Nov16

Reliance Bancshares Reports Third Quarter Net Income

Categories // Announcements

Reliance Bancshares, Inc., the parent company of Reliance Bank and Reliance Bank, FSB announces its third quarter earnings which ended September 30, 2012.

 

PRESS RELEASE

FOR FURTHER INFORMATION

At The Vandiver Group, Inc
(314) 606-1878 (cell)

Andy Likes, Sr. Director of Media Relations
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FOR IMMEDIATE RELEASE
November 16, 2012

 RELIANCE BANCSHARES REPORTS THIRD QUARTER NET INCOME

Company Continues to Make Significant Progress

ST. LOUIS, MO, November 16, 2012 – Reliance Bancshares, Inc., the parent company of Reliance Bank and Reliance Bank, FSB announces its third quarter earnings which ended September 30, 2012.

The Company reported net income of $274 thousand for the third quarter 2012 compared to a $4.2 million net loss for the third quarter of 2011. The improvement is primarily attributed to significant progress made in reducing the level of problem loans, ing for a significant reduction in provision for loan losses, which declined by $5.1 million (99.8%) and $13.2 million (77.2%) for the quarter and year-to-date, respectively. The Company has also reduced its year-to-date net loss to $550 thousand compared to a net loss of $17.6 million for the same period of 2011.


Reliance Bancshares has made significant financial strides over the last several quarters thanks to the team we’ve assembled and the changes we’ve implemented to make the Company stronger,” said Allan D. Ivie, IV, President and CEO of Reliance Bancshares, Inc. “With the vision and strategies Thomas Brouster has put in place, we’ve delivered remarkable performance and we’re turning a profit. We see the plan we’re implementing to return the bank to profitability is working. As asset quality continues to improve, we can begin to expand relationships that will continue to grow our profitable community banking franchise for the long-term.”


Reserves for possible loan losses as a percentage of loans increased to 4.91% on September 30, 2012 compared to 4.35% on December 31, 2011. Contributing to this increase, the Company has made significant progress in obtaining recoveries from previously charged-off loans. For the third quarter 2012, the Company had net recoveries of $673 thousand. The reserve as a percentage of nonperforming loans has increased to 71.95% on September 30, 2011 from 30.08% on December 31, 2011.

Key Financial Metrics

• Quarterly net income of $274 thousand
• Dramatically improved asset quality
• Major and continued decrease in nonperforming loans
• Significant reduction in loan loss provision expense
• Ongoing decline in non-interest expense

Nonperforming loans have fallen for seven consecutive quarters and declined by $20.8 million (34.2%) during the third quarter 2012. Year-to-date, nonperforming loans have declined $64.2 million (61.6%). Nonperforming loans as a percentage of outstanding loans declined to 6.8% from 14.5% at December 31, 2011. Nonperforming loans have declined by $131.0 million (76.6%) from a high of $171.1 million at December 31, 2010. Total watch list loans, which include nonperforming loans as well as loans that management considers high risk, have declined by $151.3 million (61.5%) since December 31, 2011.

 

 

Nonperforming loans

Nonperforming assets*

Watch list loans **

Reserve for possible loan*

9/30/2012

$ 40.1million

$ 82.1 million

$94.9 million

$ 28.9 million

6/30/2012

$60.9 million

$99.0 million

 $144.1 million

$28.2 million

3/31/2012

$81.1 million

$110.5 million

$217.6 million

$31.9 million

12/31/11

$104.3 million

$139.4 million

$246.2 million

$31.4 million

* Nonperforming assets are comprised of nonperforming loans, nonperforming investments, and other real estate owned.
** Watch List Loans include nonperforming loans as well as loans that management considers high risk.

Another factor in the Company's improved results was the decline in noninterest expense by $6.1 million (20.9%) for yearto-date 2012, compared to the same period of 2011. Also, third quarter 2012 noninterest expense declined $241 thousand (3.0%) from the same period last year. The largest drop came from other real estate expense, which declined $2.8 million (33.8%) for year-to-date and $446 thousand (20.9%) for the quarter compared to the same periods of 2011. Salaries and benefits dropped $1.8 million (17.9%) for year-to-date and $309 thousand (9.6%) for the quarter compared to the same periods of 2011.

Net interest income declined $4.8 million (18.6%) and $1.3 million (15.6%) for the year-to-date and third quarter, respectively. The reduction in net interest income resulted from a shrinking balance sheet due to the Company's successful efforts in reducing its commercial real estate loans. Interest expense declined $5.0 million (41.0%) and $1.3 million (36.3%) for year-to-date and the quarter, compared to the same periods during 2011. As a result of the efforts to improve the quality of the portfolio, loans decreased 18.4% or $132.4 million compared to yearend December 2011. Total assets as of September 30, 2012 were $994 million, a 5.1% decrease compared to December 31, 2011.

