gary Hartwick. “Giving back is an integral part of our mission and legacy. The Food Bank plays a very important role in helping to end hunger in our community. Everyone deserves access to nutritious food. During the holiday season it’s so important to remember those who often go without this basic life necessity. That’s what makes our relationship with them so special—it’s a wonderful example of how we can work together to affect meaningful change for our community.”

This year Exchange Bank gave an additional $10,250 to the Redwood Empire Food Bank to support their Kincade fire relief efforts. Each year, the bank supports a variety of Sonoma County local nonprofits with well over $700,000 in donations.

“Exchange Bank has a long history of serving the community. Through their generous philanthropy, it is clear that they care about the well-being of all people who call Sonoma County home. As a result of their generosity, and that of their customers, many lives are improved each and every day,” said David Goodman, CEO of the Redwood Empire Food Bank. “We are fortunate and grateful to have Exchange Bank with us in this most important work.”

About Redwood Empire Food Bank

The Redwood Empire Food Bank (REFB) is the largest hunger-relief organization serving north coastal California from Sonoma County to the Oregon border. Since 1987, the REFB has been helping our community through 11 innovative programs under three strategic initiatives – Every Child, Every Day, Senior Security and the Neighborhood Hunger Network.

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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 14-time winner of the North Bay Business Journal’s (NBBJ) Best Places to Work survey, a recipient of the 2019 North Bay Community Philanthropy Award and the 2019 Healthiest Companies in the North Bay Award. NorthBay biz magazine named Exchange Bank the 2019 Best Consumer Bank and Gold Medal Winner for Best Business Bank. The North Bay Bohemian’s Best of 2019 Readers Poll named Exchange Bank the Best Business Bank and Best Consumer Bank. Exchange Bank can also be found in the NBBJ’s Book of Lists as a leading lender and wealth management advisor—claiming the #1 position in SBA 7(a) lending in Sonoma County for 2019. www.exchangebank.com.

Member FDIC — Equal Housing Lender — Equal Opportunity Employer

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November 26, 2019

Contact: Greg Jahn, EVP, Chief Financial Officer
(707) 524.3218

Exchange Bank Declares Increase to Quarterly Cash Dividend

Santa Rosa, CA – On November 19, 2019, Exchange Bank declared a quarterly cash dividend of $1.15 per share on common stock outstanding to shareholders of record at the close of business on November 29, 2019. The dividend is payable December 13, 2019. The cash dividend of $1.15 per share represents an increase of $.05 over the prior quarter’s dividend of $1.10 per share. The dividend has increased from $1.00 per share during the similar quarter ending December 31, 2018, an increase of 15%.

50.44% of the Bank’s cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College.

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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.

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About Exchange Bank

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October 23, 2019

Contact: Greg Jahn, EVP, Chief Financial Officer
(707) 524.3218

Exchange Bank Announces Third Quarter Earnings

Santa Rosa, CA – On October 23, 2019, Exchange Bank announced earnings of $9.35 million in the third quarter of 2019, compared to $9.0 million in the second quarter of 2019, a 4% increase over the prior quarter. The $9.35 million earned in the third quarter of 2019 represented a 2% decline from $9.53 million earned in the third quarter of 2018.

“The small decline in net income in the quarter ended September 30, 2019 compared to the similar quarter in 2018 does not paint a true picture of the Bank’s very positive financial success. During this current quarter, operating expenses were heavily influenced by the Bank’s conversion to a new online and mobile banking platform to better serve our valued clients. In aggregate, the Bank recognized approximately $800 thousand of increased operating expenses during the third quarter relating to the Banks new digital delivery systems. Our third quarter performance was very good and the Bank’s core business remains strong,” said Gary Hartwick, president and CEO of Exchange Bank.

The Bank continues to experience strong growth in its core business as evidenced by an increase in net interest income which increased from $23.74 million in the third quarter of 2018 to $24.93 million during the quarter ending September 30, 2019, an increase of 5.0%. Contributing to the positive trend in net interest income was growth in the loan portfolio of approximately $82 million, an increase of 5.5% over similar balances as of September 30, 2018. Additionally, the Bank’s increased net interest income was strongly influenced by the generally rising interest rate environment during much of 2018. As a result of the lagged effect of higher treasury yields during much of 2018, the Bank was able to increase its net interest margin from 3.70% for the nine months in 2018 to 3.91% for the similar period ending September 30, 2019. As interest rates have declined materially during the first nine months of 2019, the Bank will be challenged to continue this expansion of net interest margin into the foreseeable future.

