First Reliance Bancshares Reports Second Quarter 2025 Results

Jul 25 2025 14:00 BST

FLORENCE, S.C. , July 25, 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 second quarter of 2025.

Second Quarter 2025 Highlights

Net income increased 88.1% for the second quarter of 2025 to $3.7 million, or $0.44 per diluted share, compared to $1.9 million, or $0.24 per diluted share, for the second quarter of 2024. For the six months ended June 30, 2025, net income totaled $5.3 million, or $0.63 per diluted share, compared to $3.2 million, or $0.39 per diluted share for the same period in 2024. Operating earnings (Non-GAAP) were $2.2 million, or $0.27 per diluted share, for the second quarter of 2025, compared to $1.9 million, or $0.24 per diluted share, for the second quarter of 2024. For the first half of 2025, operating earnings (Non-GAAP) totaled $3.9 million or $0.47 per diluted share, compared to $3.2 million, or $0.39 per diluted share, for the first half of 2024.
Book value per share increased $1.58, or 17.1%, from $9.22 per share at June 30, 2024, to $10.80 per share at June 30, 2025. Tangible book value per share (Non-GAAP) increased $1.58, or 17.3%, from $9.13 per share at June 30, 2024, to $10.71 per share at June 30, 2025.
Net interest income for the second quarter of 2025 was $9.1 million, which represents an increase of $1.4 million, or 18.8%, compared to the same quarter one year ago. Compared to the first quarter of 2025, the increase was $344,000, or 3.9%.
Net interest margin increased during the second quarter of 2025 to 3.53%, compared to 3.49% in the first quarter of 2025, and increased 33 basis points compared to the second quarter of 2024.
Total loans held for investment increased $280 thousand, or 0.14% annualized, to $784.7 million at June 30, 2025, from $784.5 million at March 31, 2025. For the year, loan growth totaled $31.0 million, or 8.3% annualized.
Unfunded commitments increased during the quarter by $22.3 million, primarily in construction loans. This resulted in an increase in the unfunded commitment reserve of $154 thousand to $925 thousand from $771 thousand at March 31, 2025.
Total deposits decreased $28.3 million, or 11.6% annualized, to $950.3 million at June 30, 2025, from $978.7 million at March 31, 2025. This was primarily the result of the sale of the two North Carolina branches with $55.9 million in deposits in May 2025 to Carter Bank.
Asset quality remained strong with nonperforming assets falling to $205 thousand, or 0.02% of total assets at June 30, 2025, compared to $933 thousand, or 0.09% of total assets at March 31, 2025. This decline was largely the result of the full collection on one loan and fully charging off another loan.
In June 2025, the Company's Board approved a stock repurchase program authorizing the purchase of up to $3.0 million of outstanding common stock through expiration of the program on June 30, 2026. In determining stock repurchases, management will consider the following factors: the Company's stock price, expected growth, capital position, alternative uses of capital, liquidity, financial performance, current and expected macroeconomic environment, regulatory requirements and any other relevant factors.

Rick Saunders, Chief Executive Officer, commented: "Tangible book value per share improved by $1.58 per share over the past year to $10.71, an increase of 17.3%. We grew deposit balances by $27.6 million, or 11.3% annualized, excluding the deposits sold to Carter Bank. Loan growth was muted in the second quarter of 2025, however, loan commitments will be funding over the next several quarters. Our margin expanded by four basis points to 3.53% in the second quarter of 2025 from 3.49% last quarter, as the yield on loans improved to 5.79%. Our return on average equity was 10.98%, excluding nonrecurring items. We remain focused on growing the markets in South Carolina with our bank and mortgage products and providing high-touch and quality service to our customers."

