Board Chairman Brouster leads turnaround of Reliance Bank
Reliance Bank is alive and well and is actively looking for business, following a recapitalization of $31 million earlier this year. The revival has been led by Reliance Board Chairman Thomas H. Brouster Sr. and his long-time business partner, Gaines Dittrich. Brouster is known in the business for his turnaround acumen. Reliance is the 15th bank that he has returned to profitability over the past 36 years.
Brouster and Dittrich first came to Reliance Bank in February 2012 at the behest of Allan Ivie, bank president and chief executive officer. Since then, they’ve substantially improved problem loans, reduced non-performing assets, stabilized the bank’s loan portfolio and returned the company to profitability.
Brouster was also able to raise $31 million to recapitalize the bank which has made Reliance one of the best-capitalized financial institutions in the region. It now boasts a Tier One Capital Ratio of 10.17 percent as of March 31, 2013 compared to the 8.00 percent that is required by bank regulators.
As a result of all of this intense work, Reliance turned a profit of $1.4 million last year after five years of negative numbers, according to Brouster. This year, it has matched that figure in the first quarter alone.
A large part of turning red ink to black in the banking business is reducing expenses and problem loans. Brouster has been able to reduce the expense of maintaining foreclosed real estate by 45.06 percent since 2011. And non-performing loans have fallen for nine consecutive quarters reducing the amount of problem loans by 89 percent from its apex in 2010. The bank has had no loans more than 30 days past due for 12 consecutive months.
According to Brouster, reviving an imperiled bank is like solving any other problem. It’s a matter of examining it, analyzing it, organizing it, breaking big problems down into smaller units and working through the issues one at a time.
While some banks are sitting back, waiting for a stronger economy, Reliance intends to move aggressively but prudently to capture market share. Brouster says Reliance has mapped out a marketing plan that calls for significant growth over the next four years and it will be working diligently to make that happen.
The Southwestern Illinois market figures significantly into those growth plans, says Brouster. Reliance Bank currently has three banks on the Illinois side, but Brouster says he’s bullish on the Metro East market and plans to concentrate a great deal of the bank’s efforts here.