Exchange Bank Announces Fourth Quarter and Year Ending 2025 Earnings
MWN-AI** Summary
Exchange Bank (OTC: EXSR) has reported its unaudited financial results for the fourth quarter and the year ending December 31, 2025. The bank achieved a net income after taxes of $8.76 million for the fourth quarter and $29.97 million for the entire year, marking a 25.6% increase from $23.85 million in 2024. Notably, loan balances rose by 6.97% ($112.87 million), while deposits also saw a modest increase of 1.52% ($43.03 million). The bank’s total assets slightly increased to $3.30 billion, and it remains well-capitalized, boasting a total risk-based capital ratio of 19.71%.
2025 was marked by several key financial maneuvers. The bank recognized a life insurance benefit of $700,000 and a gain on the sale of unused bank premises, contributing positively to earnings. Net interest income surged to $90.69 million, an 11.6% rise over the previous year, due largely to boosted interest from loans. Although interest income grew by $4.08 million, a decrease in income from investment securities was observed.
The bank maintained a strong loan portfolio quality, with nonaccrual loans only comprising 0.92% of total loans. Deposits were primarily non-interest-bearing, which constituted about 30% of total deposits as of December 31, 2025. Total borrowings decreased significantly from $140 million in 2024 to $40 million by the end of 2025, reflecting strategic financial management.
Exchange Bank continues to receive prestigious accolades, including recognition as one of America's Best Regional Banks in 2026. Overall, the bank’s focus on community service, stability, and growth within the competitive banking landscape remains evident as it advances into 2026.
MWN-AI** Analysis
Exchange Bank's recent announcement of its fourth-quarter and full-year earnings for 2025 reflects solid financial health and a strategic approach to navigating the dynamic banking landscape. With a reported net income of $29.97 million for the year, up from $23.85 million in 2024, the bank demonstrated resilient growth despite ongoing competitive pressures.
Key highlights include a significant 11.60% increase in net interest income, primarily driven by a notable rise in loan volumes, particularly in commercial real estate. This segment, comprising nearly 44% of the total loan portfolio, suggests that the bank's focus on robust lending practices is paying off. However, it's essential to monitor the maturity shifts in the loan portfolio, given the transition of construction loans to commercial real estate, which carries different risk profiles.
The increase in deposits, albeit modest at 1.52%, amid a tight competitive deposit environment indicates the bank's capability in maintaining core relationships. Exchange Bank's strong capital position, with a total risk-based capital ratio of 19.71%, provides a solid buffer against market volatility. While the market value of the investment portfolio has declined, the management’s view that these unrealized losses are temporary is reassuring.
Investors should also be mindful of the strategic focus on maintaining liquidity, with strong on-balance-sheet resources covering nearly 31% of total assets. The bank's reduction of borrowings significantly improves its balance sheet risk profile, which is favorable in the current rising interest rate environment.
Overall, Exchange Bank shows promising potential for future growth. Investors looking for steady long-term returns may consider holding or acquiring shares, especially as earnings momentum continues and the bank preserves its strong capital ratios. However, ongoing monitoring of loan portfolio quality and market conditions will be crucial.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Exchange Bank (OTC: EXSR) today announced its unaudited financial results for the fourth quarter and year ending 2025, reporting net income after taxes of $8.76 million in the fourth quarter of 2025 and $29.97 million for the year ended 2025.
2025 FULL YEAR HIGHLIGHTS:
- Net income after tax for the year ended December 31, 2025 was $29.97 million compared to $23.85 million in the year prior.
- In 2025, loan balances increased by 6.97% or $112.87 million.
- Deposit balances increased by 1.52% or $43.03 million in 2025.
- The Bank remains well-capitalized, and all regulatory capital ratios were well above minimum requirements with a total risk-based capital ratio of 19.71% on December 31, 2025.
INCOME STATEMENT:
For the year ended December 31, 2025, the Bank had net income after taxes of $29.97 million compared with net income of $23.85 million in 2024. In 2025, there were events that impacted the overall earnings of the Bank. In the second quarter of 2025, the Bank recognized a life insurance benefit of $700 thousand and in the third quarter of 2025, the Bank recognized a gain on sale of bank premises no longer used of $1.4 million.
