Redwood Capital Bancorp Reports Record Third Quarter Earnings of $.35 Per Share -- Cash Dividend Continued

REDWOOD CAPITAL BANCORP (RWCB.OB), the holding company for Redwood Capital Bank, announced unaudited consolidated financial results for the three and nine month period ended September 30, 2013. The only locally owned and operated community bank holding company reported record earnings and a continuation of dividend payments during its eighth consecutive year of profitability.

John Dalby, President and CEO of the company commented, "The Board of Directors and management team are encouraged by the continued progress and performance of the bank. With shareholder value and community service as core values, Redwood Capital Bancorp's strong performance and financial position continue to increase our ability to serve all of our stakeholders. In the third quarter of 2013, Redwood Capital Bank generated over $9.5 million in new loan commitments to the community with over $8 million of those loan commitments to the business community. We continue to be the leader in the markets we serve."  

Total assets as of September 30, 2013 were $250.6 million, an increase of 2% over both the June 30, 2013 and September 30, 2012 reported figures. Total deposits stood at $224.9 million as of September 30, 2013, an increase of 1% over the June 30, 2013 and 2% over the September 30, 2012 figures. The company also reported stable loan growth for the quarter. Total loans as of September 30, 2013, net of unearned income, were $166.5 million, virtually unchanged from the prior quarter but up 6% over the quarter ended September 30, 2012. 

Chief Financial Officer, Fred Moore stated, "The company's third quarter performance is reflective of the Board's strategic initiatives to continue to improve upon our already strong balance sheet. This will serve the community and the shareholders well, both now and in the future. The Board, management team and staff are committed to serving the community for the long term and we manage the balance sheet for that very purpose."

Net interest income for the three and nine months ended September 30, 2013 totaled $2,288,000 and $6,631,000, respectively, representing an increase of 2% from the three months ended June 30, 2013 and an increase of 7% for the nine months ended September 30, 2012. The company also reported net income for the third quarter of 2013 of $628,000 while earnings for the first nine months of 2013 totaled $1,430,000. The earnings represented a 45% increase over the June 30, 2013 quarter and an increase of 88% over the first nine months of 2012. The large increase in net income was attributed to decreasing credit costs, increasing non-interest income and strong net interest margin. Earnings per common share, a common measurement of shareholder value, stood at $.35 for the quarter ended September 30, 2013, a 62% increase over the previous quarter and a 114% increase over the quarter ended September 30, 2012.

Additionally, the Board of Directors declared a quarterly cash dividend of $0.055 per share, payable on November 1, 2013, to shareholders of record at the close of business on October 28, 2013. The dividend is equivalent to an annual rate of $0.22 per share or 2.70%, based upon a market price of $8.15 per common share. 

Since September 30, 2012, the company's common stock price has risen by $0.40. This increase, along with $0.21 in dividends has provided shareholders with an 8.04% annualized return. As of the end of the quarter, Redwood Capital Bancorp stock was trading below book value with a price earnings ratio for the year to date of 10.32.

For more information regarding Redwood Capital Bancorp, please visit our website at www.redwoodcapitalbank.com, contact Fred Moore, CFO, at [phone], 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		%
	9/30/2013	6/30/2013	Change
Balance Sheet Data (at period end)
Total assets	$250,627	$246,853	2%
Total deposits	224,905	221,946	1%
Total loans (net)	166,500	165,830	0%
Common equity	15,210	14,641	4%
Common shares outstanding	1,809,882	1,808,382	0%
Summary of Operations (Current Quarter)
Interest income	2,474	2,457	1%
Interest expense	186	204	-9%
Net Interest Income	2,288	2,253	2%
Non-interest income	432	396	9%
Non-interest expense	1,482	1,744	-15%
Net Income before provision	1,238	723	71%
Provision for loan losses	200	25	700%
Income before taxes	1,038	698	49%
Income taxes	410	264	55%
Net Income	628	434	45%
Earnings per share (fully diluted)	$0.35	$0.21	62%
Book value per common share	$8.40	$8.10	4%
	Period Ended		%
	9/30/2013	9/30/2012	Change
Balance Sheet Data (at period end)
Total assets	$250,627	$ 246,406	2%
Total deposits	224,905	221,002	2%
Total loans (net)	166,500	156,349	6%
Common equity	15,210	14,518	5%
Common shares outstanding	1,809,882	1,786,632	1%
Summary of Operations (Current Quarter)
Interest income	2,474	2,349	5%
Interest expense	186	293	-37%
Net Interest Income	2,288	2,056	11%
Non-interest income	432	332	30%
Non-interest expense	1,482	1,641	-10%
Net Income before provision	1,238	747	66%
Provision for loan losses	200	250	-20%
Income before taxes	1,038	497	109%
Income taxes	410	207	98%
Net Income	628	290	117%
Earnings per share (fully diluted)	$0.35	$0.16	114%
Book value per common share	$8.40	$8.14	3%
Summary of Operations (Year to Date)
Interest income	7,271	7,167	1%
Interest expense	640	955	-33%
Net Interest Income	6,631	6,212	7%
Non-interest income	1,235	858	44%
Non-interest expense	5,279	5,019	5%
Net Income before provision	2,587	2,051	26%
Provision for loan losses	275	845	-67%
Income before taxes	2,312	1,206	92%
Income taxes	882	447	97%
Net Income	1,430	759	88%
Earnings per share (fully diluted)	$0.79	$0.42	86%
Book value per common share	$8.40	$8.14	3%

CONTACT: Redwood Capital Bancorp
         Fred Moore, CFO
         [phone]