Financial Summary

	Three Months Ended					Six Months Ended
	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Jun 30	Jun 30
($ in thousands, except per share data)	2025	2025	2024	2024	2024	2025	2024
Earnings:
Net income available to common shareholders	$ 3,653	$ 1,613	$ 918	$ 1,825	$ 1,942	$ 5,266	$ 3,180
Operating earnings (Non-GAAP)	2,248	1,665	1,698	1,950	1,942	3,913	3,180
Earnings per common share, diluted (GAAP)	0.44	0.19	0.11	0.22	0.24	0.63	0.39
Operating earnings per common share, diluted (Non-GAAP)	0.27	0.20	0.21	0.24	0.24	0.47	0.39
Total revenue⁽¹⁾	13,920	11,158	9,809	9,855	10,226	25,078	19,916
Net interest margin	3.53 %	3.49 %	3.38 %	3.27 %	3.20 %	3.54 %	3.16 %
Return on average assets⁽²⁾	1.32 %	0.59 %	0.35 %	0.69 %	0.75 %	0.97 %	0.63 %
Return on average assets - Operating Non-GAAP⁽²⁾	0.81 %	0.61 %	0.64 %	0.74 %	0.75 %	0.72 %	0.63 %
Return on average equity⁽²⁾	17.84 %	8.15 %	4.66 %	9.60 %	10.69 %	13.14 %	8.93 %
Return on average equity - Operating Non-GAAP⁽²⁾	10.98 %	8.41 %	8.62 %	10.26 %	10.69 %	9.76 %	8.93 %
Efficiency ratio⁽³⁾	64.61 %	75.52 %	86.42 %	76.90 %	75.21 %	69.46 %	80.81 %
Adjusted efficiency ratio - Non-GAAP⁽³⁾	74.03 %	75.04 %	78.29 %	75.66 %	75.21 %	74.52 %	80.81 %

	As of
	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30
($ in thousands)	2025	2025	2024	2024	2024
Balance Sheet:
Total assets	$ 1,102,203	$ 1,097,389	$ 1,067,104	$ 1,071,480	$ 1,058,395
Total loans receivable	784,749	784,469	753,738	739,219	739,433
Total deposits	950,339	978,667	951,411	951,948	899,799
Total transaction deposits⁽⁴⁾ to total deposits	39.50 %	39.46 %	38.64 %	38.82 %	39.18 %
Loans to deposits	82.58 %	80.16 %	79.22 %	77.65 %	82.18 %
Bank Capital Ratios:
Total risk-based capital ratio	12.88 %	12.99 %	13.48 %	13.56 %	13.34 %
Tier 1 risk-based capital ratio	11.84 %	11.92 %	12.43 %	12.51 %	12.28 %
Tier 1 leverage ratio	9.74 %	9.80 %	9.96 %	9.87 %	10.01 %
Common equity tier 1 capital ratio	11.84 %	11.92 %	12.43 %	12.51 %	12.28 %
Asset Quality Ratios:
Nonperforming assets as a percentage of total assets	0.02 %	0.09 %	0.11 %	0.09 %	0.03 %
Allowance for credit losses as a percentage of total loans receivable	1.09 %	1.10 %	1.12 %	1.13 %	1.15 %
Annualized net charge-offs as a percentage of average total loan receivables	0.03 %	0.08 %	0.00 %	0.03 %	0.05 %

