Redwood Financial, Inc. Third Quarter Earnings REDWOOD FALLS,
Minn., May 4 /PRNewswire-FirstCall/ -- Redwood Financial, Inc.
(OTC:REDW) (the "Company"), the parent holding company of HomeTown
Bank, has announced net earnings for the third fiscal quarter ended
March 31, 2005. For the nine months ended March 31, 2005, the
Company recorded net earnings of $183,764. Basic and diluted
earnings per share were $0.37 per share, and $0.34 per share,
respectively. Comparatively, for the nine months ended March 31,
2004, the Company recorded net earnings of $76,400. Basic and
diluted earnings per share were $0.15 per share, and $0.14 per
share, respectively. At March 31, 2005, the Company reported total
consolidated assets and consolidated stockholders' equity of $72.4
million and $8.8 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). REDWOOD FINANCIAL, INC. AND SUBSIDIARY
Consolidated Balance Sheets (Unaudited) Assets March 31, June 30,
2005 2004 Cash $536,106 502,934 Interest-bearing deposits with
banks 1,464,155 2,825,050 Cash and cash equivalents 2,000,261
3,327,984 Securities available for sale: Mortgage-backed and
related securities 6,937,683 7,391,313 Investment securities
11,615,547 11,888,220 Total securities available for sale
18,553,230 19,279,533 Loans receivable, net 47,059,737 50,211,030
Federal Home Loan Bank stock, at cost 1,044,700 943,900 Accrued
interest receivable 452,655 511,433 Premises and equipment, net
2,752,079 2,835,515 Deferred tax asset 226,483 229,000 Real estate
owned, net 240,000 371,026 Other assets 81,136 111,571 Total Assets
$72,410,281 77,820,992 Liabilities and Stockholders' Equity
Deposits 52,525,107 56,515,619 Federal Home Loan Bank advances
10,041,404 10,676,040 Accrued interest payable 391,052 447,575
Advance payments by borrowers for taxes and insurance 204,904
113,747 Accrued expenses and other liabilities 414,450 474,329
Total Liabilities 63,576,917 68,227,310 Common stock ($.10 par
value): Authorized and issued 1,125,000 shares; outstanding 492,582
shares at March 31, 2005 and 533,749 shares at June 30, 2004
112,500 112,500 Additional paid-in capital 8,658,694 8,612,143
Retained earnings, subject to certain restrictions 8,581,087
8,397,322 Accumulated other comprehensive income (loss), net
(166,542) (116,593) Unearned Employee Stock Ownership Plan shares
(16,144) (65,824) Treasury stock, at cost, 632,418 shares at March
31, 2005 and 591,251 June 30, 2004 (8,336,231) (7,345,866) Total
Stockholders' Equity 8,833,364 9,593,682 Total Liabilities and
Stockholders' Equity $72,410,281 77,820,992 REDWOOD FINANCIAL, INC.
AND SUBSIDIARY Consolidated Statements of Earnings (Unaudited)
Three months Nine months Ended March 31, ended March 31, 2005 2004
2005 2004 Interest Income: Loans receivable $835,539 884,897
2,589,019 2,825,056 Securities available for sale: Mortgage-backed
and related securities 61,879 79,581 172,260 265,231 Investment
securities 113,147 124,951 341,549 247,519 Cash equivalents and
other 9,449 3,506 16,096 19,185 Total interest income 1,020,014
1,092,935 3,118,924 3,356,991 Interest Expense: Deposits 235,374
254,721 690,465 810,035 Federal Home Loan Bank advances 133,995
158,190 423,226 495,258 Total interest expense 369,369 412,911
1,113,691 1,305,293 Net interest income 650,645 680,024 2,005,233
2,051,698 Provision for losses on loans 30,000 30,000 90,000
577,975 Net interest income after provision for losses on loans
620,645 650,024 1,915,233 1,473,723 Noninterest income: Gains on
sale of securities available for sale 0 0 10,000 0 Fees and service
charges 50,278 93,485 178,536 384,952 Other 15,662 2,198 22,762
12,812 Total noninterest income 65,940 95,683 211,298 397,764
Noninterest expense: Compensation and employee benefits 380,053
386,857 1,128,379 1,132,036 Occupancy 71,995 88,287 235,531 246,501
Professional fees 22,124 18,354 59,040 54,098 Advertising 12,736
12,120 40,769 37,857 Data processing expense 15,427 13,700 31,965
29,275 Federal deposit insurance premiums 1,924 2,196 6,162 6,756
Other 79,210 133,603 343,508 261,790 Total noninterest expense
583,469 655,117 1,845,354 1,768,313 Earnings before income taxes
103,116 90,590 281,177 103,174 Income tax expense 33,002 31,178
97,413 26,774 Net earnings $70,114 59,412 183,764 76,400 Net
earnings per common share - Basic $0.14 0.12 0.37 0.15 Net earnings
per common share - Diluted 0.13 0.11 0.34 0.14 REDWOOD FINANCIAL,
INC. AND SUBSIDIARIES Selected Consolidated Financial Information
(Unaudited) Three Months Ended Nine Months Ended March 31, March
31, March 31, March 31, 2005 2004 2005 2004 Profitability Measures:
Net earnings 70,114 59,412 183,764 76,400 Basic earnings per share
0.14 0.12 0.37 0.15 Diluted earnings per share 0.13 0.11 0.34 0.14
Return on average assets 0.38% 0.31% 0.33% 0.13% Return on average
equity 3.07% 2.49% 1.48% 0.60% Net interest spread 3.36% 3.83%
3.40% 3.50% Net yield on interest earning assets 3.56% 3.84% 3.59%
3.65% Ratio of operating expense to average total assets
(annualized) 3.17% 3.44% 1.85% 1.68% Period Ended Year Ended Year
Ended March 31, June 30, June 30, Financial Position: 2005 2004
2003 Total assets 72,410,281 77,820,992 81,567,799 Total
stockholders' equity 8,833,364 9,593,682 9,408,959 Average total
assets 74,707,699 88,726,471 88,726,471 Average total equity
9,341,239 8,953,013 9,270,686 Loans receivable, net 47,059,737
50,211,030 58,753,945 Securities available for sale net of mark to
market 18,553,230 19,279,533 14,255,767 Net unrealized gain/(loss)
on securities available for sale (276,135) (193,316) 44,814
Non-performing assets 45,733 4,714 640,000 Non-performing assets to
total assets 0.06% 0.01% 0.78% Allowance for loan losses 390,204
346,553 425,717 Allowance for loan losses to total assets 0.54%
0.45% 0.52% Allowance for loan losses to total loans receivable
0.82% 0.69% 0.72% Net charge-offs (recoveries) 46,349 777,139
18,889 Stockholders' equity to total assets, at end of period
12.20% 12.33% 11.54% Total shares outstanding 492,582 533,749
522,716 Book value per share (including mark to market) 17.93 17.97
18.00 Ratio of average interest-earning assets to average
interest-bearing liabilities 109.28% 109.61% 108.34% DATASOURCE:
Redwood Financial, Inc. CONTACT: Dean Toft of Redwood Financial,
Inc., +1-507-644-4663, or fax, +1-507-644-4664 Web site:
http://www.redwoodfinancial.com/
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