First Reliance Bancshares Reports Fourth Quarter 2024 Results

Jan 28 2025 21:30 GMT

FLORENCE, S.C. , Jan. 28, 2025 /PRNewswire/ -- First Reliance Bancshares, Inc. (OTC:FSRL), the holding company for First Reliance Bank (collectively, "First Reliance" or the "Company"), today announced its financial results for the fourth quarter of 2024.

Fourth Quarter 2024 Highlights

Net income increased 18.3% for the fourth quarter of 2024 to $0.9 million, or $0.11 per diluted share, compared to $0.8 million, or $0.10 per diluted share, for the fourth quarter of 2023. Operating earnings, which excludes securities losses, net of tax, gain/(loss) on disposal/write down fixed assets and right of use assets, net of tax, and expenses related to branch sale, net of tax, were $1.7 million, or $0.21 per diluted share, for the fourth quarter of 2024, compared to $1.4 million, or $0.17 per diluted share, in the fourth quarter of 2023.
For calendar year 2024, net income increased $1.3 million to $5.9 million, or $0.71 per diluted share, compared to 2023 which was $4.6 million, or $0.56 per diluted share, an increase of $0.15 per diluted share, or 26.8%. Operating net income increased $1.0 million, or 17.2% to $6.8 million, or $0.82 per diluted share, compared to 2023 which was $5.8 million, or $0.71 per diluted share, an increase of $0.11 per diluted share, or 15.5%.
Book value per share increased $0.91, or 10.4%, from $8.77 per share at December 31, 2023, to $9.68 per share at December 31, 2024. Tangible book value per share increased $0.91, or 10.5%, from $8.68 per share at December 31, 2023, to $9.59 per share at December 31, 2024.
Net interest income for the quarter was $8.4 million, which represents an increase of $1.1 million, or 15.6%, compared to the same quarter one year ago. On a linked quarter basis, the increase was $300,000, or 3.7%.
Net interest margin increased during the quarter to 3.38% at December 31, 2024, compared to 3.27% at September 30, 2024, and increased 22 basis points compared to the same period in 2023.
Total loans held for investment increased $14.5 million, or 7.9% annualized, to $753.7 million at December 31, 2024, from $739.2 million at September 30, 2024.
Total deposits decreased $0.5 million, or 0.2% annualized, to $951.4 million at December 31, 2024, from $951.9 million at September 30, 2024.
Asset quality remained strong with nonperforming assets totaling $1.2 million, or 0.11% of total assets at December 31, 2024, compared to $924 thousand, or 0.09% of total assets at September 30, 2024.

Rick Saunders, Chief Executive Officer, commented: "I am pleased that we were able to grow our operating EPS by over 17% for the year while also increasing our tangible book value per share by 10.5%. We expanded NIM another 11 bps this quarter and go into 2025 with a strong loan pipeline. Credit quality remained steady with low net charge offs and low nonperforming assets. Managing expenses will be one of our top priorities to compliment what we think will be increased revenue in 2025 vs. 2024. Our markets are some of the best in the United States and we remain focused on growing our client base by providing exceptional service and solutions to meet their banking needs."

Financial Summary

	Three Months Ended					Twelve Months Ended
	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Dec 31	Dec 31
($ in thousands, except per share data)	2024	2024	2024	2024	2023	2024	2023
Earnings:
Net income available to common shareholders	$ 918	$ 1,825	$ 1,942	$ 1,238	$ 776	$ 5,923	$ 4,603
Operating earnings (Non-GAAP)	1,698	1,950	1,942	1,223	1,424	6,813	5,812
Earnings per common share, diluted	0.11	0.22	0.24	0.15	0.10	0.71	0.56
Operating earnings, diluted (Non-GAAP)	0.21	0.24	0.24	0.15	0.17	0.82	0.71
Total revenue⁽¹⁾	9,809	9,855	10,226	9,690	8,285	39,580	35,892
Net interest margin	3.38 %	3.27 %	3.20 %	3.11 %	3.16 %	3.25 %	3.19 %
Return on average assets⁽²⁾	0.35 %	0.69 %	0.75 %	0.49 %	0.32 %	0.57 %	0.47 %
Return on average equity⁽²⁾	4.66 %	9.60 %	10.69 %	7.01 %	4.70 %	7.97 %	7.00 %
Efficiency ratio⁽³⁾	86.42 %	76.90 %	75.21 %	81.04 %	89.83 %	79.84 %	82.78 %

