First Reliance Bancshares Reports First Quarter 2025 Results

Apr 24 2025 21:15 BST

FLORENCE, S.C. , April 24, 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 first quarter of 2025.

First Quarter 2025 Highlights

Net income increased 30.3% for the first quarter of 2025 to $1.6 million, or $0.19 per diluted share, compared to $1.2 million, or $0.15 per diluted share, for the first quarter of 2024. Operating earnings (non-GAAP), which excludes securities losses, net of tax, gain/(loss) on disposal/write down fixed assets and right of use assets, net of tax, gain on early extinguishment of debt, net of tax, and expenses related to branch sale, net of tax, were $1.7 million, or $0.20 per diluted share, for the first quarter of 2025, compared to $1.2 million, or $0.15 per diluted share, in the first quarter of 2024.
Book value per share increased $1.32, or 14.9%, from $8.86 per share at March 31, 2024, to $10.18 per share at March 31, 2025. Tangible book value (non-GAAP) per share increased $1.32, or 15.1%, from $8.77 per share at March 31, 2024, to $10.09 per share at March 31, 2025.
Net interest income for the quarter was $8.8 million, which represents an increase of $1.6 million, or 21.6%, compared to the first quarter of 2024. On a linked quarter basis, the increase was $362,000, or 4.3%.
Net interest margin increased during the quarter to 3.49% from 3.11% at March 31, 2024, and increased 11 basis points from 3.38% at December 31, 2024.
Total loans held for investment increased $30.7 million, or 16.3% annualized, to $784.5 million at March 31, 2025, from $753.7 million at December 31, 2024. The increase was $59.3 million, or 8.2%, from $725.2 million at March 31, 2024.
Total deposits increased $27.3 million, or 11.5% annualized, to $978.7 million at March 31, 2025, from $951.4 million at December 31, 2024. The increase was $97.4 million, or 11.0% from $881.3 million at March 31, 2024.
All regulatory approvals have been received for the Company's sale of its two branch locations in North Carolina to Carter Bank. Carter Bank is acquiring all deposits and other assets associated with these locations. Carter Bank is not acquiring any loans in this transaction. Closing is expected to occur in the second quarter of 2025.
Asset quality remained strong with nonperforming assets declining to $933 thousand, or 0.9% of total assets at March 31, 2025, from $1.2 million, or 0.11% of total assets at December 31, 2024, compared to $282 thousand, or 0.03% of total assets at March 31, 2024.

Rick Saunders, Chief Executive Officer, stated: "We continue to grow our balance sheet, improve our net interest margin and improve our efficiency ratio. Despite a large increase in the provision expense due to strong loan growth in both funded and unfunded commitments, our operating earnings improved 36% year over year, and our tangible book value per share improved by 15.1%. We expanded our NIM 38 basis points this quarter compared to the first quarter of 2024. We expect the transaction for the two branches in North Carolina to close in late May of 2025, which we believe will further improve our operating efficiency. Credit quality remained steady with low net charge offs and low nonperforming assets. We remain committed to our communities and the markets we serve by providing exceptional service and banking solutions for our clients."

Financial Summary

	Three Months Ended
	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
($ in thousands, except per share data)	2025	2024	2024	2024	2024
Earnings:
Net income available to common shareholders	$ 1,613	$ 918	$ 1,825	$ 1,942	$ 1,238
Operating earnings (Non-GAAP)	1,665	1,698	1,950	1,942	1,223
Earnings per common share, diluted	0.19	0.11	0.22	0.24	0.15
Operating earnings, diluted (Non-GAAP)	0.20	0.21	0.24	0.24	0.15
Total revenue⁽¹⁾	11,158	9,809	9,855	10,226	9,690
Net interest margin	3.49 %	3.38 %	3.27 %	3.20 %	3.11 %
Return on average assets⁽²⁾	0.59 %	0.35 %	0.69 %	0.75 %	0.49 %
Return on average equity⁽²⁾	8.15 %	4.66 %	9.60 %	10.69 %	7.01 %
Efficiency ratio⁽³⁾	75.52 %	86.42 %	76.90 %	75.21 %	81.04 %

