<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 5TH STREET
WASHINGTON, D.C. 20549
---------------
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
-- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
------------------
OR
-- TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT
For the transition period from to
---- -----
Commission File No 0-27624f
RELIANCE BANCSHARES, INC.
-------------------------
(Exact name of Small Business Issuer as specified in its charter)
Wisconsin 39-1834823
--------- ----------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
3140 S 27th Street, Milwaukee Wisconsin 53215
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (414) 671-2222
---------------
Not applicable
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports),and (2)
has been subject to such filing requirements for the past 90 days.
(1) Yes X No
-- --
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date.
Class Outstanding September 30, 1998
----- ------------------------------
Common Stock, par value $1.00 per share 2,395,564 shares
<PAGE> 2
RELIANCE BANCSHARES, INC. AND SUBSIDIARY
FORM 10-QSB
FOR THE QUARTER ENDED SEPTEMBER 30, 1998
INDEX
PAGE NO.
PART I - Financial Information
Consolidated Statements of Financial Condition 1
Consolidated Statements of Income 2
Consolidated Statements of Stockholders' Equity 3
Consolidated Statements of Cash Flows 4 - 5
Notes to Consolidated Financial Statements 6 - 7
Management's Discussion and Analysis of Financial Condition
and Results of Operations 8 - 11
PART II - Other Information 12
<PAGE> 3
RELIANCE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Financial Condition
(In Thousands)
<TABLE>
<CAPTION>
September 30, June 30,
1998 1998
------------ ----------
(Unaudited)
Assets:
<S> <C> <C>
Cash $ 180 $ 842
Cash equivalent interest-bearing deposits 3,919 3,504
--------- ---------
Total cash and cash equivalents 4,099 4,346
Investments
Certificates of deposit 294 493
Investment securities available for sale, at fair value 8,448 10,949
Federal Home Loan Bank stock - at cost 200 200
Loans receivable - net 27,004 25,798
Accrued interest receivable 104 87
Office properties and equipment 71 75
Prepaid expenses and other assets 234 341
--------- ---------
Total assets $ 40,454 $ 42,289
========= =========
Liabilities and Equity:
Deposit accounts $ 17,380 $ 17,330
Borrowed funds - - 2,000
Income taxes:
Current (37) 20
Deferred 292 263
Accrued and other liabilities:
Interest 21 31
Other 263 273
--------- ---------
Total liabilities 17,919 19,917
--------- ---------
Commitments and contingencies - - - -
Stockholders' equity:
Common stock, $1.00 par value; 6,000,000 shares authorized;
2,562,344 shares issued 2,562 2,562
Additional paid-in-capital 10,010 10,001
Unearned ESOP compensation (449) (449)
Accumulated other comprehensive income 780 729
Retained earnings - substantially restricted 11,146 11,043
Treasury stock, at cost, 166,780 and 166,780 shares (1,514) (1,514)
--------- ---------
Total stockholders' equity 22,535 22,372
--------- ---------
Total liabilities and stockholders' equity $ 40,454 $ 42,289
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE> 4
RELIANCE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Income
(In Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
--------------------------------------------
1998 1997
------------------- -------------------
(Unaudited)
Interest and dividend income:
<S> <C> <C>
Mortgage loans $ 582 $ 599
Investment securities 191 239
Mortgage-backed and related securities 10 15
Other loans - - - -
Dividends on stock in Federal Home Loan Bank 3 3
------------------- -------------------
Total interest and dividends 786 856
------------------- -------------------
Interest expense:
Deposits and escrows 227 227
Notes payable and other borrowings 32 88
------------------- -------------------
Total interest expense 259 315
------------------- -------------------
Net interest income 527 541
Provision for loan losses 5 5
------------------- -------------------
Net interest income after provision for loan losses 522 536
------------------- -------------------
Noninterest income:
Gain (loss) on sale of investments - - (4)
Other income - - - -
Loan fees and service charges 3 2
------------------- -------------------
Total noninterest income 3 (2)
------------------- -------------------
Operating income 525 534
------------------- -------------------
Noninterest expense:
Compensation and benefits 130 160
Occupancy 7 7
Advertising 1 2
Furniture and equipment 1 1
Federal insurance premiums 3 3
Professional services 129 22
Data processing 20 18
Stationery, communications, and other operating 19 20
Directors' fees and expenses of directors, officers
and employees 23 20
------------------- -------------------
Total noninterest expense 333 253
------------------- -------------------