CONDENSED CONSOLIDATED INCOME STATEMENTS – Unaudited

	Three Months Ended					Six Months Ended
	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Jun 30
($ in thousands, except per share data)	2025	2025	2024	2024	2024	2025	2024
Interest income
Loans	$ 11,657	$ 11,293	$ 11,053	$ 10,930	$ 10,746	$ 22,950	$ 20,831
Investment securities	2,145	2,166	2,015	1,969	1,875	4,311	3,847
Other interest income	505	318	512	623	419	823	710
Total interest income	14,307	13,777	13,580	13,522	13,040	28,084	25,388
Interest expense
Deposits	4,703	4,468	4,613	4,833	4,652	9,171	8,984
Other interest expense	495	544	564	585	722	1,039	1,530
Total interest expense	5,198	5,012	5,177	5,418	5,374	10,210	10,514
Net interest income	9,109	8,765	8,403	8,104	7,666	17,874	14,874
Provision for credit losses	88	707	141	(83)	55	795	262
Net interest income after provision for credit losses	9,021	8,058	8,262	8,187	7,611	17,079	14,612
Noninterest income
Mortgage banking income	1,586	1,351	1,207	805	1,416	2,937	2,791
Service fees on deposit accounts	299	319	327	327	307	618	643
Debit card and other service charges, commissions, and fees	543	529	550	528	568	1,072	1,087
Income from bank owned life insurance	104	102	108	105	103	206	205
Loss on sale of securities, net	-	(182)	(146)	(162)	-	(182)	-
Gain on sale of branches	2,313	-	-	-	-	2,313	-
Gain on early extinguishment of debt	-	140	-	-	-	140	-
Gain (loss) on disposal /write down of fixed assets	(200)	-	(838)	-	-	(200)	20
Other income	166	134	198	148	166	300	296
Total noninterest income	4,811	2,393	1,406	1,751	2,560	7,204	5,042
Noninterest expense
Compensation and benefits	5,574	5,281	5,028	4,682	4,693	10,855	9,571
Occupancy and equipment	770	791	890	848	837	1,561	1,678
Data processing, technology, and communications	1,143	1,156	1,184	994	1,119	2,299	2,158
Professional fees	248	153	268	265	96	401	206
Marketing	175	123	103	66	102	298	262
Other	1,083	923	1,003	723	844	2,006	1,670
Total noninterest expense	8,993	8,427	8,476	7,578	7,691	17,420	15,545
Income before provision for income taxes	4,839	2,024	1,192	2,360	2,480	6,863	4,109
Income tax expense	1,186	411	273	535	538	1,597	929
Net income available to common shareholders	$ 3,653	$ 1,613	$ 919	$ 1,825	$ 1,942	$ 5,266	$ 3,180
Addback loss on fixed assets, net of tax	151	-	646	-	-	151	-
Subtract gain on sale of branches, net of tax	(1,746)	-	-	-	-	(1,746)	-
Subtract gain on early extinguishment of debt, net of tax	-	(111)	-	-	-	(111)	-
Addback expenses related to branch sale, net of tax	190	18	21	-	-	208	-
Addback securities losses, net of tax	-	145	113	125	-	145	-
Operating net income (non-GAAP)	2,248	1,665	1,699	1,950	1,942	3,913	3,180
Weighted average common shares - basic	7,892	7,868	7,851	7,847	7,851	7,880	7,844
Weighted average common shares - diluted	8,350	8,331	8,274	8,221	8,260	8,342	8,273
Basic net income per common share*	$ 0.46	$ 0.21	$ 0.12	$ 0.23	$ 0.25	$ 0.67	$ 0.41
Diluted net income per common share*	$ 0.44	$ 0.19	$ 0.11	$ 0.22	$ 0.24	$ 0.63	$ 0.39
Operating basic net income per common share (nonGAAP)*	$ 0.28	$ 0.21	$ 0.22	$ 0.25	$ 0.25	$ 0.50	$ 0.41
Operating diluted net income per common share (nonGAAP)*	$ 0.27	$ 0.20	$ 0.21	$ 0.24	$ 0.24	$ 0.47	$ 0.39

*Note that the sum of the quarter may not equal the YTD result due to rounding of earnings per share each quarter, given the weighted average shares outstanding basic and diluted.

Footnotes to table located at the end of this release.

Net income for the three months ended June 30, 2025, was $3.7 million, or $0.44 per diluted common share, compared to $1.9 million, or $0.24 per diluted common share, for the three months ended June 30, 2024. Operating net income (Non-GAAP), for the three months ended June 30, 2025, was $2.2 million, or $0.27 per diluted common share, compared to $1.9 million, or $0.24 per diluted common share for the three months ended June 30, 2024. Net income for the six months ended June 30, 2025, totaled $5.3 million, or $0.63 per diluted common share, compared to $3.2 million, or $0.39 per diluted common share. On an operating basis, diluted EPS (Non-GAAP) was $0.47 per diluted common share, for the six months ended June 30, 2025, which includes adding back the impact of securities losses, net of tax, the impact of fixed asset write downs, net of tax, and the impact of expenses related to the branch sales, net of tax, offset by subtracting the gain recognized on the sale of branches, net of tax and the gain from the early extinguishment of debt, net of tax, compared to $0.39 per diluted common share, for the six months ended June 30, 2024.

Noninterest income, for the three months ended June 30, 2025, was $4.8 million, an increase of $2.2 million from $2.6 million for the same period in 2024. Noninterest income was primarily driven by mortgage banking income and totaled $1.6 million in the second quarter of 2025 compared to $1.4 million in the second quarter of 2024. In the second quarter of 2025, the Company sold its two branches in NC recognizing a gain of $2.3 million and wrote down a parcel of land by $200 thousand.

