Exhibit 99.2
RELIANCE BANCORP, INC.
585 STEWART AVENUE (516) 222-9300
GARDEN CITY, NY 11530 FAX: (516) 222-1997
FOR IMMEDIATE RELEASE: July 22, 1999
For Information Contact:
Paul D. Hagan
Senior Vice President and CFO
(516) 222-9308 extension 215
RELIANCE BANCORP, INC. REPORTS FOURTH QUARTER AND
FISCAL YEAR END 1999 RESULTS
Garden City, New York, July 22, 1999
Reliance Bancorp, Inc. (NASDAQ/NMS:RELY), the holding company for Reliance
Federal Savings Bank, today reported net income of $5.1 million for the quarter
ended June 30, 1999, an increase of $642,000, or 14.4%, from $4.4 million for
the prior year quarter ended June 30, 1998. On a diluted earnings per share
basis, earnings rose 28.3% to $0.59 for the quarter ended June 30, 1999 from
$0.46 for the prior year quarter ended June 30, 1998. Return on average tangible
equity increased 19.2% to 16.36% for the quarter ended June 30, 1999 from 13.72%
for the quarter ended June 30, 1998. Net income for the fiscal year ended June
30, 1999 was $20.2 million, an increase of $1.4 million, or 7.6%, from $18.7
million for the fiscal year ended June 30, 1998. On a diluted earnings per share
basis, earnings rose 13.6% to $2.26 for the year ended June 30, 1999 from $1.99
for the prior year ended June 30, 1998.
Cash earnings for the quarter ended June 30, 1999 were $6.7 million, an increase
of $330,000, or 5.1% from $6.4 million recorded in the prior year quarter. On a
diluted cash earnings per share basis, earnings rose 18.2% to $0.78 per diluted
cash earnings per share from $0.66 recorded in the prior year quarter. Cash
earnings for the year ended June 30, 1999 were $27.2 million, an increase of
$1.3 million, or 4.9% from $25.9 million recorded in the prior fiscal year. On a
diluted cash earnings per share basis, earnings rose 10.9% to $3.05 per diluted
cash earnings per share from $2.75 recorded in the prior fiscal year. The
Company's cash earnings are determined by adding back to reported earnings the
non-cash expenses related to the allocation of ESOP ("Employee Stock Ownership
Plan") stock and the earned portion of RRP ("Recognition and Retention Plan")
stock, net of associated tax benefits, and amortization of excess of cost over
fair value of net assets acquired ("goodwill").
As of June 30, 1999, total assets were $2.5 billion, deposits were $1.5 billion
and total stockholders' equity was $171.7 million. At June 30, 1999, the Company
had 8,586,210 common shares outstanding with a tangible book value per common
share of $13.66.
On June 16, 1999, the Board of Directors declared a regular cash dividend of
$0.21 per common share for the quarter ending June 30, 1999. The dividend was
paid on July 16, 1999 to stockholders of record on July 2, 1999.
Net income was $5.1 million for the quarter ended June 30, 1999, which
represents an annualized return on average assets and average tangible equity of
0.83% and 16.36%, respectively. Net interest income increased to $17.0 million
for the quarter ended June 30, 1999, an increase of $253,000, or 1.5%, from
$16.8 million for the quarter ended June 30, 1998. The increase in net interest
income was attributable to the growth in average interest-earning assets to $2.4
billion for the quarter ended June 30, 1999 from $2.2 billion for the quarter
ended June 30, 1998. The growth in average interest-earning assets resulted from
increased investments in mortgage-backed securities. As a result of a lower
interest rate environment, coupled with accelerated loan and securities
prepayments, partially offset by an overall decline in deposit and borrowing
costs, and the leveraging of the proceeds from the trust preferred securities,
the Bank's net interest spread declined to 2.59% from 2.79% and its net interest
margin declined to 2.89% from 3.09%, respectively, for the quarters ended June
30, 1999 and 1998. For the quarter ended June 30, 1999, the yield on
interest-earning assets was 6.89% and the cost of interest-bearing liabilities
was 4.30% as compared to 7.36% and 4.57%, respectively, for the quarter ended
June 30, 1998.