Income before income taxes 192 281
------------------- -------------------
Income taxes:
Current 92 121
Deferred (3) (3)
------------------- -------------------
Total income taxes 89 118
------------------- -------------------
Net income $ 103 $ 163
=================== ===================
Earnings per share (basic and diluted) $ 0.04 $ 0.07
=================== ===================
Dividends per share $ - - $ - -
=================== ===================
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 5
RELIANCE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity
(In Thousands)
<TABLE>
<CAPTION>
Accumulated
Additional Unearned Other
Common Paid-in ESOP Comprehensive Retained
Stock Capital Compensation Income Earnings
----------- ------------ ------------- -------------- ------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Balances at June 30, 1998 $ 2,562 $ 10,001 $ (449) $ 729 $ 11,043
Comprehensive Income
Net income -- -- -- - - 103
Other comprehensive income,
net of tax:
Change in unrealized gain
(loss) on securities
available for sale, net
of applicable deferred
income taxes of $32 -- -- -- 51 - -
Total Comprehensive Income
Amortization of unearned
ESOP compensation -- 9 -- -- - -
--------- ---------- ----------- --------- ----------
Balances at September 30, 1998 $ 2,562 $ 10,010 $ (449) $ 780 $ 11,146
========== ========== =========== ========= ==========
<CAPTION>
Total
Treasury Stockholders'
Stock Equity
----------------- -----------------
<S> <C> <C>
Balances at June 30, 1998
$ (1,514) $ 22,372
Comprehensive Income
Net income
-- 103
Other comprehensive income,
net of tax:
Change in unrealized gain
(loss) on securities
available for sale, net
of applicable deferred
income taxes of $32
-- 51
-----------
Total Comprehensive Income
154
-----------
Amortization of unearned
ESOP compensation
-- 9
----------- -----------
Balances at September 30, 1998
$ (1,514) $ 22,535
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 6
RELIANCE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
--------------------------------------------
1998 1997
------------------- -------------------
(Unaudited)
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 103 $ 163
Adjustments to reconcile net income to net cash provided (used)
by operating activities:
Provision for depreciation 4 4
Provision for loan losses 5 5
Amortization of premiums, discounts and fees - net (24) (25)
ESOP expenses 9 28
Increase (decrease) in income taxes payable (57) 81
Provision for (reduction of) deferred income taxes (3) (3)
(Increase) decrease in interest receivable (17) (12)
Net increase (decrease) in accrued/other liabilities (20) 11
Net (increase) decrease in prepaid expense and other assets 107 6
Loss (gain) on investments - - 4
------------------- -------------------
Net cash provided (used) by operating activities 107 262
------------------- -------------------
Cash Flows from Investing Activities:
Proceeds from sale/maturities of investment securities
available for sale 4,752 776
Purchase of investment securities available for sale (2,000) (1,898)
Net (increase) decrease in loans (1,185) 583
Principal payments collected on mortgage-backed
securities 29 165
------------------- -------------------
Net cash provided (used) by investing activities 1,596 (374)
------------------- -------------------
Cash Flows from Financing Activities:
Purchase of treasury stock - - (483)
Repayments of short-term borrowing (2,000) - -
Proceeds from securities sold under repurchase agreements - - 2,043
Payments on securities sold under repurchase agreements - - (2,008)
Increase (decrease) in deposit accounts 50 106
------------------- -------------------
Net cash provided (used) by financing activities (1,950) (342)
------------------- -------------------
Increase (decrease) in cash and cash equivalents (247) (454)
Cash and Cash Equivalents at beginning of period 4,346 3,048
------------------- -------------------
Cash and Cash Equivalents at end of period $ 4,099 $ 2,594
=================== ===================
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 7
RELIANCE BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
--------------------------------------------
1998 1997
------------------- -------------------
(Unaudited)
<S> <C> <C>
Supplemental Cash Flow Information:
Cash paid during the period for:
Interest on deposit accounts $ 27 $ 28
Income taxes 148 109
Interest on borrowings 32 88
Noncash investing activities:
Loans transferred to foreclosed properties and real
estate in judgment - - - -
Total increase in unrealized gain on securities available
for sale 84 40
Investments transferred to available-for-sale from
held-to-maturity, at cost - - 3,818
Accounting Policies Note: Cash equivalents include demand deposits at other financial institutions and
the Federal Home Loan Bank.
