Announcement of 10% Stock Repurchase Program REDWOOD FALLS, Minn.,
Feb. 17 /PRNewswire-FirstCall/ -- Redwood Financial, Inc.
(OTC:REDW) (the "Company"), the parent holding company of HomeTown
Bank has announced net earnings for the second fiscal quarter ended
December 31, 2005. For the six months ended December 31, 2005, the
Company recorded net earnings of $159,707. Basic and diluted
earnings per share were $0.35 per share, and $0.33 per share,
respectively. Comparatively, for the six months ended December 31,
2004, the Company recorded net earnings of $113,650. Basic and
diluted earnings per share were $0.23 per share, and $0.21 per
share, respectively. At December 31, 2005, the Company reported
total consolidated assets and consolidated stockholders' equity of
$76.5 million and $7.6 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
Redwood Falls and Olivia, Minnesota. The Bank's deposits are
insured up to maximum legal limits by the Federal Deposit Insurance
Corporation (FDIC). In addition, the Company further announces its
intention to repurchase shares of the Company's common stock. Mr.
Dean K Toft, President, said the Company has been authorized by the
Board of Directors to repurchase up to 43,256 shares (approximately
10% of its currently outstanding shares) of common stock. The
repurchases are expected to be made in open-market transactions,
subject to the availability of stock, market conditions, the
trading price of the stock and the Company's financial performance.
Such repurchased shares shall be recorded as treasury stock,
thereby available in the future for general corporate and other
purposes. The Company may terminate the repurchase program at any
time. REDWOOD FINANCIAL, INC. AND SUBSIDIARY Consolidated Balance
Sheets (Unaudited) Assets December 31, June 30, 2005 2005 Cash
$461,535 455,947 Interest-bearing deposits with banks 2,836,574
2,736,502 Cash and cash equivalents 3,298,109 3,192,449 Securities
available for sale: Mortgage-backed and related securities
6,510,983 6,266,297 Investment securities 9,088,100 10,733,526
Total securities available for sale 15,599,083 16,999,823 Loans
receivable, net 52,441,875 48,961,758 Federal Home Loan Bank stock,
at cost 1,260,800 1,148,000 Accrued interest receivable 606,207
527,956 Premises and equipment, net 2,691,740 2,743,448 Deferred
tax asset 231,291 174,869 Real estate owned, net 240,000 240,000
Other assets 153,808 83,197 Total Assets $76,522,913 74,071,500
Liabilities and Stockholders' Equity Deposits 55,803,626 54,329,685
Federal Home Loan Bank advances 11,550,000 10,020,870 Accrued
interest payable 625,249 489,380 Advance payments by borrowers for
taxes and insurance 97,534 61,763 Accrued expenses and other
liabilities 782,784 486,975 Total Liabilities 68,859,193 65,388,673
Common stock ($.10 par value): Authorized and issued 1,125,000
shares; outstanding 432,558 shares at December 31, 2005 and 477,028
shares at June 30, 2005 112,500 112,500 Additional paid-in capital
8,675,920 8,673,829 Retained earnings, subject to certain
restrictions 8,803,539 8,643,832 Accumulated other comprehensive
income (loss) (231,780) (85,253) Unearned Employee Stock Ownership
Plan shares Treasury stock, at cost, 692,442 shares at December 31,
2005 and 647,972 June 30, 2005 (9,696,459) (8,662,081) Total
Stockholders' Equity 7,663,720 8,682,827 Total Liabilities and
Stockholders' Equity $76,522,913 74,071,500 REDWOOD FINANCIAL, INC.
