##### Table of Contents



United States
Securities and Exchange Commission
 Washington, D. C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2009
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission file number: 000-52588
 RELIANCE BANCSHARES, INC.
  Missouri
(State or Other Jurisdiction of 
Incorporation or Organization)
    
    43-1823071
(IRS Employer
Identification No.)10401 Clayton Road 
Frontenac, Missouri
(Address of Principal Executive Offices)
    
    63131
(Zip Code)
 (314) 569-7200
 
 þ o
 o o
  Large accelerated filer: oAccelerated filer: oNon-accelerated filer: o(Do not check if a smaller reporting company)Smaller reporting company þ o þ




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##### 



RELIANCE BANCSHARES, INC. AND SUBSIDIARIES   TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsCondensed Consolidated Balance Sheets (Unaudited)
    
    
    3Condensed Consolidated Statements of Income (Unaudited)
    
    
    4Condensed Consolidated Statements of Comprehensive Income (Unaudited)
    
    
    5Condensed Consolidated Statements of Stockholders Equity (Unaudited)
    
    
    6Condensed Consolidated Statements of Cash Flows (Unaudited)
    
    
    7Notes to Unaudited Interim Condensed Consolidated Financial Statements
    
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    33Item 4T.
    
    Controls and Procedures
    
    
    35PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    35Item 1A.
    
    Risk Factors
    
    
    35Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    35Item 3.
    
    Defaults Upon Senior Securities
    
    
    35Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    35Item 5.
    
    Other Information
    
    
    36Item 6.
    
    Exhibits
    
    
    36Signatures
    
    
    37EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



Part I  Item 1  Financial Statements
 
 RELIANCE BANCSHARES, INC. AND SUBSIDIARIES
 
   March 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2008ASSETSCash and due from banks
    
    $
    9,900,850
    
    
    
    12,309,202
    
    
    
    14,366,579Interest-earning deposits in other financial institutions
    
    
    2,820,878
    
    
    
    373,586
    
    
    
    31,919,386Federal funds sold
    
    
    1,351,000
    
    
    
    86,000
    
    
    
    11,460,000Investments in available-for-sale debt and equity securities,
at fair value
    
    
    297,646,642
    
    
    
    178,987,641
    
    
    
    202,724,064Loans
    
    
    1,235,360,011
    
    
    
    993,726,912
    
    
    
    1,255,198,940Less  Deferred loan fees/costs
    
    
    (612,034
    )
    
    
    (296,545
    )
    
    
    (702,514
    )Reserve for possible loan losses
    
    
    (14,196,047
    )
    
    
    (10,480,988
    )
    
    
    (14,305,822
    )Net loans
    
    
    1,220,551,930
    
    
    
    982,949,379
    
    
    
    1,240,190,604Premises and equipment, net
    
    
    43,687,967
    
    
    
    42,047,101
    
    
    
    44,143,317Accrued interest receivable
    
    
    6,653,744
    
    
    
    4,871,789
    
    
    
    5,424,108Other real estate owned
    
    
    15,489,980
    
    
    
    6,776,894
    
    
    
    15,289,170Identifiable intangible assets, net of accumulated amortization
of $95,013, $78,725 and $90,941 at March 31, 2009 and 2008,
and December 31, 2008, respectively
    
    
    149,306
    
    
    
    165,594
    
    
    
    153,378Goodwill
    
    
    1,149,192
    
    
    
    1,149,192
    
    
    
    1,149,192Other assets
    
    
    7,757,885
    
    
    
    4,580,448
    
    
    
    7,169,420$
    1,607,159,374
    
    
    
    1,234,296,826
    
    
    
    1,573,989,218LIABILITIES AND STOCKHOLDERS EQUITYDeposits:Non-interest-bearing
    
    $
    52,601,034
    
    
    
    51,570,641
    
    
    
    59,374,964Interest-bearing
    
    
    1,214,792,775
    
    
    
    848,690,837
    
    
    
    1,168,672,335Total deposits
    
    
    1,267,393,809
    
    
    
    900,261,478
    
    
    
    1,228,047,299Short-term borrowings
    
    
    17,157,546
    
    
    
    66,436,511
    
    
    
    63,918,844Long-term Federal Home Loan Bank borrowings
    
    
    136,000,000
    
    
    
    119,000,000
    
    
    
    136,000,000Accrued interest payable
    
    
    3,591,620
    
    
    
    4,568,720
    
    
    
    3,904,941Other liabilities
    
    
    2,771,897
    
    
    
    2,647,546
    
    
    
    2,509,254Total liabilities
    
    
    1,426,914,872
    
    
    
    1,092,914,255
    
    
    
    1,434,380,338Commitments and contingenciesStockholders equity:Preferred stock, no par value; 1,850,000 shares authorized:Series A, 40,000 shares issued and outstanding at March 31,
2009
    
    
    40,000,000
    
    
    
    
    
    
    
    Series B, 2,000 shares issued and outstanding at March 31,
2009
    
    
    2,000,000
    
    
    
    
    
    
    
    Common stock, $0.25 par value; 40,000,000 shares authorized,
20,770,781 shares issued and outstanding
    
    
    5,192,696
    
    
    
    5,192,696
    
    
    
    5,192,696Surplus
    
    
    122,331,181
    
    
    
    124,142,314
    
    
    
    124,193,318Retained earnings
    
    
    10,753,950
    
    
    
    11,292,404
    
    
    
    10,663,076Treasury stock, 24,514, 102,509, and 24,514 shares at March
31,
2009, March 31, 2008, and December 31, 2008, respectively
    
    
    (335,280
    )
    
    
    (1,271,220
    )
    
    
    (335,280
    )Accumulated other comprehensive income  net unrealized
holding gains (losses) on available-for-sale debt securities
    
    
    301,955
    
    
    
    2,026,377
    
    
    
    (104,930
    )Total stockholders equity
    
    
    180,244,502
    
    
    
    141,382,571
    
    
    
    139,608,880$
    1,607,159,374
    
    
    
    1,234,296,826
    
    
    
    1,573,989,218
  3




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##### Table of Contents



RELIANCE BANCSHARES, INC. AND SUBSIDIARIES
   2009
    
    
    2008Interest income:Interest and fees on loans
    
    $
    17,671,243
    
    
    
    16,018,368Interest on debt and equity securities:Taxable
    
    
    1,982,559
    
    
    
