Earnings Release – Redwood Capital Bancorp – Third Quarter, 2023

Company Reports Continued Strong Excess Liquidity

On November 1, 2023, REDWOOD CAPITAL BANCORP (the company), (OTCQB:RWCB), the only locally owned and operated community bank holding company in Humboldt County, announced unaudited financial results for the three and nine month period ended September 30, 2023. Redwood Capital Bank (the bank), the company’s wholly owned subsidiary, reported consistent earnings.

John Dalby, President and CEO commented, “Unlike the industry trend for community banks, Redwood Capital Bank has maintained significant excess liquidity. We continue to partner with IntraFi, the largest provider of reciprocal deposits and through their network, have distributed over $125 million to other financial institutions. By doing so, Redwood Capital Bank has reduced its balance sheet by a like amount. If these deposits were included in our balance sheet, total assets would exceed $637 million. By lending these deposits through IntraFi, the bank earns additional non-interest revenue and increases the institution’s capital position. This excess liquidity, combined with a relatively small Accumulated Other Comprehensive Income (AOCI), provides the company with strong tangible and intangible capital positions. While loan growth remains modest at 2.5%, loan quality remains excellent with zero loan losses year to date. Furthermore, the modest decline in deposits does not reflect customer attrition, but rather the effects of tightening liquidity in the national market and quantitative actions by the Federal Reserve. Our customer base continues to grow and we are well positioned for the future.”

Total assets as of September 30, 2023, were $512.4 million. Total deposits stood at $459.4 million as of September 30, 2023. Total loans as of September 30, 2023, net of unearned income, were $386.4 million. Net income for the third quarter, 2023 was strong at $1,946,000. Net interest income for the three and nine months ended September 30, 2023, totaled $4,939,000 and $14,369,000 respectively, representing an increase of 6% over the three months ended September 30, 2022, and a 20% increase over the nine months ended September 30, 2022. The company also reported net income for the first nine months of 2023 of $5,482,000. Book value per common share, a common measurement of shareholder value, was $21.58 as of September 30, 2023.

Additionally, the Board of Directors declared a quarterly cash dividend of $0.08 per share, payable on November 13, 2023, to shareholders of record at the close of business on October 30, 2023. The dividend is equivalent to an annual rate of $0.32 per share or 1.68%, based upon a market price of $19.01 per common share. CEO Dalby explained, “A consistent dividend remains a top priority of the Board of Directors and management, along with continued growth in shareholder value.”

For more information regarding Redwood Capital Bancorp, please visit our website at www.redwoodcapitalbank.com, contact Renee Byers, SVP/CFO, at (707) 444-9849, or stop by our headquarters and main office at 402 “G” Street, Eureka, California 95501. Redwood Capital Bancorp (OTCQB:RWCB) trades on the OTCQB Venture Market for early stage and developing U.S. and international companies. Companies are current in their reporting and undergo an annual verification and management certification process. Investors can find Real-Time quotes and market information for the company on www.otcmarkets.com.

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.

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