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 8
RELIANCE BANCSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
1 The information contained in the accompanying consolidated financial
statements is unaudited. In the opinion of management, the financial
statements contain all adjustments (none of which were other than normal
recurring entries) necessary for a fair statement of the results of
operations for the interim periods. The results of operations for the
interim periods are not necessarily indicative of the results which may be
expected for the entire fiscal year. The accompanying consolidated
financial statements should be read in conjunction with the consolidated
financial statements for the year ended June 30, 1998 contained in the
Company's Form 10-KSB.
2 In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings Per Share" (SFAS No. 128). SFAS 128 simplifies the
standards for computing earnings per share and makes the calculation
comparable to international standards. SFAS 128 replaces primary earnings
per share with a presentation of basic earnings per share. It also requires
dual presentation of basic and diluted earnings per share and a
reconciliation of basic to diluted earnings per share.
Basic earnings per share is computed by dividing income available to common
stockholders by the weighted-average number of common shares outstanding
for the period. Diluted earnings per share reflects the potential dilution
that could occur if securities or other contracts to issue common stock
were exercised into common stock or resulted in the issuance of common
stock that then shared in the earnings of the Company.
SFAS 128 is effective for financial statements issued for periods ending
after December 15, 1997, and requires restatement of all prior earnings per
share data.
The following reconciles amounts reported in the financial statements:
<TABLE>
<CAPTION>
Three Months Ended
September 30, 1998
----------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
-------------- -------------- --------------
<S> <C> <C> <C>
Income available to
Common Shareholders:
Basic earnings per share $ 103,000 2,329,287 0.04
==============
Effect of diluted securities
Options - - 34,334
-------------- --------------
Income available to
Common Shareholders:
Diluted earnings per share $ 103,000 2,363,621 0.04
============== ============== ==============
</TABLE>
Weighted-average shares outstanding for the three months ended September
30, 1997 were 2,445,689 for basic and 2,452,142 for diluted.
6
<PAGE> 9
3 During the quarter ended September 30, 1997, the Company transferred its
investments from its held-to-maturity portfolio to its available-for-sale
portfolio. This was done as the result of the sale, from its
held-to-maturity portfolio, of a $200,000 REMIC, on which a $1,375
realized loss was incurred, whose nature and volatility was inconsistent
with the Company's investment objectives. The remaining investments in
the held-to-maturity portfolio transferred to the available-for-sale
portfolio had an amortized cost of $3.8 million and resulted in an
unrealized gain of $48,000.
4 The Financial Accounting Standards Board (FASB) has issued SFAS No. 130,
"Reporting Comprehensive Income," which is effective for fiscal years
beginning after December 15, 1997. This statement establishes standards
for reporting and display of comprehensive income and its components
(revenues, expenses, gains and losses) in a full set of general purpose
financial statements. This statement requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed
with the same prominence as other financial statements. The Company
adopted SFAS No. 130 on July 1, 1998.
The Company's comprehensive income for the three months ended September 30,
1998 and 1997 is as follows:
<TABLE>
<CAPTION>
Three months Ended
September 30,
----------------------------
1998 1997
-------------- ------------
<S> <C> <C>
Net income $ 103,000 $ 163,000
Other comprehensive income, net of taxes
Unrealized gains (losses) arising during the period 51,000 24,000
------------ ------------
Comprehensive income $ 154,000 $ 187,000
============ ============
</TABLE>
7
<PAGE> 10
RELIANCE BANCSHARES, INC. AND SUBSIDIARY
Management's Discussion and Analysis of
Financial Condition and Results of Operations
General
Reliance Bancshares, Inc. (Company) has no significant assets other than common
stock of Reliance Savings Bank (Bank), cash and cash equivalents, investment
securities and the loan to the ESOP. The Company's principal business is the
business of the Bank. Therefore, the information in the Management's Discussion
and Analysis of Financial Condition and Results of Operations relates to the
Bank and its operations.