    1,574,638Exempt from Federal income taxes
    
    
    340,054
    
    
    
    397,474Interest on short-term investments
    
    
    16,963
    
    
    
    94,954Total interest income
    
    
    20,010,819
    
    
    
    18,085,434Interest expense:Interest on deposits
    
    
    9,482,976
    
    
    
    8,732,155Interest on short-term borrowings
    
    
    260,288
    
    
    
    579,273Interest on long-term Federal Home Loan Bank borrowings
    
    
    1,231,970
    
    
    
    884,877Total interest expense
    
    
    10,975,234
    
    
    
    10,196,305Net interest income
    
    
    9,035,585
    
    
    
    7,889,129Provision for possible loan losses
    
    
    2,250,000
    
    
    
    1,132,000Net interest income after provision for possible loan losses
    
    
    6,785,585
    
    
    
    6,757,129Noninterest income:Service charges on deposit accounts
    
    
    207,638
    
    
    
    175,819Net gains on sale of debt and equity securities
    
    
    
    
    
    
    194,015Other noninterest income
    
    
    300,557
    
    
    
    311,824Total noninterest income
    
    
    508,195
    
    
    
    681,658Noninterest expense:Salaries and employee benefits
    
    
    3,880,456
    
    
    
    4,207,567Occupancy and equipment expense
    
    
    1,125,932
    
    
    
    1,067,116FDIC assessments
    
    
    503,533
    
    
    
    188,107Data processing
    
    
    474,674
    
    
    
    442,279Other real estate expense
    
    
    309,663
    
    
    
    27,808Advertising
    
    
    147,310
    
    
    
    210,870Amortization of intangible assets
    
    
    4,072
    
    
    
    4,072Other noninterest expenses
    
    
    795,492
    
    
    
    931,770Total noninterest expense
    
    
    7,241,132
    
    
    
    7,079,589Income before applicable income taxes
    
    
    52,648
    
    
    
    359,198Applicable income tax expense (benefit)
    
    
    (38,226
    )
    
    
    49,100Net income
    
    $
    90,874
    
    
    
    310,098Per share amounts:Basic earnings per share
    
    $
    <0.01
    
    
    
    0.02Basic weighted average shares outstanding
    
    
    20,746,267
    
    
    
    20,668,304Diluted earnings per share
    
    $
    <0.01
    
    
    
    0.01Diluted weighted average shares outstanding
    
    
    20,818,840
    
    
    
    21,220,572
  4




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##### Table of Contents



RELIANCE BANCSHARES, INC. AND SUBSIDIARIES
   2009
    
    
    2008Net income
    
    $
    90,874
    
    
    
    310,098Other comprehensive income before tax:Unrealized holding gains on available-for-sale securities
    
    
    616,492
    
    
    
    2,645,145Less reclassification adjustment on available-for-sale
security
gains included in net income
    
    
    
    
    
    
    (194,015
    )Other comprehensive income before tax
    
    
    616,492
    
    
    
    2,451,130Income tax related to items of other comprehensive income
    
    
    209,607
    
    
    
    833,384Other comprehensive income, net of tax
    
    
    406,885
    
    
    
    1,617,746Total comprehensive income
    
    $
    497,759
    
    
    
    1,927,844
  5




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##### Table of Contents



RELIANCE BANCSHARES, INC. AND SUBSIDIARIES
 
   Accumulated
    
    
    Totalother
    
    
    stock-Preferred
    
    
    Common
    
    
    
    
    
    
    Retained
    
    
    Treasury
    
    
    comprehensive
    
    
    holdersstock
    
    
    stock
    
    
    Surplus
    
    
    earnings
    
    
    stock
    
    
    income
    
    
    equityBalance at December 31, 2007
    
    $
    
    
    
    
    5,170,519
    
    
    
    123,329,517
    
    
    
    10,982,306
    
    
    
    
    
    
    
    408,631
    
    
    
    139,890,973Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    310,098
    
    
    
    
    
    
    
    
    
    
    
    310,098Stock options exercised 
88,704 shares
    
    
    
    
    
    
    22,177
    
    
    
    627,139
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    649,316Purchase of 105,324 common
shares for treasury
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,305,000
    )
    
    
    
    
    
    
    (1,305,000
    )Issuance of shares as partial payment
for certain operating leases
(2,565 shares from treasury)
    
    
    
    
    
    
    
    
    
    
    (5,771
    )
    
    
    
    
    
    
    30,780
    
    
    
    
    
    
    
    25,009250 shares of common stock
awarded to directors
    
    
    
    
    
    
    
    
    
    
    (30
    )
    
    
    
    
    
    
    3,000
    
    
    
    
    
    
    
    2,970Compensation cost recognized for
stock options granted
    
    
    
    
    
    
    
    
    
    
    145,387
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    145,387Amortization of restricted stock
    
    
    
    
    
    
    
    
    
    
    46,072
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,072Change in valuation of
available-for-sale securities,
net of related tax effect
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,617,746
    
    
    
    1,617,746Balance at March 31, 2008
    
    $
    
    
    
    
    5,192,696
    
    
    
    124,142,314
    
    
    
    11,292,404
    
    
    
    (1,271,220
    )
    
    
    2,026,377
    
    
    
    141,382,571Balance at December 31, 2008
    
    $
    
    
    
    
    5,192,696
    
    
    
    124,193,318
    
    
    
    10,663,076
    
    
    
    (335,280
    )
    
    
    (104,930
    )
    
    
    139,608,880Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,874
    
    
    
    
    
    
    
    
    
    
    
    90,874Issuance of 40,000 shares of
Series A preferred stock
    
    
    40,000,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000,000Exercise of warrants for
2,000 shares of Series B
preferred stock
    
    
    2,000,000
    
    
    
    
    
    
    
    (2,000,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock issuance costs
    
    
    
    
    
    
    
    
    
    
    (7,422
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,422
    )Compensation cost recognized for
stock options granted
    
    
    
    
    
    
    
    
    
    
    137,785
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    137,785Amortization of restricted stock
    
    
    
    
    
    
    
    
    
    
    7,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,500Change in valuation of
available-for-sale securities,
net of related tax effect
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    406,885
    
    
    
    406,885Balance at March 31, 2009
    
    $
    42,000,000
    
    
    
    5,192,696
    
    
    
    122,331,181
    
    
    
    10,753,950
    
    
    
    (335,280
    )
    