	As of
	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
($ in thousands)	2025	2024	2024	2024	2024
Balance Sheet:
Total assets	$ 1,097,389	$ 1,067,104	$ 1,071,480	$ 1,058,395	$ 1,027,616
Total loans receivable	784,469	753,738	739,219	739,433	725,234
Total deposits	978,667	951,411	951,948	899,799	881,309
Total transaction deposits⁽⁴⁾ to total deposits	39.46 %	38.64 %	38.82 %	39.18 %	39.86 %
Loans to deposits	80.16 %	79.22 %	77.65 %	82.18 %	82.29 %
Bank Capital Ratios:
Total risk-based capital ratio	12.99 %	13.48 %	13.56 %	13.34 %	13.46 %
Tier 1 risk-based capital ratio	11.92 %	12.43 %	12.51 %	12.28 %	12.37 %
Tier 1 leverage ratio	9.80 %	9.96 %	9.87 %	10.01 %	10.16 %
Common equity tier 1 capital ratio	11.92 %	12.43 %	12.51 %	12.28 %	12.37 %
Asset Quality Ratios:
Nonperforming assets as a percentage of total assets	0.09 %	0.11 %	0.09 %	0.03 %	0.03 %
Allowance for credit losses as a percentage of total loans receivable	1.10 %	1.12 %	1.13 %	1.15 %	1.17 %
Annualized quarterly net charge-offs as a percentage of average total loans receivable	0.08 %	0.00 %	0.03 %	0.05 %	0.06 %

Footnotes to table located at the end of this release.

CONDENSED CONSOLIDATED INCOME STATEMENTS – Unaudited

	Three Months Ended
	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
($ in thousands, except per share data)	2025	2024	2024	2024	2024
Interest income
Loans	$ 11,293	$ 11,053	$ 10,930	$ 10,746	$ 10,085
Investment securities	2,166	2,015	1,969	1,875	1,972
Other interest income	318	512	623	419	291
Total interest income	13,777	13,580	13,522	13,040	12,348
Interest expense
Deposits	4,468	4,613	4,833	4,652	4,332
Other interest expense	544	564	585	722	808
Total interest expense	5,012	5,177	5,418	5,374	5,140
Net interest income	8,765	8,403	8,104	7,666	7,208
Provision for credit losses	707	141	(83)	55	207
Net interest income after provision for loan losses	8,058	8,262	8,187	7,611	7,001
Noninterest income
Mortgage banking income	1,351	1,207	805	1,416	1,375
Service fees on deposit accounts	319	327	327	307	336
Debit card and other service charges, commissions, and fees	529	550	528	568	519
Income from bank owned life insurance	102	108	105	103	102
Loss on sale of securities, net	(182)	(146)	(162)	-	-
Gain on early extinguishment of debt	140	-	-	-	-
Gain (loss) on disposal / write down of fixed assets	-	(838)	-	-	20
Other income	134	198	148	166	130
Total noninterest income	2,393	1,406	1,751	2,560	2,482
Noninterest expense
Compensation and benefits	5,281	5,028	4,682	4,693	4,878
Occupancy and equipment	791	890	848	837	841
Data processing, technology, and communications	1,156	1,184	994	1,119	1,039
Professional fees	153	268	265	96	110
Marketing	123	103	66	102	160
Other	923	1,003	723	844	826
Total noninterest expense	8,427	8,476	7,578	7,691	7,854
Income before provision for income taxes	2,024	1,192	2,360	2,480	1,629
Income tax expense	411	273	535	538	391
Net income available to common shareholders	$ 1,613	$ 919	$ 1,825	$ 1,942	$ 1,238
Add back loss (gain) on fixed assets, net of tax	-	646	-	-	(15)
Subtract gain on early extinguishment of debt, net of tax	(111)
Add back expenses related to branch sale, net of tax	18	21	-	-	-
Add back securities losses, net of tax	145	113	125	-	-
Operating earnings (Non-GAAP)	$ 1,665	$ 1,699	$ 1,950	$ 1,942	$ 1,223
Weighted average common shares - basic	7,868	7,851	7,847	7,851	7,837
Weighted average common shares - diluted	8,331	8,274	8,221	8,260	8,217
Basic net income per common share *	$ 0.21	$ 0.12	$ 0.23	$ 0.25	$ 0.16
Diluted net income per common share *	$ 0.19	$ 0.11	$ 0.22	$ 0.24	$ 0.15
Operating earnings per common share (Non-GAAP) *	$ 0.21	$ 0.22	$ 0.25	$ 0.25	$ 0.16
Operating earnings per diluted common share (Non-GAAP) *	$ 0.20	$ 0.21	$ 0.24	$ 0.24	$ 0.15

* 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 March 31, 2025, was $1.6 million, or $0.19 per diluted common share, compared to $1.2 million, or $0.15 per diluted common share, for the three months ended March 31, 2024. On an operating basis, the first quarter of 2025 diluted EPS was $0.20, compared to $0.15 diluted EPS for the first quarter of 2024. During the first quarter of 2025, the Company added back the impact of securities losses, net of tax, of $145 thousand, cost related to the branch sale, net of tax, of $18 thousand, and subtracted the gain on early extinguishment of debt, net of tax, of $111 thousand compared to subtracting the after-tax gain on the sale of fixed assets of $15 thousand in the first quarter of 2024.