For the six months ended June 30, 2025, noninterest income increased by $2.2 million, driven by improved mortgage banking income of $146 thousand, gain on sale of branches of $2.3 million offset by the write down of fixed asset of $200 thousand, compared to the same period in 2024.

Noninterest expense, for the three months ended June 30, 2025, was $9.0 million, an increase of $1.3 million from $7.7 million for the same period in 2024. This increase in expense was primarily driven by an increase in compensation and benefits of $881 thousand due primarily to mortgage commissions, salaries and stock compensation expense, an increase of $152 thousand related to additional professional fees related to audit expense associated with Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) compliance, and $239 thousand in other expense primarily associated with costs related to the sale of the two branches in North Carolina (NC).

Noninterest expense, for the six months ended June 30, 2025, was $17.4 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 $1.3 million attributable to mortgage commissions and stock compensation expense, and an increase in professional fees related to audit expense associated with FDICIA compliance, and $336 thousand of other expense primarily associated with cost related to the sale of the two branches in NC.

Operating adjustments – 2Q 2025

During the second quarter of 2025, the Company sold the two North Carolina locations to Carter Bank from Virginia. This sale resulted in a gain of $2.3 million on the deposits assumed by Carter Bank, before expenses. Expenses directly related to the branches sold totaled $252 thousand in the second quarter of 2025. Operating net income reflects the removal of these two items. Total deposits assumed by Carter Bank were $55.9 million. No loans were acquired in this transaction by Carter Bank.

Additionally, the Company wrote down a parcel of land in North Charleston by $200 thousand. This parcel remains for sale. Operating net income reflects the add back of this item, net of tax, totaling $151 thousand.

Operating adjustments - 1Q 2025

During the first quarter of 2025, the Company recorded the following non-recurring transactions:

Paid off subordinated indebtedness of $1.0 million with $860 thousand, resulting in a pre-tax gain of $140 thousand,
Recorded pre-tax securities losses of $182 thousand, and
Recorded pre-tax branch disposal related costs of $23 thousand.

NET INTEREST INCOME AND MARGIN – Unaudited - QTD

	For the Three Months Ended
	June 30, 2025			March 31, 2025			June 30, 2024
	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	$ 46,216	$ 478	4.15 %	$ 37,230	$ 292	3.18 %	$ 29,743	$ 379	5.13 %
Investment securities	186,573	2,145	4.61 %	180,710	2,166	4.86 %	168,826	1,875	4.47 %
Nonmarketable equity securities	1,665	28	6.65 %	1,496	26	7.06 %	2,037	40	7.82 %
Loans held for sale	16,269	353	8.70 %	23,551	364	6.27 %	24,965	446	7.19 %
Loans	783,489	11,304	5.79 %	775,652	10,929	5.71 %	736,944	10,300	5.62 %
Total interest-earning assets	1,034,212	14,307	5.55 %	1,018,639	13,777	5.49 %	962,515	13,040	5.45 %
Allowance for credit losses	(8,652)			(8,616)			(8,508)
Noninterest-earning assets	80,987			81,136			79,658
Total assets	$ 1,106,547			$ 1,091,159			$ 1,033,665

Liabilities and Shareholders' Equity
Interest-bearing liabilities
NOW accounts	$ 158,726	$ 242	0.61 %	$ 158,710	$ 230	0.59 %	$ 140,821	$ 247	0.70 %
Savings & money market	435,548	3,127	2.88 %	429,861	2,872	2.71 %	366,431	2,712	2.98 %
Time deposits	158,378	1,334	3.38 %	156,527	1,366	3.54 %	179,539	1,694	3.79 %
Total interest-bearing deposits	752,652	4,703	2.51 %	745,098	4,468	2.43 %	686,792	4,652	2.72 %
FHLB advances and other borrowings	17,913	191	4.29 %	15,162	213	5.70 %	26,917	356	5.32 %
Subordinated debentures	23,228	304	5.25 %	24,761	331	5.42 %	25,737	366	5.72 %
Total interest-bearing liabilities	793,793	5,198	2.63 %	785,021	5,012	2.59 %	739,446	5,374	2.92 %
Noninterest bearing deposits	217,979			214,733			207,573
Other liabilities	12,885			12,185			13,971
Shareholders' equity	81,890			79,220			72,674
Total liabilities and shareholders' equity	$ 1,106,547			$ 1,091,159			$ 1,033,665