    
    301,955
    
    
    
    180,244,502
  6




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##### Table of Contents



RELIANCE BANCSHARES, INC. AND SUBSIDIARIES
 
   2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    90,874
    
    
    
    310,098Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    1,288,475
    
    
    
    310,761Provision for possible loan losses
    
    
    2,250,000
    
    
    
    1,132,000Capitalized interest expense on construction
    
    
    
    
    
    
    (73,930
    )Net gains on sale of debt and equity securities
    
    
    
    
    
    
    (194,015
    )Net losses on sales and writedowns of other real estate owned
    
    
    110,000
    
    
    
    Stock option compensation cost
    
    
    137,785
    
    
    
    145,387Common stock awarded to directors
    
    
    
    
    
    
    2,970Amortization of restricted stock expense
    
    
    7,500
    
    
    
    46,072Mortgage loans originated for sale in the secondary market
    
    
    (10,770,860
    )
    
    
    (7,337,316
    )Mortgage loans sold in the secondary market
    
    
    11,366,360
    
    
    
    5,755,575Decrease (increase) in accrued interest receivable
    
    
    (1,229,636
    )
    
    
    87,840Increase (decrease) in accrued interest payable
    
    
    (313,321
    )
    
    
    912,607Other operating activities, net
    
    
    (535,429
    )
    
    
    854,593Net cash provided by operating activities
    
    
    2,401,748
    
    
    
    1,952,642Cash flows from investing activities:Purchase of available-for-sale debt and equity securities
    
    
    (153,186,749
    )
    
    
    (63,210,015
    )Proceeds from maturities and calls of available-for-sale debt securities
    
    
    58,177,906
    
    
    
    34,793,678Proceeds from sales of available-for-sale debt securities
    
    
    
    
    
    
    15,944,015Net decrease (increase) in loans
    
    
    16,271,700
    
    
    
    (82,239,460
    )Proceeds from sale of other real estate owned
    
    
    222,972
    
    
    
    Construction expenditures to finish other real estate owned
    
    
    (12,308
    )
    
    
    (46,787
    )Purchase of premises and equipment, net
    
    
    (126,296
    )
    
    
    (1,856,666
    )Net cash used in investing activities
    
    
    (78,652,775
    )
    
    
    (96,615,235
    )Cash flows from financing activities:Net increase in deposits
    
    
    39,346,510
    
    
    
    65,685,029Net decrease in short-term borrowings
    
    
    (46,761,298
    )
    
    
    (21,888,404
    )Proceeds from long-term Federal Home Loan Bank borrowings
    
    
    
    
    
    
    51,000,000Issuance of Series A preferred stock
    
    
    40,000,000
    
    
    
    Stock options exercised
    
    
    
    
    
    
    649,316Purchase of treasury stock
    
    
    
    
    
    
    (1,305,000
    )Payment of stock issuance costs
    
    
    (7,422
    )
    
    
    Net cash provided by financing activities
    
    
    32,577,790
    
    
    
    94,140,941Net decrease in cash and cash equivalents
    
    
    (43,673,237
    )
    
    
    (521,652
    )Cash and cash equivalents at beginning of period
    
    
    57,745,965
    
    
    
    13,290,440Cash and cash equivalents at end of period
    
    $
    14,072,728
    
    
    
    12,768,788Supplemental information:Cash paid for interest
    
    $
    11,288,555
    
    
    
    9,357,627Noncash transactions:Warrant exercise and issuance of Series B preferred stock
    
    
    2,000,000
    
    
    
    Transfers to other real estate owned in settlement of loans
    
    
    672,985
    
    
    
    1,792,822Loans made to facilitate the sale of other real estate owned
    
    
    151,511
    
    
    
    Stock issued for operating lease payments
    
    
    
    
    
    
    25,009
  7




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##### Table of Contents



RELIANCE BANCSHARES, INC. AND SUBSIDIARIES
 
  NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      Principles of Consolidation
  Basis of Accounting
  8




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##### Table of Contents



RELIANCE BANCSHARES, INC. AND SUBSIDIARIES
  Cash Flow Information
  Stock Issuance Costs
  New Accounting Standards
  
    
    Level 1  Valuations for assets and liabilities traded in active exchange markets, such as
the New York Stock Exchange. Level 1 also includes U.S. Treasury and federal agency
securities and federal agency mortgage-backed securities, which are traded by dealers or
brokers in active markets. Valuations are obtained from readily available pricing sources for
market transactions involving identical assets or liabilities.
    
    Level 2  Valuations for assets and liabilities traded in less active dealer or broker
markets. Valuations are obtained from third party pricing services for identical or similar
assets or liabilities.
    
    Level 3  Valuations for assets and liabilities that are derived from other valuation
methodologies, including option pricing models, discounted cash flow models and similar
techniques, and not based on market exchange, dealer, or broker-traded transactions. Level 3
valuations incorporate certain assumptions and projections in determining the fair value
assigned to such assets or liabilities.
  Investments in Available-For-Sale Debt Securities
 9




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##### Table of Contents



RELIANCE BANCSHARES, INC. AND SUBSIDIARIES
   Obligations of U.S. Government agencies
and corporations
    
    $
    150,196,079Obligations of state and political subdivisions
    
    
    30,490,353Other debt securities
    
    
    1,856,915Mortgage-backed securities
    
    
    106,179,776$
    288,723,123
  Balance, at fair value on December 31, 2008
    
    $
    1,416,729Unrealized losses incurred in 2009
    
    
    (778,697
    )Principal payments received in 2009
    
    
    (7,880
    )Balance, at fair value on March 31, 2009
    
    $
    630,152
  Loans Accounting by Creditors for
Impairment of a Loan.
 Earnings per Share
  10




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##### Table of Contents



RELIANCE BANCSHARES, INC. AND SUBSIDIARIES
  Three-Months Ended March 31,2009
    
    
    2008BasicNet income
    
    $
    90,874
    
    
    
    310,098Weighted average common shares outstanding
    
    
    20,746,267
    
    
    
    20,668,304Basic earnings per share
    
    $
    <0.01
    
    
    
    0.02DilutedNet income
    
    $
    90,874
    
    
    
    310,098Weighted average common shares outstanding
    
    
    20,746,267
    
    
    
    20,668,304Effect of dilutive stock options
    
    
    72,573
    
    
    
    552,268Diluted weighted average common
shares outstanding
    
    
    20,818,840
    
    
    
