REDWOOD FALLS, Minn., April 28 /PRNewswire-FirstCall/ -- Redwood
Financial, Inc. (the "Company"), the parent holding company of
HomeTown Bank has announced net earnings for the third fiscal
quarter ended March 31, 2006. For the nine months ended March 31,
2006, the Company recorded net earnings of $208,692. Basic and
diluted earnings per share were $0.46 per share, and $0.43 per
share, respectively. Comparatively, 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. At March 31, 2006, the Company reported total
consolidated assets and consolidated stockholders' equity of $74.8
million and $7.8 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,
2006 2005 Cash $ 352,343 455,947 Interest-bearing deposits with
banks 2,386,028 2,736,502 Cash and cash equivalents 2,738,371
3,192,449 Securities available for sale: Mortgage-backed and
related securities 6,022,399 6,266,297 Investment securities
8,949,840 10,733,526 Total securities available for sale 14,972,239
16,999,823 Loans receivable, net 51,834,190 48,961,758 Federal Home
Loan Bank stock, at cost 1,337,100 1,148,000 Accrued interest
receivable 548,057 527,956 Premises and equipment, net 2,649,126
2,743,448 Deferred tax asset 321,005 174,869 Real estate owned, net
240,000 240,000 Other assets 188,528 83,197 Total Assets $
74,828,616 74,071,500 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits
52,852,272 54,329,685 Federal Home Loan Bank advances 13,000,000
10,020,870 Accrued interest payable 601,044 489,380 Advance
payments by borrowers for taxes and insurance 178,226 61,763
Accrued expenses and other liabilities 415,002 486,975 Total
Liabilities 67,046,544 65,388,673 Common stock ($.10 par value):
Authorized and issued 1,125,000 shares; outstanding 446,988 shares
at March 31, 2006 and 477,028 shares at June 30, 2005 112,500
112,500 Additional paid-in capital 8,705,137 8,673,829 Retained
earnings, subject to certain restrictions 8,852,524 8,643,832
Accumulated other comprehensive income (loss), net (310,994)
(85,253) Treasury stock, at cost, 678,012 shares at March 31, 2006
and 647,972 June 30, 2005 (9,577,095) (8,662,081) Total
Stockholders' Equity 7,782,072 8,682,827 Total Liabilities and
Stockholders' Equity $74,828,616 74,071,500 REDWOOD FINANCIAL, INC.
AND SUBSIDIARY Consolidated Statements of Earnings (Unaudited)
Three months Nine months Ended March 31, ended March 31, 2006 2005
2006 2005 Interest Income: Loans receivable $912,252 835,539
2,679,493 2,589,019 Securities available for sale: Mortgage-backed
and related securities 65,683 61,879 188,402 172,260 Investment
securities 83,297 113,147 285,538 341,549 Cash equivalents and
other 18,309 9,449 26,569 16,096 Total interest income 1,079,541
1,020,014 3,180,002 3,118,924 Interest Expense: Deposits 343,671
235,374 961,924 690,465 Federal Home Loan Bank advances 163,701
133,995 452,954 423,226 Total interest expense 507,372 369,369
1,414,878 1,113,691 Net interest income 572,169 650,645 1,765,124
2,005,233 Provision for losses on loans 0 30,000 (53,500) 90,000
Net interest income after provision for losses on loans 572,169
620,645 1,818,624 1,915,233 Noninterest income: Gains on sale of
securities available for sale 0 0 4,650 10,000 Fees and service
charges 87,737 50,278 251,384 178,536 Other 487 15,662 5,779 22,762
Total noninterest income 88,224 65,940 261,813 211,298 Noninterest
expense: Compensation and employee benefits 366,800 380,053
1,076,607 1,128,379 Occupancy 14,664 12,736 40,330 40,769
Professional fees 88,143 71,995 253,234 235,531 Advertising 1,789
1,924 5,373 6,162 Data processing expense 27,982 22,124 85,183
59,040 Federal deposit insurance premiums 14,319 15,427 34,792
31,965 Other 93,509 79,210 264,741 343,508 Total noninterest
expense 607,206 583,469 1,760,260 1,845,354 Earnings before income
taxes 53,187 103,116 320,177 281,177 Income tax expense 4,202
33,002 111,485 97,413 Net earnings $48,985 70,114 208,692 183,764
Net earnings per common share -- Basic $0.11 0.14 0.46 0.37 Net
earnings per common share -- Diluted 0.11 0.13 0.43 0.34 REDWOOD
FINANCIAL, INC. AND SUBSIDIARIES Selected Consolidated Financial
Information (Unaudited) Three Months Ended Nine Months Ended March
31, March 31, March 31, March 31, 2006 2005 2006 2005 Profitability
Measures: Net earnings 48,985 70,114 208,692 183,764 Basic earnings
per share 0.11 0.14 0.46 0.37 Diluted earnings per share 0.11 0.13
0.43 0.34 Return on average assets 0.26% 0.38% 0.38% 0.33% Return
on average equity 2.35% 3.07% 1.96% 1.48% Net interest spread 2.95%
3.36% 3.01% 3.40% Net yield on interest earning assets 3.15% 3.56%
3.23% 3.59% Ratio of operating expense to average total assets
3.22% 3.17% 1.79% 1.85% (annualized) Period Year Year Ended Ended
Ended March 31, June 30, June 30, Financial Position: 2006 2005
2004 Total assets 74,828,616 74,071,500 77,820,992 Total
stockholders' equity 7,782,072 8,682,827 9,593,682 Average total
assets 73,797,963 74,063,448 88,726,471 Average total equity
7,987,207 9,229,542 8,953,013 Loans receivable, net 51,834,190
48,961,758 50,211,030 Securities available for sale net of mark to
market 14,972,239 16,999,823 19,279,533 Net unrealized gain/(loss)
on securities available for sale (515,642) (141,353) (193,316)
Non-performing assets 68,105 0 4,714 Non-performing assets to total
assets 0.09% 0.00% 0.01% Allowance for loan losses 510,864 467,961
346,553 Allowance for loan losses to total assets 0.68% 0.63% 0.45%
Allowance for loan losses to total loans receivable 0.98% 0.95%
0.69% Net charge-offs(recoveries) (6,386) (1,408) 777,139
Stockholders' equity to total assets, at end of period 10.40%
11.72% 12.33% Total shares outstanding 446,988 477,028 533,749 Book
value per share (including mark to market) 17.41 18.50 18.34 Ratio
of average interest- earning assets to average interest-bearing
liabilities 108.16% 109.22% 109.61% 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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