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REDWOOD EMPIRE BANCORP REPORTS INCREASE IN THIRD QUARTER RESULTS

 REDWOOD EMPIRE BANCORP REPORTS INCREASE IN THIRD QUARTER RESULTS
 SANTA ROSA, Calif., Oct. 13 /PRNewswire/ -- Redwood Empire Bancorp (AMEX: REB) today reported increased earnings for the third quarter and nine months ended Sept. 30, 1992.
 Net income for the third quarter rose 73 percent to $655,000 from $379,000 in the third quarter of 1991. Earnings per share for the recent third quarter were 27 cents compared to 20 cents in the third quarter of the prior year and reflected an increase in average weighted shares outstanding to 2,398,283 for the recent quarter versus 1,851,625 in the third quarter of last year.
 For the nine-month period, net income was $1,900,000, 28 percent above net income through the same period in 1991 of $1,481,000. Earnings per share for the nine months were 88 cents versus 79 cents last year.
 "Our results continue to reflect the benefits of our diversified operating subsidiaries," said John H. Downey Jr., chairman of Redwood Empire Bancorp. "Mortgage banking activities remained strong as the low interest rate environment and expansion of our wholesale lending offices produced significant loan volume. In addition, our commercial banking operations strengthened in the quarter."
 The company generated $250 million in new mortgages during the third quarter, a new record and 131 percent above the level in the third quarter of last year. During the quarter, a third wholesale mortgage lending office was opened in Santa Rosa, supplementing the offices in San Jose and Sacramento.
 Net interest income in the third quarter increased 8 percent from the 1991 quarter, reflecting a higher level of residential mortgage loans held for sale. The net interest margin for the quarter was 4.43 percent compared with 4.77 percent a year ago and was largely due to a reduction in general market interest rates and a higher volume of mortgage loans as a percent of total assets.
 The loan loss provision decreased to $400,000 in the recent quarter compared with $800,000 last year. Net chargeoffs for the quarter were $215,000 or an annual rate of 0.38 percent of average total loans. Nonperforming assets at Sept. 30, 1992, were $6.0 million compared with $5.5 million at June 30, 1992. The increase was attributable to the addition of several loans past due more than 90 days but in the process of collection. At 2.20 percent of average total assets for the quarter, nonperforming assets remain well below peer California financial institutions. The reserve ratio remained relatively unchanged at 1.20 percent at quarter-end compared with 1.29 percent at June 30. The reserve ratio was 1.97 percent if mortgage loans held for sale are excluded from loans.
 Noninterest income rose 63 percent from the year-ago quarter, largely due to larger gains from the sales of mortgages and SBA loans because of the increased volume.
 Noninterest expense was 42 percent higher than the level in the third quarter of 1991 attributable to the additional staffing levels required to accommodate the higher mortgage loan volume.
 "We recently announced the initiation of a quarterly cash dividend of three cents per share," continued Downey. "This, along with our third annual three percent stock dividend, is an indication of our confidence in the financial strength of Redwood Empire Bancorp and the prospects for continued growth."
 Redwood Empire Bancorp is the holding company for two operating subsidiaries: Allied Savings Bank, F.S.B., a savings bank, and National Bank of the Redwoods, a commercial bank. With $287 million in assets, the company operates throughout Northern California.
 REDWOOD EMPIRE BANCORP AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
 (Dollars in thousands except for earnings per share and share data)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30, Sept. 30, Sept. 30,
 1992 1991 1992 1991
 Interest inc. $ 5,229 $ 5,655 $15,303 $16,214
 Interest expense 2,445 3,088 7,528 9,091
 Net interest inc. 2,784 2,567 7,775 7,123
 Provision for
 loan losses 400 800 1,143 1,101
 Net interest inc.
 after loan loss
 provision 2,384 1,767 6,632 6,022
 Other inc. 3,166 1,938 8,959 5,219
 Other expense 4,249 2,992 12,095 8,627
 Net inc. bef. taxes 1,301 713 3,496 2,614
 Income taxes 646 334 1,596 1,133
 Net income $ 655 $ 379 $ 1,900 $ 1,481
 Earnings per share:
 Net inc. $ 0.27 $ 0.20 $ 0.88 $ 0.79
 Weighted average
 shares 2,398,283 1,851,625 2,151,010 1,867,116
 Selected Balance Sheet Data
 (In thousands)
 Sept. 30, Sept. 30,
 1992 1991
 Total loans $ 242,263 $ 175,163
 Allowance for loan loss 2,914 2,140
 Total assets 287,363 227,096
 Total deposits 226,853 205,423
 Equity capital 21,881 15,684
 Non-performing assets 5,968 3,244
 -0- 10/13/92
 /CONTACT: Doug Sherk or Jenifer Kirtland, 415-296-7383, or David Walke or Miriam Adler, 212-986-5900, all of Morgen Walke, for Redwood Empire Bancorp/
 (REB) CO: Redwood Empire Bancorp ST: California IN: FIN SU: ERN


SG-TM -- SF002 -- 9047 10/13/92 06:30 EDT
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