    21,220,572Diluted earnings per share
    
    $
    <0.01
    
    
    
    0.01
 NOTE 2  INTANGIBLE ASSETS
   NOTE 3  STOCK OPTIONS
 Accounting for Stock
Issued to Employees,
 Share-Based Payment Accounting for
Stock-Based Compensation
 11




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##### Table of Contents



RELIANCE BANCSHARES, INC. AND SUBSIDIARIES
      Options Granted Under
    
    
    Options Granted to DirectorsIncentive Stock Option Plans
    
    
    Under Nonqualified PlansWeighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageOption Price
    
    
    Number
    
    
    Option Price
    
    
    Numberper Share
    
    
    of Shares
    
    
    per Share
    
    
    of SharesThree-Months Ended March 31, 2008:Balance at December 31, 2007
    
    $
    7.31
    
    
    
    1,648,200
    
    
    $
    8.41
    
    
    
    701,000Granted
    
    
    14.12
    
    
    
    73,000
    
    
    
    15.26
    
    
    
    5,000Exercised
    
    
    7.32
    
    
    
    (88,704
    )
    
    
    
    
    
    
    Balance at March 31, 2008
    
    $
    7.61
    
    
    
    1,632,496
    
    
    $
    8.45
    
    
    
    706,000Three-Months Ended March 31, 2009:Balance at December 31, 2008
    
    $
    7.61
    
    
    
    1,553,450
    
    
    $
    7.98
    
    
    
    673,000Granted
    
    
    7.50
    
    
    
    102,250
    
    
    
    7.50
    
    
    
    500Forfeited
    
    
    8.81
    
    
    
    (59,500
    )
    
    
    
    
    
    
    Balance at March 31, 2009
    
    $
    7.56
    
    
    
    1,596,200
    
    
    $
    7.98
    
    
    
    673,500
  NOTE 4  DISCLOSURES ABOUT FINANCIAL INSTRUMENTS
  12




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##### Table of Contents



RELIANCE BANCSHARES, INC. AND SUBSIDIARIES
    Financial instruments for which
contractual amounts represent:Commitments to extend credit
    
    $
    202,870,469Standby letters of credit
    
    
    21,418,892$
    224,289,361
  
 13




---



##### Table of Contents



Part I  Item 2  Managements Discussion and Analysis of Financial Condition and Results of
Operations
   Forward-Looking Statements
  Overview
    14




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15




---



##### Table of Contents



As of and for theQuarters Ended March 31,2009
    
    2008Percentage of net income to:Average total assets
    
    
    0.02
    %
    
    
    0.11
    %Average stockholders equity
    
    
    0.23
    %
    
    
    0.89
    %Percentage of common dividends declared to net income per common share
    
    
    
    
    
    
    Percentage of average stockholders equity to average total assets
    
    
    9.98
    %
    
    
    11.86
    %
 Critical Accounting Policies
  16




---



##### Table of Contents



Results of Operations for the Three-Month Periods Ended March 31, 2009 and 2008
         17




---



##### Table of Contents



Three Months EndedMarch 312009
    
    2008Average deposits:Noninterest-bearing
    
    
    4.02
    %
    
    
    4.91
    %Interest-bearing:Transaction accounts
    
    
    11.11
    
    
    
    16.27Savings
    
    
    12.56
    
    
    
    4.82Time deposits of $100,000 or more
    
    
    25.21
    
    
    
    28.98Other time deposits
    
    
    34.91
    
    
    
    30.20Total average interest-bearing deposits
    
    
    83.79
    
    
    
    80.27Total average deposits
    
    
    87.81
    
    
    
    85.18Short-term borrowings
    
    
    2.75
    
    
    
    6.79Longer-term advances from Federal Home Loan Bank
    
    
    9.44
    
    
    
    8.03100.00
    %
    
    
    100.00
    %
   18




---



##### Table of Contents



Amount of Increase (Decrease)Change from 2009 to 2008 Due toYield/Volume (1)
    
    Rate (2)
    
    TotalInterest income:Loans
    
    
    4,291,317
    
    
    
    (2,656,844
    )
    
    
    1,634,473Investment securities:Taxable
    
    
    995,655
    
    
    
    (587,734
    )
    
    
    407,921Exempt from Federal income taxes
    
    
    (84,988
    )
    
    
    11,634
    
    
    
    (73,354
    )Short-term investments
    
    
    82,708
    
    
    
    (160,699
    )
    
    
    (77,991
    )Total interest income
    
    
    5,284,692
    
    
    
    (3,393,643
    )
    
    
    1,891,049Interest Expense:Interest bearing transaction accounts
    
    
    (62,484
    )
    
    
    (584,165
    )
    
    
    (646,649
    )Savings accounts
    
    
    871,390
    
    
    
    168,318
    
    
    
    1,039,708Time deposits of $100,000 or more
    
    
    626,799
    
    
    
    (1,128,532
    )
    
    
    (501,733
    )Other time deposits
    
    
    1,840,552
    
    
    
    (981,057
    )
    
    
    859,495Total deposits
    
    
    3,276,257
    
    
    
    (2,525,436
    )
    
    
    750,821Funds purchased and securities sold
under repurchase agreements
    
    
    485,660
    
    
    
    (138,567
    )
    
    
    347,093Long-term borrowings
    
    
    (222,385
    )
    
    
    (96,600
    )
    
    
    (318,985
    )Total interest expense
    
    
    3,539,532
    
    
    
    (2,760,603
    )
    
    
    778,929Net interest income
    
    
    1,745,160
    
    
    
    (633,040
    )
    
    
    1,112,120
 
 (1)
    
    Change in volume multiplied by yield/rate of prior year.(2)
    
    Change in yield/rate multiplied by volume of prior year. NOTE:
    
    The change in interest due to both rate and volume has been allocated to volume and rate
changes in proportion to the relationship of the absolute dollar amounts of the change in
each.
    19




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20




---



##### Table of Contents



Financial Condition
       Recent Developments
   21




---



##### Table of Contents



pari passu
  22




---



##### Table of Contents



Quarter Ended March 31, 2009Percent
    
    
    Interest
    
    
    AverageAverage
    
    
    of Total
    
    
    Income/
    
    
    Yield/Balance
    
    
    Assets
    
    
    Expense
    
    
    RateASSETSLoans (1) (2) (3)
    