Certain statements in this report which relate to the Company's plans,
objectives or future performance, may be deemed to be forward-looking statements
within the meaning of the Private Securities Litigation Act of 1995. Such
forward-looking statements includes words and phrases such as "will likely
result", "are expected to", "will continue", "is anticipated", "estimate",
"project", or similar expressions and various other statements contained herein.
Such statements are based on management's current expectations. Actual
strategies and results in future periods may differ materially from those
currently expected because of various risks and uncertainties. Additional
discussion of factors affecting the Company's business and prospects is
contained in periodic filings with the Securities and Exchange Commission.
Pending Merger
On June 30, 1998, the Company signed a definitive Agreement and Plan of
Reorganization that provides for the acquisition of the Company and thus the
Bank by St. Francis Capital Corporation ("St. Francis"). Under the terms of the
definitive agreement, St. Francis will acquire all of the outstanding shares of
the Company through a merger transaction pursuant to which the Company's
shareholders will elect to receive either cash or shares of St. Francis's common
stock in exchange for their shares (the "Merger"). Consummation of the
transaction is subject to regulatory approval, approval of the Company's
shareholders and the satisfaction of certain other conditions.
Lending Activities
The Bank originates first mortgage loans secured by one-to-four family
owner-occupied residences and residential construction loans within the Bank's
primary lending area. All of the Bank's first mortgage loans are originated for
the Bank's own loan portfolio. The Bank originated $4,821,000 mortgage loans at
an average rate of 8.60% during the three months ended September 30, 1998
compared to $3,429,000 at an average rate of 8.69% during the three months ended
September 30, 1997.
The Bank had $475,000 in commitments outstanding to originate mortgage loans at
September 30, 1998.
Liquidity and Capital Resources
The Bank's principal sources of funds are cash receipts from deposits, principal
collections on loans and mortgage-backed and related securities, proceeds from
maturities of securities, and net earnings. The Bank has an agreement with the
Federal Home Loan Bank to provide cash advances, should the need for additional
funds be required. The financial institution industry
8
<PAGE> 11
historically has accepted interest rate risk as a part of its operating
philosophy. The Bank continues to actively manage its interest rate risk, with
strategies such as originating mortgage loans which permit adjustment to the
interest rate annually after an initial fixed-rate term of three years in order
to reduce inherent interest rate risk.
The Bank is required to maintain minimum amounts of capital to total
"risk-weighted" assets, as defined by the banking regulators. At September 30,
1998, the Bank is required to have a minimum 3% Tier 1 capital to total assets
ratio, a minimum 4% Tier 1 capital to risk-weighted assets ratio and a minimum
8% of qualifying total capital to risk-weighted assets ratio. The Bank's actual
ratios at that date were 51.99%, 69.12% and 72.34%, respectively.
Wisconsin-chartered savings banks are also required to maintain a minimum
capital to assets ratio of 6%. The Bank's capital exceeds all minimum standards
required by federal and state regulations.
For regulatory purposes, liquidity is measured as a ratio of cash and certain
investments to withdrawable deposits and short-term borrowings. The minimum
level of liquidity required by regulation is 8%. The Bank's liquidity ratio was
over 60% at September 30, 1998.
Financial Condition
Total assets decreased $1,835,000 to $40,454,000 at September 30, 1998 from
$42,289,000 at June 30, 1998. Investment securities decreased $2,501,000 to
$8,448,000 at September 30, 1998 from $10,949,000 at June 30, 1998, certificates
of deposit decreased $199,000 to $294,000 at September 30, 1998 from $493,000 at
June 30, 1998 and cash and cash equivalent deposits decreased $247,000 to
$4,099,000 at September 30, 1998 from $4,346,000 at June 30, 1998. Loans
receivable increased $1,206,000 to $27,004,000 at September 30, 1998 from
$25,798,000 at June 30, 1998. The net decrease in these items was offset by the
elimination of the $2,000,000 in borrowed funds from the $2,000,000 outstanding
balance at June 30, 1998.
Proceeds from the sale and maturity of securities were also used to fund loans
and purchase securities. An unrealized gain on securities available for sale,
net of tax effect, of $51,000 has been recognized as a component of
stockholders' equity at September 30, 1998. Stockholders' equity is expected to
increase or decrease in the future to the extent, net of income tax effect, that
the market value of securities held for sale increase or decrease.
