Exhibit 99.1
FOR: REDWOOD EMPIRE BANCORP
APPROVED BY: James Beckwith
EVP/Chief Operating Officer
(707) 522-5215
For Immediate Release
REDWOOD EMPIRE BANCORP REPORTS
FIRST QUARTER 2003 NET INCOME
SANTA ROSA, Calif. (April 16, 2003) -- Redwood Empire Bancorp (NASDAQ: REBC)
today reported net income of $2,016,000 or $.57 per diluted share for the
quarter ended March 31, 2003. This compares with net income of $1,947,000 or
$.54 per diluted share for the same quarter a year ago. Annualized return on
common equity was 28.8% in the first quarter of 2003 as compared with 30.2% in
the same quarter a year ago. Annualized return on assets was 1.60% in the first
quarter of 2003 as compared to 1.68% one year ago. "We are extremely pleased
with bottom line results," noted James Beckwith, Chief Operating Officer.
"Growing our franchise, providing excellent service to customers and delivering
outstanding returns to our shareholders are our key objectives," said Beckwith.
Total deposits amounted to $482,361,000 as of March 31, 2003 as
compared to $436,956,000 at March 31, 2002, which amounts to a $45,405,000 or
10% increase. Total assets amounted to $540,616,000 as of March 31, 2003 as
compared to $489,107,000 at March 31, 2002, which amounts to a $51,509,000 or a
11% increase. Total loans amounted to $397,836,000 as of March 31, 2003 as
compared to $351,625,000 one year ago, or a 13% increase.
Net interest income amounted to $5,530,000 in the first quarter of
2003, compared to $4,989,000 in the same period in 2002, which represents a
$541,000 or 11% increase. The increase in net interest income is attributable to
a substantial increase in earning assets. Average earning assets amounted to
$485,170,000 for the three months ended March 31, 2003 as compared to
$441,641,000 for the same period one year ago. Earning asset growth was driven
by strong deposit growth. The net interest margin was 4.62% for the quarter
ended March 31, 2003 as compared to 4.58% one year ago and 4.31% in the fourth
quarter of 2002. The Company's net interest margin has been positively impacted
by significant loan growth and the downward repricing of interest bearing
deposits.
There was no loan loss provision for the quarters ended March 31, 2003
and March 31, 2002. Net charge-offs were $45,000 or .05% (annualized) of average
portfolio loans for the quarter as compared to $31,000 or .04% (annualized) one
year ago. Non-performing assets at March 31, 2003 were $3,255,000 or .6% of
total assets, as compared to non-performing assets of $3,641,000, or .7% of
total assets, as of March 31, 2002. The allowance for loan losses to
nonperforming assets was 226% as of March 31, 2003 as compared to 207% as of
March 31, 2002.
Non-interest income amounted to $1,629,000 for the quarter ended March
31, 2003 as compared to $1,818,000 in the same period in 2002 or a 10% decrease.
Merchant draft processing revenues decreased $50,000 from $1,179,000 in the
first quarter of 2002 to $1,129,000 in the first quarter of 2003. Excluding net
revenue from merchant bankcard processing, non-interest income amounted to
$500,000 for the three months ended March 31, 2003 as compared to $639,000 for
the same period one year ago.
Non-interest expense amounted to $4,086,000 for the quarter ended March
31, 2003 as compared to $3,738,000 in the same period one year ago, which
represents an increase of $348,000 or 9%. The increase in non-interest expense
is primarily attributable to an increase in salary and employee benefit expense.
The Company's efficiency ratio for the first quarter of 2003 amounted to 57% as
compared to 55% one year ago. The efficiency ratio for the Company's subsidiary,
National Bank of the Redwoods was 54% for the quarter ended March 31, 2003 as
compared to 51% one year ago.
For the three months ended March 31, 2003, the net income of the
Company's community banking segment was $1,620,000 on revenues of $5,865,000.
This compares to net income of $1,512,000 and revenues of $5,474,000 for the
same period one year ago. The segment's improvement in net income, as compared
to the first quarter of 2002, is primarily attributable to an increase in net
interest income. The net income of the Company's bankcard segment was $396,000
for the quarter ended March 31, 2003 versus $435,000 in 2002. The decrease in
the segment's net income for the quarter ended March 31, 2003 is primarily due
to a decrease in processing revenue and an increase in salary and benefits
expenses. The increase in the unit's salary and employee benefits expense is due
to a build-up in sales development personnel. The merchant bankcard segment's
net income comprised 20% of the Company's consolidated net income for the three
months ended March 31, 2003, compared to 22% of the Company's consolidated net
income for the three months ended March 31, 2002.
As previously disclosed in the Company's quarterly and annual reports,
on January 15, 2002 National Bank of the Redwoods formed NBR Real Estate
Investment Trust, a Maryland Real Estate Investment Trust. The entity was formed
to hold the Bank's real estate secured loans and to better organize the Bank's
marketing and origination of real estate secured loans. As a result of the
formation and funding of this entity, the Company's effective tax rate was
reduced to 34% for the quarter ended March 31, 2003 as compared to 37% for the
quarter ended March 31, 2002.
In August 2001, the Company announced an authorization to repurchase
355,500 shares, as adjusted for the three-for-two stock split announced
September 20, 2001. To date, 237,003 shares have been repurchased under the
current authorization. Under the repurchase program, the Company plans to
purchase shares from time to time on the open market and/or in privately
negotiated transactions.
