RWCB Redwood Capital Bancorp (QX)

On January 30, 2013 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 and twelve month periods ended December 31, 2012. The community bank holding company reported their seventh consecutive year of profitability and declared their fourth quarterly cash dividend.

President and CEO John Dalby stated, "We continue to be pleased with the core earnings performance of the company, the low level of non-performing assets relative to our peers and the growth within our local loan portfolio during this challenging economic environment. Likewise, we remain proud of our dedicated staff who continually contributes to the growth and profitability of our organization. These results suggest that our focus of putting local deposits to work by making loans to our local business, mortgage, and consumer customers is building toward sustainable growth and positive earnings trends for the future. We will be looking to expand our reach within the Humboldt County marketplace in 2013."

During FYE 2012, Redwood Capital Bancorp worked to improve its balance sheet efficiencies by reducing high interest deposits and expanding earning assets. As a result, total assets as of December 31, 2012 were $241.5 million, a slight decrease of 2% over the September 30, 2012 figure and almost no change from the December 31, 2011 reported figures. Total deposits stood at $215 million as of December 31, 2012, 3% less than the September 30, 2012 figures and 1% less the December 31, 2011 numbers. The company also reported strong loan growth for the quarter and year. Total loans as of December 31, 2012, net of unearned income, were $158.8 million, an increase of 2% over the prior quarter and 10% over the year ended December 31, 2011.

As a result of the effort to reposition the balance sheet, the net result was an increase in net interest margin. Consolidated net interest income for the quarter and twelve months ended December 31, 2012 totaled $2,157,000 and $8,369,000, a robust increase of 5% and 4% for the quarter and twelve months ended September 30, 2012 and December 31, 2011, respectively. The company also reported net income for the fourth quarter of 2012 of $454,000 while earnings for the year ended December 31, 2012 were $1,213,000. The earnings represented a 57% increase over the September 30, 2012 quarter and a decrease of 29% over the year ended December 31, 2011. The fluctuations in net income were attributed to increased loan loss provisions and overall credit-related costs. Book value per common share, a common measurement of shareholder value, stood at $8.27 as of December 31, 2012, a 2% increase over the previous quarter and a healthy 6% increase over the December 31, 2011 amount.

Additionally, the Board of Directors declared a quarterly cash dividend of $0.05 per share, payable on February 13, 2013, to shareholders of record at the close of business on January 31, 2013. The dividend is equivalent to an annual rate of $0.20 per share or 2.82%, based upon a market price of $7.10 per common share. Since December 31, 2011, the company's stock price has risen by over 22% and its book value, combined with dividends, increased approximately 8.6% over the same period.

"We are very pleased with the opportunity to enhance shareholder value by deploying excess capital in a sound manner consistent with the desire of our Board and our shareholders at large. While other institutions are challenged to raise additional capital, we continue to be a well-capitalized organization with the ability to take advantage of strategic opportunities as they arise. The entire Redwood Capital Bank team is excited about the opportunities that lie before us in 2013," Dalby concluded.

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 Company 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		%
	12/31/2012	9/30/2012	Change
Balance Sheet Data (at period end)
Total assets	$241,513	$246,406	-2%
Total deposits	214,998	221,002	-3%
Total loans (net)	158,785	156,349	2%
Common equity	14,814	14,518	2%
Common shares outstanding	1,792,632	1,786,632	0%
Summary of Operations (Current Quarter)
Interest income	2,424	2,349	3%
Interest expense	267	293	-9%
Net Interest Income	2,157	2,056	5%
Non-interest income	464	332	40%
Non-interest expense	1,680	1,641	2%
Net Income before provision	941	747	26%
Provision for loan losses	150	250	-40%
Income before taxes	791	497	59%
Income taxes	337	207	63%
Net Income	454	290	57%
Earnings per share (fully diluted)	$0.25	$0.16	56%
Book value per common share	$8.27	$8.14	2%
	Period Ended		%
	12/31/2012	12/31/2011	Change
Balance Sheet Data (at period end)
Total assets	$241,513	$ 241,666	0%
Total deposits	214,998	216,779	-1%
Total loans (net)	158,785	144,514	10%
Common equity	14,814	13,760	8%
Common shares outstanding	1,792,632	1,761,887	2%
Summary of Operations (Current Quarter)
Interest income	2,424	2,495	-3%
Interest expense	267	416	-36%
Net Interest Income	2,157	2,079	4%
Non-interest income	464	220	111%
Non-interest expense	1,680	1,654	2%
Net Income before provision	941	645	46%
Provision for loan losses	150	--	100%
Income before taxes	791	645	23%
Income taxes	337	(46)	833%
Net Income	454	691	-34%
Earnings per share (fully diluted)	$0.25	$0.39	-35%
Book value per common share	$8.27	$7.80	6%
Summary of Operations (Year to Date)
Interest income	9,591	9,783	-2%
Interest expense	1,222	1,766	-31%
Net Interest Income	8,369	8,017	4%
Non-interest income	1,322	840	57%
Non-interest expense	6,699	6,274	7%
Net Income before provision	2,992	2,583	16%
Provision for loan losses	995	300	232%
Income before taxes	1,997	2,283	-13%
Income taxes	784	574	37%
Net Income	1,213	1,708	-29%
Earnings per share (fully diluted)	$0.68	$0.97	-30%
Book value per common share	$8.27	$7.80	6%

CONTACT: Redwood Capital Bancorp
         Fred Moore, CFO, at (707) 444-9840