    $
    1,245,164,434
    
    
    
    77.45
    %
    
    $
    17,677,113
    
    
    
    5.76
    %Investment Securities:Taxable
    
    
    231,567,616
    
    
    
    14.40
    %
    
    
    1,982,559
    
    
    
    3.47
    %Exempt from Federal income taxes (3)
    
    
    32,950,327
    
    
    
    2.05
    %
    
    
    465,078
    
    
    
    5.72
    %Short-term investments
    
    
    35,736,960
    
    
    
    2.22
    %
    
    
    16,963
    
    
    
    0.19
    %Total Earning assets
    
    
    1,545,419,337
    
    
    
    96.12
    %
    
    
    20,141,713
    
    
    
    5.29
    %Nonearning assets:Cash and due from banks
    
    
    5,117,201
    
    
    
    0.32
    %Reserve for possible loan losses
    
    
    (14,929,468
    )
    
    
    (0.93
    )%Premises and equipment
    
    
    44,025,461
    
    
    
    2.74
    %Other assets
    
    
    28,457,227
    
    
    
    1.77
    %Available-for-sale investment market
valuation
    
    
    (396,148
    )
    
    
    (0.02
    )%Total nonearning assets
    
    
    62,274,273
    
    
    
    3.88
    %Total Assets
    
    $
    1,607,693,610
    
    
    
    100.00
    %LIABILITIESInterest-bearing liabilitiesInterest-bearing transaction accounts
    
    $
    160,063,425
    
    
    
    9.96
    %
    
    
    595,238
    
    
    
    1.51
    %Savings
    
    
    180,935,049
    
    
    
    11.25
    %
    
    
    1,276,062
    
    
    
    2.86
    %Time deposits of $100,000 or more
    
    
    363,195,741
    
    
    
    22.59
    %
    
    
    3,026,517
    
    
    
    3.38
    %Other time deposits
    
    
    502,836,694
    
    
    
    31.28
    %
    
    
    4,585,159
    
    
    
    3.70
    %Total interest-bearing deposits
    
    
    1,207,030,909
    
    
    
    75.08
    %
    
    
    9,482,976
    
    
    
    3.19
    %Long term borrowings
    
    
    136,000,000
    
    
    
    8.46
    %
    
    
    1,231,970
    
    
    
    3.67
    %Funds purchased and securities sold under
repurchase agreements
    
    
    39,541,894
    
    
    
    2.46
    %
    
    
    260,288
    
    
    
    2.67
    %Total interest-bearing liabilities
    
    
    1,382,572,803
    
    
    
    86.00
    %
    
    
    10,975,234
    
    
    
    3.22
    %Noninterest-bearing deposits
    
    
    57,886,059
    
    
    
    3.60
    %Other liabilities
    
    
    6,719,860
    
    
    
    0.42
    %Total liabilities
    
    
    1,447,178,722
    
    
    
    90.02
    %STOCKHOLDERS EQUITY
    
    
    160,514,888
    
    
    
    9.98
    %Total liabilities and stockholders equity
    
    $
    1,607,693,610
    
    
    
    100.00
    %Net interest income
    
    
    
    
    
    
    
    
    
    $
    9,166,479Net yield on earning assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.41
    %
 23




---



##### Table of Contents



Quarter Ended March 31, 2008Interest
    
    
    AverageAverage
    
    
    Percent
    
    
    Income/
    
    
    Yield/Balance
    
    
    Of Total Assets
    
    
    Expense
    
    
    RateASSETSLoans (1) (2) (3)
    
    $
    953,365,819
    
    
    
    80.40
    %
    
    $
    16,042,640
    
    
    
    6.77
    %Investment securities:Taxable
    
    
    126,574,042
    
    
    
    10.67
    
    
    
    1,574,638
    
    
    
    5.00Exempt from Federal income taxes (3)
    
    
    38,749,021
    
    
    
    3.27
    
    
    
    538,432
    
    
    
    5.59Short-term investments
    
    
    7,354,606
    
    
    
    0.62
    
    
    
    94,954
    
    
    
    5.19Total earning assets
    
    
    1,126,043,488
    
    
    
    94.96
    
    
    
    18,250,664
    
    
    
    6.52Nonearning assets:Cash and due from banks
    
    
    10,376,551
    
    
    
    0.88Reserve for possible loan losses
    
    
    (9,884,344
    )
    
    
    (0.83
    )Premises and equipment
    
    
    43,595,985
    
    
    
    3.68Other assets
    
    
    14,160,342
    
    
    
    1.19Available-for-sale investment market valuation
    
    
    1,479,028
    
    
    
    0.12Total nonearning assets
    
    
    59,727,562
    
    
    
    5.04Total assets
    
    $
    1,185,771,050
    
    
    
    100.00
    %LIABILITIESInterest-bearing liabilitiesInterest-bearing transaction accounts
    
    $
    168,914,007
    
    
    
    14.25
    %
    
    
    1,241,887
    
    
    
    2.96
    %Savings
    
    
    50,040,485
    
    
    
    4.22
    
    
    
    236,354
    
    
    
    1.90Time deposits of $100,000 or more
    
    
    300,936,160
    
    
    
    25.38
    
    
    
    3,528,250
    
    
    
    4.72Other time deposits
    
    
    313,665,603
    
    
    
    26.45
    
    
    
    3,725,664
    
    
    
    4.78Total interest-bearing deposits
    
    
    833,556,255
    
    
    
    70.30
    
    
    
    8,732,155
    
    
    
    4.21Long-term borrowings
    
    
    83,408,602
    
    
    
    7.03
    
    
    
    884,877
    
    
    
    4.27Funds purchased and securities sold under
repurchase agreements
    
    
    70,547,410
    
    
    
    5.95
    
    
    
    579,273
    
    
    
    3.30Total interest-bearing liabilities
    
    
    987,512,267
    
    
    
    83.28
    
    
    
    10,196,305
    
    
    
    4.15Noninterest-bearing deposits
    
    
    50,994,115
    
    
    
    4.30Other liabilities
    
    
    6,641,518
    
    
    
    0.56Total liabilities
    
    
    1,045,147,900
    
    
    
    88.14STOCKHOLDERS EQUITY
    
    
    140,623,150
    
    
    
    11.86Total liabilities and stockholders equity
    
    $
    1,185,771,050
    
    
    
    100.00
    %Net interest income
    
    
    
    
    
    
    