For the quarter ended June 30, 1999, the Company had no provision for loan
losses as compared to $150,000 in the prior fiscal year quarter. The decrease in
the provision is due to the lower level of non-performing loans.
Non-interest income increased $493,000, or 24.9%, to $2.5 million in the quarter
ended June 30, 1999 from $2.0 million in the prior year quarter. The increase is
mainly the result of additional fee income from annuity sales, ATM transactions,
money center fees and loan prepayment penalties. In addition, the Company
recognized $100,000 in securities gains during the quarter ended June 30, 1999
primarily from the sale of debt and equity securities.
Non-interest expense totaled $10.3 million for the quarter ended June 30, 1999,
a decrease of $122,000, or 1.2% from $10.4 million recorded in the prior year
quarter. As a result of an increased asset base and limited expense growth, the
general and administrative expenses to average assets ratio improved to 1.49%
from 1.60% in the prior year period. The slight decrease in non-interest expense
is mainly due to lower compensation and benefits expense offset by increases in
advertising and other general and administrative costs. Compensation and
benefits expense decreased $600,000, or 10.8%, to $4.9 million for the quarter
ended June 30, 1999 from $5.5 million in the prior year quarter. The decrease in
compensation and benefits is due to reduced costs associated with employee
benefit plans. Advertising increased $181,000, or 62.4%, for the quarter ended
June 30, 1999 as a result of the Bank promoting its new call center for home
equity lending and other consumer loans.
Fiscal year ended Results
Net income for the fiscal year ended June 30, 1999 was $20.2 million which
represents an annualized return on average assets and average tangible equity of
0.81% and 16.40%, respectively. Net interest income increased to $69.3 million
for the fiscal year ended June 30, 1999, an increase of $2.3 million, or 3.5%,
from $67.0 million for the fiscal year ended June 30, 1998. The increase in net
interest income was attributable to the growth in average interest-earning
assets to $2.3 billion for the fiscal year ended June 30, 1999 from $2.0 billion
for the fiscal year ended June 30, 1998. The growth in interest-earning assets
resulted from assets acquired from the Continental Bank acquisition and
increased purchases of mortgage-backed and debt securities. As a result of a
lower interest rate environment, coupled with accelerated loan and securities
prepayments, partially offset by an slight decline in deposit and borrowing
costs, and the leveraging of the $50 million of proceeds from the trust
preferred securities that were issued in April 1998,
the net interest rate spread declined to 2.67% from 2.98% and the net interest
margin declined to 2.95% from 3.28%, respectively, for the fiscal year ended
June 30, 1999 and 1998. The yield on interest-earning assets was 7.13% for the
fiscal year ended June 30, 1999 and the cost of interest-bearing liabilities was
4.46% as compared to 7.52% and 4.54%, respectively, for the fiscal year ended
June 30, 1998.
For the year ended June 30, 1999, the Company provision for loan losses was
$650,000 as compared to $1.7 million in the prior fiscal year. The decrease in
the provision is due to the lower level of non-performing loans.
Non-interest expense totalled $41.0 million for the fiscal year ended June 30,
1999 as compared to $39.7 million for the fiscal year ended June 30, 1998, an
increase of $1.3 million, or 3.3%. Occupancy and equipment expense increased
$533,000, or 8.2%, from $6.5 million for the fiscal year ended June 30, 1998 to
$7.1 million for the fiscal year ended June 30, 1999 primarily due to costs
associated with the full year operation of two new banking offices and five
check cashing facilities which were acquired from Continental Bank.
For the fiscal year ended June 30, 1999, real estate operations, net was
$111,000 as compared to $218,000 in the prior fiscal year. The decrease is
mainly the result of a lower provision for REO losses and lower expenses due to
faster disposition of properties during the fiscal year ended June 30, 1999.