The provision for credit losses for loans was $364 thousand, and for unfunded commitments was $343 thousand, totaling $707 thousand for the first quarter of 2025. The increase in the ACL for loans was primarily driven by loan growth, and the increase in the reserve for unfunded commitments was primarily the result of increases in construction commitments and the expected term of those related loans.

Noninterest income for the three months ended March 31, 2025, was $2.4 million, a decrease of $89 thousand from $2.5 million in the first quarter of 2024. Noninterest income was primarily driven by mortgage banking income which totaled $1.4 million in both the first quarter of 2025 and the first quarter of 2024. In the first quarter of 2025, the company recognized securities losses, $182 thousand, which was partially offset by $140 thousand gain on the early extinguishment of debt.

Noninterest expense for the three months ended March 31, 2025, was $8.4 million, an increase of $573 thousand from $7.9 million in the first quarter of 2024. The increase was primarily driven by an increase in higher compensation and benefits of $403 thousand primarily from salaries, payroll taxes, and equity compensation; and from higher data processing and technology cost of $117 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.

Fixed Assets and Right of Use Assets – 4Q 2024

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.

In addition, a fixed asset was written down by $300,000 related 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
	March 31, 2025			December 31, 2024			March 31, 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	$ 37,230	$ 292	3.18 %	$ 44,366	$ 485	4.35 %	$ 27,557	$ 266	3.88 %
Investment securities	180,710	2,166	4.86 %	179,750	2,015	4.46 %	169,174	1,972	4.69 %
Nonmarketable equity securities	1,496	26	7.06 %	1,524	27	6.99 %	2,224	25	4.56 %
Loans held for sale	23,551	364	6.27 %	21,610	322	5.93 %	15,639	254	6.53 %
Loans	775,652	10,929	5.71 %	741,672	10,731	5.76 %	716,237	9,831	5.52 %
Total interest-earning assets	1,018,639	13,777	5.49 %	988,922	13,580	5.46 %	930,831	12,348	5.34 %
Allowance for credit losses	(8,616)			(8,317)			(8,401)
Noninterest-earning assets	81,136			78,137			79,678
Total assets	$ 1,091,159			$ 1,058,742			$ 1,002,108

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
NOW accounts	$ 158,710	$ 230	0.59 %	$ 140,981	$ 245	0.69 %	$ 142,303	$ 291	0.82 %
Savings & money market	429,861	2,872	2.71 %	405,445	2,910	2.86 %	341,680	2,445	2.88 %
Time deposits	156,527	1,366	6.54 %	160,417	1,458	3.62 %	174,169	1,596	3.69 %
Total interest-bearing deposits	745,098	4,468	2.43 %	706,843	4,613	2.60 %	658,152	4,332	2.65 %
FHLB advances and other borrowings	15,162	213	5.70 %	16,332	202	4.93 %	31,665	437	5.55 %
Subordinated debentures	24,761	331	5.42 %	25,750	362	5.59 %	25,727	371	5.81 %
Total interest-bearing liabilities	785,021	5,012	2.59 %	748,925	5,177	2.75 %	715,544	5,140	2.89 %
Noninterest bearing deposits	214,733			217,863			202,136
Other liabilities	12,185			13,118			13,768
Shareholders' equity	79,220			78,836			70,660
Total liabilities and shareholders' equity	$ 1,091,159			$ 1,058,742			$ 1,002,108

Net interest income (tax equivalent) / interest rate spread		$ 8,765	2.90 %		$ 8,403	2.71 %		$ 7,208	2.45 %
Net Interest Margin			3.49 %			3.38 %			3.11 %

Cost of funds, including noninterest-bearing deposits			2.03 %			2.13 %			2.25 %

Net interest income for the three months ended March 31, 2025, was $8.8 million compared to $7.2 million for the three months ended March 31, 2024. This increase was the result of an increase in interest income of $1.4 million, and lower interest expense of $128,000. This resulted in an improved net interest margin of 38 basis points to 3.49% from 3.11% one year ago, led by the loan portfolio yield which improved by 19 basis points, while yield on interest-bearing liabilities improved by 30 basis points. In addition, the total cost of funds, including noninterest-bearing deposits, decreased to 2.03% in the first quarter of 2025, compared to 2.25% in the first quarter of 2024. On a linked quarter basis, our net interest margin improved 13 basis points, or $362,000.

