Exchange Bank reported a decrease in net income after taxes for the third quarter of 2023 compared to the same quarter in 2022. The decrease is attributed to increased costs of deposits and interest expense related to borrowings. Loan growth for the bank continued, with gross loan balances increasing by $43.42 million. Loan quality remains strong, with nonaccrual loans totaling $4.5 million. The bank's net interest income decreased due to increased costs of deposits and interest expense. Non-interest income and non-interest expenses also decreased. Total assets and deposits decreased, while the bank's capital ratios remain well above regulatory requirements. The bank expects funding costs to remain elevated throughout 2023. The bank's portfolio has unrealized losses due to increases in market interest rates, but the bank does not view them as a significant risk to its long-term capital position. The bank has sufficient liquidity and participates in the Federal Reserve Bank Term Funding Program. Forward-looking statements in the press release caution that actual conditions, events, or results may differ from those described. Exchange Bank is a full-service community bank headquartered in Sonoma County. [e4f26f3d]