During the fiscal year ended June 30, 1999, the Bank established a provision for
REO losses of $34,500 as compared to $93,000 in the prior fiscal year.
Financial Condition
As of June 30, 1999, total assets were $2.5 billion, a decrease of $34.0 million
from June 30, 1998. Investment securities decreased $24.1 million, or 13.8%,
from $175.1 million at June 30, 1998 to $151.0 million at June 30, 1999 as a
result of sales and calls of debt securities.
Deposits decreased $78.9 million, or 4.8%, during the fiscal year ended June 30,
1999 as a result of a reduction in certificate of deposit products while
borrowings increased $72.2 million, or 11.5%, from $630.2 million at June 30,
1998 to $702.4 million at June 30, 1999 as a result of additional FHLB advances.
Treasury stock increased from $24.0 million at June 30, 1998 to $50.6 million at
June 30, 1999 as a result of 1.0 million shares repurchased net of stock options
exercised during the fiscal year ended. During the quarter ended June 30, 1999,
the Company repurchased 110,000 shares at an aggregate cost of $3.1 million.
Non-performing assets
Non-performing loans totaled $6.6 million, or 0.67% of total loans at June 30,
1999 as compared to $9.3 million, or 0.95% of total loans, at June 30, 1998.
Non-performing loans at June 30, 1999 were comprised of $4.0 million of loans
secured by one- to four-family residences, $1.9 million of commercial real
estate loans, $433,000 of commercial loans and $255,000 of guaranteed student
and other loans.
For the quarter ended June 30, 1999, the Company had no provision for loan
losses due to the improved level of non-performing loans. For the fiscal year
ended June 30, 1999, the Company's loan loss provision was $650,000. Net
charge-offs were $203,000 and $471,000, respectively, for the quarter and fiscal
year ended June 30, 1999. The Company's allowance for loan losses totalled $9.1
million at June 30, 1999 as
compared to $8.9 million at June 30, 1998 which represents a ratio of allowance
for loan losses to non-performing loans and to total loans of 139.08% and 0.93%
at June 30, 1999 compared to 96.12% and 0.91% at June 30, 1998, respectively.
Management believes the allowance for loan losses at June 30, 1999 is adequate
and sufficient reserves are presently maintained to cover losses on
non-performing loans.
Reliance Bancorp, Inc. and Reliance Federal Savings Bank are headquartered in
Garden City, New York. Reliance Federal is a community bank specializing in
providing deposit and credit services for its consumer and commercial customers.
Reliance Federal Savings Bank serves its customers from 29 banking offices
located in the New York counties of Queens, Nassau and Suffolk. Additional
information on the Company and Bank can be found on our Internet web site at
www.reliance-federal.com.
This release may contain certain forward-looking statements and may be
identified by the use of such words as "believe," "expect," "anticipate,"
"should," "planned," "estimated," and "potential." Examples of forward looking
statements include, but are not limited to, estimates with respect to the
financial condition, results of operations and business of the Company that are
subject to various factors which could cause actual results to differ materially
from these estimates. These factors include, but are not limited to, general
economic conditions, changes in interest rates, deposit flows, loan demand, real
estate values, and competition; changes in accounting principles, policies, or
guidelines; changes in legislation or regulation; and other economic,
competitive, governmental, regulatory, and technological factors affecting the
Company's operations, pricing, products, and services.
