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Earnings Release – Redwood Capital Bancorp – Year End, 2020

·6 min read

Company Experiences Record Growth and Earnings in 2020 – Cash Dividend Affirmed

REDWOOD CAPITAL BANCORP (RWCB.OB), 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, 2020.

President and CEO, John Dalby stated, "When looking back on the Company’s achievements during 2020, we have a lot to celebrate. It was a year in which Redwood Capital Bank was discovered for what it has always been - a true community bank. While the COVID-19 pandemic dominated the news, our work and lives, the Redwood Capital Bank staff rolled up their sleeves and got to work. For example, our response to the Small Business Administration’s Paycheck Protection Program (PPP) resulted in funding a total of 590 PPP loans totaling more than $72 million. This, in turn, started an avalanche of new business depository relationships. The Consumer Lending program was discovered and new mortgage originations increased 365% over 2019 - we are now the market leader in that segment. The balance sheet grew over 35%. We provided full services to our clients throughout the crisis, keeping banking available in every market we serve. When facing challenging times, Henry Ford said, ‘An airplane takes off against the wind, not with it.’ I could not be more proud of the hard work and dedication of our staff during this unprecedented year."

Total assets as of December 31, 2020 were $498 million, an increase of 1% over the September 30, 2020 figure and a 35% increase over the December 31, 2019 figure. Total deposits stood at $448 million as of December 31, 2020, a slight increase over the September 30, 2020 figures and 38% increase over the December 31, 2019 total deposits. Total loans as of December 31, 2020, net of unearned income, were $347.5 million, a slight decrease of 2% from the prior quarter and a 25% increase over December 31, 2019.

Consolidated net income before taxes for the three and twelve months ended December 31, 2020 totaled $2,182,000 and $6,232,000, an increase of over 27% from the figure reported for the three months ended September 30, 2020 and a 11% increase from the figure reported for the twelve months ended December 31, 2019. The company also reported net income for the fourth quarter of 2020 of $1,568,000, while net income for the year ended December 31, 2020 was reported as 4,405,000. The earnings represented a 31% increase over the September 30, 2020 quarter and an increase of 7% from the year ended December 31, 2019. These record earnings are a result of strong loan production and controlled expenses.

Additionally, the Board of Directors declared a quarterly cash dividend of $0.07 per share, payable on February 10, 2021 to shareholders of record at the close of business on January 25, 2021. The dividend is equivalent to an annual rate of $0.28 per share or 1.87%, based upon a market price as of year end.

"In addition to record earnings, the Company has increased its allowance for loan lease loss by $1.26 million in order to further strengthen the balance sheet in the event of an economic downturn. With strong liquidity, capital and credit quality, we look forward to serving our shareholders and community in 2021 and beyond," Dalby concluded.

For more information regarding Redwood Capital Bancorp, please visit our website at www.redwoodcapitalbank.com, contact Renee Byers, CFO, at (707) 444-9849, or stop by our 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 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

%

12/31/2020

9/30/2020

Change

Balance Sheet Data (at period end)

Total assets

$498,111

$491,997

1

%

Total deposits

448,260

446,136

0

%

Total loans (net)

347,527

354,547

-2

%

Common equity

35,683

34,080

5

%

Common shares outstanding

1,939,937

1,940,087

0

%

Summary of Operations (Current Quarter)

Interest income

4,404

4,131

7

%

Interest expense

349

363

-4

%

Net Interest Income

4,055

3,768

8

%

Non-interest income

1,509

1,062

42

%

Non-interest expense

2,747

2,748

0

%

Net Income before provision

2,817

2,082

35

%

Provision for loan losses

635

361

76

%

Income before taxes

2,182

1,721

27

%

Income taxes

614

527

17

%

Net Income

1,568

1,194

31

%

Earnings per share (fully diluted)

$0.81

$0.62

31

%

Book value per common share

$18.39

$17.57

5

%

Period Ended

%

12/31/2020

12/31/2019

Change

Balance Sheet Data (at period end)

Total assets

$498,111

$368,024

35

%

Total deposits

448,260

325,718

38

%

Total loans (net)

347,527

277,989

25

%

Common equity

35,683

31,051

15

%

Common shares outstanding

1,939,937

1,920,472

1

%

Summary of Operations (Current Quarter)

Interest income

4,404

3,737

18

%

Interest expense

349

434

-20

%

Net Interest Income

4,055

3,303

23

%

Non-interest income

1,509

560

169

%

Non-interest expense

2,747

2,773

-1

%

Net Income before provision

2,817

1,090

158

%

Provision for loan losses

635

-

-600

%

Income before taxes

2,182

1,090

100

%

Income taxes

614

272

126

%

Net Income

1,568

818

92

%

Earnings per share (fully diluted)

$0.81

$0.43

90

%

Book value per common share

$18.39

$16.17

14

%

Summary of Operations (Year to Date)

Interest income

16,109

15,252

6

%

Interest expense

1,509

1,348

12

%

Net Interest Income

14,600

13,904

5

%

Non-interest income

3,843

2,194

75

%

Non-interest expense

10,969

10,959

0

%

Net Income before provision

7,474

5,139

45

%

Provision for loan losses

1,243

(500

)

-349

%

Income before taxes

6,232

5,639

11

%

Income taxes

1,827

1,525

20

%

Net Income

4,405

4,114

7

%

Earnings per share (fully diluted)

$2.27

$2.14

6

%

Book value per common share

$18.39

$16.17

14

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210127005067/en/

Contacts

Renee Byers, CFO, (707) 444-9849