UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 5TH STREET, N.W.
WASHINGTON, D. C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-25768
RELIANCE FINANCIAL INC.
(Exact name of registrant as specified in its charter)
Delaware 43-1703958
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8930 Gravois, St. Louis Missouri 63123
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (314) 631-7500
Not applicable
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 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. Yes [X]. No [ ].
Indicate the number of shares outstanding of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding July 11, 1996
Common Stock, par value $.10 per share 440,293 Shares
PAGE
<PAGE>
RELIANCE FINANCIAL INC. AND SUBSIDIARY
FORM 10-QSB
FOR THE QUARTER ENDED JUNE 30, 1996
INDEX
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
PART I - Financial Information
Consolidated Balance Sheets 1
Consolidated Statements of Earnings 2
Consolidated Statements of Cash Flows 3
Notes to Consolidated Financial Statements 4
Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
PART II - Other Information 9
PAGE
<PAGE>
RELIANCE FINANCIAL INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
June 30, September 30,
Assets 1996 1995
----------- -----------
<S> <C> <C>
Cash and cash equivalents $ 1,301,690 $ 2,036,111
Certificates of deposit 2,081,000 3,066,000
Securities:
Available for sale, at market value
(amortized cost of $500,000) 473,421 483,038
Held to maturity, at amortized
cost (market value of $1,656,125
and $473,125, respectively) 1,688,402 486,460
Stock in Federal Home Loan Bank
of Des Moines 336,000 329,400
Mortgage-backed securities held to
maturity, at amortized cost
(market value of $5,387,694 and
$5,518,077, respectively) 5,525,424 5,649,890
Loans receivable, net 20,813,093 20,030,892
Premises and equipment, net 413,281 430,670
Foreclosed real estate held
for sale, net 33,705 6,300
Accrued interest receivable:
Securities and certificates
of deposit 29,396 18,287
Mortgage-backed securities 27,132 28,624
Loans receivable 124,124 114,298
Other assets 139,295 164,252
----------- -----------
Total assets $32,985,963 $32,844,222
----------- -----------
----------- -----------
Liabilities and Stockholders' Equity
Deposits $24,511,038 $25,252,854
Accrued interest on deposits 3,400 3,878
Advances from FHLB of Des Moines 1,000,000 -
Advances from borrowers for
taxes and insurance 215,362 265,508
Other liabilities 83,843 154,857
Accrued income taxes 50,217 68,100
----------- -----------
Total liabilities 25,863,860 25,745,197
----------- -----------
Commitments and contingencies
Preferred stock, $.01 par value,
250,000 shares authorized; none
issued and outstanding - -
Common stock, $.10 par value;
1,500,000 shares authorized;
446,993 and 430,000 shares
issued and outstanding 44,699 43,000
Additional paid-in capital 4,183,563 3,913,004
Common stock acquired by ESOP (248,035) (304,849)
Common stock acquired by RRP (238,468) -
Unrealized loss on securities
available for sale, net (26,579) (16,962)
Retained earnings - substantially
restricted 3,507,426 3,464,832
Treasury stock, at cost, 6,700 shares (100,503) -
----------- -----------
Total stockholders' equity 7,122,103 7,099,025
----------- -----------
Total liabilities and
stockholders' equity $32,985,963 $32,844,222
----------- -----------
----------- -----------
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
PAGE
<PAGE>
Consolidated Statements of Earnings
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine months ended
June 30, June 30
--------------------------- ------------------------
1996 1995 1996 1995
----------- ------------ ------------ ---------
<S> <C> <C> <C> <C>
Interest income:
Loans receivable $444,247 $ 404,087 $1,368,720 $1,246,440
Mortgage-backed securities 83,267 88,707 255,423 257,696
Securities 35,422 24,201 84,984 66,205
Other interest-earning assets 50,797 88,887 172,472 175,918
-------- ---------- ---------- ----------
Total interest income 613,733 605,882 1,881,599 1,746,259
-------- ---------- ---------- ----------
Interest expense:
Deposits 268,892 271,594 824,841 806,258
Advances from FHLB of Des Moines 14,686 - 31,471 -
-------- ---------- ---------- ----------
Total interest expense 283,578 271,594 856,312 806,258
-------- ---------- ---------- ----------
