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| 8-K - FORM 8-K - Reliance Bancshares, Inc. | a2q128-k.htm |
RELIANCE BANCSHARES, INC. REPORTS IMPROVED SECOND QUARTER 2012 RESULTS
ST. LOUIS, July 27, 2012 - Reliance Bancshares, Inc. continues to make significant progress in its return to profitability as evidenced by the results of the quarter ended June 30, 2012.
Key Financial Metrics
• | Dramatically improved asset quality. |
• | Major and continued decrease in nonperforming loans. |
• | Significant reduction in loan loss provision expense. |
• | Ongoing decline in non-interest expense. |
• | Continued success and growth in retail banking. |
“We are pleased to report that in the second quarter we continued to make great strides on our turnaround efforts,” said Allan D. Ivie, IV, President and CEO of Reliance Bancshares, Inc. “Under the guidance and vision of Thomas Brouster and with the strategies he's put in place, together with the hard work by our entire team, we have delivered remarkable performance in a very short period. We believe the plan we have employed to return the bank to profitability is working. As asset quality continues to improve, we can begin to turn our attention to building relationships that will grow our profitable community banking franchise for the long term.”
Nonperforming loans have fallen for six consecutive quarters and declined by $20.2 million (24.9%) during the second quarter 2012. Year-to-date, nonperforming loans have declined $43.4 million (41.6%). Nonperforming loans as a percentage of outstanding loans declined to 9.7% from 14.5% at December 31, 2011. Nonperforming loans have declined by $110.2 million (64.4%) 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 $102.1 million (41.5%) since December 31, 2011.
6/30/2012 | 3/31/12 | 12/31/11 | 12/31/10 | |||||
Nonperforming loans | $60.9 million | $81.1 million | $104.3 million | $171.1 million | ||||
Nonperforming assets* | $99.0 million | $110.5 million | $139.4 million | $202.1 million | ||||
Watch list loans ** | $144.1 million | $217.6 million | $246.2 million | $348.9 million | ||||
Reserve for possible loan losses | $28.2 million | $31.9 million | $31.4 million | $37.3 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.
The Company reported a net loss of $824 thousand for the six months ended June 30, 2012 compared to a net loss of $13.4 million for the same period of 2011; and a net loss of $1.5 million for the second quarter 2012 compared to $8.2 million for the second quarter of 2011. The improvement is primarily attributed to significant progress made in reducing the level of problem loans, allowing for a reduction in provision for loan losses, which declined by $8.0 million (67.5%) and $5.5 million (81.2%) for the year-to-date and quarter, respectively. Reserves for possible loan losses as a percentage of loans increased to 4.51% on June 30, 2012 compared to 4.35% on December 31, 2011. The reserve as a percentage of nonperforming loans has increased to 46.31% on June 30, 2011 from 30.11% on December 31, 2011.
Another factor in the Company's improved results was the decline in noninterest expense by $5.8 million (27.8%) for year-to-date 2012, compared to the same period of 2011. Also, second quarter 2012 noninterest expense declined $2.6 million (23.6%) from the same period last year. The largest drop came from other real estate expense, which declined $2.4 million (38.1%) for year-to-date and $1.1 million (29.5%) for the quarter compared to the same periods of 2011. Salaries and benefits dropped $1.5 million (21.6%) for year-to-date and $.81 million (24.0%) for the quarter compared to the same periods of 2011.
Net interest income declined $3.6 million (19.9%) and $1.2 million (14.6%) for the year-to-date and second 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 $3.7 million (42.9%) and $1.9 million (44.0%) 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 13.3% or $95.6 million compared to year-end December 2011. Total assets as of June 30, 2012 were $1.0 billion, a 2.8% decrease compared to December 31, 2011.
The Company's retail banking franchise remains strong. Non-interest bearing deposits increased 3.99% while interest bearing deposits declined 3.79% over the past six months and total deposits as of June 30, 2012 were $858.4 million. As part of its retail banking strategy for the first six months of 2012, the Company has opened 1,061 net new demand deposit accounts.