Accrued interest on loans and securities increased and accrued interest on
certificates of deposit decreased due to timing of interest receipts and
interest payments. Other assets and income taxes payable fluctuated due to
timing of corporate income tax payments.
Year 2000 Issue
The "Year 2000 Issue" concerns a problem resulting from computer programs being
written using two digits rather than four digits to define the applicable year.
Any of the Company's software programs, or software programs used by its
third-party providers, that are date-sensitive may recognize a date using "00"
as the year 1900 rather than the year 2000. If not corrected, this problem could
cause a major system failure or miscalculations and represent a material cost to
the Company.
During 1997, the Company developed a Year 2000 Compliance Plan and conducted a
review of its computer systems and its third-party systems identifying those
that could be affected by the Year 2000 Issue. The inventory prepared included a
review of its non-computer equipment and infrastructure issues, such as its
heating, ventilation and air-conditioning equipment, and security equipment,
which could have embedded systems, to verify that they will function in Year
2000.
9
<PAGE> 12
The plan also identified all third-party service providers, vendors, and
commercial credit customers doing business with the Company.
All of the Company's, equipment, vendors and suppliers, and commercial credit
customers were analyzed and segregated into two categories: critical systems and
non-critical systems. Critical systems were defined as those having
date-sensitive attributes which, if not Year 2000 compliant, could have a
material impact on the operations of the Company. Non-critical systems were
defined as those having date-sensitive attributes which, if not Year 2000
compliant, could continue to function by alternative methods which would not
have a material impact on the operations of the Company. An example of a
critical system is the Company's internal data-processing systems and those of
its third-party providers since non-compliance would pose a significant risk to
the Company. An example of a non-critical piece of equipment is the Company's
postage meter since, if non-compliant, the alternative is to use stamps.
During the first quarter of 1998, the Company initiated formal communications
will all of its significant vendors, suppliers, and commercial credit customers
to inform them of the Company's plan for Year 2000 compliance and to determine
the extent to which the Company is vulnerable to those third parties' failure to
remedy their own Year 2000 issue. There can be no assurance that the systems of
other organizations upon which the Company's operations rely, including
essential utilities and telecommunications providers, will be timely converted,
or would not have a materially adverse effect of the Company. A target date of
December 31, 1998 has been established for the initial assessment of the
responses of vendors, suppliers and significant credit customers.
The Company has not incurred any costs to date associated with its Year 2000
readiness plans other than the soft-dollar costs relating to its review process.
The Company estimates its costs to be between $30,000 and $40,000 to upgrade its
computer hardware to be Year 2000 compliant. The Company believes that, with
modifications to existing software used by the Company and by its third-party
providers, the Year 2000 problem will not pose significant operational problems
for the Company. The Company does not anticipate costs to remedy the Year 2000
issue will have a material impact on the financial condition of the Company.
Due to the pending merger with St. Francis Capital Corporation, the concerns
related to the Year 2000 Issue may have little or no impact on the operations of
the Company as it exists now. However the Company has developed contingency
plans should the merger not go through. Those plans include the purchase of Year
2000 computer hardware and for the testing of its computer systems with its
third-party servicer to be completed before the end of the first quarter of
1999.
Net Income
The Company had net income of $103,000 for the three months ended September 30,
1998 compared to net income of $163,000 for the three months ended September 30,
1997. The primary reason for the decrease in net income was due to decreased
interest income on investment securities and loans partially offset by decreased
interest expense on borrowings. Net income for the 1998 period was also affected
by higher professional services expense relating to the Company's pending merger
partially offset by lower compensation and benefits expense.
Net Interest Income
Net interest income decreased $14,000 from $541,000 for the three months ended
September 30, 1997 to $527,000 for the three months ended September 30, 1998.
The decrease in net
10
<PAGE> 13
interest income was due to decreased interest income on investment securities
and loans partially offset by decreased interest expense on borrowings. Interest
income on loans decreased as a result of a lower portfolio average balance and a
lower average yield while interest income on investment securities decreased as
a result of a lower portfolio average balance. Interest expense on borrowings
decreased due to a lower average balance of borrowings.