Net interest income (tax equivalent)/interest rate spread		$ 9,109	2.92 %		$ 8,765	2.90 %		$ 7,666	2.53 %
Net Interest Margin			3.53 %			3.49 %			3.20 %

Cost of funds, including noninterest-bearing deposits			2.06 %			2.03 %			2.28 %

Net interest income, for the three months ended June 30, 2025, was $9.1 million compared to $7.7 million for the three months ended June 30, 2024. This increase was the result of an increase in interest income of $1.3 million and a decrease in interest expense of $176,000. This resulted in an improved net interest margin to 3.53% from 3.20% one year ago. Loans and securities had the largest gains in income and in yields compared to the prior year. While lower yields in all categories of interest-bearing liabilities contributed to the improved net interest margin. In addition, the total cost of funds, including noninterest-bearing deposits, decreased to 2.06% in the second quarter of 2025, compared to 2.28% in the second quarter of 2024.

NET INTEREST INCOME AND MARGIN – Unaudited - YTD

	For the Six Months Ended
	June 30, 2025			June 30, 2024
	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	$ 39,262	$ 769	3.95 %	$ 29,419	$ 645	4.40 %
Investment securities	183,408	4,311	4.74 %	169,084	3,847	4.56 %
Nonmarketable equity securities	1,676	54	6.45 %	2,093	65	6.21 %
Loans held for sale	17,937	717	8.06 %	20,025	700	7.01 %
Loans	776,521	22,233	5.77 %	723,620	20,131	5.58 %
Total interest-earning assets	1,018,804	28,084	5.56 %	944,241	25,388	5.39 %
Allowance for credit losses	(8,593)			(8,450)
Noninterest-earning assets	80,765			79,850
Total assets	$ 1,090,976			$ 1,015,641

Liabilities and Shareholders' Equity
Interest-bearing liabilities
NOW accounts	$ 152,565	$ 473	0.62 %	$ 142,005	$ 538	0.76 %
Savings & money market	427,502	5,998	2.83 %	352,219	5,156	2.94 %
Time deposits	157,773	2,700	3.45 %	176,923	3,290	3.73 %
Total interest-bearing deposits	737,840	9,171	2.51 %	671,147	8,984	2.68 %
FHLB advances and other borrowings	18,732	404	4.35 %	28,538	793	5.57 %
Subordinated debentures	24,111	635	5.31 %	25,731	737	5.75 %
Total interest-bearing liabilities	780,683	10,210	2.64 %	725,416	10,514	2.91 %
Noninterest bearing deposits	217,556			205,301
Other liabilities	12,585			13,694
Shareholders' equity	80,152			71,230
Total liabilities and shareholders' equity	$ 1,090,976			$ 1,015,641

Net interest income (tax equivalent) / interest rate spread		$ 17,874	2.92 %		$ 14,874	2.49 %
Net Interest Margin			3.54 %			3.16 %

Cost of funds,including noninterest bearing deposits			2.06 %			2.27 %

Net interest income for the six months ended June 30, 2025, totaled $17.9 million compared to $14.9 million in the first six months of 2024, an increase of $3.0 million. The net interest margin was 3.54% for the first six months of 2025 compared to 3.16% for the same period in 2024. All of the yields on interest-earning assets, except fed funds sold increased. Yields on all interest-bearing liabilities have also declined in all categories. The total cost of funds, including noninterest-bearing deposits was 2.06% compared to 2.27% in 2024.