The Bank’s balance sheet experienced a small decline during the 12-month period ending September 30, 2019 as the Bank continued to witness deposit withdrawals from clients who were impacted by the wildfires of 2017. As the rebuild efforts have continued to accelerate, those clients have had the opportunity to utilize cash reserves from their insurance proceeds held at the Bank to rebuild or relocate their primary residence. As a result, deposits declined from $2.357 billion at September 30, 2018 to $2.295 billion at September 30, 2019. The growth of $82 million in loans and the run-off of $62 million in fire-related insurance deposits were primarily funded by liquid investments totaling $95 million.

Non-interest income increased in the third quarter of 2019 by $581 thousand compared to the similar quarter ending September 30, 2018. A comparison of second quarter non-interest income year-over-year was primarily influenced by an increase of approximately $440 thousand in revenue generated by our Trust and Investment Management business. The increase in Trust revenue was largely the result of recent acquisitions of Trust business in the Sacramento and South Bay markets.

During the nine months ending September 30, 2019, the Bank achieved net earnings of $27.43 million, compared to $29.51 million during the similar period in 2018, a decrease of approximately $2.08 million or 7.0%. The nine-month period ending September 30, 2018 was positively influenced by the one-time gain of $3.25 million on the sale of other real estate (OREO) that did not exist in the similar period ending September 30, 2019. Additionally, during the nine months ending September 30, 2019, the Bank recognized operating expenses totaling approximately $1.3 million that were not present during the similar period in 2018, relating to the conversion of the Bank’s internet and mobile banking platform. Absent this unusual gain of $3.25 million in 2018, and the one-time expense relating to the Bank’s digital conversion, the Bank would have experienced net income of approximately $27.15 million during the nine months ending September 30, 2018 compared to net income of $28.28 million during the similar period in 2019, an increase of 4.2%. For the nine months ending September 30, 2019, the Bank’s net interest income increased $3.79 million over the similar period in 2018, an increase of 5.5%.

When excluding the OREO gain of $3.25 million from non-interest income during the nine months ending September 30, 2018, non-interest income would have increased from $16.86 million to $18.09 million during the similar period ending in 2019. Operating expenses for the nine months ending September 30, 2019 increased by 9.5% over the similar period in 2018 as the Bank continued to invest in technology and personnel necessary to support future growth. The Bank recognized approximately $1.3 million of expenses during the nine months ending September 30, 2019 relating to the implementation of a new online and mobile banking platform. Exclusive of these non-recurring expenses, the Bank’s total operating expenses would have increased by $3.3 million or 6.8%.

“We believe the investment in a new state-of-the-art online and mobile banking platform will meet the needs of our valued clients today and well into the future,” said Mr. Hartwick.

Exchange Bank paid a quarterly cash dividend of $1.10 per share on common stock outstanding to shareholders on September 20, 2019. 50.44% of the cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College.

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Forward-Looking Information:

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About Exchange Bank

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August 23, 2019

Contact: Greg Jahn, EVP, Chief Financial Officer
(707) 524.3218

Exchange Bank Declares Quarterly Cash Dividend

Santa Rosa, CA – On August 20, 2019, Exchange Bank declared a quarterly cash dividend of $1.10 per share on common stock outstanding to shareholders of record at the close of business on September 06, 2019. The dividend is payable September 20, 2019. The cash dividend is unchanged over the prior quarter’s dividend at $1.10 per share. The dividend has increased from $.95 per share during the similar quarter ending September 30, 2018, an increase of approximately 16%.

50.44% of the Bank’s cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College.

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Forward-Looking Information:

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About Exchange Bank

Exchange Bank is a 14-time winner of the North Bay Business Journal’s (NBBJ) Best Places to Work survey, a recipient of the 2018 North Bay Community Philanthropy Award and the 2018 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 NBBJ’s Book of Lists as a leading lender and wealth management advisor—claiming the #1 position in SBA 7(a) lending in Sonoma County for 2018. www.exchangebank.com.