The Bank’s net interest income, which is the result of the Bank’s gross interest income net of interest expense, increased from $81.26 million during the year ended December 31, 2024, to $90.69 million for the year ended December 31, 2025, an increase of 11.60%. Interest income has increased year over year by $4.08 million primarily due to an increase in interest and fees on loans of $6.91 million offset by a decrease in interest on investment securities of $2.83 million. Total interest expense has decreased by $5.35 million. In 2025, total funding costs are made up of interest paid to depositors of $36.30 million and $1.81 million paid on borrowings. The decrease in cost was primarily due to decreased interest expense on borrowings of $8.39 million as the Bank paid off the $100 million borrowing with the Federal Reserve Bank’s Bank Term Funding Program in January 2025.
The quality of the Bank’s loan portfolio remains strong; the Bank did not take a provision for loan losses in 2025. While the Bank experienced growth in the loan portfolio, the mix of the portfolio changed with the maturation of construction loans of $35.41 million to commercial real estate.
Non-interest income for the year ended December 31, 2025 increased from the prior year by $3.42 million to $26.80 million, primarily related to the recognition of a life insurance benefit of $700 thousand and a gain on sale of bank premises no longer used of $1.4 million. In addition, the Bank’s wealth management division had an increase in income of $1.41 million generating a total of $11.74 million in fees during the year ended December 31, 2025.
Non-interest expense remained relatively constant in 2025, increasing by 2.18% from 2024 to $78.55 million for the year ended December 31, 2025 compared to $76.87 million in 2024.
BALANCE SHEET:
Total assets were $3.30 billion as of December 31, 2025, an increase of $4.61 million from prior year.
The market value of the investment portfolio was $1.21 billion as of December 31, 2025, down $154.56 million from one year prior. Decreases are primarily due to paydowns and maturities of the portfolio. Based on current rate conditions, the Bank estimates investment portfolio cashflow of over $250 million through 2026. As of December 31, 2025, the Bank estimates that the portfolio has an average life of approximately 3.6 years and an average effective duration of approximately 3.1 years. 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 market interest rates and not a result of credit quality related factors. The unrealized losses net of tax as of December 31, 2025 were $56.23 million compared to $101.09 million on December 31, 2024. The Bank does not view the temporary nature of the book unrealized losses to be a significant risk to its long-term capital position.
Gross loans at the end of the 2025 year were $1.73 billion, representing a 6.97% or $112.87 million increase from December 31, 2024. The Bank’s largest loan types are commercial real estate loans, making up approximately 44% of the portfolio, followed by about 18% in residential loans and about 14 % in multifamily loans. Of the commercial real estate total, approximately 20% is considered owner occupied and the remaining 80% are non-owner occupied. The portfolio is well diversified between industries with no significant concentrations. Nonaccrual loans totaled $15.88 million, or less than 0.92% of gross loans, as of December 31, 2025, compared to $11.14 million or less than 0.70% of gross loans as of December 31, 2024. The allowance for credit losses, which is based on estimating credit losses for the life of the loans in the portfolio, totaled $33.87 million, approximately 1.96% of total loans or over two times the Bank’s total non-accrual loans as of December 31, 2025.
Total deposits as of December 31, 2025 were $2.88 billion, increasing by 1.52% or $43.03 million since December 31, 2024. The Bank continues to experience 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 approximately 30% of total deposits as of December 31, 2025, compared to about 32% as of December 31, 2024. The Bank estimates approximately 74% of all deposits were fully insured by the FDIC as of December 31, 2025.
The Bank had borrowings of $40.00 million as of December 31, 2025, compared to $140.00 million as of December 31, 2024. 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 $891.19 million or 31% of total assets as of December 31, 2025. In addition, the Bank has available borrowing capacity of approximately $1 billion.
The Bank’s regulatory capital ratios remain well in excess of the minimums to be considered “well capitalized.” As of December 31, 2025, the Bank reported a total risk-based capital ratio of 19.71% and a leverage ratio of 11.86%. The Bank’s US GAAP or book equity was $346.73 million as of December 31, 2025 increasing by $65.92 million since December 31, 2024. The increase is due to net income and changes in the unrealized losses on available for sale securities. 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 $430.35 million as of December 31, 2025.
50.44% of the Bank’s cash dividend goes to the Doyle Trust which funds the Doyle Scholarships at the Santa Rosa Junior College. In 2025, dividends to the Doyle Trust totaled approximately $4.40 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 circumstances after the date of this press release or to reflect the 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 over $3.30 billion. The Bank offers a comprehensive range of personal and business banking services including personal and business financing, and Trust and Investment Management services. Exchange Bank serves customers through 18 retail branches across the North Bay and Roseville, along with Trust & Investment Management offices located in Santa Rosa, Roseville, Marin County, and Silicon Valley.
