Redwood Financial, Inc. 2010 Earnings

REDWOOD FINANCIAL, INC. AND SUBSIDIARY

Consolidated Balance Sheets

(unaudited)

December 31,

2010

2009

ASSETS

Cash and due from banks

$

2,780,652

3,501,305

Interest-bearing deposits due from banks

305,661

312,474

Cash and cash equivalents

3,086,313

3,813,779

Interest-bearing deposits in banks

2,940,000

4,314,000

Securities available for sale

27,700,893

32,433,422

Loans Receivable, net  

127,294,417

122,066,887

Investments in restricted stock

3,290,200

2,422,100

Accrued interest receivable

1,352,327

1,258,482

Premises and equipment, net

6,916,994

7,096,267

Goodwill

4,478,398

4,478,398

Real estate owned, net

427,000

744,545

Other assets

944,828

1,380,735

TOTAL ASSETS

$

178,431,370

180,008,615

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits

143,511,399

147,492,941

Borrowings

11,703,702

10,629,931

Accrued interest payable

315,103

547,400

Advance payments by borrowers for taxes and insurance

271,743

244,689

Accrued expenses and other liabilities

721,628

187,398

Deferred Tax Liability

626,866

752,246

Total

157,150,441

159,854,605

Subordinated debentures

6,186,000

6,186,000

TOTAL LIABLILITES

163,336,441

166,040,605

Preferred Stock - Capital Purchase Program

3,053,000

3,023,000

Common stock ($.10 par value):  Authorized and issued

  1,125,000 shares; outstanding 442,151 at December  31, 2010 and

  441,931 shares at December 31, 2009

112,500

112,500

Additional paid-in capital

8,960,673

8,960,673

Retained earnings, subject to certain restrictions

12,264,084

11,098,182

Accumulated other comprehensive gain (loss), net

303,704

376,664

Treasury stock, at cost, 682,849 shares at

  December 31, 2010; 683,069 shares at December 31, 2009

(9,599,032)

(9,603,009)

TOTAL STOCKHOLDERS' EQUITY

15,094,929

13,968,010

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

178,431,370

180,008,615

REDWOOD FINANCIAL, INC. AND SUBSIDIARY

Consolidated Statements of Earnings

(Unaudited)

December 31,

2010

2009

Interest Income:

  Loans receivable

$

8,912,086

8,055,428

  Securities available for sale:

     Mortgage-backed and related securities

502,459

714,839

     Investment securities

520,779

486,727

  Cash equivalents and other

14,306

15,172

Total interest income

9,949,630

9,272,166

Interest Expense:

 Deposits

1,616,348

2,308,003

 Borrowings

244,562

307,606

 Subordinate Debt

434,644

434,644

 Sweep Management Funds

12,399

23,650

Total interest expense

2,307,953

3,073,903

Net interest income

7,641,677

6,198,263

Provision for losses on loans

1,000,000

380,000

Net interest income after provision for losses on loans

6,641,677

5,818,263

Noninterest income:

  Gains on sale of securities available for sale

66,760

90,669

  Sales Commissions

234,521

273,281

  Fees and service charges

1,096,295

1,011,127

  Other

217,312

114,745

Total noninterest income

1,614,888

1,489,822

Noninterest expense:

  Compensation and employee benefits

3,704,902

3,316,133

  Advertising

100,812

106,565

  Occupancy

669,601

618,071

  Federal deposit insurance premiums

278,362

194,480

  Professional fees

96,993

215,326

  Data processing expense

284,287

298,461

  Other

1,034,032

891,790

Total noninterest expense

6,168,989

5,640,826

Earnings before income taxes

2,087,576

1,667,259

Income tax expense

726,849

621,971

Net earnings

$

1,360,727

1,045,288

Net earnings per common share - Basic

$

2.65

1.97

Net earnings per common share - Diluted

$

2.65

1.96

REDWOOD FINANCIAL, INC. AND SUBSIDIARIES

Selected Consolidated Financial Information

(unaudited)

December  31,

2010

2009

Profitability Measures:

Net income

1,360,727

1,045,288

Basic earnings per share

2.65

1.97

Diluted earnings per share

2.65

1.96

Return on average assets

0.76%

0.66%

Return on average equity

9.31%

7.84%

Net interest spread

4.68%

4.20%

Net yield on interest earning assets

4.69%

4.24%

Ratio of operating expense to average total assets (annualized)

3.45%

3.54%

Financial Position:

Total assets

178,431,370

180,008,615

Total shareholders' equity

15,094,929

13,968,010

Average total assets

178,851,750

159,125,316

Average total equity

14,621,816

13,326,338

Loans receivable, net

127,294,417

122,066,887

Securities available for sale net of mark to market

27,700,893

32,433,422

Net unrealized gain on securities available for sale

506,174

627,773

Non-performing assets

1,497,316

1,162,529

Non-performing assets to total assets

0.84%

0.65%

Allowance for loan losses

1,521,358

1,168,857

Allowance for loan losses to total assets

0.85%

0.65%

Allowance for loan losses to total loans receivable

1.18%

0.95%

Net charge-offs (recoveries)

561,304

491,860

Stockholders' equity to total assets, at end of period

8.46%

7.76%

Total shares outstanding

442,151

441,931

Book value per share (excluding mark to market)

32.99

30.19

Book value per share (including mark to market)

34.14

31.61

Ratio of average interest-earning assets to average

 interest-bearing liabilities

100.84%

102.14%