Redwood Capital Bancorp Reports Record Earnings EUREKA, Calif., Oct 17, 2008 (BUSINESS WIRE) -- On October 17, 2008, REDWOOD CAPITAL BANCORP (OTCBB:RWCB), the holding company for Redwood Capital Bank, announced unaudited consolidated financial results for the three month period ended September 30, 2008. The company reported record earnings while continuing to increase its loan loss reserves. John Dalby, President and CEO of the company, commented, "In the midst of the most challenging period in recent banking history, we are extremely proud to be able to report record earnings and prudent growth. Our solid results are a direct reflection of the conservative approach we have taken from day one as stewards of our local shareholders and depositors funds. During a time when many other banks are in distressed or weakened positions from relying on risky lending, unpredictable capital markets and unsustainable leverage, Redwood Capital Bank continues to maintain our disciplined risk and credit management practices." Redwood Capital Bank also avoided exposures to risky sub-prime loans. According to CEO Dalby, "We did not offer sub-prime loans and discouraged customers and prospective customers from obtaining them." While revenues are increasing and the company's risk management and credit underwriting standards are maintained, management continues to provide for any future economic uncertainties by increasing loan loss reserves. "Redwood Capital Bank continues to maintain its pro-active and conservative approach with regards to economic uncertainties by increasing loss loan reserves," stated CFO Fred Moore. "This strategy assures our shareholders that the franchise is well-positioned to not only weather current economic conditions, but most importantly, to fulfill our mission to provide a safe and secure financial institution for many years to come." Total assets as of September 30, 2008 were $146.5 million, an increase of 5% and 16% over the June 30, 2008 and September 30, 2007 reported figures, respectively. Total deposits stood at $132.9 million as of September 30, 2008, an increase of 5% and 15% over the June 30, 2008 and September 30, 2007 respectively. The company also reported modest loan growth for the quarter. Total loans as of September 30, 2008, net of unearned income, were $123.4 million, an increase of 5% over the prior quarter and 28% over the quarter ended September 30, 2007. Net interest income for the three months ended September 30, 2008 totaled $1,594,000 an increase of 13% and 21% from the three month ended June 30, 2008 and September 30, 2007, respectively. Loan loss provisions also increased to $125,000 for the three months ended September 30, 2008, up 3% and 79% from the three month ended June 30, 2008 and September 30, 2007, respectively. Lastly, the bank reported net income before taxes for the quarter of $453,000, up 144% and 154% from the three month ended June 30, 2008 and September 30, 2007, respectively. Since its inception in 2004, the bank has had no loan losses from its loan portfolio and continues to exceed regulatory guidelines for "well capitalized" institutions, the highest regulatory standard reported. For more information regarding Redwood Capital Bancorp, please visit our website at www.redwoodcapitalbank.com, contact Fred Moore, CFO, at (707) 444-9840, or stop by our headquarters and main office at 402 "G" Street, Eureka, CA 95501. This press release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, and competition within the business areas in which the bank is conducting its operations, including the real estate market in California and other factors beyond the bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. Redwood Capital Bancorp Selected Consolidated Financial Results - Unaudited (In Thousands) Period Ended % 9/30/2008 6/30/2008 Change Balance Sheet Data (at period end) Total assets $ 146,511 $ 139,792 5 % Total deposits 132,884 126,040 5 % Total loans (net) 123,401 117,465 5 % Summary of Operations (Current Quarter) Interest income 2,231 2,084 7 % Interest expense 637 678 -6 % Net Interest Income 1,594 1,406 13 % Non-interest income 186 178 4 % Non-interest expense 1,202 1,277 -6 % Net Income (Loss) before provision 578 307 88 % Provision for loan losses 125 121 3 % Income before taxes 453 186 144 % Period Ended % 9/30/2008 9/30/2007 Change Balance Sheet Data (at period end) Total assets $ 146,511 $ 126,745 16 % Total deposits 132,884 115,367 15 % Total loans (net) 123,401 96,250 28 % Summary of Operations (Current Quarter) Interest income 2,231 2,228 0 % Interest expense 637 916 -30 % Net Interest Income 1,594 1,312 21 % Non-interest income 186 152 22 % Non-interest expense 1,202 1,216 -1 % Net Income (Loss) before provision 578 248 133 % Provision for loan losses 125 70 79 % Income before taxes 453 178 154 % SOURCE: Redwood Capital Bancorp