Net interest income 330,155 334,288 1,025,287 940,001
Provision (credit) for loan losses - 3,323 (700) 1,270
-------- ---------- ---------- ----------
Net interest income after
provision for loan losses 330,155 330,965 1,025,987 938,731
-------- ---------- ---------- ----------
Noninterest income:
Loan service charges 3,261 4,376 10,065 13,477
Gain on investment in data center 14,965 - 14,965 -
Other 6,087 6,881 18,743 28,352
-------- ---------- ---------- ----------
Total noninterest income 24,313 11,257 43,773 41,829
-------- ---------- ---------- ----------
Noninterest expense:
Compensation and benefits 144,340 137,773 416,141 340,017
Occupancy expense 15,814 11,852 40,390 35,576
Equipment and data processing
expense 15,756 17,725 48,722 52,454
SAIF deposit insurance premium 14,246 16,123 43,458 51,818
Supervisory and professional fees 23,697 10,198 64,168 31,842
Other 37,504 26,715 98,130 81,098
-------- ---------- ---------- ----------
Total noninterest expense 251,357 220,386 711,009 592,805
-------- ---------- ---------- ----------
Earnings before income taxes 103,111 121,836 358,751 387,755
Income taxes 44,000 45,300 134,800 144,000
-------- ---------- ---------- ----------
Net earnings $ 59,111 76,536 223,951 243,755
-------- ---------- ---------- ----------
-------- ---------- ---------- ----------
Net earnings per share - See note 4. $ .15 .21 .56 .63
-------- ---------- ---------- ----------
-------- ---------- ---------- ----------
Weighted-average shares outstanding 400,924 366,524 401,341 121,729
-------- ---------- ---------- ----------
-------- ---------- ---------- ----------
Dividends per share $ .15 .00 .45 .00
-------- ---------- ---------- ----------
-------- ---------- ---------- ----------
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
June 30,
------------------------
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $223,951 $243,755
Adjustments to reconcile net earnings
to net cash provided by (used for) operating activities:
Depreciation expense 24,193 22,629
Provision (credit) for loan losses (700) 1,270
Amortization of premiums and discounts on securities, net (1,286) -
ESOP expense 80,551 36,703
RRP expense 10,053 -
FHLB stock dividends (6,600) -
Decrease (increase) in:
Accrued interest receivable (19,442) (18,090)
Other assets 24,957 5,155
Increase (decrease) in:
Accrued interest on deposits (478) (896)
Other liabilities (71,014) 46,133
Accrued income taxes (17,883) 13,782
--------- ---------
Net cash provided by (used for) operating activities 246,302 350,441
--------- ---------
Cash flows from investing activities:
Loans:
Purchased (2,802,354) (2,101,836)
Originated (2,275,481) (1,069,687)
Principal collections 4,261,740 2,928,280
Principal collections on mortgage-backed securities held to maturity 124,466 442,371
Securities held to maturity and certificates of deposit:
Purchased (2,795,000) (2,282,000)
Proceeds from maturity 2,579,343 1,571,128
Purchase of premises and equipment (6,804) (4,172)
Proceeds from sale of foreclosed real estate held for sale 7,189 15,107
--------- ---------
Net cash provided by (used for) investing activities (906,901) (500,809)
--------- ---------
Cash flows from financing activities:
Net increase (decrease) in:
Deposits (741,816) (3,108,571)
Advances from borrowers for taxes and insurance (50,146) (45,313)
Proceeds from advances from FHLB of Des Moines 1,000,000 -
Purchase of treasury stock (100,503) -
Proceeds from sale of common stock - 3,607,238
Cash dividends (181,357) -
--------- ---------
Net cash provided by (used for) financing activities (73,822) 453,354
--------- ---------
Net increase (decrease) in cash and cash equivalents (734,421) 302,986
Cash and cash equivalents at beginning of period 2,036,111 1,481,262
--------- ---------
Cash and cash equivalents at end of period $1,301,690 1,784,248
--------- ---------
--------- ---------
Supplemental disclosures of cash flow information:
Cash paid (received) during the year for:
Interest on deposits $ 825,319 807,154
Interest on advances from FHLB 31,471 -
Federal income taxes 128,681 130,218
State income taxes 24,002 -
Real estate acquired in settlement of loans $ 40,894 21,457
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
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 September 30, 1995 contained in the Annual
Report to Stockholders and as an exhibit filed with Form 10-KSB.
