Earnings release
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FOR IMMEDIATE RELEASE Charlotte Radmilovic SVP , Chief Financial Officer Exchange Bank (707) 521-3751 Exchange Bank Announces Third Quarter 2025 Earnings Santa Rosa, CA – (October 29, 2025) - Exchange Bank (OTC: EXSR) today announced its unaudited financial results for the third quarter 2025, reporting net income after taxes of $8.6 million. H IGHLIGHTS: • T hird quarter net income after taxes was $8.6 million compared with $4.9 million for the prior year quarter ended September 30, 2024. • Net interest income increased by $3.3 million or 17% from the third quarter of 2025 compared to the third quarter of 2024 primarily related to increased loan interest and fees due to volume and reduced interest expense related to a decrease in borrowings. • Non-interest income increased by $1.5 million or 25% from the third quarter of 2025 compared to the third quarter of 2024 primarily related to a gain on sale of bank premises no longer used of $1.4 million . • Gross loans increased by $103.9 million or 6% from the third quarter of 2025 compared to the third quarter of 2024 and asset quality remained strong. • The Bank’s on balance sheet liquidity (cash and equivalents, deposits held in other institutions, and unpledged available-for-sale (AFS) securities) remains strong at $915.7 million or 28% of total assets as of September 30, 2025. In addition, the Bank has available borrowing capacity of approximately $1 billion. • The Bank remains well-capitalized, and all regulatory capital ratios were well above minimum requirements with a total risk-based capital ratio of 19.46% on September 30, 2025. I NCOME STATEMENT:
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During the three months ended September 30, 2025, the Bank had net income after tax of $ 8.6 million compared with net income of $4.9 million for the quarter ended September 30, 2024. The Bank’s net interest income increased by $3.3 million or 17% to $23.3 million during the three months ended September 30, 2025. The increase in net interest income was primarily related to increased loan interest and fees due to volume and reduced interest expense related to a decrease in borrowings. Total funding costs for the third quarter of 202 5 were $9.5 million as compared to $11.6 million for the same period of 2024. In the current quarter, total funding costs are made up of interest paid to depositors of $9.1 million and $407 thousand paid on borrowings, compared to the third quarter of 2024 interest paid to depositors of $8.7 million and $2.9 million paid on borrowings. Decreased borrowing costs were a direct result of a decrease in the volume of borrowings from $245 million on September 30, 2024 to $40 million as of September 30, 2025. Non-interest income for the quarter ended September 30, 2025 increased from $5.9 million in 2024 to $7.4 million. The 25% increase can be attributed to a gain on sale of bank premises no longer used of $1.4 million. On a year-to-date basis, net income for 2025 through September was $21.2 million compared to $15.0 million for the same period of 2024. The Bank’s net interest income increased by $ 6.1 million or 10% to $66.7 million during the nine months ended September 30, 2025. The increase is primarily attributed to an increase in loan volumes and repricing of variable rate loans plus a decrease in interest expense driven by a decrease in borrowing balances. Non -interest income for the nine months ended September 30, 2025 increased from $17.4 million in 2024 to $ 20.4 million. This increase is partially due to life insurance benefit received in the second quarter plus the current quarter gain on sale of premises. Non-interest expenses remained relatively constant, increasing by less than 1% from the first nine months of 2024 to $58.4 million. BALANCE SHEET: Total assets were $3. 31 billion as of September 30, 202 5, compared to $3.41 billion as of September 30, 2024. Cash and cash equivalents have decreased by $6.6 million or 3% from September 30, 2024 to $196.8 million. The decrease in cash is attributable to loan originations and paydown of borrowings offset by cash flows from the investment portfolio plus increases in the deposit portfolio . Cash balances have increased by $36.6 million or 23% since June 30, 2025. The market value of the investment portfolio was $ 1.24 billion as of September 30, 2025, down $191.8 million from the comparable quarter-end in the prior year and down $63.5 million from June 30 , 2025. The change in investments in the third quarter of 202 5 is related primarily to