	As of
	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31
($ in thousands)	2024	2024	2024	2024	2023
Balance Sheet:
Total assets	$ 1,067,104	$ 1,071,480	$ 1,058,395	$ 1,027,616	$ 974,157
Total loans receivable	753,738	739,219	739,433	725,234	705,672
Total deposits	951,411	951,948	899,799	881,309	858,597
Total transaction deposits⁽⁴⁾ to total deposits	38.64 %	38.82 %	39.18 %	39.86 %	41.31 %
Loans to deposits	79.22 %	77.65 %	82.18 %	82.29 %	82.19 %
Bank Capital Ratios:
Total risk-based capital ratio	13.48 %	13.56 %	13.34 %	13.46 %	13.86 %
Tier 1 risk-based capital ratio	12.43 %	12.51 %	12.28 %	12.37 %	12.75 %
Tier 1 leverage ratio	9.96 %	9.87 %	10.01 %	10.16 %	10.32 %
Common equity tier 1 capital ratio	12.43 %	12.51 %	12.28 %	12.37 %	12.75 %
Asset Quality Ratios:
Nonperforming assets as a percentage of total assets	0.11 %	0.09 %	0.03 %	0.03 %	0.03 %
Allowance for credit losses as a percentage of total loans receivable	1.12 %	1.13 %	1.15 %	1.17 %	1.19 %
Annualized quarterly net charge-offs as a percentage of average total loans receivable	0.00 %	0.03 %	0.05 %	0.06 %	0.00 %

Footnotes to table located at the end of this release.

CONDENSED CONSOLIDATED INCOME STATEMENTS – Unaudited

	Three Months Ended					Twelve Months Ended
	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Dec 30
($ in thousands, except per share data)	2024	2024	2024	2024	2023	2024	2023
Interest income
Loans	$ 11,053	$ 10,930	$ 10,746	$ 10,085	$ 9,678	$ 42,814	$ 36,171
Investment securities	2,015	1,969	1,875	1,972	1,832	7,831	6,142
Other interest income	512	623	419	291	396	1,845	2,076
Total interest income	13,580	13,522	13,040	12,348	11,906	52,490	44,389
Interest expense
Deposits	4,613	4,833	4,652	4,332	4,076	18,430	12,546
Other interest expense	564	585	722	808	558	2,679	2,870
Total interest expense	5,177	5,418	5,374	5,140	4,634	21,109	15,416
Net interest income	8,403	8,104	7,666	7,208	7,272	31,381	28,973
Provision for credit losses	141	(83)	55	207	(118)	320	369
Net interest income after provision for loan losses	8,262	8,187	7,611	7,001	7,390	31,061	28,604
Noninterest income
Mortgage banking income	1,207	805	1,416	1,375	694	4,803	3,821
Service fees on deposit accounts	327	327	307	336	336	1,297	1,374
Debit card and other service charges, commissions, and fees	550	528	568	519	544	2,165	2,160
Income from bank owned life insurance	108	105	103	102	99	418	529
Loss on sale of securities, net	(146)	(162)	-	-	(802)	(308)	(1,526)
Gain (loss) on disposal / write down of fixed assets	(838)	-	-	20	-	(818)	-
Other income	198	148	166	130	143	642	561
Total noninterest income	1,406	1,751	2,560	2,482	1,014	8,199	6,919
Noninterest expense
Compensation and benefits	5,028	4,682	4,693	4,878	4,558	19,281	18,274
Occupancy and equipment	890	848	837	841	798	3,416	3,429
Data processing, technology, and communications	1,184	994	1,119	1,039	985	4,336	3,614
Professional fees	268	265	96	110	56	739	420
Marketing	103	66	102	160	104	431	687
Other	1,003	723	844	826	942	3,396	3,286
Total noninterest expense	8,476	7,578	7,691	7,854	7,443	31,599	29,710
Income before provision for income taxes	1,192	2,360	2,480	1,629	961	7,661	5,813
Income tax expense	273	535	538	391	185	1,737	1,210
Net income available to common shareholders	$ 919	$ 1,825	$ 1,942	$ 1,238	$ 776	$ 5,924	$ 4,603
Add back loss (gain) on fixed assets, net of tax	646			(15)		631
Add back expenses related to branch sale, net of tax	21					21
Add back securities losses, net of tax	113	125	-	-	648	238	1,208
Operating earnings (Non-GAAP)	$ 1,699	$ 1,950	$ 1,942	$ 1,223	$ 1,424	$ 6,814	$ 5,811
Weighted average common shares - basic	7,851	7,847	7,851	7,837	7,826	7,847	7,823
Weighted average common shares - diluted	8,274	8,221	8,260	8,217	8,164	8,294	8,164
Basic net income per common share *	$ 0.12	$ 0.23	$ 0.25	$ 0.16	$ 0.10	$ 0.75	$ 0.59
Diluted net income per common share *	$ 0.11	$ 0.22	$ 0.24	$ 0.15	$ 0.10	$ 0.71	$ 0.56
Operating earnings per common share (Non-GAAP) *	$ 0.22	$ 0.25	$ 0.25	$ 0.16	$ 0.18	$ 0.87	$ 0.74
Operating earnings per diluted common share (Non-GAAP) *	$ 0.21	$ 0.24	$ 0.24	$ 0.15	$ 0.17	$ 0.82	$ 0.71
* note that the sum of the quarters may not equal the YTD result due to rounding of earnings per share each quarter, given the weighted
average shares outstanding basic and diluted.

