Business
Exchange Bank Announces Second Quarter 2023 Results; Declaration of Third Quarter Cash Dividend
Exchange Bank Announces Second Quarter 2023 Results; Declaration of Third Quarter Cash Dividend.
About this update from Exchange Bank (santa Rosa, Ca)
[{"type":"text","content":"\nExchange Bank (OTC: EXSR) today announced results for the second quarter of 2023, reporting a net loss after taxes of $2.14 million. The net loss is after a one-time charge of $9.10 million, net of taxes, related to the voluntary termination of the Exchange Bank Pension Plan (the “Plan”). Excluding this one-time charge, recurring net earnings from the operations of Exchange Bank for the second quarter of 2023 were $6.96 million as compared with net earnings of $9.52 million for the same quarter of 2022.\n\n\nWith this level of core profitability, on July 18, 2023, the Board of Directors of the Bank declared a third quarter dividend of $1.30 per share, the same amount as paid in the prior quarter of 2023, payable on September 15, 2023, to shareholders of record as of September 1, 2023.\n\n\nThe Bank booked this one-time after-tax expenditure of $9.10 million in connection with fully retiring and settling all of its obligations to retirees and certain active employees who were once a part of the now terminated Plan. Mr. Sanderson remarked, “Similar to decisions made over the years by many other companies, this long-contemplated action by the Bank to terminate the Plan, which was initiated in mid-2022, follows 70 years of managing through complex and costly accounting and regulatory Plan requirements. The Bank believes this action now eliminates all future actuarial and regulatory risks for the Bank related to the Plan, as well as the administrative expenses to manage it.” All former Plan members were made completely whole through either lump-sum distributions or the provision of individual annuities.\n\n\nThrough the reversal of certain accruals and tax treatments related to the Plan, the Bank’s final net adjustment to capital specifically related to the Plan’s termination was a negative $3.2 million. The Bank believes this one-time reduction of Bank capital, equal to less than 1% of the Bank’s current total regulatory capital, will likely be offset in the coming years by savings tied to the elimination of the costs to administer the Plan. Further, the Bank believes that termination of the Plan eliminates the risk of any future monetary contributions that could be required by the Bank due to negative future changes in the market value of the assets that were held in the Plan. After the o...