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July 30, 2019

Contact: Carolyn Cole-Schweizer, Corporate Communications & Social Media
707.541.1250

Exchange Bank Announces Chad Barbieri as Vice President and SBA Business Development Officer

Santa Rosa, CA – (July 30, 2019) – Exchange Bank (OTC: EXSR) announces the hiring of Chad Barbieri as vice president and SBA business development officer, responsible for the development and implementation of growth strategies for Exchange Bank’s Small Business Administration.

Before joining Exchange Bank, Chad worked for Wells Fargo as vice president, business development officer and was very successful in building loan volume. Before that, he worked for Small Business Capital, Bay Funding and US Airways, serving in various development and management roles.

Chad is a graduate of CSU Sacramento where he earned a B.A. in Finance and Real Estate Land Use with a minor in Economics. He holds a teaching certificate from Cambridge University to teach English as a Second Language. Chad was born in Santa Rosa and moved back three years ago to be closer to family. He and his wife have two children ages 11 and 9. Chad is active in the community and enjoys volunteering for his children’s sports programs. We know Chad enjoys a good laugh because his wife is the long-time owner of Rooster T. Feathers Comedy Club in Sunnyvale.

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About Exchange Bank

Exchange Bank is a 13-time winner of the North Bay Business Journal’s (NBBJ) Best Places to Work survey, a recipient of the 2018 North Bay Community Philanthropy Award and the 2018 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 NBBJ’s Book of Lists as a leading lender and wealth management advisor—claiming the #1 position in SBA 7(a) lending in Sonoma County for 2018. www.exchangebank.com.

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July 25, 2019

Contact: Greg Jahn, EVP, Chief Financial Officer
(707) 524.3218

Exchange Bank Announces Second Quarter Earnings – July 25, 2019

Santa Rosa, CA – On July 25, 2019, Exchange Bank announced results for the second quarter of 2019 with a profit after tax of $9.01 million, compared to $8.87 million in the second quarter of 2018.

This represents a 1.5% increase compared to the same period a year ago. “The Bank’s core business remains strong. Our excellent credit quality, low-cost deposit base and our increased net interest margin are key indicators of the Bank’s stability. Our commitment to community support continues to be evidenced by the Bank’s loan growth, supporting our clients and the local economy,” said Gary Hartwick, president and CEO of Exchange Bank.

The Bank continues to experience solid growth in its core business as evidenced by an increase in net interest income from $23.20 million in the second quarter of 2018 to $24.01 million during the quarter ending June 30, 2019, an increase of 3.5%. Contributing to the positive trend in net interest income was growth in the loan portfolio of $39.73 million, an increase of 2.6% over similar balances as of June 30, 2018. Additionally, the Bank’s increased net interest income was strongly influenced by the generally rising interest rate environment during much of 2018. As a result of higher treasury yields during a substantial portion of the 12-month period ending June 30, 2019, the Bank was able to increase its net interest margin from 3.65% for the six months in 2018 to 3.88% for the similar six-month period ending June 30, 2019. As interest rates have declined materially during the first half of 2019, the Bank will be challenged to continue this expansion of net interest margin in the second half of the year.

The Bank’s balance sheet experienced a decline during the 12-month period ending June 30, 2019 as the Bank continued to witness deposit withdrawals from clients who were impacted by the wildfires of 2017. As the rebuild efforts have continued to accelerate, those clients have had the opportunity to utilize cash reserves from their insurance proceeds held at the Bank to rebuild or relocate their primary residence. As a result, deposits declined from $2,365 million at June 30, 2018 to $2,268 million at June 30, 2019. Funding the decline of approximately $98 million in deposits and growth of approximately $40 million in loans, was a reduction in liquid investments totaling approximately $101 million. The Bank expects this trend of deposits utilized to support the rebuild efforts to continue throughout 2019.

Non-interest income increased in the second quarter of 2019 by $645 thousand compared to the similar quarter ending June 30, 2018. This increase was primarily the result of an increase in SBA revenue of $330 thousand and an increase of approximately $220 thousand in revenue generated by our Trust and Investment Management business. The increase in Trust revenue was largely the result of recent acquisitions of Trust business in the Sacramento and South Bay markets.

