Strong Second Quarter Earnings – Arcata Branch Opens - Continued Dividend

EARNINGS RELEASE – July 30, 2014

EUREKA, CALIFORNIA – On July 30, 2014, 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 period ended June 30, 2014. Redwood Capital Bank, the company’s wholly owned subsidiary reported a strong second quarter, robust local loan growth and the opening of its newest branch located in Arcata, California. Additionally, the Board of Directors announced a continuation of the recently increased quarterly dividend.

John Dalby, President and CEO remarked, “We are pleased with the continued high level of performance of both the bank and the holding company. The recent opening of the Arcata Branch is the consummation of years of planning and execution. We couldn’t be happier with our partnership with Humboldt State University and the Natural History Museum which made this all possible.”

Redwood Capital Bank once again posted strong growth in the major balance sheet categories of assets, loans and deposits. Total assets as of June 30, 2014 were $261.9 million, an increase of 3% from the prior quarter and an increase of 6% from the same period last year. Total loans, net of unearned income, rose to $188.2 million as of June 30, 2014, an increase of 5% from the March 31, 2014 figures and an increase of 13% over the quarter ended June 30, 2013. Lastly, total deposits grew to $234.7 million as of June 30, 2014, an increase of 3% over the prior quarter and 6% higher than the June 30, 2013 reported figure.

Net interest income for the quarter ended June 30, 2014 totaled $2,432,000, up 6% from the $2,284,000 reported for the three months ended March 31, 2014 and up 8% from the $2,253,000 reported for the three months ended June 30, 2013. The company reported strong net income after taxes and provision expenses in the second quarter of 2014 of $450,000, up 4% from the $434,000 reported for the second quarter of 2013 and down 7% for the three months ended March 31, 2014, a record quarter. The increase was primarily attributed to increased Fannie Mae loan originations, strong cost controls and improving overall credit quality. “As part of our charge as the only community bank in Humboldt County, we continue to invest local deposits back into our community through loans. Our lending team has been very successful in putting these deposits to work. We have a great team!” stated Dalby.

Additionally, the Board of Directors declared a quarterly cash dividend of $0.06 per share, payable on August 8, 2014, to shareholders of record at the close of business on July 28, 2014. The dividend is equivalent to an annual rate of $0.24 per share or 2.43%, based upon a market price of $9.87 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. We remain optimistic about the future of our community.”
For more information regarding Redwood Capital Bancorp, please visit our website at, contact Fred Moore, CFO, at (707) 444-9840, or stop by our headquarters and main office at 402 “G” Street, Eureka, California 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.