RWCB Redwood Capital Bancorp (QX)

REDWOOD CAPITAL BANCORP (OTCBB:RWCB), the only locally owned and operated community bank holding company in Humboldt County, announced unaudited financial results for the three month period ended June 30, 2012. Redwood Capital Bank, the company's wholly owned subsidiary, reported their second quarterly cash dividend and strong core earnings, while increasing loan loss reserves as a hedge against future loan deteriorations.

President and CEO John E. Dalby stated, "Our Board remains optimistic about our financial performance. Though we have recognized increased credit related costs that have reduced our earnings in the short term, these are predominantly driven by impairment charges on a few large loans. We are very pleased with our success in continuing to grow customer relationships and remain united in our focus to enhance shareholder value. As we look to the remainder of 2012, we retain our sense of purpose and commitment to be the most convenient and innovative bank in the Humboldt County market."

The company again posted modest growth in the major balance sheet categories of assets, deposits, and loans. Total assets as of June 30, 2012 were $240.3 million, an increase of 6% from the same period last year. Likewise, total deposits grew to $215.6 million as of June 30, 2012, an increase of 4% over the June 30, 2011 figures. Total loans as of June 30, 2012, net of unearned income, stood at $153 million, a strong increase of 7% over the figure reported as of the quarter ended June 30, 2011.

Net interest income for the quarter ended June 30, 2012 totaled $2,137,000, up 6% and 9% from the three months ended March 31, 2012 and June 30, 2011, respectively. The company reported net income for the quarter ended June 30, 2012 of $164,000, down 45% and 39% from the amounts reported for the three months ended March 31, 2012 and June 30, 2011, respectively. The decreased net income performance was attributed to proactive recognition of credit-related expenses.  

Following up on last quarter's initial cash dividend, the Board of Directors declared a quarterly cash dividend of $0.05 per share, payable on August 14, 2012, to shareholders of record at the close of business on August 1, 2012. The dividend is equivalent to an annual rate of $0.20 per share or 2.86%, based upon a market price of $7.00 per common share.

CEO Dalby commented, "As a community bank, our business is local; all our deposits come from local depositors and these deposits are reinvested in loans to borrowers within our community. We also recognize that the majority of our shareholders are local. The ongoing payment of cash dividends to our common shareholders reflects not only our obligation to enhance shareholder value, but also reflects the operating strength of the company. We are grateful to our customers and shareholders alike and remain thankful for their ongoing confidence and support."

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.  

The Redwood Capital Bancorp logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=11463

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		%
	6/30/2012	3/31/2012	Change
Balance Sheet Data (at period end)
Total assets	$240,284	$236,615	2%
Total deposits	215,595	211,926	2%
Total loans (net)	153,083	151,811	1%
Common equity	14,252	14,008	2%
Common shares outstanding	1,786,632	1,779,320	0%
Summary of Operations (Current Quarter)
Interest income	2,451	2,367	4%
Interest expense	314	348	-10%
Net Interest Income	2,137	2,019	6%
Non-interest income	281	245	15%
Non-interest expense	1,662	1,716	-3%
Net Income before provision	756	548	38%
Provision for loan losses	545	50	990%
Income before taxes	211	498	-58%
Income taxes/(credit)	47	200	-77%
Net Income	164	298	-45%
Earnings per common share (fully diluted)	$0.08	$0.17	-51%
Book value per common share	$7.98	$7.87	1%
	Period Ended		%
	6/30/2012	6/30/2011	Change
Balance Sheet Data (at period end)
Total assets	$240,284	$ 227,074	6%
Total deposits	215,595	206,504	4%
Total loans (net)	153,083	142,759	7%
Common equity	14,252	12,762	12%
Common shares outstanding	1,786,632	1,761,887	1%
Summary of Operations (Current Quarter)
Interest income	2,451	2,413	2%
Interest expense	314	457	-31%
Net Interest Income	2,137	1,956	9%
Non-interest income	281	221	27%
Non-interest expense	1,662	1,514	10%
Net Income before provision	756	663	14%
Provision for loan losses	545	150	263%
Income before taxes	211	513	-59%
Income taxes/(credit)	47	242	-81%
Net Income	164	271	-39%
Earnings per common share (fully diluted)	$0.08	$0.17	-51%
Book value per common share	$7.98	$7.87	1%

CONTACT: Redwood Capital Bancorp
         (707) 444-9840