During the six months ending June 30, 2019, the Bank achieved net earnings of $18.08 million, compared to $19.97 million during the similar six month period in 2018, a decrease of approximately $1.9 million or 9.5%. The six-month period ending June 30, 2018 was positively influenced by the one-time gain on the sale of other real estate (OREO) that did not exist in the similar six months ending June 30, 2019. Absent this unusual gain of $3.25 million in 2018, the Bank would have experienced net income of approximately $17.62 million during the six months ending June 30, 2018 compared to net income of $18.08 million during the similar period during 2019, an increase of 2.6%. During the six months ending June 30, 2019, the Bank’s net interest income increased $2.60 million over the similar six month period in 2018, an increase of 5.7%.

When excluding the OREO gain of $3.25 million from non-interest income during the six months ending June 30, 2018, non-interest income would have increased from $11.24 million to $11.90 million during the six months ending June 30, 2019. Operating expenses for the six months ending June 30, 2019 increased by 8.3% over the similar six-month period in 2018 as the Bank continued to invest in technology and personnel to support future growth. The Bank recognized approximately $500 thousand of expenses during the six-month period ending June 30, 2019 relating to the implementation of a new online and mobile banking platform.

“We believe the investment in a new state of the art and extremely robust digital banking platform will meet the needs of our valued clients today and well into the future,” said Mr. Hartwick.

Exchange Bank paid a quarterly cash dividend of $1.10 per share on common stock outstanding to shareholders on June 21, 2019. 50.44% of the cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College.

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About Exchange Bank

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July 8, 2019

Contact: Carolyn Cole-Schweizer, Corporate Communications & Social Media Specialist
707.541.1250

Exchange Bank Announces Kevin Smart as Senior Vice President, Residential Mortgage Manager

Santa Rosa, CA – Exchange Bank today announces the promotion of Kevin Smart, Vice President and Residential Mortgage Manager, to Senior Vice President, responsible for expanding mortgage production and continuing the success and growth of Exchange Bank’s Residential Lending Department.

Since joining Exchange Bank in 2017, Kevin has been successful in consolidating the underwriting team into the Residential Mortgage Department. Kevin was instrumental in developing Exchange Bank’s wildfire rebuild construction loan program after the North Bay wildfires in 2017 and in creating public awareness for the program throughout Sonoma County.

Kevin came to Exchange Bank from Wells Fargo, where he held the position of branch sales manager and was recognized for his performance in production, compliance and customer loyalty. He has an extensive 26-year mortgage industry background and previously owned his own mortgage brokerage business.

Kevin graduated from CSU Sacramento with a B.S. in Business Administration with a concentration in Real Estate Finance and Land Use Affairs. He has lived in Sonoma County since 1993 and supports the local community through volunteering activities. He has volunteered at Rebuilding Petaluma, COTS, Petaluma People Services, Petaluma Chapter of Realtors and the Waugh School District.

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About Exchange Bank

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May 29, 2019

Contact: Greg Jahn, EVP, Chief Financial Officer
707.524.3218

Exchange Bank Declares Increase to Quarterly Cash Dividend

Santa Rosa, CA – On May 21, 2019, the Exchange Bank (OTC: EXSR) Board of Directors declared a quarterly cash dividend of $1.10 per share on common stock outstanding to shareholders of record at the close of business on June 07, 2019. The dividend is payable June 21, 2019. The cash dividend which represents an increase of $.05 over the prior quarter’s dividend at $1.05 per share, is a reflection of the Bank’s financial strength and robust earnings. The dividend has increased from $.95 per share during the similar quarter ending June 30, 2018, an increase of 15.8%.

50.44% of the Bank’s cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College.

Forward-Looking Information:

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About Exchange Bank

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April 25, 2019

Contact: Greg Jahn, EVP, Chief Financial Officer
707.524.3218

Exchange Bank Expands to Silicon Valley through Trust Business Acquisition, Adding Two Trust Professionals in San Mateo

Santa Rosa, CA – Exchange Bank today announces that the acquisition of the American Trust and Savings Bank’s California Trust and Wealth Management business is complete. The acquisition is part of Exchange Bank’s expansion of trust and investment services and follows the October 2018 purchase of the trust department of First Northern Bank based in the Sacramento area.

Exchange Bank will keep American Trust and Saving Bank’s location in San Mateo. It will be managed by Senior Trust Officer Cathleen Colgan and Trust Administrative Assistant Jill Solle, who both joined Exchange Bank from American Trust. They will continue to work from their San Mateo office where they will focus on the development of new client relationships within the advisory community. Overall oversight of the trust department will continue to be under Exchange Bank Senior Vice President of Trust and Investment Management John Mackey in Santa Rosa.