RELIANCE BANCORP, INC. and SUBSIDIARY
Consolidated Statements of Condition
(Unaudited)
(Dollars in thousands, except share and per share data)
June 30, June 30,
Assets 1999 1998
- ------ -------- -------
Cash and due from banks........................................................... $ 33,255 $ 37,596
Money market investments.......................................................... -- 9,500
Debt and equity securities available-for-sale..................................... 122,168 134,907
Debt and equity securities held-to-maturity (with estimated
market values of $28,840 and $40,509, respectively)............................ 28,835 40,189
Mortgage-backed securities available-for-sale..................................... 935,038 940,347
Mortgage-backed securities held-to-maturity (with estimated
market values of $252,233 and $252,332, respectively).......................... 255,917 249,259
Loans receivable:
Mortgage loans............................................................... 810,894 790,951
Commercial loans............................................................. 44,949 49,887
Consumer and other loans..................................................... 127,350 137,900
Less allowance for loan losses............................................. (9,120) (8,941)
--------- ---------
Loans receivable, net................................................ 974,073 969,797
Accrued interest receivable, net.................................................. 13,095 14,958
Office properties and equipment, net.............................................. 16,368 15,436
Prepaid expenses and other assets................................................. 16,960 11,732
Mortgage servicing rights......................................................... 1,514 2,317
Excess of cost over fair value of net assets acquired............................. 54,373 58,936
Real estate owned, net............................................................ 177 755
------- -----------
Total assets......................................................... $ 2,451,773 $ 2,485,729
========= =========
Liabilities and Stockholders' Equity
Deposits.......................................................................... $ 1,549,419 $ 1,628,298
Borrowed Funds.................................................................... 702,434 630,206
Advance payments by borrowers for taxes and insurance............................. 6,399 9,806
Accrued expenses and other liabilities............................................ 21,854 22,555
-------- ---------
Total liabilities.................................................... 2,280,106 2,290,865
--------- ---------
Commitments Stockholders' Equity
Preferred Stock, $.01 par value, 4,000,000 shares
authorized; none issued......................................................... -- --
Common stock, $.01 par value, 20,000,000 shares
authorized; 10,750,820 shares issued; 8,586,210 and 9,564,988
outstanding, respectively..................................................... 108 108
Additional paid-in capital........................................................ 121,037 117,909
Retained earnings, substantially restricted....................................... 115,976 102,305
Accumulated other comprehensive income:
Net unrealized (depreciation) appreciation on securities
available-for-sale, net of taxes.............................................. (10,546) 4,212
Less:
Unallocated common stock held by ESOP............................................. (3,726) (4,554)
Unearned common stock held by RRP................................................. (66) (713)
Common stock held by SERP (at cost)............................................... (550) (373)
Treasury stock, at cost (2,164,610 and 1,185,832 shares, respectively)............ (50,566) (24,030)
--------- --------
Total stockholders' equity................................................... 171,667 194,864
-------- -------
Total liabilities and stockholders' equity............................ $ 2,451,773 $ 2,485,729
========= =========
RELIANCE BANCORP, INC. and SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)
Three Months Ended Fiscal Year Ended
June 30, June 30,
---------------------- --------------------
1999 1998 1999 1998
-------- -------- -------- ------
Interest income:
First mortgage loans........................................ $15,274 $ 15,880 $ 62,182 $ 63,573
Commercial loans............................................ 1,102 1,392 4,892 3,916
Consumer and other loans.................................... 2,513 2,958 10,730 12,130
Mortgage-backed securities.................................. 19,369 16,996 78,948 67,185
Money market investments.................................... 30 277 284 615
Debt and equity securities.................................. 2,341 2,421 10,274 6,400
------ ------ -------- --------
Total interest income.................................... 40,629 39,924 167,310 153,819
------ ------ ------- -------
Interest expense:
Deposits.................................................... 14,176 16,279 61,972 63,432
Borrowed funds.............................................. 9,433 6,878 36,034 23,396
