OTCPK:RWCB

Stock Analysis Report

Redwood Capital Bancorp

Executive Summary

Redwood Capital Bancorp operates as the bank holding company for Redwood Capital Bank that provides various banking products and services to individuals and businesses in California.


Snowflake Analysis

Flawless balance sheet and undervalued.

Share Price & News

How has Redwood Capital Bancorp's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RWCB has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.6%

RWCB

-7.0%

US Banks

-2.6%

US Market


1 Year Return

-31.8%

RWCB

-32.9%

US Banks

-13.3%

US Market

Return vs Industry: RWCB exceeded the US Banks industry which returned -32.9% over the past year.

Return vs Market: RWCB underperformed the US Market which returned -13.3% over the past year.


Shareholder returns

RWCBIndustryMarket
7 Day3.6%-7.0%-2.6%
30 Day-28.7%-24.6%-15.2%
90 Day-37.7%-41.9%-22.2%
1 Year-30.7%-31.8%-30.8%-32.9%-11.5%-13.3%
3 Year-32.6%-35.6%-21.4%-27.3%13.2%5.7%
5 Year18.7%9.4%2.7%-9.2%31.8%17.2%

Price Volatility Vs. Market

How volatile is Redwood Capital Bancorp's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Redwood Capital Bancorp undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RWCB ($11.6) is trading below our estimate of fair value ($34.22)

Significantly Below Fair Value: RWCB is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RWCB is good value based on its PE Ratio (5.4x) compared to the Banks industry average (8.6x).

PE vs Market: RWCB is good value based on its PE Ratio (5.4x) compared to the US market (12.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RWCB's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RWCB is good value based on its PB Ratio (0.7x) compared to the US Banks industry average (0.8x).


Next Steps

Future Growth

How is Redwood Capital Bancorp forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

-2.8%

Forecasted Banks industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Redwood Capital Bancorp has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

  • Examine whether Redwood Capital Bancorp is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
  • While we do not consider unaudited financials to be a reliable enough to include in our analysis, you can access them on the OTC Markets Website. If you are looking for more of a qualitative research into the company, you can access Redwood Capital Bancorp's filings and announcements here.
  • Explore growth companies in the Banks industry.

Past Performance

How has Redwood Capital Bancorp performed over the past 5 years?

16.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RWCB has high quality earnings.

Growing Profit Margin: RWCB's current net profit margins (24.8%) are lower than last year (26.4%).


Past Earnings Growth Analysis

Earnings Trend: RWCB's earnings have grown by 16.5% per year over the past 5 years.

Accelerating Growth: RWCB's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: RWCB had negative earnings growth (-0.6%) over the past year, making it difficult to compare to the Banks industry average (10.9%).


Return on Equity

High ROE: RWCB's Return on Equity (13.2%) is considered low.


Next Steps

Financial Health

How is Redwood Capital Bancorp's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: RWCB's level of assets compared to its equity is moderate.

Allowance for Bad Loans: RWCB has a sufficient allowance for bad loans.

Low Risk Liabilities: RWCB's liabilities are made up of primarily low risk sources of funding.

Loan Level: RWCB has an acceptable proportion of non-loan assets held.

Low Risk Deposits: RWCB's loans are broadly funded by customer deposits.

Level of Bad Loans: RWCB has an appropriate level of bad loans (0.06%)


Next Steps

Dividend

What is Redwood Capital Bancorp's current dividend yield, its reliability and sustainability?

2.41%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: RWCB's dividend (2.41%) is higher than the bottom 25% of dividend payers in the US market (2.01%).

High Dividend: RWCB's dividend (2.41%) is low compared to the top 25% of dividend payers in the US market (5.66%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, RWCB has been paying a dividend for less than 10 years.

Growing Dividend: RWCB's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (13.1%), RWCB's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.3yrs

Average management tenure


CEO

John Dalby (60yo)

13.25s

Tenure

Mr. John E. Dalby serves as the President and Chief Executive Officer of Redwood Capital Bancorp since 2007 and its subsidiary Redwood Capital Bank since March 2004. Mr. Dalby began his nearly 30 year care ...


Leadership Team

NamePositionTenureCompensationOwnership
John Dalby
President13.25yrsno datano data
Renee Byers
CFO & Senior VP2.08yrsno datano data
Tammy Brown
Chief Credit Officer & Senior VP5.25yrsno datano data
Michael McCoy
Senior VP & Risk Manager1.5yrsno datano data
David Tierney
Senior VP & IT Directorno datano datano data
Cindy Conn
Secretaryno datano datano data
Jennifer Budwig
Chief Lending Officer & Senior VP6.58yrsno datano data

5.3yrs

Average Tenure

52.5yo

Average Age

Experienced Management: RWCB's management team is seasoned and experienced (5.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Dalby
President13.25yrsno datano data
John Gierek
Chairman of the Board3.75yrsno datano data
James McAuley
Vice Chairman of the Board3.75yrsno datano data
Steven Strombeck
Director13.25yrsno datano data
James Seiler
Director10.83yrsno datano data
W. Needham
Director8.75yrsno datano data
K. Nelson
Director1.58yrsno datano data
Michele Rieke
Director2.25yrsno datano data
Jennifer Harris
Director0.25yrno datano data

3.8yrs

Average Tenure

59.5yo

Average Age

Experienced Board: RWCB's board of directors are considered experienced (3.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Redwood Capital Bancorp's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Redwood Capital Bancorp
  • Ticker: RWCB
  • Exchange: OTCPK
  • Founded: 2006
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$22.277m
  • Shares outstanding: 1.92m
  • Website: https://www.redwoodcapitalbank.com

Location

  • Redwood Capital Bancorp
  • 402 G Street
  • Eureka
  • California
  • 95501
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RWCBOTCPK (Pink Sheets LLC)YesCommon StockUSUSDApr 2004

Biography

Redwood Capital Bancorp operates as the bank holding company for Redwood Capital Bank that provides various banking products and services to individuals and businesses in California. The company offers checking, savings, and money market accounts, as well as certificates of deposit. It also provides real estate loans, home equity lines of credit, construction and development loans, term loans for machinery and equipment, and lines of credit for working capital, as well as agricultural, industrial, and personal credits. In addition, the company offers debit and credit cards, re-order checks, and online and mobile banking services. It serves clients through its branches located in Eureka, Fortuna, and Arcata. Redwood Capital Bancorp was incorporated in 2006 and is based in Eureka, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/07 06:55
End of Day Share Price2020/04/06 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.