Business of the Company

Redwood Financial, Inc. (the "Company") is a Minnesota corporation. It was organized in January 1995 at the direction of Redwood Falls Federal Savings and Loan Association (the "Association") in connection with the Association's conversion from the mutual to stock form (the "Conversion"). On July 7, 1995, the Association completed its conversion and became a wholly owned subsidiary of the Company. Subsequently, in May 1998, the Association changed its corporate title to HomeTown Bank (the "Bank"). The Company is a unitary savings and loan holding company which, under existing laws, generally is not restricted in the types of...