CONDENSED CONSOLIDATED BALANCE SHEETS – Unaudited

	As of
	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30
($ in thousands)	2025	2025	2024	2024	2024
Assets
Cash and cash equivalents:
Cash and due from banks	$ 4,066	$ 5,011	$ 4,604	$ 4,730	$ 5,669
Interest-bearing deposits with banks	29,487	32,922	42,623	61,934	41,391
Total cash and cash equivalents	33,553	37,933	47,227	66,664	47,060
Investment securities:
Investment securities available for sale	194,136	181,596	175,846	177,641	173,298
Other investments	2,497	950	886	883	2,788
Total investment securities	196,633	182,546	176,732	178,524	176,086
Mortgage loans held for sale	14,944	22,424	20,974	19,929	25,776
Loans receivable:
Loans	784,749	784,469	753,738	739,219	739,433
Less allowance for credit losses	(8,535)	(8,654)	(8,434)	(8,317)	(8,498)
Loans receivable, net	776,214	775,815	745,304	730,902	730,935
Property and equipment, net	22,469	21,987	21,353	21,861	22,040
Mortgage servicing rights	14,093	13,614	13,410	12,690	12,680
Bank owned life insurance	18,815	18,710	18,608	18,501	18,396
Deferred income taxes	6,510	6,938	7,709	6,292	7,612
Other assets	18,972	17,422	15,787	16,117	17,810
Total assets	1,102,203	1,097,389	1,067,104	1,071,480	1,058,395
Liabilities
Deposits	$ 950,339	$ 978,667	$ 951,411	$ 951,948	$ 899,799
Federal Home Loan Bank advances	32,500	-	-	-	40,000
Federal funds and repurchase agreements	207	-	-	-	408
Subordinated debentures	9,461	14,453	15,444	15,436	15,428
Junior subordinated debentures	10,310	10,310	10,310	10,310	10,310
Reserve for unfunded commitments	925	771	428	410	364
Other liabilities	12,560	11,972	11,755	12,866	17,590
Total liabilities	1,016,302	1,016,173	989,348	990,970	983,899
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	(6,654)	(6,458)	(5,699)	(5,285)	(5,216)
Nonvested restricted stock	(2,536)	(2,566)	(2,340)	(2,444)	(2,463)
Additional paid-in capital	56,708	56,408	55,789	55,763	55,645
Retained earnings	44,937	41,284	39,671	38,753	36,928
Accumulated other comprehensive loss	(6,643)	(7,541)	(9,754)	(6,366)	(10,487)
Total shareholders' equity	85,901	81,216	77,756	80,510	74,496
Total liabilities and shareholders' equity	$ 1,102,203	$ 1,097,389	$ 1,067,104	$ 1,071,480	$ 1,058,395

First Reliance cash and cash equivalents totaled $33.6 million at June 30, 2025, compared to $37.9 million at March 31, 2025. Cash with the Federal Reserve Bank totaled $29.3 million compared to $41.3 million at June 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 $194.1 million and $181.6 million, at June 30, 2025 and March 31, 2025, respectively. The unrealized loss recorded on these securities totaled $8.8 million as of June 30, 2025, compared to $10.0 million at March 31, 2025, a decrease in the unrealized loss during the second quarter of $1.2 million (before taxes).

As of June 30, 2025, deposits decreased by $28.3 million, or 11.6% annualized. The deposit decline in all categories, except time deposits less than $250,000, was from the sale of two branches to Carter Bank in May 2025. See the table on page 10 for detail.

During the second quarter of 2025, the Company retired the remaining $5.0 million of subordinated debt that was issued in June 2020. This subordinated debt was scheduled to convert from a fixed interest rate of 5.875% to a variable interest rate of three-month SOFR plus 5.51% on June 1, 2025.

The Company had $32.5 million in outstanding borrowings with the Federal Home Loan Bank (FHLB) of Atlanta at June 30, 2025, up from zero at March 31, 2025. The Company had remaining credit availability in excess of $286.1 million with the FHLB of Atlanta, subject to collateral requirements.

First Reliance also has access to approximately $19.9 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
	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30
(shares in thousands)	2025	2025	2024	2024	2024
Voting common shares outstanding	8,787	8,786	8,764	8,820	8,819
Treasury shares outstanding	(830)	(809)	(731)	(751)	(743)
Total common shares outstanding	7,957	7,977	8,033	8,069	8,076

Book value per common share	$ 10.80	$ 10.18	$ 9.68	$ 9.98	$ 9.22
Tangible book value per common share - Non-GAAP(5)	$ 10.71	$ 10.09	$ 9.59	$ 9.89	$ 9.13

Stock price:
High	$ 10.00	$ 9.98	$ 10.24	$ 10.59	$ 8.30
Low	$ 9.00	$ 9.35	$ 9.16	$ 7.60	$ 7.60
Period end	$ 9.60	$ 9.45	$ 9.59	$ 10.14	$ 7.90