Exchange Bank’s long-standing legacy of financial leadership and community support is grounded in its core values of commitment, respect, integrity, and teamwork. The Bank is known for its people—professionals who care deeply about their customers, their colleagues, and the communities where they live and work.
Exchange Bank is a 20-time recipient of the North Bay Business Journal’s Best Places to Work award and a 14-time winner of Best Bank of Sonoma County in the Press Democrat Readers’ Choice Awards (2025). Additional honors include Best Consumer Bank by 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 also received the 2025 San Francisco Business Times Corporate Philanthropy Award, and Bohemian Magazine’s Best of the North Bay 2025 named the Bank both Best Business Bank and Best Consumer Bank.
In 2026, Exchange Bank earned national recognition as one of America’s Best Regional Banks by Newsweek.
Member FDIC — Equal Housing Lender — Equal Opportunity Employer
| EXCHANGE BANK | |||||||||||||||
| and Subsidiaries | |||||||||||||||
| Consolidated Balance Sheets | |||||||||||||||
| (Unaudited) | |||||||||||||||
| December 31, 2025 and 2024 | |||||||||||||||
| (In Thousands) | |||||||||||||||
| Change | % Change | ||||||||||||||
| ASSETS | 2025 | 2024 | 25/24 | 25/24 | |||||||||||
| Cash and due from banks | $ | 31,184 | $ | 28,639 | $ | 2,545 | 8.89 | % | |||||||
| Federal Reserve Bank | 156,871 | 106,238 | 50,633 | 47.66 | % | ||||||||||
| Total Cash and cash equivalents | 188,055 | 134,877 | 53,178 | 39.43 | % | ||||||||||
| Investments | |||||||||||||||
| Interest-earning deposits in other financial institutions | - | - | - | 0.00 | % | ||||||||||
| Securities available for sale | 1,207,788 | 1,362,345 | (154,557 | ) | -11.34 | % | |||||||||
| FHLB Stock | 15,000 | 15,000 | - | 0.00 | % | ||||||||||
| Loans and leases | |||||||||||||||
| Leasing | 425 | 2,131 | (1,706 | ) | -80.06 | % | |||||||||
| SBA | 35,094 | 31,054 | 4,040 | 13.01 | % | ||||||||||
| C&I | 187,156 | 156,941 | 30,215 | 19.25 | % | ||||||||||
| Consumer | 135,617 | 148,679 | (13,062 | ) | -8.79 | % | |||||||||
| Residential | 314,260 | 343,358 | (29,098 | ) | -8.47 | % | |||||||||
| Multi-Family | 234,669 | 182,081 | 52,588 | 28.88 | % | ||||||||||
| CRE | 764,452 | 659,146 | 105,306 | 15.98 | % | ||||||||||
| Construction | 59,779 | 95,189 | (35,410 | ) | -37.20 | % | |||||||||
1,731,452 | 1,618,579 | 112,873 | 6.97 | % | |||||||||||
| Less allowance for credit losses | (33,865 | ) | (35,099 | ) | 1,234 | -3.52 | % | ||||||||
| Net loans and leases | 1,697,587 | 1,583,480 | 114,107 | 7.21 | % | ||||||||||
| Bank premises and equipment | 23,765 | 24,470 | (705 | ) | -2.88 | % | |||||||||
| Other assets | 171,950 | 179,361 | (7,411 | ) | -4.13 | % | |||||||||
| Total Assets | $ | 3,304,145 | $ | 3,299,533 | $ | 4,612 | 0.14 | % |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
| Deposits | |||||||||||||
| Non-Interest Bearing Demand | $ | 863,342 | $ | 902,315 | $ | (38,974 | ) | -4.32 | % | ||||
| Interest Bearing | |||||||||||||
| Transaction | 426,903 | 439,993 | (13,090 | ) | -2.98 | % | |||||||
| Money market | 649,593 | 543,483 | 106,110 | 19.52 | % | ||||||||
| Savings | 440,596 | 462,123 | (21,527 | ) | -4.66 | % | |||||||
| Time | 495,036 | 484,529 | 10,507 | 2.17 | % | ||||||||
| Total Deposits | 2,875,470 | 2,832,443 | 43,026 | 1.52 | % | ||||||||
| Borrowings | 40,000 | 140,000 | (100,000 | ) | -71.43 | % | |||||||
| Other liabilities | 41,949 | 46,282 | (4,333 | ) | -9.36 | % | |||||||
| Total liabilities | 2,957,418 | 3,018,725 | (61,307 | ) | -2.03 | % | |||||||
| Stockholders' equity | 346,727 | 280,808 | 65,919 | 23.47 | % | ||||||||
