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| 8-K - FORM 8-K - Reliance Bancshares, Inc. | a1q128-k.htm |
RELIANCE BANCSHARES, INC. REPORTS IMPROVED FIRST QUARTER 2012 RESULTS
ST. LOUIS, April 27, 2012 - Reliance Bancshares, Inc. today announced improved financial and operating results for the first quarter ended March 31, 2012.
Key Financial Metrics
• | Net income of $719 thousand for the first quarter of 2012, compared to a net loss of $5.2 million for the first quarter of 2011. |
• | Nonperforming loans decreased $23.2 million (22.2%) during the first quarter 2012. Nonperforming loans have decreased $75.7 million (48.3%) since March 31, 2011. |
• | Provision for loan losses declined 49.1% to $2.6 million during the first quarter 2012 compared to $5.1 million during the same period last year. |
• | Net charge-offs totaled $2.1 million during the first quarter 2012, representing a $3.3 million (60.8%) decrease compared to the same period last year. |
“Our results for the first quarter mark a significant milestone towards improving our operating results," said Allan D. Ivie, IV, President and CEO of Reliance Bancshares, Inc. “We believe the strategies we have employed to return the bank to profitability are working. As asset quality continues to improve, we can begin to turn our attention to building relationships that grow our profitable community banking franchise for the long term.”
The Company reported net income of $719 thousand for the first quarter, compared to a net loss of $5.2 million for the first quarter of 2011. Provision for loan losses declined by $2.5 million due to improvement related to the rehabilitation and resolution of problem loans. Also, noninterest income increased by $2.4 million. The Company realized a gain of $2.5 million on the sale of investment securities during the first quarter of 2012. These gains helped to bolster the Tier 1 and Total Risk Based capital ratios at Reliance Bank to 6.98% and 10.49%, respectively, and Reliance Bank, FSB to 5.09% and 11.04%, respectively. The Company continues to pursue a capital plan which will strengthen capital levels and achieve regulators' capital directives.
Non-performing loans declined by $23.2 million during the first quarter 2012 and totaled 12.1% of outstanding loans as of March 31, 2012, compared to 14.5% at December 31, 2011. Management has identified fewer borrowers with deteriorating financial positions, thus supporting the 49.1% decrease in provision expense compared to the first quarter of 2011. Despite the reduction in provision expense, reserves for possible loan losses as a percentage of loans increased to 4.75% on March 31, 2012 compared to 4.35% on December 31, 2011.
3/31/12 | 12/31/11 | |||
Net charge-offs (first quarter) | $2.1 million | $5.4 million | ||
Nonperforming loans | $81.1 million | $104.3 million | ||
Nonperforming assets* | $110.5 million | $139.4 million | ||
Reserve for possible loan losses | $31.9 million | $31.4 million | ||
* Nonperforming assets are comprised of nonperforming loans, nonperforming investments, and other real estate owned.
Noninterest expense declined by $3.3 million, or 32.3% for the first quarter 2012, compared to the same period of 2011. Each major component of noninterest expense declined, with the largest drop coming from other real estate expense, which declined $1.3 million (50.8%) compared to the same period of 2011. Other real estate balances declined $5.5 million (16.0%) since December 2011.
Net interest income for the first quarter 2012 was $7.0 million, a 24.8% decrease from the prior year's first quarter. 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 for the first quarter 2012 declined 41.7%, or $1.9 million compared to the same period in 2011.
Loans decreased 6.8% or $49.3 million compared to year-end December 2011. Total assets as of March 31, 2012 were $1.06 billion, a 1.0% increase compared to December 31, 2011.
Total deposits remained relatively steady at $886.0 million, a decrease of 0.1% compared to December 31, 2011. Non-interest
bearing deposits decreased 0.85% and interest bearing deposits declined 0.04%. While managing the overall reduction of the balance sheet, management has placed increased attention on increasing lower-cost core transaction deposits as part of a strategy to lower total deposit costs and increase customer retention.
"We feel the strategies we have employed have placed the Bank on a positive trajectory", said Mr. Ivie. "However, low interest rates, depressed real estate values and slow loan growth dictate that we must continue to tirelessly execute our strategy in all areas of the Bank. Our entire team is committed to returning Reliance to profitability, growing the bank and offering our customers all the benefits of a true community bank."
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”. 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 March, 31, 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 | March 31, 2012 | December 31, 2011 | ||||
ASSETS | ||||||
Cash and due from banks | $ | 11,210 | 9,731 | |||
Short-term investments | 98,197 | 43,799 | ||||
Debt and equity investments | 234,841 | 222,207 | ||||
Loans | 671,291 | 720,576 | ||||
Less reserve for loan losses | (31,865 | ) | (31,370 | ) | ||
Net loans | 639,426 | 689,206 | ||||
Premises and equipment, net | 33,638 | 34,030 | ||||
Goodwill and identifiable intangible assets | 100 | 105 | ||||
Other real estate owned | 29,021 | 34,565 | ||||
Other assets | 11,294 | 13,183 | ||||
Total assets | $ | 1,057,727 | 1,046,826 | |||
LIABILITIES & EQUITY | ||||||
Noninterest bearing deposits | $ | 66,195 | 66,765 | |||
Interest bearing deposits | 819,765 | 820,121 | ||||
Total deposits | 885,960 | 886,886 | ||||
Short-term borrowings | 16,830 | 17,243 | ||||
Long-term FHLB borrowings | 67,000 | 67,000 | ||||
Other liabilities | 19,624 | 6,055 | ||||
Total liabilities | 989,414 | 977,184 | ||||
Stockholders’ equity | 68,313 | 69,642 | ||||
Total liabilities & equity | $ | 1,057,727 | 1,046,826 | |||
For the Three | For the Three | |||||
(In thousands) | Months Ended | Months Ended | ||||
INCOME STATEMENTS | March 31, 2012 | March 31, 2011 | ||||
Total interest income | $ | 9,619 | 13,797 | |||
Total interest expense | 2,600 | 4,462 | ||||
Net interest income | 7,019 | 9,335 | ||||
Provision for loan losses | 2,598 | 5,100 | ||||
Net after provision | 4,421 | 4,235 | ||||
NONINTEREST INCOME | ||||||
Service charges on deposits | 146 | 191 | ||||
Gain (loss) sale of securities | 2,523 | — | ||||
Other real estate owned income | 142 | 216 | ||||
Other income | 354 | 312 | ||||
Total noninterest income | 3,165 | 719 | ||||
NONINTEREST EXPENSE | ||||||
Salaries and benefits | 2,921 | 3,624 | ||||
Other real estate expense | 1,248 | 2,538 | ||||
Occupancy and equipment | 907 | 1,058 | ||||
FDIC assessment | 574 | 909 | ||||
Legal and professional fees | 252 | 589 | ||||
Other | 965 | 1,428 | ||||
Total noninterest expense | 6,867 | 10,146 | ||||
Income before taxes | 719 | (5,192 | ) | |||
Income taxes | — | — | ||||
Net income | $ | 719 | (5,192 | ) | ||