AND SUBSIDIARY Consolidated Statements of Earnings (Unaudited)
Three months Six months Ended December 31, Ended December 31, 2005
2004 2005 2004 Interest Income: Loans receivable $903,806 846,221
1,767,242 1,704,280 Securities available for sale: Mortgage-backed
and related securities 68,806 51,808 122,719 110,381 Investment
securities 94,270 109,956 192,307 228,403 Cash equivalents and
other 8,339 6,792 18,193 6,647 Total interest income 1,075,221
1,014,777 2,100,461 2,049,711 Interest Expense: Deposits 152,963
142,099 289,253 289,231 Federal Home Loan Bank advances 328,070
228,542 618,253 455,091 Total interest expense 481,033 370,641
907,506 744,322 Net interest income 594,188 644,136 1,192,955
1,305,389 Provision for losses on loans (81,000) 30,000 (53,500)
60,000 Net interest income after provision for losses on loans
675,188 614,136 1,246,455 1,245,389 Noninterest income: Gains on
sale of securities available for sale 0 10,000 4,650 10,000 Fees
and service charges 69,309 76,208 163,648 177,457 Other 1,559 2,475
5,291 7,099 Total noninterest income 70,868 88,683 173,589 194,556
Noninterest expense: Compensation and employee benefits 352,309
381,754 709,807 748,327 Occupancy 84,763 85,516 165,091 163,536
Professional fees 33,179 20,648 57,201 36,916 Advertising 14,335
13,905 25,666 28,032 Data processing expense 10,400 6,982 20,473
16,539 Federal deposit insurance premiums 1,816 2,077 3,584 4,238
Other 83,858 120,336 171,232 264,296 Total noninterest expense
580,660 631,218 1,153,054 1,261,884 Earnings before income taxes
165,396 71,601 266,990 178,061 Income tax expense (benefit) 73,416
26,470 107,283 64,411 Net earnings (loss) $91,980 45,131 159,707
113,650 Net earnings per common share - Basic $0.21 0.09 0.35 0.23
Net earnings per common share - Diluted 0.19 0.08 0.33 0.21 REDWOOD
FINANCIAL, INC. AND SUBSIDIARIES Selected Consolidated Financial
Information (Unaudited) Three months ended Six months ended
December December December December 31, 31, 31, 31, 2005 2004 2005
2004 Profitability Measures: Net earnings (loss) 91,980 45,131
159,707 113,650 Basic earnings per share 0.21 0.09 0.35 0.23
Diluted earnings per share 0.19 0.08 0.33 0.21 Return on average
assets 0.50% 0.24% 0.43% 0.30% Return on average equity 4.51% 1.94%
3.76% 2.41% Net interest spread 3.04% 3.39% 3.06% 3.41% Net yield
on interest earning assets 3.24% 3.59% 3.27% 3.61% Ratio of
operating expense to average total assets (annualized) 3.13% 3.41%
3.13% 3.37% Period Ended Year Ended Year Ended December 31, June
30, June 30, 2005 2005 2004 Financial Position: Total assets
76,522,913 74,071,500 77,820,992 Total stockholders' equity
7,663,720 8,682,827 9,593,682 Average total assets 73,652,431
74,063,448 88,726,471 Average total equity 8,490,752 9,229,542
8,953,013 Loans receivable, net 52,441,875 48,961,758 50,211,030
Securities available for sale net of mark to market 15,599,083
16,999,823 19,279,533 Net unrealized gain/(loss) on securities
available for sale (384,302) (141,353) (193,316) Non-performing
assets 0 0 4,714 Non-performing assets to total assets 0.00% 0.00%
0.01% Allowance for loan losses 509,198 467,961 346,553 Allowance
for loan losses to total assets 0.67% 0.63% 0.45% Allowance for
loan losses to total loans receivable 0.96% 0.95% 0.69% Net
charge-offs (recoveries) (94,736) (1,408) 777,139 Stockholders'
equity to total assets, at end of period 10.01% 11.72% 12.33% Total
shares outstanding 432,558 477,028 533,749 Book value per share
(including mark to market) 17.72 18.50 18.34 Ratio of average
interest-earning assets to average interest-bearing liabilities
108.19% 109.22% 109.61% First Call Analyst: FCMN Contact:
DATASOURCE: Redwood Financial, Inc. CONTACT: Dean Toft of Redwood
Financial, Inc., +1-507-644-4663, Fax, +1-507-644-4664 Web site:
http://www.redwoodfinancial.com/
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