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| 8-K - FORM 8-K - Reliance Bancshares, Inc. | a3q128-k.htm |
PRESS RELEASE
FOR FURTHER INFORMATION
At The Vandiver Group, Inc
(314) 606-1878 (cell)
Andy Likes, Sr. Director of Media Relations
ALikes@vandivergroup.com
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, allowing 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, 2012 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.
9/30/2012 | 6/30/2012 | 3/31/2012 | 12/31/2011 | |||||
Nonperforming loans | $ 40.1million | $60.9 million | $81.1 million | $104.3 million | ||||
Nonperforming assets* | $ 82.1 million | $99.0 million | $110.5 million | $139.4 million | ||||
Watch list loans ** | $94.9 million | $144.1 million | $217.6 million | $246.2 million | ||||
Reserve for possible loan losses | $ 28.9 million | $28.2 million | $31.9 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 year-to-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 year-end 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 Myers 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 Myers, 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 | September 30, 2012 | December 31, 2011 | ||||
ASSETS | ||||||
Cash and due from banks | $ | 11,292 | 9,731 | |||
Short-term investments | 58,150 | 43,799 | ||||
Fed Funds Sold | 340 | — | ||||
Debt and equity investments | 276,414 | 222,207 | ||||
Loans | 588,158 | 720,576 | ||||
Less reserve for loan losses | (28,852 | ) | (31,370 | ) | ||
Net loans | 559,306 | 689,206 | ||||
Premises and equipment, net | 35,653 | 34,030 | ||||
Goodwill and identifiable intangible assets | 92 | 105 | ||||
Other real estate owned | 41,582 | 34,565 | ||||
Other assets | 10,887 | 13,183 | ||||
Total assets | $ | 993,716 | 1,046,826 | |||
LIABILITIES & EQUITY | ||||||
Noninterest bearing deposits | $ | 65,518 | 66,765 | |||
Interest bearing deposits | 777,758 | 820,121 | ||||
Total deposits | 843,276 | 886,886 | ||||
Short-term borrowings | 8,375 | 17,243 | ||||
Long-term FHLB borrowings | 67,000 | 67,000 | ||||
Other liabilities | 7,879 | 6,055 | ||||
Total liabilities | 926,530 | 977,184 | ||||
Stockholders’ equity | 67,186 | 69,642 | ||||
Total liabilities & equity | $ | 993,716 | 1,046,826 | |||
For the Three | For the Three | For the Nine | For the Nine | |||||||
(In thousands) | Months Ended | Months Ended | Months Ended | Months Ended | ||||||
INCOME STATEMENTS | September 30, 2012 | September 30, 2011 | September 30, 2012 | September 30, 2011 | ||||||
Total interest income | $ | 9,145 | 11,697 | 28,409 | 38,249 | |||||
Total interest expense | 2,253 | 3,535 | 7,233 | 12,250 | ||||||
Net interest income | 6,892 | 8,162 | 21,176 | 25,999 | ||||||
Provision for loan losses | 10 | 5,144 | 3,888 | 17,060 | ||||||
Net after provision | 6,882 | 3,018 | 17,288 | 8,939 | ||||||
NONINTEREST INCOME | ||||||||||
Service charges on deposits | 152 | 174 | 445 | 581 | ||||||
Gain (loss) sale of securities | 380 | (1 | ) | 2,903 | 56 | |||||
Other real estate owned income | 367 | 453 | 781 | 1,119 | ||||||
Other income | 347 | 243 | 1,093 | 869 | ||||||
Total noninterest income | 1,246 | 869 | 5,222 | 2,625 | ||||||
NONINTEREST EXPENSE | ||||||||||
Salaries and benefits | 2,896 | 3,205 | 8,395 | 10,219 | ||||||
Other real estate expense | 1,688 | 2,134 | 5,570 | 8,410 | ||||||
Occupancy and equipment | 888 | 992 | 2,698 | 3,065 | ||||||
FDIC assessment | 550 | 496 | 1,683 | 2,273 | ||||||
Legal and professional fees | 796 | 249 | 1,758 | 1,492 | ||||||
Other | 1,036 | 1,019 | 2,956 | 3,690 | ||||||
Total noninterest expense | 7,854 | 8,095 | 23,060 | 29,149 | ||||||
Income before taxes | 274 | (4,208 | ) | (550 | ) | (17,585 | ) | |||
Income taxes | — | — | — | — | ||||||
Net income | $ | 274 | (4,208 | ) | (550 | ) | (17,585 | ) | ||