Net income for the three months ended December 31, 2024, was $0.9 million, or $0.11 per diluted common share, compared to $0.8 million, or $0.10 per diluted common share, for the three months ended December 31, 2023. On an operating basis, fourth quarter of 2024 diluted EPS was $0.21, compared to $0.17 diluted EPS for the fourth quarter of 2023. Both amounts include adding back the impact of securities losses, after tax, of $113 thousand and $648 thousand, respectively. The fourth quarter of 2024 also includes adding back losses related to write downs of fixed assets and right of use assets totaling $646 thousand and cost related to branch sales of $21 thousand, net of tax. Net income for the calendar year 2024, totaled $5.9 million, or $0.71 per diluted common share, compared to $4.6 million, or $0.56 per diluted common share, for the calendar year 2023. On an operating basis, diluted EPS was $0.82 per diluted common share or operating net income of $6.8 million, for 2024, compared to $0.71 per diluted common share or operating net income of $5.8 million, for 2023.

Noninterest income for the three months ended December 31, 2024, was $1.4 million, an increase of $0.4 million from $1.0 million for the same period in 2023. Noninterest income was primarily driven by mortgage banking income which totaled $1.2 million in the fourth quarter of 2024 compared to $0.7 million in the fourth quarter of 2023. This increase was primarily driven by increases in the gain on sale of mortgage loans of $212 thousand and the valuation of the mortgage servicing right asset of $203 thousand. In both the fourth quarter of 2024 and 2023, the company recognized securities losses, $146 thousand and $802 thousand, respectively. The fourth quarter of 2024 securities loss was $656 thousand less than the loss recognized in the fourth quarter of 2023. These two increases (in mortgage banking income and securities losses) were partially offset by losses recognized on right of use assets and fixed assets in the fourth quarter of 2024.

For the twelve months ended December 31, 2024, noninterest income increased by $1.3 million, driven by improved mortgage banking income of $982 thousand primarily related to more sales volume within the secondary market, and less securities losses that were $1.2 million less in 2024 compared to 2023. These increases were partially offset by a decline in bank owned life insurance income of $111 thousand and losses recognized on fixed assets and right of use (leased) asset totaling $818 thousand.