Provision for Loan Losses
The allowance for loan losses is increased by charges to income and decreased by
charge-offs (net of recoveries). Management's periodic evaluation of the
adequacy of the allowance is based on the Bank's past loan loss experience,
known and inherent risks in the portfolio, adverse situations that may effect
the borrower's ability to repay, the estimated value of any underlying
collateral, and current economic conditions. There can be no assurance that the
allowance for loan losses will be adequate to cover losses which may in fact be
realized in the future and that additional provisions for loan losses will not
be required. The amount of the provision for loan losses for the three months
ended September 30, 1998 and 1997 reflected management's intention to continue
to make additions to the Bank's allowance for loan losses until it is equal to
approximately 1.0% of the Bank's gross loan portfolio. However, the Bank will
continue to monitor its loan loss experience, the condition and composition of
its loan portfolio and general economic conditions, and may make further
additions to its allowance for loan losses to a greater or lesser extent than it
has done historically, depending upon changes in the aforementioned conditions.
There was one nonperforming loan of $197,000 at September 30, 1998 and none at
September 30, 1997. As a result of this evaluation, the Bank's provision for
loan losses for the three months ended September 30, 1998 and 1997 amounted to
$5,000 and $5,000 respectively.
Noninterest Income
Noninterest income increased $5,000 from ($2,000) for the three months ended
September 30, 1997 to $3,000 for the three months ended September 30, 1998. The
increase in noninterest income was the result of the $4,000 loss on the sale of
investments for the three months ended September 30, 1997.
Noninterest Expense
Noninterest expense increased $80,000 from $253,000 for the three months ended
September 30, 1997 to $333,000 for the three months ended September 30, 1998.
Compensation and benefits decreased $30,000 from $160,000 for the three months
ended September 30, 1997 to $130,000 for the three months ended September 30,
1998 due to the decrease in costs associated with the pension plan. Fees for
professional services increased $107,000 from $22,000 for the three months ended
September 30, 1997 to $129,000 for the three months ended September 30, 1998 due
to legal fees for services rendered in connection with the pending merger with
St. Francis Capital Corporation.
Income Taxes
Income taxes fluctuated due to the level of pre-tax earnings.
11
<PAGE> 14
RELIANCE BANCSHARES, INC. AND SUBSIDIARY
PART II - Other Information
Item 1 - Legal Proceedings
There are no material legal proceedings to which the Holding Company or
the Bank is a party or of which any of their property is subject. From
time to time, the Bank is a party to various legal proceedings incident
to its business.
Item 2 - Changes in Securities
None.
Item 3 - Defaults upon Senior Securities
Not applicable.
Item 4 - Submission of Matters to a Vote of Security Holders
None.
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K.
a) Exhibits: None.
b) Reports on Form 8-K: On July 2, 1998, the registrant filed a Form
8-K to announce that it had entered into a definitive Agreement
and Plan of Reorganization with St. Francis Capital Corporation,
dated June 30, 1998.
Signatures
----------
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
RELIANCE BANCSHARES, INC.
(Registrant)
Date: November 10, 1998 BY: /s/ Allan T. Bach
--------------------------------------------
Allan T. Bach, Chairman of the Board,
President and Chief Executive Officer
(Principal Executive Officer)
Date: November 10, 1998 BY: /s/ Carol A. Barnharst
--------------------------------------------
Carol A. Barnharst, Vice President and
Chief Financial Officer (Principal Financial
and Accounting Officer)
12
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 180
<INT-BEARING-DEPOSITS> 3,919
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 8,448
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 27,004
<ALLOWANCE> 174
<TOTAL-ASSETS> 40,454
<DEPOSITS> 17,380
<SHORT-TERM> 0
<LIABILITIES-OTHER> 539
<LONG-TERM> 0
0
0
<COMMON> 2,562
<OTHER-SE> 19,973
<TOTAL-LIABILITIES-AND-EQUITY> 40,454
<INTEREST-LOAN> 582
<INTEREST-INVEST> 204
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 786
<INTEREST-DEPOSIT> 227
<INTEREST-EXPENSE> 259
<INTEREST-INCOME-NET> 527
<LOAN-LOSSES> 5
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 333
<INCOME-PRETAX> 192
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 103
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
<YIELD-ACTUAL> 2.31
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 153
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 174
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 174
</TABLE>
