Redwood Financial, Inc. 2010 Earnings

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Feb 08, 2011, 02:19 ET

REDWOOD FALLS, Minn., Feb. 8, 2011 /PRNewswire/ -- Redwood Financial, Inc. (Pink Sheets: REDW) (the "Company"), the parent holding company of HomeTown Bank has announced net earnings for the year ended December 31, 2010. For the year ended December 31, 2010, the Company recorded net earnings of $1,360,727. Basic and diluted earnings per share were $ 2.65 per share, and $ 2.65 per share, respectively. Comparatively, for the year ended December 31, 2009, the Company recorded net earnings of $1,045,288. Basic and diluted earnings per share were $1.97 per share, and $1.96 per share, respectively.

At December 31, 2010, the Company reported total consolidated assets and consolidated stockholders' equity of $178.4 million and $15.1 million, respectively. HomeTown Bank is headquartered in Redwood Falls, Minnesota and operates through its main office in Redwood Falls and its branch offices located in Olivia, Henderson, St. Peter, Le Sueur, Cleveland and Jordan, Minnesota. The holding company stock is listed on the Pink Sheets under the symbol REDW. The Bank's deposits are insured up to maximum legal limits by the Federal Deposit Insurance Corporation (FDIC).


REDWOOD FINANCIAL, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(unaudited)



		December 31,
		2010	2009
ASSETS
Cash and due from banks	$	2,780,652	3,501,305
Interest-bearing deposits due from banks		305,661	312,474
Cash and cash equivalents		3,086,313	3,813,779
Interest-bearing deposits in banks		2,940,000	4,314,000
Securities available for sale		27,700,893	32,433,422
Loans Receivable, net		127,294,417	122,066,887
Investments in restricted stock		3,290,200	2,422,100
Accrued interest receivable		1,352,327	1,258,482
Premises and equipment, net		6,916,994	7,096,267
Goodwill		4,478,398	4,478,398
Real estate owned, net		427,000	744,545
Other assets		944,828	1,380,735

TOTAL ASSETS	$	178,431,370	180,008,615


LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits		143,511,399	147,492,941
Borrowings		11,703,702	10,629,931
Accrued interest payable		315,103	547,400
Advance payments by borrowers for taxes and insurance		271,743	244,689
Accrued expenses and other liabilities		721,628	187,398
Deferred Tax Liability		626,866	752,246
Total		157,150,441	159,854,605

Subordinated debentures		6,186,000	6,186,000
TOTAL LIABLILITES		163,336,441	166,040,605

Preferred Stock - Capital Purchase Program		3,053,000	3,023,000
Common stock ($.10 par value): Authorized and issued
1,125,000 shares; outstanding 442,151 at December 31, 2010 and
441,931 shares at December 31, 2009		112,500	112,500
Additional paid-in capital		8,960,673	8,960,673
Retained earnings, subject to certain restrictions		12,264,084	11,098,182
Accumulated other comprehensive gain (loss), net		303,704	376,664
Treasury stock, at cost, 682,849 shares at
December 31, 2010; 683,069 shares at December 31, 2009		(9,599,032)	(9,603,009)

TOTAL STOCKHOLDERS' EQUITY		15,094,929	13,968,010

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	178,431,370	180,008,615


REDWOOD FINANCIAL, INC. AND SUBSIDIARY
Consolidated Statements of Earnings
(Unaudited)



		December 31,
		2010	2009

Interest Income:
Loans receivable	$	8,912,086	8,055,428
Securities available for sale:
Mortgage-backed and related securities		502,459	714,839
Investment securities		520,779	486,727
Cash equivalents and other		14,306	15,172
Total interest income		9,949,630	9,272,166

Interest Expense:
Deposits		1,616,348	2,308,003
Borrowings		244,562	307,606
Subordinate Debt		434,644	434,644
Sweep Management Funds		12,399	23,650
Total interest expense		2,307,953	3,073,903

Net interest income		7,641,677	6,198,263

Provision for losses on loans		1,000,000	380,000

Net interest income after provision for losses on loans		6,641,677	5,818,263

Noninterest income:
Gains on sale of securities available for sale		66,760	90,669
Sales Commissions		234,521	273,281
Fees and service charges		1,096,295	1,011,127
Other		217,312	114,745
Total noninterest income		1,614,888	1,489,822

Noninterest expense:
Compensation and employee benefits		3,704,902	3,316,133
Advertising		100,812	106,565
Occupancy		669,601	618,071
Federal deposit insurance premiums		278,362	194,480
Professional fees		96,993	215,326
Data processing expense		284,287	298,461
Other		1,034,032	891,790
Total noninterest expense		6,168,989	5,640,826

Earnings before income taxes		2,087,576	1,667,259

Income tax expense		726,849	621,971

Net earnings	$	1,360,727	1,045,288

Net earnings per common share - Basic	$	2.65	1.97
Net earnings per common share - Diluted	$	2.65	1.96


REDWOOD FINANCIAL, INC. AND SUBSIDIARIES
Selected Consolidated Financial Information
(unaudited)



	December 31,
	2010	2009

Profitability Measures:

Net income	1,360,727	1,045,288
Basic earnings per share	2.65	1.97
Diluted earnings per share	2.65	1.96

Return on average assets	0.76%	0.66%
Return on average equity	9.31%	7.84%

Net interest spread	4.68%	4.20%
Net yield on interest earning assets	4.69%	4.24%

Ratio of operating expense to average total assets (annualized)	3.45%	3.54%


Financial Position:

Total assets	178,431,370	180,008,615
Total shareholders' equity	15,094,929	13,968,010

Average total assets	178,851,750	159,125,316
Average total equity	14,621,816	13,326,338

Loans receivable, net	127,294,417	122,066,887
Securities available for sale net of mark to market	27,700,893	32,433,422
Net unrealized gain on securities available for sale	506,174	627,773

Non-performing assets	1,497,316	1,162,529
Non-performing assets to total assets	0.84%	0.65%

Allowance for loan losses	1,521,358	1,168,857
Allowance for loan losses to total assets	0.85%	0.65%
Allowance for loan losses to total loans receivable	1.18%	0.95%
Net charge-offs (recoveries)	561,304	491,860

Stockholders' equity to total assets, at end of period	8.46%	7.76%

Total shares outstanding	442,151	441,931
Book value per share (excluding mark to market)	32.99	30.19
Book value per share (including mark to market)	34.14	31.61

Ratio of average interest-earning assets to average
interest-bearing liabilities	100.84%	102.14%