    
    
    $
    8,054,359Net yield on earning assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.88
    %
 
 (1)
    
    Interest includes loan fees, recorded as discussed in Note 1 to our consolidated financial
statements for the year ended December 31, 2008, included in our annual report in Form 10-K,
which was filed March 30, 2009.(2)
    
    Average balances include nonaccrual loans. The income on such loans is included in interest,
but is recognized only upon receipt.(3)
    
    Interest yields are presented on a tax-equivalent basis. Nontaxable income has been adjusted
upward by the amount of Federal income tax that would have been paid if the income had been
taxed at a rate of 34%, adjusted downward by the disallowance of the interest cost to carry
nontaxable loans and securities. Risk Management
  24




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##### Table of Contents



Originated InFlorida
    
    
    All other
    
    
    TotalNet Charge-offs (quarter ended
3/31/2009)
    
    $2.0 million
    
    $0.4 million
    
    $2.4 millionNet Charge-offs (quarter ended
3/31/2008)
    
    $0.2 million
    
    $0.1 million
    
    $0.3 millionNonperforming Loans (3/31/2009)
    
    $31.4 million
    
    $7.8 million
    
    $39.2 millionNonperforming Loans (12/31/2008)
    
    $32.1 million
    
    $4.8 million
    
    $36.9 millionNonperforming Loans (3/31/2008)
    
    $17.7 million
    
    $3.4 million
    
    $21.1 millionNonperforming Assets* (3/31/2009)
    
    $39.3 million
    
    $15.4 million
    
    $54.7 millionNonperforming Assets* (12/31/2008)
    
    $39.6 million
    
    $12.6 million
    
    $52.2 millionNonperforming Assets* (3/31/2008)
    
    $18.4 million
    
    $9.5 million
    
    $27.9 millionOutstanding Loans Originated In
Respective Markets **
    
    $120.0 million
    
    $1.115 billion
    
    $1.235 billion
 
 *
    
    Included in nonperforming assets are nonperforming loans and other real estate owned**
    
    51.9% of loans originated in Florida are owned by Reliance Bank  25




---



##### Table of Contents




    
    Loans totaling approximately $3.1 million to entities controlled by a Florida real estate
investor that were in default and for which foreclosure proceedings have commenced. These
loans are secured by commercial real estate properties in southwestern Florida.
    
    A loan for approximately $12.6 million to a single purpose entity, controlled by a group of
Florida investors, that is in default. The loan is secured by a mixed-use undeveloped real
estate parcel in Southwest Florida. The proposed entitlements have been completed but
development has not been started. The Company and borrower are continuing discussions
regarding future plans for site.
    
    A loan for approximately $5.1 million to a single purpose entity controlled by an
individual Florida investor, for which the borrower is in default and the loan is in the
process of foreclosure. The loan is secured by a newly constructed retail commercial property
in southwestern Florida. The Company is working through a receiver to continue to lease up
the property as foreclosure continues.
    
    A loan for approximately $2.4 million to a Florida real estate development company that is
in default. The loan is secured by an undeveloped real estate parcel in southwestern Florida.
The proposed entitlements and development have not been completed. The Bank and borrower are
continuing discussions regarding future plans for the site.
    
    A loan for approximately $1.6 million to an individual Florida investor that is in default
and in the process of foreclosure. The loan is secured by an undeveloped real estate parcel
in southwestern Florida. The proposed entitlements and development have not been completed.
    
    A loan totaling approximately $951,000 to a St. Louis area home builder for the
construction of a single family display home and lots. The loans are secured by the property
and a certificate of deposit. The Company is moving to execute a deed in lieu of foreclosure
and a deficiency agreement on the completed single family residence.
   26




---



##### Table of Contents




    
    Delinquency of a scheduled loan payment;
    
    Deterioration in the borrowers financial condition identified in a review of periodic
financial statements;
    
    Decrease in the value of collateral securing the loan; or
    
    Change in the economic environment in which the borrower operates.
      27




---



##### Table of Contents



Three-Month PeriodsEnded March 31,(in thousands of dollars)
    
    2009
    
    
    2008Average loans outstanding
    
    $
    1,245,164
    
    
    $
    953,366Reserve at beginning of year
    
    $
    14,306
    
    
    $
    9,685Provision for possible loan losses
    
    
    2,250
    
    
    
    1,13216,556
    
    
    
    10,817Charge-offs:Commercial loans:Real estate
    
    
    (409
    )
    
    
    (63
    )Other
    
    
    (28
    )
    
    
    (30
    )Real estate:Construction
    
    
    (2,031
    )
    
    
    (212
    )Residential
    
    
    (250
    )
    
    
    (12
    )Consumer
    
    
    (14
    )
    
    
    (32
    )Overdrafts
    
    
    
    
    
    
    Total charge-offs
    
    
    (2,732
    )
    
    
    (349
    )Recoveries:Commercial loans:Real estate
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    9Real estate:Construction
    
    
    364
    
    
    
    Residential
    
    
    2
    
    
    
    4Consumer
    
    
    6
    
    
    
    Overdrafts
    
    
    
    
    
    
    Total recoveries
    
    
    372
    
    
    
    13Reserve at end of period
    
    $
    14,196
    
    
    $
    10,481Net charge-offs to average loans
    
    
    0.77
    %
    
    
    0.14
    %Ending reserve to net outstanding
loans at end of period
    
    
    1.15
    %
    
    
    1.06
    %
   
    
    Specific allocations based upon probable losses identified during a quarterly review of the
loan portfolio;
    
    Allocations based principally on the Companys risk rating formulas; and
    
    An unallocated allowance based on subjective factors.
   28




---



##### Table of Contents




    
    General economic and business conditions affecting our key lending areas;
    
    Credit quality trends (including trends in nonperforming loans expected to result from
existing conditions);
    
    Collateral values;
    
    Loan volumes and concentrations;
    
    Competitive factors resulting in shifts in underwriting criteria;
    
    Specific industry conditions within portfolio segments;
    
    Recent loss experience in particular segments of the portfolio;
    
    Bank regulatory examination results; and
    
    Findings of our internal loan review department.
      29




---



##### Table of Contents




    
    There is a level of imprecision necessarily inherent in the estimates of expected loan
losses, and the unallocated reserve gives reasonable assurance that this level of imprecision
in our formula methodologies is adequately provided for.
    