ASSET QUALITY MEASURES – Unaudited

	As of
	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30
($ in thousands)	2025	2025	2024	2024	2024
Nonperforming Assets
Commercial
Owner occupied RE	$ 39	$ 42	$ 44	$ 46	$ 49
Non-owner occupied RE	-	655	646	701	-
Construction	-	-	66	-	62
Commercial business	43	146	328	57	12
Consumer
Real estate	39	40	42	44	46
Home equity	-	-	-	-	-
Construction	-	-	-	-	-
Other	84	50	64	61	66
Nonaccruing loan modifications	-	-	-	-	-
Total nonaccrual loans	$ 205	$ 933	$ 1,190	$ 909	$ 235
Other assets repossessed	-	-	11	15	75
Total nonperforming assets	$ 205	$ 933	$ 1,201	$ 924	$ 310
Nonperforming assets as a percentage of:
Total assets	0.02 %	0.09 %	0.11 %	0.09 %	0.03 %
Total loans receivable	0.03 %	0.12 %	0.16 %	0.12 %	0.04 %
Accruing loan modifications	$ 797	$ 369	$ 400	$ 428	$ 460

	Three Months Ended
	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30
($ in thousands)	2025	2025	2024	2024	2024
Allowance for Credit Losses
Balance, beginning of period	$ 8,654	$ 8,434	$ 8,317	$ 8,498	$ 8,497
Loans charged-off	110	163	24	69	102
Recoveries of loans previously charged-off	57	19	18	17	14
Net charge-offs	53	144	6	52	88
Provision for credit losses	(66)	364	123	(129)	89
Balance, end of period	$ 8,535	$ 8,654	$ 8,434	$ 8,317	$ 8,498
Allowance for credit losses to gross loans receivable	1.09 %	1.10 %	1.12 %	1.13 %	1.15 %
Allowance for credit losses to nonaccrual loans	4163.41 %	927.54 %	708.74 %	914.96 %	3616.17 %

Asset quality remained strong during the second quarter of 2025, with nonperforming assets decreasing to $205 thousand, which represents 0.02% of total assets. Two loans on nonaccrual were resolved during the second quarter. One was fully collected and the other (that was previously fully reserved) was charged off. The allowance for credit losses as a percentage of total loans receivable decreased to 1.09% at June 30, 2025, compared to 1.10% at March 31, 2025, and 1.12% at December 31, 2024. The allowance for credit losses decreased by a release of provision for credit losses of $66 thousand and by net charge-offs of $53 thousand, during the second quarter of 2025. In the second quarter of 2024, the Company experienced net charge-offs of $88 thousand and increased the ACL with a provision for credit losses of $89 thousand. The ACL was 1.15% of total loans at June 30, 2024.

Footnotes to table located at the end of this release.

LOAN COMPOSITION – Unaudited

	As of
	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30
($ in thousands)	2025	2025	2024	2024	2024
Commercial real estate	$ 483,278	$ 482,201	$ 463,301	$ 456,775	$ 450,936
Consumer real estate	223,310	216,964	204,303	193,362	188,759
Commercial and industrial	61,255	65,573	65,980	66,561	76,149
Consumer and other	16,906	19,731	20,154	22,521	23,589
Total loans, net of deferred fees	784,749	784,469	753,738	739,219	739,433
Less allowance for credit losses	8,535	8,654	8,434	8,317	8,498
Total loans, net	$ 776,214	$ 775,815	$ 745,304	$ 730,902	$ 730,935

DEPOSIT COMPOSITION – Unaudited

	As of
	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30
($ in thousands)	2025	2025	2024	2024	2024
Noninterest-bearing	$ 219,352	$ 224,031	$ 227,471	$ 219,279	$ 220,330
Interest-bearing:					-
DDA and NOW accounts	156,062	162,129	140,116	150,312	132,186
Money market accounts	379,078	393,736	381,602	362,834	325,769
Savings	38,995	39,719	40,627	41,184	42,479
Time, less than $250,000	125,607	122,613	120,397	133,940	128,869
Time, $250,000 and over	31,245	36,439	41,198	44,399	50,166
Total deposits	$ 950,339	$ 978,667	$ 951,411	$ 951,948	$ 899,799

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 $1.102 billion. The Company employs approximately 170 professionals and has locations throughout South 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 bank industry average of 82%. First Reliance is also one of two companies throughout South Carolina to receive the Best Places to Work in South Carolina award all 19 years since the program began. 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 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.

Company Announcements

First Reliance Bancshares Reports Second Quarter 2025 Results