(2) On April 18, 1996, the stockholders of Reliance Financial Inc.
ratified the 1996 Stock Option Plan. All 43,000 stock options
under the Plan were awarded in April, 1996 to directors,
executive officers and employees. The stock options were
awarded with an exercise price of $14.625 per share which was
equal to the market value of the Company's common stock at the
date of grant. At June 30, 1996 there were no shares
exercisable.
On April 18, 1996, the stockholders ratified the 1996
Recognition and Retention Plan (RRP). All 17,200 shares under
the RRP were awarded in April, 1996 to directors, executive
officers and employees. During June, 1996, 207 shares under
the RRP were forfeited. Compensation expense equal to the
market value of the shares at the date of grant will be
recognized on a pro rata basis over five years from the date
of grant.
(3) The Company initiated a stock repurchase program upon approval
by the OTS of up to 21,500 shares, or 5% of common stock
issued in the Company's initial common stock offering. During
May, 1996 the Company repurchased 6,700 shares of common stock
at a price of $15 per share.
(4) Earnings per share are based upon the weighted-average shares
outstanding during the period. Earnings for the period
October 1, 1994 to March 31, 1995 have been excluded from the
calculation of earnings per share for the three and nine
months ended June 30, 1995. Earnings for the period April 1,
1995 to April 7, 1995 (conversion date) were not significant.
ESOP shares which have been committed to be released are
considered outstanding.
(5) The Association's deposit liabilities are insured by the SAIF
fund of the FDIC. A number of proposals to more adequately
fund the SAIF are being discussed by Congress. Among the
proposals is a one-time assessment of 85 basis points on
thrift deposits. This amount would be reflected by a charge
against earnings in the period or periods the liability is
incurred. Should the Association be required to pay such
special assessment, the Association's capital will be reduced
by approximately $131,000, based on deposits of $24.5 million
at June 30, 1996 and a tax rate of 37%. In the event the
assessment is not deductible for income tax purposes, capital
would be reduced by approximately $208,000. Management is
unable to predict whether this proposal will become law or, if
enacted, the ultimate amount of the assessment, date to be
used for determining deposits on which the assessment will be
based, or deductibility for income tax purposes.
PAGE
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
General
The Company has no significant assets other than common stock of
the Association, the loan to the Employee Stock Ownership Plan
(ESOP) and net proceeds retained by the Company following the
conversion. The Company's principal business is the business of
the Association. Therefore, the discussion in the Management's
Discussion and Analysis of Financial Condition and Results of
Operations relates to the Association 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 Private Securities
Litigation Act of 1995. 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.
Liquidity and Capital Resources
The Association's principal sources of funds are cash receipts from
deposits, loan repayments by borrowers and net earnings. The
Association has an agreement with the Federal Home Loan Bank of Des
Moines to provide cash advances, should the need for additional
funds be required.
For regulatory purposes, liquidity is measured as a ratio of cash
and certain investments to withdrawable deposits. The minimum
level of liquidity required by regulation is presently 5%. The
Association's regulatory liquidity ratio was approximately 19% at
June 30, 1996. The Association maintains a high level of liquidity
as a matter of management philosophy in order to more closely match
interest-sensitive assets with interest-sensitive liabilities.
The savings and loan industry historically has accepted interest
rate risk as a part of its operating philosophy. Long-term, fixed-
rate loans were funded with deposits which adjust to market
interest rates more frequently. In recent years, the Association
has originated primarily mortgage loans which permit adjustment of
the interest rate after an initial term of one to three years in
order to reduce inherent interest rate risk.
The Financial Institutions Reform, Recovery and Enforcement Act of
1989 (FIRREA) requires that the Association maintain core capital
equal to 3% of adjusted total assets and maintain tangible capital
equal to 1.5% of adjusted total assets. The Association must
maintain an 8% risk-based capital.
