Record Quarterly Earnings, Founding Chairman Retires, Continued Dividend

EUREKA, CALIFORNIA – On July 29, 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 month periodended June 30, 2016. Redwood Capital Bank, the company’s wholly owned subsidiary reported recordquarterly 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 $229.1million 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 $295.7million 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 recordnet 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. Vice­Chairman, 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 ever­mindful 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.

For more information regarding Redwood Capital Bancorp, please visit our website at, contact Fred Moore, CFO, at (707) 444­9840, or stop by our headquarters and main office at 402 “G” Street, Eureka, California  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 Bank undertakes no obligation to publicly revise these forward­looking statements to reflect subsequent events or circumstances.