Non-interest bearing deposits decreased 1.87% while interest bearing deposits declined 5.17% over the past nine months and total deposits as of September 30, 2012 were $843.3 million. The Company has reduced higher cost deposits compared to noninterest bearing deposits, decreasing interest expense.

“While we’ve been reducing problem assets and turning around our community Bank, our focus remains on our customers,” said Mr. Ivie. “Our strong team, innovative products and best in class service set us apart and will help us grow our successful banking franchise. Our markets need a bank that knows our community well, and what they need to be successful. Reliance Bank is that true community bank in St. Louis and Fort Meyers and we are ready to grow our relationships with our customers.”

About Reliance Bancshares, Inc.
Reliance Bancshares, Inc., headquartered in St. Louis, MO, is a publicly held 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 OTCQB (www.pinksheets.com) under the symbol “RLBS”. The Company filed a Form 15 with the Securities and Exchange Commission on April 27, 2012 to deregister its shares of common stock under Rule 12g-4 (a)(1). It currently operates 20 branches in the St. Louis metropolitan area under the name of Reliance Bank. It also owns and operates Reliance Bank, FSB, which is located in Fort Meyers, Florida, with two branches in the Southwest Florida area. The Company's total assets as of September 30, 2012 was $994 million. Reliance Bancshares, Inc. website can be found at www.reliancebancshares.com.

Forward-looking statements
This news release may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words “anticipates,” “expects,” "intends” and similar expressions as they relate to Reliance Bancshares, its operations or its management are intended to identify such forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. There are important factors that could cause actual results to differ materially from those in forward-looking statements, certain of which are beyond our control. These factors, risks and uncertainties are discussed in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), as updated from time to time in our other SEC filings.

(In thousands)

BALANCE SHEETS

ASSETS

Cash and due from banks

Short-term investments

Fed Funds Sold

Debt and equity investments

 

Loans

Less reserve for loan losses

Net loans

 

Premises and equipment, net

Goodwill and identifiable intangible assets

Other real estate owned
Other assets
 
Total assets
 
LIABILITIES & EQUITY
Noninterest bearing deposits
Interest bearing deposits
Total deposits
 
Short-term borrowings
Long-term FHLB borrowings
Other liabilities
 
Total liabilities
 
Stockholders’ equity
 
Total liabilities & equity
September 30, 2012

Amount In Dollars

11,292

58,150

340

276,414

 

588,158

(28,852)

559,306

 

35,653

92

41,582
10,887
 
993,716
 
 
65,518
777,758
843,276
 
8,375
67,000
7,879
 
926,530
 
67,186
 
993,716
December 31, 2011

Amount In Dollars

 9,731

43,799

-

222,207

 

720,576

(31,370)

689,206

 

34,030

105

34,565
13,183
 
1,046,826
 
 
66,765
820,121
886,886
 
17,243
67,000
6,055
 
977,184
 
69,642
 
1,046,826

(In thousands)

INCOME STATEMENTS

 

Total interest income

Total interest expense

Net interest income

 

Provision for loan losses

Net after provision

NONINTEREST INCOME

Service charges on deposits

Gain (loss) sale of securities

Other real estate owned income

Other income

Total noninterest income

NONINTEREST EXPENSE

Salaries and benefits

Other real estate expense

Occupancy and equipment

FDIC assessment

Legal and professional fees

Other

Total noninterest expense

 

Income before taxes

Income taxes

Net income

For The Three Months Ended

September 30, 2012

Amount In Dollars

9,145

2,253  

6,892

10 

6,882 

 

152

380

367

347

1,246

 

2,896

1,688

888

550

796

1,036

7,854

 

274

-

274

For The Three Months Ended

September 30, 2011

Amount In Dollars

11,697

3,535

8,162

5,144

3,018

 

174

 (1)

453

243

869>

 

3,205

2,134

992

496

249

1,019

8,095

 

(4,208)

-

(4,208)

For The Nine Months Ended

September 30, 2012

Amount In Dollars

28,409

7,233

&21,176

3,888

17,288

 

445

2,903

781

1,093

5,222

 

8,395

5,570

2,698

1,683

1,758

2,956

23,060

 

(550)

-

(550)

For The Nine Months Ended

September 30, 2011

Amount In Dollars

38,249

12,250

25,999

17,060

8,939

 

581

56

1,119

869

2,625

 

10,219

8,410

3,065

2,273

1,492

3,690

29,149

 

(17,585)

-

(17,585)