"While our focus has been on reducing problem assets and turning around the Bank, we have not taken our eyes off of our successful and growing retail banking franchise,” said Mr. Ivie. “We have a great team, innovative products and services and a true commitment to providing best of class customer service. Our markets need a true community bank that knows its customers well. Reliance is that bank in St. Louis and Fort Myers and we are ready to go to work for our clients.”
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 Myers, Florida, with two branches in the Southwest Florida area. The Company's total assets as of June 30, 2012 exceeded $1.0 billion. 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.
Contact:
Reliance Bancshares, Inc.
Thomas T. Cooke
(314) 378-7800
(In thousands) | ||||||
BALANCE SHEETS | June 30, 2012 | December 31, 2011 | ||||
ASSETS | ||||||
Cash and due from banks | $ | 11,140 | 9,731 | |||
Short-term investments | 51,544 | 43,799 | ||||
Debt and equity investments | 275,630 | 222,207 | ||||
Loans | 624,991 | 720,576 | ||||
Less reserve for loan losses | (28,169 | ) | (31,370 | ) | ||
Net loans | 596,822 | 689,206 | ||||
Premises and equipment, net | 33,321 | 34,030 | ||||
Goodwill and identifiable intangible assets | 97 | 105 | ||||
Other real estate owned | 37,663 | 34,565 | ||||
Other assets | 11,603 | 13,183 | ||||
Total assets | $ | 1,017,820 | 1,046,826 | |||
LIABILITIES & EQUITY | ||||||
Noninterest bearing deposits | $ | 69,427 | 66,765 | |||
Interest bearing deposits | 789,020 | 820,121 | ||||
Total deposits | 858,447 | 886,886 | ||||
Short-term borrowings | 18,057 | 17,243 | ||||
Long-term FHLB borrowings | 67,000 | 67,000 | ||||
Other liabilities | 7,057 | 6,055 | ||||
Total liabilities | 950,561 | 977,184 | ||||
Stockholders’ equity | 67,259 | 69,642 | ||||
Total liabilities & equity | $ | 1,017,820 | 1,046,826 | |||
For the Three | For the Three | For the Six | For the Six | |||||||
(In thousands) | Months Ended | Months Ended | Months Ended | Months Ended | ||||||
INCOME STATEMENTS | June 30, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | ||||||
Total interest income | $ | 9,645 | 12,755 | 19,264 | 26,552 | |||||
Total interest expense | 2,380 | 4,253 | 4,980 | 8,715 | ||||||
Net interest income | 7,265 | 8,502 | 14,284 | 17,837 | ||||||
Provision for loan losses | 1,280 | 6,816 | 3,878 | 11,916 | ||||||
Net after provision | 5,985 | 1,686 | 10,406 | 5,921 | ||||||
NONINTEREST INCOME | ||||||||||
Service charges on deposits | 147 | 216 | 293 | 407 | ||||||
Gain (loss) sale of securities | — | 57 | 2,523 | 57 | ||||||
Other real estate owned income | 272 | 450 | 414 | 666 | ||||||
Other income | 392 | 314 | 746 | 626 | ||||||
Total noninterest income | 811 | 1,037 | 3,976 | 1,756 | ||||||
NONINTEREST EXPENSE | ||||||||||
Salaries and benefits | 2,578 | 3,390 | 5,499 | 7,014 | ||||||
Other real estate expense | 2,634 | 3,738 | 3,882 | 6,276 | ||||||
Occupancy and equipment | 903 | 1,015 | 1,810 | 2,073 | ||||||
FDIC assessment | 559 | 868 | 1,133 | 1,777 | ||||||
Legal and professional fees | 710 | 654 | 962 | 1,243 | ||||||
Other | 955 | 1,243 | 1,920 | 2,671 | ||||||
Total noninterest expense | 8,339 | 10,908 | 15,206 | 21,054 | ||||||
Income before taxes | (1,543 | ) | (8,185 | ) | (824 | ) | (13,377 | ) | ||
Income taxes | — | — | — | — | ||||||
Net income | $ | (1,543 | ) | (8,185 | ) | (824 | ) | (13,377 | ) | |