Noninterest expense for the three months ended December 31, 2024, was $8.5 million, an increase of $1.1 million from $7.4 million for the same period in 2023. This increase in expense was primarily driven by an increase in higher compensation and benefits of $470 thousand; higher data processing and technology cost of $199 thousand and higher professional fees totaling $212 thousand.

Noninterest expense for the twelve months ended December 31, 2024, was $31.6 million and increased $1.9 million over the same period one year ago. This increase in noninterest expense was primarily related to compensation and benefits of $1.0 million primarily attributable to mortgage commissions and employee health benefits; an increase in data processing and technology totaling $722 thousand resulting from higher core processor cost and software expense; and higher professional fees of $319 thousand in legal and consulting. These increases were partially offset by lower marketing cost of $256 thousand.

Fixed Assets and Right of Use Assets

During the fourth quarter of 2024 the Company wrote off two leases totaling $538 thousand. One was a land lease that the company no longer intends to use which totaled $504 thousand. The other lease related to a facility that was consolidated into the main banking location in Charleston which expires in mid-2025 and totaled $34 thousand. These two written off leases will reduce annual occupancy cost by $180 thousand in 2025 and by $147 thousand in 2026, 2027 and part of 2028.

The fixed asset that was written down by $300,000 relates to a parcel of land in North Charleston that the company owns, and it was written down to fair value and remains for sale.

NET INTEREST INCOME AND MARGIN – Unaudited - QTD

	For the Three Months Ended
	December 31, 2024			September 30, 2024			December 31, 2023
	Average	Income/	Yield/	Average	Income/	Yield/	Average	Income/	Yield/
($ in thousands)	Balance	Expense	Rate	Balance	Expense	Rate	Balance	Expense	Rate
Assets
Interest-earning assets:
Federal funds sold and interest-bearing deposits	$ 44,366	$ 485	4.35 %	$ 50,030	$ 588	4.68 %	$ 30,212	$ 370	4.86 %
Investment securities	179,750	2,015	4.46 %	173,728	1,969	4.51 %	161,824	1,832	4.49 %
Nonmarketable equity securities	1,524	27	6.99 %	1,509	35	9.19 %	1,420	26	7.36 %
Loans held for sale	21,610	322	5.93 %	21,629	347	6.38 %	13,860	274	7.85 %
Loans	741,672	10,731	5.76 %	737,666	10,583	5.71 %	706,002	9,404	5.28 %
Total interest-earning assets	988,922	13,580	5.46 %	984,562	13,522	5.46 %	913,318	11,906	5.17 %
Allowance for credit losses	(8,317)			(8,491)			(8,484)
Noninterest-earning assets	78,137			78,402			78,914
Total assets	$ 1,058,742			$ 1,054,473			$ 983,748

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
NOW accounts	$ 140,981	$ 245	0.69 %	$ 138,726	$ 236	0.68 %	$ 142,290	$ 269	0.75 %
Savings & money market	405,445	2,910	2.86 %	384,155	2,941	3.05 %	334,068	2,331	2.77 %
Time deposits	160,417	1,458	3.62 %	175,921	1,656	3.74 %	165,466	1,476	3.54 %
Total interest-bearing deposits	706,843	4,613	2.60 %	698,802	4,833	2.75 %	641,824	4,076	2.52 %
FHLB advances and other borrowings	16,332	202	4.93 %	15,979	226	5.63 %	15,001	193	5.09 %
Subordinated debentures	25,750	362	5.59 %	25,743	359	5.55 %	25,719	365	5.63 %
Total interest-bearing liabilities	748,925	5,177	2.75 %	740,524	5,418	2.91 %	682,544	4,634	2.69 %
Noninterest bearing deposits	217,863			224,121			221,275
Other liabilities	13,118			13,807			13,957
Shareholders' equity	78,836			76,021			65,972
Total liabilities and shareholders' equity	$ 1,058,742			$ 1,054,473			$ 983,748

