OREANDA-NEWS. On July 29, 2016, REDWOOD CAPITAL BANCORP (OTCBB:RWCB), the only locally owned and operated community bank holding company in Humboldt County, announced unaudited financial results for the three month period ended June 30, 2016.  Redwood Capital Bank, the company’s wholly owned subsidiary reported record quarterly earnings while the Board of Directors affirmed a continuation of its quarterly dividend. 

The company posted modest growth in the major balance sheet categories of assets, loans and deposits.  Total assets as of June 30, 2016 were $323.5 million, an increase of 1% from the prior quarter and an increase of 6% from the same period last year. Total loans, net of unearned income, rose to $229.1 million as of June 30, 2016, an increase of 1% from the March 31, 2016 figures and an increase of 8% over the quarter ended June 30, 2015.  Lastly, total deposits grew to $295.7 million as of June 30, 2016, an increase of 1% over the prior quarter and 7% higher than the June 30, 2015 reported figure. 

Net interest income for the quarter ended June 30, 2016 totaled $2,930,000, up 2% from the $2,876,000 reported for the three months ended March 31, 2016 and up 8% from the $2,722,000 reported for the three months ended June 30, 2015.  The company also reported record net income after taxes and provision expenses in the second quarter of 2016 of $718,000, up 34% reported for the three months ended March 31, 2016 and up 26% from the $572,000 reported for the second quarter of 2015.  The increase was primarily attributed to consistent loan growth, increased Fannie Mae loan originations, strong cost controls and excellent credit quality.

Additionally, it was announced that effective July 20, 2016, Founding Chairman of the Board of Directors, Dr. John E. Burke retired as Chairman of the Board of Directors.  Dr. Burke was one of the early visionaries who helped conceptualize what Redwood Capital Bank is today.  Dr. Burke will remain an active member of the Board in the role of Director.  Vice-Chairman, John J. Gierek, Jr. has assumed the position of Chairman of the Board of Directors.  J. William McAuley has been elected by the Board of Directors to serve as Vice Chairman.

John Dalby, President and CEO, remarked, “On behalf of the Board of Directors, senior management and the staff of Redwood Capital Bank, I would like to thank Dr. Burke for his dedication and service to this company as Founding Chairman of the Board of Directors. He represents a steady voice that guided the company for over a decade through many milestones, continued growth and success.  He was a leading advocate for creating the bank’s Board Governance Policies which have helped the Board of Directors maintain a high standard of continued excellence.  These policies have since been used as a model for other community banks throughout the country.”

Dr. Burke commented, “It has been a privilege and honor to serve as the Founding Chairman of the Board of Directors of Redwood Capital Bank.  The soul of Redwood Capital Bank is that it is from the community, for the community.  I am confident that the Board will continue to deliver strategic direction for the company and remain ever-mindful of the interests of our shareholders.  I congratulate our new Chairman, John Gierek, Jr., and Vice Chairman, Bill McAuley and look forward to this new chapter for both Redwood Capital Bank and the Board of Directors.”

Finally, the Board of Directors declared a quarterly cash dividend of $0.06 per share, payable on August 10, 2016, to shareholders of record at the close of business on July 29, 2016.  The dividend is equivalent to an annual rate of $0.24 per share or 2.04%, based upon a market price of $11.75 per common share. CEO Dalby explained, “We are pleased to continue our dividend payments as a sign of our belief in the financial strength of the company while enhancing the return to those that have entrusted us with their investment.  We remain confident that our first half performance for 2016 is indicative of the opportunities available to us over the remainder of the year and beyond,” stated Dalby.

Redwood Capital Bancorp
Selected Consolidated Financial Results - Unaudited
(In Thousands)
             
      Period Ended %  
      6/30/2016 3/31/2016 Change  
             
Balance Sheet Data (at period end)        
  Total assets   $ 323,542   $ 320,658     1 %  
  Total deposits     295,653     293,580     1 %  
  Total loans (net)     229,108     226,192     1 %  
  Common equity     20,803     20,098     4 %  
  Common shares outstanding     1,903,575     1,882,843     1 %  
             
Summary of Operations (Current Quarter)          
  Interest income     3,132       3,086     1 %  
  Interest expense     202       210     -4 %  
  Net Interest Income     2,930       2,876     2 %  
  Non-interest income     458       352     30 %  
  Non-interest expense     2,209       2,197     1 %  
  Net Income before provision    1,179       1,031     14 %  
  Provision for loan losses   0       90     -100 %  
  Income before taxes     1,179       941     25 %  
  Income taxes/(credit)     461       406     14 %  
  Net Income     718       535     34 %  
  Earnings per common share (fully diluted)   $ 0.38   $ 0.28     33 %  
  Book value per common share   $ 10.93   $ 10.67     2 %  
             
      Period Ended %  
      6/30/2016 6/30/2015 Change  
             
Balance Sheet Data (at period end)        
  Total assets   $ 323,542   $ 304,202     6 %  
  Total deposits     295,653     275,428     7 %  
  Total loans (net)     229,108     212,922     8 %  
  Common equity     20,803     18,385     13 %  
  Common shares outstanding     1,903,575     1,882,143     1 %  
             
Summary of Operations (Current Quarter)          
  Interest income     3,132     2,896     8 %  
  Interest expense     202     174     16 %  
  Net Interest Income     2,930     2,722     8 %  
  Non-interest income     458     348     32 %  
  Non-interest expense     2,209     2,026     9 %  
  Net Income before provision   1,179     1,044     13 %  
  Provision for loan losses   0     120     -100 %  
  Income before taxes     1,179     924     28 %  
  Income taxes     461     352     31 %  
  Net Income     718     572     26 %  
  Earnings per common share (fully diluted)   $ 0.38   $ 0.30     24 %  
  Book value per common share   $ 10.93   $ 9.77     12 %