------ ------- ------ ------
Total interest expense................................... 23,609 23,157 98,006 86,828
------ ------ ------ ------
Net interest income before provision for loan losses..... 17,020 16,767 69,304 66,991
Provision for loan losses................................... -- 150 650 1,650
-------- ------- ------- -------
Net interest income after provision for loan losses...... 17,020 16,617 68,654 65,341
------ ------ ------ ------
Non-interest income:
Loan fees and service charges............................... 505 329 1,352 1,047
Other operating income...................................... 1,150 978 4,279 3,452
Income from Money Centers................................... 720 675 2,650 1,882
Condemnation award on joint venture......................... -- -- -- 1,483
Net gain (loss) on securities............................... 100 -- 119 (5)
------ ------- ------ ---------
Total non-interest income................................ 2,475 1,982 8,400 7,859
----- ----- ----- -----
Non-interest expense:
Compensation and benefits................................... 4,933 5,533 20,373 20,297
Occupancy and equipment..................................... 1,782 1,746 7,064 6,531
Federal deposit insurance premiums.......................... 232 231 930 921
Advertising................................................. 471 290 1,247 1,202
Other operating expenses.................................... 1,762 1,475 6,675 6,274
----- ----- ----- -----
Total general and administrative expenses................ 9,180 9,275 36,289 35,225
Real estate operations, net................................. 21 48 111 218
Amortization of excess of cost over fair value
of net assets acquired.................................... 1,141 1,141 4,563 4,218
------ ------- ------ -------
Total non-interest expense.................................. 10,342 10,464 40,963 39,661
------ ------ ------ ------
Income before income taxes..................................... 9,153 8,135 36,091 33,539
Income tax expense ............................................ 4,068 3,692 15,940 14,810
----- ----- ------ ------
Net income..................................................... $ 5,085 $ 4,443 $ 20,151 $ 18,729
====== ===== ====== ======
Net income per common share:
Basic......................................... $ 0.62 $ 0.48 $ 2.38 $ 2.11
==== ==== ==== ====
Diluted....................................... $ 0.59 $ 0.46 $ 2.26 $ 1.99
==== ==== ==== ====
RELIANCE BANCORP, INC. and SUBSIDIARY
Selected Financial Ratios
(Unaudited)
At or for the At or for the
Three Months Ended Fiscal Year Ended
June 30, June 30,
--------------------- ---------------------
1999 1998 1999 1998
-------- -------- ------- ------
Performance ratios:
Return on average assets....................................... 0.83% 0.77% 0.81% 0.86%
Cash return on average assets.................................. 1.09% 1.11% 1.10% 1.19%
Return on average equity (2)................................... 11.34% 9.39% 11.22% 10.42%
Cash return on average equity (2).............................. 15.04% 13.56% 15.13% 14.42%
Return on average tangible equity (2).......................... 16.36% 13.72% 16.40% 15.14%
Average equity to average assets.............................. 7.14% 8.36% 7.30% 8.45%
Equity to total assets......................................... 7.00% 7.84% 7.00% 7.84%
Tangible equity to tangible assets............................. 4.89% 5.60% 4.89% 5.60%
Core deposits to total deposits................................ 39.94% 36.91% 39.94% 36.91%
Net interest spread............................................ 2.59% 2.79% 2.67% 2.98%
Net interest margin............................................ 2.89% 3.09% 2.95% 3.28%
General and administrative expenses to average assets.......... 1.49% 1.60% 1.47% 1.62%
Cash general and administrative
expenses to average assets.................................. 1.39% 1.43% 1.34% 1.45%
Operating income to average assets (1)......................... 0.39% 0.34% 0.33% 0.29%
Average interest-earning assets to average
interest-bearing liabilities................................ 1.07X 1.07X 1.07X 1.07X
Cash net income per diluted common share....................... $ 0.78 $ 0.66 $ 3.05 $ 2.75
At At
June 30, June 30,
1999 1998
--------- ------
Assets quality ratios:
Non-performing loans to total loans............................................... 0.67% 0.95%
Non-performing loans to total assets.............................................. 0.27% 0.37%
Non-performing assets to total assets............................................. 0.27% 0.40%
Allowance for loan losses to total loans.......................................... 0.93% 0.91%
Allowance for loan losses to non-performing loans................................. 139.08% 96.12%
(1) Operating income represents non-interest income less (plus) net gain (loss)
on securities and condemnation award from joint venture.
(2) For purposes of these calculations, average equity and average tangible
equity exclude the effect of changes in the net unrealized appreciation
(depreciation) on securities available for sale, net of taxes.