Net interest income (tax equivalent) / interest rate spread		$ 8,403	2.71 %		$ 8,104	2.55 %		$ 7,272	2.48 %
Net Interest Margin			3.38 %			3.27 %			3.16 %

Cost of funds, including noninterest-bearing deposits			2.13 %			2.23 %			2.03 %

Net interest income for the three months ended December 31, 2024, was $8.4 million compared to $7.3 million for the three months ended December 31, 2023. This increase was the result of a larger increase in interest income of $1.7 million than the increase in interest expense of $0.5 million. This resulted in an improved net interest margin of 22 basis points to 3.38% from 3.16% one year ago, led by the loan portfolio yield which improved by 48 basis points. The yields on interest-bearing liabilities were only slightly higher and increased by 6 basis points, net comparing 2024 to 2023. There were no outstanding FHLB advances at December 31, 2024 and September 30, 2024. In addition, the total cost of funds, including noninterest-bearing deposits, increased to 2.13% in the fourth quarter of 2024, compared to 2.03% in the fourth quarter of 2023.

NET INTEREST INCOME AND MARGIN – Unaudited - YTD

	For the Twelve Months Ended
	December 31, 2024			December 31, 2023
	Average	Income/	Yield/	Average	Income/	Yield/
(dollars in thousands)	Balance	Expense	Rate	Balance	Expense	Rate
Assets
Interest-earning assets
Federal funds sold and interest-bearing deposits	$ 38,357	$ 1,718	4.48 %	$ 43,739	$ 1,969	4.50 %
Investment securities	172,932	7,831	4.53 %	161,201	6,142	3.81 %
Nonmarketable equity securities	1,803	127	7.01 %	1,774	108	6.08 %
Loans held for sale	20,827	1,369	6.57 %	14,131	995	7.04 %
Loans	731,688	41,445	5.66 %	687,682	35,175	5.12 %
Total interest-earning assets	965,607	52,490	5.44 %	908,527	44,389	4.89 %
Allowance for loan losses	(8,427)			(8,170)
Noninterest-earning assets	78,987			78,277
Total assets	$ 1,036,167			$ 978,634

Liabilities and Shareholders' Equity
Interest-bearing liabilities
NOW accounts	$ 140,923	$ 1,018	0.72 %	$ 142,082	$ 764	0.54 %
Savings & money market	373,626	11,008	2.95 %	318,347	7,731	2.43 %
Time deposits	172,522	6,404	3.71 %	143,422	4,051	2.82 %
Total interest-bearing deposits	687,071	18,430	2.68 %	603,851	12,546	2.08 %
FHLB advances and other borrowings	22,313	1,221	5.47 %	33,076	1,441	4.36 %
Subordinated debentures	25,739	1,458	5.67 %	25,707	1,429	5.56 %
Total interest-bearing liabilities	735,123	21,109	2.87 %	662,634	15,416	2.33 %
Noninterest bearing deposits	213,190			236,468
Other liabilities	13,508			13,798
Shareholders' equity	74,346			65,734
Total liabilities and shareholders' equity	$ 1,036,167			$ 978,634

Net interest income (tax equivalent) / interest rate spread		$ 31,381	2.57 %		$ 28,973	2.56 %
Net Interest Margin			3.25 %			3.19 %

Cost of funds,including noninterest bearing deposits			2.23 %			1.71 %

Net interest income for the twelve months ended December 31, 2024, totaled $31.4 million compared to $29.0 million for the twelve months ended December 31, 2023, an increase of $2.4 million. The net interest margin was 3.25% for 2024 compared to 3.19% for 2023. The yield on interest-earning assets increased by 55 basis points to 5.44% in 2024. Led by loans and securities, the yield improved by 54 basis points within the loan portfolio and by 72 basis points within the securities portfolio. For interest-bearing liabilities, the rate paid totaled 2.87% compared to 2.33% in the same period one year ago, reflecting an increase in yield in all categories. The total cost of funds, including noninterest-bearing deposits, was 2.23% compared to 1.71% in 2023.

