RELIANCE BANCORP, INC. REPORTS THIRD QUARTER AND NINE-MONTH FISCAL 1995 EARNINGS.GARDEN CITY, N.Y.--(BUSINESS WIRE)--April 20, 1995--Reliance Bancorp,Inc. (NASDAQ/NMS:RELY), the holding company for Reliance Federal Savings Bank Noun 1. federal savings bank - a federally chartered savings bank FSB savings bank - a thrift institution in the northeastern United States; since deregulation in the 1980s they offer services competitive with many commercial banks , today reported net income of $2.7 million or $0.29 per common share for the quarter ended March 31, 1995, an increase of $808,000, or 42.2%, from $1.9 million for the quarter ended March 31, 1994. For the nine months ended March 31, 1995, net income was $7.3 million, or $0.77 per common share. The increase in net income is primarily the result of higher net interest income and a significant non-recurring gain on the sale of real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most . Per share earnings for the quarter and nine months ended March 31, 1994 are not applicable as the Company completed its initial public offering on March 31, 1994. As of March 31, 1995, total assets were $938.8 million, deposits were $645.7 million and total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. was $155.5 million. The Company had 9,704,515 common shares outstanding as of March 31, 1995 and the book value per share of common stock was $16.02. On March 22, 1995, the Board of Directors declared a regular cash dividend of $0.10 per common share for the quarter ended March 31, 1995, to stockholders of record as of April 7, 1995 payable April 21, 1995. The Company reports earnings based upon a fiscal year ending June June: see month. 30. The Company announced on March 31, 1995 that it had entered into a definitive agreement to acquire Bank of Westbury Westbury, residential village (1990 pop. 13,060), Nassau co., SE N.Y., on Long Island; settled 1650, inc. 1932. The State Univ. of New York's Westbury campus is located in the village. Harness races are held at Roosevelt Raceway there. , a federal savings bank with 6 offices located in Nassau County Nassau County is the name of two counties in the United States of America:
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . As of December 31, 1994, the Bank of Westbury had total assets of $181.7 million, deposits of $153.7 million and stockholders' equity of $11.0 million. Quarterly Results Reliance Bancorp, Inc. reported net income of $2.7 million for the quarter ended March 31, 1995 which represents an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on average assets and equity of 1.17% and 6.86%, respectively. Net interest income increased to $8.3 million for the quarter ended March 31, 1995, an increase of $1.9 million, or 29.5%, from $6.4 million for the quarter ended March 31, 1994. The increase in net interest income was primarily the result of an increase in average interest-earning assets attributable to the investment of net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the conversion plus new deposit growth and increased borrowings. For the quarter ended March 31, 1995 average interest- earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin were $905.3 million and average interest-bearing liabilities were $756.4 million representing a ratio of average interest-earning assets to average interest-bearing liabilities of 1.20X as compared to 1.08X for the prior year period. Net interest margin increased from 3.50% for the quarter ended March 31, 1994 to 3.68% for quarter ended March 31, 1995. However, the net interest spread declined from 3.28% for the quarter ended March 31, 1994 to 3.00% for the quarter ended March 31, 1995 due primarily to an investment focus on adjustable rate Adjustable rate Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on Treasury bonds or notes. mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. purchased at teaser rates Teaser rate A low initial interest rate on an adjustable-rate mortgage to entice borrowers, that is later eliminated and replaced by a market-level rate. and a general flattening
The flattening, ellipticity, or oblateness of an oblate spheroid is the "squashing" of the spheroid's pole, down towards its equator. of the interest rate yield curve. The yield on interest-earning assets was 7.15% for the quarter ended March 31, 1995 and the cost of interest bearing liabilities was 4.15%. Non-interest expense totalled $3.9 million for the quarter ended March 31, 1995 as compared to $3.3 million for the quarter ended March 31, 1994, an increase of $596,000, or 18.0%. The increase is mainly the result of an increase in compensation and benefits expense, advertising expense and other operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. partially offset by income from real estate operations, net. For the quarter ended March 31, 1995 compensation and benefits expense increased to $2.4 million from $1.6 million for the quarter ended March 31, 1994. The increase in compensation and benefits expense is due primarily to the establishment of stock based benefit plans in connection with the conversion of the Bank. For the quarter ended March 31, 1995, advertising totalled $245,000, an increase of $88,000, or 56.1%, from the $157,000 recorded for the quarter ended March 31, 1994. During the quarter ended March 31, 1995, the Company continued its marketing program for deposit products which resulted in an increase of $28.8 million in deposits. Other operating expenses increased $353,000, or 63.0% from $560,000 during the quarter ended March 31, 1994 to $913,000 for the quarter ended March 31, 1995 as a result of costs associated with operating as a public company, additional lending costs and miscellaneous general expenses. Offsetting the increase in non-interest expense was income related to real estate operations, net. During the quarter ended March 31, 1995, the Bank realized significant gains on the sale of several REO reo Noun NZ a language [Maori] properties. The Company's operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. to average assets ratio was 1.92% for the quarter ended March 31, 1995 as compared to 1.71% for the quarter ended March 31, 1994. The Company's effective tax rate decreased to 40.7% during the quarter ended March 31, 1995 from 42.5% during the quarter ended March 31, 1994. The decrease is due to the Bank using the percentage of taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. method for calculating its tax bad debt deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. resulting in a lower state and city income tax expense. The Bank had used the experience method for calculating its tax bad debt deduction during the quarter ended March 31, 1994 which resulted in a higher effective tax rate under SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 109 "Accounting for Income Taxes". Nine Months Ended Results Net income for the nine months ended March 31, 1995 was $7.3 million which