RWCB Redwood Capital Bancorp (QX)

On October 28, 2009, REDWOOD CAPITAL BANCORP (RWCB.OB), the only locally owned and operated community bank holding company in Humboldt County, announced unaudited financial results for the three month periods ended September 30, 2008 and 2009 respectively. The Company reported strong balance sheet and core earnings growth while bolstering loan loss reserves to hedge against potential loan deterioration.

“Credit quality, relationship deposit growth and superior customer service are the hallmarks of our franchise. While aggressive credit management and early problem loan recognition continues to be a priority for our team, we are quite pleased with our net income and core deposit growth. Additionally, the Company continues to maintain its conservative approach with regard to economic uncertainties by increasing loss loan reserves,” stated CEO John Dalby. “Our strategy assures both the shareholders and our community that the franchise will weather the current economic conditions and fulfill our mission to be a first rate financial institution for many years to come.”

Total assets as of September 30, 2009 were $190.7 million, an increase of 8% and 30% over the June 30, 2009 and September 30, 2008 reported figures, respectively. Total deposits stood at $174 million as of September 30, 2009, an increase of 8% and 31% over June 30, 2009 and September 30, 2008, respectively. The Company deleveraged slightly based on loan totals reported for the quarter. Total loans as of September 30, 2009, net of unearned income, were $137.1 million, a slight decrease of 1% over the prior quarter and a increase of 11% over the quarter ended September 30, 2008.

Net interest income for the three months ended September 30, 2009 totaled $1,756,000 an increase of 7% and 10% from the three months ended June 30, 2009 and September 30, 2008, respectively. Loan loss provisions were reported at $370,000 for the three months ended September 30, 2009, down 54% from the three months ended June 30, 2009 and up 196% for the quarter ended September 30, 2008. Lastly, the Company reported net income before taxes for the quarter of $363,000, up 153% from the three months ended June 30, 2009 and down 20% from the three months ended September 30, 2008.

CEO Dalby commented, “Our robust financial performance in spite of skyrocketing FDIC insurance premiums is a testament to the strength of our core earnings. Additionally, the general lack of service at money center banks continues to present us with exceptional opportunities to develop new relationships and enhance existing ones. With strong liquidity, stable sources of capital, and expanded FDIC insurance coverage, we will continue to support our customers and the community in good times and bad.”

Board Chairman Dr. John E. Burke also added, “The Company has invested in seasoned local people, innovative technologies and scalable systems to provide for exceptional customer experiences today and in the future while building shareholder value.”

Since the formation of the bank in 2004, the Company has exceeded regulatory guidelines for “well capitalized” status, the highest possible rating from bank regulatory agencies. For more information regarding Redwood Capital Bancorp, please visit our website at www.redwoodcapitalbank.com, contact Fred Moore, CFO, at (707) 444-9840, or stop by our headquarters and main office at 402 “G” Street, Eureka, CA 95501.

This press release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, and competition within the business areas in which the bank is conducting its operations, including the real estate market in California and other factors beyond the bank’s control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management’s view only as of the date hereof. The bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

Redwood Capital Bancorp Selected Consolidated Financial Results - Unaudited (In Thousands)           Period Ended %   9/30/2009     6/30/2009   Change   Balance Sheet Data (at period end) Total assets $ 190,679 $ 176,320 8% Total deposits 173,953 161,545 8% Total loans (net) 137,087 137,991 -1%   Summary of Operations (Current Quarter) Interest income 2,308 2,189 5% Interest expense 552 551 0% Net Interest Income 1,756 1,638 7% Non-interest income 277 227 22% Non-interest expense 1,300 1,755 -26% Net Income (Loss) before provision 733 110 566% Provision for loan losses 370 798 -54% Income before taxes 363 (688) 153%   Period Ended %   9/30/2009     9/30/2008   Change   Balance Sheet Data (at period end) Total assets $ 190,679 $ 146,511 30% Total deposits 173,953 132,884 31% Total loans (net) 137,087 123,401 11%   Summary of Operations (Current Quarter) Interest income 2,308 2,231 3% Interest expense 552 637 -13% Net Interest Income 1,756 1,594 10% Non-interest income 277 186 49% Non-interest expense 1,300 1,202 8% Net Income (Loss) before provision 733 578 27% Provision for loan losses 370 125 196% Income before taxes 363 453 -20%