CONDENSED CONSOLIDATED BALANCE SHEETS – Unaudited

	As of
	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31
($ in thousands)	2024	2024	2024	2024	2023
Assets
Cash and cash equivalents:
Cash and due from banks	$ 4,604	$ 4,730	$ 5,669	$ 5,482	$ 4,354
Interest-bearing deposits with banks	42,623	61,934	41,391	36,173	17,590
Total cash and cash equivalents	47,227	66,664	47,060	41,655	21,944
Investment securities:
Investment securities available for sale	175,846	177,641	173,298	171,075	171,400
Other investments	886	883	2,788	2,548	1,078
Total investment securities	176,732	178,524	176,087	173,623	172,478
Mortgage loans held for sale	20,974	19,929	25,776	18,307	7,156
Loans receivable:
Loans	753,738	739,219	739,433	725,234	705,672
Less allowance for credit losses	(8,434)	(8,317)	(8,498)	(8,497)	(8,393)
Loans receivable, net	745,304	730,902	730,935	716,737	697,279
Property and equipment, net	21,353	21,861	22,040	22,185	22,298
Mortgage servicing rights	13,410	12,690	12,680	12,226	11,638
Bank owned life insurance	18,608	18,501	18,396	18,293	18,191
Deferred income taxes	7,709	6,292	7,612	7,990	7,775
Other assets	15,787	16,117	17,809	16,600	15,398
Total assets	1,067,104	1,071,480	1,058,395	1,027,616	974,157
Liabilities
Deposits	$ 951,411	$ 951,948	$ 899,799	$ 881,309	$ 858,597
Federal Home Loan Bank advances (FHLB)	-	-	40,000	35,000	5,000
Federal funds and repurchase agreements	-	-	408	-	307
Subordinated debentures	15,444	15,436	15,428	15,421	15,413
Junior subordinated debentures	10,310	10,310	10,310	10,310	10,310
Reserve for unfunded commitments	428	410	364	398	407
Other liabilities	11,755	12,866	17,590	13,070	12,727
Total liabilities	989,348	990,970	983,899	955,508	902,761
Shareholders' equity
Preferred stock - Series D non-cumulative, no par value	1	1	1	1	1
Common Stock - $.01 par value; 20,000,000 shares authorized	88	88	88	88	88
Treasury stock, at cost	(5,758)	(5,285)	(5,216)	(4,965)	(4,821)
Nonvested restricted stock	(2,340)	(2,444)	(2,463)	(2,900)	(2,518)
Additional paid-in capital	55,848	55,763	55,645	56,134	55,471
Retained earnings	39,671	38,753	36,928	34,986	33,748
Accumulated other comprehensive (loss) income	(9,754)	(6,366)	(10,487)	(11,236)	(10,573)
Total shareholders' equity	77,756	80,510	74,496	72,108	71,396
Total liabilities and shareholders' equity	$ 1,067,104	$ 1,071,480	$ 1,058,395	$ 1,027,616	$ 974,157

First Reliance cash and cash equivalents totaled $47.2 million at December 31, 2024, compared to $66.7 million at September 30, 2024. Cash with the Federal Reserve Bank totaled $41.8 million compared to $61.6 million at September 30, 2024.

First Reliance does not have any Held-to-Maturity (HTM) securities for any reported period. All debt securities were classified as Available-For-Sale (AFS) securities with balances of $175.8 million and $177.6 million, at December 31, 2024 and September 30, 2024, respectively. The unrealized loss recorded on AFS securities totaled $12.9 million as of December 31, 2024, compared to $8.4 million at September 30, 2024, an increase during the fourth quarter of 2024 of $4.5 million (before taxes).

As of December 31, 2024, deposits decreased slightly by $537 thousand, or 0.2% annualized. See page 10 for detail on the deposit balance changes over the past 5 quarters.

The Company had no outstanding borrowings with the FHLB of Atlanta at December 31, 2024 and September 30, 2024. The Company had credit availability in excess of $310.8 million with the FHLB of Atlanta, subject to collateral requirements.

First Reliance also has access to approximately $25.4 million through the Federal Reserve Bank discount window with posted collateral. There are currently no borrowings against the Federal Reserve Bank discount window.