| Total Liabilities and Stockholder's Equity | $ | 3,304,145 | $ | 3,299,533 | $ | 4,612 | 0.14 | % |
| EXCHANGE BANK | |||||||||||||||||||||
| and Subsidiaries | |||||||||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| For the Period Ended December 31, 2025 and 2024 | |||||||||||||||||||||
| (In Thousands, except per share amounts) | Twelve Months Ended | ||||||||||||||||||||
| Quarter Ended | Twelve Months Ended | Change | % Change | ||||||||||||||||||
2025 | 2024 | 2025 | 2024 | 25/24 | 25/24 | ||||||||||||||||
| Interest Income | |||||||||||||||||||||
| Interest and fees on loans | $ | 24,977 | $ | 22,364 | $ | 96,001 | $ | 89,096 | $ | 6,905 | 7.75 | % | |||||||||
| Interest on investments securities | 8,386 | 9,547 | 32,796 | 35,624 | (2,828 | ) | -7.94 | % | |||||||||||||
| Total interest income | 33,363 | 31,911 | 128,797 | 124,720 | 4,077 | 3.27 | % | ||||||||||||||
| Interest expense | |||||||||||||||||||||
| Interest on deposits | 8,968 | 9,233 | 36,296 | 33,256 | 3,040 | 9.14 | % | ||||||||||||||
| Other interest expense | 408 | 2,006 | 1,813 | 10,201 | (8,388 | ) | -82.23 | % | |||||||||||||
| Total interest expense | 9,376 | 11,239 | 38,109 | 43,457 | (5,348 | ) | -12.31 | % | |||||||||||||
| Net interest income | 23,987 | 20,672 | 90,688 | 81,263 | 9,425 | 11.60 | % | ||||||||||||||
| Provision (reversal of) for credit losses | - | (5,800 | ) | - | (5,800 | ) | 5,800 | -100.00 | % | ||||||||||||
| Net interest income after | |||||||||||||||||||||
| provision for credit losses | 23,987 | 26,472 | 90,688 | 87,063 | 3,625 | 4.16 | % | ||||||||||||||
| Non-interest income | 6,377 | 6,033 | 26,810 | 23,386 | 3,424 | 14.64 | % | ||||||||||||||
| Non interest expense | |||||||||||||||||||||
| Salary and benefit costs | 11,546 | 10,570 | 43,484 | 42,787 | 697 | 1.63 | % | ||||||||||||||
| Other expenses | 8,588 | 8,316 | 35,065 | 34,084 | 981 | 2.88 | % | ||||||||||||||
| Total non-interest expense | 20,134 | 18,886 | 78,549 | 76,871 | 1,678 | 2.18 | % | ||||||||||||||
| Income before income taxes | 10,230 | 13,619 | 38,949 | 33,578 | 5,371 | 16.00 | % | ||||||||||||||
| Provision for income taxes | 1,475 | 4,812 | 8,981 | 9,725 | (744 | ) | -7.65 | % | |||||||||||||
| Net income | $ | 8,755 | $ | 8,807 | $ | 29,968 | $ | 23,853 | $ | 6,115 | 25.64 | % | |||||||||
| Basic earnings per common share | $ | 5.11 | $ | 5.14 | $ | 17.48 | $ | 13.91 | $ | 3.57 | 25.64 | % | |||||||||
| Dividends per share | $ | 1.30 | $ | 1.30 | $ | 5.20 | $ | 5.20 | $ | - | 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 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20260202837187/en/
Charlotte Radmilovic
SVP, Chief Financial Officer
Exchange Bank
(707) 521-3751
FAQ**
How did Exchange Bank EXSR manage to achieve a notable increase in net income from $23.85 million in 2024 to $29.97 million in 2025, and what key factors contributed to this growth?
Considering the reported loan balance increase of 6.97% for Exchange Bank EXSR in 2025, how does the bank plan to sustain this momentum amidst rising competition for deposits in its market?
With the bank's total risk-based capital ratio reported at 19.71%, what strategies is Exchange Bank EXSR employing to maintain its well-capitalized status while managing investment portfolio volatility?
Given the unrealized loss on investments decreasing to $56.23 million in 2025, how does Exchange Bank EXSR perceive the impact of market interest rates on its long-term capital position moving forward?
**MWN-AI FAQ is based on asking OpenAI questions about Exchange Bank (OTC: EXSR).
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