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scheduled paydowns in the portfolio. Based on current rate conditions, the Bank estimates investment portfolio paydowns of approximately $45 million through the rest of 2025. The Bank continues to maintain our entire portfolio as available for sale, providing full transparency and management flexibility. The Bank’s portfolio has unrealized losses that are a direct result of fluctuations in interest rates and not a result of credit quality related factors. Gross loans at the end of the third quarter were $1. 7 billion, representing a $ 103.9 million increase from September 30, 2024 and up $71.7 million from June 30, 2025. The Bank’ s largest loan categories are commercial real estate loans, making up 42% of the portfolio, followed by 20% in residential loans and 1 4% in multifamily loans. The portfolio is well diversified between industries with no significant concentrations. Loan quality remains strong, non-accrual loans totaled $2.8 million, or 0.17% of gross loans, as of September 30, 2025 compared to $6.0 million as of September 30, 2024 and $5.3 million as of June 30, 2025. From June 30, 2025, non-accrual balances have decreased by $2.5 million primarily d u e t o t h e p a y o ff o f o n e l o a n of approximately $ 2.3 million. The allowance for credit losses totaled $34.0 million, or 2.03% of total loans. Deposits have increased by $69.7 million, or 2.5%, since September 30, 2024, ending at $2. 89 billion. In the third quarter of 2025, deposits increased by $15.9 million or 0.6% from June 30, 2025. The Bank continues to see elevated competition for deposits in our market. This coupled with the rate environment has led the Bank to make strategic decisions to maintain core deposit relationships. Non-interest-bearing deposits made up 30% of total deposits as of September 30, 2025, compared to 32% as of September 30, 2024. The Bank estimates approximately 75.6% of all deposits were fully insured by the FDIC as of September 30, 2025. The Bank’s combined on- balance sheet liquidity and contingent liquidity equate s to more than two times that of the estimated uninsured deposits. As of September 30, 2025, the Bank had borrowings of $40 million compared to $245 million as of September 30, 2024. As mentioned in previous press releases, in January 2025, the Bank paid off a borrowing with the Federal Reserve Bank’s Bank Term Funding Program. The Bank has not replaced the borrowing, primarily due to cash flows from investment securities and higher deposit balances, which have supported overall balance sheet liquidity. The Bank’s regulatory capital ratios remain well above the minimum thresholds required to be classified as “well capitalized.” As of September 30, 2025, the Bank reported a total risk -based capital ratio of 19.46% and a leverage ratio of 11.81%. The Bank’s book equity increased $ 38.8 million, or 13%, since September 30, 2024, to a total of $332.7 million. The increase is due to net income and changes in the unrealized losses on available for sale securities. The unrealized losses net of tax on September 30, 2025 were $63.7 million compared to $ 81.4 million on September 30, 2024. The Bank has the intent and ability to hold the investments until maturity, expects full
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collection of the carrying amount of these securities, and does not expect to realize the unrealized losses. T h e B a n k d o e s n o t v i e w t h e t e m p o r a r y n a t u r e o f t h e b o o k u n r e a l i z e d l o s s e s t o b e a significant risk to its long -term capital position. The unrealized losses reduce the Bank’s accumulated other comprehensive income, which the Bank has opted to exclude from its common equity tier 1 capital. Therefore, the Bank’s regulatory capital is not impacted by the changes in the market value of the investment securities in the Bank’s investment portfolio. The Bank’s regulatory capital, as defined by the FDIC, was $ 423.8 million as of September 30, 2025, an increase of $22.4 million, or 6.0%, over the same period in 2024. 50.44% of the Bank’s cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at t h e S a n t a R o s a J u n i o r C o l l e g e . I n t h e fi r s t nine months of 2025 , dividends to the Doyle Trust totaled approximately $3.3 million. FORWARD-LOOKING INFORMATION: The following appears in accordance with the Private Securities Litigation Reform Act of 1995: This press release may contain forward-looking statements about the Bank, including descriptions of plans or objectives of its management for future operations, products or services, forecasts of its revenues, earnings, legislative, regulatory issues, 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 Bank’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 Bank undertakes no obligation to release publicly the result of any revisions to these forward -looking statements that may be made to reflect events or circumst a n c e s a ft e r t h e d a t e o f t h i s p r e s s r e l e a s e o r t o r e fl e c t t h e occurrence of unanticipated events. About Exchange Bank Headquartered in Sonoma County and founded in 1890, Exchange Bank is a full -service community bank with assets of $3. 31 billion. Exchange Bank provides a wide range of personal, commercial, and trust and investment management services with 1 7 retail branches in Sonoma County, a retail branch in Roseville and Trust & Investment Management offices in Santa Rosa, Roseville, Marin County and Silicon Valley. The Bank’s legacy of financial leadership and community support is grounded in its core values of commitment, respect, integrity, and teamwork. Exchange Bank is known for its people who care about their customers, their company,