COMMON STOCK SUMMARY - Unaudited

			As of
	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31
(shares in thousands)	2024	2024	2024	2024	2023
Voting common shares outstanding	8,833	8,820	8,819	8,785	8,772
Treasury shares outstanding	(800)	(751)	(743)	(649)	(633)
Total common shares outstanding	8,033	8,069	8,076	8,136	8,139

Book value per common share	$ 9.68	$ 9.98	$ 9.22	$ 8.86	$ 8.77
Tangible book value per common share - Non-GAAP⁽⁵⁾	$ 9.59	$ 9.89	$ 9.13	$ 8.77	$ 8.68

Stock price:
High	$ 10.24	$ 10.59	$ 8.30	$ 8.65	$ 9.00
Low	$ 9.16	$ 7.60	$ 7.60	$ 7.70	$ 6.91
Period end	$ 9.59	$ 10.14	$ 7.90	$ 8.15	$ 8.57

ASSET QUALITY MEASURES – Unaudited

	As of
	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31
($ in thousands)	2024	2024	2024	2024	2023
Nonperforming Assets
Commercial
Owner occupied RE	$ 44	$ 46	$ 49	$ -	$ -
Non-owner occupied RE	646	701	-	-	86
Construction	66	-	62	-	-
Commercial business	328	57	12	12	99
Consumer
Real estate	42	44	46	48	-
Home equity	-	-	-	-	-
Construction	-	-	-	-	-
Other	64	61	66	52	8
Nonaccruing loan modifications	-	-	-	56	56
Total nonaccrual loans	$ 1,190	$ 909	$ 235	$ 168	$ 249
Other assets repossessed	11	15	75	114	47
Total nonperforming assets	$ 1,201	$ 924	$ 310	$ 282	$ 296
Nonperforming assets as a percentage of:
Total assets	0.11 %	0.09 %	0.03 %	0.03 %	0.03 %
Total loans receivable	0.16 %	0.12 %	0.04 %	0.04 %	0.04 %
Accruing loan modifications	$ 400	$ 428	$ 460	$ 970	$ 947

	Three Months Ended
	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31
($ in thousands)	2024	2024	2024	2024	2023
Allowance for Credit Losses
Balance, beginning of period	$ 8,317	$ 8,498	$ 8,497	$ 8,393	$ 8,430
Loans charged-off	24	69	102	195	108
Recoveries of loans previously charged-off	18	17	14	82	109
Net charge-offs (recoveries)	6	52	88	113	(1)
Provision for credit losses (release)	123	(129)	89	217	(38)
Balance, end of period	$ 8,434	$ 8,317	$ 8,498	$ 8,497	$ 8,393
Allowance for credit losses to gross loans receivable	1.12 %	1.13 %	1.15 %	1.17 %	1.19 %
Allowance for credit losses to nonaccrual loans	708.74 %	914.96 %	3616.17 %	5057.74 %	3370.68 %

Asset quality remained steady during the fourth quarter of 2024, with nonperforming assets increasing to $1.2 million, which represents 0.11% of total assets. The increase of $277 thousand was primarily related to one loan and a specific reserve of $100 thousand was recorded. The allowance for credit losses as a percentage of total loans receivable decreased to 1.12% at December 31, 2024, compared to 1.13% at September 30, 2024, and 1.19% at December 31, 2023. The allowance for credit losses increased by a provision for credit losses of $123 thousand offset by net charge-offs of $6 thousand, during the fourth quarter of 2024. In the fourth quarter of 2023, the Company experienced net recoveries of ($1) thousand and decreased the ACL with a provision for credit release of ($38) thousand.

Footnotes to table located at the end of this release.