    Pressures to maintain and grow the loan portfolio with competition from de novo institutions
and larger competitors have to some degree affected credit granting criteria adversely. The
Company monitors the disposition of all credits, which have been approved through its
Executive Loan Committee in order to better understand competitive shifts in underwriting
criteria.
   Liquidity and Capital Resources
    30




---



##### Table of Contents



To Be a WellCapitalized Bank UnderFor Capital
    
    Prompt CorrectiveActual
    
    Adequacy Purposes
    
    Action Provision(in thousands of dollars)
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioTotal capital (to
risk-weighted
assets)Consolidated
    
    $
    192,764
    
    
    
    13.79
    %
    
    $
    111,846
    
    
    
    ≥8.0
    %
    
    $
    N/A
    
    
    
    N/AReliance Bank
    
    
    154,397
    
    
    
    11.82
    %
    
    
    104,511
    
    
    
    ≥8.0
    %
    
    
    130,639
    
    
    
    ≥10.0
    %Reliance Bank, FSB
    
    
    20,747
    
    
    
    19.86
    %
    
    
    8,356
    
    
    
    ≥8.0
    %
    
    
    10,445
    
    
    
    ≥10.0
    %Tier 1 capital
(to risk-weighted
assets)Consolidated
    
    $
    178,568
    
    
    
    12.77
    %
    
    $
    55,923
    
    
    
    ≥4.0
    %
    
    $
    N/A
    
    
    
    N/AReliance Bank
    
    
    142,258
    
    
    
    10.89
    %
    
    
    52,255
    
    
    
    ≥4.0
    %
    
    
    78,383
    
    
    
    ≥6.0
    %Reliance Bank, FSB
    
    
    20,606
    
    
    
    19.73
    %
    
    
    4,178
    
    
    
    ≥4.0
    %
    
    
    6,267
    
    
    
    ≥6.0
    %Tier 1 capital
(to average
assets)Consolidated
    
    $
    178,568
    
    
    
    11.11
    %
    
    $
    64,320
    
    
    
    ≥4.0
    %
    
    $
    N/A
    
    
    
    N/AReliance Bank
    
    
    142,258
    
    
    
    9.61
    %
    
    
    59,184
    
    
    
    ≥4.0
    %
    
    
    73,383
    
    
    
    ≥5.0
    %Reliance Bank, FSB
    
    
    20,606
    
    
    
    16.01
    %
    
    
    5,150
    
    
    
    ≥4.0
    %
    
    
    6,437
    
    
    
    ≥5.0
    %
  Total
    
    Tier 1
    
    Tier 2Risk-Based
    
    Risk-Based
    
    LeverageRatio
    
    Ratio
    
    RatioWell capitalized
    
    
    10
    %
    
    
    6
    %
    
    
    5
    %Adequately capitalized
    
    
    8
    
    
    
    4
    
    
    
    4Undercapitalized
    
    
    <8
    
    
    
    <4
    
    
    
    <4Significantly undercapitalized
    
    
    <6
    
    
    
    <3
    
    
    
    <3Critically undercapitalized
    
    
    *
    
    
    
    *
    
    
    
    *
 
 *
    
    A critically undercapitalized institution is defined as having a tangible equity to total
assets ratio of 2% or less.  31




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##### Table of Contents



Contractual Obligations, Off-Balance Sheet Risk, and Contingent Liabilities
   Over 1 YearTotal Cash
    
    Less Than 1
    
    Less Than 5
    
    Over 5Commitment
    
    Year
    
    Years
    
    YearsOperating leases
    
    $
    7,831,971
    
    
    $
    681,250
    
    
    $
    2,164,542
    
    
    $
    4,986,179Time deposits
    
    
    841,480,862
    
    
    
    573,919,924
    
    
    
    267,367,066
    
    
    
    193,872Federal Home Loan Bank borrowings
    
    
    136,000,000
    
    
    
    22,000,000
    
    
    
    42,000,000
    
    
    
    72,000,000Commitments to extend credit
    
    
    202,870,469
    
    
    
    90,869,802
    
    
    
    56,572,139
    
    
    
    55,428,528Standby letters of credit
    
    
    21,418,892
    
    
    
    13,252,645
    
    
    
    8,166,247
    
    
    
    
 Recent Accounting Pronouncements
  
    
    In September 2006, the FASB issued FAS No. 157, Fair Value Measurements(FAS No. 157). FAS
No. 157 defines fair value, establishes a framework for measuring fair value in generally
accepted accounting standards, and expands disclosures about fair value measurements. FAS No.
157 is effective for financial statements issued for fiscal years beginning after November 15,
2007. Effective January 1, 2008, the Company adopted FAS No. 157. In accordance with the
FASB Staff Position 157-2, Effective Date of SFAS No. 157, the Company has not applied the
provisions of FAS No. 157 to nonfinancial assets and nonfinancial liabilities such as other
real estate owned and goodwill. The Company uses fair value measurements to determine fair
value disclosures. The following is a description of valuation methodologies used for assets
recorded at fair value:
 Investments in Available-For-Sale Debt Securities
 32




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##### Table of Contents



Obligations of U.S. Government agencies
and corporations
    
    $
    150,196,079Obligations of state and political subdivisions
    
    
    30,490,353Other debt securities
    
    
    1,856,915Mortgage-backed securities
    
    
    106,179,776$
    288,723,123
  Balance, at fair value on December 31, 2008
    
    $
    1,416,729Unrealized losses incurred in 2009
    
    
    (778,697
    )Principal payments received in 2009
    
    
    (7,880
    )Balance, at fair value on March 31, 2009
    
    $
    630,152
  Loans Accounting by Creditors for
Impairment of a Loan.
 
