May09

RELIANCE BANK ANNOUNCES FIRST QUARTER 2014 FINANCIAL RESULTS

Categories // In The News

SAINT LOUIS, May 7, 2014 – Thomas H. Brouster, Sr., Chairman of the Board of Reliance Bank, the wholly owned subsidiary of Reliance Bancshares, Inc. (OTCPK: RLBS), today announced financial and operating results for the first quarter ending March 31, 2014.

Key Financial Metrics for the First Quarter 2014 compared to First Quarter 2013

  • Achieved net income of $1.72 million
  • Loan portfolio grew 14.9%
  • Total deposits grew 4.6%
  • Texas Ratio improved to 33.4%
  • Nonperforming assets declined 25.6%
  • 25th consecutive month of no loans past due 30 days or more

“Reliance Bank recorded solid financial performance in the first quarter, which represents our sixth consecutive quarter of positive earnings,” said Thomas H. Brouster, Sr., Chairman of Reliance Bank. “The accomplishments we have made in brief time reflect the underlying strength of our core banking franchise. We intend to capitalize on this momentum by further expanding our loan and deposit portfolios, reducing costs of funds and continuing to control expenses. We believe these strategies set the stage for a period of sustainable earnings growth.”

For the three-­‐month period ending March 31, 2014, Reliance Bank achieved earnings of $1.72 million, representing an increase of $1.2 million or 221% when compared to the first quarter of 2013, exclusive of $1.0 million of extraordinary income resulting from a reversal to the Bank’s loan loss reserve in January 2013 (see table below for details).

For detailed information on the Bank’s financial performance in the first quarter, please refer to our Call Report at: https://cdr.ffiec.gov/public/ManageFacsimiles.aspx

The continued positive earnings are direct result of an increase in loans, significant growth in lower-­‐cost demand deposits and the realization of ongoing expense controls. These results extend the Bank’s positive trend in earnings, which began in late 2011.

Reliance Bank -­‐ Net Income (Loss)
 3 mos.3 mos.3 mos.3 mos.3 mos.
 20142013201220112010
Missouri Bank $1,716,227 $607,080 $442,790 $(4,580,704) $(1,614,683)
Florida Bank * $927,4751 $442,489 $(271,972) $(1,420,396)
Total Net Income (Loss): $1,716,227 $1,534,555 $885,279 $(4,852,676) $(3,035,079)

1 Includes extraordinary income resulting from a reversal in the loan loss reserve

* Missouri and Florida Banks combined o 3/31/13

New business activities during the first quarter increased total assets to $1.040 billion as of March 31, 2014. Outstanding loans grew $85.2 million or 14.9% as compared with the end of the first quarter 2013 and totaled $655.5 million on March 31, 2014.

Nonperforming assets, which include nonperforming loans and foreclosed real estate, totaled

$39.2 million as of March 31, 2014, a decrease of $13.5 million, or 25.6%, from March 31, 2013. This also represents a 79.8% reduction from the peak of $194.0 million on March 31, 2011.

The Bank as of March 31, 2014 had only one nonaccrual loan totaling $10.5 million. During the month of April this loan was paid in full and thus, as of April 18, 2014 the Bank had zero nonaccrual loans. At that time, the Bank had only one nonperforming loan in its portfolio totaling approximately $100 thousand. As of March 31, 2014 the Bank had no loans past due 30 days or more for 25 consecutive months.

Reliance Bank – Nonaccrual Loans
April 30thMarch 31stMarch 31stMarch 31stMarch 31st
20142014201320122011
$0.00 $10.5 million $17.64 million $70.72 million $139.14 million

In addition to the improvement in loan quality, management has continued to reduce the Bank’s foreclosed real estate portfolio. As of March 31, 2014 total ORE was $28.6 million representing decline $4.8 million or 14.4% from March 31, 2013 and decline of 47.2% from the high of $54.2 million on June 30, 2011. The Bank anticipates closing on approximately $11.2 million of pending ORE sales in the second quarter including one property for $7.6 million. Management continues to actively seek buyers for its remaining ORE properties.

The additional improvements to earnings have contributed to the Bank’s strong capital ratios, which remain well in excess of the minimum required for “well capitalized” bank as defined by the FDIC. On March 31, 2014 the Bank’s Tier One Capital Ratio was 10.1%. Reliance remains one of the best-­‐capitalized banks in the St. Louis region.

As a result of the Bank’s ongoing improvement to net income and the reduction in nonperforming assets, the Bank’s Texas Ratio improved to 33.4% o March 31, 2014 as compared with 43.2% o March 31, 2013 and the high of 146.5% in June 2011. Following the resolution of the Bank’s final nonaccrual loan in April 2014, the Bank’s Texas Ratio further improved to 24.3%. The Texas Ratio is commonly used metric to determine bank’s financial strength and is calculated by taking a bank’s non-­‐performing assets as a percentage of its total capital plus loan loss reserves.

The Company also achieved several other significant accomplishments during the first quarter:

  • Tod Stafford, formerly Executive Vice President of the Bank was promoted to President and Chief Risk Officer. During his extensive career, Mr. Stafford has held various executive leadership positions in risk management and finance. As part of his new role, he will be responsible for deposit operations, loan administration, loan review and credit, accounting and finance and CRA compliance. Mr. Stafford has held similar roles at Midland Bank, Pioneer Bank and Trust and most recently he ran the special assets group for Central Bank of Kansas City.
  • At its April meeting, the Board of Directors gave final authorization to create full-­‐ service branch in The Grove a residential, business and entertainment district located in the central core of the City of St. Louis. This project, which involves the restoration of a historic building at the intersection of Tower Grove and Manchester has received the necessary regulatory and zoning approvals and represents a significant opportunity for the Bank to attract new loan and deposit in an under-­‐banked area within our St. Louis footprint. We expect to open this new branch prior to the end of 2014.
  • The Bank reached a significant milestone in the construction of full-­‐service branch on property it owns at the northwest corner of Clayton Road and Lindbergh Boulevard when the development plan for this project recently received zoning approval from the City of Frontenac. The Bank is awaiting regulatory approval from the FDIC and expects to complete the project in early 2015. The Bank will relocate its existing limited service Frontenac branch to this new location.

About Reliance Bancshares, Inc.

Reliance Bancshares, Inc., headquartered in St. Louis, MO, is a Missouri bank holding company that provides a full range of banking services to individual and corporate customers. The Company’s common stock is quoted on the Pink Sheets (www.pinksheets.com) under the symbol “RLBS”. It currently operates twenty branches and one loan production office (LPO) in the St. Louis metropolitan area and two branches in Fort Myers, Florida under the name of Reliance Bank. The company’s total assets as of March 31, 2014 were approximately $1.04 Billion. Reliance Bank’s website can be found at www.reliancebankstl.com