represents an annualized return on average assets of 1.10%. This is a $1.9 million, or 36.1% increase in net income from the prior year period excluding the $1.2 million benefit for the cumulative effect of a change in accounting for income taxes during the nine months ended March 31, 1994. Net interest income increased $5.0 million, or 25.7%, to $24.5 during the nine months ended March 31, 1995, from $19.5 million during the nine months ended March 31, 1994. The increase in net interest income was primarily the result of an increase in average interest-earning assets attributable to the investment of net proceeds from the conversion plus new deposit growth and borrowings. For the nine months ended March 31, 1995 average interest-earning assets were $858.6 million and average interest-bearing liabilities were $710.8 million representing a ratio of average interest-earning assets to average interest-bearing liabilities of 1.21X as compared to 1.08X for the prior year period. Net interest margin increased from 3.62% for the nine months ended March 31, 1994 to 3.80% for nine months ended March 31, 1995. However, the net interest spread declined from 3.39% for the nine months ended March 31, 1994 to 3.16% for the nine months ended March 31, 1995 due primarily to an investment focus on adjustable rate mortgage-backed securities purchased at teaser rates and a general flattening of the interest rate yield curve. The yield on interest-earning assets was 6.87% for the nine months ended March 31, 1995 and the cost of interest bearing liabilities was 3.71%. Non-interest income increased $124,000, or 14.6%, from $851,000 recorded during the nine months ended March 31, 1994 to $975,000 during the nine months ended March 31, 1995. The increase is due to a gain on a tax exempt security exempt security A security that is exempt from registration under the Security Act of 1933 or from margin requirements of the Securities Exchange Act of 1934. Examples of exempt securities are small issues, intrastate issues, and direct placements. called during the nine months ended March 31, 1995. Non-interest expense totalled $12.7 million for the nine months ended March 31, 1995 as compared to $10.7 million for the nine months ended March 31, 1994, an increase of $1.9 million, or 18.0%. The increase is mainly the result of an increase in compensation and benefits expense, advertising expense, and other operating expenses partially offset by income from real estate operations, net. For the nine months ended March 31, 1995 compensation and benefits expense increased $2.2 million, from $4.9 million for the nine months ended March 31, 1994 to $7.1 million for the nine months ended March 31, 1995. The increase in compensation and benefits expense is due primarily to the establishment of stock based benefit plans in connection with the conversion of the Bank. For the nine months ended March 31, 1995, advertising totalled $876,000, an increase of $431,000 or 96.9% from the $445,000 recorded in the nine months ended March 31, 1994. During the nine months ended March 31, 1995, the Company continued its aggressive marketing program for its deposit products which is reflected in the Bank's increased deposit base. Expenses related to real estate operations, net were $919,000 for the nine months ended March 31, 1994. For the nine months ended March 31, 1995, the Bank recognized income related to real estate operations, net of $414,000. This decrease was directly attributable to the reduction of holding costs and provisions for losses associated with real estate operations and gains on the sale of real estate owned. The Company's operating expense to average assets ratio was 1.98% for the nine months ended March 31, 1995 as compared to 1.78% for the nine months ended March 31, 1994. Financial Condition As of March 31, 1995, total assets were $938.8 million, deposits were $645.7 million and total stockholders' equity was $155.5 million. Mortgage-backed securities held-to-maturity increased from $394.2 million at June 30, 1994 to $424.4 million at March 31, 1995, an increase of $30.2 million, or 7.7%. The increase in mortgage-backed securities is primarily due to the Bank using cash flow to purchase adjustable rate mortgage-backed securities to supplement the low demand for loans in its primary market area. The Bank also has $86.2 million of mortgage-backed securities available-for-sale purchased as part of its leveraging strategy. The Bank has funded these purchases of mortgage-backed-securities through a combination of new deposit growth, FHLB FHLB Federal Home Loan Bank advances and reverse repurchase agreements Reverse Repurchase Agreement The purchase of securities with the agreement to sell them at a higher price at a specific future date. For the party selling the security (and agreeing to repurchase it in the future) it is a repo for the party on the other end of the . Deposits increased $58.5 million, or 10.0%, from $587.2 million at June 30, 1994 to $645.7 million at March 31, 1995. The increase in deposits is the result of the Company aggressively marketing its certificate of deposit products. Borrowings increased from $78.0 million at June 30, 1994 to $124.9 million at March 31, 1995, an increase of $46.9 million, or 60.2%. During the nine months ended March 31, 1995, the Bank used deposit growth and borrowings to fund asset growth in an effort to leverage the Bank's capital and improve returns on average assets and equity. Non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. totalled $4.4 million, or 1.33% of total loans at March 31, 1995 as compared to $3.6 million, or 1.08% of total loans at June 30, 1994. Non-performing loans at March 31, 1995 was comprised of $623,000 of guaranteed student loans and $3.8 million of loans secured by one-to-four family residences. The Company's allowance for loan losses totalled $1.6 million at March 31, 1995 which represents a ratio of allowance for loan losses to non- non- word element [L.]not . non- pref. Not: noninvasive. performing loans and to total loans of 37.48% and .50%, respectively. Excluding guaranteed student loans, the ratio of allowance for loan losses to non-performing loans would be 43.68%. The Company's non-performing assets to total assets ratio was .68% at March 31, 1995. Net charge-offs were $33,000 for the quarter ended March 31, 1995. Reliance Bancorp, Inc. and Reliance Federal Savings Bank are headquartered in Garden City, New York Garden City, New York is a village in central Nassau County, New York in the USA, which was founded by multi-millionaire Alexander Turney Stewart in 1869. The village is located 18.5 miles to the east of mid-town Manhattan, on Long Island. . Reliance Federal Savings Bank serves its customers from 11 branch offices located in the New York counties of Queens and Nassau. ...............MORE TO FOLLOW..................... CONTACT: Paul Hagan Vice President (516)222-9300 |
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