SANTA ROSA, Calif. - Redwood Empire Bancorp subsidiary Allied Bank resumed payment of dividends to the holding company. Dividends had been suspended at the end of 1994 when the savings and loan institution developed problems related to its mortgage banking business.

"The resumption of dividend payments to REB represents a significant step in our efforts to restructure Allied's business and restore profitability," said John H. Downey Jr., chairman and chief executive of Redwood Empire Bancorp. "In the past six months, Allied's overhead and asset size have been significantly reduced. With a favorable interest rate environment, Allied is in a position to continue to pay a quarterly dividend to REB."

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