“We believe the geographic expansion of our Trust & Investment Management department into the South Bay is a natural extension of our long-standing trust business,” said Gary Hartwick, president and CEO of Exchange Bank. “We are pleased to welcome Cathleen and Jill to the Exchange Bank family.”

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About Exchange Bank

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April 23, 2019

Contact: Greg Jahn, EVP, Chief Financial Officer
707.524.3218

Exchange Bank Earnings Remain Strong in First Quarter

On April 23, 2019, Exchange Bank announced results for the first quarter of 2019 with a profit after tax of $9.07 million, compared to $9.01 million in the previous quarter ending December 31, 2018.

The Bank’s net income of $9.07 million, compared to $11.1 million in the first quarter of 2018, shows a decrease in earnings which can be attributed to a decline in 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. The Bank recognized no such gain on sale of OREO in the first quarter of 2019. Absent the gain on sale of OREO in 2018, the Bank’s income after tax for the first quarter of 2018 would have been approximately $8.78 million compared to net income of $9.07 million during the first quarter of 2019. The Bank’s net interest income, a better measure of the Bank’s sustainable earnings growth, increased by $1.79 million or 8%, growing from $22.31 million in the first quarter of 2018 to $24.1 million for the similar quarter in 2019.

“This was another strong quarter of financial performance, as demonstrated by the increased net interest income. The increase in net interest income was fueled by a prudently managed balance sheet that allowed the Bank to take advantage of a generally rising interest rate environment” said Greg Jahn, executive vice president and CFO.

A key driver of the growth in net interest income was the rising interest rate environment experienced during much of the 12-month period ending March 31, 2019. As a result of four increases in the Fed Funds rate totaling 1.0% and a similar increase in Treasury yields, the Bank successfully redeployed an average of approximately $166 million in excess reserves at the Fed into higher yielding investment securities. The Bank’s balance sheet experienced a decline during the 12-month period ending March 31, 2019 as it began to witness deposit withdrawals from clients who were impacted by the wildfires of 2017. As the rebuild efforts have continued to accelerate, those clients have had the opportunity to utilize cash reserves from their insurance proceeds held at the Bank to rebuild or relocate their primary residence. The Bank expects this trend of deposits utilized to support the rebuild efforts to continue throughout 2019.

When excluding the OREO gain of $3.25 million from non-interest income during the first quarter of 2018, non-interest income was almost unchanged from the $5.86 million recognized during the first quarter of 2019. During the quarter ending March 31, 2019, declines in SBA revenue were offset by increases in fees generated by Trust and Investment Management as well as gains on sale of investment securities. Operating expenses for the first quarter of 2019 increased by almost 9% over the similar quarter in 2018 as the Bank continues to invest in technology and personnel necessary to support future growth.

The first quarter of 2019 marked the completion of Exchange Bank’s successful acquisition of the trust department of First Northern Bank of Dixon, CA.

“We believe the expansion of our Trust & Investment Management Department will provide significant value to our shareholders, clients and employees,” said Gary Hartwick, president and CEO of Exchange Bank. “First Northern Bank’s shared values and highly respected team is a natural fit which increases our wealth management capabilities and ability to serve the families and businesses of the Sacramento area.”

Exchange Bank paid a quarterly cash dividend of $1.05 per share on common stock outstanding to shareholders on March 15, 2019. 50.44% of the cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College.

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About Exchange Bank

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February 22, 2019

Contact: Greg Jahn, EVP, Chief Financial Officer
707.524.3218

Exchange Bank Declares Increase to Quarterly Cash Dividend – 2.22.19

Santa Rosa, CA – On February 20, 2019, the Exchange Bank Board of Directors declared a quarterly cash dividend of $1.05 per share on common stock outstanding to shareholders of record at the close of business on March 04, 2019. The dividend is payable March 15, 2019. The cash dividend which represents an increase of $.05 over the prior quarter’s dividend at $1.00 per share, is a reflection of the Bank’s financial strength and robust earnings. The dividend has increased from $.95 per share during the similar quarter ending March 31, 2018, an increase of 10.5%.

50.44% of the Bank’s cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College.

