REDWOOD FALLS, Minn., Oct. 21 /PRNewswire-FirstCall/ -- Redwood
Financial, Inc. (OTC:REDW) (the "Company"), the parent holding
company of HomeTown Bank has announced net earnings for the first
fiscal quarter ended September 30, 2005. For the three months ended
September 30, 2005, the Company recorded net earnings of $67,727.
Basic and diluted earnings per share were $0.14 per share, and
$0.13 per share, respectively. Comparatively, for the three months
ended September 30, 2004, the Company recorded net earnings of
$68,519. Basic and diluted earnings per share were $0.14 per share,
and $0.13 per share, respectively. At September 30, 2005, the
Company reported total consolidated assets and consolidated
stockholders' equity of $74.2 million and $8.6 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 that it is very close to completing the
10% stock repurchase program that was announced on November 9, 2004
and intends to repurchase additional 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 47,300
shares (approximately 10% of the outstanding shares after the
November 9, 2004 10% stock repurchase program is completed). 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 September 30, June 30, 2005 2005 Cash
$443,299 455,947 Interest-bearing deposits with banks 2,136,616
2,736,502 Cash and cash equivalents 2,579,915 3,192,449 Securities
available for sale: Mortgage-backed and related securities
6,981,895 6,266,297 Investment securities 9,088,950 10,733,526
Total securities available for sale 16,070,845 16,999,823 Loans
receivable, net 50,444,236 48,961,758 Federal Home Loan Bank stock,
at cost 1,159,900 1,148,000 Accrued interest receivable 592,735
527,956 Premises and equipment, net 2,719,791 2,743,448 Deferred
tax asset 180,694 174,869 Real estate owned, net 240,000 240,000
Other assets 183,960 83,197 Total Assets $74,172,076 74,071,500
Liabilities and Stockholders' Equity Deposits 54,095,389 54,329,685
Federal Home Loan Bank advances 10,000,000 10,020,870 Accrued
interest payable 560,793 489,380 Advance payments by borrowers for
taxes and insurance 142,374 61,763 Accrued expenses and other
liabilities 725,964 486,975 Total Liabilities 65,524,520 65,388,673
Common stock ($.10 par value): Authorized and issued 1,125,000
shares; outstanding 509,434 shares at September 30, 2004 and
533,749 shares at June 30, 2004 112,500 112,500 Additional paid-in
capital 8,673,829 8,673,829 Retained earnings, subject to certain
restrictions 8,750,517 8,643,832 Accumulated other comprehensive
income (200,371) (85,253) Unearned Employee Stock Ownership Plan
shares Treasury stock, at cost, 615,566 shares at September 30,
2004 and 591,251 June 30, 2004 (8,688,919) (8,662,081) Total
Stockholders' Equity 8,647,556 8,682,827 Total Liabilities and
Stockholders' Equity $74,172,076 74,071,500 REDWOOD FINANCIAL, INC.
AND SUBSIDIARY Consolidated Statements of Earnings (Unaudited)
Three months ended September 30, 2005 2004 Interest Income: Loans
receivable $838,548 848,209 Securities available for sale:
Mortgage-backed and related securities 53,913 58,573 Investment
securities 98,037 118,447 Cash equivalents and other 9,855 (145)
Total interest income 1,000,353 1,025,084 Interest Expense:
Deposits 136,290 147,132 Federal Home Loan Bank advances 290,183
226,549 Total interest expense 426,473 373,681 Net interest income
573,880 651,403 Provision for losses on loans 27,500 30,000 Net
interest income after provision for losses on loans 546,380 621,403
Noninterest income: Gain on sale of securities available for sale
4,650 Fees and service charges 119,227 111,099 Other 3,733 4,625
Total noninterest income 127,610 115,724 Noninterest expense:
Compensation and employee benefits 357,498 366,573 Occupancy 80,329
78,019 Professional fees 24,022 16,268 Advertising 11,331 14,128
Data processing expense 10,073 9,557 Federal deposit insurance
premiums 1,768 2,161 Other 87,375 143,961 Total noninterest expense
572,396 630,667 Earnings before income taxes 101,594 106,460 Income
tax expense 33,867 37,941 Net earnings $67,727 68,519 Net earnings
per common share - Basic $0.14 0.14 Net earnings per common share -
Diluted 0.13 0.13 REDWOOD FINANCIAL, INC. AND SUBSIDIARIES Selected
Consolidated Financial Information (Unaudited) Three months ended
September 30, 2005 2004 Profitability Measures: Net income 67,727
68,518 Basic earnings per share 0.14 0.14 Diluted earnings per
share 0.13 0.13 Return on average assets 0.37% 0.36% Return on
average equity 3.07% 2.86% Net interest spread 3.09% 3.44% Net
yield on interest earning assets 3.31% 3.63% Ratio of operating
expense to average total assets 3.13% 3.31% Period Ended Year Ended
Year Ended September 30, June 30, June 30, Financial Position: 2005
2005 2004 Total assets 74,172,076 74,071,500 77,820,992 Total
stockholders' equity 8,647,556 8,682,827 9,593,682 Average total
assets 73,204,090 74,063,448 88,726,471 Average total equity
8,820,674 9,229,542 8,953,013 Loans receivable, net 50,444,236
48,961,758 50,211,030 Securities available for sale net of mark to
market 16,070,845 16,999,823 19,279,533 Unrealized gain on
securities available for sale (332,224) (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 497,310 467,961
346,553 Allowance for loan losses to total assets 0.67% 0.63% 0.45%
Allowance for loan losses to total loans receivable 0.98% 0.95%
0.69% Net charge-offs (recoveries) (1,848) (1,408) 777,139
Stockholders' equity to total assets, at end of period 11.66%
11.72% 12.33% Total shares outstanding 475,750 477,028 533,749 Book
value per share (including mark to market) 18.87 18.50 18.34 Ratio
of average interest-earning assets to average Interest- bearing
liabilities 109.07% 109.22% 109.61% DATASOURCE: Redwood Financial,
Inc. CONTACT: Dean K. Toft of Redwood Financial, Inc.,
+1-507-644-4663, Fax: +1-507-644-4664 Web site:
http://www.redwoodfinancial.com/
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