CONDENSED CONSOLIDATED BALANCE SHEETS – Unaudited

	As of
	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
($ in thousands)	2025	2024	2024	2024	2024
Assets
Cash and cash equivalents:
Cash and due from banks	$ 5,011	$ 4,604	$ 4,730	$ 5,669	$ 5,482
Interest-bearing deposits with banks	32,922	42,623	61,934	41,391	36,173
Total cash and cash equivalents	37,933	47,227	66,664	47,060	41,655
Investment securities:
Investment securities available for sale	181,596	175,846	177,641	173,298	171,075
Other investments	950	886	883	2,788	2,548
Total investment securities	182,546	176,732	178,524	176,087	173,623
Mortgage loans held for sale	22,424	20,974	19,929	25,776	18,307
Loans receivable:
Loans	784,469	753,738	739,219	739,433	725,234
Less allowance for credit losses	(8,654)	(8,434)	(8,317)	(8,498)	(8,497)
Loans receivable, net	775,815	745,304	730,902	730,935	716,737
Property and equipment, net	21,987	21,353	21,861	22,040	22,185
Mortgage servicing rights	13,614	13,410	12,690	12,680	12,226
Bank owned life insurance	18,710	18,608	18,501	18,396	18,293
Deferred income taxes	6,938	7,709	6,292	7,612	7,990
Other assets	17,422	15,787	16,117	17,809	16,600
Total assets	1,097,389	1,067,104	1,071,480	1,058,395	1,027,616
Liabilities
Deposits	$ 978,667	$ 951,411	$ 951,948	$ 899,799	$ 881,309
Federal Home Loan Bank advances (FHLB)	-	-	-	40,000	35,000
Federal funds and repurchase agreements	-	-	-	408	-
Subordinated debentures	14,453	15,444	15,436	15,428	15,421
Junior subordinated debentures	10,310	10,310	10,310	10,310	10,310
Reserve for unfunded commitments	771	428	410	364	398
Other liabilities	11,972	11,755	12,866	17,590	13,070
Total liabilities	1,016,173	989,348	990,970	983,899	955,508
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	(6,458)	(5,699)	(5,285)	(5,216)	(4,965)
Nonvested restricted stock	(2,566)	(2,340)	(2,444)	(2,463)	(2,900)
Additional paid-in capital	56,408	55,789	55,763	55,645	56,134
Retained earnings	41,284	39,671	38,753	36,928	34,986
Accumulated other comprehensive (loss) income	(7,541)	(9,754)	(6,366)	(10,487)	(11,236)
Total shareholders' equity	81,216	77,756	80,510	74,496	72,108
Total liabilities and shareholders' equity	$ 1,097,389	$ 1,067,104	$ 1,071,480	$ 1,058,395	$ 1,027,616

First Reliance cash and cash equivalents totaled $37.9 million at March 31, 2025, compared to $47.2 million at December 31, 2024. Cash with the Federal Reserve Bank totaled $32.5 million as of March 31, 2025, compared to $41.8 million at December 31, 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 $181.6 million and $175.8 million, at March 31, 2025 and December 31, 2024, respectively. The unrealized loss recorded on AFS securities totaled $10.0 million as of March 31,2025, compared to $12.9 million as of December 31, 2024, a decrease during the first quarter of 2025 of $2.9 million, pre-tax.

As of March 31, 2025, deposits increased by $27.3 million, or 11.5% annualized. See page 9 for detail on the deposit balance amounts over the past five quarters.

The Company had no outstanding borrowings with the FHLB of Atlanta at March 31, 2025 or at December 31, 2024.

During the first quarter of 2025, the Company retired $1.0 million of subordinated debt with payment of $860,000, resulting in a gain of $140,000 on the early extinguishment of debt. $500 thousand of the retired debt had a fixed interest rate of 5.875% and $500 thousand had a fixed interest rate of 3.375%.

The Company's subordinated debt with a current interest rate of 5.875% becomes callable in the second quarter of 2025. The Company is evaluating the possibility of calling this debt.

COMMON STOCK SUMMARY - Unaudited

			As of
	31-Mar	Dec 31	Sep 30	Jun 30	Mar 31
(shares in thousands)	2025	2024	2024	2024	2024
Voting common shares outstanding	8,786	8,764	8,820	8,819	8,785
Treasury shares outstanding	(809)	(731)	(751)	(743)	(649)
Total common shares outstanding	7,977	8,033	8,069	8,076	8,136

Book value per common share	$ 10.18	$ 9.68	$ 9.98	$ 9.22	$ 8.86
Tangible book value per common share - Non-GAAP⁽⁵⁾	$ 10.09	$ 9.59	$ 9.89	$ 9.13	$ 8.77

Stock price:
High	$ 9.98	$ 10.24	$ 10.59	$ 8.30	$ 8.65
Low	$ 9.35	$ 9.16	$ 7.60	$ 7.60	$ 7.70
Period end	$ 9.45	$ 9.59	$ 10.14	$ 7.90	$ 8.15

Book value (BV) and tangible book value (TBV) per share increased $0.50 per share during the first quarter of 2025. BV and TBV increased $1.32 per share since March 31, 2024, or 15%.