Total assets were $540,616,000 at March 31, 2003. Common book value per
share was $8.51. The Company's Tier 1 capital to average assets ratio was 7.04%
as of March 31, 2003.
Redwood Empire Bancorp, through its principal operating subsidiary,
National Bank of the Redwoods, provides diverse financial products and services.
The Company offers commercial banking services primarily to businesses and
professionals in the North Coast counties of California. The Company's business
strategy includes the development of fee-based products and services which will
provide insulation to the Company's results from changes in interest rates.
Except for historical information contained herein, the statements
contained in this press release, including statements concerning future
increases in the value of Redwood Empire Bancorp stock, are forward-looking
statements within the meaning of the "safe harbor" provisions of Section 27A of
the Securities Act of 1933, as amended, and section 21E of the Securities
Exchange Act or 1934, as amended. These forward-looking statements are subject
to risks and uncertainties. Actual results may differ materially from those set
forth in or implied by forward-looking statements. These risks are described
from time to time in Redwood Empire Bancorp's Securities and Exchange Commission
filings, including its Annual Reports on Form 10-K and quarterly reports on Form
10-Q. Redwood Empire Bancorp disclaims any intent or obligation to update these
forward-looking statements.
(Tables to follow)
REDWOOD EMPIRE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands except for earnings per share and share data)
Three Months Ended
March 31,
2003 2002
-------------------------------------
Total interest income $7,542 $7,409
Total interest expense 2,012 2,420
-------------------------------------
Net interest income 5,530 4,989
Provision for loan losses - -
-------------------------------------
Net interest income after provision for loan losses 5,530 4,989
-------------------------------------
Service charges on deposit accounts 268 314
Merchant draft processing, net 1,129 1,179
Loan servicing income 35 54
Net realized gains on investment securities available for sale - 35
Other income 197 236
-------------------------------------
Total noninterest income 1,629 1,818
-------------------------------------
Salaries and employee benefits 2,284 2,046
Occupancy and equipment expense 614 524
Other 1,188 1,168
-------------------------------------
Total noninterest expense 4,086 3,738
-------------------------------------
Income before income tax expense 3,073 3,069
Income tax expense 1,057 1,122
-------------------------------------
Net income $2,016 $1,947
=====================================
Basic earnings per share:
Net income available for common stock shareholders $0.60 $0.56
Weighted average shares 3,385,000 3,499,000
Diluted earnings per share:
Net income available for common stock shareholders $0.57 $0.54
Weighted average shares 3,507,000 3,632,000
Selected Ratios
Annualized Return on Average Total Equity 28.82 % 30.20%
Annualized Return on Average Total Assets 1.60 % 1.68%
Selected Balance Sheet Data
(In Thousands)
(Unaudited)
March 31, December 31, March 31,
2003 2002 2002
---------------------------------------------------
Total Loans $397,836 $365,076 $351,625
Allowance for Loan Losses 7,355 7,400 7,549
Total Assets 540,616 513,181 489,107
Total Deposits 482,361 453,093 436,956
Trust Preferred Debt 10,000 10,000 10,000
Total Shareholders' Equity 28,706 28,807 26,488
Nonperforming Assets 3,255 2,794 3,641
REDWOOD EMPIRE BANCORP AND SUBSIDIARIES
BUSINESS SEGMENTS
(Unaudited)
(Dollars in thousands)
Three Months Ended
March 31, 2003
-----------------------------------
Community
Banking Bankcard
-----------------------------------
Total interest income $7,542 $ ---
Total interest expense 2,007 5
Interest income (expense) allocation (170) 170
-----------------------------------
Net interest income 5,365 165
-----------------------------------
Provision for loan losses --- ---
Service charges on deposit accounts 268 ---
Merchant draft processing, net --- 1,129
Loan servicing income 35 ---
Net realized gains on investment securities available for sale --- ---
Other income 197 ---
-----------------------------------
Total noninterest income 500 1,129
-----------------------------------
Salaries and employee benefits 1,830 454
Occupancy and equipment expense 565 49
Other 1,000 188
-----------------------------------
Total noninterest expense 3,395 691
-----------------------------------
Income before income tax expense 2,470 603
Income tax expense 850 207
-----------------------------------
Net income $1,620 $396
===================================
Three Months Ended
March 31, 2002
-----------------------------------
Community
Banking Bankcard
-----------------------------------
Total interest income $7,409 $ ---
Total interest expense 2,418 2
Interest income (expense) allocation (156) 156
-----------------------------------
Net interest income 4,835 154
-----------------------------------
Provision for loan losses --- ---
Service charges on deposit accounts 314 ---
Merchant draft processing, net --- 1,179
Loan servicing income 54 ---
Net realized gains on investment securities available for sale 35 ---
Other income 236 ---
-----------------------------------
Total noninterest income 639 1,179
-----------------------------------
Salaries and employee benefits 1,639 407
Occupancy and equipment expense 478 46
Other 971 197
-----------------------------------
Total noninterest expense 3,088 650
-----------------------------------
Income before income tax expense 2,386 683
Income tax expense 874 248
-----------------------------------
Net income $1,512 $435
===================================