Redwood Financial, Inc. Second Quarter Earnings REDWOOD FALLS,
Minn., March 30 /PRNewswire-FirstCall/ -- Redwood Financial, Inc.
(Pink Sheets: REDW) (the "Company"), the parent holding company of
HomeTown Bank has announced net earnings for the second fiscal
quarter ended December 31, 2003. For the six months ended December
31, 2003, the Company recorded net earnings of $16,988. Basic and
diluted earnings per share were $0.03 per share, and $0.03 per
share, respectively. Comparatively, for the six months ended
December 31, 2002, the Company recorded net earnings of $277,611.
Basic and diluted earnings per share were $0.54 per share, and
$0.52 per share, respectively. At December 31, 2003, the Company
reported total consolidated assets and consolidated stockholders'
equity of $82.0 million and $9.4 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 December
31, June 30, 2003 2003 Cash $382,783 380,284 Interest-bearing
deposits with banks 3,186,436 2,720,745 Cash and cash equivalents
3,569,219 3,101,029 Securities available for sale: Mortgage-backed
and related securities (amortized cost $7,851,117 and $12,210,120,
respectively) 7,794,032 12,228,417 Investment securities (amortized
cost $12,000,717 and $2,000,833, respectively) 12,031,310 2,027,350
Total securities available for sale 19,825,342 14,255,767 Loans
receivable, net 53,507,778 58,753,945 Federal Home Loan Bank stock,
at cost 883,800 1,697,500 Accrued interest receivable 570,095
514,492 Premises and equipment, net 2,889,417 2,944,654 Deferred
tax asset 173,671 159,240 Real estate owned, net 292,196 48,336
Other assets 280,037 92,836 Total Assets $81,991,555 81,567,799
Liabilities and Stockholders' Equity Deposits 59,883,403 57,719,015
Federal Home Loan Bank advances11,490,413 13,090,481 Accrued
interest payable 454,999 524,656 Advance payments by borrowers for
taxes and insurance 125,683 105,118 Accrued expenses andother
liabilities 592,888 719,570 Total Liabilities 72,547,386 72,158,840
Common stock ($.10 par value): Authorized and issued 1,125,000
shares; outstanding 528,647 shares at December 31, 2003and 522,716
shares at June 30, 2003 112,500 112,500 Additional paid-in capital
8,584,507 8,561,403 Retained earnings, subject to certain
restrictions 8,221,994 8,205,005 Accumulated other comprehensive
income (loss) (15,978) 27,028 Unearned Employee Stock Ownership
Plan shares (98,944) (132,064) Treasury stock, at cost, 596,353
shares at December 31, 2003 and 602,284 June 30, 2003 (7,359,910)
(7,364,913) Total Stockholders' Equity 9,444,169 9,408,959 Total
Liabilities and Stockholders' Equity $81,991,555 81,567,799 REDWOOD
FINANCIAL, INC. AND SUBSIDIARY Consolidated Statements of Earnings
(Unaudited) Three months Six months Ended December 31, ended
December 31, 2003 2002 2003 2002 Interest Income: Loans receivable
$940,204 1,068,251 1,940,159 2,187,092 Securities available for
sale: Mortgage-backed and related securities 80,484 155,122 185,650
357,144 Investment securities 96,045 100,563 135,188 192,904 Cash
equivalents and other 341 10,072 3,060 16,262 Total interest income
1,117,074 1,334,008 2,264,057 2,753,402 Interest Expense: Deposits
262,592 409,861 555,314 837,232 Federal Home Loan Bank advances
162,763 310,864 337,068 624,254 Total interest expense 425,355
720,725 892,382 1,461,486 Net interest income 691,719 613,283
1,371,675 1,291,916 Provision for losses on loans 496,851 21,000
547,975 36,000 Net interest income after provision for losses on
loans 194,868 592,283 823,700 1,255,916 Noninterest income: Gains
on sale of securities available for sale 0 38,250 0 38,250 Fees and
service charges 114,504 82,207 291,467 167,753 Other 5,660 1,047
10,614 6,654 Total noninterest income 120,164 121,504 302,081
212,657 Noninterest expense: Compensation and employee benefits
373,776 329,761 745,179 670,999 Occupancy 82,871 71,288 158,214
142,464 Professional fees 17,897 16,673 35,745 33,695 Advertising
14,210 13,294 25,737 26,401 Data processing expense 7,135 9,083
15,575 17,977 Federal deposit insurance premiums 2,222 2,489 4,560
4,901 Other 67,381 60,561 128,187 122,517 Total noninterest expense
565,492 503,149 1,113,197 1,018,954 Earnings before income taxes
(250,460) 210,638 12,584 449,619 Income tax expense (benefit)
(106,025) 80,128 (4,404) 172,008 Net earnings (loss) $(144,435)
130,510 16,988 277,611 Net earnings per common share - Basic
$(0.28) 0.26 0.03 0.54 Net earnings per common share - Diluted
(0.25) 0.24 0.03 0.52 REDWOOD FINANCIAL, INC. AND SUBSIDIARIES
Selected Consolidated Financial Information (Unaudited) Three
monthsended Six months ended December 31, December 31, December 31,
December 31, 2003 2002 2003 2002 Profitability Measures: Net
earnings (loss) (144,435) 130,510 16,988 277,611 Basic earnings per
share (0.28) 0.26 0.03 0.54 Diluted earnings per share (0.25) 0.24
0.03 0.52 Return on average assets (.72%) 0.58% .04% 0.61% Return
on average equity (6.00%) 5.62% .36% 5.97% Net interest spread
3.39% 2.56% 3.35% 2.72% Net yield on interest earning assets 3.59%
2.82% 3.56% 3.00% Ratio of operating expense to average total
assets (annualized) 0.70% 2.26% 1.38% 2.21% Period Ended Year Ended
Year Ended December 31, June 30, June 30, Financial Position: 2003
2003 2002 Total assets 81,991,555 81,567,799 90,063,806 Total
stockholders' equity 9,444,169 9,408,959 9,599,643 Average total
assets 80,608,751 88,726,471 88,235,704 Average total equity
9,531,852 9,270,686 9,125,669 Loans receivable, net 53,507,778
58,753,945 57,099,418 Securities available for sale net of mark to
market 19,825,342 14,255,767 23,344,390 Net unrealized gain/(loss)
on securities available for sale (26,492) 44,814 323,540
Non-performing assets 831,583 640,000 1,610 Non-performing assets
to total assets 1.01% 0.78% 0.00% Allowance for loan losses 339,807
425,717 348,606 Allowance for loan losses to total assets 0.41%
0.52% 0.39% Allowance for loan losses to total loans receivable
0.63% 0.72% 0.61% Net charge-offs (recoveries) 633,885 18,889
11,197 Stockholders' equity to total assets, at end of period
11.52% 11.54% 10.66% Total shares outstanding 528,647 522,716
555,921 Book value per share (including mark to market) 17.86 18.00
17.27 Ratio of average interest-earning assets to average
interest-bearing liabilities 109.26% 108.34% 108.72% 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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