Do you remember me posting about RLBS a while back? This

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SaltyMutt PoemStone #7744

Do you remember me posting about RLBS a while back? This bank has been "saved". I regret that I only bought 3000 shares back when it  was really cheap, 41 cents. Look for this one to end 2013 with a pps well north of two bucks a share.

Brouster leads $31 million recapitalization of Reliance Bancshares

Reliance Bancshares, Inc. (QB) (USOTC:RLBS)
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1 Month : From Mar 2013 to Apr 2013

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SAINT LOUIS , April 5, 2013 /PRNewswire/ -- Reliance Bancshares, Inc. (OTCPK: RLBS) the holding company of Reliance Bank today announced that Chairman Thomas H. Brouster, Sr. has successfully led the recapitalization of both Reliance Bancshares and Reliance Bank, raising $31 million dollars , representing one of the most significant bank recapitalizations in the State of Missouri during the current economic cycle.

(Photo: http://photos.prnewswire.com/prnh/20130405/CG89358-a)

(Logo: http://photos.prnewswire.com/prnh/20130405/CG89358LOGO-b)

Mr. Brouster and the local investors he assembled, now have a controlling interest in the recently delisted Company. With over 40 years of experience in the banking industry, Mr. Brouster is a highly regarded entrepreneur who has successfully led the turnaround of 14 other financial institutions throughout Missouri , Illinois and Kansas . "Our ability to raise this new capital locally, demonstrates the underlying strength of the Reliance 22 branch retail banking network," said Mr. Brouster. "This investment allows us to grow the Bank, increase profitability and create additional franchise value."

Immediately following the injection of capital on March 29, 2013 , the Company merged its Florida Bank , (Reliance Bank, FSB) into its Missouri Bank (Reliance Bank) thereby consolidating all banking operations into a single subsidiary.

Since the Third Quarter of 2010 Reliance Bank has operated under a Consent Order issued by the Federal Deposit Insurance Corporation (FDIC). This Order was lifted effective March 12, 2013 and the Bank is no longer subject to any regulatory orders.

Of the $31 million raised, $24 million has been injected into Reliance Bank as capital, resulting in a Tier One Capital Ratio of 10.16% as of March 31 , 2013. Banking regulators consider banks with an excess of 5% capital as "well capitalized". The additional capital has improved the Bank's Texas Ratio – a commonly used metric to determine a bank's financial strength – to approximately 43% as of March 31, 2013 , from a high point of 154% in March 2011 .

Mr. Brouster joined Reliance Bancshares in early 2012 as a consultant. Under his guidance, the Company significantly reduced its portfolio of problem loans and assets and recorded a profit in 2012 – the first for the Company since 2007. Aiding Mr. Brouster in the Bank's turnaround has been long-term colleague Gaines S. Dittrich who is serving as Vice Chairman, and Allan D. Ivie, IV , Reliance Bank President and CEO.

Summary of Results of Operations and Financial Condition

Key Financial Metrics

  • First Quarter net income of $1.3 million
  • 2012 net income of $1.4 million compared to $34.0 million net loss for 2011
  • Dramatically improved asset quality
  • Major and continued decrease in nonperforming loans
  • Significant reduction in loan loss provision expense
  • Ongoing decline in non-interest expense

The Company reported net income of $1.4 million for 2012 compared to a $34.0 million loss for 2011 and a $48.5 million loss for 2010. The improvement is primarily attributed to major progress made in reducing the level of problem loans, allowing for a significant reduction in provision for loan losses, which declined by $22.0 million (92.48%) for the year.

The positive financial trend has continued into 2013, as evidenced by first quarter net income for the Company of $1.3 million .

The chart below shows the positive trend in earnings and reduction in provision for loan losses over the past three years:


1Q 2013

FYE 2012


FYE 2011


FYE 2010

Net income (loss):

$1.3 million

$1.4 million


$(34.0) million


$(48.5) million

Provision for possible loan losses:

$(1.0) million

$1.8 million


$23.8 million


$41.5 million

Nonperforming loans have fallen for nine consecutive quarters and total $18.3 million as of March 31 , 2013. This reflects a decrease of $86 million or 82% from December 31, 2011 and $153 million or 89% from the high at the end of 2010. Total watch list loans, which include nonperforming loans as well as loans that management considers high risk, have declined by $195 million (79%) since December 31 , 2011.


March 31,

December 31,


2013

2012


2011


2010

Nonperforming loans

$18.3 million

$39.6 million


$104.3 million


$171.1 million

Watch list loans *

$51.5 million

$74 million


$246.2 million


$348.9 million

Reserve for possible loan losses

$23.7 million

$28.1 million


$31.4 million


$37.3 million

* Watch list loans include nonperforming loans as well as loans that management considers high risk.

Reserves for possible loan losses as a percentage of loans increased to 4.89% on December 31, 2012 compared to 4.35% on December 31, 2011 . Contributing to this increase, the Company has made significant decreases in charged-off loans. For 2012, the Company had net charge-offs of $5.0 million compared to $29.7 million for 2011. The reserve as a percentage of nonperforming loans has increased to 71.07% on December 31, 2012 from 30.08% on December 31, 2011 .

Another factor in the Company's improved results was the decline in noninterest expense by $10 .5 million (25.5%) for 2012, compared to 2011. The largest drop came from other real estate expense, which declined $5.8 million (45.06%) compared to 2011. Salaries and benefits dropped $2.0 million (15.0%) compared to 2011.

Mr. Brouster added: "With our capital raise complete and the Consent Order released, we are well positioned for future growth. Now, we can redouble our efforts to provide our clients with a full-range of enhanced products and services, and build a community bank we are all proud to be a part of."

About Reliance Bancshares, Inc.

Reliance Bancshares, Inc., headquartered in St. Louis, MO , is a 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 Pink Sheets (www.pinksheets.com) under the symbol "RLBS". It currently operates twenty branches in the St. Louis metropolitan area and two branches in Fort Myers, Florida under the name of Reliance Bank. The company's total assets as of December 31, 2012 were approximately $1 Billion . Reliance Bank's website can be found at www.reliancebancshares.com

SOURCE Reliance Bancshares, Inc.

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