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 | 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, | 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- | $ 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 | 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 | 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 | $ 1,106,547 | $ 1,091,159 | $ 1,033,665 | |||||||||
Net interest income (tax | $ 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 | 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 | $ 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 | 1 | 1 | 1 | 1 | 1 |
Common Stock - $.01 par value; 20,000,000 shares | 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 | $ 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 | 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
[email protected]
SOURCE First Reliance Bancshares, Inc.
