RWCB Redwood Capital Bancorp (QX)

On February 2, 2011 REDWOOD CAPITAL BANCORP (OTCBB:RWCB), 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, 2010. The company reported record earnings and continued growth despite the continued challenges within the banking environment.

President and CEO John Dalby stated, “We are extremely proud of the company’s strong financial performance and we plan on reinvesting our profits where it matters most – within our community in the form of relationship-based loans to the individuals and small business of Humboldt County. Our numbers from 2010 represent our fifth consecutive year of annual profitability and substantiate our consistent ability to gain valuable market share. As many banks continue to struggle or fail, our results bolster our strategy of building a safe, strong and profitable financial institution that Humboldt County can bank on and with.”

Total assets as of December 31, 2010 were $213.7 million, almost no change from the September 30, 2010 figure and a sharp increase of 15% over the December 31, 2009 reported figures. Total deposits stood at $193.4 million as of December 31, 2010, again virtually no change from the September 30, 2010 figures and an increase of 14% over the December 31, 2009 numbers. While the company reported no loan growth for the quarter ended December 31, 2010, they reported modest loan growth of 5% for the year ended December 31, 2010.

Consolidated net interest income for the three and twelve months ended December 31, 2010 totaled $1,942,000 and $7,468,000, an increase of 5% and 11% from the three and twelve months ended September 30, 2010 and December 31, 2009, respectively. The company also reported an impressive increase in consolidated net income before provisions and taxes for the three and twelve months ended December 31, 2010 of $796,000 and $2,792,000, an increase of 20% and 8% from the three and twelve months ended September 30, 2010 and December 31, 2009, respectively. The increase from last year’s performance was attributed to enhanced core earnings, robust residential mortgage revenues and reduced credit related costs. The company also reported an increase in consolidated net income after taxes and provisions for the twelve months ended December 31, 2010 of $1,006,000, an increase of 137% from the twelve months ended December 31, 2009.

“These results reflect not only the hard work of our entire banking team but the loyalty and support of our customers. We continue to grow the bank with customers who appreciate a relationship with a strong, locally based commercial bank, absent the bureaucracy and inefficiencies of a big bank,” remarked CEO Dalby. “In times like these, people understand the value of doing business with a locally owned and managed community bank. This past year has been our strongest year yet. That positive momentum continues to build and we are excited about the opportunities that lie before us in 2011 and beyond,” he concluded.

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, except per share data)           Period Ended % 12/31/2010     9/30/2010     Change   Balance Sheet Data (at period end) Total assets 213,672 $ 213,586 0 % Total deposits 193,449 194,368 0 % Total loans (net) 143,967 143,993 0 %   Summary of Operations (Current Quarter) Interest income 2,399 2,310 4 % Interest expense 457 455 0 % Net Interest Income 1,942 1,855 5 % Non-interest income 318 234 36 % Non-interest expense 1,464 1,425 3 % Net Income before provision 796 664 20 % Provision for loan losses 150 400 -63 % Income before taxes 646 264 145 % Income taxes/(credit) (264 ) 0 N/A Net Income 910 264 245 %     Period Ended % 12/31/2010     12/31/2009     Change   Balance Sheet Data (at period end) Total assets 213,672 186,302 15 % Total deposits 193,449 169,126 14 % Total loans (net) 143,967 136,677 5 %   Summary of Operations (Year to Date) Interest income 9,283 8,951 4 % Interest expense 1,815 2,209 -18 % Net Interest Income 7,468 6,742 11 % Non-interest income 978 961 2 % Non-interest expense 5,654 5,129 10 % Net Income before provision and OREO 2,792 2,574 8 % OREO Expenses 0 589 N/A Provision for loan losses 2,050 1,558 32 % Income before taxes 742 427 74 % Income taxes/(credit) (264 ) 2 N/A Net Income 1,006 425 137 %   Summary of Operations (Current Quarter) Interest income 2,399 2,310 4 % Interest expense 457 455 0 % Net Interest Income 1,942 1,855 5 % Non-interest income 318 234 36 % Non-interest expense 1,464 1,425 3 %

Net Income (Loss) before provision and OREO

796 664 20 % OREO Expenses 0 0 N/A Provision for loan losses 150 400 -63 % Income before taxes 646 264 145 % Income taxes/(credit) (264 ) 0 N/A Income before taxes 910 264 245 %