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Forward-Looking Information:

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About Exchange Bank

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February 17, 2019

Contact: Carolyn Cole-Schweizer, Corporate Communications & Social Media Specialist
707.541.1250

Exchange Bank Announces the Acquisition of American Trust and Savings Bank’s California Trust and Wealth Management Business

Santa Rosa, CA – On (February 17, 2019) – Exchange Bank (OTC: EXSR) today announced the signing of a purchase and sale agreement to acquire the American Trust and Savings Bank’s California Trust and Wealth Management business. The purchase is subject to regulatory approval by the California Department of Business Oversight.

Joining Exchange Bank from American Trust and Savings Bank are Senior Trust Officer Cathleen Colgan and Trust Administrative Assistant Jill Solle. Both will continue to work from their San Mateo office where they will focus on the development of new client relationships within the advisory community.

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About Exchange Bank

Member FDIC — Equal Housing Lender — Equal Opportunity Employer

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January 29, 2019

Contact: Greg Jahn, EVP, Chief Financial Officer
707.524.3218

Exchange Bank Announces Fourth Quarter and Year Ending 2018 Earnings

Santa Rosa, CA – On January 29, 2019, Exchange Bank announced results for the fourth quarter and year ending 2018, reporting income before taxes of $12.49 million in the fourth quarter of 2018, compared to $10.86 million for the same period in 2017, an increase of 15%. Income before taxes for the year ended December 31, 2018 totaled $53.50 million, compared to $43.57 million a year ago, an increase of 22.8%. However, the comparisons between net income after tax for the quarter and year ending December 31, 2018 and 2017 were strongly influenced by the impact of a change in tax law enacted during 2017. As a result of the enactment of the “Tax Cuts and Jobs Act” (Tax Act) as signed into law on December 22, 2017, the Bank reported an additional adjustment to income tax expense totaling $6.9 million in the fourth quarter of 2017, which had a material impact on net income for both the year and quarter ending December 31, 2017. As a result of this additional tax expense, the Bank reported a net loss of $291 thousand in the fourth quarter of 2017 and net income for the year ending December 31, 2017 of $19.5 million, as compared to net income of $9.0 million and $38.51 million for the quarter and year ended December 31, 2018. Without this additional income tax expense, net income would have been $6.6 million and $26.4 million for the quarter and year ending December 31, 2017.

“While the Bank was required to re-measure its net deferred tax assets in the fourth quarter of 2017, the reduction in federal tax rates beginning January 1, 2018 have had a significant and positive impact on net income in during 2018 and will continue to have positive impacts well into the future. Based on pretax earnings, the 2018 impact on tax expense resulting from the reduction in the Federal income tax rate from 35% to 21% added approximately $6 million to net income after tax for the year ending December 31, 2018,” stated Executive Vice President and CFO, Greg Jahn.

During the first quarter of 2018 the Bank did benefit from a gain of $3.25 million on the sale of other real estate held for sale. Such a gain is of a nonrecurring nature and such unusual gains are not anticipated in 2019. Similarly, the Bank did benefit from two unusual and nonrecurring items of income during 2017 that contributed to an elevated level of revenue in 2017, including a gain of $1.6 million on the sale of other real estate held for sale and a $1.4 million litigation settlement. During 2018, the Bank witnessed strong growth in revenue generated by the Bank’s Wealth Management division and our SBA lending division. Noninterest income generated by the Bank’s Wealth Management business increased from $6.7 million in 2017 to $7.3 million in 2018, an increase of $.6 million or 9%. Revenue generated from gains on sale of SBA loans increased from $1.0 million in 2017 to $1.8 million in 2018 an increase of $.8 million or 80%.

The earnings of the Bank were driven primarily by continued growth in average loans and investments, which were funded by a significant increase in the level of average deposits outstanding during the year. The growth in loans and investments led to an increase in net interest income of approximately $12.4 million for the year ending December 31, 2018, a 15% increase over the year ending December 31, 2017. While the Bank experienced loan growth of approximately $17 million using year end balances from December 31, 2017 to December 31, 2018, the average increase in loans outstanding during the year was a more significant $51 million, an increase of 3.5% over the average balance outstanding during the year ending December 31, 2017. “The modest net growth in net loans outstanding during 2018, understates the Bank’s true commitment to supporting the economic growth and credit needs of the communities and clients we serve. In fact, the Bank supported our communities with an excess of $300 million of new loan production during 2018. This was largely offset by an unusually high volume of prepayments the Bank experienced as clients elected to refinance existing debt into longer term structures during this period of rapidly rising interest rates,” stated President and CEO, Gary Hartwick.

