Redwood Financial (PK) (USOTC:REDW)
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Announcement of 10% Stock Repurchase Program
REDWOOD FALLS, Minn., Feb. 17 /PRNewswire-FirstCall/ -- Redwood Financial, Inc. (OTC:REDW) (the "Company"), the parent holding company of HomeTown Bank has announced net earnings for the second fiscal quarter ended December 31, 2005. For the six months ended December 31, 2005, the Company recorded net earnings of $159,707. Basic and diluted earnings per share were $0.35 per share, and $0.33 per share, respectively. Comparatively, for the six months ended December 31, 2004, the Company recorded net earnings of $113,650. Basic and diluted earnings per share were $0.23 per share, and $0.21 per share, respectively.
At December 31, 2005, the Company reported total consolidated assets and consolidated stockholders' equity of $76.5 million and $7.6 million, respectively. HomeTown Bank is headquartered in Redwood Falls, Minnesota and operates through its main office in Redwood Falls and its branch offices located in Redwood Falls and Olivia, Minnesota. The Bank's deposits are insured up to maximum legal limits by the Federal Deposit Insurance Corporation (FDIC).
In addition, the Company further announces its intention to repurchase shares of the Company's common stock. Mr. Dean K Toft, President, said the Company has been authorized by the Board of Directors to repurchase up to 43,256 shares (approximately 10% of its currently outstanding shares) of common stock. The repurchases are expected to be made in open-market transactions, subject to the availability of stock, market conditions, the trading price of the stock and the Company's financial performance. Such repurchased shares shall be recorded as treasury stock, thereby available in the future for general corporate and other purposes. The Company may terminate the repurchase program at any time.
REDWOOD FINANCIAL, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
Assets December 31, June 30,
2005 2005
Cash $461,535 455,947
Interest-bearing deposits with banks 2,836,574 2,736,502
Cash and cash equivalents 3,298,109 3,192,449
Securities available for sale:
Mortgage-backed and related securities 6,510,983 6,266,297
Investment securities 9,088,100 10,733,526
Total securities available for sale 15,599,083 16,999,823
Loans receivable, net 52,441,875 48,961,758
Federal Home Loan Bank stock, at cost 1,260,800 1,148,000
Accrued interest receivable 606,207 527,956
Premises and equipment, net 2,691,740 2,743,448
Deferred tax asset 231,291 174,869
Real estate owned, net 240,000 240,000
Other assets 153,808 83,197
Total Assets $76,522,913 74,071,500
Liabilities and Stockholders' Equity
Deposits 55,803,626 54,329,685
Federal Home Loan Bank advances 11,550,000 10,020,870
Accrued interest payable 625,249 489,380
Advance payments by borrowers for taxes
and insurance 97,534 61,763
Accrued expenses and other liabilities 782,784 486,975
Total Liabilities 68,859,193 65,388,673
Common stock ($.10 par value): Authorized
and issued 1,125,000 shares; outstanding
432,558 shares at December 31, 2005 and
477,028 shares at June 30, 2005 112,500 112,500
Additional paid-in capital 8,675,920 8,673,829
Retained earnings, subject to certain
restrictions 8,803,539 8,643,832
Accumulated other comprehensive income (loss) (231,780) (85,253)
Unearned Employee Stock Ownership Plan shares
Treasury stock, at cost, 692,442 shares at
December 31, 2005 and 647,972 June 30, 2005 (9,696,459) (8,662,081)
Total Stockholders' Equity 7,663,720 8,682,827
Total Liabilities and Stockholders'
Equity $76,522,913 74,071,500
REDWOOD FINANCIAL, INC. AND SUBSIDIARY
Consolidated Statements of Earnings
(Unaudited)
Three months Six months