<PAGE>
The following table presents the Association's capital position
relative to its regulatory capital requirements under FIRREA at
June 30, 1996:
<TABLE>
<CAPTION>
Unaudited Regulatory Capital
-------------------------------------
Tangible Core Risk-Based
----------- --------- ----------
<S> <C> <C> <C>
Stockholders' equity per consolidated
financial statements $ 7,122,103 7,122,103 7,122,103
Stockholders' equity of Reliance Financial Inc.
not available for regulatory capital purposes (1,692,348) (1,692,348) (1,692,348)
GAAP capital 5,429,755 5,429,755 5,429,755
General valuation allowances - limited - - 176,467
Non-includable deferred tax assets (102,000) (102,000) (102,000)
Regulatory capital 5,327,755 5,327,755 5,504,222
Regulatory capital requirement (471,609) (943,218) (1,119,565)
Regulatory capital - excess $ 4,856,146 4,384,537 4,384,657
Regulatory capital ratio 16.95% 16.95% 39.33%
Regulatory capital requirement (1.50) (3.00) (8.00)
Regulatory capital ratio - excess 15.45% 13.95% 31.33%
</TABLE>
There were no commitments to originate adjustable-rate mortgage
loans at June 30, 1996.
Financial Condition
Cash and cash equivalents and certificates of deposit decreased by
$1.72 million from September 30, 1995 to June 30, 1996 as such
funds were used in normal operations and to purchase Federal agency
obligations. The components of interest-bearing assets change from
time to time based on the availability and interest rates of loans,
securities, and mortgage-backed securities meeting the
Association's risk guidelines. Loans receivable, net increased by
$782,000, or 3.9%, from September 30, 1995 to June 30, 1996 due to
the origination of $2.3 million in loans and the purchase of $2.8
million of single-family loans partially offset by loan repayments.
Accrued interest receivable on loans increased by $10,000, or 8.6%,
due to a higher average balance and higher interest rates on
adjustable-rate loans. Other assets decreased by $25,000, or
15.2%, due to the payment of patronage dividends by the
Association's data processor. The Association obtained an advance
of $1.0 million from the Federal Home Loan Bank of Des Moines in
order to supplement short-term liquidity. Management may utilize
FHLB advances in the future where the overall cost is less than
retail deposits or to meet short-term liquidity needs. Advances by
borrowers for taxes and insurance decreased due to seasonal
factors. Real estate taxes are paid on behalf of borrowers in
December of each year. Other liabilities decreased by $71,000, or
45.9%, due to payment of bonuses accrued for the year ended
September 30, 1995 and timing of payments of other accounts
payable.
Asset Quality
The Association's general policy is to exclude from earnings,
interest on loans contractually delinquent 90 days or more. At
June 30, 1996 and September 30, 1995, the Association had $67,000
and $43,000, respectively in loans which were 90 days or more
delinquent. Such delinquent loans represented .32% and .21% of net
loans receivable at June 30, 1996 and September 30, 1995,
respectively.
<PAGE>
Results of Operations
Net Earnings
Net earnings were $224,000 and $59,000 for the nine and three
months ended June 30, 1996, respectively, compared to $244,000 and
$77,000, for the nine and three months ended June 30, 1995,
respectively. Net earnings decreased for the nine month period
ended June 30, 1996, reflecting higher noninterest expense which
offset higher net interest income. Net earnings decreased for the
three month period ended June 30, 1996 due to higher noninterest
expense which offset higher noninterest income.
Net Interest Income
Net interest income increased by $85,000, or 9.1%, for the nine
months ended June 30, 1996 over the same period of the prior year.
Net interest income for the three months ended June 30, 1996 was
virtually unchanged from the three months ended June 30, 1995.
During the nine months ended June 30, 1996, the Association
recognized amortization of unearned discount of $52,000 to interest
income on certain loans which were paid off. The loans were
classified as troubled debt restructurings prior to the effective
date of SFAS No. 114 SFAS No. 118. Unearned discount was
recognized for cash receipts in excess of the carrying amount of
the loans. The increase in net interest income was also due to the
completion of the sale of common stock. Upon completion of the
offering of common stock, net proceeds received were invested in
interest-bearing assets, while proceeds withdrawn from depositors
accounts no longer incurred interest expense.
