EXHIBIT 99

                                  Press Release










                      [Redwood Financial, Inc. Letterhead]



FOR IMMEDIATE RELEASE
Date:             August 7, 1998
Contact:          Paul W. Pryor
                  (507) 637-8730
                  Fax:  (507) 637-5825



                 Redwood Financial, Inc. Fourth Quarter Earnings
                  and Authorization of Stock Repurchase Program

         Redwood Falls,  Minnesota--Redwood Financial, Inc. (the "Company"), the
parent  holding  company of HomeTown  Bank  (previously  known as Redwood  Falls
Federal Savings and Loan  Association) has announced net earnings for the fourth
fiscal  quarter  ended June 30, 1998.  For the three months ended June 30, 1998,
the Company  recorded net earnings of $108,415.  Basic and diluted  earnings per
share were $0.13 per share,  and $0.13 per share,  respectively.  For the fiscal
year ended June 30, 1998, the Company  recorded net earnings of $425,335.  Basic
and  diluted  earnings  per share  were  $0.52 per  share,  and $0.49 per share,
respectively.

         Comparatively,  for the three months  ended June 30, 1997,  the Company
recorded  net earnings of  $126,487.  Basic and diluted  earnings per share were
$0.13 per share,  and $0.13 per share,  respectively.  For the fiscal year ended
June 30, 1997, the Company recorded net earnings of $251,500.  Basic and diluted
earnings per share were $0.27 per share, and $0.26 per share, respectively.

         The Company further announced its intention to repurchase shares of the
Company's common stock. Mr. Paul W. Pryor, President,  said the Company has been
authorized  by  the  Board  of  directors  to  repurchase  up to  86,800  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.  Repurchased shares will be
retired,  thereby  available  in the  future  for  general  corporate  and other
purposes,  including the issuance of shares in  connection  with the exercise of
stock options. The Company may terminate this program at any time.

         At June 30, 1998, the Company  reported total  consolidated  assets and
consolidated  stockholders' equity of $77,287,000 and $11,938,000  respectively.
HomeTown Bank is headquartered in Redwood Falls,  Minnesota and operates through
its main  office in  Redwood  Falls and its  branch  office  located  in Olivia,
Minnesota.  The Bank's  deposits  are insured up to maximum  legal limits by the
Federal  Deposit  Insurance  Corporation  (FDIC).  The  common  stock of Redwood
Financial, Inc. (trading symbol "REDW") is listed on the OTC Bulletin Board.