Ended December 31, Ended December 31,
2005 2004 2005 2004
Interest Income:
Loans receivable $903,806 846,221 1,767,242 1,704,280
Securities available
for sale:
Mortgage-backed
and related
securities 68,806 51,808 122,719 110,381
Investment
securities 94,270 109,956 192,307 228,403
Cash equivalents and
other 8,339 6,792 18,193 6,647
Total interest
income 1,075,221 1,014,777 2,100,461 2,049,711
Interest Expense:
Deposits 152,963 142,099 289,253 289,231
Federal Home Loan
Bank advances 328,070 228,542 618,253 455,091
Total interest
expense 481,033 370,641 907,506 744,322
Net interest
income 594,188 644,136 1,192,955 1,305,389
Provision for losses
on loans (81,000) 30,000 (53,500) 60,000
Net interest income
after provision for
losses on loans 675,188 614,136 1,246,455 1,245,389
Noninterest income:
Gains on sale of
securities available
for sale 0 10,000 4,650 10,000
Fees and service
charges 69,309 76,208 163,648 177,457
Other 1,559 2,475 5,291 7,099
Total noninterest
income 70,868 88,683 173,589 194,556
Noninterest expense:
Compensation and
employee benefits 352,309 381,754 709,807 748,327
Occupancy 84,763 85,516 165,091 163,536
Professional fees 33,179 20,648 57,201 36,916
Advertising 14,335 13,905 25,666 28,032
Data processing
expense 10,400 6,982 20,473 16,539
Federal deposit
insurance premiums 1,816 2,077 3,584 4,238
Other 83,858 120,336 171,232 264,296
Total noninterest
expense 580,660 631,218 1,153,054 1,261,884
Earnings before
income taxes 165,396 71,601 266,990 178,061
Income tax expense
(benefit) 73,416 26,470 107,283 64,411
Net earnings
(loss) $91,980 45,131 159,707 113,650
Net earnings per
common share - Basic $0.21 0.09 0.35 0.23
Net earnings per
common share - Diluted 0.19 0.08 0.33 0.21
REDWOOD FINANCIAL, INC. AND SUBSIDIARIES
Selected Consolidated Financial Information
(Unaudited)
Three months ended Six months ended
December December December December
31, 31, 31, 31,
2005 2004 2005 2004
Profitability Measures:
Net earnings (loss) 91,980 45,131 159,707 113,650
Basic earnings per
share 0.21 0.09 0.35 0.23
Diluted earnings per
share 0.19 0.08 0.33 0.21
Return on average
assets 0.50% 0.24% 0.43% 0.30%
Return on average
equity 4.51% 1.94% 3.76% 2.41%
Net interest spread 3.04% 3.39% 3.06% 3.41%
Net yield on interest
earning assets 3.24% 3.59% 3.27% 3.61%
Ratio of operating
expense to average
total assets
(annualized) 3.13% 3.41% 3.13% 3.37%
Period Ended Year Ended Year Ended
December 31, June 30, June 30,
2005 2005 2004
Financial Position:
Total assets 76,522,913 74,071,500 77,820,992
Total stockholders'
equity 7,663,720 8,682,827 9,593,682
Average total assets 73,652,431 74,063,448 88,726,471
Average total equity 8,490,752 9,229,542 8,953,013
Loans receivable, net 52,441,875 48,961,758 50,211,030
Securities available for
sale net of mark to market 15,599,083 16,999,823 19,279,533
Net unrealized gain/(loss)
on securities available
for sale (384,302) (141,353) (193,316)
Non-performing assets 0 0 4,714
Non-performing assets to
total assets 0.00% 0.00% 0.01%
Allowance for loan losses 509,198 467,961 346,553
Allowance for loan losses to
total assets 0.67% 0.63% 0.45%
Allowance for loan losses to
total loans receivable 0.96% 0.95% 0.69%
Net charge-offs (recoveries) (94,736) (1,408) 777,139
Stockholders' equity to total
assets, at end of period 10.01% 11.72% 12.33%
Total shares outstanding 432,558 477,028 533,749
Book value per share
(including mark to market) 17.72 18.50 18.34
Ratio of average interest-earning
assets to average interest-bearing
liabilities 108.19% 109.22% 109.61%
First Call Analyst:
FCMN Contact:
DATASOURCE: Redwood Financial, Inc.
CONTACT: Dean Toft of Redwood Financial, Inc., +1-507-644-4663,
Fax, +1-507-644-4664
Web site: http://www.redwoodfinancial.com/