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and the communities where they live and work. Exchange Bank is a 20-year winner of the North Bay Business Journal’s Best Places to Work survey and a 1 4-time winner of the Best Bank of S o n o m a C o u n t y b y t h e P r e s s D e m o c r a t ’ s R e a d e r s ’ C h o i c e 2 0 25 awards. Exchange Bank was named Best Consumer Bank by the NorthBay biz Magazine’s Best of the North Bay readers’ poll and Best Local Bank by The Petaluma Argus Courier People’s Choice Awards 2025. Exchange Bank is also a winner of the 2025 San Francisco Business Times Corporate Philanthropy award, and the Bohemian Magazine’s Best of the North Bay 2025 named Exchange Bank Best Business Bank and Best Consumer Bank. www.exchangebank.com Member FDIC — Equal Housing Lender — Equal Opportunity Employer ###
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September 30, 2025 and 2024 (In Thousands) Change % Change ASSETS 2025 2024 25/24 25/24 Cash and due from banks 48,369$ 37,313$ 11,056$ 29.63% Federal Reserve Bank 148,408 166,112 (17,704) -10.66% Total Cash and cash equivalents 196,777 203,425 (6,648) -3.27% Investments Interest-earning deposits in other financial institutions - - - 0.00% Securities available for sale 1,239,399 1,431,151 (191,752) -13.40% FHLB Stock 15,000 15,000 - 0.00% Loans and leases Leasing 693 2,998 (2,305) -76.88% SBA 34,211 32,787 1,424 4.34% C&I 199,242 156,655 42,587 27.19% Consumer 136,726 147,268 (10,542) -7.16% Residentail 320,576 349,886 (29,310) -8.38% Multi-Family 232,155 179,564 52,591 29.29% CRE 709,923 644,514 65,409 10.15% Construction 72,984 88,911 (15,927) -17.91% 1,706,510 1,602,583 103,927 6.48% Less allowance for credit losses (34,012) (41,014) 7,002 -17.07% Net loans and leases 1,672,498 1,561,569 110,929 7.10% Bank premises and equipment 22,831 24,691 (1,860) -7.53% Other assets 161,830 175,589 (13,759) -7.84% Total Assets 3,308,335$ 3,411,425$ (103,090)$ -3.02% LIABILITIES AND STOCKHOLDERS' EQUITY Deposits Non-Interest Bearing Demand 872,362$ 913,022$ (40,660)$ -4.45% Interest Bearing Transaction 404,940 430,684 (25,744) -5.98% Money market 656,076 540,248 115,828 21.44% Savings 451,683 469,885 (18,202) -3.87% Time 502,076 463,606 38,470 8.30% Total Deposits 2,887,137 2,817,445 69,692 2.47% Borrowings 40,000 245,000 (205,000) -83.67% Other liabilities 48,486 55,083 (6,596) -11.98% Total liabilities 2,975,624 3,117,528 (141,905) -4.55% Stockholders' equity 332,711 293,897 38,814 13.21% Total Liabilities and Stockholder's Equity 3,308,335$ 3,411,425$ (103,091)$ -3.02% EXCHANGE BANK and Subsidiaries Consolidated Balance Sheets (Unaudited)
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For the Period Ended September 30, 2025 and 2024 (In Thousands, except per share amounts) Change % Change 2025 2024 2025 2024 25/24 25/24 Interest Income Interest and fees on loans 24,576$ 22,564$ 71,027$ 66,732$ 4,295$ 6.44% Interest on investments securities 8,241 8,954 24,403 26,075 (1,672) -6.41% Total interest income 32,817 31,518 95,430 92,807 2,623 2.83% Interest expense Interest on deposits 9,128 8,705 27,329 24,025 3,304 13.75% Other interest expense 407 2,871 1,405 8,195 (6,790) -82.86% Total interest expense 9,535 11,576 28,734 32,220 (3,486) -10.82% Net interest income 23,282 19,942 66,696 60,587 6,109 10.08% Provision (reversal of) for credit losses - - - - - 0.00% Net interest income after provision for credit losses 23,282 19,942 66,696 60,587 6,109 10.08% Non-interest income 7,435 5,925 20,437 17,355 3,082 17.76% Non interest expense Salary and benefit costs 10,401 10,677 31,938 32,212 (274) -0.85% Other expenses 8,567 8,558 26,476 25,770 706 2.74% Total non-interest expense 18,968 19,235 58,414 57,982 432 0.75% Income before income taxes 11,749 6,632 28,719 19,960 8,759 43.88% Provision for income taxes 3,192 1,687 7,506 4,913 2,593 52.77% Net income 8,557$ 4,945$ 21,213$ 15,047$ 6,166$ 40.98% Basic earnings per common share 4.99$ 2.88$ 12.37$ 8.78$ 3.60$ 40.98% Dividends per share 1.30$ 1.30$ 3.90$ 3.90$ -$ 0.00% Earnings per share is computed by dividing net income, by the weighted averaged number of shares outstanding during the year. Total average shares outstanding for both 2025 and 2024 was 1,714,344 Quarter Ended EXCHANGE BANK and Subsidiaries Consolidated Statements of Operations (Unaudited) Nine Months Ended Nine Months Ended