RWCB Redwood Capital Bancorp (QX)

On November 2, 2011, REDWOOD CAPITAL BANCORP (RWCB), the holding company for Redwood Capital Bank, announced unaudited consolidated financial results for the three and nine month period ended September 30, 2011. The only locally owned and operated community bank holding company reported record year to date earnings during its sixth consecutive year of profitability.

John Dalby, President and CEO of the company, commented, “We are proud to again report such strong financial results to our loyal shareholders and the greater Humboldt County community. In spite of the many economic challenges that continue to plague our local and state economies, our track record of outstanding financial performance and our proven ability to adapt to the realities of today’s financial marketplace has enabled us to outperform our competitors. We continue to grow and expand as our peers shrink or turn their attention to other markets. Redwood Capital Bank is banking on Humboldt County and we are grateful that Humboldt County is banking with us,” concluded Dalby.

While revenues are increasing and the company boosts its lending within the region, management continues to provide for any future economic uncertainties by adding to its loan loss reserves. “Redwood Capital Bank continues to maintain its pro-active and conservative approach with regards to economic uncertainties by adding to our loss loan reserves,” stated CEO Dalby. “This strategy assures our shareholders and customers that the franchise is well-positioned to be successful for many years to come.”

The company’s continued strong performance hasn’t gone unnoticed. Earlier this year, The Findley Reports, one of the most respected and well known California bank research and rating firms, designated the Bank a Super Premier Performing Bank based on last year’s operating performance and management effectiveness. The rating of Super Premier Performance is the highest designation possible for California community banks to receive and places the Bank in the top 10% of all banks in the Western United States.

Total assets as of September 30, 2011 were $240.1 million, an increase of 6% and 12% over the June 30, 2011 and September 30, 2010 reported figures, respectively. Total deposits stood at $215.6 million as of September 30, 2011, an increase of 4% and 11% over the June 30, 2011 and September 30, 2010 respectively. The company also reported modest loan growth for the quarter. Total loans as of September 30, 2011, net of unearned income, were $146.7 million, an increase of 3% over the prior quarter and 2% over the quarter ended September 30, 2010.

Net interest income for the three and nine months ended September 30, 2011 totaled $1,989,000 and $5,938,000, respectively, representing an increase of 2% from the three month ended June 30, 2011 and 7% for the nine months ended September 30, 2010. The company also reported earnings for the third quarter of 2011 of $300,000 while earnings for the first nine months of 2011 were $1,017,000. The earnings represented an 11% increase over the June 30, 2011 quarter and an impressive 986% over the first nine months of 2010. While the company’s income tax expenses increased, its loan loss provision expense decreased, contributing to the large increase in net income after taxes. Book value per common share stood at $7.41 as of September 30, 2011, a 2% increase over the previous quarter and a healthy 13% increase over the September 30, 2010 amount.

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 the 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 - except share data)

          Period Ended % 9/30/2011 6/30/2011 Change   Balance Sheet Data (at period end) Total assets $ 240,117 $ 227,074 6 % Total deposits 215,596 206,504 4 % Total loans (net) 146,745 142,759 3 % Common equity 13,051 12,762 2 % Common shares outstanding 1,761,887 1,761,887 0 %   Summary of Operations (Current Quarter) Interest income 2,425 2,413 0 % Interest expense 436 457 -5 % Net Interest Income 1,989 1,956 2 % Non-interest income 193 221 -13 % Non-interest expense 1,479 1,514 -2 % Net Income before provision 703 663 6 % Provision for loan losses 150 150 0 % Income before taxes 553 513 8 % Income taxes 253 242 5 % Net Income 300 271 11 % Earnings per share (fully diluted) $ 0.17 $ 0.15 11 % Book value per common share $ 7.41 $ 7.24 2 %     Period Ended % 9/30/2011 9/30/2010 Change   Balance Sheet Data (at period end) Total assets $ 240,117 $ 213,586 12 % Total deposits 215,596 194,368 11 % Total loans (net) 146,745 143,993 2 % Common equity 13,051 11,460 14 % Common shares outstanding 1,761,887 1,746,799 1 %   Summary of Operations (Year to Date) Interest income 7,288 6,886 6 % Interest expense 1,350 1,360 -1 % Net Interest Income 5,938 5,526 7 % Non-interest income 620 660 -6 % Non-interest expense 4,620 4,192 10 % Net Income before provision 1,938 1,994 -3 % Provision for loan losses 300 1,900 -84 % Income before taxes 1,638 94 1649 % Income taxes 620 - 100 % Net Income 1,017 94 986 % Earnings per share (fully diluted) $ 0.58 $ 0.05 977 % Book value per common share $ 7.41 $ 6.56 13 %