Interest Income
Interest on loans receivable increased due to a higher average
yield and balance. The average yield on loans was 8.41% for the
nine months ended June 30, 1995 compared to 8.64% for the nine
months ended June 30, 1996. The yield on loans receivable
increased by 33 basis points for the nine months ended June 30,
1996 as a result of the amortization of unearned discount to
interest income on certain loans paid off as discussed in the
previous paragraph. The average yield on loans was 8.28% for the
three months ended June 30, 1995 compared to 8.35% for the three
months ended June 30, 1996.
Interest on securities increased as a result of a higher average
balance. The increase is due to a shift in investments from
certificates of deposit to higher yielding Federal agency
obligations.
Interest on other interest-earning assets decreased for the three
months ended June 30, 1996 as compared to the same period in 1995
due to lower average balances. The nine month periods were
virtually the same as lower average balances were offset by higher
yields. The generally rising market interest rate environment
resulted in improved yields on new investments purchased and
investments which repriced during the period.
Interest Expense
Interest on deposits decreased by $3,000, or 1.0%, and increased by
$19,000, or 2.3% for the three and nine months ended June 30, 1996,
respectively, compared to the earlier periods due to higher
interest rates offset by a lower average balance. The lower
average balance resulted from purchases of common stock by
depositors in connection with the conversion. The average rate
increased to 4.32% for the three months ended June 30,
PAGE
<PAGE>
1996 from 3.98% for the three months ended June 30, 1995. The
average rate for the nine months ended June 30, 1996 increased to
4.41% from 3.90% for the nine months ended June 30, 1995. These
rate increases reflected an overall increase in market interest
rates. Average deposits decreased to $24.9 million for the three
and nine months ended June 30, 1996, from $27.3 million and $27.6
million for the three and nine months ended June 30, 1995,
respectively.
Provision for Loan Losses
The Association had no loss provision or credit for the three
months ended June 30, 1996 and a $700 net credit for the nine month
period ended June 30, 1996, compared to a provision of $3,323 and
$1,270 for the three and nine month periods ended June 30, 1995,
respectively. The allowance for losses on loans is based on
management's periodic evaluation of the loan portfolio and reflects
an amount that, in management's opinion, is adequate to absorb
losses existing in the portfolio. In evaluating the portfolio,
management takes into consideration numerous factors, including
current economic conditions, prior loan loss experience, the
composition of the loan portfolio, and risk characteristics of the
loan portfolio.
Noninterest Income
Total noninterest income increased by $13,000 to $24,000 for the
three months ended June 30, 1996 from $11,000 for the three months
ended June 30, 1995. Total noninterest income increased by $2,000
to $44,000 for the nine months ended June 30, 1996 from $42,000 for
the nine months ended June 30, 1995. During the three and nine
months ended June 30, 1996 the Association recognized income of
$15,000 as a result of the sale of assets of the Association's data
processing service bureau to its successor. This nonrecurring
income was offset by lower deposit account service charges and
mortgage loan prepayment penalty income.
Noninterest Expense
Noninterest expense increased to $251,000 and $711,000 for the
three and nine months ended June 30, 1996, respectively, from
$220,000 and $593,000 for the three and nine months ended June 30,
1995, respectively. Compensation and benefit costs increased by
$6,000 to $144,000 for the three months ended June 30, 1996 from
$138,000 for the three months ended June 30, 1995. Compensation
and benefit costs increased by $76,000 to $416,000 for the nine
months ended June 30, 1996 from $340,000 for the nine months ended
June 30, 1995. Compensation expense related to the Employee Stock
Ownership (ESOP) was $27,000 and $80,000 for the three and nine
months ended June 30, 1996, respectively, compared to $37,000 for
the three and nine months ended June 30, 1995. The three and nine
months ended June 30, 1996 also included $10,000 related to the
Recognition and Retention Plan (RRP). To a lesser extent,
compensation and benefit costs also increased due to normal salary
adjustments. Under generally accepted accounting principles,
expense of the ESOP is affected by changes in the market price of
the Company's common stock. SAIF deposit insurance premium
decreased due to a lower deposit base and lower assessment rate.