LOAN COMPOSITION – Unaudited

	As of
	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31
($ in thousands)	2024	2024	2024	2024	2023
Commercial real estate	$ 463,301	$ 456,775	$ 450,936	$ 434,743	$ 433,687
Consumer real estate	204,303	193,362	188,759	184,969	177,102
Commercial and industrial	65,980	66,561	76,149	77,023	63,946
Consumer and other	20,154	22,521	23,589	28,499	30,937
Total loans, net of deferred fees	753,738	739,219	739,433	725,234	705,672
Less allowance for credit losses	8,434	8,317	8,498	8,497	8,393
Total loans, net	$ 745,304	$ 730,902	$ 730,935	$ 716,737	$ 697,279

DEPOSIT COMPOSITION – Unaudited

	As of
	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31
($ in thousands)	2024	2024	2024	2024	2023
Noninterest-bearing	$ 227,471	$ 219,279	$ 220,330	$ 212,083	$ 210,604
Interest-bearing:
DDA and NOW accounts	140,116	150,312	132,186	139,229	144,039
Money market accounts	381,602	362,834	325,769	307,696	289,158
Savings	40,627	41,184	42,479	44,191	45,558
Time, less than $250,000	120,397	133,940	128,869	125,248	121,035
Time, $250,000 and over	41,198	44,399	50,166	52,862	48,203
Total deposits	$ 951,411	$ 951,948	$ 899,799	$ 881,309	$ 858,597

Footnotes to tables:
(1)	Total revenue is the sum of net interest income and noninterest income.
(2)	Annualized for the respective period.
(3)	Noninterest expense divided by the sum of net interest income and noninterest income.
(4)	Includes noninterest-bearing and interest-bearing DDA and NOW accounts.
(5)	The tangible book value per share is calculated as total shareholders' equity less intangible assets, divided by period-end outstanding common shares.

ABOUT FIRST RELIANCE

Founded in 1999, First Reliance Bancshares, Inc. (OTC: FSRL.OB), is based in Florence, South Carolina and has assets of approximately $1.067 billion. The Company employs approximately 170 professionals and has locations throughout South Carolina and central North Carolina. First Reliance has redefined community banking with a commitment to making customers' lives better, its founding principle. Customers of the Company have given it a 92% customer satisfaction rating, well above the community bank industry average of 82%. First Reliance has also received "the Best Places to Work in South Carolina award" for 19 years consecutive years. We believe that this recognition confirms that our associates are engaged and committed to our brand and the communities we serve. The Company offers a full range of personalized community banking products and services for individuals, small businesses, and corporations. The Company also offers a full suite of digital banking services, Treasury Services, a Customer Service Guaranty, a Mortgage Service Guaranty, and First Reliance Wealth Strategies.

FORWARD-LOOKING STATEMENTS

Certain statements in this news release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements include, but are not limited to, statements with respect to our plans, objectives, expectations and intentions and other statements that are not historical facts, and other statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," and "projects," as well as similar expressions. Such statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans, or expectations contemplated by the Company will be achieved.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected resulting in, among other things, a deterioration in the credit quality or a reduced demand for credit, including the resultant effect on the Company's loan portfolio and allowance for credit losses; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for credit loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (4) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized; (5) changes in the U.S. legal and regulatory framework including, but not limited to, the Dodd-Frank Act and regulations adopted thereunder; (6) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) could have a negative impact on the Company, including the value of its MSR asset; (7) the business related to acquisitions may not be integrated successfully or such integration may take longer to accomplish than expected; (8) the expected cost savings and any revenue synergies from acquisitions may not be fully realized within expected timeframes; and (9) disruption from acquisitions may make it more difficult to maintain relationships with clients, associates or suppliers. Moreover, a trade war or other governmental action related to tariffs or international trade agreements or policies, as well as Covid-19 or other potential epidemics or pandemics, have the potential to negatively impact ours and/or our customers' costs, demand for our customers' products, and/or the U.S. economy or certain sectors thereof and, thus, adversely affect our business, financial condition, and results of operations. All subsequent written and oral forward-looking statements concerning the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

Contact:
Robert Haile
SEVP & Chief Financial Officer
(843) 656-5000
rhaile@firstreliance.com

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SOURCE First Reliance Bancshares, Inc.

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First Reliance Bancshares Reports Fourth Quarter 2024 Results