 Part I  Item 3  Quantitative and Qualitative Disclosures About Market Risk
   33




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##### Table of Contents



3
    
    
    Over 3
    
    
    Over 1months
    
    
    months
    
    
    yearor
    
    
    through
    
    
    through
    
    
    Overless
    
    
    12 months
    
    
    5 years
    
    
    5 years
    
    
    TotalInterest-earning assetsLoans
    
    $
    451,959,194
    
    
    $
    141,580,157
    
    
    $
    589,509,079
    
    
    $
    52,311,581
    
    
    $
    1,235,360,011Investment securities, at amortized cost
    
    
    80,158,785
    
    
    
    106,955,164
    
    
    
    94,734,312
    
    
    
    15,340,872
    
    
    
    297,189,133Other interest-earnings assets
    
    
    4,171,878
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,171,878Total interest-earning assets
    
    $
    536,289,857
    
    
    $
    248,535,321
    
    
    $
    684,243,391
    
    
    $
    67,652,453
    
    
    $
    1,536,721,022Interest bearing-liabilitiesSavings and interest bearing transaction accounts
    
    $
    373,288,913
    
    
    $
    23,000
    
    
    
    
    
    
    $
    
    
    
    $
    373,311,913Time certificates of deposit of $100,000 or more
    
    
    155,965,225
    
    
    
    132,679,411
    
    
    
    90,095,169
    
    
    
    
    
    
    
    378,739,805All other time deposits
    
    
    138,579,199
    
    
    
    146,696,089
    
    
    
    177,271,897
    
    
    
    193,872
    
    
    
    462,741,057Nondeposit interest-bearing liabilities
    
    
    15,788,983
    
    
    
    23,368,563
    
    
    
    42,000,000
    
    
    
    72,000,000
    
    
    
    153,157,546Total interest-bearing liabilities
    
    $
    683,622,320
    
    
    $
    302,767,063
    
    
    $
    309,367,066
    
    
    $
    72,193,872
    
    
    $
    1,367,950,321Gap by period
    
    $
    (147,332,463
    )
    
    $
    (54,231,742
    )
    
    $
    374,876,325
    
    
    $
    (4,541,419
    )
    
    $
    168,770,701Cumulative gap
    
    $
    (147,332,463
    )
    
    $
    (201,564,205
    )
    
    $
    173,312,120
    
    
    $
    168,770,701
    
    
    $
    168,770,701Ratio of interest-sensitive assets to interest-
sensitive liabilities
    
    
    0.78
    x
    
    
    0.82
    x
    
    
    2.21
    x
    
    
    0.94
    x
    
    
    1.12
    xCumulative ratio of interest-sensitive assets to
interest-sensitive liabilities
    
    
    0.78
    x
    
    
    0.80
    x
    
    
    1.13
    x
    
    
    1.12
    x
    
    
    1.12
    x
   34




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##### Table of Contents



Part I  Item 4T  Controls and Procedures
     
 PART II
 
 Part II  Item 1  Legal Proceedings
  
 Part II  Item 1A  Risk Factors
  
 Part II  Item 2  Unregistered Sales of Equity Securities and Use of Proceeds
  Date
    
    Number of Options
    
    Exercise Price
    
    Date Exercisable
    
    Expiration DateJanuary 20, 2009
    
    102,250 Incentive
Stock Options
    
    $
    7.50
    
    
    January 20,
2010-34,061;
January 20,
2011-34,071;
January 20,
2012-34,118
    
    January 20, 2019March 27, 2009
    
    500 Non-Qualified
Stock Options
    
    $
    7.50
    
    
    March 27, 2011- 500
    
    August 1, 2015
 
 Part II  Item 3  Defaults Upon Senior Securities
  
 Part II  Item 4  Submission of Matters to a Vote of Security Holders
  35




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##### Table of Contents



Part II  Item 5  Other Information
 (a)
    
    None(b)
    
    There have been no material changes to the procedures by which security holders may recommend
nominees to the Companys Board of Directors implemented since the filing of the Companys
Annual Report on Form 10-K for the year ended December 31, 2008.
 
 Part II  Item 6  Exhibits
 ExhibitNumber
    
    Description4.1
    
    Certificate of Designation establishing Fixed Rate Cumulative
Perpetual Preferred Stock, No Par Value, Series A, of Reliance
Bancshares, Inc. (filed as Exhibit 4.1 to the registrants Form
8-K filed on February 23, 2009 and incorporated herein by
reference).4.2
    
    Certificate of Designation establishing Fixed Rate Cumulative
Perpetual Preferred Stock, No Par Value, Series B of Reliance
Bancshares, Inc. (filed as Exhibit 4.2 to the registrants Form
8-K filed on February 23, 2009 and incorporated herein by
reference).4.3
    
    Corrected Certificate of Designation establishing Fixed Rate
Cumulative Perpetual Preferred Stock, No Par Value, Series B, of
Reliance Bancshares, Inc. (filed as Exhibit 4.3 to the
registrants Form 8-K filed on February 23, 2009 and incorporated
herein by reference).4.4
    
    Form of stock certificates for Fixed Rate Cumulative Perpetual
Preferred, No Par Value, Series A and Series B (filed as Exhibit
4.4 to the registrants Form 8-K filed on February 23, 2009 and
incorporated herein by reference).4.5
    
    Form of Warrant to Purchase up to 2,000.02 Shares of Fixed Rate
Cumulative Perpetual Preferred Stock, No Par Value, Series B of
Reliance Bancshares, Inc. (filed as Exhibit 4.5 to the
registrants Form 8-K filed on February 23, 2009 and incorporated
herein by reference).10.1
    
    Letter Agreement dated February 13, 2009 including the Securities
Purchase Agreement  Standard Terms incorporated by reference
therein between the Company and the U.S. Treasury Department
(filed as Exhibit 10.1 to the registrants Form 8-K filed on
February 23, 2009 and incorporated herein by reference).
 36




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##### Table of Contents



ExhibitNumber
    
    Description10.2
    
    Form of Omnibus Agreement between Reliance Bancshares, Inc. and
each of Jerry S. Von Rohr, Dale E. Oberkfell, David S. Matthews,
Daniel W. Jasper and Daniel S. Brown (filed as Exhibit 10.2 to the
registrants Form 8-K filed on February 23, 2009 and incorporated
herein by reference).10.3
    
    Waivers executed by each of Jerry S. Von Rohr, Dale E. Oberkfell,
David S. Matthews, Daniel W. Jasper and Daniel S. Brown (filed as
Exhibit 10.3 to the registrants Form 8-K filed on February 23,
2009 and incorporated herein by reference).31.1
    
    Chief Executive Officers Certification pursuant to Rules
13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.31.2
    
    Chief Financial Officers Certification pursuant to Rules
13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.32.1
    
    Chief Executive Officer Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Chief Financial Officer Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 
 SIGNATURES
  RELIANCE BANCSHARES, INC.By:
    /s/ Jerry S. Von RohrJerry S. Von RohrChief Executive OfficerBy:
    /s/ Dale E. OberkfellDale E. OberkfellChief Financial Officer  37