5­ Star Rating –Small Business Lending Fund Redeemed ­ Cash Dividend Affirmed

EARNINGS RELEASE – January 27, 2016 

REDWOOD CAPITAL BANCORP (RWCB.OB), the only locally owned and operated community bank holding company in Humboldt County, announced unaudited financial results for the three and twelve month periods ended December 31, 2015. The community bank holding company reported record annual profits, the full redemption of the US Treasury’s Small Business Lending Fund (SBLF) shares while reaffirming its ongoing quarterly cash dividend.

President and CEO John Dalby stated, “In 2015, Redwood Capital Bank was awarded a 5­Star rating from Bauer Financial, one of the most well­known and respected financial rating agencies within the banking trade. These results and accolades suggest that our focus on putting local deposits to work by making loans to our local business, mortgage and consumer customers is building toward sustainable growth and positive earnings trends for the future.”

Total assets as of December 31, 2015 were $317.1 million, a slight decrease of 2% over the September 30, 2015 figure and a robust increase of 13% over the December 31, 2014 reported figures. Total deposits stood at $290.1 million as of December 31, 2015, 1% less than the September 30, 2015 figures and 15% higher than the December 31, 2014 numbers. The company reported strong loan growth for the quarter and year. Total loans as of December 31, 2015, net of unearned income, were $223.6 million, an increase of 3% over the prior quarter and 9% over the year ended December 31, 2014.

Consolidated net interest income for the three and twelve months ended December 31, 2015 totaled $2,829,000 and $10,955,000, up 2% from the figure reported for the three months ended September 30, 2015 and up a strong 10% for the twelve months ended December 31, 2014. The company also reported net income for the fourth quarter of 2015 of $617,000, while record earnings for the year ended December 31, 2015 were reported as $2,274,000. The earnings represented a 3% decrease over the September 30, 2015 quarter and a strong increase of 13% over the year ended December 31, 2014.

The company also announced that it has redeemed all of the shares issued to the US Treasury in July, 2011 under the Treasury’s SBLF program. Utilizing the funds from the SBLF, the company was able to grow its small business loans in the local area by more than $17 million. The redemption, approved by all appropriate regulatory authorities, was made possible, in part, by five years of record earnings, reflecting the company’s successful execution of its growth strategy. After redemption, the company’s capital ratios remain well in excess of the capital ratios required to meet the regulatory “standard” designation.

Additionally, the Board of Directors declared a quarterly cash dividend of $0.06 per share, payable on February 4, 2016 to shareholders of record at the close of business on January 25, 2016. The dividend is equivalent to an annual rate of $0.24 per share or 2.09%, based upon a market price of $11.50 per common share. Since January 27, 2015 the rise in the company’s stock price, combined with dividends, has generated a total return of over 19%.

“We are very pleased with the opportunity to enhance shareholder value by deploying excess capital in a sound manner consistent with the desire of our Board of Directors and our shareholders at large. We continue to be a well­capitalized organization with the ability to take advantage of strategic opportunities as they arise. The entire Redwood Capital Bank team is excited about the opportunities before us in 2016,” Dalby concluded.

For more information regarding Redwood Capital Bancorp, please visit our website at www.redwoodcapitalbank.com, contact Fred Moore, CFO, at (707) 444­9840, or stop by our headquarters and main office at 402 “G” Street, Eureka, CA 95501.

This press release may contain forward­looking 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 forward­looking statements, which reflect management’s view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward­looking statements to reflect subsequent events or circumstances.