The Association's assessment rate decreased from 26 basis points to
23 basis points effective January 1, 1995. Supervisory and
professional fees increased primarily as a result of legal costs
incurred in conjunction with the RRP, ESOP and stock option plan,
and Company's annual meeting. Other professional fees also
increased as a result of operating as a public company. Other
noninterest expense increased due to higher payroll tax expense
incurred on shares awarded under the RRP to certain participants
who elected immediate taxation under the Internal Revenue Code.
The nine month period also included higher stationery and printing
costs and stock registrar expenses.
<PAGE>
<PAGE>
Income Taxes
Income tax expense fluctuated due to the level of pretax earnings.
PAGE
<PAGE>
RELIANCE FINANCIAL INC. AND SUBSIDIARY
PART II - Other Information
Item 1 - Legal Proceedings
There are no material legal proceedings to which the Company or
the Association is a party or of which any of their property is
subject. From time to time, the Association 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
(a) On April 18, 1996, the Company held its Annual Meeting of
Stockholders.
(b) At the meeting John E. Bowman and Jeannette Larson were
elected as directors, each to serve for a three-year term.
(c) Stockholders voted on the following matters:
(i) The election of the following directors of the
Company:
VOTES: FOR WITHHELD
John E. Bowman 364,118 17,000
Jeannette Larson 364,118 17,000
(ii) The ratification of the Company's 1996 Stock Option
Plan:
VOTES: FOR AGAINST ABSTAIN
339,032 313,441 22,610 2,981
(iii) The ratification of the Company's 1996 Recognition
and Retention Plan:
VOTES: FOR AGAINST ABSTAIN
339,032 312,528 21,323 5,181
(iv) The ratification of the appointment of Michael Trokey
& Company, P.C. as auditors for the Company for the
fiscal year ending September 30, 1996:
VOTES: FOR AGAINST ABSTAIN
381,118 363,078 17,000 1,040
<PAGE>
<PAGE>
RELIANCE FINANCIAL INC. AND SUBSIDIARY
PART II - Other Information
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits: none
(b) Reports on Form 8-K: No reports on Form 8-K have been filed
during the quarter for which this report is filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
RELIANCE FINANCIAL INC.
(Registrant)
DATE: August 12, 1996 BY: (S) John Bowman
John Bowman, President,
Principal Financial Officer
and Duly Authorized Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> JUN-30-1996
<CASH> 1301690
<INT-BEARING-DEPOSITS> 2081000
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 473421
<INVESTMENTS-CARRYING> 7549826
<INVESTMENTS-MARKET> 7379819
<LOANS> 20813093
<ALLOWANCE> 303023
<TOTAL-ASSETS> 32985963
<DEPOSITS> 24511038
<SHORT-TERM> 1000000
<LIABILITIES-OTHER> 83843
<LONG-TERM> 0
<COMMON> 44699
0
0
<OTHER-SE> 7077404
<TOTAL-LIABILITIES-AND-EQUITY> 32985963
<INTEREST-LOAN> 1378785
<INTEREST-INVEST> 340407
<INTEREST-OTHER> 172472
<INTEREST-TOTAL> 1881599
<INTEREST-DEPOSIT> 824841
<INTEREST-EXPENSE> 856312
<INTEREST-INCOME-NET> 1025287
<LOAN-LOSSES> (700)
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 18743
<INCOME-PRETAX> 358751
<INCOME-PRE-EXTRAORDINARY> 223951
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 223951
<EPS-PRIMARY> .56
<EPS-DILUTED> .56
<YIELD-ACTUAL> 7.745
<LOANS-NON> 67000
<LOANS-PAST> 0
<LOANS-TROUBLED> 57493
<LOANS-PROBLEM> 67000
<ALLOWANCE-OPEN> 305060
<CHARGE-OFFS> 5175
<RECOVERIES> 2953
<ALLOWANCE-CLOSE> 303023
<ALLOWANCE-DOMESTIC> 54170
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 245623
</TABLE>
