RELIANCE BANCSHARES, INC. ANNOUNCES SIGNIFICANT PROGRESS WITH THIRD QUARTER 2011 RESULTS
ST. LOUIS, October 28, 2011 - Reliance Bancshares, Inc. today announced financial and operating results for the third quarter ended September 30, 2011.
Key Third Quarter Metrics
Nonperforming loans have now decreased three consecutive quarters through September 30, 2011, totaling $49.1 million or 28.7%.
Net charge-offs totaled $4.7 million, representing a $9.4 million (66.7%) decrease from the third quarter of 2010.
Losses before taxes for the third quarter 2011 were $4.2 million compared to $14.8 million for the same period in 2010.
Provision for loan losses dropped to $5.1 million for the third quarter of 2011 compared to $17.2 million for the same period in 2010.
“This past quarter, Reliance made excellent progress in reducing problem loans, net charge-offs, net losses, and loan loss provision”, said Allan D. Ivie, IV, President and Chief Executive Officer of Reliance Bancshares, Inc. “We are pleased and proud of our progress over the past several months and we remained focused on returning the Company to profitability.”
The net loss for the third quarter 2011 was $4.2 million compared to $8.9 million for the same period in 2010. Year-to-date, the net loss totaled $17.6 million compared to a net loss of $14.9 million for the same period last year. Year-to-date, loss before taxes totaled $17.6 million compared to a loss before taxes of $25.0 million in 2010. Economic challenges continue to prevail and create unprecedented financial stresses in the commercial real estate markets where the Company operates. As a result, the Company increased its reserve for possible loan losses to $37.7 million, a $0.4 million increase over year-end 2010. This reserve represents 4.9% of outstanding loans. The third quarter 2011 provision for possible loan losses was $5.1 million compared to $17.2 million for the same period last year. The decrease in the provision was the primary reason for the improvement in earnings. Offsetting the savings in loan loss provision, the Company incurred increases of $3.7 million in expenses associated with other real estate for the first nine months of 2011.
The Company achieved operational cost savings of $0.8 million, or 9.2%, for the third quarter 2011, compared to the same period of 2010. Cost savings initiatives have been a focus throughout.
Net interest income for the third quarter 2011 was $8.2 million, a 19.9% decrease from the prior year's third quarter. For the nine months ended September 30, 2011, net interest income decreased $5.2 million, or 16.7% compared to the same period in 2010. 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 and improving liquidity. Year over year, the Company also experienced a 6.5% reduction in long-term borrowings.
Total assets as of September 30, 2011 were $1.134 billion. This represents a 12.5% decrease compared to December 31, 2010. For the nine month period ended September 30, 2011, loans decreased 21.0% or $203.3 million compared to year-end December, 2010, a result of scheduled amortizations, pay downs and charge-offs. Management remains focused on improving credit quality and has implemented elevated credit review processes and rigorous action plans for all troubled loans.
During the third quarter of 2011, net charge-offs were $4.7 million. Non-performing loans totaled 15.9% of outstanding loans as of September 30, 2011, compared to 17.6% at December 31, 2010. During the first nine months of 2011 management has identified fewer borrowers with deteriorating financial positions thus supporting a decrease of $17.5 million in provision expense compared to the same period in 2010.
The following information was filed by Reliance Bancshares, Inc. (RLBS) on Friday, October 28, 2011 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.