As a result of the unusually strong deposit growth in the fourth quarter of 2017, the Bank carried significant levels of liquidity in interest earning deposits at the Fed and with other depository institutions at December 31, 2017. A significant amount of this liquidity was redeployed into higher yielding investment securities during 2018. On the surface, the growth in investments and other interest earning deposits as measured by balances at December 31, 2018 compared to December 31, 2017 in aggregate are modest, with aggregate growth in these assets of $56 million. However, the growth year-over-year in average volumes paints a different picture. The average growth in the balance of investment securities totaled $225 million and growth in average interest earning deposits totaled $67 million, representing increases of 39% and 47% respectively over similar averages during the year ended December 31, 2017.

Similarly, the difference between year end balances in deposits compared to averages for the year are both significant and the drivers of this substantial growth in the average balances in loans and investments. While growth in deposits as measured by year end balances at December 31, 2018 over year end balances at December 31, 2017 reflects a modest increase of $36 million, the average balances tell quite a different story. The increase in average deposits outstanding was approximately $345 million, an increase of 17% over average deposit balances of $2,029 million during 2017. The extraordinary growth in deposits occurred during the fourth quarter of 2017 and generally remained with the Bank throughout 2018. To a large extent, these deposits related to the inflow of insurance settlements received by the Bank’s clients who suffered losses as a result of the extraordinary wildfires that occurred in October of 2017 in the communities we serve. As we look forward to 2019, the Bank expects average deposit balances to decline as the Bank’s customers continue to move forward through the rebuild or relocation process.

The Bank’s credit quality remains strong, with non-accrual loans declining to just 0.28% of total loans at December 31, 2018. Despite continued loan growth, as a result of the continued improvement in asset quality and a limited amount of net charge offs, the Bank did not make any provision for loan losses in 2018 and was able to maintain a ratio of loan loss reserves to total loans of 2.63%. In addition, the Bank’s capital ratios remain in excess of the regulatory definitions of “well capitalized.” As of December 31, 2018, the Bank reported total risk-based capital of 15.14%.

“The strong financial performance we achieved in 2018 is due to the hard work of our dedicated employees and the continued support of our loyal customers,” said Mr. Hartwick.

Exchange Bank paid a quarterly cash dividend of $1.00 per share on common stock outstanding to shareholders on December 14, 2018. Total dividends paid to Exchange Bank common shareholders during 2018 were $6.6 million and represented an increase of approximately 14% above total dividends of $5.8 million paid to common shareholders during 2017. The Doyle Trust, which funds the Doyle Scholarships at the Santa Rosa Junior College, receives 50.44% of all cash dividends paid by the Bank.

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About Exchange Bank

Member FDIC — Equal Housing Lender — Equal Opportunity Employer

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January 18, 2019

Contact: Carolyn Cole-Schweizer, Corporate Communications & Social Media Specialist
707.541.1250

Exchange Bank Donates $20,000 to the Redwood Empire Food Bank in Honor of its Customers and Business Partners

Santa Rosa, CA – (January 18, 2019) – On January 16, 2019, Exchange Bank (OTC: EXSR) presented a check for $20,000 to the Redwood Empire Food Bank.

On hand for Wednesday’s check presentation were Exchange Bank President and CEO, Gary Hartwick and Bill Schrader, Exchange Bank Chairman of the Board. The check was presented to Redwood Empire Food Bank CEO, David Goodman and Director of Development, Lisa Cannon.

“On behalf of our loyal customers and business partners, we are proud to make this donation to the Redwood Empire Food Bank,” said Gary Hartwick. “Giving back is an integral part of our mission and culture. The Food Bank plays a very important role in improving the lives of people in our community. That’s what makes our relationship with them so special—it’s a wonderful example of how we can work together to affect meaningful change for our community.” In addition to the Redwood Empire Food Bank, Exchange Bank gives well over $600,000 annually to local non-profits within the communities it serves.

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About Redwood Empire Food Bank

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About Exchange Bank

Headquartered in Sonoma County and founded in 1890 with assets of $2.6 billion, Exchange Bank is a premier community bank providing 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 13-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 2018 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

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