ASSET QUALITY MEASURES – Unaudited

	As of
	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
($ in thousands)	2025	2024	2024	2024	2024
Nonperforming Assets
Commercial
Owner occupied RE	$ 42	$ 44	$ 46	$ 49	$ -
Non-owner occupied RE	655	646	701	-	-
Construction	-	66	-	62	-
Commercial business	146	328	57	12	12
Consumer
Real estate	40	42	44	46	48
Home equity	-	-	-	-	-
Construction	-	-	-	-	-
Other	50	64	61	66	52
Nonaccruing loan modifications	-	-	-	-	56
Total nonaccrual loans	$ 933	$ 1,190	$ 909	$ 235	$ 168
Other assets repossessed	-	11	15	75	114
Total nonperforming assets	$ 933	$ 1,201	$ 924	$ 310	$ 282
Nonperforming assets as a percentage of:
Total assets	0.09 %	0.11 %	0.09 %	0.03 %	0.03 %
Total loans receivable	0.12 %	0.16 %	0.12 %	0.04 %	0.04 %
Accruing loan modifications	$ 369	$ 400	$ 428	$ 460	$ 970

	Three Months Ended
	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
($ in thousands)	2025	2024	2024	2024	2024
Allowance for Credit Losses
Balance, beginning of period	$ 8,434	$ 8,317	$ 8,498	$ 8,497	$ 8,393
Loans charged-off	163	24	69	102	195
Recoveries of loans previously charged-off	19	18	17	14	82
Net charge-offs (recoveries)	144	6	52	88	113
Provision for credit losses (release)	364	123	(129)	89	217
Balance, end of period	$ 8,654	$ 8,434	$ 8,317	$ 8,498	$ 8,497
Allowance for credit losses to gross loans receivable	1.10 %	1.12 %	1.13 %	1.15 %	1.17 %
Allowance for credit losses to nonaccrual loans	927.54 %	708.74 %	914.96 %	3616.17 %	5057.74 %

Asset quality remained steady during the first quarter of 2025, with nonperforming assets decreasing to $933 thousand, which represents 0.09% of total assets. The decrease was in all categories, except one, non-owner occupied RE. The allowance for credit losses as a percentage of total loans receivable decreased to 1.10% at March 31, 2025 compared to 1.12% at December 31, 2024, and compared to 1.17% at March 31, 2024. The allowance for credit losses increased by a provision for credit losses of $364 thousand offset by net charge-offs of $144 thousand, during the first quarter of 2025. In the first quarter of 2024, the Company experienced net charge-offs of $113 thousand and increased the ACL with a provision for credit losses of $217 thousand.

Footnotes to table located at the end of this release.

LOAN COMPOSITION – Unaudited

	As of
	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
($ in thousands)	2025	2024	2024	2024	2024
Commercial real estate	$ 482,201	$ 463,301	$ 456,775	$ 450,936	$ 434,743
Consumer real estate	216,964	204,303	193,362	188,759	184,969
Commercial and industrial	65,573	65,980	66,561	76,149	77,023
Consumer and other	19,731	20,154	22,521	23,589	28,499
Total loans, net of deferred fees	784,469	753,738	739,219	739,433	725,234
Less allowance for credit losses	8,654	8,434	8,317	8,498	8,497
Total loans, net	$ 775,815	$ 745,304	$ 730,902	$ 730,935	$ 716,737

DEPOSIT COMPOSITION – Unaudited

	As of
	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
($ in thousands)	2025	2024	2024	2024	2024
Noninterest-bearing	$ 224,031	$ 227,471	$ 219,279	$ 220,330	$ 212,083
Interest-bearing:
DDA and NOW accounts	162,129	140,116	150,312	132,186	139,229
Money market accounts	393,736	381,602	362,834	325,769	307,696
Savings	39,719	40,627	41,184	42,479	44,191
Time, less than $250,000	122,613	120,397	133,940	128,869	125,248
Time, $250,000 and over	36,439	41,198	44,399	50,166	52,862
Total deposits	$ 978,667	$ 951,411	$ 951,948	$ 899,799	$ 881,309

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 $1.097 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.